Federal Reserve Bulletin, 1995-07

VOLUME 81 • NUMBER 7 • JULY 1995 FEDERAL RESERVE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 629 FINANCIAL SERVICES USED BY corresponding benefits to the safety and SMALL BUSINESSES: EVIDENCE FROM soundness of our nation's financial institu- THE 1993 NATIONAL SURVEY tions, the protection of bank customers, or the OF SMALL BUSINESS FINANCES availability of credit, before the Subcommittee on Financial Institutions and Regulatory Using data newly available from the 1993 Relief of the Senate Committee on Banking, National Survey of Small Business Finances, Housing, and Urban Affairs, May 2, 1995. this article offers preliminary findings regarding the characteristics of the U.S. population 676 Edward W. Kelley, Jr., Member, Board of of small businesses—firms with fewer than Governors, presents information on the bene- 500 employees—and their use of credit and fits and costs of substituting a $1 coin for the other financial services. The main purposes of $1 bank note now in circulation and says that the survey were to provide information on the although there would be important budget use of credit by small and minority-owned gains, the foremost consideration in any decifirms and to create a general-purpose database sion to replace $1 notes with coins should be on the finances of such firms. Although the the convenience and needs of the public and 1993 data are still in the editing stage, and that preparing for issuance of such coins will hence subject to revision, the broad findings be complex and time consuming, before the presented in this article are likely to be robust. Subcommittee on Domestic and International Monetary Policy of the House Committee on Banking and Financial Services, May 3, 1995. 668 INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION FOR MAY 1995 679 Governor Phillips testifies on the Economic Industrial production declined 0.2 percent in Growth and Regulatory Paperwork Reduction May after a revised decline of 0.5 percent in Act of 1995 and says that although the Board April. At 120.9 percent of its 1987 average, supports the majority of the provisions of the industrial production in May was 3.1 percent proposed legislation, it believes that there are higher than it was in May 1994. Capacity two provisions of the bill that cause concern: utilization declined 0.5 percentage point in relaxing the standards for foreign banks oper- May to 83.7 percent, 1.8 percentage points ating in the United States to the extent probelow the most recent high, attained this past posed and transferring authority for adminis- December and January. tering the Real Estate Settlement Procedures Act to the Board, before the Subcommittee on Financial Institutions and Consumer Credit of 671 STATEMENTS TO THE CONGRESS the House Committee on Banking and Financial Services, May 18, 1995. Susan M. Phillips, Member, Board of Governors of the Federal Reserve System, discusses the Economic Growth and Regulatory Paperwork Reduction Act of 1995 and says that the 684 ANNOUNCEMENTS Board supports the purpose of this proposed legislation of relieving costs imposed on our Requests for nominations for appointments to nation's banking system by governmental the Consumer Advisory Council and meeting regulation when those costs are not offset by of the council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Issuance of joint framework for supervisory A3 GUIDE TO TABULAR PRESENTATION information about derivatives activities of A4 Domestic Financial Statistics banks and securities firms. A45 Domestic Nonfinancial Statistics Final revisions to the official staff commentary A53 International Statistics for Regulation B. A67 GUIDE TO STATISTICAL RELEASES AND Availability of a brochure on the terms of SPECIAL TABLES credit card plans. Erratum regarding a table in a Bulletin article. A68 INDEX TO STATISTICAL TABLES 686 MINUTES OF THE FEDERAL OPEN A70 BOARD OF GOVERNORS AND STAFF MARKET COMMITTEE MEETING HELD ON MARCH 28, 1995 A72 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS At its meeting on March 28, 1995, the Committee adopted a directive that called for main- A74 FEDERAL RESERVE BOARD taining the existing degree of pressure on PUBUCATIONS reserve positions but that included a bias toward the possible firming of reserve condi- A76 MAPS OF THE FEDERAL RESERVE tions during the intermeeting period. SYSTEM 697 LEGAL DEVELOPMENTS A78 FEDERAL RESERVE BANKS, BRANCHES, Various bank holding company, bank service AND OFFICES corporation, and bank merger orders; and pending cases. AI FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of May 29, 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses: Evidence from the 1993 National Survey of Small Business Finances Rebel A. Cole and John D. Wolken, of the Board's In broad overview, the 1993 data show that more Division of Research and Statistics, prepared this than two-thirds of small businesses in the United article. Michael Abramowicz, Peter Sorock, and States are indeed very small (fewer than five Ronnie McWilliams provided research assistance. employees) and that more than one-half operate in the retail trade, business services, or professional Using data newly available from the 1993 National services industries. Overall, 12 percent of small Survey of Small Business Finances, this article businesses in the United States are Hispanic-owned offers preliminary findings regarding the character- or nonwhite-owned and 22 percent are femaleistics of the U.S. population of small businesses— owned. Firm size is a dominant factor in determinfirms with fewer than 500 employees—and their ing the types and sources of financial services that use of credit and other financial services. Small small businesses use. Nonetheless, almost all small businesses account for the vast majority of enter- businesses reported using a checking account prises in the United States and for a substantial through a commercial bank; and more than oneshare of total business output, but information half of small businesses reported having some about the small business sector is sparse. credit outstanding, most commonly in the form of a The 1993 survey collected data through inter- line of credit at a commercial bank. views conducted in 1994 and early 1995 with about This article is limited to detailing these descrip- 5,300 firms that were selected to provide a repre- tive findings. The complete range of data gathered sentative sample of all small businesses in the by the survey (see the appendix) is useful for United States. The main purposes of the survey studying various issues in finance, including the were to provide information on the use of credit by determinants of the capital structure of small busismall and minority-owned firms and to create a nesses, the importance of financial relationships, general-purpose database on the finances of such and the differences between small businesses and firms. Although the 1993 data are still in the editing larger firms. stage, and hence subject to revision, the broad findings presented in this article are likely to be BACKGROUND robust. After completion of the data editing and other processing steps, the Federal Reserve Bulle- Historically, commercial banks have been the tin will announce the availability of a data tape and major providers of credit and other financial seruser's manual through the National Technical vices to small businesses. During the past two Information Service.1 decades, however, the market shares of banks for many financial services, including credit to busi- 1. The 1993 survey was cosponsored by the Federal Reserve nesses, have eroded. Several explanations could Board and the U.S. Small Business Administration. A similar survey, conducted for 1987, focused on the definition of banking account for this development. First, many larger markets (see Gregory E. Elliehausen and John D. Wolken, "Bank- firms have gone directly to credit markets. ing Markets and the Use of Financial Services by Small and Medium-Sized Businesses," Federal Reserve Bulletin, vol. 76, October 1990, pp. 801-17). For comparability of 1987 and 1993 Service's tax files and from surveys conducted by the Bureau of the results, see the appendix, note 17. Other sources of information Census (see U.S. Small Business Administration, Handbook of about small businesses include data from the Internal Revenue Small Business Data, 1994 ed., Government Printing Office). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin • July 1995 Second, the Depository Institutions Deregulation tutions to disclose information about their small and Monetary Control Act of 1980, the Garn- business lending and thereby sharpen the focus on St Germain Depository Institutions Act of 1982, such lending in the assessment of the performance and other regulatory changes in the 1980s of lenders covered by the act. Taken together, the expanded the number and types of financial institu- regulatory changes since 1987 may have had divertions providing business credit. gent effects on the availability of financial services Third, many manufacturers have used their to small businesses. finance and leasing company subsidiaries to pro- During these changes in the lending industry and vide credit and other services associated with some in the regulatory environment, macroeconomic of the assets they produce. Even so, the Federal conditions fluctuated. In 1987, the economy was Reserve's 1987 National Survey of Small Business well into the 1982-90 expansion, whereas in 1993 Finances found that commercial banks were one of the economy was in the early stages of expansion the most frequently used sources for almost all following the 1990-91 recession. That recession financial services to small businesses, particularly was associated with a sharp contraction in business for checking accounts and most types of credit. loans at commercial banks. Anecdotal evidence Since the 1989 release of information from that suggests that small businesses often encountered survey, there has been little new information useful exceptional difficulty in obtaining credit during this for assessing the financial marketplace in which period. Some small businesses sought alternative, small businesses operate. Nevertheless, that mar- nontraditional sources of credit. Many other firms, ketplace has continued to change substantially. faced with declining sales and heavy debt burdens, For example, the value of commercial real estate sought to reduce outstanding debt. plummeted during the early 1990s, damaging an By 1993 the growth of depository credit had important source of equity and collateral for many begun to strengthen, especially at larger banks. The small businesses. At the same time, record numbers prime interest rate—a key indicator of the cost of of both commercial banks and savings and loan funds to businesses—declined from a high of associations failed as a result of asset-quality prob- 11.5 percent in February 1989 to 6.0 percent at lems. In response to those failures, regulatory year-end 1993. The banks and savings associations changes mandated by the Financial Institutions that survived the shake-out of depository institu- Reform, Recovery, and Enforcement Act of 1989 tions recovered their financial health as record and the Federal Deposit Insurance Corporation profits during 1993 and 1994 enabled them to write Improvement Act of 1991 have been implemented, off nonperforming assets. With healthy balance and supervisory and examination policies have sheets, these institutions began to ease their lending undergone important changes designed to return standards and make credit available on more favorfederally insured depository institutions to safe and able terms than had been available during 1989-92. sound conditions. Together with lower interest rates, these eased stan- Other regulatory changes implemented since dards likely expanded the availability of financial 1987 include revisions to the regulations that services to small businesses. implement the Community Reinvestment Act of 1977.2 The revisions require larger depository insti- CHARACTERISTICS OF SMALL BUSINESSES 2. The act was intended to encourage depository institutions to The 1993 National Survey of Small Business meet the credit needs of households and small businesses in the Finances (NSSBF) collected information on the local communities where the institutions are chartered. Revised regulations, adopted in April 1995, require independent banks and availability and use of credit by small and minoritysavings institutions to report the number and dollar amount of their small business loans by census tract if the institutions have more than $250 million in assets or are affiliated with holding companies with more than $1 billion in assets. For a description of the act and (April 1993), pp. 251-67; and Glenn B. Canner and Wayne its evolution during the 1980s and 1990s, see Griffith L. Garwood Passmore, "Home Purchase Lending in Low-Income Neighborand Dolores S. Smith, "The Community Reinvestment Act: hoods and to Low-Income Borrowers," Federal Reserve Bulletin, Evolution and Current Issues," Federal Reserve Bulletin, vol. 79 vol. 81 (February 1995), pp. 71-103. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 631 owned businesses. It provides detailed information organized as sole proprietorships, which accounted on the types and sources of financial services used for more than 40 percent of firms; about 30 percent by small businesses, with emphasis on the use of were organized as C corporations, 20 percent as credit. The survey also provides information on S corporations, and the remainder as partnerships. each firm's employment, assets, liabilities, equity, Firms were classified by industry with the U.S. income and expenses; on firm characteristics, government's standard industrial classification including location, organizational form, and age; (SIC) system. The majority of firms (60 percent) and on demographic characteristics of each firm's were distributed among the business services, retail primary owner, including age, education, experi- trade, and professional services industries. Only ence, ethnicity, sex, and race.3 about one in ten firms were in the primary manu- General characteristics of the small business facturing, other manufacturing, or transportation population as covered by the survey are measured industries. by firm size and age, organizational form, standard Firms less than five years old (that is, whose industrial classification, location and number of current ownership had been in place less than five offices, management, export sales, and the race, years) accounted for about 15 percent of the popuethnicity, and sex of the firm's majority owners lation, as did firms twenty-five years old or older. (table 1). More than 25 percent of firms were between five Business size is measured in three ways: the and ten years old, and the average age (not shown average number of full-time-equivalent employees in tables) was 14.5 years. for 1993, sales for 1993, and year-end 1993 assets.4 About eight in ten small businesses were located The employment size of most firms in the popula- in urban areas, with similar proportions having a tion of small businesses is near the bottom of the single office and an owner-manager. Fewer than 0-499 range. Nearly 70 percent of firms had fewer one in ten small businesses reported export sales. than five full-time-equivalent employees, about 40 percent had fewer than two, and only 3 percent had more than fifty. Race, Ethnicity, and Sex of Majority Owners Size in terms of sales and assets reveals a similar A firm was classified as being owned by individuskewness; in sales, for example, more than half of als of a specific race, ethnic group, or sex if more the firms had less than $250,000, whereas fewer than 50 percent of the ownership shares at the end than one in twenty had at least $5 million. A business can be organized as a corporation (C-type or S-type), a proprietorship, or a partnership.5 Small businesses were most commonly A partnership is a legal relationship between two or more persons for the purpose of conducting business as joint principals. Income goes directly to the partners and is taxed only at the 3. The statistics in this article are weighted to adjust for dispro- personal level. Like a sole proprietor, partners are responsible for portionate rates of sampling and response. These statistics represent the firm's liabilities. estimates of population characteristics rather than sample values. In contrast to a proprietorship and a partnership, a corporation is Sample data have been analyzed to identify and correct for errors a legal entity separate from its owners, and as such, the liability of and outliers and, except for asset and sales data, to impute missing an owner is limited to his or her equity investment. values. See the appendix for details on the methods used in the Two primary types of corporation exist: C and S. The income of survey. a C corporation is subject to the corporate tax, whereas income 4. Full-time-equivalent employment was calculated as the sum from an S corporation is not. However, ownership of an S corporaof the number of full-time employees and one-half the number of tion carries several restrictions—such as those on the number of part-time employees. Sales were reported for calendar or fiscal shareholders and on the number of different classes of stock—that 1993; a sales figure for less than a full year was converted to an do not apply to C corporations. Hence, the S form of corporation is annual figure. Assets were as of year-end calendar or fiscal 1993. designed primarily for small businesses. The preliminary data on sales and assets reported here are based In recent years, the limited liability company (LLC), a new upon the approximately 85 percent of sample firms that reported organizational form, has gained legal status in many states. LLCs such data. are similar to partnerships except that the liability of partners is 5. From a legal and financial viewpoint, a sole proprietor and his limited to their equity investment. At the time this survey was or her company are one. The income of the company flows directly conducted, however, published reports indicated that fewer than to the proprietor, and the proprietor is responsible for all liabilities 10,000 LLCs were in existence. Any such firms participating in the of the company. survey were classified as partnerships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin • July 1995 of 1993 belonged to such individuals.6 Less than owned, a category that consists of Hispanic-owned 12 percent of small businesses were minority- and nonwhite-owned firms. About 4 percent were Hispanic-owned and 8 percent nonwhite-owned. By race, about 3 percent were black-owned, 6. Fewer than ten firms reported ownership that was exactly 3Vi percent were Asian-owned, and about 1 perequally split between Hispanic and non-Hispanic individuals or between white and nonwhite individuals. In those cases, following cent were owned by American Indians or native government convention, the firms were classified as non-Hispanic- Alaskans. By sex, 22 percent of small businesses owned or as white-owned respectively. were majority-owned by females, 72 percent by males, and the remaining 6 percent by males and 1. Number and population proportion of small businesses females equally. in survey sample, distributed by selected category of Female-owned and minority-owned firms have firm, 1993 some characteristics in common that distinguish Unweighted Weighted Category number percentage in sample of population 1.—Continued All firms 5,276 100 Number of full-timeequivalent employees Unweighted Weighted 0-1 1,496 38.78 Category number percentage 2-4, 1,137 29.15 5-9 718 16.10 in sample of population 10-10 436 7.86 20-49 531 5.07 Census region of main office 50-99 482 1.75 1,020 22.58 100-499 476 1.30 New England 309 6.99 Middle Atlantic 711 15.59 Sales (thousands of dollars) Less than 25 432 12.82 Midwest 1,291 24.14 25-49 293 8.44 East North Central 871 16.04 50-99 431 11.88 West North Central 420 8.11 100-249 800 24.10 250-499 541 15.01 1,749 29.30 500-999 479 11.49 South Atlantic 864 14.68 1,000-2,499 541 8.91 East South Central 293 4.39 .........«* sit* * 369 3.63 West South Central 592 10.22 5,000-9,999 319 1.85 10,000 or more 464 j 1.87 West 1,216 23.98 Mountain 293 5.89 Assets {thousands of dott&fs} Pacific 923 18.09 Less than 25 997 32.11 25-49 366 12.48 Urbanization at main office 50-99 449 14.39 4,233 m 78.95 100-249 604 17.29 1,043 21.05 250-499 , . . . .... 407 10.51 500-999 320 5.87 Number of offices 1,000-2,499 394 4.13 One 3,928 8844..7755 2,500-4,999 233 1.43 649 1100..2211 5,000 or more 346 1.81 Three or more 699 5.03 Organizational form Export sales PPrroopprriieettoorrsshhiipp 1,747 4433..9999 Some 626 7.41 PPaarrttnneerrsshhiipp 389 8.29 4,650 92.59 SS ccoorrppoorraattiioonn 1,222 19.60 CCccoorrppoorraattiioonn ..,,....,,........ii;;.. ——........ 1,918 28.12 Owners' participation Owner management 4,251 85.25 Standard industrial classification Hired management 1,025 14.75 Construction and mining (10-19) 661177 1133..7766 Primary manufacturing (20-29) 304 3.81 Race, ethnicity, and sex OOtthheerr mmaannuuffaaccttuurriinngg ((3300--3399)) 350 4.09 of majority owners TTrraannssppoorrttaattiioonn ((4400--4499)) 210 2.78 Nonwhite or Hispanic 1,231 11.90 Wholesale trade (50-51) 487 8.07 Non-Hispanic white 4,045 88.10 1 142 22 06 Insurance agents and real estate White 4,371 ' 92.03 (60-69) 366 7.19 523 3.23 Business services (70-79) 1,038 21.82 Asian or Pacific Islander 336 3.52 Professional services (80-89) 762 16.41 American Indian or Native Alaskan ... 45 1.22 Years under current ownership Hispanic 369 4.38 0-4 777 15.30 Non-Hispanic 4,907 95.62 5-9 1,353 27.28 995 1901 1,009 22.07 15-19 729 14.49 3.995 72.29 20-24 522 8.99 Ownership equally divided by sex .... 272 5.63 25 or more 900 14.95 NOTE. See the appendix for weighting procedure. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 633 these two groups from the general population of categories: (1) liquid asset services, which are small businesses (table A.l). Both female-owned checking accounts and savings-type accounts, and minority-owned firms were somewhat smaller (2) credit lines, loans, and capital leases, which are and younger than other firms and were more con- lines of credit, mortgages, motor vehicle loans, centrated in the business services industry. Female- equipment loans, capital leases, and miscellaneous owned businesses were also more concentrated loans, and (3) financial management services, in the retail trade industry. Female-owned and which are transaction services, cash management minority-owned businesses were less likely to be in services, credit-related services, brokerage services, the construction and mining, primary manufactur- and trust and pension services.8 A fourth service ing, other manufacturing, and insurance and real category included in the survey is nontraditional estate industries. credit, which covers shareholder and partner loans, Female-owned firms had minority owners more credit card loans, and trade credit provided by often than did male-owned firms, and minority- suppliers. The data on the use of nontraditional owned businesses had female owners more often credit in 1993 are excluded from the tallies on than did nonminority-owned firms. the 1993 use of "any service," and no information One notable difference between female-owned was collected on the individual sources of such and minority-owned firms is that female-owned credit. firms (as well as the general small business popula- Overall, 96 percent of firms reported using tion) are more likely to be organized as S corpo- at least one financial service during 1993 rations than are minority-owned firms. Another (table A.2.A). In general, the use of financial serdifference is the higher concentration of minority- vices increased with firm size. Almost all firms owned businesses in urban areas. with ten or more employees or with $100,000 or Throughout this article, reported differences more in annual sales or assets used at least one among businesses must be viewed with caution financial service; at the other end of the spectrum, because standard errors have not been calculated; 8 percent of firms with fewer than two employees, without them, the statistical significance of differ- 10 percent of firms with less than $25,000 in assets, ences cannot be determined.7 and 18 percent of firms with less than $25,000 in sales used no financial services in 1993. Proprietorships were more likely to have re- TYPES OF FINANCIAL SERVICES ported using no financial services than were part- USED BY SMALL BUSINESSES nerships, S corporations, and C corporations. This seeming disparity may be attributable to the fact Use of a financial service is measured by the per- that many proprietors commingle their business centage of small businesses using a specific type or and personal finances. For example, they may use source of service. Other measures of use can be personal checking and savings accounts for busiconstructed from dollar amounts or the number of ness purposes. Interestingly, the oldest firms— accounts. Dollar measures will be available and those in business under current ownership for analyzed at a later date, but significant differences twenty-five or more years—were more likely to between results based on dollar amounts and have reported using no financial services than were results based on the percentage of firms are not firms five to nine years old. expected; the 1987 NSSBF data yielded similar conclusions when based upon either measure. The types of financial services used by small businesses can be grouped into the following broad 8. Transaction services cover the provision of paper money and coins, the processing of credit card receipts, the collection of night deposits, and wire transfers. Cash management services encompass the provision of sweep accounts, zero-balance accounts, lockbox 7. The complexity involved in calculating standard errors for a services, and other services designed to automatically invest liquid stratified random sample prevented such calculations at this pre- funds in liquid, interest-bearing assets. Credit-related services are liminary stage of data processing. Consequently, comparisons of the provision of bankers acceptances, letters of credit, and factorgroup means are not subjected to standard tests for statistical ing. Trust and pension services consist of the provision of 401(k) significance. plans, pension funds, business trusts, and securities safekeeping. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin • July 1995 Liquid Asset Services Two explanations may account for the contrary evidence reported here. Small businesses almost universally reported the First, the toppling of commercial real estate valuse of checking accounts (a liquid asset service), ues during the late 1980s and early 1990s in many which are vehicles for paying suppliers and depos- cases erased any equity against which firms could iting sales receipts. Predictably, therefore, the borrow; future comparisons of results from the reported use of liquid asset services (95 percent) 1987 and 1993 NSSBFs may shed light on the nearly matches the reported use of all financial importance of this explanation. services (table A.2.A). Second, firms may have pledged real estate as The use of savings accounts, however, reveals collateral against other types of loans. The survey some interesting differences across firm character- collected information on the collateral associated istics. Respondents were asked to include use of with lines of credit and miscellaneous loans, and any business savings account, money market further analysis of that information may clarify the account (if checking was limited), credit union importance of this explanation. share account, and certificate of deposit or other As with liquid asset services, the use of credit time deposit when considering their use of savings lines, loans, and capital leases increased with accounts. By any of the three size measures, firm size. Around 90 percent of the largest firms roughly 15 percent of the smallest firms used sav- reported using one of these types of credit, but less ings accounts, whereas around half of the largest than half of the smallest firms reported such use. firms reported such use. Proprietorships reported Both S and C corporations were more likely than using savings accounts at about half the frequency partnerships or proprietorships to report credit of all other firms. By industry, professional ser- lines, loans, or capital leases. By industry, transporvices firms and insurance and real estate firms tation firms and manufacturing firms were reported the highest incidence of savings account most likely to report credit lines, loans, or capital use, and retail trade firms and business services leases—a consequence of the asset-intensive nature firms reported the lowest incidence. By race, white- of these industries. Business services firms were owned firms were more likely to have reported least likely to report credit lines, loans, or capital using savings accounts than were black-owned and leases, probably because such firms require less Asian-owned firms. inventory and equipment than do those in other industries. The youngest firms (those under current owner- Traditional Credit: ship fewer than five years) reported nearly the Credit Lines, Loans, and Capital Leases same incidence of borrowing as did more mature firms (about 60 percent), even though depository More than half of all firms reported outstanding institutions typically require several years of financredit in the form of a credit line, a loan, or a cial history for a borrower to qualify for credit. For capital lease (table A.2.A). Lines of credit and firms older than nine, however, the use of credit motor vehicle loans were the most frequently used, lines, loans, and capital leases declines with the with each reported by one in four firms.9 rise in age. Firms under current ownership for Surprisingly, only about one in twenty small twenty-five or more years reported the lowest incibusinesses reported using funds from a mortgage dence of borrowing. for business purposes. Anecdotal evidence as well The use of credit lines, loans, and capital leases as data from the 1987 NSSBF suggest that borrow- differed somewhat by the sex, race, and ethnicity ing against hard assets such as real estate is an of firm owners. About 55 percent of male-owned important method of funding small businesses. firms reported using such credit services, compared with about 50 percent of female-owned firms; and less than 40 percent of black-owned firms reported 9. For purposes of this article, use of a credit line refers to the such use, compared with about 45-55 percent of availability of a credit line and not necessarily to the takedown of firms owned by other minority groups and 55 percredit. Survey information on outstanding credit-line balances will cent of white-owned firms. be available at a later date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 635 Some of the differences by race, ethnicity, and vices; for the professional services firms, in trust sex may be attributable to differences in other firm and pension services. The lowest use of financial characteristics, such as size. For example, the inci- management services was among construction dence of credit lines, loans, or capital leases at the firms. smallest firms is similar to that reported by black- Small businesses differ in their use of financial owned firms. Only 42 percent of firms with fewer management services by the minority status, but than two employees used a credit line, a loan, or a not by the sex, of the majority owners. Hispaniccapital lease, including 16 percent that used a line owned and nonwhite-owned firms made less use of credit. Attribution of these univariate differences of such services than did white-owned or nonto size, race, age, or a combination of these and Hispanic-owned firms; and these services were other factors is a topic for future research. used more often by black-owned firms than by Hispanic-owned firms. The disparities largely reflect differences in the use of trust and pension Financial Management Services services and transaction services. Use of at least one financial management service Nontraditional Credit: Trade Credit, Credit (see note 8) was reported by one-third of small Card Loans, and Loans from Owners businesses (table A.2.B). Use of transaction services was reported by almost one-fourth of all Besides their use of traditional types of credit such firms, whereas brokerage services were used by as credit lines, loans, and capital leases, small fewer than one in twenty. Cash management and businesses often obtain nontraditional forms of credit-related services were used by slightly more credit from suppliers of goods and services (trade firms than were brokerage services; trust and pencredit); from use of the firm's or the owners' credit sion services were used by one in ten. cards; or, in the cases of partnerships, S corpora- The use of financial management services tions, or C corporations, by borrowing from the increased with firm size, rising from 24 percent of firm's owners. firms with fewer than two employees to 76 percent Each of these nontraditional forms of credit has of firms with 100 to 499 employees. Cash managecharacteristics that make it somewhat different ment services are about as important as trust and from traditional credit lines, loans, and leases. pension services for the largest firms but less so for Trade credit and credit cards, for example, are smaller firms. generally used in conjunction with the purchase of Proprietorships used financial management sergoods, and many users view them simply as convevices much less than did firms with other organizanient methods for paying bills and, in the case of tional forms. Proprietorships have less of a need for credit cards, for tracking expenses. Loans from business-only financial services for two reasons: partners or shareholders are not arm's-length trans- They are smaller than other types of firms, and they actions, as some portion of the borrowing firm is are more likely to commingle personal and busiowned by the lender. ness accounts because there is no legal distinction between the owner and the firm. As firms age, their use of transaction services Trade Credit appears to decline, while their use of brokerage and trust and pension services appears to rise. Interest- Trade credit was used by 61 percent of small ingly, firms with fewer than five years under cur- businesses in 1993—a rate that exceeded the use rent ownership and those with more than twenty- of all other financial services except checking five years reported the identical incidence of use (table A.2.B). As with most financial services, the for financial management services. reported use of trade credit increased with the size By industry, retail trade and professional ser- of the firm. Also, minority firms were less likely to vices firms reported the most prevalent use of use trade credit than were nonminority firms, but financial management services. For retail trade, the among minority firms there was little difference in high incidence was concentrated in transaction ser- use by race or ethnicity. Female-owned firms were Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636 Federal Reserve Bulletin • July 1995 only slightly less likely to use trade credit than The age of the firm does not appear to be a key male-owned firms. factor in the use of credit cards, except among very Trade credit was most important for firms in young and very old companies. For example, firms manufacturing, wholesale trade, and retail trade— under current ownership for at least twenty-five industries in which nonlabor costs, such as those years were less likely to use personal credit cards for equipment and inventory, are large relative to than were younger firms, and firms under current labor costs. Trade credit was less important in ownership fewer than five years were less likely to insurance and real estate, business services, and use business credit cards than were older firms. professional services, where labor accounts for the largest component of costs. Loans from Owners Loans from owners (shareholders or partners) Credit Cards were reported by 17 percent of small businesses (table A.2.B).12 By definition, the 44 percent of Anecdotal evidence suggests that many small busismall businesses organized as proprietorships cannesses use credit card balances as a form of financnot have owner loans because, in their cases, busiing. In particular, firms with little experience or ness and owner are one. Among the remaining credit history—typically firms just starting out and firms (partnerships, S corporations, and C corporasmaller firms—are thought to use credit card loans tions) 30 percent reported shareholder or partner as substitutes for traditional bank loans. Indeed, loans (not shown in the table). some banks have actively promoted the use of business credit cards as a cost-effective method of Because they generally have fewer credit delivering credit lines to small businesses. Other options, smaller firms would seem more likely to banks encourage the owners of small businesses to borrow from owners than would larger firms; but in use their personal credit cards as a source of busi- fact, the incidence of owner loans increased with ness credit.10 firm size. About 10 percent or less of the smallest firms reported owner loans, whereas more than The 1993 survey, part of which focused on the 25 percent of the larger firms did so. Anecdotal use of credit cards, reveals that four in ten small evidence from depository lenders suggests, howbusinesses used personal credit cards for business ever, that smaller and younger firms are more likely purposes, and three in ten used business credit than other firms to lack sufficient equity to qualify cards (table A.2.B). As expected, smaller firms for bank loans; consequently, the owners of such were more likely to use personal credit cards for firms would be more likely to provide equity than business purposes, but larger firms were more likely to use business credit cards.11 loans. A complementary explanation is that larger firms typically are less likely to fail, so that the Proprietorships and S corporations were more riskiness of an owner loan decreases with firm size. likely than partnerships and C corporations to use The information gathered by the survey regarding personal credit cards, whereas both C and S corposize, capitalization, equity injections, and owner rations were more likely than partnerships and loans will enable researchers to analyze this topic proprietorships to use business credit cards. These in the future. findings are likely related both to size and to the limited liability of corporations. SUPPLIERS OF FINANCIAL SERVICES 10. Banks record personal credit card loans as consumer, rather USED BY SMALL BUSINESSES than commercial, loans. Typically, consumer loans are less expensive to underwrite than are commercial loans. Moreover, credit card balances usually carry much higher interest rates than do commer- The survey obtained information on both financial cial loans of comparable size. and nonfinancial sources of financial services used 11. Many issuers of business charge cards do not provide revolving credit; they require full payment of outstanding balances each month. Firms may use such cards for tracking miscellaneous expenses or for the credit that lasts for the duration of the billing 12. Loans from shareholders or partners exclude firm credit cycle. obtained with the owners' personal credit cards. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 637 by small businesses. Financial sources consist of sources, small businesses used finance companies depository institutions (commercial banks, savings most frequently, followed by brokerage firms and associations and savings banks, and credit unions) leasing companies. and nondepository sources (finance, leasing, mort- The use of nondepository financial sources bears gage, insurance, and other nondepository finan- a strong direct relation to firm size. In addition, cial companies). Among nonfinancial sources are proprietorships and partnerships used nondeposifamilies and individuals, other businesses, and tory financial services with much less frequency government.13 than did S and C corporations. Use of nondepository financial sources varies considerably by industrial classification. Transpor- Depository Financial Institutions tation firms were the most frequent users, and their use of one such source—finance companies—was About 95 percent of small businesses used deposidouble the population average. It seems likely that tory sources (table A.3.A)—the same percentage these firms were financing motor vehicle loans that used liquid asset accounts (table AAA).14 using the captive finance companies of manufactur- Among depository institutions, commercial banks ers. The high frequency with which transportation were used far more frequently than savings institufirms reported motor vehicle loans (table A.2.A) is tions or credit unions. In general, as firm size consistent with this hypothesis. Business services increased, the use of commercial banks increased firms were the least frequent users of nondeposiand the use of savings institutions and credit unions tory financial sources, and these firms also were decreased. Proprietorships, generally the smallest generally the least frequent users of any financial type of firm, were less likely than other firms to service. use commercial banks but were twice as likely as The use of nondepository financial sources difothers to use credit unions. fered by race, ethnicity, and sex. The greatest dis- Small businesses in the Northeast were twice as parities were in the use of brokerage firms, which, likely to use savings institutions as were firms in as we will see in table 2, small businesses used the other Census regions, a finding most likely primarily to obtain brokerage services, trust and attributable to the relatively large number of savpension services, and liquid asset services. Ten ings banks in New England. percent of white-owned firms used brokerage firms; The use of depository institutions shows few 3 percent of both black-owned and Hispanic-owned differences when measured by the race, ethnicity, firms and 7 percent of female-owned firms did so. or sex of the firms' majority owners, with a few These differences by race of majority owners in the notable exceptions. Firms owned by blacks and by use of brokerage firms are, however, similar to the American Indians or native Alaskans were much differences by firm size. more likely than other firms to use credit unions; and firms owned by American Indians or native Alaskans were much less likely than other firms to Nonfinancial Sources use savings institutions. Nonfinancial sources were used by 15 percent of Nondepository Financial Sources small businesses, with family and individuals and other business firms being the primary providers Nondepository financial sources were used by (table A.3.C). Only 1 percent of small businesses 29 percent of firms (table A.3.B). Among these reported using government sources.15 The use of nonfinancial sources—and among 13. The survey did not collect information on the individual them, family and individuals—declined as the age sources of nontraditional credit. 14. Because the near ubiquity of checking accounts obscures the use of other financial services at depository institutions, additional 15. This figure understates the true role of government entities appendix tables present data similar to those in table A.3, but for in providing credit to small businesses. Many, such as the Small firms using liquid asset (checking and savings) services (table A.4); Business Administration, provide credit guarantees, which assure credit lines, loans, and capital leases (table A.5); and financial repayment of small business loans made by traditional lenders such management services (table A.6). as commercial banks and thrift institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638 Federal Reserve Bulletin • July 1995 of the firm rose. Newer firms generally have diffi- of small businesses (table 2); no other source proculty obtaining funds from financial sources, in vided checking to even 10 percent of firms. Compart because these sources often require several mercial banks also were the dominant source for years of financial statements. Nonfinancial sources, savings services, far outpacing brokerage firms and especially family and individuals familiar with savings institutions. prospective borrowers, are better positioned to evaluate creditworthiness and monitor the financial condition of newer firms. Sources of Traditional Credit Commercial banks were the primary source of tra- USE OF FINANCIAL SERVICES SUPPLIERS, ditional credit.16 Other important sources of such BY SERVICE credit were finance companies, family and individuals, leasing companies, and other businesses. The data reviewed so far separately cover the finan- Commercial banks were the most frequent source cial services used by small businesses and the for credit lines, mortgages, motor vehicle loans, suppliers of such services, but the extent to which and equipment loans. Family and individuals, particular suppliers are used for particular services however, were the leading source of miscellaneous is also of interest. loans; and leasing companies, not surprisingly, were the leading source of capital leases. Sources of Asset Services Commercial banks dominated the provision of liq- 16. The survey did not collect information on the individual uid asset services, providing checking to 86 percent sources of credit cards and trade credit. Percentage of small businesses that use selected suppliers of financial services, by selected service, 1993 A. Any supplier and financial institutions Savings Credit lines, loans and capital leases Line of credit .... Equipment .. Capital lease Financial management Transaction ... Cash Credit-related . Brokerage — Trust and For notes, see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 639 Many of the demographic differences in the mated 26 percent of small businesses (table 2). use of credit lines, loans, and capital leases dis- Brokerage firms, the second most frequently used cussed above also are evident in the use of the source of financial management, were used by suppliers of these credit services. For example, the 7 percent of small businesses. Brokerage firms use of commercial banks for credit lines, loans, were the leading providers of both brokerage and or capital leases is highly correlated with firm trust and pension services, while commercial banks size (table A.5.A). Roughly one-fourth of the were the leading providers of transaction, cash smallest firms, but three-fourths of the largest management, and credit-related services. firms, used commercial banks for these credit services. The use of commercial bank credit differs a great SUMMARY deal by race and less so by ethnicity and sex (table A.5.A): About 38 percent of male-owned The 1993 NSSBF provides detailed information on and of white-owned firms reported using such the characteristics of small businesses and on the credit, compared with about 33 percent of types and sources of credit and other financial Hispanic-owned and of female-owned firms, services used by these firms. The preliminary statis- 24 percent of Asian-owned firms, and 18 percent of tics summarized in this article suggest interesting black-owned firms. Black-, Hispanic-, and female- behavior patterns and differences in the use of owned firms were more likely than other firms to credit by small businesses. report loans or leases from credit unions. Explaining these differences and, more fundamentally, understanding the factors that affect small business financing, require a rigorous analytical Sources of Financial Management Services framework that takes account of the financial characteristics of borrowers and the markets in which Commercial banks were the dominant source of they operate. Such analysis is beyond the scope of financial management services, serving an estithis article, but the complete NSSBF data will support formal study of the search for credit by 2. Percentage of small businesses that use selected suppli- small businesses as well as of the terms granted to ers of financial services, by selected service, 1993— those receiving credit. In combination with infor- Continued mation from the 1987 NSSBF, these data can pro- B. Nonfinancial suppliers vide evidence on how the changing financial landscape has affected the types and sources of credit used by small businesses. NOTE. * Number of respondents was less than fifteen, too small to calculate a reliable statistic. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin • July 1995 APPENDIX: SURVEY METHODS ing eligibility criteria then received an advance worksheet to encourage the use of written records The 1993 National Survey of Small Business in responding to the subsequent computer-assisted Finances covers a nationally representative sample telephone interviews, which were conducted by of small businesses in the United States. Conducted Price Waterhouse. The average duration of the during 1994-95 for the Board of Governors of the telephone interviews was fifty minutes. Federal Reserve System and the U.S. Small Busi- The survey collected the following types of ness Administration, the survey drew its sample information from each business: from the population of all for-profit, nonfinancial, nonfarm business enterprises that were listed in • An inventory of the firm's deposit and savings Dun's Market Identifier file and that were in accounts, financial leases, credit lines, mortgages, operation as of year-end 1992 with fewer than motor vehicle loans, equipment loans, other loans, 500 employees.17 More than 14,000 firms were and selected other financial products for each financontacted, of which about 10,200 met the definition cial service supplier used by that business of small business as used in this study. The number • The business reasons for choosing each of its of respondents used in this analysis is 5,276, for a financial institutions, the locations of the offices of response rate of about 52 percent. the financial institutions it uses for financial ser- The sample was a stratified random design with vices, the most frequent method of conducting oversampling to ensure the ability to estimate sepa- business with each institution (in person, by telerately the reporting domains of five employment- phone, or by mail), and the number of years the size groups, nine Census regions, urban or rural firm has done business with each institution location, and three minority categories regarding • Experience in the past three years in applying ownership. Because the larger and minority-owned for credit firms are only small percentages of the population • Data from each firm's income statement and of small businesses but are of special interest to balance sheet, demographic information on the researchers, the survey oversampled larger firms owners, and other characteristics of the firm such (50 to 499 employees), as well as black-owned, as the industry to which it belongs and its age Asian-owned, and Hispanic-owned firms to ensure • Information on the recent credit history of the sufficient numbers for individual analyses of these firm and its owners. groups. The results in this article were weighted to adjust for disproportionate rates of sampling and response and to permit inferences about the population of small firms. Businesses were contacted in advance of the survey to determine eligibility, verify addresses, and identify a contact person. Each business meet- 17. Dun's Marketing Service, Dun and Bradstreet, Inc. The DMI list, containing nearly 10 million businesses, is broadly representative of all businesses but does not include many of the newest start-up firms or the self-employed individuals filing business tax returns. In contrast, the Internal Revenue Service reports that for 1991 about 20 million individuals filed business tax returns, including about 13 million sole proprietorships, of which about 3 million reported less than $2,500 in annual receipts. Both the 1987 and 1993 surveys obtained lists of businesses from Dun and Bradstreet, Inc., which expanded its coverage of small, retail, and business services firms in the years between the two surveys; hence, the 1993 survey is more broadly representative of such firms, and valid comparisons between the 1987 and 1993 surveys can be made only after accounting for these differences in coverage. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 641 Appendix tables begin on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin • July 1995 A.l. Characteristics of small businesses, distributed by selected category of firm, 1993 Majority owners Number of employees AAllll SSI ffiirrmmss Non- Nonwhite Hispanic Male Female 0-1 2-4 5-19 20-49 50-499 or Hispanic white 100 100 100 100 100 100 100 100 100 100 38.78 40.24 38.58 37.22 44.27 100 29.15 30.90 28.91 29.33 28.51 S|!!g|jj|pf|j 100 . •.'" . 16.10 17.42 15.92 16.15 15.94 ... 67.19 m § 7.86 5.59 8.17 8.12 6.95 . . • 32.81 5.07 3.69 5.25 5.84 2.33 . . . 100 1.75 1.10 1.84 1.99 .91 54.36 1.30 1.07 1.33 1.36 1.08 45.64 n 12.82 14.70 12.58 10.89 20.21 26.84 6.78 1.71 1.35* .00* 8.44 13.14 7.81 7.70 11.24 17.12 5.45 .97* .00* .08* 11.88 13.77 11.63 11.85 11.98 18.25 13.42 3.53 1.31* .08* 24.10 25.31 23.93 23.75 25.42 20.73 41.45 15.38 4.30* 3.17* 15.01 12.99 15.27 15.36 13.66 8.01 19.52 24.41 5.96 2.10* 11.49 8.08 11.94 12.22 8.72 4.57 7.70 27.45 12.89 8.73 8.91 7.84 9.06 9.97 4.89 2.68 3.89 17.79 37.08 15.11 3.63 2.12 3.83 4.00 2.20 .88 .81* 5.58 21.06 18.76 1.85 1.10 1.95 2.08 .97 .35* .73* 2.16 8.55 18.73 1.87 .93 2.00 2.18 .70 .55 .27* 1.01 7.51 33.25 (thousands of dollars) Less than 25 32.11 37.71 31.39 29.73 41.33 54.11 27.36 10.96 5.17 3.32* 25-49 II 12.48 14.63 12.20 12.06 14.10 12.12 17.30 10.04 5.47* 2.23* 50-99 14.39 15.22 14.28 14.20 15.13 11.80 21.59 13.88 3.78 1.65* 17.29 15.46 17.52 17.57 16.19 10.21 20.46 27.01 14.53 5.25 10.51 6.29 11.05 11.20 7.83 6.29 8.49 18.17 20.29 7.18 sflj 5.87 5.46 5.92 6.92 1.80 2.66 2.20 12.49 17.18 10.20 4.13 2.76 4.30 4.48 2.78 1.33 1.81 5.22 21.83 23.54 1.43 .98 1.48 1.72 .27 .51 .22* .96* 7.47 19.22 5,000 or more 1.81 1.49 1.85 2.13 .57 .96 .58* 1.27* 4.27 27.41 Organisational form Proprietorship 43.99 56.40 42.31 42.38 49.65 66.31 45,35 19.23 6.22 4.71 Partnership 8.29 7.49 8.40 8.39 7,94 7.26 9.96 7.87 7.89 10.23 19.60 12.23 20.60 1983 18.81 12.38 20.88 26.49 28.97 29.35 28.12 23.88 28.69 29.40 23.60 14.06 23.81 46.40 57.01 55.71 industrial <10-19) 13.76 10.85 14.16 15.69 6.97 13.99 13.82 14,12 12.64 8.01 Primary manufacturing (20-29) 3.81 2.40 4.00 3.89 3.55 2.87 3.41 4.68 7.39 7.07 Other manufacturing (30-39) 4.09 3.53 4.16 4.47 2.74 2.66 3.03 5.99 7.69 12.05 Transportation (40-49) 2.78 2.57 2.81 2.72 2.98 1.37 3.00 4.00 6.15 3.40 Wholesale trade (50-51) 8.07 7.70 8.13 8.37 7.02 6.73 8.17 9.95 8.12 9.89 Retail trade (52-59) K 22.06 23.25 21.90 20.67 26.95 18.85 25.39 22.90 21.22 26.18 Insurance agents and real estate (60-69) .. 7.19 4.23 7.59 7.83 4.93 9.16 7.44 4.76 4.85 3.06 Business services (70-79) 21.82 29.34 20.81 19.97 28.34 29.26 1834 16.60 12.91 1630 Professional services (80-89) 16.41 16.12 16.45 16.39 16.51 15.11 17.42 17.00 19.03 14.05 jjj 15.30 23.48 14.19 14.24 19.02 16.32 17.06 13.10 9.22 13.15 27.28 29.16 27.02 26.02 31.71 29.53 28.24 25.26 19.87 18.12 10-14 19.01 17.88 19.16 18.81 19.69 17.95 20.89 18.41 20.51 17.16 15-19 14.49 12.95 14.69 15.02 12.59 13.81 13.26 16.40 17.09 14.37 20-24 «gs 8.99 6.33 9.35 9.54 7.02 8.78 8.82 8.94 10.34 11.77 25 or more 14.95 10.19 15.59 16.36 9.96 13.60 11.73 17.89 22.96 25.42 For notes, see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 643 A. 1.—Continued 4.77 10.41 13.29 22.23 95.23 93.98 89.59 86.71 77.77 Owners' participation Owner management .... 85.25 84.39 8537 85.87 83.09 92 48 86.26 77.44 75.81 59.74 Hired management 14.75 15.61 14.63 14.13 16.91 7.52 13.74 22.56 24.19 40.26 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic ... 11.90 100 11.05 14.91 12.35 12.61 11.42 8.66 8.21 Non-Hispanic white ... J 88.10 100 88.95 85.09 87.65 87.39 88.58 91.34 91.79 White 92.03 33.01 100 92.87 89.05 91.28 91.61 92.61 95.00 95.75 Black 3.23 27.14 2.85 4.57 3.88 3.42 2.72 .95 .94 Asian or Pacific Islander 3.52 29.56 3.41 3.89 3.39 3.72 3.77 3.32 1.64* American Indian or Native Alaskan 1.22 10.22 .86 2.48 1.45 1.25* .86* .73* 1.68* 4.38 36.79 4.26 4.79 4.35 4.62 4.22 3.87 3.95* Non-Hispanic 95.62 63.21 100 95.74 95.21 95.65 95.38 95.78 96.13 96.05 22.07 27.66 21.32 100 25.20 21.59 21.09 10.15 13.94 Male 72.29 68.49 72.81 92.11 71.51 71.68 70.96 82.45 82.01 Ownership equally divided by sex 5.63 3.85 5.88 7.23 .00* 3.29 6.73 7.95 7.41 4.05 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin • July 1995 A.l. Characteristics of small businesses, distributed by selected category of firm, 1993—Continued Years under current ownership Urbanizaton at main office Organizational form Category 0-9 10 or more Urban Rural Proprietorship Other All firms 100 100 100 100 100 IM offull-time-equivalent employees 0-1. 41.76 36.57 38.40 40.19 58.45 2333 2-4 . 31.02 27.76 28.58 31.29 3005 28.44 5-9. 14.36 17.39 16.18 15.82 8.48 22.09 7.23 833 8.06 7.11 2.00 12.47 3.46 6.26 5.48 3.52 .72 8.48 50-99 . 1.08 2.24 1.91 1.16 18 2.98 100-499 1.09 1.45 1.40 .91 .12* 2.22 r (thousands of dollars) Less than 25 14.74 11.40 12.56 13.78 20.67 6.69 10.22 7.10 8.27 9.05 13.94 4.13 12.26 11.59 11.51 13.24 17.24 7.68 100-249 26.00 22.68 23.69 25.57 28.45 20.69 14.49 15.39 15.50 13.18 10.97 18.17 500-999 .. 10.39 12.31 11.08 12.99 5.30 1633 1,000-2,499. 6.89 10.42 ¥ 9.24 f§ 7.71 2.76 13.73 2*500-4,999 2.41 4.54 4,09 1.95 .35 6.20 5,000-9,999 1.25 2.30 1.96 1.45 .01* 3.29 10,000 or mon U5 2.26 2.09 1.07 .31* 3.10 Assets (thousands of dollars) Less than 25 36.85 28.50 33.03 28.77 46.84 20.79 25-49 13.67 11.56 12.33 13.00 14.78 10.71 50-99 15.60 13.47 14.65 13.45 13.88 14.78 16.31 18.03 16.28 20.95 13.47 20.22 250-499 8.18 12.28 9.65 13.65 7.35 12.93 500-999 4.56 6.87 5.98 5.45 2 54 8.43 1,000-2,499 2.45 5.41 4.46 2.92 iS .62 6.83 2,500-4,999 .77 1.92 1.56 .95 .24* 233 1.60 1.96 2.07 .86 .28* 2.98 42.32 45.23 41.76 52.33 100 8.91 7.83 8.13 8.89 14.80 tion . 26.43 14.54 20.27 17.10 35.00 C corporation 22.35 32.40 29.83 21.68 50.20 Standard industrial classification Construction and mining (10-19) 12.25 14.89 13.66 14.17 14.32 13.33 Primary manufacturing (20—29) 3.35 4.15 3 70 3.88 2.86 4.55 Other manufacturing (30-39) 3,96 4.18 4.25 3.46 2.23 535 Transportation (40-49) 3.15 2.50 2.56 3.58 137 3.88 Wholesale trade (50-51) 8.76 7.57 8.45 6.67 5.08 10.42 Retail trade (52-59) 24.71 20.09 19.97 29.89 21.52 22.47 Insurance agents and real estate (60-69) 5.74 8.27 7.42 6.36 5.55 8.48 Business services (70-79) 24.04 20.18 22.07 20.88 28.13 16.87 Professional services (80-89) 14.04 18.17 17.83 11.11 18.93 14.43 Years under current 0-4 35.93 15.79 13.43 14.11 16.23 5-9 64.07 28.02 24.50 26.85 27.61 10-14 . . , 33.09 19.36 17.68 19.03 18.99 15-19 . . . 25.22 14.19 15.60 14.51 14.47 20-24 15.65 8.38 H.25 10.38 7.89 25 or more 26.03 14.26 17.54 15.12 14.81 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 645 A.l.—Continued Years under current ownership Urbanizaton at main office Organizational form CCaatteeggoorryy 0-9 10 or more ft-' Urban Rural Proprietorship Other Census region of main office Northeast New England 7.14 6.88 696 5.90 Middle Atlantic 15.33 15.78 17.80 14.23 1666 Midwest East North Central 16.16 15.94 16.10 15.78 15.10 16.77 West North Central 7.00 8.93 6.04 15.87 9.22 7.23 South South Atlantic .... 15.54 14.05 14.54 15.23 11.80 16.95 East South Central 4.17 4.56 3.20 8.86 4.18 4.56 West South Central 11.79 9.05 10.33 9.80 11.38 9.31 West Mountain 5.49 6.19 4.58 6.66 Pacific ... 17.38 18.62 20.45 21.53 Urbanization at main office Urban 81.24 77.25 100 74.95 Sard 18.76 22.75 25.05 Number of offices One 84.76 84.74 84.23 91.63 Two 10.84 9.75 10.47 6.20 Three or i 4.39 5.51 5.31 2.16 Export sales Some 8.27 6.78 8.50 3.32 3.34 None 91.73 93.22 91.50 96.68 96.66 Owners' Owner! 87.82 83.35 84.55 87.88 93.42 Hired 12.18 16.65 15.45 12.12 6.58 Race, ethnicity, and sej hite or Hispanic 14.72 9.81 13.40 6.27 15.26 lispanic white . 90.19 86.60 93.73 84.74 •ss White 93.92 91.06 95.68 Black 83J4 2.85 3.65 1.67 Asisn or Pacific Islsndcr 4.88 2.51 4.22 American Indian or Native Alaskan .. 1.88 .73 1.07 KS. 4.07 1.48 Hispanic 4.90 3.99 4.96 2.21 5.73 Non-Hispanic 95.10 96.01 95.04 97.79 94.27 Female 26.31 18.94 22.18 21.67 24.92 Male 68.60 75.03 72.51 71.49 75.08 Ownership equally divided by sex 5.09 6.04 5.31 6.85 .00* NOTE. * Number of respondents was less than fifteen, too small to calculate a reliable statistic. . . . Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin • July 1995 A.2. Percentage of small businesses using selected financial services, by selected category of firm, 1993 A. Any service; liquid asset accounts; credit lines, loans, and capital leases Liquid asset accounts Credit lines, loans, and capitalleases AAnnyy CCaatteeggoorryy sseerrvviiccee Credit Equip- Capital Any Checking Savings Any Mortgage Vehicle Other line ment lease All firms 96.00 95.14 94.70 23.94 55.48 25.54 6.18 24,09 14.00 920 11.68 Number of full-timeequivalent employees 0-1 92.01 90.40 89,60 16.98 41.87 15.75 5.72 16.85 8.10 4.42 9.37 2-4 97.77 97.42 97.19 21.48 54.51 23.37 6.08 24.49 12.31 6.92 11.81 5-9 98.88 98.45 98.05 28.47 67.04 31.59 6.14 32.12 17.62 11.99 12.74 10-19 99.78 99.02 99.02 34.79 75.89 39.55 7.45 35.35 24.74 20.18 17.69 20-49 99.24 99.24 99.20 46.67 77.83 52.64 5.44 30.43 31.40 20.28 13.22 50-99 99.12 99.04 99.04 40.47 86.16 56.38 5.55 33.10 30.07 30.39 14.10 100-499 100.00 99.74 99.74 54.11 88.46 59.53 18.99 26.44 28.84 30.25 19.17 • 1 11 Salts (thousands of dollars) Less Hub 25 81.67 78.96 76.54 12.94 26.33 9.05 2.92* 9.85 5.16 1.97* 6.98 25-49 94.22 92.73 91.80 13.26 41.52 10.77 7.41 18.78 9.93 3.13* 8.61 50-99 95.53 94.56 94.56 15.04 47.60 16.47 7.09 18.76 11.80 6.42 12.10 100-249 99.02 98.90 98.90 21.78 58.03 24.81 7.55 25.66 13.62 8.08 11.04 250-499 99.47 98.60 98.60 27.23 62.86 25.39 7.06 31.77 1733 9.75 13.26 500-999 99.92 99.09 99.09 30.92 7139 36.45 7 16 33.72 19.55 15.25 16.36 1,000-2,499 99.28 99.25 98.89 39.63 73,13 42.19 5.76 28.86 21.10 17.22 16.12 2300-4,999 98.08 98.01 97.% 41.64 80.22 63 12 2.69 33.78 22.51 23.83 12.92 5,000-9,999 99.70 99.70 99.70 45.01 83,83 69.43 4 12 29.01 25.75 21.30 17.14 10,000 or more 99.90 99.72 99.72 46.92 90.11 61.43 10.99 26.92 28.50 21.68 25.44 Assets (thousands of dollars) Less than 25 90.11 88.97 87.93 13.80 38.02 13.25 3.30 15.91 7.65 5.34 7.31 25-49 97.65 96.74 96.73 20.49 55.78 23.44 6.41 25.63 12.51 8.60 12.74 50-99 98.57 98.15 98.15 23.34 59.23 21.12 6.42 28.63 14.07 10.28 13.88 100-249 99.42 98.64 98.19 29.44 66.93 33.23 6.20 30.25 22.17 10.72 14.52 250-499 .. .. 99.89 99.89 99.19 36.09 73.66 37.99 9.18 33 32 20.74 12.32 20.46 500-999 99.41 99.41 99.41 38.23 73.55 42.72 12.52 28.44 24.35 16.05 1,000-2,499 99.63 99.36 98.21 48.61 84.90 58.42 11.59 29.74 23.22 23.96 21.78 2,500-4,999 98.98 98.84 98.84 44.28 84.56 52.75 7.52 23.41 27.11 20.96 23.61 5,000 or more 100.00 96.58 96.58 43.33 90.24 59.07 22.58 17.48 17.21 25.78 25.21 Organizational form Proprietorship 92.49 91.16 90.60 1155..8811 4466..0011 17.80 6.67 19.47 10.72 5.03 9.76 Partnership 96.93 96.24 94.63 28.02 56.53 25.12 9.54 20.94 12.31 8.06 13.76 S corporation 99.70 9935 99.18 28.43 64.73 31.37 7.09 29.14 16.92 11.86 12,95 C corporation 98.64 98,10 98.00 32.31 63.54 33.72 3.80 28.72 17.60 14.20 13.19 Standard industrial classification Construction and mining (10-19) 95.44 94.78 94.45 22.35 60.86 27.29 5.31 36.91 14.23 3.92 8.77 Primary manufacturing (20-29) 97.06 97.05 97.05 27.99 63.16 33.16 5.83 26.66 28.46 15.79 13.74 Other manufacturing (30-39) 98.02 97.83 97.78 29.25 63.11 33.71 6.95 24.66 19.60 19.34 8.81 Transportation (40-49) 96.16 95.11 93.88 25.14 68.01 27.86 5.21 36.61 22.08 19.73 12.05 Wholesale trade (50-51) . 96.61 96.28 95.93 26.66 59.16 39.50 4.98 25.79 11.69 13.33 » 15,08 Retail trade (52-59) 97.14 96.68 96.68 18.54 57.02 27.02 7.00 22.85 10.08 7 4 3 15.47 Insurance agents and real estate (60-69) .. 97.69 95.92 94.66 30.51 52.14 20.15 11.24 14.83 9.47 6.89 16.35 Business services (70-79) 93.18 91,79 91.03 20.34 47.35 16.86 5.37 21.56 15.10 6.85 8.94 Professional services (80-89) 96.88 95.81 95.34 30.62 53.57 24.93 5.32 18.73 14.63 12.27 9.13 Years under current ownership 0-4 95.54 94.60 93.84 20.66 57.54 26.22 7.91 21.31 14.56 12.90 15.78 5-9 97.52 96.47 96.18 23.25 58.75 25.73 6.45 26.09 15.94 8.77 12.05 10-14 96.48 95.68 95.08 23.98 58.63 28.55 6.41 25.06 13.24 10.03 12.57 15-19 96.25 95.41 95.15 26.09 54.09 25.47 6.48 27.10 14.01 8.16 9.44 20-24 95.06 94.66 94.33 26.84 52.67 23.58 7.58 23.61 13.58 8.48 10.15 25 or more 93.39 92.60 92.14 24.67 46.45 21.93 2.52 19.42 11.11 6.58 8.78 For notes, see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 647 A.2.—Continued A.—Continued Liquid asset accounts Credit lines, loans, and capital leases Any Category service Credit Equip- Capital Any Checking Savings Any line Mortgage Vehicle ment lease Other Census region of main office Northeast New England .. 96 26 96.26 95.78 25.42 51.76 21.70 6.18 22.13 9.88 8.04 12.41 Middle Atlantic 97.09 95.41 95.11 23.43 54.78 21.06 4.25 25.29 11.15 10.78 11.30 Midwest East North Central 95.79 95.36 94.27 25.55 51.78 23.37 8.84 23.74 12.82 6.97 9.39 West North Central 96.57 94.95 94.95 25.32 64.14 33.12 8.24 24.57 22.71 6.49 12.41 South South Atlantic .... 96.28 95.34 94.38 21.75 57.67 29.37 5.87 26.59 15.09 8.82 9.33 East South Central 98.14 96.50 96.50 17.13 65.11 32.82 9.22 27.46 16.21 8.78 12.97 West South Central 93.73 92.75 92.40 19.71 53.33 23.83 2.11 28.50 14.93 7.22 11.11 West Mountain 97.71 96.20 96.20 27.84 61.84 28.28 7.77 24.63 17.43 10.24 20.52 Pacific ... 94.86 94.86 94.81 26.30 51.95 24.62 5.87 18.40 12.14 12.66 12.48 Urbanization at main office Urban 96.04 95.25 94.79 24.44 54.41 24.49 5.65 23.65 13.03 9.77 10.85 Rural 95.85 94.72 94.34 22.06 59.49 29.50 8.20 25.74 17.65 7.05 14.81 Number of offices One 95.54 94.70 94.22 22.54 52.95 23.37 5.63 23.24 12.73 8.02 11.18 Two 98.35 96.85 96.85 26.63 63.75 32.68 8.34 27.03 18.00 13.14 12.59 Three or more ... 99.03 98.99 98.40 42.07 81.33 47.54 11.17 32.36 27.39 21.08 18.29 Export sales Some 98.41 97.17 96.79 30.66 63.01 36.17 6.91 24.30 14.23 18.51 16,51 None 95.81 94.98 94.53 23.40 54.88 24.69 6.13 24.07 13.98 8.45 11.30 Owners' participation Owner management . 95.62 94.72 94.27 22.82 54.53 24.37 6.17 24.06 13.46 8.47 11.89 Hired management... 98.20 97.57 97.15 30.42 60.96 32.29 6.26 24.26 17.16 13.41 10.48 Race, ethnicity, and sex NNoonnwwhhiittee oorr HHiissppaanniicc ........ 95.32 93.76 92.27 21.18 47.10 19.02 4.59 21.62 12.82 6.58 11.31 NNoonn--HHiissppaanniicc wwhhiittee 96.09 95.32 95.02 24.31 56.61 26.42 6.40 24.42 14.16 9.55 11.73 White 96.08 95.26 94.92 24.24 56.65 26.51 6.23 24.56 14.14 9.46 11.72 Black 93.91 91.24 89.93 19.25 38.55 14.97 5.78 18.59 14.10 5.27 7.82 Asian or Pacific Islander . 96.92 96.47 94.90 19.82 44.12 14.79 5.20 16.28 9.41 8.79 14.18 American Indian or Native Alaskan 92.81 92.81 89.85 25.89* 45.14 11.25* 6.41* 25.49* 1166..3388** 00..7766** 1111..8822** Hispanic 94.27 92.37 91.37 22.17 54.64 26.95 2.47 27.06 13.34 6.73 11.09 Non-Hispanic 96.08 95.27 94.85 24.02 55.52 25.48 6.35 23.95 14.03 9.31 11.71 Female 95.52 93.83 93.47 22.42 51.12 19.62 6.83 21.89 11.90 7.45 12.28 Male 95.92 95.37 94.87 24.02 56.27 26.94 5.75 24.19 14.58 9.55 11.45 Ownership equally divided by sex 98.94 97.30 97.30 28.86 62.46 30.81 9.18 31.41 14.90 11.49 12.36 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin • July 1995 A.2. Percentage of small businesses using selected financial services, by selected category of firm, 1993—Continued B. Financial management Financial management MEMO: Nontraditional credit Category TTrruusstt LLooaann Credit card TTrraannss-- CCrreeddiitt-- TTrraaddee AAnnyy CCaasshh BBrrookkeerraaggee aanndd ffrroomm aaccttiioonn rreellaatteedd ccrreeddiitt ppeennssiioo , nn oowwnneerr Personal Business All firn 35.11 23.03 5.19 4.56 4.30 9.71 16.67 39.22 27.63 60.77 Number of full-time- 0-1 23.83 14.78 3.09 2.24 2.72 5.72 9.44 40.55 20.64 49.93 2-4 ... 34.85 25.05 3.22 4.04 3.51 8.16 14.59 39.97 24.74 62.82 5-9 ... 42.16 27.90 6.13 4.98 4.89 9.73 25.33 41.90 39.42 69.64 10-19 . 49.05 32.23 6.28 8.88 8.41 14.58 29.63 36.11 34.53 73.40 20-49 . 57.40 34.34 12.60 7.37 8.80 24.64 27.61 30.43 40.84 74.14 50-99 . 67.32 29.88 21.20 17.09 12.50 36.20 29.11 22.85 46.07 72.25 100-499 75.55 54.48 43.36 26.24 8.05 39.90 34.14 24.80 37.13 84.31 (thousands of dollars) Less than 25 15.91 9.96 2.76* 1.02* 2.43* 2.62* 7.96 36.47 10.28 35.67 25-49 21.05 12.21 2.58* 1.68* 2.03* 4.93* 7.55 48.83 21.26 51.79 50-99 26.02 15.58 1.33* 2.85* 2.%* 6.97 10.25 43.75 23.59 55.69 100-249 33.60 25.71 2.67 3.24 2.73 7.14 14.54 41.49 26.43 64.32 250-499 43.84 31.41 5.02 4.33 4.44 9.26 18.87 39.71 34.15 70.95 500-999 44.50 29.58 3.96 5.13 5.82 10.23 26.19 37.91 35.23 74.04 1,000-2,499 48.49 31.15 9.54 6.94 5.70 15.32 25.88 35.09 42.31 71.46 2,500-4,999 55.89 22.71 11.66 12.68 13.68 26.05 32.03 31.52 44.26 75.81 5,000-9,999 71.38 41.49 19.66 12.08 10.19 38.37 41.04 25.74 41.90 76.35 10,000 or more ...... 86.44 57.38 47.27 31.83 19.06 52.36 25.70 22.25 37.52 74.28 Assets (thousands of dollars) Less than 25 23.43 15.22 2.13 1.24* 2.61 6.05 10.41 41.61 19.63 49.20 25-49 34.87 24.53 2.84* 3.83 2.91* 8.61 13.66 47.83 31.38 59.53 50-99 36.22 27.42 3.73 3.09 2.86* 7.05 16.34 40.80 28.78 68.34 100-249 44.87 29.23 5.25 5.28 6.60 11.39 22.93 46.70 34.81 69.77 250-499 42.22 29.66 5.05 5.15 5.19 11.49 23.43 35.18 32.97 71.27 500-999 47.81 30.09 8.49 6.27 7.85 14.43 26.63 32.84 43.42 69.12 1,000-2,499 56.91 29.87 14.05 15.72 8.65 24.02 29.11 31.30 37.49 74.10 2,500-4,999 81.13 42.65 32.72 19.54 12.85 44.59 29.95 21.76 36.74 77.41 5,000 or more 68.54 42.36 34.45 20.70 20.47 36.56 30.66 22.13 30.88 67.21 Organizational form Proprietorship 26.25 17.72 3.26 2.03 2.27 6.33 40.72 21.85 52.62 36.04 25.08 5.84 6.33 6.44 6.87 16.17 34.55 23.94 68.42 40.42 26.70 6.71 6.22 5.25 10.30 36.30 43.82 33.53 68.08 C corporation 44.99 28.16 6.95 6.82 6.17 15.41 29.22 • 35.05 33.64 66.16 Standard industrial classification Construction and mining (10-19) 19.38 9.30 2.25 3.44 2.26 6.75 13.46 37.07 31.94 71.60 Primary manufacturing (20-29) 26.43 18.20 5.83 3.91 3.21 7.72 21.74 35.86 25.87 77.94 Other manufacturing (30-39) 34.97 18.57 8.09 10.03 4.08 13.18 34.00 41.54 36.21 78.07 Transportation (40-49). 38.57 26.37 11.44 8.68 5.26* 8.91 26.90 43.47 26.01 52.60 Wholesale trade (50-51) 37.82 22.70 6.78 7.72 4.70 12.80 26.43 36.71 33.70 72.46 Retail trade (52-59).... 45.73 37.71 6.13 5,26 2.82 5.03 19.45 34.84 22.37 65.71 Insurance agents and real estate (60-69) 33.09 13.61 7.53 4.29 9.29 10.60 15.98 38.81 22.77 39.98 Business services (70-79) 27.19 20.99 2.40 2.67 2.24 4.99 11.04 38.90 21.55 53.01 Professional services (80-89) 45.57 23.47 6.36 3.71 8.49 22.56 11.41 48.26 36.87 51.80 Years under current ownership 0-4 34.03 25.00 4.55 6.94 2.78 6.27 20.64 39.05 23.01 58.94 5-9 35.12 24.60 3.75 3.77 2.80 8.66 18.39 41.03 28.08 62.59 10-14 37.84 24.09 5.79 4.78 4.92 10.79 17.07 41.13 30.92 61.09 15-19 33.71 23.96 4.39 3.23 3.93 9.23 14.46 39.57 27.13 63.81 20-24 35.22 20.18 7.16 4.69 5.89 11.19 10.54 40.19 27.17 62.81 25 or more 34.03 17.61 7.30 4.50 7.19 13.33 14.82 32.76 28.11 54.72 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 649 A.2.—Continued B.—Continued Financial management MEMO: Nontraditional credit Category TTrruusstt LLooaann | Credit card AAnnyy TT aacc rr tt aa ii nn oo ss nn -- CCaasshh CC rree rr ll ee aa dd ttee iitt dd -- BBrrookkeerraaggee ppee aa nn nn ss dd iioo nn oo ff ww rroo nn mm eerr Personal Business TT ccrr rr ee aa dd dd ii ee tt Census region of main office Northeast New England 33.36 23.86 4.12 4.28 2.65 10.49 16.59 38.17 2638 59.55 Middle Atlantic 36.54 24.18 4.65 3.86 4.37 10.75 18.81 38.69 2826 64.34 Midwest East North Cental ... 37.77 24.11 6.13 3.49 6.04 11.20 16.34 37.59 25.09 59.64 West North Central 34.95 22.66 6.32 4.87 4.77 I 9.52 10.40 43.16 24.39 57.19 South South Atlantic 37.73 22.78 7.09 5.99 4.58 11.22 22.97 40.47 29.28 60.99 East South Central ... 32.16 18.92 3.92 6.78 2.55* 7.79 18.79 30.72 28.03 63.95 West South Central 30.05 20.98 4.36 4.91 2.24 6.42 14.99 35.75 25.94 55.56 We* Mountain 37.75 27.36 4.21 5.37 5.09 9.53 15.32 38.18 36.76 58.50 Pacific .. 32.86 21.86 4.28 3.91 | 4.21 8.42 13.73 43.14 27.83 63.49 Urbanization at main office Urban 35.00 22.93 4.82 4.34 4.70 10.37 17.25 40.30 28.67 60.39 Rural 35.51 23.39 6.59 5.38 2.79 7.20 14.50 35.20 23.74 62.18 Number of offices One 32.43 21.36 4.26 3.82 3.90 8.34 15.25 38.77 25.92 58.84 Two 45.72 29.07 6.57 5.94 5.53 13.90 22.10 43.60 36.01 71.02 Three or more ... 58.76 38.79 17.99 14.14 8.53 24.23 29.68 38.00 39.49 72.44 Export sales None 33.78 22.17 4.82 3.70 4.02 9.27 15.25 38.31 26.44 60.08 Some 51.78 33.70 9.78 15.32 7.79 15.13 34.47 50.69 42.58 69.33 Owners' participation Owner management . 32.98 21.51 4.65 3.99 4.14 8.44 16.21 4023 27.00 59.81 Hired management — 47.44 31.78 8.33 7.84 5.20 17.04 19.35 33.40 31.26 66.29 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic .. 25.64 18.05 4.05 4.14 1.76 3.88 13.75 35.84 26.29 51.42 Non-Hispanic white ... 36.39 23.70 5.34 4.61 4.64 10.49 17.07 39.68 27.81 62.03 White 35.74 23.38 5.16 4.54 4.49 10.16 16.99 39.60 28.02 61.65 Black 26.66 19.98 5.69 234 1.88* 2.24 9.40 34.30 27.91 4939 Asian or Pacific Islander . 31.72 18.55 5.12 5.63 2.79* 8.11 15.76 37.83 15.92 51.58 American Indian or Native Alaskan 20.09* 17.37* 6.22* 8.26* 0.20* 0.20* 14.01* 28.44 30.79 50.05 Hispanic 20.13 15.77 0.98* 2 55* 1.11* 2.33* 13.72 35.26 30.32 51.16 Non-Hispanic 35.80 23.36 5.38 4.65 4.44 10.04 16.81 39.41 27.51 61.21 Female 33.03 24.88 3.91 3.77 3.31 6.03 15.38 42.35 27.61 58.89 Male 35.49 22.14 5.56 4.93 4.51 11.23 15.95 37.72 27.71 60.46 Ownership equally divided by sex 38.34 27.16 5.43 2.84 5.46 4.59 31.01 46.27 26.65 72.07 NOTE. Memo items are excluded from the data in the first column of table A.2.A, "any service." * Number of respondents was less than fifteen, too small to calculate a reliable statistic. . . . Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin • July 1995 A.3. Percentage of small businesses that use selected suppliers of financial services, by selected category of firm, 1993 A. Any supplier, any financial institution, and depository institutions Financial institution Depository AAAAnnnnyyyy CCCCaaaatttteeeeggggoooorrrryyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any institution union All firms 96.00 95.25 94.81 87.76 15.44 11.67 4.25 Number of full-time-equivalent employees 0-1 92.01 90.67 90.17 80.51 16.67 12.73 4.44 2-4 97.77 97.35 96.88 89.86 16.03 10.20 6.42 5-9 98.88 98.70 98.26 92.86 15.27 12.86 2.96 10-19 99.78 99.13 98.67 95.50 13.02 11.63 1.51* 20-49 99.24 99.19 99.08 97.20 10.02 9.85 0.39* 50-99 99.12 97.95 97.95 96.11 8.14 6.81 1.47* 100-499 100.00 99.86 99.86 98.56 13.40 12.47 1.25* Sales (thousands of dollars) Less than 25 81.67 81.00 80.02 68.80 15.38 11.35 4.32 25-49 94.22 92.59 - 91.94 79.47 19.04 13.37 6.35 50-99 95.53 95.18 94.50 83.62 19.35 12 89 6 81 100-249 99.02 98.96 98.59 91.31 16.54 12.16 5.22 250-499 99.47 98.78 98-73 93.51 16.62 12.55 4.74 500-999 99.92 99.33 ; 98.93 96.60 11.91 10.10 1.92* 1,000-2,499 99.28 98.98 98.57 97.14 9.49 8.48 1.00* 2,500-4,999 98.08 97.77 96.89 93.46 11.16 10.41 0.83* 5.000-9,999 99.70 99.35 99.35 98.89 11.55 10.90 1.33* 10,000 or more 99.90 99.63 99.63 96.68 11.14 8.81 2.48* Assets (thousands of dollars) Less than 25 90.11 89.25 88.97 77.92 16.74 12.29 4.75 25-49 97.65 97.65 97.33 87.98 16.77 13.32 3.89 50-99 98.57 98.56 97.65 94.46 13.29 10.15 3.49 100-249 99.42 99.17 98.43 94.22 13.97 9.44 5.19 250-499 99.89 99.82 99.82 96.51 13.26 9.39 3.93 500-999 99.41 99.41 99.41 95.10 18.44 16.81 1.64* 1,000-2,499 99.63 99.63 99.63 95.37 14.14 13.49 0.94* 2,500-4,999 98.98 98.98 98.98 97.51 7.03 5.84 1.19* 5,000 or more 100.00 100.00 96.68 96.35 13.48 13.34 0.30* Organizational form Proprietorship 92.49 91.32 90.80 80.53 18.43 13.07 6.00 Partnership 96.93 96.68 96.29 88.99 17.30 14.45 3.22* S corporation 99.70 99.18 98.73 94.31 13.82 10.71 3.74 C corporation 98.64 98.26 97.91 94.13 11.36 9.34 2.17 Standard industrial classification Construction and mining (10-19) 95.44 95.21 94.72 85.14 17.85 12.39 6.42 Primary manufacturing (20-29) 97.06 96.23 96.07 84.55 18.51 15.06 4.37* Other manufacturing (30-39) 98.02 97.06 97.06 90.37 16.64 13.63 3.02* Transportation (40-49) 96.16 96.14 94.98 89.96 11.99 7.90* 4.09* Wholesale trade (50-51) 96.61 96.27 96.27 92.62 7.87 5.97 1.90* Retail trade (52-59) 97.14 96.51 96.36 89.65 16.26 12.82 4.09 Insurance agents and real estate (60-69) ... 97.69 96.75 95.91 88.53 19.22 13.73 6.19 Business services (70-79) 93.18 92.01 9L60 84.17 14.90 12.08 3.36 Professional services (80-89) 96.88 95.94 94.98 89.16 14.68 10.27 4.43 Tears under current ownership 0-4 95.54 94 41 94,37 87.30 15.93 11.01 5.22 5-9 97.52 96.87 95.91 87.16 17.44 13.59 4.62 10-14 96.48 95.62 95.03 86.13 18.80 12.97 6.06 15-19 96.25 95.51 95.27 90.28 12.14 10.02 2.63 20-24 95.06 95.00 94.99 87.70 14.01 11.93 3.16* 93.39 92.63 92.42 88.97 11.09 8.66 2.49 For notes, see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 651 A.3.—Continued A.—Continued Any Category supplier Any Thrift Commercial Any bank Savings Credit Any institution region of main office 96.26 95.77 95.77 97.09 96.21 95.37 Midwest East North Central 95.79 95.35 95.13 West North Central 96.57 95.78 95.32 South South Atlantic .... 96.28 95.75 95.31 East South Central 98.14 96.67 96.67 West South Central 93.73 92.25 91.57 West : • • Mountain 97.71 97.20 97.20 12.69 4.34+ 94.86 94.23 93.64 17.® 12.46 Urbanization at main office Urban 96.04 95.24 94.76 87.49 12.18 Rural 95.85 95.31 95.00 88.74 9.79 Number of offices One 95.54 94.70 94.33 86.85 15.39 11.45 Two 98.35 98.19 97.02 90.66 17.36 14.50 Three or more 99.03 98.69 98.45 97.09 12.38 9.66 Export sales Some 98.41 98.30 97.68 92.10 14.90 13.11 1.83* None 95.81 95.01 94.58 87.41 15.48 11.56 4.44 Owners participation as Owner management .. 95.62 94.96 86.83 12.54 4.56 Hired i 98.20 96.94 93.09 6.69 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic 95.32 94.31 93.55 84.40 11.38 Non-Hispanic white . 96.09 95.38 94.98 88.21 11.71 White 96.08 95.39 94.95 88.12 11.67 Black 93.91 91.44 90.26 77.85 13.68 Asian or Pacific Islander 96.92 96.15 95.97 87.63 12.87 American Indian or Native Alaskan 92.81 92.81 92.81 86.94 3.60* Hispanic 94.27 93.80 92.75 83.57 10.46 Non-Hispanic 96.08 95.32 94.90 87.95 11.73 95.52 94.25 93.38 84.37 11.89 Male 95.92 95.29 94.93 88.25 15.09 11.62 Ownership equally divided by sex 98.94 98.79 98.79 94.71 15.71 11.58 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin • July 1995 A.3. Percentage of small businesses that use selected suppliers of financial services, by selected category of firm, 1993—Continued B. Nondepository financial institutions Any Category nondepository c F o i m na p n a c n e y Brokerage c L om ea p si a n n g y Other financial All firms 28.66 12.93 9.50 7.56 3.50 Number of full-time-equivalent employees <M 18.69 7.80 6.36 3.52 22..8899 2-4 25.60 11.85 7.91 6.61 2.57 5-9 :v: 36.13 -III 16.38 11.87 10.20 3.25 10-19 52.36 26.03 15.46 16.13 5.36 20-49 44.52 19.33 18.34 14.70 6.70 50-99 56.18 27.29 19.62 19.72 8.88 100-499 60.19 23.57 25.46 20.83 14.40 Sales (thousands of dollars) Less than 25 12.71 6.22 3.91 1.82* 00..8899** 25-49 17.00 6.76 5.14 2.94* 2.69* 50-99 19.73 9.40 6.74 3.91 1.27* 100-249 25.10 11.73 6.75 7.24 2.80 250-499 35.41 16.47 11.02 9.30 4.19 500-999 40.92 19.65 13.31 12.42 4.62 1,000-2,499 42.21 16.98 15.08 12.89 4.48 2,500-4,999 54.04 25.11 23.92 15.65 7.14 5,000-9,999 49.37 21.79 23.36 10.67 7.91 10,000 or more 59.01 27.34 29.32 16.21 16.65 Assets (thousands of dollars) Less than 25 18.70 8.82 6.81 3.18 11..0044 25-49... 28.36 16.56 6.57 6.57 2.36* 50-99.... 28.76 11.68 6.80 11.81 3.89 100-249 36.54 16.33 13.91 9.38 3,02 250-499 34.38 13.11 12.89 10.09 5.43 500-999 39.61 20.15 10.15 12.42 5.05 1,000-2,499 51.18 20.68 23.35 11.97 8.00 2,500-4,999 65.09 30.26 29.07 18.30 17.08 64.50 23.24 34.42 12.98 20.24 OOrrggaanniizzaattiioonnaall ffoorrmm PPrroopprriieettoorrsshhiipp 19.65 88..4411 55..7744 44..5522 22..8877 Partnership 26.00 7.82 10.40 6.78 3.37 S corporation 35.58 18.16 10.70 10.13 4.71 C corporation 38.72 17.85 14.28 10.75 3.67 Standard industrial classification Construction and mining (10-19) 25.06 17.10 44..6688 44..3322 22..0099 Primary manufacturing (20-29) 35.44 18.76 7.57 11.35 4.19 Other manufacturing (30-39) 32.68 13.24 9.12 10.25 4.40 Transporation (40-49) 43.90 25.90 13.05 9.67 4.23 Wholesale trade (50-51) 32.25 14.37 13.81 8.23 3.43 Retail trade (52-59) 25.38 14.41 4.84 5.64 4.52 Insurance agents and real estate (60-69) 29.65 6.87 12.64 5.63 8.57 Business services (70-79) ... — 21.53 9.24 5.92 7.75 1.99 Professional services (80-89) 38.20 10.64 21.01 11.24 2.60 Years under current ownership 0-4. 27.38 14.47 5.63 8.06 3.09 S-9 29.49 14.18 8.69 8.88 3.07 10-14 30.64 13.25 10.88 8.54 3.46 15-19 29.01 13.42 10.91 6.25 3.17 20-24 27.19 12.48 10.49 6.10 3.44 25 or more 26.47 8.45 1123 5.56 5.09 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 653 A.3.—Continued B.—Continued Census region of main office Northeast ROTHM New England Middle Atlantic Midwest East North Central West North Central South South Atlantic 31.08 14.59 10.64 7.24 3.71 East South Centra] 9.01 5.15 9.00 1.91* West South Central 2670 6.90 6.31 2.80 West Mountain 25.53 9.04 9.10 3.28* Pacific 30.34 9.53 10.56 3.75 Urbanization at main office Urban 30.71 10.59 8.45 3.62 Rural 20 46 5.41 4.23 3.03 Number of offices One 26.77 6.66 3.12 35.41 9.95 4.36 Three or more 46.80 17.87 8.13 Export sales Some 39.79 10.87 5.46 None 27.77 7.30 3.34 Owners' participation Owner management .. 12.63 8.91 7.08 3.19 Hired management 14.66 12.92 10.35 5.25 Race, ethnicity, and sex of majority < Nonwhite or Hispanic 21.23 11.57 3.96 6.44 2.75 29.66 13.11 10.25 7.71 3.60 White 29.55 9.94 7.74 3.54 17.05 3.23 3.48 3.05 Asian or Pacific Islander 19.94 5.84 6.66 3.87* American Indian or Native Alaskan 3.59* 7.86* 0.56* Hispanic 2.69* 7.62 2.56* Non-Hispanic 9.81 7.56 3.54 Female 7.44 6.92 3.10 Male 10.18 7.50 3.63 Ownership equally divided by sex 8.88 10.84 3.43* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin • July 1995 A.3. Percentage of small businesses that use selected suppliers of financial services, by selected category of firm, 1993—Continued C. Nonfinancial suppliers Any Family and nonfinancial individuals 4.95 8.53 9.52 10.39 14.26 18.01 15.96 8.87 25-49 13.88 50-99 17.05 100-249 16.44 250-499 14.65 500-999 21.12 1,000-2,499 17.31 2,500-4,999 20.34 5,000-9,999 17.49 10,000 or more 30.04 Assets (thousands of dollars) Less than 25 12.26 25-49 15.71 50-99 . 19.85 19.36 20.77 16.67 1,000-2,499 18.70 2,500-4,999 23.05 5,000 or more 26.96 Organizational fortn Proprietorship 13.20 7.29 15.80 6.71 17.96 16.98 9.59 Standard industrial classification Construction and mining (10-19) 13.15 8.88 Primary manufacturing (20-29) 21.14 9.48 Other manufacturing (30-39) 14.66 6.90 Transportation (40-49) 18.07 8.71* Wholesale trade (50-51) 18.75 10.18 Retail trade (52-59) 17.44 9.44 Insurance agents and real estate (60-69) 12.51 8.49 Business services (70-79) 14.52 7.45 Professional services (80-89) 13.81 5.71 Years under current ownership 0-4 22.49 5-9 17.20 10-14 15.16 15-19 13.89 20-24 11.51 25 or more 9.05 2.62 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 655 A.3.—Continued C.—Continued My Family and Other Category Government Unknown nonfinancial individuals businesses Census region of main office Northeast New England 18.14 10.17 8.90 .90* 1.69* Middle Atlantic 6.75 7.12 .33* Midwest East North Central 12.26 6.16 6.96 .12* 2.22 West North Central 19.93 10.55 10.76 1.27* 2.20* South South Atlantic .... 14.92 6.67 8.74 .92* 2.44 East South Central 14.93 8.36 7.26 .14* 1.57* West South Central 11.91 5.24 7.24 .60* 3.24 West Mountain 22.49 14.70 7.78 1.24* 2.66* Pacific ... 17.43 10.12 8.17 .12* 2.38 Urbanization at main office Urban 15.39 7.96 8.32 .50 2.48 Rural 15.50 9.04 6.81 .68* 1.99 Number of offices One 14.76 7.93 7.51 .58 2.09 Two 16.62 8.83 8.79 .10* 3.41 Three or more ... 23.94 11.12 14.55 68* 5.16 Export sales Some 20.15 10.16 10.76 1.46 3.35 None 15.03 8.03 7.78 .46 2.30 Owners' participation Owner management 15.17 8.49 7.55 .44 2.02 Hired management 16.81 6.42 10.58 1.06 4.44 Race, ethnicity, and sex of majority Nonwhite or Hispanic 15.10 8.05 7.48 .75 3.23 Non-Hispanic white 15.45 8.20 8.07 .51 2.26 W" White 15.43 8.19 8.06 .50 2.25 Black 13.80 6.60 6.76 1.89* 5.22* Asian or Pacific Islander 18.72 9.23 10.34 .26* 2.09* American Indian or Native Alaskan 8.87* 8.87* .00* .00* 5.26* Hispanic 14.77 7.78 7.83 .58* 2.13* Non-Hispanic 15.44 8.20 8.01 .53 2.39 Female 16.28 10.03 7.21 .88* 2.18 Male 14.97 7.41 8.34 .45 2.51 Ownership equally divided by sex 17.61 10.89 6.70 .23* 1.37* NOTE. * Number of respondents was less i fifteen, too small to calculate a reliable statistic. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin • July 1995 A.4. Percentage of small businesses that have liquid asset accounts at selected suppliers of financial services, by selected category of firm, 1993 A. Any supplier, any financial insitution, and depository institutions Financial institution Depository AAAAnnnnyyyy CCCCaaaatttteeeeggggoooorrrryyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any institution union All firms 95.14 94.48 94.07 85.86 12.00 9.68 235 Number of full-time-equivalent employees HHHHHH| Wmmmmfi 0-1 90.40 89.49 89.11 78.35 13.39 10.70 2.95 2-4 97.42 96.82 96.55 88.41 12.39 9.12 3.50 5-9 98.45 98.05 97.61 90.72 11.05 9.60 1.71* 10-19 99.02 98.66 97.86 93.77 10.08 9.11 1.09* 20-49 99.24 99.06 98.23 95.51 7.62 7.62 .18* 50-99 99.04 97.74 97.74 95.90 6.03 5.55 .60* 100-499 99.74 98.74 98.74 93.50 10.22 9.89 .52* Sales (thousands of dollars) Less than 25 78.96 78.96 7788..6677 67.30 13.95 10.50 3.45 25-49 92.73 91.59 91.58 77.18 15.70 11.86 3.85* 50-99 94.56 94.23 94.23 81.31 15.62 11.00 4.98 100-249 98.90 98.62 98.04 89.74 12.16 10.04 2.40 250-499 98.60 97.65 97.40 90.71 12.48 9.15 3.64 500-999 99.09 99.09 98.33 94.90 7.40 7.33 .16* 1,000-2,499 99.25 98.81 98.40 96.% 7.15 6.70 .45* 2,500-4,999 98.01 96.60 96.60 92.10 8.72 8.53 .19* 5,000-9,999 99.70 99.35 99.35 98.67 7.45 7.16 .86* 10,000 or more 99.72 99.46 97.24 94.07 9.09 6.85 2.38* Assets (thousands of dollars) Less than 25 88.97 88.56 88.37 75.64 14.40 11.00 3.53 25-49 96.74 96.74 96.42 85.91 13.57 ! 10.73 2.84* 50-99 98.15 97.84 97.41 92.98 8.31 7.06 1.25* 100-249 98.64 98.13 97.13 91.66 10.25 7.03 3.29 250-499 99.89 99.82 99.82 95.98 10.51 7.62 2.89* 500-999 99.41 99.41 99.41 93.76 15.14 14.41 .74* 1,000-2,499 99.36 99.36 99.36 95.03 9.35 9.30 .34* 2,500-4,999 98.84 98.84 98.84 97.02 4.12* 3.70* .43* 5,000 or more 96.58 96.58 93.97 93.52 9.29 9.16 .30* Organizational form Proprietorship 91.16 90.29 90.04 7788..6633 14.82 11.42 3.75 Partnership 96.24 95.96 94.59 84.57 14.69 12.38 2.30* S corporation 99.35 98.62 98.27 92.62 9.% 8.54 1.62 C corporation 98.10 97.69 97.30 92.84 8.23 6.% 1.40 Standard industrial classification Construction and mining (10-19) 94.78 9944..3333 9944..0066 8822..8811 14.41 10.60 4.12 Primary manufacturing (20-29) 97.05 95.50 95.35 81.98 14.54 12.97 2.50* Other manufacturing (30-39) 97.83 96.60 95.81 89.11 11.04 8.24 2.81* Transportation (40-49) 95.11 94.86 91.21 86.44 7.54* 7.21* .33* Wholesale trade (50-51) 96.28 95.66 95.21 90.63 6.03 4.39 1.65* Retail trade (52-59) 96.68 96.03 96.03 87.66 12.70 10.69 2.13 Insurance agents and real estate (60-69) 95.92 95.09 94.63 86.90 15.12 11.88 3.94* Business services (70-79) 91.79 91.44 91.44 83.21 11.81 10.12 2.05 Professional services (80-89) 95.81 94.87 93.91 86.71 11.26 8.64 2.63* Years wuJer current ownership 0-4 94.60 93.96 9933..6622 8855..5588 10.97 8.74 2.22* 5-9 96.47 95.98 95.11 84.57 14.34 11.55 3.10 10-14 95.68 94.85 94.25 84.41 14.35 10.40 4.18 15-19 95.41 94.68 94.68 88.66 9.64 8.33 1.30* 20-24 94.66 94.21 94.20 86.10 1131 10.68 1.91* 25 or more 92.60 91.74 91.74 87.48 8.39 7.04 1.42* For notes, see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 657 A.4.—Continued A.—Continued Financial nstitution Depository AAAAnnnnyyyy CCCCaaaatttteeeeggggoooorrrryyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any institution union Census region of main office Northeast New England 96.26 95.77 95.77 68.17 35.77 32.79 3.12* Middle Atlantic 95.41 95.25 94.47 87.65 11.30 10.83 .75* ^^^^^^ Midwest East North Central 95.36 95.15 94.49 84.72 12.73 9.17 3.98 West North Central 94.95 93.71 93.71 88.13 8.89 5.18 3.71* South South Atlantic 95.34 94.77 94.76 90.14 8.49 7.54 .96* East South Central 96.5Q 95.76 95.76 89.98 6.06* 4.42* 1.64* West South Central 92.75 90.99 90.32 85.47 5.85 3.96 1.97* West Mountain 96.20 95.78 95.78 90.91 7.31 3.73* 3.58* Pacific 94.86 94.04 93.46 85.25 13.45 10.41 3.62 utZizaHmatmain0^ce. 95.25 94.67 94.17 85.72 12.14 10.08 2.35 94.72 93.73 93.73 86.38 11.48 8.21 3.32 Number of offices One 94.70 94.01 93.63 85.07 12.05 99..6688 22..6644 Two 96.85 96.37 95.65 87.37 12.90 10.52 2.37* Three or more 98.99 98.53 98.41 96.05 9.38 7.94 1.49* Export sales y _ ^' - Some 97.17 96.91 96.47 90.00 9.89 88..7722 11..2200** None 94.98 94.28 93.88 85.53 12.17 9.76 2.66 Owners' participation 94.72 94.13 93.70 84.77 12.85 1100..3311 2.81 Hired management 97.57 96.45 96.24 92.16 7.09 6.03 1.09* Race, ethnicity, and sex of majority owners iiiiiiiiillillltiP Nonwhite or Hispanic 93.76 92.73 92.72 83.71 12.07 99..3355 3.15 95.32 94.71 94.26 86.15 11.99 9.73 2.47 White 95.26 94.64 94.21 86.09 11.98 9,72 2.46 Black 91.24 88.83 88.79 77.77 12.60 8.96 4.94* Asian or Pacific Islander 96.47 95.79 95.79 86.84 13.05 11.37 1.68* American Indian or Native Alaskan 92.81 92.81 92.81 86.94 9.27* 3.60* 5.87* Hispanic 92.37 91.73 91.73 82.37 12.44 962 2.99* Non-Hispanic 95.27 94.60 94.18 86.02 11.98 9.69 2.53 Female 93.83 92.91 92.44 82.64 13.72 10.31 3.84 Male 95.37 94.78 94.37 86.61 11.53 9.56 2.16 Ownership equally divided by sex 97.30 96.66 96.66 88.80 11.25 8.80 2.48* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin • July 1995 A.4. Percentage of small businesses that have liquid asset accounts at selected suppliers of financial services, by selected category of firm, 1993—Continued B. Nondepository financial institutions and nonfinancial suppliers Nondepository financial institution Nonfinancial supplier Family Finance Leasing Other Govern- Any Brokerage Other Any and Unknown company company businesses ment individuals All firms 4.07 31 3.61 .00* .19* .21 .00* M .00* .87 Number offull-time- 0-1 2.84 .27* 2.31 .00* .26* .29* .00* .29* .00* 1.10 2-4 3.13 .34* 2.79 .00* .00* .03* .00* .03* .00* .74* 5-9 5.46 .00* 5.46 .00* .24* .18* .00* .18* .00* .82* 10-19 6.07 .64* 5.37 .00* .06* .08* .00* .08* .00* .40* 20-49 7.75 .67* 6.17 .00* .91* .30* .00* .30* .00* .51* 50-99 5.98 .81* 5.17 .00* .00* 1.65* .13* 1.50* .14* 1.26* 100-499 15.89 1.09* 14.80 .00* .00* .61* .00* .61* .00* 1.45* Sales (thousands of dollars) Less than 25 1.22* .00* 1.22* .00* .00* .37* .00* .37* .00* .01* 25-49 1.97* .00* 1.97* .00* .01* .00* .00* .00* .00* 1.14* 50-99 2.66* .26* 2.39* .00* .00* .33* .00* .33* .00* .00* 100-249 2.60 .24* 2.35 .00* .00* .01* .00* .01* .00* .64* 250-499 5.03 .51* 4.25 .00* .57* .05* .00* .05* .00* 1.52* 500-999 5.79 .22* 5.47 .00* .10* .00* .00* .00* .00* .00* 1,000-2,499 7.12 .40* 6.66 .00* .06* .16* .03* .16* .00* .79* 2,500-4,999 10.27 .33* 9.94 .00* .00* .68* .00* .68* .00* 1.68* 5,000-9,999 4.64 1.26* 3.37 .00* .00* .42* .00* .42* .00* 1.36* 10,000 or more 10.34 1.80* 6.32 .00* 2.22* .80* .00* .65* .16* 2.56* MSN! Assets (thousands of dollars) Less than 25 2.22 .13* 2.10 .00* .16* .31* .00* .31* .00* .26* 25-49 2.96* .45* 2.50* .00* .01* .00* .00* .00* .00* .00* 50-99 2.94 .58* 2.37* .00* .00* .06* .00* .06* .00* .32* 100-249 7.08 .43* 6.39 .00* .26* .38* .00* .38* .00* .73* 250-499 6.07 .00* 5.95 .00* .12* .13* .00* .13* 00* .07* 500-999 4.05 .00* 3.94 .00* .11* .05* .00* .05* .00* .21* 1,000-2,499 8.58 .40* 8.18 .00* .00* .21* .07* .21* .00* .04* 2,500-4,999 8.99 1.42* 7.57 .00* .00* 1.24* .00* 1.01* .23* .35* 5,000 or more 13.45 1.53* 9.31 .00* 2.61* .66* .00* .66* .00* .34* Organizational form Proprietorship 1.95 .18* 1.53 .00* .23* 31* .00* .31* .00* .89 Partnership 4.83 .06* 4.34 .00* .44* .13* .03* .13* .00* .78* S corporation 5.67 .83* 4.84 .00* .00* .13* .00* .12* .01* .73* C corporation 6.05 .23* 5.77 .00* .19* .13* .00* .13* .00* .98 Standard industrial classification Construction and mining (10-19) 2.88 .33* 2.29 .00* .26* .38* .00* .38* .00* .72* Primary manufacturing (20-29) 3.43 .28* 3.15* .00* .00* .24* .06* .18* .07* 1.55* Other manufacturing (30-39) 4.00 .76* 3.24 .00* .00* .23* .00* .23* .00* 1.60* Transportation (40-49)... 8.31* 1.01* 5.99* .00* 1.32* .08* .00* .08* .00* .30* Wholesale trade (50-51) . 6.26 .38* 5.76 .00* .13* .07* .01* .07* .00* .76* Retail trade (52-59) 1.85 .35 130 .00* .00* .35* .00* .35* .00* .59* Insurance agents and real estate (60-69) .. 4.94 .77* 3.67 .00* .50* .00* .00* .00* .00* 1.34* Business services (70-79) 2.77 .00* 2.77 .00* .00* .08* .00* .08* .00* .34* Professional services (80-89) 7.78 .21* 7.36 .00* .45* .21* .00* .21* .00* 1.69* Years under current ownersrup 0-4 2.02 .22* 1.80* .00* .00* .30* .00* .30* .00* .70* 5-9 3.70 .20* 3.23 .00* .27* .12* .01* .12* .00* .88* 10-14 4.04 .03* 3.63 .00* .37* .30* .00* .30* .00* .79* 15-19 5.08 .67* 4.34 .00* .07* .28* .00* .28* .00* .82* 20-24 5.05 .84* 4.21 .00* .00* .14* .00* .11* .03* .87* 25 or more 5.33 .31* 5.02 .00* .26* .11* .00* .11* .00* 1.20* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 659 A.4.—Continued B.—Continued Nondepository financial institution Nonfinancial supplier Category Any c F o i m na p n a c n e y Brokerage c L o e m a p si a n n g y Other Any ind F i a a v m n id d i u l y a ls bu O si t n h e e s r s es G m ov e e n r t n - Unknown Census region qf main office Northeast 2,39* .00* 2.39* .00* .00* .72* .03* .72* .00* 1.04* Middle Atlantic 4.21 .18* 3.80 .00* .23* .03* .00* .02* .02* .44* Midwest East North Central .... 5.33 .48* 4.43 .00* : .42* .06* .00* .06* .00* .71* West North Central .... 4.38 .54* 3.84 .00* .00* .11* .00* .11* .00* 1.19* South South Atlantic 3.15 .08* 3.07 .00* .00* .04* .00* .04* .00* .62* East South Central .... 3.33* .04* 3.07* .00* 1.11* .00* .00* .00* .00* .73* West South Central .... 4.54 1.07* 3.12 .00* .35* .59* .00* .59* .00* 1.50* West 3.68 .04* 3.55* .00* .08* .07* .00* .07* .00* 1.16* 4.15 .22* 3.94 .00* .00* .35* .00* .35* .00* .97* Urbanization at main office 4.51 .35 3.97 .00* .24* .19 .00* .18 .00* .84 Rural 2.42 .19* 2.23 .00* .00* .28* .00* .28* .00* .99* Number of offices One 3.71 .35 3.19 .00* .22* .22 .00* .22 .00* .89 Two 5.28 .09* 5.19 .00* .00* i .00* .00* .00* .00* .88* Three or more 7.78 .18* 7.39 .00* .20* .35* .00* 35* .00* .54* Export sales 5.72 .09* 5.64 .00* .00* .21* .00* .21* .00* .61* 3.94 .33 3.44 .00* .21* .21 .00* .20 .00* .89 Owners' participation Owner management 3.91 .33 3.40 .00* .18* .23 .00* .22 .00* .73 Hired management 5.03 .22* 4.81 .00* .26* .09* .00* .09* .00* 1.67 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic .... 1.51 .11* 1.40 .00* .01* .21* .00* .21* .00* 1.57* 4.42 .34 3.90 .00* .22* .21 .00* .20 .00* .78 White 4.31 .33 3.81 .00* .21* .21 .00* .21 .00* .77 Black .32* .07* .24* .00* .03* .02* .02* .02* .00* 4.88* Asian or Pacific Islander . 1.61* .22* 1.39* ,00* .00* .43* .00* .43* .00* .25* American Indian or Native Alaskan ... 3.59* .00* 3.59* .00* .00* .00* .00* .00* .00* .00* Hispanic 1.58* .06* 1.52* .00* .00* .23* .00* .23* .00* .65* Non-Hispanic 4.19 .33 3.70 .00* .20* .21 .00* .20 .00* .88 2.61 .10* 2.35 .00* .16* .23* .00* 23* .00* .97 Male 4.47 .36 3.94 .00* .22* .20 .00* .20 .00* .87 Ownership equally divided by sex 4.73 .54* 4.19* .00* .00* .16* .01* .16* .00* .48* NOTE. * Number of respondents was less than fifteen, too small to calculate a reliable statistic. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin • July 1995 A.5. Percentage of small businesses that obtain credit lines, loans, and leases from selected suppliers, by selected category of firm, 1993 A. Any supplier, any financial insitution, and depository institutions Financial institution Depository AAAAnnnnyyyy CCCCaaaatttteeeeggggoooorrrryyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any institution union All firms 55.48 49.86 41.09 36.97 6.21 3.88 2.34 Number of full-time-equivalent employees 0-1 41.87 35.45 28.98 25.10 5.27 3.13 2.16 2-4 54.51 48.60 39.48 34.93 7.26 3.43 3.83 5-9 67.04 61.47 50.67 45.29 7.67 5.71 1.96 10-19 75.89 71.53 57.04 54.07 5,22 4.80 .42* 20-49 77.83 75.71 68.33 65.59 5.39 5.23 .21* 50-99 86.16 84.18 69.49 67.65 3.96 3.00 .96* 100-499 88.46 86.19 79.29 77.20 4.36 3.74 .80* Sales (thousands of dollars) i<essthan25 26.33 21.50 16.85 13.84 3.62 2.17* 11..4455** | || 25-49 41.52 34.00 25.69 22.09 5.45 2.55* 3.00* 50-99 47.60 41.99 33.83 27.73 7.67 3.87* 3.80 100-249 58.03 51.54 41.79 36.79 7.84 4.00 3.84 250-499 62.86 57.43 46.55 41.45 6.98 5.05 1.93* 500-999 71.39 65.75 55.86 52.37 6.66 4.90 1,76* 1,000-2,499 73.13 68.69 58.12 55.59 4.33 3.78 .55* 2,500-4,999 80.22 77.32 70.16 65.68 7.26 6.65 .69* 5,000-9,999 83.83 81.79 78.12 77.62 4.66 4.19* .47* 10,000 or more 90.11 87.04 74.53 71.31 4.02* 4.02* .00* Assets (thousands of dollars) Less than 25 ,..,..,.... 38.02 31.20 23.89 20.18 4.58 2.40 2.18 25-49 55.78 51.74 39.60 34.55 7.07 4.61 2.47* 50-99 59.23 51.26 40.21 35.50 7.08 4.79 2.29* 100-249 .. .. 66.93 61.74 53.66 49.44 7.30 4.82 2.48* 250-499 73.66 67.24 58.27 55.56 4.66 2.66* 2.03* 500-999 73.55 70.28 60.61 55.66 7.70 6.80 .90* 1,000-2,499 84.90 81.86 75.13 69.02 9.21 8.56 .65* 2 500-4 999 84.56 82.88 70.41 67.99 3.33* 2.71* .63* 5,000 or more 90.24 85.99 71.91 66.25 7.16* 7.16* .00* Organizational form Proprietorship 46.01 39.76 3322..2233 2277..0099 77..1111 3.77 33..3377 Partnership 56.53 51.78 45.64 41.90 6.33 5.00* 1.32* S corporation 64.73 59.38 49.63 46.22 5.97 3.65 2.32 C corporation 63.54 58.45 47.66 44.51 4.92 3.88 1.05 Standard industrial classification Construction and mining (10-19) 60.86 56.90 46.76 39.54 9.27 5.91 3.3? Primary manufacturing (20-29) 63.16 56.09 47.12 41.48 9.05 6.34 2.78* Other manufacturing (30-39) 63.11 58.06 49.92 44.05 9.46 8.36 1.12* Transportation (40-49) 68.01 64.49 52.59 48.78 6.83* 2.82* 4-01* Wholesale trade (50-51) 59.16 54.11 47.68 45.12 3.48 2.65* ,84* Retail trade (52-59) 57.02 51.14 42.14 38.26 6.18 3.77 2.41 Insurance agents and real estate (60-69) 52.14 47.02 41.09 34.99 8.13 5.31 2.81* Business services (70-79) 47.35 39.83 31.22 27.86 5.18 3.32 1.90 Professional services (80-89) 53.57 48.73 39.26 37.22 3.95 1.54* 2.43 :18t®88il8S8SIgBMi Years under current ownership 0-4 57.54 49.89 40.50 36.63 6.64 3.21 3.44 5-9 58.75 52.08 41.62 37.01 . 6.79 4.55 2.28 10-14 58.63 53.68 44.49 38.99 8.29 4.98 3.32 15-19 54.09 50.00 40.98 37.83 5.05 3.23 1.84 20-24 52.67 48.16 41.25 36.82 5.70 4.17 1.53* 25 or more 46.45 41.79 36.43 33.92 3.46 2.38 1.08* For notes, see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 661 A.5.—Continued A.—Continued Financial institution •••• •••• •••••••• Depository CCCCaaaatttteeeeggggoooorrrryyyy AAAAnnnnyyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift AAnnyy CCoommmmeerriiccaall bbaannkk Savings Credit Any institution union - Census region of main office Northeast sagsisaspsliaits 51.76 45.41 35.21 26.38 10.19 9.17 1.06* Middle Atlantic 54.78 48.74 36.76 32.26 7.10 4.48 2.62 Midwest llll11111 East North Central 51.78 46.94 41.06 37.56 5.54 3.54 2.01* West North Central 64.14 56.97 52.14 48.14 6.88 4.16* Z72* South South Atlantic 57.67 52.03 43.35 41,11 4.15 3.45 .76* East South Central 65.11 62.49 56.64 52.37 6.17 3.50* 2.68* West South Central 53.33 49.17 40.08 37.90 3.74 1.16* 2.57 West Mountain 61.84 53.72 46.56 43.37 7.15 1.77* 55..3399 Pacific 51.95 46.24 35.36 29.87 6.94 4.14 2.81 ffffffgiii Urbanization at main office 54.41 48.51 38.84 34.58 6.37 4.07 2.32 Rural 59.49 54.91 49.54 45.91 5.58 3.17 2.41 Number of offices One 52.95 47.06 38.66 34.52 6.16 3.71 22..4466 Two 63.75 59.97 49.20 44.20 7.39 5.84 1.55* 81.33 76.43 65.62 63.41 4.61 2.67 1.99* Export sales 63.01 55.55 46.79 43.51 5.86 5.12 .77* 54.88 49.40 40.64 36.44 6.23 3.78 2.47 Owners' participation Owner management 54.53 49.06 40.43 36.06 66..6633 4.16 2.47 60.% 54.47 44.92 42.21 3.76 2.22 1J» Race, ethnicity, and sex of majority OHn ers 47.10 40.48 3300..7722 26.70 5.17 2.34 2.92 Non-Hispanic white 56.61 51.12 42.49 38.35 6.35 4.08 2.26 White 56,65 . 51.16 423? 38.22 6.29 4.05 2.26 Black 38.55 33.04 24.69 18.31 6.78 3.27* 3.54 44.12 35.94 26.96 24.17 3.48* 1.33* 2.15* American Indian or Native Alaskan .. 45.14 36.92 28.86* 28.66* 5.94* .20* 5.94* Hispanic 54.64 49.40 38.32 32.98 6.23 2.85* 3.56 Non-Hispanic 55.52 49.88 41.22 37,15 6.21 3.92 2.29 Female 51.12 44.73 34.93 31.59 4,74 2.08 2.71 Male... 56.27 50.70 42.34 37.78 6.62 4.34 2.28 Ownership equally divided by sex ... 62.46 59.09 49.24 47.56 6.63 4.94* 1.69* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Federal Reserve Bulletin • July 1995 A.5. Percentage of small businesses that obtain credit lines, loans, and leases from selected suppliers, by selected category of firm, 1993—Continued B. Nondepository financial institutions and nonfinancial suppliers Nondepository financial institution Nonfinancial supplier CCaatteeggoorryy Finance Leasing Family Other Govern- Any Brokerage Other Any and Unknown company company businesses ment individuals All firms 19.02 11.75 .25 7.50 .94 13.77 7.99 6.19 .53 137 Number of full-time- u$«mSUBS equivalent employees 0-1 11.58 7.19 .20* 332 1.36 10.66 7.21 4.02 .20* ,95 2-4 17.04 10.68 .12* 6.52 .65* 14.97 8.40 6.98 .75* 1.12* 5-9 2434 15.02 20* 10.20 .39* 15.83 8.72 7.25 .54* 1.65* 10-19 t 36.69 22.71 .98* 15.71 1.10* 19.30 11.55 7.78 .48* 1.81* 20-49 31.29 18.25 .23* 14.70 .61* 15.01 5.26 10.00 1.08* 2.95* 50-99 ( 39.48 25.06 .49* 19.72 .77* 13.74 3.70 9.39 1.68* 2.29 100-499 36.94 22.15 .44* 20.67 1.96 16.12 7.46 11.26 1.75 533 mmmmzmsmm- Sales (thousands of dollars) Less than 25 8.40 5.73 .07* 1.82* .79* 8.31 4.80 3.40 .55* .02* 25-49 11.34 6.76 .01* 2.94* 2.02* 13.88 9.52 5.30 .48* .00* 50-99 12.25 8.35 .00* 3.91 .92* 15.00 9.45 5.43 .74* 1.12* 100-249 17.88 10.48 .17* 7.24 .70* 15.17 8.74 7.28 .48* .84* 250-499 24.20 14.71 .58* 9.30 1.37* 13.28 8.67 5.13 .87* 1.40* 500-999 27.11 17.74 .00* 12.42 .32* 19.68 11.73 8.73 .14* 2.07* 1,000-2,499 27.59 15.23 .84* 12.47 .56* 14.78 8.64 5.93 .31* 2.96* 2,500-4,999 34.44 23.62 .00* 15.65 .47* 16.68 5.51 11.25 .25* 4.07* 5,000-9,999 30.51 21.00 .53* 10.54 1.32* 11.70 4.18 7.01 1.80* 3.45* 10,000 or more 36.10 25.93 1.35* 16.21 1.81 2131 10.04 15.90 1.33* 1.30* Assets flpfgp (thousands of dollars) Less than 25 11.32 8.04 .00* 3.18 31* 11.51 * 727 4.88 36* .44* 25-49 .. 21.16 14.95 .01* 6.57 1.14* 14.47 8.44 6.53 .63* .81* 50-99 21.23 10.85 .01* 11.81 - 1.12* 17.03 10.23 7.28 .24* .33* 100-249 21.98 13.62 .27* 9.13 .63* 17.75 11.00 734 .69* 1.60* 250-499 23.37 12.44 .46* 10.09 1.48* 19.20 11.35 8.49 .93* 2.95* 500-999 30.54 19.63 1.09* 12.42 .21* 14.69 8.75 5.65 .67* 1.78* 1,000-2,499 30.36 19.89 .00* 11.97 1.59* 15.73 6.10 10.29 1.17* .55* 2,500-4,999 41.01 28.56 4.64* 18.11 2.97* 12,27 5.40* 6.44 1.16* 1.16* 5,000 or more 40.27 22.52 3.33* 12.98 7.83 20.69 10.10 12.75 1.92* 1.16* Organizational form Proprietorship 13.28 7.90 .11* 4.52 1.47 12.16 7.13 5.65 .30* .85 Partnership 1 13.42 6.79 .01* 6.44 1.07* 14.27 6.71 7.18 1.18* 2.12* S corporation 1 24.62 16.29 .43* 9.97 .70 15.75 8.29 7.63 .73 1.54 C corporation 25.75 16.08 .40* 10.75 .23 14.76 9.49 5.72 .55 1.83 Standard industrial classification Construction and mining (10-19) 20.34 16.49 .31* 4.32 .53* 12.32 8.88 3.77 .45* 1.43* Primary manufacturing (20-29) 29.00 17.61 .18* 1111..3355 1.15* 19.83 9.48 12.09 1.35* .12* Other manufacturing (30-39) 23.05 13.09 .35* 10.25 .74* 13.72 6.83 5.24 2.17 2.53* Transportation (40-49)... 32.17 24.59 1.23* 939 .07* 15.78 8.71* 7.07 .02* 3.78* Wholesale trade (50-51) . 18.61 12.94 .17* 7.48 .19* 17.90 10.17 8.59 .87* 2.77* Retail trade (52-59) 17.16 12.07 .06* 5.64 .58* 14.32 8.94 6.09 30* .95 Insurance agents and real estate (60-69) .. 16.41 6.18 .97* 5.63 5.35 10.64 8.11 3.38 .72* 2.37* Business services NPMK (70-79) 16.10 8.58 .20* 7.75 .36* 13.69 7.23 6.42 .33* .98 Professional services (80-89) 20.08 9.57 .05* 11.24 1.10* 11.97 5.64 6.81 .14* .83* Years under current ownership 0-4 20.74 13.27 .02* 7.87 .80* 20.00 13.08 8.48 1.06* 1.73* 5-9 1 21.61 12.62 .57* 8.75 1.08 16.11 9.37 6.97 35 1.84 10-14 20.32 12.16 .21* 8.54 1.08* 13.18 7.98 5.43 .14* 1.09 15-19 ( 17.25 11.73 .13* 6.25 .55* 11.91 5.75 6.62 .25* .96* 20-24 17.02 11.83 .16* 6.10 .82* 9.75 5.18 4.06 .91* .58* 25 or more 13.80 8.07 .10* 5.56 1.08 8.12 4.11 4.25 .49 133 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 663 A.5.—Continued B.—Continued Nondepository financial institution Nonfinancial supplier Category Any c F o i m na p n a c n e y Brokerage c L om ea p si a n n g y Other Any ind F i a a v m n id d i u l y a ls bu O si t n h e e s r s es G m ov e e n r t n - Unknown Census region of main office Northeast 19.45 15.95 .01* 3.46 .60* 14.82 10.15 4.39 .87* 1.05* 22.38 12.88 .33* 10.19 .39* 11.54 6.38 5.70 .31* 1.98 Midwest East North Central .... 16.27 10.96 .03* 5.28 .66* 10.96 6.15 5.21 .11* 1.10* West North Central .... 13.53 9.19 .00* 4.14 1.09* 18.83 10.40 9.60 1.27* .34* South South Atlantic 20.05 13.56 .12* 7.24 .82* 12.71 6.66 6.27 .92* 1.75 East South Central .... 17.25 8.51 .04* 8.96 .00* 13.58 8.36 5.90 .14* .93* West South Central .... 18.23 11.69 .48* 6.31 .40* 10.41 5.24 5.66 .60* 1.78* West Mountain 18.74 9.59 .75* 8.62 2.19* 21.07 14.06 6.82 1.24* .70* 20.99 11.08 .44* 10.38 1.93 15.94 9.63 6.73 .12* 1.43 Urbanization at main office 20.49 12.35 .27 8.41 1.07 13.59 7.73 6.31 .49 1.52 Rural 13.48 9.52 .17* 4.10 .44* 14.46 8.93 5.72 .68* .77 Number of offices One 17.59 10.94 .21 6.63 .85 13.34 7.86 5.83 .58 1.19 Two 23.82 15.79 .49* 9.95 .92* 14.75 8.33 7.04 .10* 2.07 33.27 17.28 .39* 17.22 2.47 19.07 9.42 10.47 .61* 2.91 Export sales Some 23.38 13.70 .12* 10.84 .16* 18.61 10.00 8.87 1.43 2.30 18.67 11.60 .26 7.23 1.00 13.38 7.82 5.97 .46 1.29 Owners' participation Owner management 18.50 11.54 .28 7.04 .94 13.79 8.29 6.01 .44 1.14 22.02 13.02 .06* 10.13 .89 13.67 6.20 7.22 1,05 2.66 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic — 17.24 11.42 .49* 6.44 .72* 14.20 8.04 6.08 .75 2.01 Non-Hispanic white 19.26 11.80 .21 7.64 .97 13.71 7.98 6.20 .50 1.28 White 19.45 11.96 .22 7.67 .93 13.75 7.98 6.22 .50 1.28 Black 13.61 10.62 1.10* 3.48 1.63* 13.63 6.57 6.57 1.89* 1.72* Asian or Pacific Islander . 14.45 8.71 .00* 6.66 .66* 16.09 9.23 7.23 .26* 1.84* American Indian or Native Alaskan ... 14.44* 8.35* .71* 7.86* .00* 8.87* 8.87* .00* .00* 5.26* 22.47 14.93 .32* 7.62 .83* 14.55 7.78 6.66 .58* 1.42* 18.86 11.61 .24 7.49 .94 13.74 7.99 6.17 .53 1.36 17.91 10.59 .22* 6.92 1.23 14.65 9.77 5.26 .88* 1.02* Male 19.03 11.92 .23 7.46 .88 13.28 7.21 6.52 .45 1.51 Ownership equally divided by sex 23.26 14.16 .58* 10.26 .53* 16.60 10.88 5.52 .23* .89* NOTE. * Number of respondents was less than fifteen, too small to calculate a reliable statistic. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin • July 1995 A.6. Percentage of small businesses that obtain financial management services from selected suppliers, by selected category of firm, 1993 A. Any supplier, any financial insitution, and depository institutions Financial institution Depository AAAAnnnnyyyy CCCCaaaatttteeeeggggoooorrrryyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any institution union Afi firms 35.11 33.80 27.85 25.94 2.65 2.20 .46 Number offull-time-equivalent employees 0-1 23.83 22.94 17.76 15.94 2.20 1.81 .39* 2-4 34.85 33.86 28.91 26.84 2.95 1.96 .98* 5-9 42.16 40.34 33.15 31.07 3.09 3.04 .05* 10-19 49.05 46.47 38.16 35.53 3.78* 3.78* .00* 20-49 57.40 55.76 47.49 47.07 1.60* 1.60* .00* 50-99 67.32 63.01 52.50 50.95 2.23 2.13* .10* 100-499 75-55 73.82 67.24 66.71 1.59* 132* .58* Sales (thousands of dollars) Less than 25 15.91 14.65 12.28 11.52 .79* .71* .07* 25-49 21.05 20.83 16.12 14.66 1.47* 1.05* .42* 50-99 26.02 23.97 18.35 15.62 3.04* 1,93* 1.11* 100-249 33.60 33.08 28.27 25.44 3.89 3.22 .67* 250-499 43.84 42.16 35.90 33.58 4.39 3.84 ,55* 500-999 44.50 43.39 32.99 31.70 1.42* 1.42* .00* 1,000-2,499 48.49 46.89 38.76 36.62 • 2.38* 2.37* .01* 2,500-4,999 55.89 51.76 37.35 . 35.44 2.40* 2.34* .05* 5,000-9,999 71.38 68.45 60.19 59.94 1.46* 1.46* .11* 10,000 or more 86.44 83.40 77.56 76.64 2.51* 2.30* .21* Assets (thousands of dollars) Less than 25 23.43 22.82 17.93 16.19 22..1166 1.73 .43* 25-49 34.87 34.06 28.58 25.09 4.48* 4.16* .32* 50-99 36.22 34.27 28,20 26.58 2.90* 2.28* J&1* 100-249 44.87 42.80 34.84 32.71 2.81 2.05 .76* 250499 42.22 41.53 34.41 31.98 2.56* 1.98* .60* 500-999 47.81 45.89 38.38 36.21 3.15* 3.15* .00* 1,000-2,499 56.91 54.97 45.09 43.57 3.36* 1 3.31* .05* 2,500-4,999 81.13 77.83 62.73 59.99 4.33* 4.19* .14* 5,000 or more 68.54 67,87 59.44 59.33 1.46* 1.32* .14* Organizational form Proprietorship 26.25 25.70 21.21 18.78 3.11 2.52 .60* Partnership 36.04 34.41 28.41 27.48 S§ 2.47* 2.47* .00* S corporation 40.42 38.88 31.99 30.43 2.32 1.74 .57* C corporation 44.99 42.73 35.17 33.56 2.22 1.93 .29* Standard industrial classification Construction and mining (10-19) 19.38 18.51 14.70 13.37 1.43* 1.19* .24* Primary manufacturing (20-29) 26.43 25.24 21.68 19.81 1.91* 1.87* .10* Other manufacturing (30-39) 34.97 34.37 28.74 26.38 3.10* 3.10* .00* Transportation (40-49) 38.57 36.36 29.64 29.56 .08* .08* .00* Wholesale trade (50-51) 37.82 37.48 30.11 29.21 1.74* 1.26* .48* Retail trade (52-59) 45.73 43.77 39.40 37.05 4.23 3.31 .93* Insurance agents and real estate (60-69) 33.09 30.72 22.63 20.15 2.59* 2.59* .00* Business services (70-79) 27.19 26.64 22.89 20.75 2.49 2.29 .20* Professional services (80-89) 45.57 43.67 32.01 30.09 2.71 1.91 .80* Years under current ownership 0-4 34.03 33.02 29.30 27.71 2.17 1.76 .41* 5-9 35.12 33.94 27.47 25.22 3.23 3.03 .20* 10-14 37.84 36.46 30.04 27.29 3.96 3.01 .96* 15-19 33.71 31.76 26.15 24.89 1.58* 1.33* .25* 20-24 35.22 33.88 26.70 24.60 2.72 1.79* .93* 25 or more 34.03 32.86 26.59 25.56 1.40 1.17* .24* For notes, see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 665 A.6.—Continued A.—Continued Financial nstitution Depository AAAAnnnnyyyy Category ssssuuuupppppppplllliiiieeeerrrr Thrift AAAnnnyyy CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any union New England ... 33.36 31.44 26.72 18.61 10.38 9.35 1.03* Middle Atlantic 36.54 35.54 28.02 27.21 1.46* 1.45* .01* Midwest East North Central 37.77 36.28 30.72 29.06 2.92 2.53 .39* West North Central 34.95 34.11 28.05 25.96 2.26* 1.85* .41* South South Atlantic .... 37.73 35.04 27.61 26.00 1.97 1.71 .26* East South Central 32.16 32.16 27,75 25.60 2.15* 2.15* .00+ West South Central 30.05 29.44 24.35 24.31 .76* .42* .34* West Mo 37.75 36 28 33.34 31.50 1.89* .65* 1.27* Pacific 32.86 3190 25.89 24.07 2.59 1.84 .76* Urbanization at main office Urban 35.00 33-51 27.27 25.41 2.41 2.04 .38 Rural 35.51 34.86 30.02 27.95 3.52 2.77 .75* Number of offices One 32.43 31.27 25.56 23.79 235 1.83 .52 Two 45.72 43.54 35.71 31.98 5.61 5,53 .07* Three or more ... 58.76 56.51 50.43 49.92 1.67 1.57 .18* Export sales Some 51.78 50.70 43.30 39.96 4.90 4.78* .15* None 33.78 32.44 26.61 24.82 2.47 1.99 .48 Owners' participation Owner management .. 32.98 31.95 26.09 24 05 2.81 242 .40 Hired management.... 47.44 44.47 38.01 36.85 1.68 .91 .80* ita Race, etknm Nonwhite or Hispanic 25.64 24.46 22.32 20.01 2.63 2.42 .23* Non-Hispanic white 36.39 35.06 28.59 26.74 2.65 2.17 .49 White 35.74 34.44 28.14 26.33 2.57 2.09 .48 Black 26.66 24.07 23.88 19.95 4.85* 4.82* .03* Asian or Pacific Islander 31.72 30.61 26.83 23.54 3.50* 3.25* .25* American Indian or Native Alaskan ... 20.09* 20.09* 19.53* 19 33* .20* .20* .20* Hispanic 20.13 19.72 17.24 15.61 1.64* 1.29* .34* Non-Hispanic .. 35.80 34.44 28.33 26.41 2.69 2.24 .46 33.03 31.35 27.13 24.93 3.29 2.70 .60* Male 35.49 34..""3 27.68 25.88 2.49 2.09 .40 Ownership equally divided by sex 38.34 37.76 32.75 30.67 2.16* 1.57* .59* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin • July 1995 A.6. Percentage of small businesses that obtain financial management services from selected suppliers, by selected category of firm, 1993—Continued B. Nondepository financial institutions and nonfinancial suppliers Nondepository financial institution I Nonfinancial supplier Category Family Finance Leasing Other Govern- Any Brokerage Other Any and Unknown company company businesses ment individuals All firms 10.87 1.49 7.40 .13* 2.48 2.29 .35 2.00 .01* .54 Number offull-timeequivalent employees 0-1 6.85 .68* 4.86 .01* 1.46 .97 .06* .94 .00* .60* 2-4 9.32 1.18 6.38 .25* 1.92 2.06 .39* 1.83 .00* .09* 5-9 12.18 1.70* 8.99 .00* 2.86 3.04 .47* 2.57 .00* .53* 10-19 18.93 3.65* 11.99 .41* 4.19 3.69 1.13* 236* .00* 1.11* 20-49 22.97 2.51 15.74 .20* 5.18 5.44 .39* 5.05 .13* .33* 50-99 28.97 6.11 16.37 .60* 8.23 10.22 .84* 9.25 .14* 1.51* 100-499 29.37 7.05 14.31 .27* 12.65 6.09 .91* 5.74 .27* 5.02* Sales (thousands of dollars) Less than 25 3.90 .49* 3.31* .00* .11* 1.24* .30* .94* .00* .64* 25-49 4.73 .00* 4.07* .00* .66* .11* .00* .11* .00* .12* 50-99 6.33 1.05* 4.93 .00* .36* 2.45* .61* 1.84* .00* .00* 100-249 8.68 1.43* 5.48 .21* 2.10* 1.98* .41* 1.80* .00* .30* 250-499 12.37 1.76* 8.51 .00* 2.81* 2.07* .00* 2.07* .00* .90* 500-999 14.56 2.50* 9.04 .03* 4.20 2.64 .18* 2.55 .07* .19* 1,000-2,499 17.49 1.71* 12.11 .56* 3.85 3.19 .00* 3.16 .02* .50* 2,500-4,999 28.21 3.05 19.86 .00* 6.67 4.81 .69* 4.12 .00* 1.85* 5,000-9,999 30.92 3.27 21.25 .13* 6.59 7.67 1.70* 6.65 .15* .42* 10,000 or more 43.48 10.52 26.36 .09* 12.93 9.97 2.61* 7.24 .11* 5.74* Assets (thousands of dollars) Less than 25 6.71 .78* 5.56 .00* .53* .78* .11* .67* .00* .15* 25-49 9.32 2.35* 5.77 .00* 1.21* 1.98* .01* 1.98* .00* .38* 50-99 8.84 .64* 5.42 .17* 2.77* 4.13 .78* 3.35* .06* .26* 100-249 14.40 2.50* 10.28 .25* 2.39* 2.88 .30* 2.65 .00* .50* 250-499 13.37 1.17* 9.33 .00* 3.82 2.17 .03* 2.14 .00* .33* 500-999 13.11 1.68* 7.87 .06* 4.72 3.38* .46* 2.92* .00* .05* 1,000-2,499 25.59 1.27* 18.57 .00* 6.41 4.00 .43* 3.65 .00* .73* 2,500-4,999 41.38 8.18* 20.48 .19* 14.11 10.59 3.98* 6.39* .22* .60* 5,000 or more 40.49 7.12 29.65 .11* 10.05 8.01 .85* 7.79 .13* 3.97* Organizational form Proprietorship 6.78 .62* 4.83 .10* 1.33 1.30 .26* 1.14 .00* .16* Partnership 11.84 1.20* 8.76 .37* 1.87* 2.41* .00* 2.41* .00* .02* S corporation 12.53 2.12 7.52 .17* 4.02 3.02 .67* 2.40 .01* .27* C corporation 15.84 2.51 10.94 .09* 3.40 3.30 .37* 2.96 .04* 1.47 Standard industrial classification Construction and mining (10-19) 5.16 .61* 3.04 .07* 1.56 1.02* .00* 1.02* .00* .01* Primary manufacturing (20-29) 9.72 1.91* 5.53 .25* 3.04 1.70* .21* 1.49* .00* .34* Other manufacturing (30-39) 12.19 .43* 8.58 .00* 3.75 1.30 .29* 1.16* .06* .21* Transportation (40-49)... 12.10 1.33* 921 .07* 2.84* 4.87 .09* 4.78* .00* 1.75* Wholesale trade (50-51) . 15.07 1.81* 9.91 .75* 3.11 1.08 .17* .91 .00* .18* Retail trade (52-59) 10.26 3.49 3.81 .05* 3.94 4.47 .65* 4.03 .01* .92* Insurance agents and real estate (60-69) .. 12.99 .29* 10.58 .00* 2.72* 2.24* .47* 1.78* .09* 1.26* Business services (70-79) 5.83 .87* 3.85 .16* 1.63 1.00 .21* .83 .01* .02* Professional services (80-89) 19.94 .94* 17.82 .02* 1.51 2.71 .56* 2.17 .00* .96* Years under current ownership 0-4 8.51 1.75 4.84 .30* 2.30 3.40 1.16* 2.61 .00* .56* 5-9 9.96 1.97 6.49 .27* 1.73 1.86 .20* 1.70 .00* .17* 10-14 12.04 1.29 9.04 .05* 2.39 2.54 .11* 2.43 .03* .66* 15-19 10.95 1.18* 7.66 .00* 2.55 2.39 .02* 2.37 .00* 1.02* 20-24 11.79 1.17* 8.60 .00* 2.62 2.59 .90* 1.68 .05* .13* 25 or more 12.85 1.12 8.65 .01* 4.02 1.35 .10* 1.23 .01* .82* Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Services Used by Small Businesses 667 A.6.—Continued B.—Continued Nondepository financial institution Nonfinancial supplier Category Any c F o i m na p n a c n e y Brokerage c L om ea p si a n n g y Other Any ind F i a a v m n id d i u l y a ls bu O si t n h e e s r s es G m ov e e n r t n - Unknown Census region of main office Northeast New England 9.86 2.58* 5.85 .00* 2.68* 4.51 .03* 4.46 .03* .10* Middle Atlantic 13.54 .85* 10.49 .00* 3.38 1.63 .39* 1.55 .00* .73* Midwest East North Central .... 10.32 .86 7.08 .01* 2.76 1.82 .02* 1.80 .01* .87* West North Central.... 10.43 .77* 7.40 .00* 2.34 1.78 .56* 1.22* .00* 1.04* South South Atlantic 12.74 1.49 8.66 .32* 2.89 3.77 .56* 3.21 .04* .67* East South Central — 6.42 1.75* 4.27 .05* 1.69* 1.36* .00* 1.36* .00* .06* West South Central .... 8.49 2.80 4.38 .00* 2.40 1.24* .08* 1.24* .00* .03* West 8.57 .70* 6.43 .48* 1.03* 1.80* .86* 1.12* .00* .80* 11.32 1.99 7.40 .30* 1.83 2.43 .54* 1.87 .01* .24* Urbanization at main office 11.73 1.58 8.29 .13* 2.45 2.51 .41 2.16 .02* .56 Rural ,.»..,. 7.67 1.16 4.07 .13* 2 59 1.49 .12* 1.42 .00* .45* Number of offices One 9.96 1.24 6.89 .10* 2.19 1.95 .19* 1.82 .00* .40 Two 14.00 3.05 9.28 .00* 3.44 3.23 .80* 2.43 .00* .95* 19.92 2.65 12.26 .94* 5.53 6.14 2.15* 4.19 .20* 2.00 Export sales 19.43 1.93 13.55 .08* 5.34 2.00 .16* 1.79 .06* 1.21* None 10.19 1.46 6.91 .14* 2.25 2.32 .37 2.02 .01* .49 Owners' participation Owner management 1100..0088 11..4411 66..9900 .10* 2.16 2.01 .31 1.76 .01* .41 1155..4477 22..0011 1100..3300 .29* 4.38 3.93 .60* 3.44 .03* 1.32* Race, ethnicity, and sex of majority owners Nonwhite or Hispanic .... 4.95 .36* 2.49 .37* 2.02 1.78 .13* 1.65 .05* .45* Non-Hispanic white 11.67 1.65 8.07 .10* 2.55 2.36 .38 2.05 .01* .55 White 11.37 1.58 7.79 .14* 2.52 2.33 .38 2.02 .01* .54 Black 3.62 .19* 2.04 .00* 1.39* 1.32 .02* 1.31* .00* 1.39* Asian or Pacific Islander . 8.05 1.04* 4.80 .00* 3.20* 2.94* .00* 2.94* .00* .00* American Indian or Native Alaskan ... .56* .00* .00* .00* .56* .00* .00* .00* .00* .00* 4.14 .00* 1.41* 1.00* 1.73* 1.49* .33* 1.16* .15* .20* 11.18 1.56 7.68 .09* 2.52 2.33 .35 2.04 .01* .56 Female 7.90 1.07* 5.51 .08* 1.70 2.59 .80* 2.05 .00* 32* Miale....... 11.79 1.61 8.10 .11* 2.69 2.28 .24 2.05 .02* 59 Ownership equally divided by sex 10.79 1.66* 5.85 .60* 2.90* 1.23* .00* 123* .00* .00* ____________ NOTE. * Number of respondents was less than fifteen, too small to calculate a reliable statistic. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Industrial Production and Capacity Utilization for May 1995 Released for publication June 15 production of motor vehicles and parts; excluding motor vehicles and parts, industrial production was Industrial production declined 0.2 percent in May unchanged from its level in April. Manufacturing after a revised decline of 0.5 percent in April. The output fell 0.3 percent and mine production de- May decrease reflects a drop of 3.9 percent in the clined 1.0 percent, but output at utilities advanced Industrial production indexes Twelve-month percent change Twelve-month percent change 10 10 Materials 5 5 + Products Nondurable 0 manufacturing 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^dustry^ Capacity _ — 140 140 120 120 100 100 ^^^^—.—«—Production 80 80 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I 1 Percent of capacity Percent of capacity Total industry Manufacturing Utilization 90 Utilization 90 — —- 80 80 70 70 i i i i i i i i i i i i i i i i i i i i i i 1981 1983 1985 1987 1989 1991 1993 1995 1981 1983 1985 1987 1989 1991 1993 1995 All series are seasonally adjusted. Latest series, May. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

669 Industrial production and capacity utilization, May 1995 Industrial production, index, 1987=100 Percentage change CCaatteeggoorryy 11999955 19951 MMaayy 11999944 ttoo Feb.r Mar.r Apr/ May? Feb.r Mar.r Apr.r MayP MMaayy 11999955 Total 122.1 121.9 121.2 120.9 -.2 -.5 -.2 3.1 Previous estimate 122.0 121.6 121.1 -.3 -.4 Major market groups Products, total2 119.1 118.8 118.0 117.8 .0 -.3 -.6 -.2 2.2 Consumer goods 115.7 114.8 113.9 113.6 .0 -.8 -.8 -.2 .7 Business equipment 154.5 155.5 155.2 155.4 .5 .7 -.2 .1 7.5 Construction supplies 111.0 110.4 109.0 108.3 -1.0 -.5 -1.3 -.6 2.1 Materials 126.7 126.7 126.2 125.8 .1 .0 -.4 -.3 4.4 Major industry groups Manufacturing 124.2 124.1 123.3 123.0 -.2 -.6 -.3 3.3 Durable 131.5 131.5 130.7 130.3 -.1 -.6 -.4 5.1 Nondurable 116.1 115.7 115.0 114.8 -.4 -.7 -.1 1.3 Mining 100.6 100.0 99.8 98.8 .7 -.2 -1.0 -1.9 Utilities 119.2 119.1 119.7 120.4 2.3 .5 .6 4.0 Capacity utilization, percent 1994 1995 Average, Low, High, 1967-94 1982 1988-89 May Feb.r Mar.' Apr.1 MayF Total 82.0 71.8 84.9 83.8 85.3 84.9 84.2 83.7 3.2 Previous estimate 85.2 84.7 84.1 Manufacturing 81.3 70.0 85.2 83.2 84.7 84.3 83.5 83.0 3.6 Advanced processing 80.7 71.4 83.5 81.3 82.8 82.4 81.5 81.0 4.1 Primary processing . 82.5 66.8 89.0 88.0 89.4 89.1 88.4 87.9 2.4 Mining 87.4 80.6 86.5 90.3 90.3 89.7 89.6 88.7 -.1 Utilities 86.7 76.2 92.6 85.8 87.5 87.3 87.6 88.0 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. 0.6 percent. At 120.9 percent of its 1987 average, of furniture and carpeting fell. The output of the industrial production in May was 3.1 percent higher nondurable component of consumer goods than it was in May 1994. Capacity utilization increased 0.3 percent; growth in residential sales declined 0.5 percentage point in May after having by electric utilities and increases in the production declined 0.7 percentage point in April. At 83.7 per- of drugs and medicines and consumer paper prodcent, the rate of capacity utilization in May was ucts more than offset further decreases in the out- 1.8 percentage points below the most recent high, put of gasoline and distillate fuel oil. attained this past December and January. The production of business equipment edged up When analyzed by market group, the data show 0.1 percent in May after having decreased 0.2 perthat the overall output of consumer goods cent in April. As in April, the output of transit decreased 0.2 percent in May, continuing the equipment declined 2.5 percent in May, led by retreat that began in March. The output of the another large reduction in the production of busidurable goods component dropped 2.1 percent, ness autos; the output of light trucks and comlargely because of further sizable cutbacks in the mercial aircraft was also down significantly. The production of consumer autos and trucks. Among production of industrial equipment turned up other consumer durables, the production of appli- 0.3 percent after two consecutive monthly declines, ances and television sets increased, and the output and the output of information processing equip- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670 Federal Reserve Bulletin • July 1995 ment, led by a 2.0 percent increase in computers metals; transportation equipment; and miscellaand office equipment, advanced 0.9 percent. neous manufactures. Among other manufacturers The output of defense and space equipment fell of durables, the production of lumber and products 1.1 percent. and of furniture and fixtures rebounded somewhat The overall output of intermediate products in May, while that of instruments and industrial decreased 0.3 percent, as the production of con- machinery and computer equipment continued to struction supplies fell 0.6 percent and the output of advance. Within nondurables manufacturing, business supplies slipped 0.1 percent. increases in the production of tobacco and paper The production index for materials decreased and products partly offset declines in textiles, petro- 0.3 percent, with declines in the output of durable leum products, rubber and plastics, and leather. and nondurable goods materials and energy materi- Reflecting the continuing decline in output, the als. Reductions in the production of original equip- factory operating rate declined further in May, to ment parts for motor vehicles and in the output of 83.0 percent of capacity, a level that is 2.2 percentmiscellaneous plastics and basic metals materials age points below the most recent peak, reached in account for much of the decrease in durable goods December 1994 and January 1995. The utilization materials. Textiles, containers, and chemicals all rate in the primary-processing industries retreated contributed to the fall in nondurable goods materi- 0.5 percentage point, to 87.9 percent; the most als, while the decline in energy materials was recent peak, in December 1994, was 90.8 percent. attributable to a decrease in coal production. The utilization rate for advanced-processing indus- When analyzed by industry group, the data show tries also fell back 0.5 percentage point; at 81.0 perthat factory output decreased 0.3 percent in May cent, the May rate was 2.2 percentage points below after a revised decline of 0.6 percent in April. In its January 1995 peak. May, the output of durables manufacturers dropped The operating rate at utilities rose 0.4 percentage 0.4 percent, while that of nondurables manufactur- point, to 88.0 percent. The operating rate at mines ers slipped 0.1 percent. Among durables manufac- decreased 0.9 percentage point, to 88.7 percent, turers, output fell significantly in four major indus- largely because of a 7.0 percent decline in productry groups: stone, clay, and glass products; primary tion at coal mines. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

671 Statements to the Congress Statement by Susan M. Phillips, Member, Board of thereby the taxpayer, preserving a strong banking Governors of the Federal Reserve System, before system, minimizing the destabilizing effects on the the Subcommittee on Financial Institutions and economy caused by any difficulties in the banking Regulatory Relief of the Committee on Banking, system, providing consumer protection, and ensur- Housing, and Urban Affairs, U.S. Senate, May 2, ing that communities are served by our banking 1995 system. Such regulation, however, cannot succeed if it is I am pleased to be here today to discuss S.650, the designed to eliminate at any cost the possibility of Economic Growth and Regulatory Paperwork Reany bank failure—either a financial failure or a duction Act of 1995. The Board welcomes its failure to serve customers. Rather, banking regulaintroduction and supports its purpose of relieving tion must aim to produce at a reasonable cost the costs imposed on our nation's banking system by banking system that can best serve our economy governmental regulation when those costs are not and the American people. Each requirement, reoffset by corresponding benefits to the safety and striction, application, and report imposed may insoundness of our nation's financial institutions, the dividually be justified at the time of adoption, but protection of bank customers, or the availability of collectively the amount of regulation created over credit. time may become a significant obstacle for the In my testimony today, I will discuss the Board's community banker and, equally important, someefforts to reduce the cost of regulation and why we one hoping to start a community bank. believe that legislation is necessary to continue The aggregate burden on our nation's banks has those efforts. I will then address those portions of become substantial, raising the cost of banking the bill that make major changes to laws adminisservices and thereby encouraging customers to seek tered by the Board, particularly in the area of bank less costly loans and services or higher yielding and branching applications, where I believe the bill investments from other financial intermediaries that would significantly reduce burden, and in the conare not subject to the same regulatory requirements. sumer area. Finally, I will highlight provisions Furthermore, our banks must operate in increasabout which the Board does have concerns. Still, I ingly competitive financial markets, both domestic do not wish these objections in any way to detract and global. The United States can ill afford to from the central message of my testimony: that the handicap its banking institutions with unnecessary nation's banking system needs legislation of the and dysfunctional regulation. type presented by S.650. The Board believes the time has come to reex- Appended to my testimony is a brief summary of amine each of our banking statutes and regulations the Board's comments on certain provisions that and decide whether its benefits are commensurate are not discussed directly in my testimony.1 with its costs. The Board believes that there are restrictions in current banking law that cannot pass this test. To address this problem, the Board advo- THE ROLE OF REGULATION cates not only burden relief of the type provided by S.650 but also reform of anachronistic statutes such Banking regulation has clearly defined purposes. as the Glass-Steagall Act, which needlessly and They include protecting the federal safety net and significantly hinders the ability of U.S. banking organizations to compete in their home market. We 1. The attachments to this statement are available from Publica- encourage the full committee to take up the matter tions Services, Mail Stop 127, Board of Governors of the Federal of Glass-Steagall reform promptly. Reserve System, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin • July 1995 OUR EFFORTS AT THE BOARD tions are either required by statute or are necessary to explain or implement a statute. Put simply, we The recognition that regulatory burden must be have no choice but to regulate, and in some cases to reduced is not new at the Board. Since 1978 the overregulate. Board has maintained a formal program of regula- S.650 provides the type of statutory changes that tory review and simplification, and in 1986 the would allow a reduction in regulatory burden in Board established a Regulatory Planning and Re- many areas without adversely affecting safety and view office, charged with ensuring that regulatory soundness or other important supervisory and polproposals minimize the burdens imposed on those icy concerns. that must comply. The Board has long believed that significant reductions can be made in regulatory burden by eliminating requirements that are redun- Applications dant or have outlived their usefulness. The Board has redoubled these efforts in recent One of S.650's important reforms, from the years. For example, we have streamlined the appli- Board's perspective, comes in the applications cations process by shortening processing times, area, where S.650 would eliminate federal regulasubstituting a notice requirement for an application tory review for routine bank acquisitions and whenever possible, waiving applications for trans- branch openings by well-capitalized and wellactions reviewed by other regulators, and reducing managed banking organizations that are helping to the paperwork that must accompany applications meet the credit needs of their communities. The and notices. These changes have reduced both the Board's experience in administering these statutory volume of paper that must be filed by notificants requirements over the past thirty-nine years leads and the time required for the Board to review us to endorse these initiatives very strongly. nonbanking proposals. Of the more than 3,500 Currently, the Bank Holding Company Act reapplications and notices acted on during 1994, 94 quires that all bank holding companies obtain percent were completed within the Board's self- Board approval before acquiring control of another imposed sixty-day target, with the average period depository institution or merging with another bank of review lasting thirty-four days. In other areas, holding company. The bill would eliminate this the Board has worked within the limits of its application requirement for proposals that raise no governing statutes to expand the list of permissible serious competitive issue and are made by bank nonbanking activities for banking organizations, to holding companies that met specified standards for remove unnecessary, outdated restrictions on the capital, management, and community reinvestment conduct of these activities, and to eliminate restric- at their previous examination. The vast majority of tions that prevented banking organizations from proposals processed by the Board meet these reproviding discounts to their customers on packages quirements and are routinely approved. Thus, we of products. believe that the cost of continuing the applications I have attached to my testimony a more complete process in such cases is unnecessary from any list of our initiatives to reduce unnecessary regula- public policy perspective. The bill not only would tory burden over the past three years. make the applications process simpler, less burdensome, and more transparent for qualifying banking organizations but also would provide a powerful incentive for banking organizations to achieve and maintain strong capital positions, solid manage- THE NEED FOR LEGISLATIVE CHANGE ment, and a commitment to the community. There is a limit, however, to how far we or the other In a similar vein, S.650 would eliminate branch banking agencies can go in rationalizing the regu- applications for banks that meet the specified caplation imposed on our nation's banks. Although we ital, management, and community reinvestment speak of "regulatory" burden, that term is some- standards. The cost of these applications, which are thing of a misnomer. The Board must operate routinely approved by all the agencies, is not within statutory constraints, and all of our regula- justified when the applicant is well-capitalized, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 673 well-managed, and serving its community. Further- million to $50 million. The Board believes that this more, S.650 would eliminate branch applications step would provide important relief to our nation's for automatic teller machines (ATMs) in all cases. community banks without undercutting the goal of The law defining a branch to include an ATM for the act. this purpose is simply an anachronism. Together, Second, the bill makes a variety of changes to the these two changes would eliminate the need for a Community Reinvestment Act (CRA) that, collecsubstantial number of branch applications filed tively, would affect the way the banking agencies with the banking agencies. administer that act. Some of these changes are Finally, S.650 would eliminate or modify other directed at concerns the agencies addressed in their applications requirements whose benefits no longer recently revised CRA regulations, such as the justify their costs, including applications for invest- exemption for small banks. That multiyear effort ment in bank premises and determinations that a recognized that the burden imposed on small instibank holding company does not control shares of tutions needed to be reduced and focused on stock that it divests to certain companies. making the CRA evaluation process more objec- The Board supports these changes and, indeed, tive, performance-based, and predictable. Before believes that the bill should go further still. We changing the rules in this area once again, we believe that the provisions in the bill eliminating believe that the Congress should pause to consider the application process for acquisitions by well- whether the agencies' efforts will achieve the obmanaged and well-capitalized banking organiza- jectives of S.650 in this area. Furthermore, the tions need to be extended to routine proposals prohibition on additional reporting would leave the involving nonbanking activities (such as mortgage agencies unable to carry out the mandates of the act banking or securities brokerage) that the Board has through their recently adopted regulations. We already determined to be permissible. The applica- believe that if an agency is assigned a responsibiltion requirement places bank holding companies ity, it should also be granted the tools necessary to increasingly at a competitive disadvantage with fulfill its mandate. other companies that face no similar federal review S.650 also contains CRA reforms not addressed requirement. We estimate that adoption of this by the agencies' recent efforts, particularly incenproposal could reduce the filing of notices to tives for CRA performance. Section 133 provides engage in nonbanking activities by 60 percent or that any institution that receives a "satisfactory" or more. The reduction in burden associated with all "outstanding" rating is deemed, for purposes of the the changes made by S.650 and recommended by applications process, to have met the purposes of the Board would be substantial. the CRA in regard to community credit needs. The Lastly, we believe that the bill should be Board endorses the concept of providing incentives amended to eliminate a hearing provision for non- to institutions for good CRA performance. As the banking applications, given the ample opportunity Board has previously testified, however, it is imafforded all parties to make written submissions. portant to differentiate in the offering of incentives between institutions whose performance may be barely satisfactory and institutions whose performance is close to outstanding. Accordingly, the CONSUMER REFORMS Board believes that the Congress should add a new rating category of "high satisfactory" to the current S.650 contains numerous amendments to the con- 4-point rating system and then focus benefits, such sumer protection statutes administered by the as the application relief mentioned earlier, on insti- Board. Although time does not permit me to tutions at that and the higher "outstanding" level. discuss each of these provisions, I will mention Third, the entire Board believes that the Truth in those of particular importance to the Board. Savings Act could be amended to make compliance First, section 236 of the bill would reduce the less onerous but is divided on the merits of the number of institutions required to report the Home approach taken in section 141 of the bill. I and a Mortgage Disclosure Act data by raising the asset majority of the Board support the approach of the level at which reporting is mandatory from $10 bill, which would repeal portions of Truth in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin • July 1995 Savings. Section 141 would leave intact the re- (FBSEA) to lower the standards under which forquirement that a depository institution pay interest eign banks may enter and operate in the United on the full principal in a consumer's account, States and to reduce significantly the authority of thereby barring the use of the investable and the Federal Reserve to examine their U.S. operalow-balance methods in determining interest pay- tions on a comprehensive basis. The Board strongly ments. This requirement, which is already in place opposes these provisions of the bill, as they remove for financial institutions generally, benefits con- many of the important protections that were consumers without imposing excessive burdens. In sidered necessary in the wake of the Banca Nazioaddition, the Congress should prohibit misleading nale del Lavoro and Bank of Credit and Commerce or inaccurate advertising in the promotion of de- International (BCCI) affairs and were included in posit accounts—similar to the approach taken in FBSEA. The Board believes that it is too soon to H.R.1362, which leaves in place the current bar on conclude that those protections are no longer necmisleading advertisements. Such a limitation would essary and sees no evidence that they are not. be valuable in ensuring that consumers are not More specifically, the bill would permit the misled by advertising that, for example, publicizes Board to deny entry to foreign banks only on the high "teaser" rates without informing consumers very narrow ground that establishment of an office of the limited periods for which they are in effect or by a foreign bank would place at risk the safe and of other conditions that will determine the rates sound operation of the U.S. financial system—a actually paid. standard that even BCCI probably would not have Before leaving the consumer area, I would like to failed. The bill would also deprive the Board of make one general observation. Our consumer reg- important examination authority. Because the aculations are quite detailed, more so than one might tivities of the various U.S. banking offices of a expect. One reason for this detail, and, ironically, foreign bank are often highly intertwined, examithe reason why the industry often demands rather nations need to be coordinated not only to avoid than rejects such detail, is the possibility of civil duplication of effort but also to ensure a complete liability. Because banks can be liable for any and comprehensive picture of the organization, misstep, they ask the Board to clarify every rule reducing the potential for financial manipulation. and validate every practice. It may be time for a To this end, in 1994 the Federal Reserve and other serious reexamination of whether all the civil lia- state and federal bank regulatory authorities that bility provisions in the consumer statutes are truly supervise more than 90 percent of the assets of U.S. needed to protect consumers. branches and agencies of foreign banks announced a joint program to enhance the supervision of foreign banks. Although the Board believes that these provi- OTHER PROVISIONS sions go too far, the Board believes that some provisions of FBSEA should be reevaluated—most Although the Board supports the great majority of notably the inflexible requirement that the Board the provisions of S.650, there are three that cause us may not approve an application unless a foreign considerable concern: relaxing the standards for bank is subject to comprehensive consolidated foreign banks operating in the United States to the supervision by home country authorities. This stanextent proposed, loosening the terms for intraday dard has proved a significant barrier to entry for credit for the Federal Home Loan Banks, and banks from jurisdictions, especially developing transferring authority for administering the Real countries, that have not yet implemented a policy of Estate Settlement Procedures Act (RESPA) to the consolidated supervision. The Board would recom- Board. mend adding a provision to S.650 that would allow a foreign bank that meets all other requirements to open a limited office in the United States, subject to Foreign Banks appropriate safeguards, if the bank's home country is making progress toward consolidated supervi- As currently drafted, S.650 would amend the Forsion. This amendment would give well-run foreign eign Bank Supervision Enhancement Act of 1991 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 675 banks from developing countries an opportunity to other does not achieve substantial reform or, necestablish a limited presence in the United States, essarily, burden reduction. while still providing an incentive for home country Instead, we offer a different solution for RESPA. authorities to continue to implement reforms for The Board believes that an in-depth reassessment consolidated supervision. Although the Board sup- by the Congress of RESPA's fundamental requireports the setting of a deadline for action on appli- ments is more to the point. We believe that the cations for foreign bank entry, the deadline in the Congress should set aside the very complex issues bill is too restrictive, given the difficult issues raised by RESPA for separate hearings that could raised in many foreign bank cases. focus on the substance of RESPA rather than on administrative jurisdiction. There are serious ques- Daylight Overdrafts tions to be considered, including, for example, the suggestion by some parties to real estate transac- Also of concern to the Board is section 305 of the tions that RESPA may be stifling innovation and bill, which would essentially require that the Fed- technological advancement from which the public eral Reserve make intraday credit, in the form of might benefit. daylight overdrafts, available to the Federal Home We urge the Congress to undertake such an Loan Banks. This would create a nonmarket source assessment rather than simply transfer regulatory of short-term funding for the Federal Home Loan authority. We believe that the Board is not the Bank system without the costs incurred by depos- appropriate locus for this responsibility. itory institutions in maintaining required reserves. Section 305 would thereby serve as a precedent for CLOSING THOUGHTS government-sponsored enterprises to escape the market discipline inherent in their statutory funding In closing, I would like to expand on one thought I schemes. The Board opposes extending this tax- mentioned earlier: that when the Congress or the payer subsidy to the Federal Home Loan Banks. agencies impose a regulatory burden, there are generally good reasons for doing so at the time. As RESPA time passes, however, the reasons for imposing the requirement may subside, but the requirement takes S.650 attempts in a very limited way to improve the on a life of its own. A good example of this administration of the Real Estate Settlement Proce- phenomenon is the sixty-year-old Glass-Steagall dures Act, or RESPA, by transferring regulatory Act, a law that was a response to a time and a authority from the Department of Housing and financial system that bear little relation to our own. Urban Development to the Board. Although such a S.650 addresses half of this problem by requiring transfer may have some intuitive appeal because of that the agencies reexamine each regulation on a the Board's Truth in Lending responsibilities, there regular basis, a provision the Board endorses. are important reasons why the Board is concerned However, as S.650 elsewhere recognizes, there are about this provision. First, unlike Truth in Lending, some things that only the Congress can do. For that certain portions of RESPA are in essence a price- reason, the Board hopes that the Congress would regulation scheme—one that the Board lacks ex- commit itself to a similar reexamination of the pertise to administer and that is foreign to the banking statutes themselves—either through the Board's central bank responsibilities. Second, even use of sunset provisions when appropriate or, less if the Board were better suited to the task, simply formally, through periodic oversight hearings on transferring responsibility from one agency to an- existing statutes and regulatory burden. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin • July 1995 Statement by Edward W. Kelley, Jr., Member, Board fit" coins and notes as they wear out and operating of Governors of the Federal Reserve System, to the the Federal Reserve currency and coin-processing Subcommittee on Domestic and International Mon- facilities that provide the public with good-quality, etary Policy of the Committee on Banking and genuine coins and notes. Financial Services, U.S. House of Representatives, May 3, 1995 Let us start with the following assumptions to illustrate the budget and accounting processes: (1) the Treasury's borrowing rate is 5.5 percent; (2) 7 The Board of Governors is pleased that the Con- billion $1 notes will already be in circulation at the gress is again considering legislation that would time of the changeover; (3) $1 notes have a useful provide for substituting a $1 coin for the $1 bank life of 1.5 years and cost 3.8 cents each to produce; note now in circulation, and we appreciate the (4) $1 coins would have a useful life of thirty years opportunity to present information on several ben- and cost 8 cents each to produce; and (5) $1 notes efits and costs of making such a replacement. and $1 coins would cost 75 cents and 30 cents per In summary, a $1 coin would produce a substan- thousand pieces respectively to be processed at the tial budgetary gain for the federal government, Federal Reserve Banks. provided that the $1 note is withdrawn from circu- In the issuance of currency notes, the reduction lation. The Board believes, however, that the con- in net governmental borrowing from the public venience and needs of the American public, rather occurs indirectly. The federal government's total than cost savings, should be the main consideration borrowing and total interest outlays are not afin making this decision. Experience in Canada, fected, but the Federal Reserve System holds a where a similar change was made some years ago, portfolio of government securities equal to the suggests that the public will, over time, find a $1 value of Federal Reserve notes outstanding, and, at coin more convenient than the $1 note. Finally, we the margin, the Federal Reserve returns to the would note that the significance of the U.S. dollar Treasury its full earnings on those securities. These goes beyond the purchasing power it represents or earnings are, from the Treasury's viewpoint, a the utility it provides; for Americans, the dollar is a return of its own interest outlays.1 symbol of economic and political stability and a source of national pride; consequently, any change • In our simplified model, the $7 billion of should be made only for the most compelling outstanding $1 notes provides a gross benefit to the reasons. If, after taking account of all these consid- Treasury of $385 million per year.2 erations, the Congress is inclined toward replacing • The cost of servicing the $1 note issue is the the $1 note, it should enact legislation with a cost of replacing each note every 1.5 years, or $177 reasonably delayed effective date so that all those million per year,3 and of processing it 1.3 times per affected can plan adequately for the transition. year at Reserve Banks, or $7 million per year.4 The impact on the federal budget of issuing coins and currency notes is not widely understood by the Thus the net benefit to the Treasury associated with public, so it may be useful to devote a part of this 7 billion of outstanding $1 notes is $201 million per statement to reviewing those fundamentals. The year.5 accounting processes and budget presentations are quite different in substance: In the issuance of coins, the reduction in net governmental borrowing from the public occurs • Both issuing coins and issuing currency notes directly. When the Treasury deposits newly minted lower the government's effective cost of borrowing from the public, by approximately the value of the coin or currency notes in circulation times the 1. The federal government budget accounts treat Federal Reserve interest rate that the government pays on its debt. earnings paid to the Treasury as a miscellaneous receipt. • There is an offsetting cost to the government 2. $7 billion x 5.5 percent. 3. 7 billion notes ^ 1.5 x $.038. associated with servicing the outstanding circulat- 4. 7 billion notes x 1.3 x $.00075. ing coins or notes, which involves replacing "un- 5. $385 million - $177 million - $7 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 677 coins at Federal Reserve Banks, it receives credit to their pocket change at the end of the day and partly its checking account, and thus the government is from a tendency for banking and retail establishable to make budgeted expenditures without addi- ments to hold larger quantities of coins than of tional borrowing in the amount of the face value of notes of equal value.) In our simplified model, the newly deposited coins less their production cost doubling the number of $1 coins in circulation (which amount we call "seigniorage").6 would add another $334 million per year to the Treasury's benefit, for a total benefit of $467 • Seven billion new $1 coins would reduce the million.14 federal government's total borrowing by $6.44 The simplified model, of course, does not fully billion7 and total interest outlays by $354 million reflect the real world. There are factors that would per year,8 a gross benefit not much different from both increase and decrease the $467 million annual the gross benefit from 7 billion notes. benefit shown above. In particular, growth in the • But the cost of replacing each coin every thirty volume of $1 currency pieces outstanding—historyears would be only $19 million per year9 and of ically, more than 4 percent per year—would, over processing dollar coins at Reserve Banks 0.3 times time, considerably increase the benefit of substitutonly $1 million per year.10 ing coins for notes. So would any numismatic, or sentimental, collecting of $1 notes that might result Thus the net benefit to the Treasury associated with from the announcement that they soon would no 7 billion of outstanding $1 coins would be $334 longer be issued (although $1 notes would continue million per year,11 considerably higher than that for to be legal tender). On the other hand, some an equal number of currency notes. increase in the use of $2 notes by the public seems At this point in the analysis, replacing $1 notes very likely if the $1 note were no longer issued, and with $1 coins would have a favorable impact on the any such increase would reduce the budgetary gain. governmental budget of $133 million per year.12 In addition, the production cost for higher denom- However, such a replacement would have a fur- ination notes would rise because fixed costs at the ther—and even more significant—benefit. Based Bureau of Engraving and Printing would be spread on the experience in virtually every country that over a smaller production volume. ($1 notes achas made a comparable substitution, the govern- count for nearly 50 percent of the total annual ment can expect to issue at least twice as many $1 currency note production.) coins as it would have issued $1 notes.13 (This may Taking account of these additional factors, the result partly from the habit of many people to save Board's staff estimates that, in the first five years of the implementation, the federal government budget position would be improved by a total of $2.28 6. The budgetary accounting process for coin production somebillion (in nominal terms). The average yearly gain times gives rise to the belief that the booking of seigniorage per se reduces the Treasury's borrowing requirement. This is not so. It is in real present-value terms, over the assumed being able to spend the newly minted coins that reduces the thirty-year life of a $1 coin is estimated to be $460 Treasury's need to borrow. Such spending seldom occurs directly, million.15 of course; the Treasury ordinarily deposits newly minted coins at Federal Reserve Banks for credit to its checking account. Reserve These gains are unlikely to be achieved, how- Banks accept only as many new coins as they expect to need to ever, if the $1 note is not withdrawn from circulameet the requirements of depository financial institutions in their tion. This is because the private sector (notably Districts. 7. $7 billion face value—$560 million production cost. 8. $6.44 billion x 5.5 percent. 9. 7 billion coins ^ 30 x $.08. New Dollar Coin or Elimination of Pennies (GAO, May 1990), 10. 7 billion coins x 0.2 x $.00030. Note that $1 notes are p. 39. typically deposited at Federal Reserve Banks an average of 1.3 14. An attachment to this statement summarizes these effects times per year. We expect that $1 coins would be deposited only 0.2 and is available from Publications Services, Board of Governors of times. the Federal Reserve System, Washington, DC 20551. 11. $354 million - $20 million. 15. The thirty-year estimate uses an inflation rate of zero, a 12. $334 million - $201 million. Treasury borrowing rate of 3 percent, and a rate for discounting 13. In six countries that replaced a note valued at about $1 with future values to the present of 3 percent. The advantage of a coin, the General Accounting Office found coin-for-note replace- expressing the longer-run financial impacts in real present-value ment rates ranging from 1.6 to 1 to 4 to 1. General Accounting terms is that it adjusts for inflation and the time value of the Office, National Coinage Proposals, Limited Public Demand for magnitudes involved. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin • July 1995 banking and retail establishments), not knowing time for those most involved—the Nation's bankhow extensively the public will use the $1 coin, ing and retail establishments, the Treasury Bureaus will be reluctant to make the infrastructure outlays of the mint and of Engraving and Printing, and the necessary for the coin to succeed (training employ- Federal Reserve Banks. Preparing for the issuance ees on new cash-register-drawer procedures, order- of new $1 coins will be complex and time-consuming of $1 coin inventories, new arrangements with ing, and the prescribed preparation period—eightfinancial institutions, and the like). Likewise, the een months—would not be sufficient. The mint will public will refrain from using the new coin if the need time to be certain that the design is effective, retail sector is not prepared.16 In the meantime, the both mechanically and in terms of public acceppublic sector (particularly the Bureau of Engraving tance. There will be substantial changes in resource and Printing, the Bureau of the Mint, and the requirements at the Bureau of Engraving and Print- Federal Reserve System; perhaps also the Postal ing, the Bureau of the Mint, and the Federal Service and mass transit systems), not knowing Reserve Banks and branches. And, above all, the what the respective demands will be for $1 notes Nation's banks and retail establishments will have and coins, and wanting to be able to meet any likely to plan carefully for the changeover. demand, will inevitably overinvest in production Moreover, beginning in 1996, the Treasury and and processing capacity. Federal Reserve will begin a multiyear introduction As important as the budgetary gains would be, of new designs for Federal Reserve notes that will the Board believes that the foremost consideration be completed (with the introduction of a newly in this decision should be the convenience and designed $5 note) in about 1999. It would be needs of the public. In this regard, opinion surveys preferable that these important changes not occur indicate that the American public generally is contemporaneously with the introduction of a $1 satisfied with the present currency system and may coin. not initially welcome replacing the $1 note. There A reasonable approach may be for the Congress is evidence in the Canadian experience, however, to explore thoroughly the implications—for the that over time a $1 coin would come to be recog- federal budget, for the convenience and needs of nized as more convenient, cleaner, and more effi- the public, and for the public's feelings toward the cient than the $1 note. currency—of replacing the $1 note with a coin. If If designed properly, a $1 coin may well be able the Congress judges that the balance of considerto evoke confidence in the currency system and be ations weighs in favor of replacing the note, it a source of national pride to the same extent that should adopt legislation as promptly as possible the $1 note does now. Market testing, such as with that would establish dates in the future for introfocus groups, can help to achieve this result. ducing the new $1 coin, say in about four years to We believe that some legislative proposals, such coincide with issuance of the newly designed $5 as H.R.534, would not provide enough preparation note, and for no longer issuing $1 notes. In that way, both the public and private sectors would have a sound basis for beginning immediately to plan for 16. For an excellent treatment of "network externalities" in the change. • currency systems, see John P. Caskey and Simon St. Laurent, "The Susan B. Anthony Dollar and the Theory of Coin/Note Substitutions," Journal of Money, Credit, and Banking, vol. 26 (August 1994, Part 1), pp. 495-510. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 679 Statement by Susan M. Phillips, Member, Board of Such regulation, however, cannot succeed if it is Governors of the Federal Reserve System, before designed to eliminate at any cost the possibility of the Subcommittee on Financial Institutions and any bank failure—either a financial failure or a Consumer Credit of the Committee on Banking and failure to serve customers. Rather, banking regula- Financial Services, U.S. House of Representatives, tion must aim to produce at a reasonable cost the May 18, 1995 banking system that can best serve our economy and the American people. Each requirement, re- I am pleased to be here today to discuss H.R.I362, striction, application, and report imposed may inthe Financial Institutions Regulatory Relief Act of dividually be justified at the time of adoption, but 1995. The Board welcomes its introduction and collectively the amount of regulation created over supports its purpose of relieving costs imposed on time can become a significant obstacle for the our nation's banking system by governmental reg- community banker and, equally important, someulation, particularly when those costs are not offset one hoping to start a community bank. by corresponding benefits to the safety and sound- As H.R.I362 recognizes, the aggregate regulaness of our nation's financial institutions, the pro- tory burden on our nation's banks has become tection of bank customers, or the availability of substantial, raising the cost of banking services and credit. thereby encouraging customers to seek less costly In my testimony today, I will discuss the Board's loans and services or higher yielding investments efforts to reduce the cost of regulation and why we from other financial intermediaries that are not believe that legislation is necessary to continue subject to the same regulatory requirements. Furthose efforts. I will then address those portions of thermore, our banks must operate in increasingly the bill that make major changes to laws adminis- competitive financial markets, both domestic and tered by the Board, particularly in the area of bank global. The United States can ill afford to handicap and branching applications, where I believe the bill its banking institutions with unnecessary and dyswould significantly reduce burden, and in the con- functional regulation. sumer area. Finally, I will highlight provisions The Board believes the time has come to reexabout which the Board does have concerns. Still, I amine each of our banking statutes and regulations do not wish these objections in any way to detract and decide whether its benefits are commensurate from the central message of my testimony: that the with its costs. The Board believes that there are nation's banking system needs legislation of the restrictions in current banking law that cannot pass type presented by H.R.I362. this test. To address this problem, the Board advo- Appended to my testimony are the Board's cates not only burden relief of the type provided by comments on certain provisions that are not dis- H.R.I362 but also reform of anachronistic statutes cussed directly in my testimony.1 such as the Glass-Steagall Act, which needlessly and significantly hinders the ability of U.S. banking organizations to compete. We applaud this commit- THE ROLE OF REGULATION tee' s recent approval of Glass-Steagall reform and urge the House to pass H.R.1062. Banking regulation serves clearly defined purposes. They include protecting the federal safety net and thereby the taxpayer, preserving a strong banking system, minimizing the destabilizing effects on the OUR EFFORTS AT THE BOARD economy caused by any difficulties in the banking system, providing consumer protection, and ensur- The recognition that regulatory burden must be ing that communities are served by our banking reduced is not new at the Board. Since 1978, the system. Board has maintained a formal program of regulatory review and simplification, and in 1986 the Board established a Regulatory Planning and Re- 1. The attachments to this statement are available from Publicaview office, charged with ensuring that regulatory tions Services, Mail Stop 127, Board of Governors of the Federal Reserve System, Washington, DC 20551. proposals minimize the burdens imposed on those Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

680 Federal Reserve Bulletin • July 1995 that must comply. The Board has long believed that Applications significant reductions can be made in regulatory burden by eliminating requirements that are redun- One of H.R.I362's most important reforms comes dant or have outlived their usefulness. in the applications area, where it would eliminate The Board has redoubled these efforts in recent federal regulatory review for routine bank acquisiyears. For example, we have streamlined the appli- tions and branch openings by well-capitalized and cations process by shortening processing times, well-managed banking organizations that are helpsubstituting a notice requirement for an application ing to meet the credit needs of their communities. whenever possible, waiving applications for trans- H.R.1362 would also allow well-capitalized and actions reviewed by other regulators, and reducing well-managed organizations to commence previthe paperwork that must accompany applications ously approved nonbanking activities without filing and notices. These changes have reduced both the an application. The Board's experience in adminvolume of paper that must be filed by notificants istering these statutory requirements over the past and the time required for the Board to review thirty-nine years leads us to endorse these initianonbanking proposals. Of the more than 3,500 tives very strongly. applications and notices acted on during 1994, 94 Currently, the Bank Holding Company Act repercent were completed within the Board's self- quires that all bank holding companies obtain imposed sixty-day target, with the average period Board approval before acquiring control of another of review lasting thirty-four days. In other areas, depository institution or merging with another bank the Board has worked within the limits of its holding company. The bill would eliminate this governing statutes to expand the list of permissi- application requirement for proposals that raise no ble nonbanking activities for banking organiza- serious competitive issue and are made by bank tions, to remove outdated restrictions on the con- holding companies that met specified standards for duct of these activities, and to eliminate restrictions capital, management, and community reinvestment that prevented banking organizations from provid- at their previous examination. The vast majority of ing discounts to their customers on packages of such proposals processed by the Board meet these products. requirements and are routinely approved. Thus, we I have attached to my testimony a more complete believe that the cost of continuing the applications list of our initiatives to reduce unnecessary regula- process in such cases is unnecessary from a public tory burden over the past three years. policy perspective. The bill not only would make the applications process simpler, less burdensome, and more transparent for qualifying banking organizations but also would provide a powerful incen- THE NEED FOR LEGISLATIVE CHANGE tive for banking organizations to achieve and maintain strong capital positions, solid management, There is a limit, however, to how far we or the other and a commitment to the community. banking agencies can go in rationalizing the regu- The bill would also eliminate the application lation imposed on our nation's banks. Although we process for well-managed and well-capitalized speak of "regulatory" burden, that term is some- banking organizations that wish to engage in nonthing of a misnomer. The Board must operate banking activities (such as mortgage banking or within statutory constraints, and all of our regula- securities brokerage) that the Board has already tions are either required by statute or are necessary determined to be permissible. The application reto explain or implement a statute. Put simply, we quirement places bank holding companies inhave no choice but to regulate and in some cases to creasingly at a competitive disadvantage with overregulate. other companies that face no similar federal re- H.R.1362 provides the type of statutory changes view requirement. The bill also eliminates a hearthat would allow a reduction in regulatory burden ing provision for nonbanking applications, which is an unnecessary burden given the ample opporin many areas without adversely affecting safety tunity afforded all parties to make written submisand soundness or other important supervisory and sions. policy concerns. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 681 In a similar vein, H.R.I362 would eliminate self-certification, are directed at concerns the agenbranch applications for banks that meet the speci- cies addressed in their recently revised CRA regufied capital, management, and community reinvest- lations. That multiyear effort recognized that the ment standards. The cost of these applications, burden imposed on small institutions needed to be which are routinely approved by all the agencies, is reduced and focused on making the CRA evaluanot justified when the applicant is well-capitalized, tion process more objective, performance-based, well-managed, and serving its community. Further- and predictable. Before changing the rules in this more, H.R.I362 would eliminate branch applica- area once again, we believe that the Congress tions for automated teller machines (ATMs) in all should pause to consider whether the agencies' cases. The law defining a branch to include an ATM efforts will achieve the objectives of H.R.I362 in for this purpose is simply an anachronism. To- this area. Furthermore, the prohibition on addigether, these two changes would eliminate the need tional reporting would leave the agencies unable to for a substantial number of branch applications carry out the mandates of the act through their filed with the banking agencies. recently adopted regulations. We believe that if an Finally, H.R.I362 would eliminate or modify agency is assigned a responsibility, it should also be other applications requirements whose benefits no granted the tools necessary to fulfill its mandate. longer justify their costs, including applications for H.R.I362 also contains CRA reforms not adinvestment in bank premises and determinations dressed by the agencies' recent efforts, particularly that a bank holding company does not control incentives for CRA performance. Section 124 proshares of stock that it divests to certain companies. vides that any institution that receives a "satisfac- I wish to stress the practical, bottom-line impor- tory" or "outstanding" rating is deemed to have tance of these reforms. We estimate that adoption met the purposes of the CRA in regard to commuof this proposal would reduce the number of nity credit needs for purposes of the applications applications filed with the Federal Reserve by at process. The Board endorses the concept of providleast 50 percent—eliminating more than 1,700 ing incentives to institutions for good CRA perforapplications currently filed with the Board each mance. As the Board has previously testified, howyear and saving the industry untold hours of time ever, it is important to differentiate in the offering of and substantial legal expenses. incentives between institutions whose performance may be barely satisfactory and institutions whose performance is close to outstanding. Accordingly, the Board believes that the Congress should add a CONSUMER REFORMS new rating category of "high satisfactory" to the current 4-point rating system and then focus bene- H.R.I362 also contains numerous amendments to fits, such as the application relief in title II of the the consumer protection statutes administered by bill, on institutions at that and the higher "outstandthe Board. Although time does not permit me to ing" level. discuss each of these provisions, I will mention Third, the entire Board believes that the Truth in those of particular importance to the Board. Savings Act could be amended to make compliance First, section 116 of the bill would reduce the less onerous but is divided on the merits of portions number of institutions required to report Home of section 131 of the bill. I and a majority of the Mortgage Disclosure Act data by raising the asset Board support the general direction of the bill, level at which reporting is mandatory from $10 which would eliminate some provisions of the million to $50 million. The Board believes that this Truth in Savings Act and revise others. Section 131 step would provide important relief to our nation's would leave intact the requirement that a deposicommunity banks without undercutting the goal of tory institution pay interest on the full principal in the act. Second, the bill makes a variety of changes a consumer's account, thereby barring the use of to the Community Reinvestment Act (CRA) that, the investable and low-balance methods in detercollectively, would affect the way the banking mining interest payments. This requirement, which agencies administer that act. Some of these is already in place for financial institutions generchanges, such as the small bank exemption and ally, benefits consumers without imposing exces- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin • July 1995 sive burdens. Section 131 would also continue to by a foreign bank would place at risk the safe and prohibit misleading or inaccurate advertising in the sound operation of the U.S. financial system—a promotion of deposit accounts. Such a limitation is standard that even the Bank of Credit and Comvaluable in ensuring that consumers are not misled merce International probably would not have by advertising that, for example, publicizes high failed. As drafted, the bill would also deprive the "teaser" rates without informing consumers of the Board of important examination authority. Because limited periods for which they are in effect or of the activities of the various U.S. banking offices of other conditions that will determine the rates actu- a foreign bank are often highly intertwined, examally paid. inations need to be coordinated not only to avoid Before leaving the consumer area, I would like to duplication of effort but also to ensure a complete make one general observation. Our consumer reg- and comprehensive picture of the organization, ulations are quite detailed, more so than one might reducing the potential for financial manipulation. expect. One reason for this detail, and, ironically, To this end, in 1994 the Federal Reserve and other the reason why the industry often demands rather state and federal bank regulatory authorities that than rejects such detail, is the possibility of civil supervise more than 90 percent of the assets of U.S. liability. Because banks can be liable for any branches and agencies of foreign banks announced misstep, they ask the Board to clarify every rule a joint program to enhance the supervision of and validate every practice. The amendments to the foreign banks. Truth in Lending Act in title I of the bill, which the Although the Board believes that these provi- Board supports, take an important step toward sions go too far, the Board believes that some addressing this problem, but it may also be time for provisions of FBSEA should be reevaluated—most a broader reexamination of whether all the civil notably the inflexible requirement that the Board liability provisions in the consumer statutes are not approve an application unless a foreign bank is truly needed to protect consumers. subject to comprehensive consolidated supervision by home country authorities. This standard has proved a significant barrier to entry for banks from jurisdictions, especially developing countries, that OTHER PROVISIONS have not yet fully implemented a policy of consolidated supervision. The Board would recommend Although the Board supports the great majority of adding a provision to H.R.I362 that would allow a the provisions of H.R.I 362, there are two that cause foreign bank to open an office in the United States, us considerable concern: relaxing the standards for subject to appropriate safeguards, if the bank's foreign banks operating in the United States to the home country is making progress toward consoliextent proposed and transferring authority for ad- dated supervision. This amendment would give ministering the Real Estate Settlement Procedures well-run foreign banks from developing countries Act (RESPA) to the Board. an opportunity to establish a presence in the United States under appropriate conditions, while still Foreign Banks providing an incentive for home country authorities to continue to implement reforms for consolidated As currently drafted, H.R.I362 would amend the supervision. H.R.I362 also establishes a deadline Foreign Bank Supervision Enhancement Act of for the Board to act on foreign bank applications, a 1991 (FBSEA) to lower the standards under which concept the Board endorses. foreign banks may enter and operate in the United We would be pleased to work with the committee States and to reduce significantly the authority of on appropriate changes to the foreign bank provithe Federal Reserve to examine their U.S. opera- sions. tions on a comprehensive basis. The Board opposes these provisions of the bill as drafted. RESPA More specifically, the bill would permit the Board to deny entry to foreign banks only on the H.R.I362 attempts in a very limited way to imvery narrow ground that establishment of an office prove the administration of the Real Estate Settle- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 683 ment Procedures Act by transferring regulatory We urge the Congress to undertake such an authority from the Department of Housing and assessment rather than simply transfer regulatory Urban Development to the Board. Although such a authority. We believe that the Board is not the transfer may have some intuitive appeal because of appropriate locus for this responsibility. the Board's Truth in Lending responsibilities, there are important reasons why the Board is concerned CLOSING THOUGHTS about this provision. First, unlike Truth in Lending, certain portions of RESPA are in essence a price- In closing, I would like to expand on one thought I regulation scheme—one which the Board lacks mentioned earlier: that when the Congress or the expertise to administer and which is foreign to the agencies impose a regulatory burden, there are Board's central bank responsibilities. Second, even generally good reasons for doing so at the time. As if the Board were better suited to the task, simply time passes, however, the reasons for imposing the transferring responsibility from one agency to an- requirement may subside, but the requirement takes other does not achieve substantial reform or, nec- on a life of its own. A good example of this essarily, burden reduction. phenomenon is the sixty-year-old Glass-Steagall Instead, we offer a different solution for RESPA. Act, a law that was a response to a time and a The Board believes that an in-depth reassessment financial system that bear little relation to our own. by the Congress of RESPA's fundamental require- H.R.1362 addresses half of this problem by ments is more to the point. We believe that the requiring the agencies to reexamine each regulation Congress should set aside the very complex issues on a regular basis, a provision the Board endorses. raised by RESPA for separate hearings that could However, as H.R.1362 elsewhere recognizes, there focus on the substance of RESPA rather than on are some things that only the Congress can do. For administrative jurisdiction. There are serious ques- that reason, the Board hopes that the Congress tions to be considered, including, for example, the would commit itself to a similar reexamination of suggestion by some parties to real estate transac- the banking statutes themselves—either through tions that RESPA may be stifling innovation and the use of sunset provisions when appropriate or, technological advancement from which the public less formally, through periodic oversight hearings might benefit. on existing statutes and regulatory burden. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Announcements REQUESTS FOR NOMINATIONS FOR ISSUANCE OF JOINT FRAMEWORK APPOINTMENTS TO THE CONSUMER FOR SUPERVISORY INFORMATION ADVISORY COUNCIL AND MEETING ABOUT DERIVATIVES ACTIVITIES OF THE COUNCIL OF BANKS AND SECURITIES FIRMS The Federal Reserve Board announced on June 1, The Basle Committee on Banking Supervision and 1995, that it was seeking nominations of qualified the Technical Committee of the International individuals for nine appointments to its Consumer Organisation of Securities Commissions (IOSCO) Advisory Council. issued on May 16, 1995, a joint framework for The Consumer Advisory Council is composed of supervisory information about the derivatives thirty representatives of consumer and community activities of banks and securities firms. interests and of the financial services industry. The This joint framework, which is being issued to council was established by the Congress in 1976 to supervisors of banks and securities firms, is part of advise the Board on the exercise of its responsibili- a continuing effort to improve supervisors' access ties under the Consumer Credit Protection Act and to, and evaluation of, timely and comprehensive information about institutions' activities involving on other matters on which the Board seeks its over-the-counter and exchange-traded derivatives. advice. The council by law represents the interests The joint supervisory information framework has both of consumers and of the financial community. two main parts. The first part summarizes the risks The group meets in Washington, D.C., three times associated with derivatives (for example, credit a year. risk, liquidity risk, and market risk) and discusses Nine new members will be selected from the qualitative and quantitative information that supernominations to serve three-year terms that will visors could obtain to assess these risks. The paper begin in January 1996. The Board expects to also discusses earnings information that may be announce the selection of new members by yearuseful for supervisory analysis purposes. end 1995. The second part of the paper sets forth a com- Nominations should be submitted in writing and mon minimum framework of supervisory informashould include the address and telephone number tion that focuses on a baseline of information that of the nominee. In addition, information about past is useful for supervisors to begin assessing the and present positions held and special knowledge, effect of derivatives on an institution's risk interests, or experience related to consumer credit profile—primarily information about the extent of or other consumer financial services should be an institution's derivatives activities and their credit included. risk. The written nominations must be received by The two committees plan to periodically update August 31, 1995, and should be addressed to the joint supervisory information framework and to Dolores S. Smith, Associate Director, Division incorporate information about market risk into its of Consumer and Community Affairs, Board of common minimum framework at a later stage. Governors of the Federal Reserve System, Washington, D.C. 20551. Information about nominees REGULATION B: FINAL REVISIONS TO will be available for inspection upon request. OFFICIAL STAFF COMMENTARY The Federal Reserve Board announced on May 31, 1995, that a meeting of its Consumer The Federal Reserve Board published on June 1, Advisory Council was scheduled for June 29. 1995, final revisions to its official staff commentary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

685 to Regulation B (Equal Credit Opportunity). The variable rate), and a telephone number for each revisions became effective on June 5. card issuer surveyed. The revisions to the commentary provide guid- In addition, definitions and explanations of the ance on several issues including disparate treat- various methods to calculate the finance charge are ment, special purpose credit programs, credit- supplied. Consumers are encouraged to examine scoring systems, and discrimination based on the various plans and to determine the effect the marital status. different variables might have on their budgets. Copies of the brochure may be obtained free of charge and are available from the twelve Federal AVAILABILITY OF A BROCHURE ON THE Reserve Banks or from Publications Services, Mail TERMS OF CREDIT CARD PLANS Stop 127, Board of Governors of the Federal Reserve System, Washington, DC 20551. The Federal Reserve Board has published its semiannual report on the terms of credit card plans offered by credit card issuers throughout the United ERRATUM: Federal Reserve Bulletin States. The survey information on credit card terms is contained in the brochure Shop... The Card You In "Monetary Policy and Open Market Operations Pick Can Save You Money. It is designed to help during 1994" in the June 1995 issue of the Federal consumers comparison shop when looking for a Reserve Bulletin, table 1 on page 571 contains an credit card. Because the terms can affect the error: The federal funds rate for the July 5-6,1994, amount an individual pays for using a credit card, meeting was listed as 43A percent; in fact the rate the brochure lists the annual percentage rate (APR), was 4V4 percent. No change was made to the fedannual fee, grace period, type of pricing (fixed or eral funds rate at this meeting. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Minutes of the Federal Open Market Committee Meeting Held on March 28,1995 A meeting of the Federal Open Market Committee Mr. Simpson, Associate Director, Division of was held in the offices of the Board of Governors Research and Statistics, Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, March 28, 1995, at 9:00 a.m. Ms. Low, Open Market Secretariat Assistant, Division of Monetary Affairs, Board of Governors Present: Mr. Greenspan, Chairman Mr. McDonough, Vice Chairman Messrs. Goodfriend, Lang, Rolnick, Rosenblum, Mr. Blinder and Sniderman, Senior Vice Presidents, Mr. Hoenig Federal Reserve Banks of Richmond, Mr. Kelley Philadelphia, Minneapolis, Dallas, and Mr. Lindsey Cleveland respectively Mr. Melzer Ms. Minehan Messrs. Kos and Judd, and Ms. Rosenbaum, Mr. Moskow Vice Presidents, Federal Reserve Banks of Ms. Phillips New York, San Francisco, and Atlanta Ms. Yellen respectively Messrs. Boehne, Jordan, McTeer, and Stern, Alternate Members of the Federal Open Mr. Thornton, Assistant Vice President, Federal Market Committee Reserve Bank of St. Louis Messrs. Broaddus, Forrestal, and Parry, Presidents By unanimous vote, the minutes of the meeting of the Federal Reserve Banks of Richmond, of the Federal Open Market Committee held on Atlanta, and San Francisco respectively January 31-February 1, 1995, were approved. By unanimous vote, responsibility for making Mr. Kohn, Secretary and Economist Mr. Bernard, Deputy Secretary decisions on appeals of denials by the Secretary of Mr. Coyne, Assistant Secretary the Committee for access to Committee records Mr. Gillum, Assistant Secretary was delegated under the provisions of 271.4(d) of Mr. Mattingly, General Counsel the Committee's Rules Regarding Availability of Mr. Baxter, Deputy General Counsel Information to Ms. Phillips and, in her absence, to Mr. Prell, Economist Mr. Truman, Economist Ms. Yellen. By unanimous vote, the Committee elected Ms. Browne, Messrs. Davis, Hunter, Lindsey, Thomas C. Baxter, Jr. as Deputy General Counsel Mishkin, Promisel, Siegman, Slifman, and from the Federal Reserve Bank of New York and Stockton, Associate Economists William C. Hunter as Associate Economist from the Federal Reserve Bank of Chicago to serve until Mr. Fisher, Manager, System Open Market Account the next election at the first meeting of the Committee after December 31, 1995, with the understand- Mr. Ettin, Deputy Director, Division of Research ing that in the event of the discontinuance of their and Statistics, Board of Governors official connection with the Federal Reserve Banks Mr. Madigan, Associate Director, Division of Monetary Affairs, Board of Governors of New York and Chicago respectively, they would Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

687 cease to have any official connection with the Fed- the extent necessary to carry out the most recent eral Open Market Committee. domestic policy directive adopted at a meeting of the Committee: On January 12, 1995, the continuing rules, regu- (a) To buy or sell U.S. Government securities, lations, and other instruments of the Committee including securities of the Federal Financing Bank, and had been distributed with the advice that, in accor- securities that are direct obligations of, or fully guarandance with procedures approved by the Committee, teed as to principal and interest by, any agency of the they were being called to the Committee's attention United States in the open market, from or to securities dealers and foreign and international accounts mainto give members an opportunity to raise any questained at the Federal Reserve Bank of New York, on a tions they might have concerning them. cash, regular, or deferred delivery basis, for the System Members were asked to indicate if they wished Open Market Account at market prices, and, for such to have any of the instruments in question placed Account, to exchange maturing U.S. Government and on the agenda, and no requests for substantive Federal agency securities with the Treasury or the individual agencies or to allow them to mature without consideration were received. Apart from the updatreplacement; provided that the aggregate amount of U.S. ing of the Manager's title, all of the instruments Government and Federal agency securities held in such identified below remained in effect in their existing Account (including forward commitments) at the close forms: of business on the day of a meeting of the Committee at which action is taken with respect to a domestic policy 1. Federal Open Market Committee Rules directive shall not be increased or decreased by more than $8.0 billion during the period commencing with the a) Rules of Organization opening of business on the day following such meeting b) Rules of Procedure and ending with the close of business on the day of the c) Rules Regarding Availability of next such meeting; Information (b) When appropriate, to buy or sell in the open d) Open Market Operations of Federal market, from or to acceptance dealers and foreign Reserve Banks accounts maintained at the Federal Reserve Bank of New York, on a cash, regular, or deferred delivery basis, e) Procedures for Allocation of Securities in for the account of the Federal Reserve Bank of the System Open Market Account New York at market discount rates, prime bankers accepf) Resolution to Provide for the Continued tances with maturities of up to nine months at the time of Operation of the Committee During an Emergency acceptance that (1) arise out of the current shipment of goods between countries or within the United States, or g) Resolution Authorizing Certain Actions by (2) arise out of the storage within the United States of Federal Reserve Banks During an Emergency goods under contract of sale or expected to move into h) Guidelines for the Conduct of System the channels of trade within a reasonable time and that Open Market Operations in Federal Agency Issues are secured throughout their life by a warehouse receipt 2. Authority for the Chairman to appoint a Fed- or similar document conveying title to the underlying goods; provided that the aggregate amount of bankers eral Reserve Bank as agent to operate the System acceptances held at any one time shall not exceed Account in case the New York Bank is unable to $100 million; function (c) To buy U.S. Government securities, obligations 3. Resolution relating to examinations of the that are direct obligations of, or fully guaranteed as to System Open Market Account principal and interest by, any agency of the United 4. Regulation relating to Open Market Opera- States, and prime bankers acceptances of the types authorized for purchase under 1(b) above, from dealers tions of Federal Reserve Banks for the account of the Federal Reserve Bank of New York under agreements for repurchase of such By unanimous vote, the Authorization for securities, obligations, or acceptances in 15 calendar Domestic Open Market Operations shown below days or less, at rates that, unless otherwise expressly was reaffirmed. authorized by the Committee, shall be determined by competitive bidding, after applying reasonable limitations on the volume of agreements with individual deal- AUTHORIZATION FOR DOMESTIC ers; provided that in the event U.S. Government securi- OPEN MARKET OPERATIONS ties or agency issues covered by any such agreement are not repurchased by the dealer pursuant to the agreement Reaffirmed March 28, 1995 or a renewal thereof, they shall be sold in the market or transferred to the System Open Market Account; and provided further that in the event bankers acceptances 1. The Federal Open Market Committee authorizes covered by any such agreement are not repurchased by and directs the Federal Reserve Bank of New York, to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin • July 1995 the seller, they shall continue to be held by the Federal tional Settlements, and with other international financial Reserve Bank or shall be sold in the open market. institutions: 2. In order to ensure the effective conduct of open market operations, the Federal Open Market Committee Austrian schillings Italian lire authorizes and directs the Federal Reserve Banks to lend Belgian francs Japanese yen Canadian dollars Mexican pesos U.S. Government securities held in the System Open Danish kroner Netherlands guilders Market Account to Government securities dealers and to Pounds sterling Norwegian kroner French francs Swedish kronor banks participating in Government securities clearing German marks Swiss francs arrangements conducted through a Federal Reserve Bank, under such instructions as the Committee may B. To hold balances of, and to have outstanding specify from time to time. forward contracts to receive or to deliver, the foreign 3. In order to ensure the effective conduct of open currencies listed in paragraph A above. market operations, while assisting in the provision of C. To draw foreign currencies and to permit forshort-term investments for foreign and international eign banks to draw dollars under the reciprocal currency accounts maintained at the Federal Reserve Bank of arrangements listed in paragraph 2 below, provided that New York, the Federal Open Market Committee autho- drawings by either party to any such arrangement shall rizes and directs the Federal Reserve Bank of New York be fully liquidated within 12 months after any amount (a) for System Open Market Account, to sell U.S. Gov- outstanding at that time was first drawn, unless the ernment securities to such foreign and international Committee, because of exceptional circumstances, speaccounts on the bases set forth in paragraph 1(a) under cifically authorizes a delay. agreements providing for the resale by such accounts of D. To maintain an overall open position in all those securities within 15 calendar days on terms compaforeign currencies not exceeding $25.0 billion. For this rable to those available on such transactions in the purpose, the overall open position in all foreign currenmarket; and (b) for New York Bank account, when cies is defined as the sum (disregarding signs) of net appropriate, to undertake with dealers, subject to the positions in individual currencies. The net position in a conditions imposed on purchases and sales of securities single foreign currency is defined as holdings of balin paragraph 1(c), repurchase agreements in U.S. Governances in that currency, plus outstanding contracts for ment and agency securities, and to arrange correspondfuture receipt, minus outstanding contracts for future ing sale and repurchase agreements between its own delivery of that currency, i.e., as the sum of these eleaccount and foreign and international accounts mainments with due regard to sign. tained at the Bank. Transactions undertaken with such 2. The Federal Open Market Committee directs the accounts under the provisions of this paragraph may Federal Reserve Bank of New York to maintain reciproprovide for a service fee when appropriate. cal currency arrangements ("swap" arrangements) for the System Open Market Account for periods up to a By unanimous vote, the Authorization for For- maximum of 12 months with the following foreign eign Currency Operations was amended to reflect banks, which are among those designated by the Board of Governors of the Federal Reserve System under Secthe new title of Manager, System Open Market tion 214.5 of Regulation N, Relations with Foreign Account. Banks and Bankers, and with the approval of the Committee to renew such arrangements on maturity. AUTHORIZATION FOR FOREIGN Foreign bank CURRENCY OPERATIONS Austrian National Bank Amended March 28, 1995 National Bank of Belgium 1. The Federal Open Market Committee authorizes Bank of Canada National Bank of Denmark and directs the Federal Reserve Bank of New York, for Bank of England System Open Market Account, to the extent necessary to Bank of France German Federal Bank carry out the Committee's foreign currency directive and Bank of Italy express authorizations by the Committee pursuant Bank of Japan thereto, and in conformity with such procedural instruc- Bank of Mexico tions as the Committee may issue from time to time: Regular A. To purchase and sell the following foreign cur- Special Netherlands Bank rencies in the form of cable transfers through spot or Bank of Norway forward transactions on the open market at home and Bank of Sweden Swiss National Bank abroad, including transactions with the U.S. Treasury, Bank for International Settlements: with the U.S. Exchange Stabilization Fund established Dollars against Swiss francs by Section 10 of the Gold Reserve Act of 1934, with Dollars against authorized European currencies other than Swiss francs foreign monetary authorities, with the Bank for Interna- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 689 Any changes in the terms of existing swap arrange- B. To keep the Secretary of the Treasury fully ments, and the proposed terms of any new arrangements advised concerning System foreign currency operations, that may be authorized, shall be referred for review and and to consult with the Secretary on policy matters approval to the Committee. relating to foreign currency operations; 3. All transactions in foreign currencies undertaken C. From time to time, to transmit appropriate reunder paragraph l.A. above shall, unless otherwise ports and information to the National Advisory Council expressly authorized by the Committee, be at prevailing on International Monetary and Financial Policies. market rates. For the purpose of providing an investment 8. Staff officers of the Committee are authorized to return on System holdings of foreign currencies, or for transmit pertinent information on System foreign curthe purpose of adjusting interest rates paid or received in rency operations to appropriate officials of the Treasury connection with swap drawings, transactions with for- Department. eign central banks may be undertaken at non-market 9. All Federal Reserve Banks shall participate in the exchange rates. foreign currency operations for System Account in ac- 4. It shall be the normal practice to arrange with cordance with paragraph 3 G(l) of the Board of Goverforeign central banks for the coordination of foreign nors' Statement of Procedure with Respect to Foreign currency transactions. In making operating arrangements Relationships of Federal Reserve Banks dated January 1, with foreign central banks on System holdings of foreign 1944. currencies, the Federal Reserve Bank of New York shall not commit itself to maintain any specific balance, By unanimous vote, the Foreign Currency Direcunless authorized by the Federal Open Market Committive shown below was reaffirmed. tee. Any agreements or understandings concerning the administration of the accounts maintained by the Federal Reserve Bank of New York with the foreign banks designated by the Board of Governors under Section 214.5 of Regulation N shall be referred for review and approval to the Committee. FOREIGN CURRENCY DIRECTIVE 5. Foreign currency holdings shall be invested insofar as practicable, considering needs for minimum working Reaffirmed March 28, 1995 balances. Such investments shall be in liquid form, and generally have no more than 12 months remaining to 1. System operations in foreign currencies shall genmaturity. When appropriate in connection with arrange- erally be directed at countering disorderly market condiments to provide investment facilities for foreign cur- tions, provided that market exchange rates for the U.S. rency holdings, U.S. Government securities may be pur- dollar reflect actions and behavior consistent with the chased from foreign central banks under agreements for IMF Article IV, Section 1. repurchase of such securities within 30 calendar days. 2. To achieve this end the System shall: 6. All operations undertaken pursuant to the preced- A. Undertake spot and forward purchases and sales ing paragraphs shall be reported promptly to the Foreign of foreign exchange. Currency Subcommittee and the Committee. The For- B. Maintain reciprocal currency ("swap") arrangeeign Currency Subcommittee consists of the Chairman ments with selected foreign central banks and with the and Vice Chairman of the Committee, the Vice Chair- Bank for International Settlements. man of the Board of Governors, and such other member C. Cooperate in other respects with central banks of the Board as the Chairman may designate (or in the of other countries and with international monetary absence of members of the Board serving on the Sub- institutions. committee, other Board members designated by the 3. Transactions may also be undertaken: Chairman as alternates, and in the absence of the Vice A. To adjust System balances in light of probable Chairman of the Committee, his alternate). Meetings of future needs for currencies. the Subcommittee shall be called at the request of any B. To provide means for meeting System and Treamember, or at the request of the Manager, System Open sury commitments in particular currencies, and to facili- Market Account ("Manager"), for the purposes of tate operations of the Exchange Stabilization Fund. reviewing recent or contemplated operations and of con- C. For such other purposes as may be expressly sulting with the Manager on other matters relating to his authorized by the Committee. responsibilities. At the request of any member of the 4. System foreign currency operations shall be Subcommittee, questions arising from such reviews and conducted: consultations shall be referred for determination to the A. In close and continuous consultation and coop- Federal Open Market Committee. eration with the United States Treasury; 7. The Chairman is authorized: B. In cooperation, as appropriate, with foreign A. With the approval of the Committee, to enter monetary authorities; and into any needed agreement or understanding with the C. In a manner consistent with the obligations of Secretary of the Treasury about the division of responsi- the United States in the International Monetary Fund bility for foreign currency operations between the Sys- regarding exchange arrangements under the IMF Artitem and the Treasury; cle IV. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690 Federal Reserve Bulletin • July 1995 By unanimous vote, the Procedural Instructions by the System and about any operations that are not of a with Respect to Foreign Currency Operations routine character. shown below were amended to reflect the new title of Manager, System Open Market Account. The Manager of the System Open Market Account reported on developments in foreign exchange markets and on System open market transactions in foreign currencies during the period PROCEDURAL INSTRUCTIONS WITH RESPECT TO February 1, 1995, through March 27, 1995. By FOREIGN CURRENCY OPERATIONS unanimous vote, the Committee ratified these Amended March 28, 1995 transactions. The Manager also reported on developments in In conducting operations pursuant to the authorization domestic financial markets and on System open and direction of the Federal Open Market Committee as market transactions in government securities and set forth in the Authorization for Foreign Currency federal agency obligations during the period Feb- Operations and the Foreign Currency Directive, the Federal Reserve Bank of New York, through the Manager, ruary 1, 1995, through March 27, 1995. By System Open Market Account ("Manager"), shall be unanimous vote, the Committee ratified these guided by the following procedural understandings with transactions. respect to consultations and clearances with the Commit- The Committee then turned to a discussion of the tee, the Foreign Currency Subcommittee, and the Chaireconomic and financial outlook and the implemenman of the Committee. All operations undertaken pursuant to such clearances shall be reported promptly to the tation of monetary policy over the intermeeting Committee. period ahead. A summary of the economic and 1. The Manager shall clear with the Subcommittee financial information available at the time of the (or with the Chairman, if the Chairman believes that meeting and of the Committee's discussion is proconsultation with the Subcommittee is not feasible in the vided below, followed by the domestic policy ditime available): A. Any operation that would result in a change in rective that was approved by the Committee and the System's overall open position in foreign currencies issued to the Federal Reserve Bank of New York. exceeding $300 million on any day or $600 million since The information reviewed at this meeting sugthe most recent regular meeting of the Committee. gested that the expansion of economic activity had B. Any operation that would result in a change on moderated considerably in early 1995. Slower any day in the System's net position in a single foreign currency exceeding $150 million, or $300 million when growth in consumer spending, associated in part the operation is associated with repayment of swap with a sharp decline in expenditures for motor drawings. vehicles, and weakness in housing purchases were C. Any operation that might generate a substantial factors in the moderation. Despite signs of some volume of trading in a particular currency by the System, weakening in final demand, however, further sizeven though the change in the System's net position in that currency might be less than the limits specified in able gains had been recorded in industrial producl.B. tion and payroll employment, and overall rates of D. Any swap drawing proposed by a foreign resource utilization remained high. Broad indexes bank not exceeding the larger of (i) $200 million or of consumer and producer prices had risen more (ii) 15 percent of the size of the swap arrangement. rapidly on average over January and February, but 2. The Manager shall clear with the Committee (or wages had shown no sign of an acceleration. with the Subcommittee, if the Subcommittee believes that consultation with the full Committee is not feasible Nonfarm payroll employment increased considin the time available, or with the Chairman, if the Chair- erably over January and February, although the man believes that consultation with the Subcommittee is average monthly advance was somewhat smaller not feasible in the time available): than that of 1994. Further brisk job gains were A. Any operation that would result in a change in recorded in the January-February period in manuthe System's overall open position in foreign currencies exceeding $1.5 billion since the most recent regular facturing; hiring in retail and wholesale trade and meeting of the Committee. in the service-producing sector slowed a bit; and B. Any swap drawing proposed by a foreign bank construction payrolls changed little on balance. The exceeding the larger of (i) $200 million or (ii) 15 percent average workweek of production or nonsuperof the size of the swap arrangement. visory workers remained at a high level over the 3. The Manager shall also consult with the Subcomtwo months. The civilian unemployment rate rose mittee or the Chairman about proposed swap drawings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 691 in January but fell back in February to its Decem- about the average rate of the final three quarters of ber level of 5.4 percent. 1994. In manufacturing, inventory accumulation The expansion in industrial production also mod- outpaced sales in January; the stocks-to-sales ratio erated in January and February from the rapid pace edged higher but was still near historical lows. At of last year. Manufacturing production grew less wholesale establishments, inventory accumulation rapidly, with output gains down sharply in Febru- picked up in January as a large rise in automotive ary for consumer durable goods and construction inventories more than offset a reduced increase in supplies. Mining production continued to be slug- stocks of other goods. The inventory-to-sales ratio gish. By contrast, the output of utilities surged for the sector moved higher in January but during the January-February period as winter tem- remained well within its range of the last several peratures, which had been unusually warm, moved years. At the retail level, inventories jumped in back toward normal. Capacity utilization rates, January after a slight decline in December; almost which were little changed over the first two months all the rise reflected increased stocks of motor of the year, remained high. vehicles. The inventory-to-sales ratio for the retail Retail sales fell in February, reversing most of a sector as a whole was unchanged in January and sizable rise in January. The February declines in remained near the middle of its range of recent sales were widespread, with slippage evident at years; at automotive dealerships, the inventory-tomost types of retail outlets. Most indicators of sales ratio rose sharply while elsewhere the ratio housing activity had weakened in recent months in edged lower. lagged response to the earlier rise in mortgage The nominal deficit on U.S. trade in goods and interest rates. Housing starts fell sharply in January services widened sharply in January from its and edged still lower in February; these declines December level and its average rate in the fourth more than erased the gains that had been posted on quarter; some of the increase in the deficit was due balance over the closing months of 1994. A sub- to trade with Mexico, but somewhat distorted stantial drop in sales of existing homes in January seasonal adjustment factors also may have been (latest data) extended the trend that had been evi- involved. The value of exports of goods and serdent for some months. vices declined substantially in January after having Shipments of nondefense capital goods recorded increased strongly in November and December. another strong advance in February. Shipments of The value of imports rose considerably in January, office and computing equipment rebounded in continuing the pattern of the fourth quarter. The February from declines in December and January, export losses and import gains in January were and demand for most other types of equipment distributed widely across major trade categories. remained brisk. Business outlays for heavy trucks The pace of economic recovery in the major forfell back slightly in February after a surge in eign industrial countries appeared to have moder- January. While there were tentative signs in the ated in recent months. In the fourth quarter, ecorecent orders data of some deceleration in business nomic activity declined in Japan and grew more equipment spending, the still-growing backlog of slowly in most of the other major industrial coununfilled orders suggested further solid expansion in tries; growth had picked up in Canada. Available business spending on equipment. Nonresidential data suggested that in the first quarter economic construction activity had been trending appreciably expansion had slowed in all of the major foreign higher over the past two years; however, a slow- industrial countries except Japan, where growth down in spending by public utilities in December appeared to be positive despite the Kobe and January, in an environment of uncertainty earthquake. related to pending deregulation, and a third straight Consumer price increases in January and Februmonthly decline in permit issuance for nonresiden- ary were a little larger than the average monthly tial structures in February pointed to some soften- rise in 1994. Food prices were unchanged on baling in the uptrend. ance over the two-month period, while energy Business inventory investment surged in January prices were up only slightly. Producer prices of after a slowdown in December; excluding a large finished goods increased in January and February increase in stocks of motor vehicles at the whole- at the same rate as consumer prices; producer price sale and retail levels, inventories rose in January at inflation for the two months also was higher than in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin • July 1995 1994, with a steep rise in gasoline prices in January of monetary policy tightening might be coming to a contributing to the pickup. Producer prices of inter- close. The largest declines in yields were concenmediate materials surged in the first two months of trated in intermediate- and long-term obligations. this year after having accelerated sharply in the Stronger-than-expected earnings reports coupled second half of 1994. Average hourly earnings of with heightened prospects for sustained, moderate private production or nonsupervisory workers were economic expansion and continued low inflation unchanged in February after a substantial rise in boosted major indexes of equity prices to record January. For the two months combined, hourly levels. earnings increased at about the same average In foreign exchange markets, the trade-weighted monthly pace as in 1994. value of the dollar in terms of the other G-10 At its meeting on January 31-February 1, 1995, currencies fell substantially further. The dollar's the Committee adopted a directive that called for decline was particularly sharp against the Japanese increasing somewhat the existing degree of pres- yen and the German mark, and post-World War II sure on reserve positions, taking account of a pos- record lows against these two currencies were sible rise of Vi percentage point in the discount recorded. Declines in U.S. interest rates and conrate. The directive approved by the Committee did cerns about the persistence of large U.S. trade and not include a presumption about the likely direction fiscal deficits appeared to have contributed to the of any further adjustments to policy during the dollar's drop. Continuing economic and financial intermeeting period. Accordingly, the directive problems in Mexico, which resulted in further stated that in the context of the Committee's long- depreciation on balance of the Mexican peso run objectives for price stability and sustainable against the dollar, also seemed to add to negative economic growth, and giving careful consideration sentiment toward the dollar because the process of to economic, financial, and monetary develop- adjustment in the Mexican economy to the lower ments, somewhat greater or somewhat lesser value of the peso was viewed as implying reduced reserve restraint would be acceptable during the imports from and increased exports to the United intermeeting period. The reserve conditions associ- States. ated with this directive were expected to be consis- M2 declined, and growth of M3 slowed in Februtent with moderate growth of M2 and M3 over ary after sizable January gains; data for the first coming months. part of March pointed to some recovery in both On the second day of the meeting, the Board of aggregates. M2's weakness in February partly Governors approved an increase of xh percentage reflected an unwinding of temporary increases in point in the discount rate, to 5'A percent. The rise January of its volatile components, including was made effective immediately and was passed demand deposits, overnight repurchase agreements, through fully to interest rates in reserve markets. and overnight Eurodollars; the weakness also Open market operations during the intermeeting appeared to be associated with depositor efforts to period were conducted with a view to maintaining obtain higher returns by shifting funds into market the tighter policy stance adopted at the meeting and instruments. The slowdown in growth of M3 in implemented immediately thereafter. The federal February was entirely attributable to the decline in funds rate averaged a little less than 6 percent over M2; its non-M2 component increased substantially the intermeeting interval, and adjustment plus sea- further as banks continued to rely heavily on mansonal borrowing was a little below anticipated aged liabilities to fund loan growth. Expansion of levels. total domestic nonfinancial debt had picked up a Financial market participants generally had little in recent months. expected a firming in reserve market conditions, The staff forecast prepared for this meeting sugand consequently market interest rates showed little gested that growth of economic activity was slowimmediate reaction. Subsequently, most market ing and for some period ahead would average a interest rates declined considerably in response to little less than the rate of increase in the economy's both incoming data that were seen as indicating an potential output. The pace of the expansion seemed appreciable slowing in the pace of economic to have slackened somewhat more than had been expansion and statements by Federal Reserve offi- anticipated at the last meeting; however, the recent cials that were viewed as suggesting that the period declines in long-term interest rates and the rally in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 693 stock prices were expected to provide additional what with respect to both the likely extent of the support for aggregate demand later in the year. slowdown and the prognosis for inflation, the mem- Moreover, the substantial depreciation of the dollar bers generally agreed that the economy appeared to against the yen and several European currencies be on a trajectory toward a more sustainable path was acting to offset some of the effects on demand for economic activity. However, a number of memof the previous tightening of reserve conditions. bers expressed concern that the slowdown might The forecast continued to anticipate that in the not be sufficient to relieve the persisting pressures period ahead consumer spending would be on labor and capital resources, thereby portending restrained by smaller gains in real incomes, the higher inflation. substantial degree to which pent-up demands had In the course of the Committee's discussion, been satisfied, and the lagged effects of earlier members reported on widespread signs that busiincreases in interest rates on the demand for ness activity, while still quite strong in many areas, durable goods. Business outlays for new equipment was growing less rapidly on balance. Still, a numwould decelerate substantially in response to ber of factors pointed to continued solid expansion. slower growth of sales and profits. Homebuilding Business sentiment was generally described as was projected to decline somewhat further in the quite positive, though somewhat less ebullient than near term and to remain at somewhat subdued in earlier months. Likewise, recent surveys suglevels for a time in reflection of the damping effects gested that consumer confidence remained very on housing demand of slower growth in jobs and favorable, though down slightly from recent peaks incomes and of the earlier rise in mortgage rates. by most measures. In addition to the favorable Developments in Mexico were likely to interrupt recent developments in financial markets, bank only briefly a strong uptrend in U.S. exports, based lending policies remained quite accommodative, on sustained growth in the economies of other U.S. although business loan growth had slowed recently trading partners. Considerable uncertainty contin- after a period of unusual strength. ued to surround the federal fiscal outlook but, as in In their review of developments in key sectors of the previous forecast, a moderate pace of deficit the economy, members took note of the sluggishreduction was assumed over the forecast horizon. ness in consumer spending that had emerged in In the staff's judgment, the economy was operat- recent months in much of the country. To a considing beyond its long-run, noninflationary capacity, erable extent the recent weakness reflected a sharp and there remained a risk that higher inflation reduction in spending for motor vehicles, but there could emerge if the expansion did not moderate also were signs in the most recent data of broader sufficiently. declines in spending, especially for durable goods In the Committee's discussion of current and other than automobiles. Some reduction in spendprospective economic developments, the members ing for durable goods could be expected in lagged agreed that the pace of the economic expansion response to the policy tightening over the past year, was moderating, though the extent of the slow- but a few members noted that unusual weather down was not yet clear. The effects of the policy might have led to the temporary postponement of tightening implemented since early 1994 seemed to some discretionary purchases. In assessing the be showing through in interest-sensitive sectors, recent spending patterns, it was difficult to deterand those effects were expected to be reinforced by mine whether they represented a temporary pause some cutback in inventory accumulation from the or a more prolonged pullback by consumers. On unsustainable rates of previous quarters. Quarters balance, however, growth in consumer spending of fairly slow growth were not unusual in a period probably would slow somewhat further to a rate of expansion. On the whole, however, the economy more in line with the expansion in jobs and appeared to retain considerable forward momen- incomes. Consumer spending would tend to be tum, with current imbalances seemingly of a rela- sustained, however, by the ready availability of tively minor nature and in the process of being consumer financing and the rise in bond and stock corrected. Moreover, the recent declines in long- prices, which had strengthened household balance term interest rates, if these persisted, could provide sheets and perhaps was helping to bolster consumer fresh support for interest-sensitive spending later in confidence. 1995 and in 1996. While opinions differed some- The housing market had weakened noticeably Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin • July 1995 according to incoming data and anecdotal reports that inventory-to-sales ratios already were at genfrom around the country. The decline in home sales erally low levels, and they anticipated that any that began in the latter part of 1994 had persisted, desired adjustments to production would be made and housing starts had fallen sharply in the early quickly. In the circumstances, the size of the invenpart of the year as a consequence of the weaker tory correction and its effect on economic activity sales and a larger inventory of unsold homes. Partly would be limited. Moreover, reports of inventory because of the higher mortgage rates that had pre- shortages in some industries suggested that many vailed for some time, members anticipated still soft firms might raise their desired inventory levels to housing demand, particularly for single-family protect against shortfalls in materials needed in the houses. There had been some reports that recent production process. declines in mortgage interest rates were having a The defeat of the balanced budget amendment in mitigating effect. In some parts of the country, the Congress had clouded the outlook for deficit reducweakness in housing construction was being coun- tion. Nonetheless, a moderately restrictive fiscal tered by further improvement in nonresidential con- policy that would provide for some progress struction activity. In other areas where commercial toward a balanced budget during the forecast real estate conditions remained soft, declines in period was seen as a reasonable assumption. One vacancy rates seemed to be preparing the way for a member observed that there was a risk of a more pickup in commercial building activity. restrictive fiscal policy arising out of the dynamics Committee members anticipated that growth of of the current political debate. In any event, any business investment in plant and equipment would progress toward a balanced budget might be moderate from the extraordinary rate of the last expected to have a favorable effect on domestic two years but that such investment would continue financial markets and perhaps also on the dollar in to support growth in aggregate final demand during foreign exchange markets. the forecast period. The demand for durable equip- Members commented that considerable uncerment was expected to increase more gradually as tainty surrounded the outlook for the external secthe growth of economic activity slowed and busi- tor, but for now it seemed reasonable to forecast ness profits tended to flatten out, and the available that this sector would make a small positive contridata on equipment expenditures thus far in 1995 bution, on balance, to the growth of economic appeared to be in line with that expectation. How- activity over the forecast period. In the near term, ever, some anecdotal reports suggested that invest- economic developments in Mexico were leading to ment in plant and equipment might be stronger lower U.S. exports and higher imports; anecdotal than expected in an environment of tight labor reports suggested that the effects on trade flows and supply and elevated levels of capacity utilization, local business activity tended to be felt most intense desires to control costs and improve com- strongly in states that border Mexico. However, petitiveness, and a still relatively low user cost of there were signs that conditions were stabilizing in capital. The desire for additional production capac- Mexico, and more generally the relatively robust ity was reflected in spending for the construction growth projected for the major trading partners of of commercial and industrial structures, which the United States and the lower value of the dollar remained on an uptrend. now prevailing were expected to foster improve- The rapid rise in business inventories in recent ment in the nation's trade balance. quarters had been sustainable in the context of Members noted that while the pace of the expanbriskly increasing final sales, but with some further sion evidently had slowed, economic activity and accumulation early in the first quarter and eco- utilization of labor and other producer resources nomic growth projected to moderate, the rate of were still at very high levels. Prices of many mateinventory investment would have to adjust down- rials inputs to the production process had risen ward as well. While the timing and extent could sharply, but thus far there had been only a small not be anticipated with any precision, a short-term pickup in consumer prices. Likewise, the persisting inventory correction process might already be tightness in many labor markets had not to this under way, with firms initiating cutbacks to pro- point fostered appreciable increases in wages. The duction schedules to reflect smaller-than-expected absence of a significant rise in prices of finished gains in sales over recent months. Members noted goods or in wages might reflect in some measure Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 695 the lags in the inflation transmission process, the pected impulse that could ratchet inflation even fruits of heavy business investments in new capac- higher suggested that an asymmetric directive ity and more productive equipment in recent years, would be more consistent with the Committee's and perhaps structural changes in business organi- objective of moving over time toward price stabilzation that were raising the economy's capacity for ity. The economy retained considerable forward sustained, noninflationary activity. Members were momentum and, as had often happened in the past, concerned, however, that despite continuing com- the recent slowdown in growth could prove to be petitive pressures and some recent abatement in temporary, with additional monetary tightening materials prices, business firms were reporting needed at some point to contain inflation. In this greater success in passing cost increases through to connection a few members indicated that further prices. The depreciation of the dollar also would tightening might well be needed sooner rather than add to inflationary pressures in the economy. In later. An asymmetric directive also would provide these circumstances, the members generally con- a clear signal of the Committee's intention to resist cluded that some increase in inflation was likely in higher inflation. coming months. A few members preferred a symmetric directive. In the Committee's discussion of monetary pol- These members agreed that additional policy icy for the intermeeting period ahead, all the mem- tightening might be needed if inflation began bers endorsed a proposal to maintain an unchanged to pick up. However, they saw an undesirably degree of pressure in reserve markets. The policy weaker economic performance as being about tightening that had been implemented since early equally likely, and in their view this balance in the 1994 appeared to be exerting a desired restraining risks to the outlook called for the adoption of a effect on the growth of economic activity and asso- symmetric directive. The Committee's determinaciated demands for goods and services. But the tion to keep inflation under control would be approextent of the slowing in growth and its effects on priately conveyed, in their view, through future inflationary pressures were not yet clear. On bal- actions rather than through the adoption of a tilt ance, though, the available evidence tended to sug- toward restraint. However, these members indigest that the economy might be moving toward a cated that they could accept an asymmetric intergrowth path for economic activity that would be meeting instruction. consistent with limiting the uptick in inflation that At the conclusion of the Committee's discussion, was currently being experienced. In discussing all the members indicated that they preferred or their policy choices, several members noted the could support a directive that called for maintainrelatively steep decline in the value of the dollar. ing the existing degree of pressure on reserve posi- However, they believed that policy should not be tions and that included a bias toward the possible directed toward the achievement of a specific level firming of reserve conditions during the intermeetfor the dollar but rather toward the implementation ing period. Accordingly, in the context of the Comof an effective anti-inflationary monetary policy, mittee's long-run objectives for price stability and taking account of all the factors bearing on the sustainable economic growth, and giving careful economic outlook. In current circumstances, and consideration to economic, financial, and monetary given the substantial uncertainties that were developments, the Committee decided that someinvolved, the members believed that it would be what greater reserve restraint would be acceptable prudent to pause and assess developments before and slightly lesser reserve restraint might be accepttaking any further policy action. able during the intermeeting period. The reserve With regard to possible adjustments to policy conditions contemplated at this meeting were during the intermeeting period, most members expected to be consistent with moderate growth of expressed a preference for an asymmetric directive M2 and M3 over coming months. tilted toward restraint. These members indicated At the conclusion of the meeting, the Federal that near-term developments were not likely to call Reserve Bank of New York was authorized and for an adjustment to policy in either direction. directed, until instructed otherwise by the Commit- Nonetheless, with the economy expected to be tee, to execute transactions in the System Account operating in the neighborhood of its potential, the in accordance with the following domestic policy recent rise in inflation and the risk of an unex- directive: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Federal Reserve Bulletin • July 1995 The information reviewed at this meeting suggests and promote sustainable growth in output. In furtherance that the expansion of economic activity has moderated of these objectives, the Committee at its meeting on considerably in early 1995. Nonfarm payroll employ- January 31-February 1 established ranges for growth ment rose appreciably further in January and February, of M2 and M3 of 1 to 5 percent and 0 to 4 percent but at a pace below the average monthly gain in 1994; respectively, measured from the fourth quarter of 1994 the civilian unemployment rate, after rising in January, to the fourth quarter of 1995. The Committee anticipated fell back in February to its December level of 5.4 per- that money growth within these ranges would be consiscent. Advances in industrial production also moderated tent with its broad policy objectives. The monitoring in January and February, and capacity utilization rates range for growth of total domestic nonfinancial debt was generally changed little from already high levels. Total lowered to 3 to 7 percent for the year. The behavior of retail sales were about unchanged over the two months. the monetary aggregates will continue to be evaluated in Housing starts have declined somewhat after posting the light of progress toward price level stability, movesizable gains on balance during the closing months of ments in their velocities, and developments in the econ- 1994. Orders for nondefense capital goods point to a still omy and financial markets. strong expansion of spending on business equipment, In the implementation of policy for the immediate but with tentative signs of some deceleration; nonresi- future, the Committee seeks to maintain the existing dential construction has been trending appreciably degree of pressure on reserve positions. In the context of higher. The nominal deficit on U.S. trade in goods and the Committee's long-run objectives for price stability services widened sharply in January from its average and sustainable economic growth, and giving careful rate in the fourth quarter. Broad indexes of consumer and consideration to economic, financial, and monetary producer prices increased faster on average over January developments, somewhat greater reserve restraint would and February. or slightly lesser reserve restraint might be acceptable in On February 1, 1995, the Board of Governors the intermeeting period. The contemplated reserve conapproved an increase from 43A to 5lA percent in the ditions are expected to be consistent with moderate discount rate, and in keeping with the Committee's growth in M2 and M3 over coming months. decision at the January 31-February 1 meeting, the increase was allowed to show through fully to interest Votes for this action: Messrs. Greenspan, McDonrates in reserve markets. Nonetheless, most market inter- ough, Blinder, Hoenig, Kelley, Lindsey, Melzer, Ms. est rates have declined somewhat since the Committee Minehan, Mr. Moskow, Mses. Phillips and Yellen. meeting; the largest declines have been concentrated Votes against this action: None. in intermediate- and long-term obligations. In foreign exchange markets, the trade-weighted value of the dollar It was agreed that the next meeting of the Comin terms of the other G-10 currencies was down substanmittee would be held on Tuesday, May 23, 1995. tially further over the intermeeting period. The Mexican peso has continued to depreciate against the dollar. The meeting adjourned at 1:15 p.m. M2 and M3 weakened in February, though data for the first part of March pointed to some rebound. Growth of Donald L. Kohn total domestic nonfinancial debt has picked up a little in Secretary recent months. The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

697 Legal Developments FINAL RULE—AMENDMENT TO REGULATION BB Section 228.25—Community development test for wholesale or limited purpose banks. The Board of Governors is amending 12 C.F.R. Part 228, Section 228.26—Small bank performance standards. its Regulation BB (Community Reinvestment Act). The Section 228.27—Strategic plan. purpose of the Community Reinvestment Act regulation Section 228.28—Assigned ratings. is to establish the framework and criteria by which the Section 228.29—Effect of CRA performance on applica- Federal financial supervisory agencies assess an institu- tions. tion's record of helping to meet the credit needs of its community, including low- and moderate-income neigh- Subpart C—Records, Reporting, and Disclosure borhoods, consistent with safe and sound operations, and Requirements to provide that the agencies' assessment shall be taken into account in reviewing certain applications. Section 228.41—Assessment area delineation. The final rule seeks to emphasize performance rather Section 228.42—Data collection, reporting, and disclothan process, to promot consistency in evaluations, and sure. to eliminate unnecessary burden. As compared to the Section 228.43—Content and availability of public file. 1993 and 1994 proposals, the final rule reduces record- Section 228.44—Public notice by banks. keeping and reporting requirements and makes other Section 228.45—Publication of planned examination modifications and clarifications. schedule. Effective July 1, 1995, 12 C.F.R. Part 228 is revised to read as follows: Subpart D—Transition Rules Section 228.51—Transition rules. Part 228—Community Reinvestment (Regulation BB) 1. The authority citation for Part 228 is revised to read as follows: APPENDIX A TO PART 228—RATINGS Authority: 12 U.S.C. 321, 325, 1828(c), 1842, 1843, 1844, and 2901 et seq. APPENDIX B TO PART 228—CRA NOTICE Subpart A—General 2. Part 228 is amended by adding Subparts A through D and Appendices A and B to read as follows: Section 228.11—Authority, purposes, and scope. Subpart A—General Section (a) Authority. The Board of Governors of the Federal Reserve System (the Board) issues this part to imple- Section 228.11—Authority, purposes, and scope. ment the Community Reinvestment Act (12 U.S.C. 2901 Section 228.12—Definitions. et seq.) (CRA). The regulations comprising this part are issued under the authority of the CRA and under the Subpart B—Standards for Assessing Performance provisions of the United States Code authorizing the Board: Section 228.21—Performance tests, standards, and (1) To conduct examinations of State-chartered banks ratings, in general. that are members of the Federal Reserve System Section 228.22—Lending test. (12 U.S.C. 325); Section 228.23—Investment test. (2) To conduct examinations of bank holding compa- Section 228.24—Service test. nies and their subsidiaries (12 U.S.C. 1844); and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin • July 1995 (3) To consider applications for: Section 228.12—Definitions. (i) Domestic branches by State member banks (12 U.S.C. 321); For purposes of this part, the following definitions apply: (ii) Mergers in which the resulting bank would be a (a) Affiliate means any company that controls, is con- State member bank (12 U.S.C. 1828(c)); trolled by, or is under common control with another (iii) Formations of, acquisitions of banks by, and company. The term "control" has the meaning given to mergers of, bank holding companies (12 U.S.C. that term in 12 U.S.C. 1841(a)(2), and a company is 1842); and under common control with another company if both (iv) The acquisition of savings associations by bank companies are directly or indirectly controlled by the holding companies (12 U.S.C. 1843). same company. (b) Purposes. In enacting the CRA, the Congress re- (b) Area median income means: quired each appropriate Federal financial supervisory (1) The median family income for the MSA, if a agency to assess an institution's record of helping to person or geography is located in an MSA; or meet the credit needs of the local communities in which (2) The statewide nonmetropolitan median family inthe institution is chartered, consistent with the safe and come, if a person or geography is located outside an sound operation of the institution, and to take this MSA. record into account in the agency's evaluation of an ap- (c) Assessment area means a geographic area delineated plication for a deposit facility by the institution. This in accordance with section 228.41. part is intended to carry out the purposes of the CRA (d) Automated teller machine (ATM) means an autoby: mated, unstaffed banking facility owned or operated by, (1) Establishing the framework and criteria by which or operated exclusively for, the bank at which deposits the Board assesses a bank's record of helping to meet are received, cash dispersed, or money lent. the credit needs of its entire community, including (e) Bank means a State member bank as that term is low- and moderate-income neighborhoods, consistent defined in section 3(d)(2) of the Federal Deposit Insurwith the safe and sound operation of the bank; and ance Act (12 U.S.C. 1813(d)(2)), except as provided in (2) Providing that the Board takes that record into section 228.11(c)(3), and includes an uninsured State account in considering certain applications. branch (other than a limited branch) of a foreign bank (c) Scope. (1) General. This part applies to all banks described in section 228.11(c)(2). except as provided in paragraph (c)(3) of this section. (f) Branch means a staffed banking facility approved as a (2) Foreign bank acquisitions. This part also applies branch, whether shared or unshared, including, for examto an uninsured State branch (other than a limited ple, a mini-branch in a grocery store or a branch operbranch) of a foreign bank that results from an acquisi- ated in conjunction with any other local business or tion described in section 5(a)(8) of the International nonprofit organization. Banking Act of 1978 (12 U.S.C. 3103(a)(8)). The (g) CMSA means a consolidated metropolitan statistical terms "State branch" and "foreign bank" have the area as defined by the Director of the Office of Managesame meanings as in section 1(b) of the International ment and Budget. Banking Act of 1978 (12 U.S.C. 3101 et seq.y, the (h) Community development means: term "uninsured State branch" means a State branch (1) Affordable housing (including multifamily rental the deposits of which are not insured by the Federal housing) for low- or moderate-income individuals; Deposit Insurance Corporation; the term "limited (2) Community services targeted to low- or moderatebranch" means a State branch that accepts only depos- income individuals; its that are permissible for a corporation organized (3) Activities that promote economic development by under section 25A of the Federal Reserve Act financing businesses or farms that meet the size eligi- (12 U.S.C. 611 etseq.). bility standards of 13 C.F.R. 121.802(a)(2) or have (3) Certain special purpose banks. This part does not gross annual revenues of $1 million or less; or apply to special purpose banks that do not perform (4) Activities that revitalize or stabilize low- or commercial or retail banking services by granting moderate- income geographies. credit to the public in the ordinary course of business, (i) Community development loan means a loan that: other than as incident to their specialized operations. (1) Has as its primary purpose community develop- These banks include banker's banks, as defined in ment; and 12 U.S.C. 24 (Seventh), and banks that engage only in (2) Except in the case of a wholesale or limited one or more of the following activities: providing cash purpose bank: management controlled disbursement services or serv- (i) Has not been reported or collected by the bank ing as correspondent banks, trust companies, or clear- or an affiliate for consideration in the bank's assessing agents. ment as a home mortgage, small business, small Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 699 farm, or consumer loan, unless it is a multifamily or a median family income that is 120 percent or dwelling loan (as described in Appendix A to Part more, in the case of a geography, 203 of this chapter); and (o) Limited purpose bank means a bank that offers only a (ii) Benefits the bank's assessment area(s) or a narrow product line (such as credit card or motor vehicle broader statewide or regional area that includes the loans) to a regional or broader market and for which a bank's assessment area(s). designation as a limited purpose bank is in effect, in (j) Community development service means a service that: accordance with section 228.25(b). (1) Has as its primary purpose community develop- (p) Loan location. A loan is located as follows: ment; (1) A consumer loan is located in the geography (2) Is related to the provision of financial services; and where the borrower resides; (3) Has not been considered in the evaluation of the (2) A home mortgage loan is located in the geography bank's retail banking services under section 228.24(d). where the property to which the loan relates is lo- (k) Consumer loan means a loan to one or more individ- cated; and uals for household, family, or other personal expendi- (3) A small business or small farm loan is located in tures. A consumer loan does not include a home mort- the geography where the main business facility or gage, small business, or small farm loan. Consumer farm is located or where the loan proceeds otherwise loans include the following categories of loans: will be applied, as indicated by the borrower. (1) Motor vehicle loan, which is a consumer loan (q) Loan production office means a staffed facility, other extended for the purchase of and secured by a motor than a branch, that is open to the public and that provides vehicle; lending-related services, such as loan information and (2) Credit card loan, which is a line of credit for applications. household, family, or other personal expenditures that (r) MSA means a metropolitan statistical area or a priis accessed by a borrower's use of a "credit card," as mary metropolitan statistical area as defined by the this term is defined in section 226.2 of this chapter; Director of the Office of Management and Budget, (3) Home equity loan, which is a consumer loan (s) Qualified investment means a lawful investment, desecured by a residence of the borrower; posit, membership share, or grant that has as its primary (4) Other secured consumer loan, which is a secured purpose community development, consumer loan that is not included in one of the other (t) Small bank means a bank that, as of December 31 of categories of consumer loans; and either of the prior two calendar years, had total assets of (5) Other unsecured consumer loan, which is an unse- less than $250 million and was independent or an affilicured consumer loan that is not included in one of the ate of a holding company that, as of December 31 of other categories of consumer loans. either of the prior two calendar years, had total banking (1) Geography means a census tract or a block number- and thrift assets of less than $1 billion, ing area delineated by the United States Bureau of the (u) Small business loan means a loan included in "loans to small businesses" as defined in the instructions for Census in the most recent decennial census, preparation of the Consolidated Report of Condition and (m) Home mortgage loan means a "home improvement Income. loan" or a "home purchase loan" as defined in section 203.2 of this chapter, (v) Small farm loan means a loan included in "loans to (n) Income level includes: small farms" as defined in the instructions for prepara- (1) Low-income, which means an individual income tion of the Consolidated Report of Condition and Inthat is less than 50 percent of the area median income, come. or a median family income that is less than 50 percent, (w) Wholesale bank means a bank that is not in the in the case of a geography. business of extending home mortgage, small business, (2) Moderate-income, which means an individual in- small farm, or consumer loans to retail customers, and come that is at least 50 percent and less than for which a designation as a wholesale bank is in effect, 80 percent of the area median income, or a median in accordance with section 228.25(b). family income that is at least 50 and less than 80 percent, in the case of a geography. Subpart B—Standards for Assessing Performance (3) Middle-income, which means an individual income that is at least 80 percent and less than Section 228.21—Performance tests, standards, 120 percent of the area median income, or a median and ratings, in general. family income that is at least 80 and less than 120 percent, in the case of a geography. (a) Performance tests and standards. The Board assesses (4) Upper-income, which means an individual income the CRA performance of a bank in an examination as that is 120 percent or more of the area median income, follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Federal Reserve Bulletin • July 1995 (1) Lending, investment, and service tests. The Board Appendix A of this part: "outstanding"; "satisfactory"; applies the lending, investment, and service tests, as "needs to improve"; or "substantial noncompliance" as provided in sections 228.22 through 228.24, in evalu- provided in 12 U.S.C. 2906(b)(2). The rating assigned by ating the performance of a bank, except as provided in the Board reflects the bank's record of helping to meet paragraphs (a)(2), (a)(3), and (a)(4) of this section. the credit needs of its entire community, including low- (2) Community development test for wholesale or and moderate-income neighborhoods, consistent with limited purpose banks. The Board applies the commu- the safe and sound operation of the bank, nity development test for a wholesale or limited pur- (d) Safe and sound operations. This part and the CRA do pose bank, as provided in section 228.25, except as not require a bank to make loans or investments or to provided in paragraph (a)(4) of this section. provide services that are inconsistent with safe and sound (3) Small bank performance standards. The Board operations. To the contrary, the Board anticipates banks applies the small bank performance standards as pro- can meet the standards of this part with safe and sound vided in section 228.26 in evaluating the performance loans, investments, and services on which the banks of a small bank or a bank that was a small bank during expect to make a profit. Banks are permitted and encourthe prior calendar year, unless the bank elects to be aged to develop and apply flexible underwriting stanassessed as provided in paragraphs (a)(1), (a)(2), or dards for loans that benefit low- or moderate-income (а)(4) of this section. The bank may elect to be as- geographies or individuals, only if consistent with safe sessed as provided in paragraph (a)(1) of this section and sound operations. only if it collects and reports the data required for other banks under section 228.42. Section 228.22—Lending test. (4) Strategic plan. The Board evaluates the performance of a bank under a strategic plan if the bank submits, and the Board approves, a strategic plan as (a) Scope of test. (1) The lending test evaluates a bank's provided in section 228.27. record of helping to meet the credit needs of its (b) Performance context. The Board applies the tests and assessment area(s) through its lending activities by standards in paragraph (a) of this section and also con- considering a bank's home mortgage, small business, siders whether to approve a proposed strategic plan in small farm, and community development lending. If the context of: consumer lending constitutes a substantial majority of (1) Demographic data on median income levels, distri- a bank's business, the Board will evaluate the bank's bution of household income, nature of housing stock, consumer lending in one or more of the following housing costs, and other relevant data pertaining to a categories: motor vehicle, credit card, home equity, bank's assessment area(s); other secured, and other unsecured loans. In addition, (2) Any information about lending, investment, and at a bank's option, the Board will evaluate one or service opportunities in the bank's assessment area(s) more categories of consumer lending, if the bank has maintained by the bank or obtained from community collected and maintained, as required in section organizations, state, local, and tribal governments, 228.42(c)(1), the data for each category that the bank economic development agencies, or other sources; elects to have the Board evaluate. (3) The bank's product offerings and business strategy (2) The Board considers originations and purchases of as determined from data provided by the bank; loans. The Board will also consider any other loan (4) Institutional capacity and constraints, including data the bank may choose to provide, including data the size and financial condition of the bank, the eco- on loans outstanding, commitments and letters of nomic climate (national, regional, and local), safety credit. and soundness limitations, and any other factors that (3) A bank may ask the Board to consider loans significantly affect the bank's ability to provide lend- originated or purchased by consortia in which the ing, investments, or services in its assessment area(s); bank participates or by third parties in which the bank (5) The bank's past performance and the performance has invested only if the loans meet the definition of of similarly situated lenders; community development loans and only in accordance (б) The bank's public file, as described in sec- with paragraph (d) of this section. The Board will not tion 228.43, and any written comments about the consider these loans under any criterion of the lending bank's CRA performance submitted to the bank or the test except the community development lending crite- Board; and rion. (7) Any other information deemed relevant by the (b) Performance criteria. The Board evaluates a bank's Board. lending performance pursuant to the following criteria: (c) Assigned ratings. The Board assigns to a bank one of (1) Lending activity. The number and amount of the the following four ratings pursuant to section 228.28 and bank's home mortgage, small business, small farm, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 701 and consumer loans, if applicable, in the bank's as- (d) Lending by a consortium or a third party. Commusessment area(s); nity development loans originated or purchased by a (2) Geographic distribution. The geographic distribu- consortium in which the bank participates or by a third tion of the bank's home mortgage, small business, party in which the bank has invested: small farm, and consumer loans, if applicable, based (1) Will be considered, at the bank's option, if the on the loan location, including: bank reports the data pertaining to these loans under (i) The proportion of the bank's lending in the section 228.42(b)(2); and bank's assessment area(s); (2) May be allocated among participants or investors, (ii) The dispersion of lending in the bank's assess- as they choose, for purposes of the lending test, except ment area(s); and that no participant or investor: (iii) The number and amount of loans in low-, (i) May claim a loan origination or loan purchase if moderate-, middle-, and upper-income geographies another participant or investor claims the same loan in the bank's assessment area(s); origination or purchase; or (3) Borrower characteristics. The distribution, particu- (ii) May claim loans accounting for more than its larly in the bank's assessment area(s), of the bank's percentage share (based on the level of its participahome mortgage, small business, small farm, and con- tion or investment) of the total loans originated by sumer loans, if applicable, based on borrower character- the consortium or third party. istics, including the number and amount of: (e) Lending performance rating. The Board rates a (i) Home mortgage loans to low-, moderate-, bank's lending performance as provided in Appendix A middle-, and upper-income individuals; of this part. (ii) Small business and small farm loans to businesses and farms with gross annual revenues of $1 million or less; Section 228.23—Investment test. (iii) Small business and small farm loans by loan amount at origination; and (iv) Consumer loans, if applicable, to low-, (a) Scope of test. The investment test evaluates a bank's moderate-, middle-, and upper-income individuals; record of helping to meet the credit needs of its assess- (4) Community development lending. The bank's com- ment area(s) through qualified investments that benefit munity development lending, including the number its assessment area(s) or a broader statewide or regional and amount of community development loans, and area that includes the bank's assessment area(s). their complexity and innovativeness; and (b) Exclusion. Activities considered under the lending or (5) Innovative or flexible lending practices. The service tests may not be considered under the investment bank's use of innovative or flexible lending practices test. in a safe and sound manner to address the credit needs of (c) Affiliate investment. At a bank's option, the Board low- or moderate-income individuals or geographies. will consider, in its assessment of a bank's investment (c) Affiliate lending. (1) At a bank's option, the Board performance, a qualified investment made by an affiliate will consider loans by an affiliate of the bank, if the of the bank, if the qualified investment is not claimed by bank provides data on the affiliate's loans pursuant to any other institution. section 228.42. (d) Disposition of branch premises. Donating, selling on (2) The Board considers affiliate lending subject to the favorable terms, or making available on a rent-free basis following constraints: a branch of the bank that is located in a predominantly (i) No affiliate may claim a loan origination or loan minority neighborhood to a minority depository institupurchase if another institution claims the same loan tion or women's depository institution (as these terms origination or purchase; and are defined in 12 U.S.C. 2907(b)) will be considered as a (ii) If a bank elects to have the Board consider loans qualified investment. within a particular lending category made by one or (e) Performance criteria. The Board evaluates the inmore of the bank's affiliates in a particular assess- vestment performance of a bank pursuant to the followment area, the bank shall elect to have the Board ing criteria: consider, in accordance with paragraph (c)(1) of (1) The dollar amount of qualified investments; this section, all the loans within that lending cate- (2) The innovativeness or complexity of qualified gory in that particular assessment area made by all investments; of the bank's affiliates. (3) The responsiveness of qualified investments to (3) The Board does not consider affiliate lending in credit and community development needs; and assessing a bank's performance under paragraph (4) The degree to which the qualified investments are (b)(2)(i) of this section. not routinely provided by private investors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702 Federal Reserve Bulletin • July 1995 (f) Investment performance rating. The Board rates a Section 228.25—Community development test bank's investment performance as provided in Appendix for wholesale or limited purpose banks. A of this part. (a) Scope of test. The Board assesses a wholesale or limited purpose bank's record of helping to meet the Section 228.24—Service test. credit needs of its assessment area(s) under the community development test through its community develop- (a) Scope of test. The service test evaluates a bank's ment lending, qualified investments, or community derecord of helping to meet the credit needs of its assess- velopment services. ment area(s) by analyzing both the availability and effec- (b) Designation as a wholesale or limited purpose bank. tiveness of a bank's systems for delivering retail banking In order to receive a designation as a wholesale or services and the extent and innovativeness of its commu- limited purpose bank, a bank shall file a request, in nity development services. writing, with the Board, at least three months prior to the (b) Area(s) benefitted. Community development services proposed effective date of the designation. If the Board must benefit a bank's assessment area(s) or a broader approves the designation, it remains in effect until the statewide or regional area that includes the bank's as- bank requests revocation of the designation or until one sessment area(s). year after the Board notifies the bank that the Board has (c) Affiliate service. At a bank's option, the Board will revoked the designation on its own initiative. consider, in its assessment of a bank's service perfor- (c) Performance criteria. The Board evaluates the commance, a community development service provided by munity development performance of a wholesale or liman affiliate of the bank, if the community development ited purpose bank pursuant to the following criteria: service is not claimed by any other institution. (1) The number and amount of community develop- (d) Performance criteria—retail banking services. The ment loans (including originations and purchases of Board evaluates the availability and effectiveness of a loans and other community development loan data bank's systems for delivering retail banking services, provided by the bank, such as data on loans outstandpursuant to the following criteria: ing, commitments, and letters of credit), qualified (1) The current distribution of the bank's branches investments, or community development services; among low-, moderate-, middle-, and upper-income (2) The use of innovative or complex qualified investgeographies; ments, community development loans, or community (2) In the context of its current distribution of the development services and the extent to which the bank's branches, the bank's record of opening and investments are not routinely provided by private inclosing branches, particularly branches located in low- vestors; and or moderate-income geographies or primarily serving (3) The bank's responsiveness to credit and commulow- or moderate-income individuals; nity development needs. (3) The availability and effectiveness of alternative (d) Indirect activities. At a bank's option, the Board will systems for delivering retail banking services (e.g., consider in its community development performance ATMs, ATMs not owned or operated by or exclusively assessment: for the bank, banking by telephone or computer, loan (1) Qualified investments or community development production offices, and bank-at-work or bank-by- mail services provided by an affiliate of the bank, if the programs) in low- and moderate-income geographies investments or services are not claimed by any other and to low- and moderate-income individuals; and institution; and (4) The range of services provided in low-, moderate-, (2) Community development lending by affiliates, middle-, and upper-income geographies and the de- consortia and third parties, subject to the requirements gree to which the services are tailored to meet the and limitations in section 228.22(c) and (d). needs of those geographies. (e) Benefit to assessment area(s). (1) Benefit inside (e) Performance criteria—community development ser- assessment area(s). The Board considers all qualified vices. The Board evaluates community development ser- investments, community development loans, and comvices pursuant to the following criteria: munity development services that benefit areas within (1) The extent to which the bank provides community the bank's assessment area(s) or a broader statewide development services; and or regional area that includes the bank's assessment (2) The innovativeness and responsiveness of commu- area(s). nity development services. (2) Benefit outside assessment area(s). The Board (f) Service performance rating. The Board rates a bank's considers the qualified investments, community develservice performance as provided in Appendix A of this opment loans, and community development services part. that benefit areas outside the bank's assessment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 703 area(s), if the bank has adequately addressed the needs (2) Multiple assessment areas. A bank with more than of its assessment area(s). one assessment area may prepare a single plan for all (f) Community development performance rating. The of its assessment areas or one or more plans for one or Board rates a bank's community development perfor- more of its assessment areas. mance as provided in Appendix A of this part. (3) Treatment of affiliates. Affiliated institutions may prepare a joint plan if the plan provides measurable Section 228.26—Small bank performance goals for each institution. Activities may be allocated standards. among institutions at the institutions' option, provided that the same activities are not considered for more (a) Performance criteria. The Board evaluates the record than one institution. of a small bank, or a bank that was a small bank during (d) Public participation in plan development. Before the prior calendar year, of helping to meet the credit submitting a plan to the Board for approval, a bank shall: needs of its assessment area(s) pursuant to the following (1) Informally seek suggestions from members of the criteria: public in its assessment area(s) covered by the plan (1) The bank's loan-to-deposit ratio, adjusted for sea- while developing the plan; sonal variation and, as appropriate, other lending- (2) Once the bank has developed a plan, formally related activities, such as loan originations for sale to solicit public comment on the plan for at least 30 days the secondary markets, community development by publishing notice in at least one newspaper of loans, or qualified investments; general circulation in each assessment area covered by (2) The percentage of loans and, as appropriate, other the plan; and lending-related activities located in the bank's assess- (3) During the period of formal public comment, ment area(s); make copies of the plan available for review by the (3) The bank's record of lending to and, as appropri- public at no cost at all offices of the bank in any ate, engaging in other lending-related activities for assessment area covered by the plan and provide borrowers of different income levels and businesses copies of the plan upon request for a reasonable fee to and farms of different sizes; cover copying and mailing, if applicable. (4) The geographic distribution of the bank's loans; (e) Submission of plan. The bank shall submit its plan to and the Board at least three months prior to the proposed (5) The bank's record of taking action, if warranted, in effective date of the plan. The bank shall also submit response to written complaints about its performance with its plan a description of its informal efforts to seek in helping to meet credit needs in its assessment suggestions from members of the public, any written area(s). public comment received, and, if the plan was revised in (b) Small bank performance rating. The Board rates the light of the comment received, the initial plan as released performance of a bank evaluated under this section as for public comment. provided in Appendix A of this part. (f) Plan content. (1) Measurable goals, (i) A bank shall specify in its plan measurable goals for helping to Section 228.27—Strategic plan. meet the credit needs of each assessment area covered by the plan, particularly the needs of low- and (a) Alternative election. The Board will assess a bank's moderate-income geographies and low- and record of helping to meet the credit needs of its assess- moderate-income individuals, through lending, inment area(s) under a strategic plan if: vestment, and services, as appropriate, (1) The bank has submitted the plan to the Board as (ii) A bank shall address in its plan all three perforprovided for in this section; mance categories and, unless the bank has been (2) The Board has approved the plan; designated as a wholesale or limited purpose bank, (3) The plan is in effect; and shall emphasize lending and lending-related activi- (4) The bank has been operating under an approved ties. Nevertheless, a different emphasis, including a plan for at least one year. focus on one or more performance categories, may (b) Data reporting. The Board's approval of a plan does be appropriate if responsive to the characteristics not affect the bank's obligation, if any, to report data as and credit needs of its assessment area(s), considerrequired by section 228.42. ing public comment and the bank's capacity and (c) Plans in general. (1) Term. A plan may have a term constraints, product offerings, and business stratof no more than five years, and any multi-year plan egymust include annual interim measurable goals under (2) Confidential information. A bank may submit adwhich the Board will evaluate the bank's perfor- ditional information to the Board on a confidential mance. basis, but the goals stated in the plan must be suffi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704 Federal Reserve Bulletin • July 1995 ciently specific to enable the public and the Board to assesses performance under a plan as provided for in judge the merits of the plan. Appendix A of this part. (3) Satisfactory and outstanding goals. A bank shall specify in its plan measurable goals that constitute Section 228.28—Assigned ratings. "satisfactory" performance. A plan may specify measurable goals that constitute "outstanding" performance. If a bank submits, and the Board approves, (a) Ratings in general. Subject to paragraphs (b) and (c) both "satisfactory" and "outstanding" performance of this section, the Board assigns to a bank a rating of goals, the Board will consider the bank eligible for an "outstanding," "satisfactory," "needs to improve," or "outstanding" performance rating. "substantial noncompliance" based on the bank's perfor- (4) Election if satisfactory goals not substantially met. mance under the lending, investment and service tests, A bank may elect in its plan that, if the bank fails to the community development test, the small bank performeet substantially its plan goals for a satisfactory mance standards, or an approved strategic plan, as applirating, the Board will evaluate the bank's performance cable. under the lending, investment, and service tests, the (b) Lending, investment, and service tests. The Board community development test, or the small bank perfor- assigns a rating for a bank assessed under the lending, mance standards, as appropriate. investment, and service tests in accordance with the (g) Plan approval. (1) Timing. The Board will act upon a following principles: plan within 60 calendar days after the Board receives (1) A bank that receives an "outstanding" rating on the complete plan and other material required under the lending test receives an assigned rating of at least paragraph (d) of this section. If the Board fails to act "satisfactory"; within this time period, the plan shall be deemed (2) A bank that receives an "outstanding" rating on approved unless the Board extends the review period both the service test and the investment test and a for good cause. rating of at least "high satisfactory" on the lending (2) Public participation. In evaluating the plan's test receives an assigned rating of "outstanding"; and goals, the Board considers the public's involvement in (3) No bank may receive an assigned rating of "satisformulating the plan, written public comment on the factory" or higher unless it receives a rating of at least plan, and any response by the bank to public comment "low satisfactory" on the lending test. on the plan. (c) Effect of evidence of discriminatory or other illegal (3) Criteria for evaluating plan. The Board evaluates credit practices. Evidence of discriminatory or other a plan's measurable goals using the following criteria, illegal credit practices adversely affects the Board's evalas appropriate: uation of a bank's performance. In determining the effect (i) The extent and breadth of lending or lending- on the bank's assigned rating, the Board considers the related activities, including, as appropriate, the dis- nature and extent of the evidence, the policies and procetribution of loans among different geographies, dures that the bank has in place to prevent discriminabusinesses and farms of different sizes, and individ- tory or other illegal credit practices, any corrective acuals of different income levels, the extent of com- tion that the bank has taken or has committed to take, munity development lending, and the use of innova- particularly voluntary corrective action resulting from tive or flexible lending practices to address credit self-assessment, and other relevant information. needs; (ii) The amount and innovativeness, complexity, Section 228.29—Effect of CRA performance on and responsiveness of the bank's qualified investapplications. ments; and (iii) The availability and effectiveness of the bank's systems for delivering retail banking services and (a) CRA performance. Among other factors, the Board the extent and innovativeness of the bank's commu- takes into account the record of performance under the nity development services. CRA of: (h) Plan amendment. During the term of a plan, a bank (1) Each applicant bank for the: may request the Board to approve an amendment to the (i) Establishment of a domestic branch by a State plan on grounds that there has been a material change in member bank; and circumstances. The bank shall develop an amendment to (ii) Merger, consolidation, acquisition of assets, or a previously approved plan in accordance with the pub- assumption of liabilities requiring approval under lic participation requirements of paragraph (c) of this the Bank Merger Act (12 U.S.C. 1828(c)) if the section. acquiring, assuming, or resulting bank is to be a (i) Plan assessment. The Board approves the goals and State member bank; and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 705 (2) Each insured depository institution (as defined in bank has its main office, branches, and deposit-taking 12 U.S.C. 1813) controlled by an applicant and sub- ATMs. sidiary bank or savings association proposed to be (c) Geographic area(s) for other banks. The assessment controlled by an applicant: area(s) for a bank other than a wholesale or limited (i) To become a bank holding company in a transac- purpose bank must: tion that requires approval under section 3 of the (1) Consist generally of one or more MSAs (using the Bank Holding Company Act (12 U.S.C. 1842); MSA boundaries that were in effect as of January 1 of (ii) To acquire ownership or control of shares or all the calendar year in which the delineation is made) or or substantially all of the assets of a bank, to cause one or more contiguous political subdivisions, such as a bank to become a subsidiary of a bank holding counties, cities, or towns; and company, or to merge or consolidate a bank holding (2) Include the geographies in which the bank has its company with any other bank holding company in a main office, its branches, and its deposit-taking ATMs, transaction that requires approval under section 3 of as well as the surrounding geographies in which the the Bank Holding Company Act (12 U.S.C. 1842); bank has originated or purchased a substantial porand tion of its loans (including home mortgage loans, (iii) To own, control or operate a savings associa- small business and small farm loans, and any other tion in a transaction that requires approval under loans the bank chooses, such as those consumer loans section 4 of the Bank Holding Company Act on which the bank elects to have its performance (12 U.S.C. 1843). assessed). (b) Interested parties. In considering CRA performance (d) Adjustments to geographic area(s). A bank may in an application described in paragraph (a) of this adjust the boundaries of its assessment area(s) to insection, the Board takes into account any views ex- clude only the portion of a political subdivision that it pressed by interested parties that are submitted in accor- reasonably can be expected to serve. An adjustment is dance with the Board's Rules of Procedure set forth in particularly appropriate in the case of an assessment part 262 of this chapter. area that otherwise would be extremely large, of un- (c) Denial or conditional approval of application. A usual configuration, or divided by significant geobank's record of performance may be the basis for graphic barriers. denying or conditioning approval of an application listed (e) Limitations on the delineation of an assessment area. in paragraph (a) of this section. Each bank's assessment area(s): (d) Definitions. For purposes of paragraph (a)(2) of this (1) Must consist only of whole geographies; section, "bank," "bank holding company," "subsid- (2) May not reflect illegal discrimination; iary," and "savings association" have the meanings (3) May not arbitrarily exclude low- or moderategiven to those terms in section 2 of the Bank Holding income geographies, taking into account the bank's Company Act (12 U.S.C. 1841). size and financial condition; and (4) May not extend substantially beyond a CMSA Subpart C—Records, Reporting, and Disclosure boundary or beyond a state boundary unless the as- Requirements sessment area is located in a multistate MSA. If a bank serves a geographic area that extends substantially beyond a state boundary, the bank shall delin- Section 228.41—Assessment area delineation. eate separate assessment areas for the areas in each state. If a bank serves a geographic area that extends (a) In general. A bank shall delineate one or more substantially beyond a CMSA boundary, the bank assessment areas within which the Board evaluates the shall delineate separate assessment areas for the areas bank's record of helping to meet the credit needs of its inside and outside the CMSA. community. The Board does not evaluate the bank's (f) Banks serving military personnel. Notwithstanding delineation of its assessment area(s) as a separate perfor- the requirements of this section, a bank whose business mance criterion, but the Board reviews the delineation predominantly consists of serving the needs of military for compliance with the requirements of this section. personnel or their dependents who are not located within (b) Geographic area(s) for wholesale or limited purpose a defined geographic area may delineate its entire debanks. The assessment area(s) for a wholesale or limited posit customer base as its assessment area. purpose bank must consist generally of one or more (g) Use of assessment area(s). The Board uses the as- MSAs (using the MSA boundaries that were in effect as sessment area(s) delineated by a bank in its evaluation of of January 1 of the calendar year in which the delinea- the bank's CRA performance unless the Board detertion is made) or one or more contiguous political subdi- mines that the assessment area(s) do not comply with the visions, such as counties, cities, or towns, in which the requirements of this section. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

706 Federal Reserve Bulletin • July 1995 Section 228.42—Data collection, reporting, and originated or purchased within that category. The bank disclosure. shall maintain data separately for each category, including for each loan: (a) Loan information required to be collected and main- (i) A unique number or alpha-numeric symbol that tained. A bank, except a small bank, shall collect, and can be used to identify the relevant loan file; maintain in machine readable form (as prescribed by the (ii) The loan amount at origination or purchase; Board) until the completion of its next CRA examina- (iii) The loan location; and tion, the following data for each small business or small (iv) The gross annual income of the borrower that farm loan originated or purchased by the bank: the bank considered in making its credit decision. (1) A unique number or alpha-numeric symbol that (2) Other loan data. At its option, a bank may provide can be used to identify the relevant loan file; other information concerning its lending performance, (2) The loan amount at origination; including additional loan distribution data. (3) The loan location; and (d) Data on affiliate lending. A bank that elects to have (4) An indicator whether the loan was to a business or the Board consider loans by an affiliate, for purposes of farm with gross annual revenues of $1 million or less. the lending or community development test or an ap- (b) Loan information required to be reported. A bank, proved strategic plan, shall collect, maintain, and report except a small bank or a bank that was a small bank for those loans the data that the bank would have colduring the prior calendar year, shall report annually by lected, maintained, and reported pursuant to paragraphs March 1 to the Board in machine readable form (as (a), (b), and (c) of this section had the loans been prescribed by the Board) the following data for the prior originated or purchased by the bank. For home mortgage calendar year: loans, the bank shall also be prepared to identify the (1) Small business and small farm loan data. For each home mortgage loans repotted under part 203 of this geography in which the bank originated or purchased chapter by the affiliate. a small business or small farm loan, the aggregate (e) Data on lending by a consortium or a third party. A number and amount of loans: bank that elects to have the Board consider community (i) With an amount at origination of $100,000 or development loans by a consortium or third party, for less; purposes of the lending or community development tests (ii) With amount at origination of more than or an approved strategic plan, shall report for those loans $100,000 but less than or equal to $250,000; the data that the bank would have reported under para- (iii) With an amount at origination of more than graph (b)(2) of this section had the loans been originated $250,000; and or purchased by the bank. (iv) To businesses and farms with gross annual (f) Small banks electing evaluation under the lending, revenues of $1 million or less (using the revenues investment, and service tests. A bank that qualifies for that the bank considered in making its credit deci- evaluation under the small bank performance standards sion); but elects evaluation under the lending, investment, and (2) Community development loan data. The aggregate service tests shall collect, maintain, and report the data number and aggregate amount of community develop- required for other banks pursuant to paragraphs (a) and ment loans originated or purchased; and (b) of this section. (3) Home mortgage loans. If the bank is subject to (g) Assessment area data. A bank, except a small bank reporting under part 203 of this chapter, the location or a bank that was a small bank during the prior calendar of each home mortgage loan application, origination, year, shall collect and report to the Board by March 1 of or purchase outside the MSAs in which the bank has a each year a list for each assessment area showing the home or branch office (or outside any MSA) in accor- geographies within the area. dance with the requirements of part 203 of this chap- (h) CRA Disclosure Statement. The Board prepares annuter. ally for each bank that reports data pursuant to this (c) Optional data collection and maintenance. section a CRA Disclosure Statement that contains, on a (1) Consumer loans. A bank may collect and maintain state-by-state basis: in machine readable form (as prescribed by the Board) (1) For each county (and for each assessment area data for consumer loans originated or purchased by smaller than a county) with a population of 500,000 the bank for consideration under the lending test. A persons or fewer in which the bank reported a small bank may maintain data for one or more of the follow- business or small farm loan: ing categories of consumer loans: motor vehicle, (i) The number and amount of small business and credit card, home equity, other secured, and other small farm loans reported as originated or purunsecured. If the bank maintains data for loans in a chased located in low-, moderate-, middle-, and certain category, it shall maintain data for all loans upper-income geographies; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 707 (ii) A list grouping each geography according to the Office of Thrift Supervision, prepares annually, for whether the geography is low-, moderate-, middle-, each MSA (including an MSA that crosses a state boundor upper-income; ary) and the non-MSA portion of each state, an aggre- (iii) A list showing each geography in which the gate disclosure statement of small business and small bank reported a small business or small farm loan; farm lending by all institutions subject to reporting unand der this part or parts 25, 345, or 563e of this title. These (iv) The number and amount of small business and disclosure statements indicate, for each geography, the small farm loans to businesses and farms with gross number and amount of all small business and small farm annual revenues of $1 million or less; loans originated or purchased by reporting institutions, (2) For each county (and for each assessment area except that the Board may adjust the form of the disclosmaller than a county) with a population in excess of sure if necessary, because of special circumstances, to 500,000 persons in which the bank reported a small protect the privacy of a borrower or the competitive business or small farm loan: position of an institution. (i) The number and amount of small business and (j) Central data depositories. The Board makes the small farm loans reported as originated or pur- aggregate disclosure statements, described in paragraph chased located in geographies with median income (i) of this section, and the individual bank CRA Disclorelative to the area median income of less than sure Statements, described in paragraph (h) of this sec- 10 percent, 10 or more but less than 20 percent, 20 tion, available to the public at central data depositories. or more but less than 30 percent, 30 or more but The Board publishes a list of the depositories at which less than 40 percent, 40 or more but less than the statements are available. 50 percent, 50 or more but less than 60 percent, 60 or more but less than 70 percent, 70 or more Section 228.43—Content and availability of but less than 80 percent, 80 or more but less than public file. 90 percent, 90 or more but less than 100 percent, 100 or more but less than 110 percent, 110 or more (a) Information available to the public. A bank shall but less than 120 percent, and 120 percent or more; maintain a public file that includes the following infor- (ii) A list grouping each geography in the county or mation: assessment area according to whether the median (1) All written comments received from the public for income in the geography relative to the area median the current year and each of the prior two calendar income is less than 10 percent, 10 or more but less years that specifically relate to the bank's performance than 20 percent, 20 or more but less than 30 per- in helping to meet community credit needs, and any cent, 30 or more but less than 40 percent, 40 or response to the comments by the bank, if neither the more but less than 50 percent, 50 or more but less comments nor the responses contain statements that than 60 percent, 60 or more but less than 70 per- reflect adversely on the good name or reputation of cent, 70 or more but less than 80 percent, 80 or any persons other than the bank or publication of more but less than 90 percent, 90 or more but less which would violate specific provisions of law; than 100 percent, 100 or more but less than (2) A copy of the public section of the bank's most 110 percent, 110 or more but less than 120 percent, recent CRA Performance Evaluation prepared by the and 120 percent or more; Board. The bank shall place this copy in the public file (iii) A list showing each geography in which the within 30 business days after its receipt from the bank reported a small business or small farm loan; Board; and (3) A list of the bank's branches, their street ad- (iv) The number and amount of small business and dresses, and geographies; small farm loans to businesses and farms with gross (4) A list of branches opened or closed by the bank annual revenues of $1 million or less; during the current year and each of the prior two (3) The number and amount of small business and calendar years, their street addresses, and geograsmall farm loans located inside each assessment area phies; reported by the bank and the number and amount of (5) A list of services (including hours of operation, small business and small farm loans located outside available loan and deposit products, and transaction the assessment area(s) reported by the bank; and fees) generally offered at the bank's branches and (4) The number and amount of community develop- descriptions of material differences in the availability ment loans reported as originated or purchased. or cost of services at particular branches, if any. At its (i) Aggregate disclosure statements. The Board, in con- option, a bank may include information regarding the junction with the Office of the Comptroller of the Cur- availability of alternative systems for delivering retail rency, the Federal Deposit Insurance Corporation, and banking services (e.g., ATMs, ATMs not owned or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

708 Federal Reserve Bulletin • July 1995 operated by or exclusively for the bank, banking by need not include information submitted to the Board telephone or computer, loan production offices, and on a confidential basis in conjunction with the plan. bank-at-work or bank-by-mail programs); (5) Banks with less than satisfactory ratings. A bank (6) A map of each assessment area showing the that received a less than satisfactory rating during its boundaries of the area and identifying the geographies most recent examination shall include in its public file contained within the area, either on the map or in a a description of its current efforts to improve its perforseparate list; and mance in helping to meet the credit needs of its entire (7) Any other information the bank chooses, community. The bank shall update the description (b) Additional information available to the public. quarterly. (1) Banks other than small banks. A bank, except a (c) Location of public information. A bank shall make small bank or a bank that was a small bank during the available to the public for inspection upon request and at prior calendar year, shall include in its public file the no cost the information required in this section as folfollowing information pertaining to the bank and its lows: affiliates, if applicable, for each of the prior two calen- (1) At the main office and, if an interstate bank, at one dar years: branch office in each state, all information in the (i) If the bank has elected to have one or more public file; and categories of its consumer loans considered under (2) At each branch: the lending test, for each of these categories, the (i) A copy of the public section of the bank's most number and amount of loans: recent CRA Performance Evaluation and a list of (A) To low-, moderate-, middle-, and upper- services provided by the branch; and income individuals; (ii) Within five calendar days of the request, all the (B) Located in low-, moderate-, middle-, and information in the public file relating to the assessupper-income census tracts; and ment area in which the branch is located. (C) Located inside the bank's assessment area(s) (d) Copies. Upon request, a bank shall provide copies, and outside the bank's assessment area(s); and either on paper or in another form acceptable to the (ii) The bank's CRA Disclosure Statement. The person making the request, of the information in its bank shall place the statement in the public file public file. The bank may charge a reasonable fee not to within three business days of its receipt from the exceed the cost of copying and mailing (if applicable). Board. (e) Updating. Except as otherwise provided in this sec- (2) Banks required to report Home Mortgage Disclo- tion, a bank shall ensure that the information required by sure Act (HMDA) data. A bank required to report this section is current as of April 1 of each year. home mortgage loan data pursuant part 203 of this chapter shall include in its public file a copy of the HMDA Disclosure Statement provided by the Federal Section 228.44—Public notice by banks. Financial Institutions Examination Council pertaining to the bank for each of the prior two calendar years. In A bank shall provide in the public lobby of its main addition, a bank that elected to have the Board conoffice and each of its branches the appropriate public sider the mortgage lending of an affiliate for any of notice set forth in Appendix B of this part. Only a branch these years shall include in its public file the affiliate's of a bank having more than one assessment area shall HMDA Disclosure Statement for those years. The include the bracketed material in the notice for branch bank shall place the statement(s) in the public file offices. Only a bank that is an affiliate of a holding within three business days after its receipt. company shall include the next to the last sentence of the (3) Small banks. A small bank or a bank that was a notices. A bank shall include the last sentence of the small bank during the prior calendar year shall include notices only if it is an affiliate of a holding company that in its public file: is not prevented by statute from acquiring additional (i) The bank's loan-to-deposit ratio for each quarter banks. of the prior calendar year and, at its option, additional data on its loan-to-deposit ratio; and (ii) The information required for other banks by Section 228.45—Publication of planned paragraph (b)(1) of this section, if the bank has examination schedule. elected to be evaluated under the lending, investment, and service tests. (4) Banks with strategic plans. A bank that has been The Board publishes at least 30 days in advance of the approved to be assessed under a strategic plan shall beginning of each calendar quarter a list of banks schedinclude in its public file a copy of that plan. A bank uled for CRA examinations in that quarter. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 709 Subpart D—Transition Rules with section 228.21, and section 228.28, which provides for adjustments on the basis of evidence of Section 228.51—Transition rules. discriminatory or other illegal credit practices. (2) A bank's performance need not fit each aspect of a (a) Effective date. Sections of this part become applica- particular rating profile in order to receive that rating, ble over a period of time in accordance with the schedule and exceptionally strong performance with respect to set forth in paragraph (c) of this section. some aspects may compensate for weak performance (b) Data collection and reporting; strategic plan; perfor- in others. The bank's overall performance, however, mance tests and standards. must be consistent with safe and sound banking prac- (1) Data collection and reporting, (i) On January 1, tices and generally with the appropriate rating profile 1996, the data collection requirements set forth in as follows. section 228.42 (except section 228.42(b) and (g)) be- (b) Banks evaluated under the lending, investment, and come applicable. service tests. (ii) On January 1, 1997, the data reporting require- (1) Lending performance rating. The Board assigns ments set forth in section 228.42(b) and (g) become each bank's lending performance one of the five folapplicable. lowing ratings. (2) Small banks. Beginning January 1, 1996, the Board (i) Outstanding. The Board rates a bank's lending evaluates banks that qualify for the small bank perfor- performance "outstanding" if, in general, it demonmance standards described in section 228.26 under strates: that section. (A) Excellent responsiveness to credit needs in (3) Strategic plan. Beginning January 1, 1996, a bank its assessment area(s), taking into account the that elects to be evaluated under an approved strategic number and amount of home mortgage, small plan pursuant to section 228.27 may submit its strate- business, small farm, and consumer loans, if apgic plan to the Board for approval. plicable, in its assessment area(s); (4) Other performance tests, (i) Beginning January 1, (B) A substantial majority of its loans are made 1996, a bank may elect to be evaluated under the in its assessment area(s); pertinent revised performance tests described in sec- (C) An excellent geographic distribution of loans tions 228.22, 228.23, 228.24, and 228.25, if the bank in its assessment area(s); provides the necessary data to permit evaluation. (D) An excellent distribution, particularly in its (ii) Beginning July 1, 1997, the Board evaluates all assessment area(s), of loans among individuals banks under the pertinent revised performance tests. of different income levels and businesses (includ- (c) Schedule. (1) On July 1, 1995, sections 228.11, ing farms) of different sizes, given the product 228.12, 228.29, and 228.51 become applicable, and sec- lines offered by the bank; tions 228.1, 228.2, 228.8, and 228.100 expire. (E) An excellent record of serving the credit (2) On January 1, 1996, section 228.41 and the perti- needs of highly economically disadvantaged arnent provisions of Subpart B of this part will apply to eas in its assessment area(s), low-income individbanks that elect to be evaluated under sections 228.22 uals, or businesses (including farms) with gross through 228.25, banks that submit for approval strate- annual revenues of $1 million or less, consistent gic plans under section 228.27, and banks that qualify with safe and sound operations; for the small bank performance standards described in (F) Extensive use of innovative or flexible lendsection 228.26. ing practices in a safe and sound manner to (3) On January 1, 1996, sections 228.42 (except sec- address the credit needs of low- or moderatetion 228.42(b) and (g)) and 228.45 become applicable. income individuals or geographies; and (4) On January 1, 1997, sections 228.41 and 228.42(b) (G) It is a leader in making community developand (g) become applicable. ment loans. (5) On July 1, 1997, sections 228.21 through 228.28, (ii) High satisfactory. The Board rates a bank's 228.43, and 228.44 become applicable, and sections lending performance "high satisfactory" if, in gen- 228.3 through 228.7 and 228.51 expire. eral, it demonstrates: (A) Good responsiveness to credit needs in its assessment area(s), taking into account the number and amount of home mortgage, small busi- APPENDIX A TO PART 228—RATINGS ness, small farm, and consumer loans, if applica- (a) Ratings in general. (1) In assigning a rating, the ble, in its assessment area(s); Board evaluates a bank's performance under the appli- (B) A high percentage of its loans are made in its cable performance criteria in this part, in accordance assessment area(s); Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

710 Federal Reserve Bulletin • July 1995 (C) A good geographic distribution of loans in its cable, in its assessment area(s); assessment area(s); (B) A small percentage of its loans are made in (D) A good distribution, particularly in its assess- its assessment area(s); ment area(s), of loans among individuals of dif- (C) A poor geographic distribution of loans, parferent income levels and businesses (including ticularly to low- or moderate-income geografarms) of different sizes, given the product lines phies, in its assessment area(s); offered by the bank; (D) A poor distribution, particularly in its assess- (E) A good record of serving the credit needs of ment area(s), of loans among individuals of difhighly economically disadvantaged areas in its ferent income levels and businesses (including assessment area(s), low-income individuals, or farms) of different sizes, given the product lines businesses (including farms) with gross annual offered by the bank; revenues of $1 million or less, consistent with (E) A poor record of serving the credit needs of safe and sound operations; highly economically disadvantaged areas in its (F) Use of innovative or flexible lending prac- assessment area(s), low-income individuals, or tices in a safe and sound manner to address the businesses (including farms) with gross annual credit needs of low- or moderate-income individ- revenues of $1 million or less, consistent with uals or geographies; and safe and sound operations; (G) It has made a relatively high level of commu- (F) Little use of innovative or flexible lending nity development loans. practices in a safe and sound manner to address (iii) Low satisfactory. The Board rates a bank's the credit needs of low- or moderate-income lending performance "low satisfactory" if, in gen- individuals or geographies; and eral, it demonstrates: (G) It has made a low level of community devel- (A) Adequate responsiveness to credit needs in opment loans. its assessment area(s), taking into account the (v) Substantial noncompliance. The Board number and amount of home mortgage, small rates a bank's lending performance as being in business, small farm, and consumer loans, if ap- "substantial noncompliance" if, in general, it plicable, in its assessment area(s); demonstrates: (B) An adequate percentage of its loans are made (A) A very poor responsiveness to credit needs in in its assessment area(s); its assessment area(s), taking into account the (C) An adequate geographic distribution of loans number and amount of home mortgage, small in its assessment area(s); business, small farm, and consumer loans, if ap- (D) An adequate distribution, particularly in its plicable, in its assessment area(s); assessment area(s), of loans among individuals (B) A very small percentage of its loans are made of different income levels and businesses (includ- in its assessment area(s); ing farms) of different sizes, given the product (C) A very poor geographic distribution of loans, lines offered by the bank; particularly to low- or moderate-income geogra- (E) An adequate record of serving the credit phies, in its assessment area(s); needs of highly economically disadvantaged ar- (D) A very poor distribution, particularly in its eas in its assessment area(s), low-income indi- assessment area(s), of loans among individuals viduals, or businesses (including farms) with of different income levels and businesses (includgross annual revenues of $1 million or less, con- ing farms) of different sizes, given the product sistent with safe and sound operations; lines offered by the bank; (F) Limited use of innovative or flexible lending (E) A very poor record of serving the credit practices in a safe and sound manner to address needs of highly economically disadvantaged arthe credit needs of low- or moderate-income eas in its assessment area(s), low-income individindividuals or geographies; and uals, or businesses (including farms) with gross (G) It has made an adequate level of community annual revenues of $1 million or less, consistent development loans. with safe and sound operations; (iv) Needs to improve. The Board rates a bank's (F) No use of innovative or flexible lending praclending performance "needs to improve" if, in tices in a safe and sound manner to address the general, it demonstrates: credit needs of low- or moderate-income individ- (A) Poor responsiveness to credit needs in its uals or geographies; and assessment area(s), taking into account the num- (G) It has made few, if any, community developber and amount of home mortgage, small busi- ment loans. ness, small farm, and consumer loans, if appli- (2) Investment performance rating. The Board assigns Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 711 each bank's investment performance one of the five community development needs. following ratings. (3) Service performance rating. The Board assigns (i) Outstanding. The Board rates a bank's invest- each bank's service performance one of the five folment performance "outstanding" if, in general, it lowing ratings. demonstrates: (i) Outstanding. The Board rates a bank's service (A) An excellent level of qualified investments, performance "outstanding" if, in general, the bank particularly those that are not routinely provided demonstrates: by private investors, often in a leadership posi- (A) Its service delivery systems are readily accestion; sible to geographies and individuals of different (B) Extensive use of innovative or complex qual- income levels in its assessment area(s); ified investments; and (B) To the extent changes have been made, its (C) Excellent responsiveness to credit and com- record of opening and closing branches has immunity development needs. proved the accessibility of its delivery systems, (ii) High satisfactory. The Board rates a bank's particularly in low- or moderate-income geograinvestment performance "high satisfactory" if, in phies or to low- or moderate-income individuals; general, it demonstrates: (C) Its services (including, where appropriate, (A) A significant level of qualified investments, business hours) are tailored to the convenience particularly those that are not routinely provided and needs of its assessment area(s), particularly by private investors, occasionally in a leadership low- or moderate-income geographies or low- or position; moderate-income individuals; and (B) Significant use of innovative or complex (D) It is a leader in providing community develqualified investments; and opment services. (C) Good responsiveness to credit and commu- (ii) High satisfactory. The Board rates a bank's nity development needs. service performance "high satisfactory" if, in gen- (iii) Low satisfactory. The Board rates a bank's eral, the bank demonstrates: investment performance "low satisfactory" if, in (A) Its service delivery systems are accessible to general, it demonstrates: geographies and individuals of different income (A) An adequate level of qualified investments, levels in its assessment area(s); particularly those that are not routinely provided (B) To the extent changes have been made, its by private investors, although rarely in a leader- record of opening and closing branches has not ship position; adversely affected the accessibility of its delivery (B) Occasional use of innovative or complex systems, particularly in low- and moderatequalified investments; and income geographies and to low- and moderate- (C) Adequate responsiveness to credit and com- income individuals; munity development needs. (C) Its services (including, where appropriate, (iv) Needs to improve. The Board rates a bank's business hours) do not vary in a way that inconinvestment performance "needs to improve" if, in veniences its assessment area(s), particularly general, it demonstrates: low- and moderate-income geographies and low- (A) A poor level of qualified investments, partic- and moderate-income individuals; and ularly those that are not routinely provided by (D) It provides a relatively high level of commuprivate investors; nity development services. (B) Rare use of innovative or complex qualified (iii) Low satisfactory. The Board rates a bank's investments; and service performance "low satisfactory" if, in gen- (C) Poor responsiveness to credit and community eral, the bank demonstrates: development needs. (A) Its service delivery systems are reasonably (v) Substantial noncompliance. The Board rates a accessible to geographies and individuals of difbank's investment performance as being in "sub- ferent income levels in its assessment area(s); stantial noncompliance" if, in general, it demon- (B) To the extent changes have been made, its strates: record of opening and closing branches has gen- (A) Few, if any, qualified investments, particu- erally not adversely affected the accessibility of larly those that are not routinely provided by its delivery systems, particularly in low- and private investors; moderate-income geographies and to low- and (B) No use of innovative or complex qualified moderate-income individuals; investments; and (C) Its services (including, where appropriate, (C) Very poor responsiveness to credit and business hours) do not vary in a way that incon- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

712 Federal Reserve Bulletin • July 1995 veniences its assessment area(s), particularly community development services, or qualified inlow- and moderate-income geographies and low- vestments, particularly investments that are not rouand moderate-income individuals; and tinely provided by private investors; (D) It provides an adequate level of community (ii) Extensive use of innovative or complex qualidevelopment services. fied investments, community development loans, or (iv) Needs to improve. The Board rates a bank's community development services; and service performance "needs to improve" if, in gen- (iii) Excellent responsiveness to credit and commueral, the bank demonstrates: nity development needs in its assessment area(s). (A) Its service delivery systems are unreasonably (2) Satisfactory. The Board rates a wholesale or liminaccessible to portions of its assessment area(s), ited purpose bank's community development perforparticularly to low- or moderate-income geogra- mance "satisfactory" if, in general, it demonstrates: phies or to low- or moderate-income individuals; (i) An adequate level of community development (B) To the extent changes have been made, its loans, community development services, or qualirecord of opening and closing branches has ad- fied investments, particularly investments that are versely affected the accessibility its delivery sys- not routinely provided by private investors; tems, particularly in low- or moderate-income (ii) Occasional use of innovative or complex qualigeographies or to low- or moderate-income indi- fied investments, community development loans, or viduals; community development services; and (C) Its services (including, where appropriate, (iii) Adequate responsiveness to credit and commubusiness hours) vary in a way that inconve- nity development needs in its assessment area(s). niences its assessment area(s), particularly low- (3) Needs to improve. The Board rates a wholesale or or moderate-income geographies or low- or limited purpose bank's community development permoderate-income individuals; and formance as "needs to improve" if, in general, it (D) It provides a limited level of community demonstrates: development services. (i) A poor level of community development loans, (v) Substantial noncompliance. The Board rates a community development services, or qualified inbank's service performance as being in "substantial vestments, particularly investments that are not rounoncompliance" if, in general, the bank demon- tinely provided by private investors; strates: (ii) Rare use of innovative or complex qualified (A) Its service delivery systems are unreasonably investments, community development loans, or inaccessible to significant portions of its assess- community development services; and ment area(s), particularly to low- or moderate- (iii) Poor responsiveness to credit and community income geographies or to low- or moderate- development needs in its assessment area(s). income individuals; (4) Substantial noncompliance. The Board rates a (B) To the extent changes have been made, its wholesale or limited purpose bank's community derecord of opening and closing branches has sig- velopment performance in "substantial noncomplinificantly adversely affected the accessibility of ance" if, in general, it demonstrates: its delivery systems, particularly in low- or (i) Few, if any, community development loans, moderate-income geographies or to low- or community development services, or qualified inmoderate-income individuals; vestments, particularly investments that are not rou- (C) Its services (including, where appropriate, tinely provided by private investors; business hours) vary in a way that significantly (ii) No use of innovative or complex qualified ininconveniences its assessment area(s), particu- vestments, community development loans, or comlarly low- or moderate-income geographies or munity development services; and low- or moderate-income individuals; and (iii) Very poor responsiveness to credit and commu- (D) It provides few, if any, community develop- nity development needs in its assessment area(s). ment services. (d) Banks evaluated under the small bank performance (c) Wholesale or limited purpose banks. The Board standards. The Board rates the performance of each assigns each wholesale or limited purpose bank's com- bank evaluated under the small bank performance stanmunity development performance one of the four follow- dards as follows. ing ratings. (1) Eligibility for a satisfactory rating. The Board (1) Outstanding. The Board rates a wholesale or lim- rates a bank's performance "satisfactory" if, in genited purpose bank's community development perfor- eral, the bank demonstrates: mance "outstanding" if, in general, it demonstrates: (i) A reasonable loan-to-deposit ratio (considering (i) A high level of community development loans, seasonal variations) given the bank's size, financial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 713 condition, the credit needs of its assessment area(s), bank's performance under the plan as "outstandand taking into account, as appropriate, lending- ing." related activities such as loan originations for sale (iii) If the bank fails to meet substantially its plan to the secondary markets and community develop- goals for a satisfactory rating, the Board will rate ment loans and qualified investments; the bank as either "needs to improve" or "substan- (ii) A majority of its loans and, as appropriate, other tial noncompliance," depending on the extent to lending-related activities are in its assessment which it falls short of its plan goals, unless the bank area(s); elected in its plan to be rated otherwise, as provided (iii) A distribution of loans to and, as appropriate, in section 228.27(f)(4). other lending-related activities for individuals of different income levels (including low- and moderate-income individuals) and businesses and farms of different sizes that is reasonable given the APPENDIX B TO PART 228—CRA NOTICE demographics of the bank's assessment area(s); (iv) A record of taking appropriate action, as war- (a) Notice for main offices and, if an interstate bank, one ranted, in response to written complaints, if any, branch office in each state. about the bank's performance in helping to meet the credit needs of its assessment area(s); and Community Reinvestment Act Notice (v) A reasonable geographic distribution of loans given the bank's assessment area(s). Under the Federal Community Reinvestment Act (CRA), (2) Eligibility for an outstanding rating. A bank that the Federal Reserve Board (Board) evaluates our record meets each of the standards for a "satisfactory" rating of helping to meet the credit needs of this community under this paragraph and exceeds some or all of those consistent with safe and sound operations. The Board standards may warrant consideration for an overall also takes this record into account when deciding on rating of "outstanding." In assessing whether a bank's certain applications submitted by us. performance is "outstanding," the Board considers Your involvement is encouraged. the extent to which the bank exceeds each of the You are entitled to certain information about our operperformance standards for a "satisfactory" rating and ations and our performance under the CRA, including, its performance in making qualified investments and for example, information about our branches, such as its performance in providing branches and other ser- their location and services provided at them; the public vices and delivery systems that enhance credit avail- section of our most recent CRA Performance Evaluaability in its assessment area(s). tion, prepared by the Federal Reserve Bank of xxxx (3) Needs to improve or substantial noncompliance (Reserve Bank); and comments received from the public ratings. A bank also may receive a rating of "needs to relating to our performance in helping to meet commuimprove" or "substantial noncompliance" depending nity credit needs, as well as our responses to those on the degree to which its performance has failed to comments. You may review this information today. meet the standards for a "satisfactory" rating. At least 30 days before the beginning of each quarter, (e) Strategic plan assessment and rating. the Federal Reserve System publishes a list of the banks (1) Satisfactory goals. The Board approves as "satis- that are scheduled for CRA examination by the Reserve factory" measurable goals that adequately help to Bank in that quarter. This list is available from (title of meet the credit needs of the bank's assessment area(s). responsible official), Federal Reserve Bank of xxxx (ad- (2) Outstanding goals. If the plan identifies a separate dress). You may send written comments about our perforgroup of measurable goals that substantially exceed mance in helping to meet community credit needs to the levels approved as "satisfactory," the Board will (name and address of official at bank) and (title of approve those goals as "outstanding." responsible official), Federal Reserve Bank of xxxx (ad- (3) Rating. The Board assesses the performance of a dress). Your letter, together with any response by us, will bank operating under an approved plan to determine if be considered by the Federal Reserve System in evaluatthe bank has met its plan goals: ing our CRA performance and may be made public. (i) If the bank substantially achieves its plan goals You may ask to look at any comments received by the for a satisfactory rating, the Board will rate the Reserve Bank. You may also request from the Reserve bank's performance under the plan as "satisfacto- Bank an announcement of our applications covered by the CRA filed with the Reserve Bank. We are an affiliate ry." (ii) If the bank exceeds its plan goals for a satisfac- of (name of holding company), a bank holding company. tory rating and substantially achieves its plan goals You may request from (title of responsible official), for an outstanding rating, the Board will rate the Federal Reserve Bank of xxxx (address) an announce- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

714 Federal Reserve Bulletin • July 1995 ment of applications covered by the CRA filed by bank You may ask to look at any comments received by the holding companies. Reserve Bank. You may also request from the Reserve Bank an announcement of our applications covered by (b) Notice for branch offices. the CRA filed with the Reserve Bank. We are an affiliate of (name of holding company), a bank holding company. You may request from (title of responsible official), Community Reinvestment Act Notice Federal Reserve Bank of xxxx (address) an announcement of applications covered by the CRA filed by bank Under the Federal Community Reinvestment Act (CRA), holding companies. the Federal Reserve Board (Board) evaluates our record Sections 228.1, 228.2, 228.8 and 228.100 [Removed] of helping to meet the credit needs of this community consistent with safe and sound operations. The Board 3. Sections 228.1, 228.2, 228.8 and 228.100 are realso takes this record into account when deciding on moved effective July 1, 1995. certain applications submitted by us. Your involvement is encouraged. Sections 228.3, 228.4, 228.5, 228.6, and 228.7, and You are entitled to certain information about our opersubpart D [Removed] ations and our performance under the CRA. You may review today the public section of our most recent CRA evaluation, prepared by the Federal Reserve Bank of 4. Sections 228.3, 228.4, 228.5, 228.6, and 228.7, and xxxx (address), and a list of services provided at this subpart D, consisting of section 228.51, are removed branch. You may also have access to the following effective July 1, 1997. additional information, which we will make available to you at this branch within five calendar days after you make a request to us: (1) A map showing the assessment area containing FINAL RULE — AMENDMENT TO REGULATION C this branch, which is the area in which the Board The Board of Governors is amending 12 C.F.R. Part 203, evaluates our CRA performance in this community; its Regulation C (Home Mortgage Disclosure), and the (2) Information about our branches in this assessment instructions that financial institutions must use to comply area; with the annual reporting requirements under the regula- (3) A list of services we provide at those locations; tion. The amendments conform Regulation C to reflect (4) Data on our lending performance in this assessrevisions adopted by the Board, the Office of the Compment area; and troller of the Currency, the Federal Deposit Insurance (5) Copies of all written comments received by us that Corporation, and the Office of Thrift Supervision to their specifically relate to our CRA performance in this regulations implementing the Community Reinvestment assessment area, and any responses we have made to Act (CRA). Under the joint CRA rule, banks or savings those comments. associations that report data about their home mortgage If we are operating under an approved strategic plan, you lending pursuant to the Home Mortgage Disclosure Act may also have access to a copy of the plan. (HMDA)—and that have assets of $250 million or more, [If you would like to review information about our or that are subsidiaries of a holding company with total CRA performance in other communities served by us, banking and thrift assets of $1 billion or more—will the public file for our entire bank is available at (name of collect and report geographic information on loans and office located in state), located at (address)]. loan applications relating to property located outside the At least 30 days before the beginning of each quarter, Metropolitan Statistical Areas (MSAs) in which the instithe Federal Reserve System publishes a list of the banks tution has a home or branch office, or outside any MSA. that are scheduled for CRA examination by the Reserve Currently, geographic identification is required only Bank in that quarter. This list is available from (title of within MSAs where these lenders have a home or branch responsible official), Federal Reserve Bank of xxxx (ad- office. Data will be collected and reported in accordance dress). You may send written comments about our per- with the instructions in Regulation C. The agencies formance in helping to meet community credit needs to believe that these data will provide geographic detail on (name and address of official at bank) and (title of re- home mortgage lending that will facilitate more comsponsible official), Federal Reserve Bank of xxxx (ad- plete CRA assessments for institutions that do not qualdress). Your letter, together with any response by us, ify as small banks or thrifts. will be considered by the Federal Reserve System in Effective May 1, 1995, 12 C.F.R. Part 203 is amended evaluating our CRA performance and may be made as follows and compliance is mandatory for loan and» public. application data collected beginning January 1, 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 715 Part 203—Home Mortgage Disclosure 7. Data reporting under CRA for banks and savings (Regulation C) associations with total assets of $250 million or more and banks and savings associations that are subsidiaries 1. The authority citation for Part 203 continues to read as of a holding company whose total banking and thrift follows: assets are $1 billion or more. If you are a bank or savings association with total assets of $250 million or Authority: 12 U.S.C. 2801-2810. more as of December 31 for each of the immediately preceding two years, you must also enter the location of 2. Section 203.4 is amended by adding a new paragraph property located outside the MSAs in which you have a (e) to read as follows: home or branch office, or outside any MSA. You must also enter this information if you are a bank or savings association that is a subsidiary of a holding company Section 203.4—Compilation of loan data. with total banking and thrift assets of $ 1 billion or more as of December 31 for each of the immediately preceding two years. (e) Data Reporting Under CRA for Banks and Savings Associations with Total Assets of $250 Million or More and Banks and Savings Associations that are Subsidiaries of a Holding Company Whose Total Banking and FINAL RULE—AMENDMENT TO RULES REGARDING Thrift Assets are $1 Billion or More. As required by DELEGATION OF AUTHORITY agency regulations that implement the Community Reinvestment Act, banks and savings associations that had The Board of Governors is amending 12 C.F.R. Part 265, total assets of $250 million or more (or are subsidiaries its Rules Regarding Delegation of Authority, to allow of a holding company with total banking and thrift assets Federal Reserve Banks to approve certain public welfare of $1 billion or more) as of December 31 for each of the investments by state member banks under the Board's immediately preceding two years, shall also collect the Regulation H. This amendment should provide for more location of property located outside the MSAs in which expeditious processing of these requests. the institution has a home or branch office, or outside Effective June 5, 1995, 12 C.F.R. Part 265 is amended any MSAs. as follows: 3. Appendix A to Part 203 is amended by revising the Part 265—Rules Regarding Delegation of introductory text of paragraph V.C. and by adding a new Authority paragraph V.C.7. to read as follows: 1. The authority citation for Part 265 continues to read as follows: APPENDIX A TO PART 203—FORM AND Authority: 12 U.S.C. 248(i) and (k). INSTRUCTIONS FOR COMPLETION OF HMDA 2. Section 265.11(e) is amended by adding a new para- LOAN/APPUCATION REGISTER graph (12) to read as follows: y * * * Section 265.11 Functions delegated to Federal C. Property Location Reserve Banks. In these columns enter the applicable codes for the MSA, state, county, and census tract for the property to which a loan relates. For home purchase loans secured (c) ^ ^ (12) Public welfare investments. To permit a state by one dwelling, but made for the purpose of purchasing member bank to make a public welfare investment another dwelling, report the property location for the property in which the security interest is to be taken. If that meets the conditions set forth in section the home purchase loan is secured by more than one 208.21(b)(l)-(8) of Regulation H (12 C.F.R. 208), exproperty, report the location data for the property being cept that: purchased. (See paragraphs 5., 6., and 7. of para- (i) The state member bank received an overall ratgraph V.C. of this appendix for treatment of loans on ing of "3" as of its most recent consumer compliproperty outside the MSAs in which you have offices.) ance examination; (ii) The investment exceeds 2 percent, but does not exceed 5 percent, of the state member bank's capi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

716 Federal Reserve Bulletin • July 1995 tal stock and surplus as defined under 12 C.F.R. The Board also concludes, based on all the facts of 250.162; or record, that the financial and managerial resources and (iii) The aggregate of all such investments of the future prospects of First Place and Western Bank, and all state member bank exceeds 5 percent, but does not other supervisory factors that the Board must consider exceed 10 percent, of its capital stock and surplus under section 3 of the BHC Act, are consistent with as defined under 12 C.F.R. 250.162. approval of this proposal.2 Convenience and Needs Considerations ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT In considering an application to acquire a commercial banking organization under the BHC Act, the Board Orders Issued Under Section 3 of the Bank must consider the convenience and needs of the commu- Holding Company Act nities to be served, and take into account the records of the relevant commercial banking organizations under the First Place Financial Corporation Community Reinvestment Act (12 U.S.C. § 2901 Farmington, New Mexico et seq.) ("CRA"). The CRA requires the federal financial supervisory agencies to encourage financial institu- Order Approving the Acquisition of a Bank tions to help meet the credit needs of the local communities in which they operate, consistent with their safe and First Place Financial Corporation, Farmington, New sound operation. To accomplish this end, the CRA re- Mexico ("First Place"), has applied under section 3 of quires the appropriate federal supervisory authority to the Bank Holding Company Act (12 U.S.C. § 1842 "assess the institution's record of meeting the credit et seq.) ("BHC Act") to acquire all the voting shares of needs of its entire community, including low- and Western Bank, Gallup, New Mexico ("Western Bank"). moderate-income neighborhoods, consistent with safe Notice of the application, affording interested persons and sound operation of such institutions," and to take an opportunity to submit comments, has been published that record into account in its evaluation of these applica- (60 Federal Register 9841 (1995)). The time for filing tions.3 comments has expired, and the Board has considered the In evaluating the convenience and needs factors in this application and all comments received in light of the case, the Board has carefully reviewed the CRA perforfactors set forth in section 3(c) of the BHC Act. mance records of the subsidiary banks of First Place and First Place, with total consolidated assets of $616.9 million, is the fifth largest commercial banking organization in New Mexico, controlling deposits of 2. The Board has carefully reviewed comments from two individapproximately $360.1 million, representing 3.2 percent uals ("Protestants"), alleging that Western Bank's Chairman of the Board would be unjustly enriched under a separate agreement with of total deposits in commercial banking organizations in First Place and that First Place has exercised a controlling influence the state.1 Western Bank is the 50th largest commercial over the management of Western Bank. First Place denies that there banking organization in New Mexico, controlling depos- is any agreement with Western Bank's Chairman of the Board, or its of approximately $26 million, representing less than that First Place has exercised a controlling influence over Western Bank. While a former officer of First Place is employed at Western. 1 percent of total deposits in commercial banking organi- Bank, he completely terminated his employment, including all zations in the state. Upon consummation of this proemployee benefits, with First Place before commencing his duties posal, First Place would remain the fifth largest commer- at Western Bank and has no right to return if Western Bank is not cial banking organization in New Mexico, controlling acquired by First Place. deposits of approximately $386.1 million, representing Protestants also allege that the interests of Western Bank shareholders were not adequately represented in negotiating the proposal 3.5 percent of total deposits in commercial banking and that the share price under the proposal was below fair market organizations in the state. value. The Board notes that this proposal has been approved by First Place and Western Bank do not compete directly Western Bank's board of directors and the owners of the majority in any banking market. Therefore, consummation of this of its shares. The courts have determined that the Board is precluded from considering stock pricing, exchange ratios, and similar proposal would not result in any significantly adverse matters that do not relate to a factor specifically enumerated in the effects on competition or the concentration of banking BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480 resources in any relevant banking market. Accordingly, F.2d 749 (10th Cir. 1973). Finally, one of the Protestants alleges the Board concludes that competitive considerations are that he was wrongfully terminated by Western Bank. This matter is consistent with approval of this application. also outside the statutory factors in the BHC Act and is subject to review under other laws. Based on the foregoing and the other facts of record, the Board concludes that these allegations do not present adverse considerations under the statutory factors in the BHC Act. 1. Asset and state deposit data are as of December 31, 1994. 3. 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 92 Western Bank and all other relevant facts of record, in ically conditioned on compliance with all the commitlight of the CRA,4 the Board's regulations, and the ments made by First Place in connection with this appli- Statement of the Federal Financial Supervisory Agencies cation. For purposes of this action, the commitments and Regarding the Community Reinvestment Act ("Agency conditions relied on in reaching this decision are deemed CRA Statement").5 to be conditions imposed in writing by the Board and, as The Agency CRA Statement provides that a CRA such, may be enforced in proceedings under applicable examination is an important and often controlling factor law. in the consideration of an institution's CRA record and The transaction shall not be consummated before the that reports of these examinations will be given great fifteenth calendar day following the effective date of this weight in the applications process.6 The Board notes that order, or later than three months after the effective date First Place's lead bank, the First National Bank of Farm- of this order, unless such period is extended for good ington, Farmington, New Mexico ("First Bank"), with cause by the Board or by the Federal Reserve Bank of assets of approximately $524.8 million, received an Kansas City, acting pursuant to delegated authority. "outstanding" CRA performance rating from its primary By order of the Board of Governors, effective May 8, regulator, the Office of the Comptroller of the Currency 1995. ("OCC"), in its most recent examination on December 22, 1994. First Place's other subsidiary bank, the Voting for this action: Chairman Greenspan, and Governors Burns National Bank, Durango, Colorado, received a Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chairman Blinder and Governor Kelley. "satisfactory" rating from the OCC in its most recent CRA performance examination on October 31, 1994. JENNIFER J. JOHNSON Western Bank, with assets of approximately Deputy Secretary of the Board $30.7 million, received a "needs to improve" rating in its most recent CRA performance examination by its primary regulator, the Federal Deposit Insurance Corpo- Lone Star National Bancshares-Texas, Inc. ration ("FDIC"), on April 29, 1994. However, Western Pharr, Texas Bank has initiated a number of steps to improve its performance in the areas noted by FDIC examiners. The Lone Star National Bancshares-Texas, Inc., ("Lone FDIC recently completed a CRA performance examina- Star") has applied under section 3(a)(1) of the Bank tion of the bank and has preliminarily upgraded its CRA Holding Company Act ("BHC Act") (12 U.S.C. performance rating to "satisfactory." Moreover, First § 1842(a)(1)) to become a bank holding company by Place has committed to implement the CRA policies and acquiring all the voting shares of Lone Star National programs of First Bank at Western Bank after consum- Bank ("Bank"), both of Pharr, Texas. Bank would be mation of the proposal. These policies and programs, acquired through Lone Star's wholly owned subsidiary, which presently support First Bank's CRA-related activ- Lone Star National Bancshares-Nevada, Inc., Reno, Neities in an area with similar credit needs to that served by vada, which also has applied to become a bank holding Western Bank, have been found by OCC examiners to company. be effective in helping to meet the credit needs of the Notice of the applications, affording interested persons bank's local communities, including low- and moderatean opportunity to submit comments, has been published income areas. The Board also believes that the additional (60 Federal Register 9689 (1995)). The time for filing resources that would be available to Western Bank as a comments has expired, and the Board has considered the subsidiary of First Place would increase the bank's caapplications and all comments received in light of the pacity to assist in meeting the credit needs of the Gallup factors set forth in section 3(c) of the BHC Act. community. In light of these and other facts of record, Lone Star and its Nevada subsidiary are non-operating the Board concludes that the convenience and needs corporations formed for the purpose of acquiring Bank. considerations of the communities to be served are con- Bank is the 237th largest commercial banking organizasistent with approval of this application. tion in Texas, with deposits of $82.5 million, represent- Based on the foregoing and all the facts of record, the ing less than 1 percent of total deposits in commercial Board has determined that this application should be, banking organizations in the state.1 Based on all the facts and hereby is, approved. The Board's approval is specifof record, consummation of this proposal would not have a significantly adverse effect on competition or the concentration of banking resources in any relevant bank- 4. The Board also considered comments from the Protestants ing market. alleging generally that the proposal would not be in the best interests of the community. 5. 54 Federal Register 13,742 (1989). 6. Id. at 13,742. 1. All banking data are as of December 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

718 Federal Reserve Bulletin • July 1995 The financial and managerial resources and future these reports will be given great weight in the applicaprospects of Lone Star and Bank are consistent with tions process.5 The Board notes that Bank received a approval of these applications, as are the other supervi- rating of "satisfactory" from its primary federal supervisory factors that the Board is required to consider under sor, the Office of the Comptroller of the Currency section 3 of the BHC Act. ("OCC"), in its most recent CRA performance examination as of August 3, 1993 (the "1993 Examination").6 Convenience and Needs Consideration Examiners concluded that the bank's geographic distribution of credit extensions, applications and denials In acting on applications to acquire a depository institu- demonstrated a reasonable penetration of all segments of tion, the Board must consider the convenience and needs its delineated community, including low- and moderateof the communities to be served, and take into account income areas. No disproportionate lending patterns were the records of the relevant depository institutions under found in the 1993 Examination. In addition, 1993 the Community Reinvestment Act (12 U.S.C. § 2901 HMDA data show that bank's penetration of low- and et seq.) ("CRA"), which requires the federal financial moderate-income areas was comparable to the aggregate supervisory agencies to encourage financial institutions of all lenders in the market. to help meet the credit needs of the local communities in In response to Protestant's comments on its lending which they operate, consistent with their safe and sound record to Hispanics, Bank notes that its shareholders and operation. To accomplish this end, the CRA requires the management are predominately Hispanic and that Hisappropriate federal supervisory authority to "assess the panics comprise approximately 85 percent of its cusinstitution's record of meeting the credit needs of its tomer base. HMDA data show that in 1993, 76 percent entire community, including low- and moderate-income of loan applications from Hispanic borrowers were apneighborhoods, consistent with the safe and sound oper- proved.7 Moreover, the 1993 Examination found no eviation of such institutions," and to take that record into dence of illegal discrimination or of any practices inaccount in its evaluation of these applications.2 tended to discourage credit applications from any The Board has received comments from an individual segment of the community.8 ("Protestant") alleging that certain aspects of Bank's Bank is a participant in numerous governmentrecord of CRA performance are inadequate. In particu- sponsored lending programs; is the only lender in Pharr lar, Protestant contends that data reported under the certified by the Small Business Administration ("SBA"), Home Mortgage Disclosure Act ("HMDA") show that Veterans Administration, and Federal Housing Adminisapproval rates are lower for Hispanic borrowers than the tration, and is one of two such lenders in McAllen, rates for white borrowers. Protestant also maintains that Texas. As of December 1994, Bank reported $3.1 mil- Bank's locations are not convenient for most people in lion in SBA loans. In addition, Bank has made direct Bank's delineated service area and that Bank's advertise- loans to the City of Alamo Housing Authority, Affordments are distasteful.3 The Board has carefully reviewed able Homes, Inc., and the Hidalgo County Housing the entire CRA performance record of Bank, all com- Authority to provide funding for community developments received on these applications, Bank's response to ment programs. these comments, and all other relevant facts of record, in The 1993 Examination concluded that Bank's offices light of the CRA, the Board's regulations and the State- were easily accessible by all segments of the community ment of the Federal Financial Supervisory Agencies and that its hours of operation were reasonable. Examin- Regarding the Community Reinvestment Act ("Agency CRA Statement").4 5. Id. at 13,745. Record of CRA Performance 6. Bank has been rated "satisfactory" for CRA performance by the OCC since its chartering in 1983. 7. In 1993, over 80 percent of Bank's HMDA-related loans were The Agency CRA Statement provides that a CRA examto Hispanic borrowers (72 out of 86 loans originated). Preliminary ination is an important and often controlling factor in the data through November 1994, as reported by Bank, indicate that its consideration of an institution's CRA record, and that lending continues this trend; Bank originated 114 HMDA-related loans to Hispanic borrowers. These loans comprise approximately 86 percent of Bank's total HMDA-related reported loans. 8. Examiners found no prohibited discriminatory or other illegal 2. 12 U.S.C. § 2903. credit practices at Bank. Although certain technical violations of 3. Protestant has particularly criticized advertisements by Bank the record maintenance or notice requirements of the antithat feature animals instead of humans. Bank notes that customers discrimination laws were noted, Bank has taken corrective or and competitors have commented favorably on these advertise- follow-up action on these violations. In this light, the Board conments, and that Bank's assets have steadily increased during this cludes that the record does not support Protestant's allegations that promotional program. discriminatory lending practices have made Bank a target for 4. 54 Federal Register 13,742 (1989). investigation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 719 ers also noted that Bank made a concerted effort to Reserve Act (12 U.S.C. § 324), to pay a dividend as ensure that its marketing activities inform all segments part of the financing for this transaction. of the community about its products and services. The Notice of the application, affording interested persons bank advertises in newspapers, trade publications and an opportunity to submit comments on the proposal, has business journals that reach all parts of its delineated been published (59 Federal Register 52,305 (1994)). community, including low- and moderate-income areas. The time for filing comments has expired, and the Board The Board has carefully considered all the facts of has considered the application and all comments rerecord, including the comments received, in reviewing ceived in light of the factors set forth in section 3 of the the CRA records of performance for Bank. Based on a BHC Act. review of the entire record, including the information Ogden is a nonoperating company formed for the from Protestant's comments and Bank's response to purpose of acquiring Bank.1 Bank is the 179th largest those comments, and relevant reports of examination, commercial banking organization in Iowa, controlling the Board concludes that convenience and needs consid- deposits of approximately $38 million, representing less erations, including the CRA record of performance of than 1 percent of the total deposits in commercial bank- Bank, are consistent with approval of this application. ing organizations in the state.2 Ogden and Bank do not Based on the foregoing, and after a review of all the compete in any banking market. Based on all the facts of facts of record, the Board has determined that these record, the Board has concluded that consummation of applications should be, and hereby are, approved. The this proposal would not result in any significantly ad- Board's approval of this proposal is expressly condi- verse effect on competition or the concentration of banktioned on Lone Star's compliance with all the commit- ing resources in any relevant banking market. ments made in connection with these applications. For purposes of this action, these commitments and condi- Convenience and Needs Considerations tions are deemed to be conditions imposed in writing by the Board in connection with its findings and decision, In acting on an application under the BHC Act to acquire and, as such, may be enforced in proceedings under a depository institution, the Board must consider the applicable law. convenience and needs of the communities to be served, This transaction shall not be consummated before the and take into account the records of the relevant deposififteenth calendar day following the effective date of this tory institutions under the Community Reinvestment Act order, or later than three months after the effective date ("CRA") (12 U.S.C. § 2901 et seq.). The CRA requires of this order, unless such period is extended for good the federal financial supervisory agencies to encourage cause by the Board or by the Federal Reserve Bank of financial institutions to help meet the credit needs of the Dallas, acting pursuant to delegated authority. local communities in which they operate, consistent with By order of the Board of Governors, effective May 15, their safe and sound operation. To accomplish this end, 1995. the CRA requires the appropriate federal supervisory authority to "assess the institution's record of meeting Voting for this action: Chairman Greenspan, Vice Chairman the credit needs of its entire community, including low- Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. and moderate-income neighborhoods, consistent with the safe and sound operation of such institution," and to JENNIFER J. JOHNSON take that record into account in its evaluation of certain Deputy Secretary of the Board banking applications.3 The Board has received comments both supporting and opposing this application on the basis of Bank's Ogden Bancshares, Inc. efforts in helping to meet the credit needs of its commu- Ogden, Iowa nity. Some comments commended Bank's lending activities, including its activities related to government- Order Approving the Formation of a Bank Holding sponsored loan programs. Other comments, including Company and the Payment of a Dividend Ogden Bancshares, Inc., Ogden, Iowa ("Ogden"), has 1. Ogden would acquire 54 percent of Bank's voting shares from applied under section 3 of the Bank Holding Company a charitable trust ("Trust") and additional voting shares from Act ("BHC Act") (12 U.S.C. § 1842) to become a bank minority shareholders of Bank. Based on all the facts of record, the holding company through the acquisition of at least Board has concluded that this proposal would constitute an effective divestiture by the Trust of the Bank shares controlled by Trust 54 percent of the voting stock of City State Bank, for purposes of the BHC Act. Ogden, Iowa ("Bank"), a state member bank. Bank also 2. Deposit data are as of September 30, 1994. has requested approval, under section 9 of the Federal 3. 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

720 Federal Reserve Bulletin • July 1995 those from the Iowa Citizens for Community Improve- conducted by the Federal Reserve Bank of Chicago ment ("ICCI") and individual commenters (collectively, ("Reserve Bank") as of December 5, 1994 ("1994 Ex- "Protestants"), generally questioned Bank's record of amination").7 performance under the CRA and asserted that this pro- In connection with the 1994 Examination, and as part posal would not improve Bank's CRA performance. of the processing of this application, Reserve Bank ex- Protestants believe that Bank's lending activities, includ- aminers met with a number of local residents, including ing the amount of its overall lending, its level of lending individuals suggested by Protestants.8 Based on all the to homeowners and small farms and businesses, and its facts considered in the examination process, the Reserve participation in guaranteed farm loan programs and sim- Bank found no evidence of discriminatory or other illeilar government-sponsored loan programs, are inade- gal credit practices. The 1994 Examination also found quate. Protestants also contend that some aspects of Bank to be in compliance with the substantive provi- Bank's lending policies, such as its underwriting stan- sions of the fair housing and fair lending laws, including dards, interest rate charges, and amount of lending out- the Fair Housing and Equal Credit Opportunity Acts. In side the town of Ogden, contribute to a deficient record addition, the 1994 Examination detected no practices of CRA performance. Other aspects of Bank's CRA that would discourage applications for the types of credit performance, including ascertainment and marketing ef- offered by Bank.9 forts, also are cited by Protestants as areas of weakness in performance.4 B. Lending and Community Development In considering the convenience and needs factor under Activities the BHC Act, the Board has carefully reviewed the entire record of CRA performance of Bank, all com- The Board has carefully reviewed comments by ICCI ments received on this application, Ogden's and Bank's and other Protestants regarding Bank's lending activiresponses to those comments, and all other facts of ties, in light of the resources available to Bank in helping record in light of the CRA, the Board's regulations, and to meet the credit needs of its entire community. Bank is the Statement of the Federal Financial Supervisory a single-office institution, controlling deposits of approx- Agencies Regarding the Community Reinvestment Act imately $38 million, with a service area that encom- ("Agency CRA Statement").5 passes Ogden, which has a population of approximately 2,000, and several small surrounding communities with Record of CRA Performance populations of less than 250, all in Iowa. As of the 1994 Examination, approximately 81 percent of the Bank's A. CRA Performance Examination loans were made within its delineated community.10 The 1994 Examination also found that credit extended by The Agency CRA Statement provides that a CRA exam- Bank was satisfactorily distributed throughout its service ination is an important and often controlling factor in the consideration of an institution's CRA record and that 7. Some Protestants, particularly the ICCI, generally disagree these reports will be given great weight in the applicawith the inferences and conclusions in the 1994 Examination, as tions process.6 In this case, the Board has noted that well as the procedures followed by the examiners. The 1994 Bank received a rating of "satisfactory" during its most Examination followed established procedures, and included conrecent examination for CRA performance which was tacts with members of the Ogden, Iowa, community. 8. The ICCI contends that more local residents should have participated in the 1994 Examination. 9. Individuals contacted as part of the 1994 Examination and 4. Some Protestants contend that some of Bank's public CRA some Protestants contend that Bank's policies and customer service files are unavailable and others are incomplete. Examination re- are not consistent with helping to meet the credit needs of the ports reveal, however, that procedures have been implemented to community. For example, some individuals believe that borrowers ensure that files are maintained for the purposes of receiving public are discouraged by the bank's conservative lending policies and its comments and for reviewing and responding to those comments. In failure to process applications promptly. Many of these criticisms light of all the facts of record, including reports and responses to were based on experiences that predated the 1991 change in Bank's these comments provided by Ogden and Bank in connection with management. As a result of this change, new policies, including a this application, the Board has concluded that Protestants' com- loan application tracking system that documents each step in the ments concerning Bank's public CRA file do not warrant an loan process, have been implemented at Bank. Other commenters adverse finding on the factors the Board must consider under the criticized the performance of Bank's current management in certain BHC Act. Protestants also have criticized the CRA performance business transactions with these individuals. These comments, record of an organization that is providing debt financing to Ogden when considered in light of all the facts of record, including the in connection with this proposal. The Board does not believe that results of the 1994 Examination and other supervisory evaluations this bank stock lender's CRA performance record is relevant in this of management, do not support adverse action on this proposal. case. 10. Bank reviews its community delineation annually. The 1994 5. 54 Federal Register 13,742 (1989). Examination reviewed a sample of loans and found that this sample 6. Id. at 13,745. supported the reasonableness of Bank's delineation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 721 community, and that Bank extends credit in a manner 1993, this program was expanded to include financing consistent with its CRA statement of available credit and for the purchase of replacement appliances and heating stated loan policies. and air conditioning systems that were damaged in the The 1994 Examination also found that Bank's overall floods. Examiners noted that Bank had received 65 applilending was increasing, and that improvement had been cations under this program, and had originated 64 loans. demonstrated in several types of loans.11 Examiners In November 1993, Bank expanded its loan product line concluded that Bank's total loan portfolio had increased by offering home equity loans. By the time of the 1994 by over 50 percent to $13.9 million since December 31, Examination, Bank had originated eight home equity 1990, and by more than 18 percent over the one-year loans totalling over $95,000. To assist in meeting conperiod preceding the 1994 Examination. sumer credit needs, Bank also originates installment and The 1994 Examination also noted that Bank partici- single-payment loans in amounts as little as $100, and pates in government-sponsored loan programs, such as has introduced a zero-percent financing program under the Small Business Administration ("SBA"), Guaran- which consumers may purchase products from particiteed Student Loan ("GSL"), and Farmers Home Admin- pating merchants with no interest charges.13 istration ("FmHA") loan programs. Examiners found Bank's community development activities include parthat Bank had originated 50 loans under SBA, GSL, or ticipation in the Ogden Rural Main Street Program FmHA programs in the one-and-a-half year period pre- ("ORMS"), which seeks to improve the downtown busiceding the 1994 Examination.12 ness area of Ogden by providing low-interest loans for Since new management was installed in 1991, Bank the replacement of signs and facades. Bank has commithas developed a variety of policies and programs focus- ted $50,000 to the ORMS loan program, and has origiing on the specific credit needs of its community, includ- nated a number of loans under this program. In addition, ing low- and moderate-income residents. For example, Bank donates funds to ORMS for operational expenses, Bank has taken steps to be more flexible in its underwrit- and Bank's president is a member of the ORMS board of ing criteria. In June 1992, Bank increased the maximum directors. Bank also is involved in the Ogden Commuloan-to-value ratio on residential real estate loans from nity Development Corporation, which seeks to attract 75 percent to 80 percent. Since this change was imple- new business to the Ogden area. Bank's management mented, Bank has originated over 30 loans with loan-to- involvement includes a bank officer who serves as treavalue ratios that exceed the earlier requirement. Bank surer and two bank directors who are members of this also has arranged for a third-party insurance company to organization. Bank also has funded a $194,000 loan for provide private mortgage insurance for residential real the construction of the Boone Work Activity Center, estate loans when the loan-to-value ratio exceeds which provides housing and living quarters for disabled 80 percent. Examiners also noted that Bank's president individuals in Boone County, Iowa. The 1994 Examinaconducts a second review of all denied loan applications. tion also noted that Bank had made a number of commu- Denied applications also are reviewed at the loan com- nity development-related loans to small businesses. Bank mittee meetings, and are discussed at the monthly meetalso has made substantial investments in state and local ings of Bank's board of directors. government bonds, and has made project loans to local In April 1992, Bank introduced its Reduced Rate governments in its service area. Property Improvement Loan Program to assist in meeting community credit needs for home improvement C. Other Aspects of CRA Performance loans. Initially, this program offered loans for exterior improvements on residential properties in the Ogden The 1994 Examination found that Bank has taken steps area. After extensive flooding in Bank's service area in to initiate effective methods for ascertaining the credit needs of its community through contacts with various organizations in the community by its staff, management, and directors, participation by officers and staff in 11. The 1994 Examination noted significant increases in residential real estate loans, commercial and industrial loans, agricultural civic and religious organizations, and meetings with real estate loans, and agricultural operating loans. Examiners found various community representatives that included discusthat approximately 46 percent of Bank's loans were for agricultural sions of credit and service needs within Bank's delinpurposes. These loans were made to more than 100 separate cuseated community. tomers. 12. The SBA recently approved Bank to participate in the "Low The 1994 Examination noted that Bank used radio and Doc" loan program whereby a bank may originate small business newspaper advertising of its loan and investment prodand small farm loans under $100,000, with a reduction in the paperwork required by the SBA. Bank also has applied to the State of Iowa to participate in the Linked Investments for Tomorrow 13. Under this program, the merchant pays a fee to Bank to program. This program can be used in conjunction with SBA loans compensate it for the absence of interest charges assessed to the to provide below-market financing for small business borrowers. customer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

722 Federal Reserve Bulletin • July 1995 ucts. Bank also was found to rely on word-of-mouth The Board notes that Bank currently is in satisfactory advertising by its employees, management, and directors financial condition, and that Ogden's debt service projecthrough various community groups and activities, as tions and pro forma debt-to-equity ratio are reasonable well as messages in bank statements, to market its prod- and consistent with the Board's guidelines.16 In light of ucts and services. these considerations and all the other facts of record, The 1994 Examination also noted that Bank's board including relevant reports of examination, the Board has of directors reviews Bank's CRA plan quarterly and concluded that financial considerations are consistent formally adopts the plan annually, and reviews and ap- with approval. proves the CRA Statement at least annually. A senior The Board also has considered the managerial reofficer of the bank has served as Community Affairs sources and future prospects of Ogden and Bank,17 and Officer since 1991, and he is assisted in his CRA respon- all other supervisory factors the Board must consider sibilities by another Bank officer. The 1994 Examination under section 3 of the BHC Act,18 in light of the comfound that the board of directors has delegated sufficient ments received. Based on all the facts of record, the authority to the Community Affairs Officer to enable him Board has concluded that these considerations are consisto implement Bank's CRA plan. tent with approval of this proposal. The Board also The 1994 Examination also concluded that the avail- believes that considerations related to Bank's proposed ability of Bank's services was reasonable, in light of the size and nature of Bank's community and the size of its staff.14 16. See 12 C.F.R. Part 225, Appendix C (Policy Statement for Formation of Small One-Bank Holding Companies). Conclusion Regarding Convenience and Needs Factor 17. The Board has reviewed all the allegations raised by Protestants and other commenters regarding the management of Ogden In reviewing the overall CRA performance record of and Bank, including those relating to specific transactions (such as Bank, the Board has carefully considered the entire improper loans to insiders and other borrowers), Bank's general record in this case, including the comments received on compliance policies and procedures (such as check cashing) and contentions that the proposed investors lack banking experience. this proposal. Based on a review of the entire record of Recent examination reports for Bank by the Reserve Bank support performance, including all comments received, remanagement's competence and compliance with applicable regulasponses to those comments, and relevant reports of ex- tions and the sufficiency of Bank's financial resources. The Board amination, the Board has concluded that convenience also notes that some of the proposed investors in Ogden are and needs considerations, including the CRA perfor- currently members of Bank's board of directors or senior management, and that no major changes in management have been promance record of Bank, are consistent with approval of posed as a result of this proposal. Other comments about investors, this application. such as a trust that would acquire 5 percent of Ogden's shares, do not present any adverse regulatory factors. On the basis of all the Other Factors facts of record, including relevant examination reports, the Board has concluded that these comments do not warrant an adverse finding on the factors the Board must consider under the BHC Act. The Board has considered the financial aspects of this 18. Some Protestants believe that the financing arrangement proposal in light of Protestants' contentions that adverse between Ogden and a bank that is controlled by an out-of-state effects, such as an excessive level of debt and an unsafe bank holding company that competes with Bank would result in debt-to-equity ratio, would result from this proposal.15 decreased competition, restraint of trade, conflicts of interests, and improper exercise of control over Bank by the lender. Some commenters also contend that foreclosure on Bank stock pledged as collateral for this loan could violate the Iowa interstate banking 14. Several Protestants maintained that Bank should provide statute, which prohibits an out-of-state bank holding company from specific types of banking services, such as accounts established in acquiring control of more than 10 percent of the total deposits in connection with certain bonding requirements. The Board notes the state. See Iowa Code Ann. § 524.1802 (West 1994). The loan that the CRA does not require an institution to provide any particu- agreement in this case contains covenants customarily provided by lar type of banking product. a borrower in a bona fide loan transaction, and, as such, does not 15. Some Protestants also have speculated that the sale price for raise competitive or control issues under the BHC Act. In addition, this transaction indicates that there are undisclosed financial prob- the Iowa Superintendent of Banking has informally confirmed that lems at Bank, and that recent decreases in Bank's deposit levels the Iowa interstate banking statute would not preclude a foreclosure indicate a lack of confidence in Bank. In addition, a general on the stock pledged as collateral under the circumstances preobjection has been registered by one Protestant to the dividend sented in this case. Moreover, the issues raised by Protestants could proposed as part of the financing for this transaction. The Board has be considered in a future application by the out-of-state bank carefully considered these comments and has reviewed the pro holding company to control Ogden or Bank. After reviewing all of forma financial condition of Bank after payment of the dividend Protestants' allegations regarding this loan transaction and other and all other relevant information. On the basis of all the facts of comments relating to the lender in this transaction, in light of the record, including all commitments and representations made in facts in the record, the Board has concluded that these comments connection with this application, the Board has approved the re- do not warrant an adverse finding on the factors the Board must quest for Bank to pay the dividend described in the application. consider under the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 723 dividend are consistent with approval of this aspect of of this order, unless such period is extended for good the transaction.19 cause by the Board or by the Reserve Bank, acting Based on the foregoing and all other facts of record, pursuant to delegated authority. the Board has determined that the application should be, By order of the Board of Governors, effective May 18, and hereby is, approved.20 This approval is specifically 1995. conditioned upon compliance by Ogden with all of the commitments made in connection with this application Voting for this action: Chairman Greenspan, Vice Chairman and with the conditions referred to in this order. For Blinder, and Governors Kelley, Lindsey, and Phillips. Absent and not voting: Governor Yellen. purposes of this action, these commitments and conditions shall be deemed to be conditions imposed in writ- WILLIAM W. WILES ing by the Board in connection with its findings and Secretary of the Board decision, and, as such, may be enforced in proceedings under applicable law. Concurring Statement of Governor Lindsey This transaction shall not be consummated before the fifteenth calendar day following the effective date of this I concur because the facts in this case, including the order, or later than three months after the effective date "satisfactory" rating in the 1994 Examination, provide a CRA performance record that is consistent with approval. I note that under the Board's revised CRA regu- 19. The Board has reviewed several comments relating to the lations, which would become effective for Bank Jan- Trust, the administration of the Trust, and the propriety of this uary 1, 1996, we would evaluate this bank under the transaction, including allegations that the trustees have violated their fiduciary duties by selling the Trust's shares in Bank at a price performance standards for small banks. These simplified below fair market value, thereby adversely affecting the resources criteria focus on a bank's lending activities through a of the charitable trust available to benefit the residents of the Ogden variety of measures, including an institution's loan-tocommunity. These comments also allege that other aspects of the deposit ratio. In this case, Bank's modest loan-to-deposit trustees' proposed sale and administration of the Trust assets generally, including the manner of soliciting bids for Bank's stock and ratio would require careful review by examiners under the use of the Trust's assets in a manner inconsistent with the terms these new standards. It is important for Bank to be aware of the Trust, were improper. The courts have held that issues of these changes in the CRA regulations in conducting relating to stock pricing, exchange ratios, and similar matters its CRA-related activities. related to conducting stock offerings are generally outside the scope of the factors enumerated in the BHC Act that the Board is required to consider. See Western Bancshares, Inc. v. Board of Governors, May 18, 1995 480 F.2d 749 (10th Cir. 1973). In addition, an Iowa state district court with jurisdiction over the Trust has reviewed and approved Orders Issued Under Section 4 of the Bank this proposal. See In the Matter of the Leonard A. Good Trust, Iowa District Court for Boone County, in Probate, No. 18954 (November Holding Company Act 4, 1994). The Iowa Attorney General, who is charged by statute with the responsibility for reviewing the activities and transactions Bay Banks, Inc. of charitable foundations, was also informed of this transaction and Boston, Massachusetts raised no objection. See Iowa Code Ann. § 633.303 (West 1992). Based on all the facts of record, the Board has concluded that these comments do not warrant an adverse finding on the factors the Order Approving Acquisition of Shares of a Savings Board must consider under the BHC Act. Association 20. One Protestant has requested that the Board hold a public hearing on this application and permit Protestant to present oral BayBanks, Inc., Boston, Massachusetts ("BayBanks"), argument to the Board. Section 3 of the BHC Act does not require a bank holding company within the meaning of the Bank the Board to hold a public hearing on an application unless the primary supervisor for the bank to be acquired makes a timely Holding Company Act ("BHC Act"), has given notice written recommendation of denial, which has not occurred in this under section 4(c)(8) of the BHC Act (12 U.S.C. case. Under its rules, the Board may, in its discretion, hold a public § 1843(c)(8)) and section 225.23 of the Board's Regulahearing on an application to clarify factual issues related to the tion Y (12 C.F.R. 225.23) of its intention to acquire NFS application and to provide an opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully Financial Corp., Nashua ("NFS"),1 and thereby indiconsidered Protestant's request. In the Board's view, Protestant has rectly acquire its thrift subsidiaries, NFS Savings Bank, had ample opportunity to present written submissions, and has, in Nashua ("Nashua Bank"), and Plaistow Cooperative fact, submitted substantial written comments that have been considered by the Board. In light of the foregoing and all other facts of record, the Board has determined that neither a hearing nor an oral argument is necessary to clarify the factual record in this applica- 1. In connection with this proposal, BayBanks has also requested tion, or otherwise warranted in this case. Accordingly, the request approval to acquire an option to purchase up to 9.9 percent of the for a public hearing or oral argument on this application is hereby outstanding voting shares of NFS. This option would terminate denied. upon consummation of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

724 Federal Reserve Bulletin • July 1995 Bank, Plaistow ("Plaistow Bank"), all in New Hamp- financial supervisory agencies to encourage financial shire.2 institutions to help meet the credit needs of the local Notice of this proposal, affording interested persons an communities in which they operate, consistent with the opportunity to submit comments, has been published (60 safe and sound operation of such institutions. To accom- Federal Register 18,103 (1995)). The time for filing plish this end, the CRA requires the appropriate federal comments has expired, and the Board has considered the supervisory authority to "assess the institution's record notice and all comments received in light of the factors of meeting the credit needs of its entire community, set forth in section 4(c)(8) of the BHC Act. including low- and moderate-income neighborhoods, con- BayBanks, with total consolidated assets of sistent with the safe and sound operations of such institu- $10.8 billion, operates three banks in Massachusetts and tion," and to take that record into account in its evalua- Connecticut.3 BayBanks is the second largest commer- tion of bank holding company applications.6 cial or thrift organization in Massachusetts, controlling The Board has received comments from the New deposits of $8.7 billion, representing approximately Hampshire Community Reinvestment Association and 8.7 percent of total deposits in depository institutions in several individuals, including the Mayor of the City of Massachusetts.4 NFS is the sixth largest commercial or Nashua, commending the CRA record of NFS and questhrift organization in New Hampshire, controlling depos- tioning whether BayBanks would continue to assist in its of $515.5 million, representing approximately meeting the credit needs, particularly the housing-related 4.1 percent of total deposits in depository institutions in credit needs of low-income individuals, of local commu- New Hampshire. nities in the Nashua area. The Board has carefully re- The Board has determined that the operation of a viewed these comments in light of the CRA, the Board's savings association is closely related to banking and regulations, and the jointly issued Statement of the Fedpermissible for bank holding companies. 12 C.F.R. eral Financial Supervisory Agencies Regarding the Com- 225.25(b)(9). In making this determination, the Board munity Reinvestment Act ("Agency CRA Statement").7 requires that savings associations acquired by bank hold- The Agency CRA Statement provides that a CRA ing companies conform their direct and indirect activi- examination is an important and often controlling factor ties to those permissible for bank holding companies in the consideration of an institution's CRA record, and under section 4 of the BHC Act. BayBanks has commit- that reports of these examinations will be given great ted to conform all activities of Nashua Bank and weight in the applications process.8 BayBanks's lead Plaistow Bank to the requirements of section 4 of the bank subsidiary, BayBank, Burlington, Massachusetts, BHC Act and Regulation Y. representing approximately 90 percent of its consolidated assets, received a "satisfactory" rating from its Convenience and Needs Considerations primary supervisor, the Federal Deposit Insurance Corporation, at its most recent examination for CRA perfor- In considering an application to acquire a savings associ- mance as of April 1993. BayBanks's Boston bank subation under section 4 of the BHC Act, the Board reviews sidiary, BayBank Boston, N.A., Boston, Massachusetts the records of performance of the relevant institutions ("Boston Bank"), also received a "satisfactory" rating under the Community Reinvestment Act (12 U.S.C. from its primary supervisor, the Office of the Comptrol- § 2901 et seq.) ("CRA").5 The CRA requires the federal ler of the Currency ("OCC"), at its most recent examination for CRA performance as of March 1993.9 In addi- 2. Upon consummation of this proposal, BayBanks would own BayBank, FSB, an organization resulting from the merger of 6. See 12 U.S.C. § 2903. Nashua Bank and Plaistow Bank, through its wholly owned subsid- 7. 54 Federal Register 13,742 (1989). iary, BayBanks New Hampshire, Inc. 8. See Agency CRA Statement, at 13,745. 3. Asset and state deposit data are as of December 31, 1994. 9. The Board notes that BayBanks's other subsidiary bank, 4. In this context, depository institutions include commercial BayBank Connecticut, N.A., Hartford, Connecticut ("Connecticut banks, savings banks, and savings associations. Bank"), received three consecutive less-than-satisfactory CRA per- 5. The Board previously has determined that the CRA by its formance ratings from the OCC. Connecticut Bank represents less terms generally does not apply to applications by bank holding than 1 percent of BayBanks's consolidated assets and was acquired companies to acquire nonbanking companies under section 4(c)(8) by BayBanks in connection with the sale of a financially troubled of the BHC Act. The Mitsui Bank, Ltd., 76 Federal Reserve institution. Because of the poor financial condition of Connecticut Bulletin 381 (1990). The Board also has stated that, unlike other Bank at the "time of its acquisition, Connecticut Bank has focused companies that may be acquired by bank holding companies under its financial and managerial resources on improving the bank's section 4(c)(8) of the BHC Act, savings associations are depository financial condition. The OCC has informed the Board that manageinstitutions, as that term is defined in the CRA, and thus acquisi- ment has shown an improved awareness of CRA requirements and tions of savings associations are subject to review under the express a commitment to raise the level of the bank's performance in terms of the CRA. Norwest Corporation, 76 Federal Reserve Connecticut, and Connecticut Bank has already implemented Bulletin 873 (1990). changes to its CRA program that have resulted in a greater volume Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 725 tion, NFS's bank subsidiaries Nashua Bank and Plaistow Other Considerations Bank received "outstanding" and "satisfactory" ratings, respectively, from their primary supervisor, the Office of Under section 4 of the BHC Act, the Board also is Thrift Supervision, at their most recent CRA perfor- required to consider whether the proposal is likely to mance examinations.10 result in any significantly adverse effects, such as undue The Board has carefully considered the comments concentration of resources, decreased or unfair competireceived from interested parties regarding the CRA per- tion, conflicts of interests, or unsound banking practicformance record of the institutions involved in this pro- es.11 BayBanks and NFS compete directly in the Boston posal in light of the relevant exam reports, the responses banking market12 and the market would remain unconprovided by BayBanks, and all other facts of record. centrated as measured by the Herfindahl-Hirschman In- BayBanks has indicated that it intends to continue NFS's dex ("HHI").13 After considering the competition ofemphasis on housing-related lending, including afford- fered by other depository institutions in the market, the able rental housing, to retain management responsible number of competitors that would remain in the market, for NFS's CRA programs, and to continue NFS's com- the relatively small increase in concentration as meamitment to participate in activities with organizations sured by the HHI, and all other facts of record, the Board within the local community. In addition, BayBanks has concludes that consummation of the proposal would not committed to initiate a number of its CRA policies and result in a significantly adverse effect on competition or programs designed to assist in meeting the credit needs the concentration of banking resources in any relevant of local communities, including low- and moderate- banking market. income communities, at the NFS institutions acquired in Consummation of this proposal would result in an this proposal. For example, BayBanks will implement its enhanced selection of services to retail and business BayBank Neighborhood Banking Program, a program customers, including new automated banking facilities. used by BayBank Boston for the past six years to meet a variety of CRA-related credit needs in the Boston area. Under this program, BayBank Boston has invested in 11. Two individuals have commented that BayBanks's acquisiaffordable housing projects and over 650 affordable tion of Nashua Bank would result in anticompetitive effects in rental units in Massachusetts; financed affordable rental Nashua, New Hampshire, which is part of the Boston banking units through loan pools and direct financing; and of- market. For the reasons discussed below, the Board concludes that these comments do not present adverse competitive considerations fered first-time and affordable mortgage programs with under the BHC Act for the relevant banking market. flexible underwriting guidelines and no closing costs for 12. The Boston banking market is approximated by the Boston low- and moderate-income home buyers. In addition, Metro Ranally Area and the townships of Greenville, Lyndeboro, BayBanks will offer a basic checking account with no and New Ipswich in New Hampshire. Based on deposit and market data as of June 30, 1994, BayBanks would remain, after consummaminimum balance requirement and a low monthly sertion, the second largest depository institution in the market, controlvice fee. ling deposits of $8 billion, representing approximately 12.6 percent of total deposits in depository institutions in the market. Market Based on a review of the entire record of performance, share data before consummation are based on calculations in which including information provided by the OCC and relevant the deposits of thrift institutions are included at 50 percent. The reports of examination, the Board believes that the ef- Board previously has indicated that thrift institutions have become, forts of BayBanks and its subsidiaries and its plans for or have the potential to become, significant competitors of commer- NFS to help meet the credit needs of all segments of its cial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin communities, including low- and moderate-income 743 (1984). Because the deposits of NFS would be transferred to a neighborhoods, are consistent with approval of this apcommercial banking organization under this proposal, those deposplication. its are included at 100 percent in the calculation of the pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990). 13. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the of loans in its delineated community. The Board expects BayBanks post-merger HHI is less than 1000 is considered unconcentrated. to improve the services and programs available to the areas served The Justice Department has informed the Board that a bank merger by Connecticut Bank and fully implement programs that address or acquisition generally will not be challenged (in the absence of the concerns raised by the OCC. The Board will consider Bay- other factors indicating anticompetitive effects) unless the post- Banks's progress in this regard in future applications to acquire a merger HHI is at least 1800 and the merger increases the HHI by depository facility. On this basis, and on the basis of all the facts of more than 200 points. The Justice Department has stated that the record, the Board believes that BayBanks's proposal is consistent higher than normal HHI thresholds for screening bank mergers for with approval. anticompetitive effects implicitly recognize the competitive effect 10. Nashua Bank's CRA performance was rated "outstanding" of limited-purpose lenders and other non-depository financial instias of July 1994, and Plaistow Bank's CRA performance was rated tutions. Upon consummation of this proposal, the HHI in the "satisfactory" as of May 1993. Boston banking market would increase 19 points to 855. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

726 Federal Reserve Bulletin • July 1995 The Board also finds that consummation of this proposal Voting for this action: Chairman Greenspan, Vice Chairman is not likely to result in any significantly adverse effects, Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound JENNIFER J. JOHNSON Deputy Secretary of the Board banking practices that are not likely to be outweighed by the public benefits. Accordingly, the Board has deter- First Union Corporation mined that the balance of public interest factors it must Charlotte, North Carolina consider under section 4(c)(8) of the BHC Act is favorable and consistent with approval of the application. Order Approving a Notice to Engage in Underwriting Based on the foregoing and all the facts of record, the and Dealing in All Types of Debt and Equity Securities Board has determined that the application should be, and hereby is, approved.14 The Board's approval is specifi- on a Limited Basis, and Certain Swap-Related Advisory Activities cally conditioned on compliance by BayBanks with all the commitments made in connection with this applica- First Union Corporation, Charlotte, North Carolina tion. The Board's determination also is subject to all the ("First Union"), a bank holding company within the conditions set forth in Regulation Y, including those meaning of the Bank Holding Company Act ("BHC in sections 225.7 and 225.23(b)(3) of Regulation Y Act"), has provided notice under section 4(c)(8) of the (12 C.F.R. 225.7 and 225.23(b)), and to the Board's BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.23 authority to require modification or termination of the of the Board's Regulation Y (12 C.F.R. 225.23) of its activities of a bank holding company or any of its proposal to expand the activities of its section 20 subsidsubsidiaries as the Board finds necessary to assure comiary, First Union Capital Markets Corporation, Charlotte, pliance with, and to prevent evasion of, the provisions North Carolina ("Company"), to include underwriting and purposes of the BHC Act and the Board's regulaand dealing in, to a limited extent, all types of debt and tions and orders issued thereunder. For the purpose of equity securities (other than ownership interests in openthis action, the commitments and conditions relied on by end investment companies), and providing advice with the Board in reaching this decision are deemed to be respect to swaps and swap derivative products1 based on conditions imposed in writing by the Board in conneccommodities, stock, bond, or commodity indices, or a tion with its findings and decision, and, as such, may be hybrid of interest rates and such commodities or indices. enforced in proceedings under applicable law. Notice of the proposal, affording interested persons an This transaction shall not be consummated later than opportunity to submit comments, has been published three months after the effective date of this order, unless (60 Federal Register 10,210 (1995)). The time for filing such period is extended for good cause by the Board or comments has expired, and the Board has considered the by the Federal Reserve Bank of Boston, acting pursuant notice and all comments received in light of the factors to delegated authority. set forth in section 4(c)(8) of the BHC Act. By order of the Board of Governors, effective May 30, First Union, with total consolidated assets of 1995. $77.9 billion, operates subsidiary banks in seven states.2 Company currently is engaged in limited bank-ineligible 14. Two commenters requested that the Board hold a public securities3 underwriting and dealing activities that are meeting or hearing on this application regarding the ability of permissible under section 20 of the Glass-Steagall Act BayBanks to meet the needs of the New Hampshire communities (12 U.S.C. § 377).4 Company is, and will continue to be, currently served by NFS. The Board's rules provide that a hearing a broker-dealer registered with the Securities and Exis required under section 4 of the BHC Act if there are disputed issues of material fact that cannot be resolved in some other change Commission ("SEC") under the Securities Exmanner. 12 C.F.R. 225.23(g). In addition, the Board may, in its discretion, hold a public meeting or hearing on an application to clarify factual issues related to the application and to provide an 1. "Swap derivative products" means caps, floors, collars, and opportunity for testimony, if appropriate. 12 C.F.R. 262.3(e) and options on swaps, caps, floors, and collars. 262.25(d). The Board has carefully considered the commenters' 2. Asset data are as of March 31, 1995. requests. In the Board's view, the commenters have had a sufficient 3. As used in this order, "bank-ineligible securities" refers to all opportunity to present written submissions, and have submitted types of debt and equity securities that a bank may not underwrite written comments that have been considered by the Board. The or deal in directly under section 16 of the Glass-Steagall Act Board also concludes that commenters' requests do not identify (12 U.S.C. §24(7)). disputed issues of fact that are material to the Board's decision. On 4. Company has authority to underwrite and deal in, to a limited the basis of all facts of record, the Board has determined that a extent, certain municipal revenue bonds, 1-4 family mortgagepublic meeting or hearing is not necessary to clarify the factual related securities, commercial paper, and consumer-receivablerecord in this application, or otherwise warranted in this case. related securities. See First Union Corporation, 75 Federal Re- Accordingly, the requests for a public meeting or hearing on this serve Bulletin 645 (1989). Company also is authorized to engage in application are hereby denied. a variety of other nonbanking activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 727 change Act of 1934 (15 U.S.C. § 78a et seq.) and is a pany will conduct its underwriting and dealing activities member of the National Association of Securities Deal- in bank-ineligible securities subject to the 10-percent ers, Inc. ("NASD"). Accordingly, Company is subject to revenue test.9 the record-keeping and reporting obligations, fiduciary Under section 4(c)(8) of the BHC Act, the Board standards, and other requirements of the Securities Ex- considers the financial and managerial resources of the change Act of 1934, the SEC, and the NASD. notificant and its subsidiaries and the effect of the trans- The Board previously has determined that the pro- action upon such resources.10 The Board has reviewed posed swap-related advisory activities are closely related the capitalization of First Union and Company in accorto banking.5 First Union has committed that Company dance with the standards set forth in the Section 20 will conduct the proposed activities in accordance with Orders, and finds the capitalization of each to be consisthe limitations and conditions relied on by the Board in tent with approval. With respect to Company, this deter- Swiss Bank.6 mination is based on all the facts of record, including The Board also previously has determined that, sub- First Union's projections of the volume of Company's ject to the prudential framework of limitations estab- underwriting and dealing activities in bank-ineligible lished in previous decisions to address the potential for securities. On the basis of all the facts of record, includconflicts of interests, unsound banking practices, or other ing the foregoing, and, with respect to First Union's adverse effects ("section 20 firewalls"), the proposed proposal to underwrite and deal in bank-ineligible secuactivities of underwriting and dealing in bank-ineligible rities, subject to the completion of a satisfactory infrasecurities are so closely related to banking as to be structure review, the Board has concluded that financial proper incidents thereto within the meaning of section and managerial considerations are consistent with ap- 4(c)(8) of the BHC Act.7 First Union has committed that proval of this notice. Company will conduct the proposed underwriting and In order to approve this notice, the Board also must dealing activities using the same methods and proce- determine that the performance of the proposed activities dures, and subject to the same prudential limitations that by First Union can reasonably be expected to produce were established by the Board in the Section 20 Orders public benefits that would outweigh possible adverse and other cases. effects under the proper incident to banking standard of The Board also has determined that the conduct of section 4(c)(8) of the BHC Act. Under the framework these securities underwriting and dealing activities is established in this and prior decisions, consummation of consistent with section 20 of the Glass-Steagall Act this proposal is not likely to result in any significantly (12 U.S.C. § 377), provided that the company engaged in adverse effects, such as undue concentration of rethe underwriting and dealing activities derives no more sources, decreased or unfair competition, conflicts of than 10 percent of its total gross revenue from underwriting and dealing in bank-ineligible securities over any two-year period.8 First Union has committed that Com- stated in the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989), the Order Approving Modifications to the Section 20 Orders, 79 Federal Reserve Bulletin 226 (1993), and the 5. See Swiss Bank Corporation, 81 Federal Reserve Bulletin 185 Supplement to Order Approving Modifications to Section 20 Or- (1995) ("Swiss Bank"). ders, 79 Federal Reserve Bulletin 360 (1993) (collectively, "Modi- 6. First Union has indicated that it expects that an affiliate of fication Orders"). The Board notes that First Union has not adopted Company would act as counterparty principal for transactions on the Board's alternative indexed-revenue test to measure compliwhich Company would provide advice. In these situations, Com- ance with the 10-percent limitation on bank-ineligible securities pany would be acting as the agent of its affiliate. In order to address activities, and, absent such election, First Union will continue to potential conflicts of interest that may arise, First Union has com- employ the Board's original 10-percent revenue test. mitted that Company will disclose to each customer that an affiliate 9. As an incident to the proposed underwriting and dealing of Company will be the counterparty to the customer with respect activities, First Union proposes that Company engage in risk manto the transaction which is the subject of the advice. See The Long agement activities, such as hedging, in accordance with the Board's Term Credit Bank of Japan, Limited, 79 Federal Reserve Bulletin policy statement on derivative transactions, 12 C.F.R. 225.142. 345, 346 (1993). First Union also proposes that Company underwrite bank-ineligible 7. See Canadian Imperial Bank of Commerce, 76 Federal Re- securities on a best efforts basis. The Board notes that Company serve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al., may engage in activities that are necessary incidents to the pro- 75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities posed underwriting and dealing activities, provided that any such Industries Ass'n v. Board of Governors of the Federal Reserve activities are treated as part of the bank-ineligible securities activi- System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal ties unless Company has received specific approval under section Reserve Bulletin 473 (1987), aff'd sub nom. Securities Industry 4(c)(8) of the BHC Act to conduct the activities independently. Ass'n v. Board of Governors of the Federal Reserve System, 839 Until such approval is obtained, any revenues from the incidental F.2d 47 (2d Cir.), cert, denied, 486 U.S. 1059 (1988) (collectively, activities must be counted as ineligible revenues subject to the "Section 20 Orders"). 10-percent revenue limitation set forth in the Section 20 Orders, as 8. See Section 20 Orders. Compliance with the 10 percent reve- modified by the Modification Orders. nue limitation shall be calculated in accordance with the method 10. See 12 C.F.R. 225.24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

728 Federal Reserve Bulletin • July 1995 interests, or unsound banking practices. The Board ex- pliance with, and to prevent evasion of, the provisions of pects that consummation of the proposal would provide the BHC Act and the Board's regulations and orders added convenience to First Union's customers and would issued thereunder. The Board's decision is specifically increase the level of competition among existing provid- conditioned on compliance with all the commitments ers of these services. Accordingly, the Board has deter- made in connection with this notice, including the commined that the performance of the proposed activities by mitments discussed in this order and the conditions set First Union can reasonably be expected to produce pub- forth in the above-noted Board regulations and orders. lic benefits that outweigh possible adverse effects under These commitments and conditions shall be deemed to the proper incident to banking standard of section 4(c)(8) be conditions imposed in writing by the Board in conof the BHC Act. nection with its findings and decisions, and may be Accordingly, and for the reasons set forth in this order enforced in proceedings under applicable law. and in the Section 20 Orders, the Board has concluded This transaction shall not be consummated later than that First Union's proposal to engage through Company three months after the effective date of this order unless in the proposed activities is consistent with the Glass- such period is extended for good cause by the Board or Steagall Act, and that the proposed activities are so by the Federal Reserve Bank of Richmond, acting pursuclosely related to banking as to be proper incidents ant to delegated authority. thereto within the meaning of section 4(c)(8) of the BHC By order of the Board of Governors, effective May 30, Act, provided that First Union limits Company's activi- 1995. ties as specified in this order and the Section 20 Orders, as modified by the Modification Orders. Voting for this action: Chairman Greenspan, Vice Chairman On the basis of the record, the Board has determined Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. to, and hereby does, approve this notice subject to all the terms and conditions discussed in this order and in the JENNIFER J. JOHNSON Deputy Secretary of the Board Section 20 Orders as modified by the Modification Orders. The Board's approval of this proposal extends only to activities conducted within the limitations of those HSBC Holdings pic orders and this order, including the Board's reservation London, England of authority to establish additional limitations to ensure that Company's activities are consistent with safety and HSBC Holdings BV soundness, conflicts of interests, and other relevant con- Amsterdam, The Netherlands siderations under the BHC Act. Underwriting and dealing in any manner other than as approved in this order Order Approving Notices to Engage in Private and the Section 20 Orders (as modified by the Modifica- Placement, Riskless Principal, and Other Securities tion Orders) is not authorized for Company. Related Activities The Board's approval of First Union's proposal to underwrite and deal in all types of debt and equity securities is conditioned on a future determination by the HSBC Holdings pic, London, England ("HSBC"), and Board that First Union and Company have established HSBC Holdings BV, Amsterdam, The Netherlands policies and procedures to ensure compliance with the ("HHBV") (together, "Notificants"), both bank holding section 20 firewalls and the other requirements of this companies within the meaning of the Bank Holding order and the Section 20 Orders, including computer, Company Act ("BHC Act"), have given notice pursuant audit, and accounting systems, internal risk management to section 4(c)(8) of the BHC Act (12 U.S.C. controls, and the necessary operational and managerial § 1843(c)(8)) and section 225.23(a) of the Board's Reginfrastructure. Upon notification by the Board that this ulation Y (12 C.F.R. 225.23(a)) of their intention to condition has been satisfied, Company may immediately engage through their wholly owned subsidiary, James commence the proposed underwriting and dealing activ- Capel Incorporated, New York, New York ("Compaities with respect to bank-ineligible securities, subject to ny"), in the following securities related activities: the other conditions of this order and the Section 20 (1) Providing investment and financial advice, pursu- Orders. ant to section 225.25(b)(4) of Regulation Y; The Board's determination is also subject to all the (2) Providing securities brokerage services on a terms and conditions set forth in Regulation Y, including discount and full-service basis, pursuant to secthose in sections 225.7 and 225.23(b), and to the Board's tion 225.25(b)(15) of Regulation Y; authority to require modification or termination of the (3) Acting as agent in the private placement of all activities of a bank holding company or any of its types of securities, and providing related advisory subsidiaries as the Board finds necessary to assure com- services; and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 729 (4) Buying and selling all types of securities on the these activities in accordance with the limitations order of investors as a "riskless principal." imposed by sections 225.25(b)(4) and (15) of Regulation Y.4 Notificants propose to conduct the foregoing activities Private placement involves the placement of new isthroughout the United States. sues of securities with a limited number of sophisticated Notice of this proposal, affording interested persons an purchasers in a nonpublic offering. A financial intermediopportunity to submit comments, has been published ary in a private placement transaction acts solely as an (59 Federal Register 13,726 (1995)). The time for filing agent of the issuer in soliciting purchasers, and does not comments has expired, and the Board has considered the purchase the securities and attempt to resell them. Secunotices and all comments received in light of the factors rities that are privately placed are not subject to the set forth in section 4(c)(8) of the BHC Act. registration requirements of the Securities Act of 1933 Notificants, with consolidated assets equivalent to ap- (15 U.S.C. 77a et seq.), and are offered only to finanproximately $315 billion, are the thirteenth largest com- cially sophisticated institutions and individuals and not mercial banking organization in the world and provide a to the public. Notificants have committed that Company wide range of banking, financial, and related services will not privately place registered securities, and will worldwide through their various subsidiaries and affili- only place securities with "institutional customers" as ated companies.1 Notificants own Marine Midland Bank, that term is defined in section 225.2(g) of Regulation Y Buffalo, New York, the fifth largest commercial bank (12 C.F.R. 225.2(g)). in the state, with total deposits of approximately "Riskless principal" is the term used in the securities $12.8 billion. In addition, Notificants' Hong Kong bank- business to refer to a transaction in which a brokering subsidiaries, The Hongkong and Shanghai Banking dealer, after receiving an order from a customer to buy Corporation Limited and Hang Seng Bank Limited, (or sell) a security, purchases (or sells) the security for its maintain branches in Los Angeles and San Francisco, own account to offset a contemporaneous sale to (or California; Chicago, Illinois; New York, New York; purchase from) the customer.5 "Riskless principal" Portland, Oregon; and Seattle, Washington; an agency in transactions are understood in the industry to include Houston, Texas; and representative offices in Newport only transactions in the secondary market. Thus, under Beach and Alhambra, California. Midland Bank pic, the proposal, Company would not act as a "riskless London, England, a banking subsidiary of HSBC, main- principal" in selling securities at the order of a customer tains a branch in New York, New York, and Equator that is the issuer of the securities to be sold, or in any Bank Limited, Nassau, Bahamas, another banking sub- transaction where Company has a contractual agreement sidiary of HSBC, maintains representative offices in to place the securities as agent of the issuer. Company Glastonbury, Connecticut, and Washington, D.C. also would not act as a "riskless principal" in any Company is a broker-dealer registered with the Securi- transaction involving a security for which it makes a ties and Exchange Commission ("SEC") and is a mem- market. ber of the National Association of Securities Dealers The Board has previously determined by order that, ("NASD").2 Accordingly, Company is subject to the subject to prudential limitations that address the potenrecordkeeping, reporting, fiduciary standards, and other tial for conflicts of interests, unsound banking practices, requirements of the Securities Exchange Act of 1934 and other adverse effects, the proposed private place- (15 U.S.C. 78a et seq.), the SEC, and the NASD. ment and riskless principal activities are so closely re- The Board previously has determined by regulation lated to banking as to be a proper incident thereto within that engaging in financial and investment advisory activ- the meaning of section 4(c)(8) of the BHC Act.6 The ities and securities brokerage activities are closely re- Board also has previously determined that acting as lated to banking and permissible for bank holding com- agent in the private placement of securities, and purchaspanies under section 4(c)(8) of the BHC Act.3 ing and selling securities on the order of investors as a Notificants have committed that Company will conduct "riskless principal," do not constitute underwriting and dealing in securities for purposes of section 20 of the 1. Asset and deposit data are as of December 31, 1994. 2. Company currently engages in all the securities related activities described above on a limited basis in connection with the 4. Notificants have advised the Board that Company will not purchase and sale by U.S. institutional customers of securities of provide financial and investment advice pursuant to sections non-U.S. companies, and acts as financial advisor to its affiliates 225.25(b)(4)(v) and 225.25(b)(4)(vi)(A)(2) of Regulation Y. and their non-U.S. clients in connection with corporate transactions 5. See Securities and Exchange Commission Rule 10b-10 (17 in U.S. markets. Notificants received temporary authority to acquire C.F.R. 240.1Ob-10(a)(8)(i)). a controlling interest in Company and to engage in the activities 6. See J.P. Morgan & Company Incorporated, 76 Federal Redescribed in this footnote under section 4(c)(9) of the BHC Act. serve Bulletin 26 (1990); Bankers Trust New York Corporation, 75 3. See 12 C.F.R. 225.25(b)(4) and (15). Federal Reserve Bulletin 829 (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

730 Federal Reserve Bulletin • July 1995 Glass-Steagall Act (12 U.S.C. § 377), and that revenue In every case involving a nonbanking acquisition by a derived from such activities is not subject to the bank holding company under section 4 of the BHC Act, 10 percent revenue limitation on underwriting and deal- the Board considers the financial condition and resources ing in ineligible securities.7 Notificants have committed of the applicant and its subsidiaries and the effect of the that Company will conduct its private placement and proposal on these resources.10 In this case, the Board "riskless principal" activities in a manner consistent notes that Notificants meet the relevant risk-based capiwith the limitations, methods, and procedures estab- tal standards consistent with the Basle Accord, and have lished by the Board in prior orders, as modified to reflect capital equivalent to that which would be required of a the status of Notificants as foreign banking organiza- United States banking organization. In view of these and tions.8 other facts of record, the Board has determined that the In order to approve these notices, the Board also is financial factors are consistent with approval of these required to determine that the performance of the pro- notices. The managerial resources of Notificants also are posed activities by Notificants can reasonably be ex- consistent with approval.11 pected to produce public benefits which would outweigh Based on the foregoing and other facts of record, and possible adverse effects under the proper incident to subject to the commitments made by Notificants, the banking standard of section 4(c)(8) of the BHC Act.9 Board has determined that the balance of public interest Under the framework established in this and prior deci- factors it is required to consider under section 4(c)(8) is sions, consummation of this proposal is not likely to favorable. Accordingly, the Board has determined that result in any significantly adverse effects, such as undue these notices should be, and hereby are, approved, subconcentration of resources, decreased or unfair competi- ject to all the terms and conditions set forth in this order, tion, conflicts of interests, or unsound banking practices. and in the Board regulations and orders noted above. Moreover, the Board has determined that performance of The Board's determination also is subject to all the terms the proposes activities by Notificants can reasonably be and conditions set forth in its Regulation Y, including expected to produce public benefits, such as added con- those in sections 225.7 and 225.23(b), and to the Board's venience to their customers, that would outweigh any authority to require modification or termination of the adverse effects under the proper incident to banking activities of a bank holding company or any of its standard of section 4(c)(8) of the BHC Act. 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. The Board's decision is specifically conditioned on compliance with all the commitments 7 .Id. 8. See The Sumitomo Bank, Limited, 77 Federal Reserve Bulletin made in these notices, including the commitments dis- 339 (1991); Creditanstalt-Bankverein, 11 Federal Reserve Bulletin cussed in this order and the conditions set forth in the 183 (1991); The Royal Bank of Scotland Group PLC, 76 Federal Board orders noted above. These commitments and con- Reserve Bulletin 866 (1990); Canadian Imperial Bank of Comditions shall both be deemed to be conditions imposed in merce, et al., 76 Federal Reserve Bulletin 158 (1990). As detailed writing by the Board in connection with its findings and more fully in these orders, in addition to the commitments imposed by the Board in connection with underwriting and dealing in securities, Notificants have committed that Company will maintain specific records that will clearly identify all "riskless principal" transactions, and that Company will not engage in any "riskless principal" transactions for any securities carried on its inventory. 10. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal When acting as a "riskless principal," Company will only engage Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Fedin transactions in the secondary market, and not at the order of a eral Reserve Bulletin 155 (1987). customer that is the issuer of the securities to be sold; will not act as 11. In reaching this conclusion, the Board has carefully reviewed a "riskless principal" in any transaction involving a security for a settlement recently entered into by Company with the SEC which it makes a market; and will not hold itself out as making a concluding an enforcement action concerning Company's involvemarket in the securities that it buys and sells as a "riskless princi- ment in the private placement of shares of a foreign company in pal." Moreover, Company will not engage in "riskless principal" 1991 and the Company's retention of and failure to disclose excess transactions on behalf of its foreign affiliates that engage in securi- local charges on certain customer trades in foreign markets from ties dealing activities outside the United States and will not act as 1989 through 1992. Company has neither admitted nor denied any "riskless principal" for registered investment company securities. violations of Federal securities laws, but in settlement of this action In addition, Company will not act as a "riskless principal" with has agreed to pay a civil money penalty and disgorge the net respect to any securities of investment companies that are advised amount of the excess local charges on foreign trades, with interest. by Notificants or any of their affiliates. With regard to private Based on all the facts of record, including the terms of Company's placement activities, Notificants have committed that Company settlement with the SEC and the actions undertaken by Company to will not privately place registered investment company securities or improve its operational controls and management in the areas cited securities of investment companies that are advised by Notificants by the SEC and other areas, the Board does not believe that or any of their affiliates. Company's alleged activities warrant adverse consideration of this 9. 12 U.S.C. § 1843(c)(8). proposal under the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 731 decisions, and, as such, may be enforced in proceedings ing investment advice with respect to certain futures under applicable law. and options on futures on financial commodities.2 This transaction shall not be consummated later that Notice of the proposal, affording interested persons an three months after the effective date of this order, unless opportunity to submit comments, has been published such period is extended for good cause by the Board or (59 Federal Register 63,048 (1994)). The time for filing by the Federal Reserve Bank of New York, acting pursucomments has expired, and the Board has considered the ant to delegated authority. notice and all comments received in light of the factors By order of the Board of Governors, effective May 25, set forth in section 4(c)(8) of the BHC Act. 1995. IBJ, with total consolidated assets equivalent to approximately $398 billion, is the seventh largest commer- Voting for this action: Chairman Greenspan, Vice Chairman cial banking organization in Japan.3 IBJ's United States Blinder, and Governors Kelley, Lindsey, and Phillips. Absent and not voting: Governor Yellen. subsidiaries include Bank; branches in New York, New York, and Chicago, Illinois; agencies in Los Angeles, JENNIFER J. JOHNSON California, Atlanta, Georgia, and San Francisco, Califor- Deputy Secretary of the Board nia; and representative offices in Houston, Texas, and Washington, D.C. The Industrial Bank of Japan, Limited Lanston is registered as a futures commission mer- Tokyo, Japan chant with the Commodity Futures Trading Commission ("CFTC"), and is a member of the National Futures Order Approving a Notice to Engage in Certain Association ("NFA"). Therefore, Lanston is subject to Nonbanking Activities the recordkeeping, reporting, fiduciary standards, and other requirements of the Commodity Exchange Act The Industrial Bank of Japan, Limited, Tokyo, Japan (7 U.S.C. § 1 et seq.), the CFTC, and the NFA. In addi- ("IBJ"), a bank holding company within the meaning of tion, Lanston is registered with the Securities and Exthe Bank Holding Company Act ("BHC Act"), has change Commission ("SEC") as a broker-dealer under provided notice under section 4(c)(8) of the BHC Act the Securities Exchange Act of 1934 (15 U.S.C. § 78a (12 U.S.C. § 1843(c)(8)) and section 225.23 of the et seq.) and is a member of the National Association of Board's Regulation Y (12 C.F.R. 225.23), of its inten- Securities Dealers, Inc. ("NASD"). Therefore, Lanston tion to acquire Aubrey G. Lanston & Co., Inc., New is subject to the recordkeeping, reporting, fiduciary stan- York, New York ("Lanston"), from IBJ's subsidiary dards, and other requirements of the Securities Exchange bank, IBJ Schroder Bank & Trust Company, New York, Act of 1934, the SEC, and the NASD. New York ("Bank"), and thereby engage in the follow- The Board previously has determined by order or ing activities: regulation that the proposed activities, when conducted (1) Underwriting and dealing in bank-eligible instru- within limitations established by the Board in its regulaments pursuant to 12 C.F.R. 225.25(b)(16); tions, orders and related interpretations, are closely re- (2) Providing investment advisory services pursuant lated to banking.4 IBJ has committed that it will conduct to 12 C.F.R. 225.25(b)(4);1 these activities in accordance with the limitations estab- (3) Trading foreign exchange in the spot market for lished by the Board. nonhedging purposes; and (4) Executing and clearing, clearing without executing, executing without clearing, purchasing and selling through the use of omnibus accounts, and provid- 2. Lanston would provide these services only to institutional customers, as defined in Regulation Y. 12 C.F.R. 225.2(g). Lanston would conduct the proposed clearing-only, execution-only and 1. Lanston's investment advisory activities would include provid- omnibus account activities in accordance with the limitations, ing swaps-related advisory services to unaffiliated parties. See conditions and commitments previously relied on by the Board. See 12 C.F.R. 225.25(b)(4)(vi)(A). IBJ states that Lanston also would Northern Trust Corporation, 79 Federal Reserve Bulletin 723 provide swaps-related transactional services to affiliates. In order to (1993) ("Northern Trust"). address potential conflicts of interest, IBJ has committed that 3. Asset data are as of September 30, 1994, and use exchange Lanston will disclose to unaffiliated customers that receive swaps- rates then in effect. Ranking data are as of March 31, 1994. related advisory services that Lanston may have an interest as 4. See 12 C.F.R. 225.25(b)(4); 12 C.F.R. 225.25(b)(16); broker in the course of action ultimately chosen by the customer, 12 C.F.R. 225.25(b)(19); 12 C.F.R. 225.25(b)(18) and Northern and, if Lanston arranges a swap transaction between an unaffiliated Trust (executing and clearing, executing, clearing, and purchasing customer that receives advisory services and an affiliate, the unaffil- and selling through omnibus accounts, futures and options on iated customer will be informed that Lanston is acting on behalf of futures on financial commodities); and The Nippon Credit Bank, an affiliate. See The Long Term Credit Bank of Japan, Limited, 79 Ltd., 75 Federal Reserve Bulletin 308 (1989) (trading foreign Federal Reserve Bulletin 345, 346 (1993). exchange for nonhedging purposes). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

732 Federal Reserve Bulletin • July 1995 In order to approve this notice, the Board also must be deemed to be conditions imposed in writing by the determine that the performance of the proposed activities Board in connection with its findings and decision, and, by IBJ "can reasonably be expected to produce benefits as such, may be enforced in proceedings under applicato the public, such as greater convenience, increased ble law. competition, or gains in efficiency, that outweigh possi- This transaction shall not be consummated later than ble adverse effects, such as undue concentration of re- three months after the effective date of this order, unless sources, decreased or unfair competition, conflicts of such period is extended for good cause by the Board or interests, or unsound banking practices."5 The Board ex- by the Federal Reserve Bank of New York, pursuant to pects that the proposal would produce gains in effi- delegated authority. ciency for IBJ. Accordingly, based on all the facts of By order of the Board of Governors, effective May 18, record, including the commitments provided by IBJ re- 1995. garding its conduct of the proposed activities, the Board has concluded that approval of the notice can reason- Voting for this action: Chairman Greenspan, Vice Chairman ably be expected to produce public benefits that would Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC JENNIFER J. JOHNSON Deputy Secretary of the Board Act. In every case under section 4 of the BHC Act, the Norwest Corporation Board also must consider the financial condition and Minneapolis, Minnesota resources of the notificant and its subsidiaries and the effect of the proposal on these resources.6 In this case, Order Approving a Notice to Engage De Novo in the Board notes that IBJ's capital ratios satisfy applica- Providing Employment Information ble risk-based standards established under the Basle Accord, and are considered equivalent to the capital Norwest Corporation, Minneapolis, Minnesota ("Norlevels that would be required of a U.S. banking organizawest"), a bank holding company within the meaning of tion. In view of these and other facts of record, the Board the Bank Holding Company Act ("BHC Act"), has has determined that the financial factors are consistent given notice under section 4(c)(8) of the BHC Act with approval of this notice. The managerial resources of (12 U.S.C. § 1843(c)(8)) and section 225.23 of the IBJ also are consistent with approval. Board's Regulation Y (12 C.F.R. 225.23) of its intention Based on the foregoing and all the facts of record, to engage de novo through its subsidiary, Norwest Mortincluding all the representations and commitments made gage Corporation, Des Moines, Iowa ("Norwest Mortby IBJ in this case, the Board has determined to, and gage"), in providing employment histories to third parhereby does, approve the notice subject to all the terms ties for a fee. and conditions set forth in this order, and in the above- Notice of this proposal, affording interested persons an noted Board regulations and orders that relate to these opportunity to submit comments, has been published (60 activities. The Board's determination also is subject to Federal Register 13,987 (1995)). The time for filing all the terms and conditions set forth in the Board's comments has expired, and the Board has considered the Regulation Y, including those in sections 225.7 and notice and all comments received in light of the factors 225.23(b), and to the Board's authority to require modiset forth in section 4(c)(8) of the BHC Act. fication or termination of the activities of a bank holding Norwest, with total consolidated assets of approxicompany or any of its subsidiaries as the Board finds mately $59.3 billion, controls bank subsidiaries in necessary to assure compliance with, and to prevent 15 states.1 Norwest also engages directly and through evasion of, the provisions of the BHC Act, and the subsidiaries in a broad range of permissible nonbanking Board's regulations and orders issued thereunder. The activities. Board's decision is specifically conditioned on compliance with all the commitments made by IBJ in this Proposed Activities notice, including the commitments discussed in this order and the conditions set forth in this order and in the The employment histories to be provided by Norwest above-noted Board regulations and orders. For purposes Mortgage would include the names of past and current of this action, these commitments and conditions shall employers of an individual, and the salary and length of employment for each position, if the individual has 5. 12 U.S.C. § 1843(c)(8). consented to the release of such information. Norwest 6. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155 (1987). 1. Asset data are as of December 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 733 Mortgage would compile an individual's employment extend credit. Norwest Mortgage would provide such history from information available from state depart- information to third-party credit grantors only with the ments of employment services and other similar sources. express consent of the individual involved. In addition, This information would be provided for a fee to any Norwest has committed that Norwest Mortgage will third-party credit grantor for the purpose of assessing the comply with the Fair Credit Reporting Act (15 U.S.C. creditworthiness of a prospective borrower.2 § 1681 et seq.) ("FCRA"), and all applicable state and Norwest also proposes to provide employment histo- federal laws and regulations in performing the proposed ries to third-party depository institutions, including credit activity. In the normal course of their lending activities, unions, and their affiliates for use in the regular course of banks collect and analyze employment and salary infortheir business. However, regardless of whether the cus- mation, including names of past and current employers tomer is a third-party depository institution or other and salary histories. The Board previously has detercredit grantor, the proposed activity would only involve mined that providing past credit information, which inproviding employment information, and Norwest does cludes employment history information, to a credit not propose to provide any additional service, such as grantor who is considering a borrower's application for analyzing an individual's creditworthiness. credit is an activity that is closely related to banking and In order to approve a proposal under section 4(c)(8) of permissible for bank holding companies.5 the BHC Act, the Board is required to determine that the Accordingly, the Board concludes that providing emproposed activity is "so closely related to banking as to ployment histories to third-party credit grantors for use be a proper incident thereto."3 The Board has not previ- in making decisions to extend credit is an activity that is ously determined that providing employment informa- closely related to banking under the National Courier tion to third parties for a fee is closely related to banking standard. under section 4 of the BHC Act and permissible for bank holding companies. 2. Activities by Depository Institutions Not Related to Credit A. Closely Related to Banking Analysis Norwest also proposes to provide employment histories Under the National Courier test, the Board may find that to depository institutions and their affiliates for use in the an activity is closely related to banking for purposes of regular course of their business, including, for example, section 4(c)(8) if the Board concludes that banks gener- hiring employees for such institutions. Norwest Mortally: gage would provide such information to these entities (1) Provide the proposed services; only with the express consent of the individual involved. (2) Provide services that are operationally or function- In addition, Norwest has committed that Norwest Mortally so similar to the proposed services as to equip gage will comply with the FCRA and all applicable state them particularly well to provide the proposed ser- and federal laws and regulations in performing the provices; or posed activity. The Board previously has permitted bank (3) Provide services that are so integrally related to holding companies to provide employment information, the proposed services as to require their provision in a including employment histories, to depository instituspecialized form.4 tions and their affiliates in connection with the provision of career counseling services.6 To the extent that these 1. Credit-Related Activities of Third Parties organizations use the information to be provided by Norwest Mortgage for other purposes, it will only be Norwest Mortgage would provide employment histories used in connection with the operation of their banking to third-party credit grantors, including depository and business. non-depository grantors, for use in making decisions to Accordingly, the Board concludes that providing employment histories for the use by depository institutions and their affiliates in their regular course of business is 2. Credit grantors could include lessors, if the leasing transaction an activity that is closely related to banking under the were the functional equivalent of an extension of credit. National Courier standard. 3. 12 U.S.C. § 1843(c)(8). 4. See National Courier Association v. Board of Governors, 516 F.2d 1229, 1237 (D.C. Cir. 1975) ("National Courier"). In addition, the Board may consider any other basis that may demonstrate 5. See 12 C.F.R. 225.25(b)(24). Norwest has committed not to that the proposed activity has a reasonable or close connection or promote Norwest Mortgage as a provider of employment informarelationship to banking or managing and controlling banks. See tion to non-depository institutions for general business purposes Board Statement Regarding Regulation Y, 49 Federal Register 794, unrelated to credit decisions. 806 (1984); Securities Association v. Board of Governors, 468 U.S. 6. See Comerica Incorporated, 80 Federal Reserve Bulletin 207, 210-211 n. 5 (1984). 51 (1994). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

734 Federal Reserve Bulletin • July 1995 B. Proper Incident to Banking Analysis by the Federal Reserve Bank of Minneapolis, pursuant to delegated authority. In determining whether an activity is a proper incident to By order of the Board of Governors, effective banking, the Board must consider whether the activity May 8, 1995. "can reasonably be expected to produce benefits to the public, such as greater convenience, increased competi- Voting for this action: Chairman Greenspan and Governors tion, or gains in efficiency, that outweigh possible ad- Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chairman Blinder and Governor Kelley. verse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or JENNIFER J. JOHNSON unsound banking practices."7 Norwest has committed Deputy Secretary of the Board that Norwest Mortgage will engage in the proposed activities only upon the express consent of the individual Orders Issued Under Sections 3 and 4 of the involved, and will comply with the FCRA and all appli- Bank Holding Company Act cable state and federal laws and regulations in performing the proposed activities. There is no evidence in the North Fork Bancorporation, Inc. record to indicate that the proposed activities would lead Mattituck, New York to any undue concentration of resources, unsound banking practices, or other adverse effects. In addition, the Order Approving Acquisition of Shares of a Bank record indicates that Norwest's de novo entry of Nor- Holding Company west Mortgage into this market could result in new products and services, increased convenience for cus- North Fork Bancorporation, Inc., Mattituck, New York tomers, and greater efficiencies. ("North Fork"), a bank holding company within the For these reasons, the Board believes that Norwest's meaning of the Bank Holding Company Act ("BHC provision of employment information, as described Act"), has applied under section 3 of the BHC Act above, is not likely to result in significantly adverse (12 U.S.C. § 1842) to acquire up to 19.9 percent of the effects that would outweigh the public benefits of Norvoting shares of Suffolk Bancorp ("Suffolk") and west's proposal. The financial and managerial resources thereby indirectly acquire an interest in Suffolk's wholly of Norwest and Norwest Mortgage also are consistent owned subsidiary bank, The Suffolk County National with approval. Bank, both of Riverhead, New York. North Fork also has Based on the foregoing and all the facts of record, the given notice under section 4(c)(8) of the BHC Act Board has determined that the notice should be, and (12 U.S.C. § 1843(c)(8)) and section 225.23 of the hereby is, approved. Approval of this proposal is specif- Board's Regulation Y (12 C.F.R. 225.23) of its intention ically conditioned on compliance by Norwest and Norto acquire an indirect interest in Suffolk's wholly owned west Mortgage with the commitments made in connecsubsidiary, Island Computer Corporation of New York, tion with this notice. The Board's determination also is Inc., Bohemia, New York ("Island Computer"), and subject to all the terms and conditions set forth in Reguthereby engage in data processing activities under seclation Y, including those in sections 225.7 and 225.23(b) tion 225.25(b)(7) of Regulation Y. of Regulation Y, and to the Board's authority to require Notice of this proposal, affording interested persons an such modification or termination of the activities of a opportunity to submit comments, has been published (60 bank holding company or any of its subsidiaries as the Federal Register 7970 (1995)). The time for filing com- Board finds necessary to ensure compliance with, and to ments has expired, and the Board has considered this prevent evasion of, the provisions of the BHC Act and proposal and all comments received in light of the facthe Board's regulations and orders issued thereunder. tors set forth in sections 3 and 4 of the BHC Act. For purposes of this transaction, these commitments and North Fork, with consolidated assets of approximately conditions shall be deemed to be conditions imposed in $2.7 billion, is the 15th largest commercial banking writing by the Board in connection with its findings and organization in New York, controlling total deposits of decision, and, as such, may be enforced in proceedings approximately $2.3 billion, representing 1 percent of under applicable law. total deposits in commercial banking organizations in These activities shall not be commenced later than the state.1 Suffolk, with consolidated assets of approxithree months after the effective date of this order, unless mately $812 million, is the 28th largest commercial such period is extended for good cause by the Board or banking organization in New York, controlling approximately $725 million in deposits, representing less than 7. 12 U.S.C. § 1843(c)(8). 1. Asset and deposit data are as of December 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 735 1 percent of total deposits in commercial banking organi- Based on all the facts of record, it is the Board's zations in the state. If North Fork were deemed to judgment in this case that no significant reduction in control Suffolk after consummation of this proposal, competition is likely to result from this proposal. North North Fork would become the 14th largest commercial Fork has agreed to abide by certain commitments previbanking organization in New York, controlling approxi- ously relied on by the Board in cases involving minority mately $3 billion in deposits, representing 1.3 percent of investments.6 For example, North Fork has committed total deposits in commercial banking organizations in not to exercise a controlling influence over the managethe state. ment or policies of Suffolk or its subsidiary banks; not to have any director, officer, or employee interlocks with Competitive Considerations Suffolk; and not to solicit or participate in soliciting proxies with respect to any matter presented to the The Board has previously indicated that the acquisition shareholders of Suffolk. In addition, North Fork has of less than a controlling interest in a bank is not a committed not to exercise any enhanced shareholder normal acquisition for a bank holding company.2 How- rights that it would acquire at any time as a result of its ever, the requirement in section 3(a)(3) of the BHC Act ownership of more than 5 percent of Suffolk voting that the Board's approval be obtained before a bank shares to obtain nonpublic information concerning the holding company acquires more than 5 percent of the performance, condition, or business plans of Suffolk; not voting shares of a bank suggests that Congress contem- to participate in Suffolk's decisionmaking or to commuplated the acquisition by bank holding companies of nicate with other Suffolk shareholders; and not to refer to between 5 and 25 percent of the voting shares of banks. Suffolk or its interest in Suffolk in any future advertising Moreover, nothing in section 3(c) of the BHC Act re- or solicitation of customers. North Fork also is prohibquires denial of an application solely because a bank ited by its commitments and the BHC Act from acting holding company proposes to acquire less than a control- either alone or in concert with any other entity to control ling interest in a bank or a bank holding company. On Suffolk without prior Board approval. Moreover, the this basis, the Board has previously approved the acqui- record in this case indicates that the proposed increased sition by a bank holding company of less than a control- investment by North Fork in Suffolk is not likely to ling interest in a bank.3 weaken or eliminate the independence of Suffolk. In The question of whether a minority interest in a com- particular, the management of Suffolk has indicated its peting bank would result in a substantial lessening of intention to remain completely independent of North competition must be answered in light of the specific Fork, and North Fork has committed not to attempt to facts of record in each case.4 The Board views these exercise control over the management or policies of acquisitions with concern and continues to believe that Suffolk. In this light, the Board believes that North Fork controlling interests in directly competing banks or bank would not be able to weaken or eliminate the indepenholding companies may raise serious questions under the dence of action between the two organizations under the BHC Act. The Board has noted previously that one circumstances presented in this proposal. company need not acquire control of another in order substantially to lessen competition between them. It is Definition of the Relevant Banking Market possible, for example, that the acquisition of a substantial ownership interest in a competitor or a potential The Board also has considered this proposal on the basis competitor of the acquiring firm may alter the market that North Fork would have the ability to alter the behavior of both firms in such a way as to weaken or market behavior of both organizations in an anticompetieliminate independence of action between the organiza- tive manner. The BHC Act provides that the Board may tions and increase the likelihood of cooperative opera- not approve a proposal under section 3 of the BHC Act tions.5 that would result in a monopoly or if the effect of the proposal may be substantially to lessen competition in any relevant market. The Board has carefully considered 2. See, e.g., State Street Boston Corporation, 67 Federal Reserve the comments of Suffolk management ("Protestant") Bulletin 862, 863 (1981). that the relevant geographic market for analyzing the 3. See, e.g., Mansura Bancshares, Inc., 79 Federal Reserve competitive effects of this proposal should be limited to Bulletin 37 (1993) ("Mansura") (acquisition of 9.7 percent of the the five easternmost townships of Suffolk County, New voting shares of a bank holding company); SunTrust Banks, Inc., 76 Federal Reserve Bulletin 542 (1990) ("SunTrust") (acquisition of York, which are on the eastern end of Long Island up to 24.99 percent of the voting shares of a bank); First State Corporation, 76 Federal Reserve Bulletin 376 (1990) ("First State") (acquisition of 24.9 percent of the voting shares of a bank). 4. See, e.g., Mansura; SunTrust; First State. 6. See, e.g., Mansura at 39. These commitments are set forth as 5. See Mansura at 38. numbers 1 through 11 in the Appendix. 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736 Federal Reserve Bulletin • July 1995 ("eastern Suffolk County"),7 and that consummation of and the rest of the New York Market.12 For example, this proposal would substantially lessen competition for 22 percent of the labor force residing in eastern Suffolk banking services in this area. In Protestant's view, local County commute to work elsewhere in the New York customers have no reasonable alternatives for banking Market, including 4 percent who commute to New York services except depository institutions located in eastern City. Moreover, approximately 26 percent of all persons Suffolk County, and North Fork would be able to raise employed in eastern Suffolk County commute from other prices or reduce service in eastern Suffolk County with- parts of the New York Market.13 The high level of out concern about competition from outside this area.8 commuting between eastern Suffolk County and the rest The Board and the courts have found that the relevant of the New York Market indicates substantial economic banking market for analyzing the competitive effects of a integration between the two areas, including access to proposal must reflect commercial and banking realities alternative providers of financial services.14 and must consist of the local area where the banks In previous cases, the Board also has used the Ranally involved offer their services and where local customers Metropolitan Area ("RMA") as a guide in defining the can practicably turn for alternatives.9 The Board has relevant geographic banking market.15 In this instance, considered all the facts in this case, including the com- the New York RMA extends into eastern Suffolk County ments and information provided by Protestant and other and to within five miles of the town of Riverhead, the commenters10 and a study conducted by the Federal principal business center in eastern Suffolk County out- Reserve Bank of New York ("Reserve Bank"), and side the New York RMA.16 Moreover, the town of concludes that the relevant geographic market to evalu- Riverhead is connected to the New York RMA by an ate the competitive effects of this proposal is the Metro- interstate highway, and the Riverhead business center is politan New York-New Jersey Banking Market ("New less than 20 miles along major highways from full York Market"), which includes eastern Suffolk County.11 Data gathered by the Census Bureau in 1990 indicate extensive commuting between eastern Suffolk County 12. The Board has previously recognized that commuting patterns are a significant factor in the determination of a relevant geographic banking market. See Crestar Bank, 81 Federal Reserve Bulletin 200, 201 fn. 5 (1995); St. Joseph Valley Bank, supra, at 674; U.S. Bancorp, 67 Federal Reserve Bulletin 60, 61 fn. 2 (1981). 7. This area comprises the townships of East Hampton, River- 13. The Board notes that eastern Suffolk County provides more head, Shelter Island, Southampton, and Southold. According to jobs to the rest of the New York Market than the rest of the New Protestant, this area is characterized by seasonal economic activity, York Market provides to eastern Suffolk County. The net surplus of including agriculture, fishing, and tourism, a relatively low popula- jobs in eastern Suffolk County is especially noteworthy in view of tion density, and predominantly small businesses. Protestant asserts the disparity in population between eastern Suffolk County and that these characteristics distinguish the financial needs of this area even its closest neighbors in the New York Market. For example, from those of the adjoining metropolitan area. based on 1990 census data, Brookhaven township alone, which 8. Protestant also asserts that any definition of the relevant adjoins eastern Suffolk County to the west, has nearly four times as banking market larger than eastern Suffolk County would not large a population. The Board considers the role of eastern Suffolk adequately take into consideration the competitive consequences of County as a source of employment for the rest of the New York this proposal for small business borrowers in this area. For reasons Market to be a significant indicator of economic integration beexplained in previous orders, the Board continues to believe that tween eastern Suffolk County and the rest of the New York Market. the competitive analysis of banking expansionary proposals should 14. The Board notes that Suffolk, in its 1993 annual report to be based on the availability of the cluster of banking services to a shareholders, frequently described its "primary lending market" as range of customers in the local banking market. See, e.g., First all of Suffolk County, and, in its 1993 Form 10-K report to the Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991); see also Securities and Exchange Commission, included the town of United States v. Philadelphia National Bank, 374 U.S. 321 (1963). Brookhaven, in Brookhaven township, in its "main service area." 9. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, Nearly all commercial banks and thrift institutions operating in 674 (1982). eastern Suffolk County also maintain branches in Brookhaven 10. The Board received comments from 47 individuals and small township. businesses in Suffolk County who assert that the proposal would 15. An RMA generally consists of a defined geographical area result in monopolistic market power by North Fork that would with a relatively high population density that is demographically reduce the availability and increase the cost of banking products and commercially integrated by commuting, retail, and wholesale and services, reduce the quality and convenience of available trade patterns. It typically includes a central city or cities and all banking products and services, and discourage other competitors adjacent continuously built up areas and certain other areas. See St. from entering the market. These commenters also assert that the Joseph Valley Bank, supra at 674. proposal would reduce employment in eastern Suffolk County. 16. The Board notes that the current definition of the New York 11. The Metropolitan New York-New Jersey banking market RMA is based on 1980 census data, and that certain data subseincludes New York City; Nassau, Orange, Putnam, Rockland, quently collected suggest that the updated RMA could extend even Suffolk, Sullivan, and Westchester Counties in New York; Bergen, further into eastern Suffolk County. For example, wholesale trade Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, in Suffolk County increased 36.2 percent between 1982 and 1987, Passaic, Somerset, Sussex, Union, Warren, and a portion of Mercer compared to 8.6 percent for the entire state, and the population in Counties in New Jersey; Pike County in Pennsylvania; and portions Suffolk County increased 4 percent between 1990 and 1994, comof Fairfield and Litchfield Counties in Connecticut. pared to 1.4 percent for the entire state. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 737 service-branches of several large banking organizations As in other cases, the Board also has sought comments serving all of Suffolk County. The record indicates that from the United States Attorney General's office, the several banks have assigned loan officers located outside Office of the Comptroller of the Currency ("OCC"), and of eastern Suffolk County to make business calls in the Federal Deposit Insurance Corporation ("FDIC") on eastern Suffolk County or accept walk-in loan applica- the competitive effects of this proposal. The Attorney tions from customers from eastern Suffolk County. Over- General, OCC, and FDIC did not object to consummaall, 14 commercial banks, including several large re- tion of the proposal or indicate that the proposal would gional, national, and international banking organizations, have any significantly adverse competitive effects in the and nine thrift institutions compete in eastern Suffolk New York Market. County and Brookhaven township. Substantial lending In light of the unconcentrated nature of the New York capacity exists within the immediate geographical area Market as measured by the HHI, the number of competito respond to the banking needs of eastern Suffolk tors that would remain in the market, and other facts of County. record, the Board concludes that, even if North Fork After review of these data and other facts of record, could alter the market behavior of both organizations in including Protestant's comments and comments from an anti-competitive manner, this proposal is not likely to Suffolk's customers, the Board concludes that the record result in any significantly adverse effect on competition indicates that customers in eastern Suffolk County can in the New York Market. practicably turn to providers of banking services in the New York Market. On this basis, the Board disagrees Other Considerations with Protestant's contention that the geographic market in this case should be limited to eastern Suffolk County. The Board also has reviewed information about the Instead, based on all the facts of record, including Prot- financial and managerial resources19 and future prosestant's comments and those of Suffolk's customers and pects20 of North Fork, Suffolk, and their respective substudies conducted by the Reserve Bank, the Board finds sidiaries, and other supervisory factors the Board must that the relevant geographic market in this case is the New York Market, including eastern Suffolk County. North Fork and Suffolk compete directly in the New unless the post-merger HHI is at least 1800 and the merger or York Market. North Fork is the 22d largest commercial acquisition increases the HHI by 200 points. The Department of bank or thrift institution ("depository institution") in the Justice has stated that the higher-than-average HHI thresholds for market, controlling deposits of approximately $2.3 bil- screening bank mergers for anticompetitive effects implicitly recognize the competitive effects of limited-purpose lenders and other lion, representing less than 1 percent of total deposits in non-depository financial entities. depository institutions in the market ("market depos- 19. Protestant alleges that certain officers and directors of North its").17 Suffolk is the 54th largest depository institution Fork acted in concert with North Fork to acquire less than 1 percent in the market, controlling deposits of approximately of Suffolk voting stock which, when combined with the 4.9 percent of Suffolk's voting stock directly owned by North Fork, would $723 million, representing less than 1 percent of market result in North Fork's controlling in excess of 5 percent of the deposits. If considered as a combined organization, outstanding voting stock of Suffolk without prior Board approval as North Fork would become the 19th largest depository required by section 3 of the BHC Act. Based on all the facts of institution in the New York Market, controlling total record, the Board believes that the ownership of shares of Suffolk's deposits of approximately $3 billion, representing less voting stock by North Fork and its officers and directors is consistent with the requirements of the BHC Act. For example, all the than 1 percent of market deposits. The Herfindahlshares were acquired by gift or purchase in small amounts at Hirschman Index ("HHI") would increase less than various times over several years, without financing or advice from 1 point to 531.18 North Fork or arrangements with North Fork for their disposition. Moreover, at the time the shares were acquired, North Fork owned less than 5 percent of Suffolk voting stock and, therefore, these acquisitions were not subject to the regulatory presumption of 17. Market share data are as of June 30, 1994. Market share data control by North Fork. See 12 C.F.R. 225.31(d)(2)(H). are based on calculations in which the deposits of thrift institutions 20. Several commenters raised questions about the financial are included at 50 percent. The Board has previously indicated that stability of North Fork and objected to the acquisition of an thrift institutions have become, or have the potential to become, independent, locally owned bank. The Board has reviewed the most major competitors of commercial banks. See WM Bancorp, 76 recent reports of examination of North Fork by the Reserve Bank Federal Reserve Bulletin 788 (1990); National City Corporation, and of North Fork's wholly owned subsidiary, North Fork Bank, 70 Federal Reserve Bulletin 743 (1984). Mattituck, New York ("Bank"), by Bank's primary federal bank- 18. Under the revised Department of Justice Merger Guidelines, ing supervisor, the FDIC, and by the New York Superintendent of 49 Federal Register 26,823 (1984), a market in which the post- Banking. The Board notes that these examination reports assess the merger HHI is less than 1000 is considered to be unconcentrated. financial and managerial resources of North Fork and Bank and do The Department of Justice has informed the Board, that, as a not support the commenters' allegations. Based on all the facts of general matter, a bank merger or acquisition will not be challenged, record, the Board does not believe that these allegations warrant in the absence of other factors indicating anticompetitive effects, denial of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

738 Federal Reserve Bulletin • July 1995 consider under section 3 of the BHC Act, and concludes quire ownership of Island Computer as a result of its that these factors are consistent with approval of this interest in Suffolk. Moreover, as discussed previously in proposal.21 this order, the Board has determined, on the basis of the North Fork also has given notice of its intention under commitments North Fork has made to the Board, that section 4(c)(8) of the BHC Act indirectly to acquire an consummation of this proposal would not permit North interest in Suffolk's data processing subsidiary, Island Fork to control Suffolk, and, therefore, North Fork would Computer, as a result of North Fork's purchase of shares be unable to influence the activities of Island Computer. of Suffolk. The Board has previously determined by In addition, North Fork is prohibited under the BHC Act regulation that the data processing activities of Island from acquiring any shares of Suffolk's voting stock other Computer are closely related to banking for purposes of than the shares approved in this proposal without the section 4(c)(8) of the BHC Act.22 Protestant alleges that prior approval of the Board, and North Fork has not consummation of this proposal would result in adverse requested any such approval. The Board believes that effects by impairing the ability of Island Computer to these restrictions substantially mitigate any potential adcompete effectively in the market for the sale of its data verse effects and address concerns that Island Computer processing services to other financial institutions. Protes- may not be able to compete independently in the market tant believes that prospective clients would hesitate to for data processing services. If North Fork were to seek enter into long-term arrangements with Island Computer Board approval for such an acquisition in the future, the while it appeared to be subject to a change of control in Board would consider the effects of such a proposal on the near future. the public interest at that time. The record in this case North Fork states that its proposal would have the also indicates that there are numerous providers of the public benefit of stabilizing and possibly increasing the nonbanking services provided by Island Computer and market value of Suffolk's voting stock and thereby pro- that consummation of this proposal is not likely to result viding Suffolk with greater and less costly access to in any significantly adverse effects, such as undue concapital markets. North Fork would only indirectly ac- centration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices that would outweigh the public benefits of this proposal. 21. Protestant requested that the Board hold a public hearing to Accordingly, the Board has determined that the balance determine the circumstances under which certain officers and direcof public interest factors it must consider under sectors of North Fork acquired Suffolk's voting stock. Section 3(b) of the BHC Act does not require the Board to hold a public hearing or tion 4(c)(8) of the BHC Act is favorable and consistent meeting on an application unless the appropriate supervisory au- with approval. thority of the bank to be acquired makes a timely written recommendation of denial of the application. In this case, the Board has not received such a recommendation. Generally, under the Board's Conclusion Rules of Procedure, the Board may, in its discretion, hold a public hearing or meeting on an application to clarify factual issues related to the application and to provide an opportunity for testimony, if Based on the foregoing, and in light of all the facts of appropriate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has record, including the commitments made by North Fork carefully considered Protestant's request in light of all the facts of record. In the Board's view, Protestant has had ample opportunity in connection with these applications, the Board has to submit its views, and has in fact submitted substantial written determined that these applications should be, and hereby materials that have been considered by the Board in acting on this are, approved. The Board's approval is specifically conproposal. In the case of Suffolk's voting shares owned by North ditioned on compliance by North Fork with all commit- Fork's officers and directors, Protestant's request fails to demonstrate why its written submissions do not adequately present its ments made in connection with these applications as allegations, what substantial evidence it would produce at an oral well as the conditions discussed in this order. hearing, or why a public hearing is otherwise warranted in this The Board's determination as to the nonbanking activcase. Moreover, after a careful review of all the facts of record, ities to be conducted by North Fork are subject to all the including detailed information from North Fork concerning the conditions in Regulation Y, including those in sections acquisition of Suffolk's voting stock by North Fork's officers and directors by gift or cash purchase in small amounts at various times 225.7 and 225.23(b) (12 C.F.R. 225.7 and 225.23(b)), over several years, without financing or advice from North Fork or and to the Board's authority to require such modification arrangements with North Fork for their disposition, the Board or termination of the activities of a holding company or concludes that Protestant's request disputes the weight that should any of its subsidiaries as it finds necessary to assure be accorded to, and the conclusions that may be drawn from, the existing facts of record, and does not identify any genuine dispute compliance with, or to prevent evasions of, the proviabout the facts that are material to the Board's decision. Based on sions and purposes of the BHC Act and the Board's all the facts of record, the Board has determined that a public regulations and orders issued thereunder. The commithearing is not necessary to clarify the factual record, and is not ments and conditions relied on by the Board in reaching otherwise warranted in this case. Accordingly, Protestant's request this decision are deemed to be conditions imposed in for a public hearing on this matter is denied. writing by the Board in connection with its findings and 22. See 12 C.F.R. 225.25(b)(7). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 739 decision, and as such may be enforced in proceedings specific action or nonaction by Suffolk or any of its under applicable law. subsidiaries; The acquisition of shares of Suffolk's voting stock (10) Enter into any banking or nonbanking transactions shall not be consummated before the fifteenth day fol- with Suffolk or any of its subsidiaries, except that North lowing the effective date of this order, and not later than Fork may establish and maintain deposit accounts with three months following the effective date of this order, any banking subsidiaries of Suffolk; provided that the unless such period is extended for good cause by the aggregate balance of all such accounts does not exceed Board or by the Federal Reserve Bank of New York, $500,000 and that the accounts are maintained on subacting pursuant to delegated authority. stantially the same terms as those prevailing for compa- By order of the Board of Governors, effective rable accounts of persons unaffiliated with Suffolk or any May 8, 1995. of its subsidiaries; (11) Seek or accept representation on the board of direc- Voting for this action: Chairman Greenspan and Governors tors of Suffolk or any of its subsidiaries; Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chair- (12) Exercise any enhanced shareholder rights that it man Blinder and Governor Kelley. would acquire at any time as a result of its ownership of more than 5 percent of Suffolk voting shares to obtain JENNIFER J. JOHNSON nonpublic information concerning the performance, con- Deputy Secretary of the Board dition, or business plans of Suffolk, to participate in Suffolk decisionmaking, or to communicate with other Suffolk shareholders; or Appendix (13) Make reference to Suffolk or its interest in Suffolk in any future advertising or solicitation of customers by As part of this proposal, North Fork has committed that North Fork and its subsidiaries. it will not, without the Board's prior approval: (1) Exercise or attempt to exercise a controlling influ- ORDERS ISSUED UNDER FEDERAL RESERVE ACT ence over the management or policies of Suffolk or any of its subsidiaries; Marine Midland Bank (2) Have or seek to have any employees or representa- Buffalo, New York tive serve as an officer, agent, or employee of Suffolk or any of its subsidiaries; Order Approving Establishment of a Branch (3) Take any action causing Suffolk or any of its subsidiaries to become a subsidiary of North Fork or any of its Marine Midland Bank, Buffalo, New York ("Bank"), a subsidiaries; state member bank, has given notice of its intention to (4) Acquire or retain shares that would cause the com- establish a branch office under section 9 of the Federal bined interests of North Fork or any of its subsidiaries Reserve Act ("Act") (12 U.S.C. § 321 et seq.) at and its officers, directors, and affiliates to equal or ex- 4191 North Buffalo Street, Orchard Park, New York. ceed 25 percent of the outstanding voting shares of Notice of the proposal, affording interested persons an Suffolk or any of its subsidiaries; opportunity to submit comments, has been published in (5) Propose a director or slate of directors in opposition accordance with the Board's Rules of Procedure to a nominee or slate of nominees proposed by the (12CFR 262.3(b)). The time for filing comments has management or board of directors of Suffolk or any of its expired, and the Board has considered the applications subsidiaries; and all comments received in light of the factors con- (6) Attempt to influence the dividend policies or prac- tained in the Act. tices of Suffolk or any of its subsidiaries; Bank is the fifth largest commercial banking organiza- (7) Solicit or participate in soliciting proxies with re- tion in New York, controlling deposits of $12.8 billion, spect to any matter presented to the shareholders of which represent 5.2 percent of the total deposits in Suffolk or any of its subsidiaries; commercial banks in the state.1 Bank is wholly owned (8) Attempt to influence the loan and credit decisions or by HSBC Holdings pic, London, England, which also policies of Suffolk and its banking subsidiary, the pricing wholly owns Hongkong and Shanghai Banking Corporaof services, any personnel decision, the location of any tion Limited, Hong Kong. offices, branching, the hours of operation, or similar activities of Suffolk or any of its subsidiaries; (9) Dispose or threaten to dispose of shares of Suffolk or any of its subsidiaries in any manner as a condition of 1. Deposit data are as of December 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

740 Federal Reserve Bulletin • July 1995 Community Reinvestment Act Performance Record comments received. For reasons set forth in the order approving those applications, and specifically incorpo- In acting on branch applications, the Board is required to rated by reference herein, the Board concluded that take into account the bank's record under the Commu- Bank's overall performance record was generally consisnity Reinvestment Act (12 U.S.C. § 2901 et seq.) tent with approval of the applications.5 ("CRA"). The CRA requires the federal financial supervisory agencies to encourage financial institutions to A. CRA Performance Examinations help meet the credit needs of the local communities in which they operate, consistent with the safe and sound The Agency CRA Statement provides that a CRA examoperation of such institutions. To this end, the CRA ination is an important and often controlling factor in the requires the appropriate federal supervisory authority to consideration of an institution's CRA record, and that "assess the institution's record of meeting the credit reports on these examinations will be given great weight needs of its entire community, including low- and in the applications process.6 The Board notes that Bank moderate-income neighborhoods, consistent with the received a "satisfactory" rating from the Office of the safe and sound operation of such institution," and to take Comptroller of the Currency for CRA performance as of that record into account in its evaluation of branch March 31, 1992, and a "satisfactory" rating from the applications.2 Federal Reserve Bank of New York7 ("Reserve Bank") The Board has received comments from the Broome for CRA performance as of January 31, 1994 (the "1994 County CRA Coalition, Binghamton, New York ("Pro- Examination"). testant"), criticizing Bank's CRA performance record. In particular, Protestant alleges that no banks in Broome B. HMDA Data and Lending Practices County, including Bank, are in compliance with the CRA. Protestant maintains that the banks have histori- In light of Protestant's allegations,8 the Board has recally neglected certain census tracts in Binghamton and viewed Bank's 1993 and preliminary 1994 data9 filed elsewhere in Broome County, and that the products and under the Home Mortgage Disclosure Act ("HMDA")10 services offered inherently exclude residents of low- to for Broome County. These data show that, in low- and moderate-income neighborhoods.3 moderate-income tracts, loan origination rates increased The Board has carefully reviewed the entire record of and denial rates decreased from 1993 to 1994. These Bank's CRA performance, the comments received, data also reflect some variations in the rate of loan Bank's response to those comments, and all other rele- originations, denials, and applications by income level. vant facts of record, in light of the CRA, the Board's The 1994 Examination found that Bank's loan poliregulations, and the Agency CRA Statement.4 cies and underwriting criteria were reasonable and did The Board recently reviewed Bank's CRA perfor- not discriminate on any prohibited basis. Specifically, mance record in connection with its applications to es- examiners noted that the loan terms, qualifying ratios tablish a branch office in Syracuse, New York, and an and underwriting guidelines for residential mortgage off-site electronic facility in Rochester, New York. This loans were reasonable and comparable with industry review included consideration of Bank's special mort- standards. The examination also noted that Bank used a gage programs, small business lending, community de- second review program for all declined residential mortvelopment activities, ascertainment and marketing ef- gage applications, in which underwriting supervisors forts, and other CRA programs and policies in light of reviewed the original underwriter's decision and had to concur in the proposed denial of an application. The 1994 Examination did not find any practices that 2. 12 U.S.C. § 2903. were intended to discourage credit applications. Examin- 3. In addition, Protestant objects to Bank's failure to reach an ers noted that Bank solicited credit applications from all agreement with it to support CRA-related initiatives and programs. segments of its communities, including low- and The Board has indicated 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 5. See Marine Midland Bank, 81 Federal Reserve Bulletin 310 assessing and determining how best to address the credit needs of a (1995). community. However, neither the CRA nor the Agency CRA 6. 54 Federal Register at 13,745. Statement requires depository institutions to enter into agreements 7. Bank has been a state member bank of the Federal Reserve with particular organizations. Accordingly, the Board's review has System since December 31, 1993. focused on the programs and policies Bank has in place in Broome 8. Protestant has also generally questioned Bank's record of County and other areas to serve the credit needs of its entire lending to minorities in Broome County. community. See Fifth Third Bancorp, 80 Federal Reserve Bulletin 9. The Board's review included HMDA data for both Bank and 838 (1994). Marine Midland Mortgage Corporation. 4. 54 Federal Register 13,742 (1989). 10. 12 U.S.C. § 2801 etseq. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 741 moderate-income areas. Moreover, the examination variety of local organizations that support housing, ecofound that Bank's credit practices complied with antidis- nomic development, rehabilitation or small business decrimination laws and regulations. Examiners also found velopment. From July 1992 to July 1994, the bank's that Bank generally had a reasonable geographic distri- community development financing totalled $27.2 milbution of residential mortgage and home improvement lion. Examiners also found that many of Bank's officers loans and applications from low- and moderate-income and employees provided technical assistance to organizacensus tracts throughout its delineated service areas. tions located throughout the state that promote commu- Bank offers several special mortgage programs, in- nity development programs. cluding nine affordable housing programs, to assist in meeting the housing credit needs of its communities. For C. Ascertainment and Marketing example, Bank has participated since 1990 in the Federal National Mortgage Association's Community Homebuy- Bank ascertains community credit needs in various ways. ers and FannieNeighbors programs, both of which pro- For example, Bank has a directed call program, and its vide flexible down payment methods for borrowers who officers and employees participate in a number of comdo not exceed the Department of Housing and Urban munity organizations.12 Moreover, in June 1993, Bank Development's median income guidelines. In addition, conducted a CRA survey in five New York State markets Bank recently initiated its own Affordable Housing Loan using a random sample of customers residing in low- Program for low- and moderate-income borrowers who and moderate-income zip codes to determine the level of do not qualify for other residential lending programs and awareness of Bank and its products and services. In has committed $10 million to this program to finance Binghamton, Bank representatives have recently met residential mortgage loans and an additional $300,000 to with the mayor, the director of the Urban League, and assist in financing down payments. In Broome County, other community development leaders, and have sched- Bank is developing a home ownership counseling pro- uled meetings with various community groups. Bank has gram in conjunction with four other banks, and the banks also committed to sponsor this spring the City Living have agreed to work with Consumer Credit Counseling Sundays program in Binghamton, which is an educa- Services to provide the counseling services and with tional outreach effort focus sed on credit and affordable three local groups to provide community outreach. Bank housing. has also dedicated a mobile mortgage originator to serv- Bank markets its products and services primarily ing the Binghamton area. In 1994, Bank introduced a through advertisements in daily newspapers, local low minimum amount personal installment loan program weekly news and trade publications, and some journals and a secured credit card program. and special audience publications that focus on specific Bank also participates in several governmentally in- minority groups and low- and moderate-income areas. sured loan programs. Bank offers Veterans' Administra- Bank also conducts free seminars throughout its delintion ("VA"), Federal Housing Agency ("FHA") 203B,11 eated community. During the 18 months covered by the and State of New York Mortgage Association 1994 Examination, Bank conducted 16 first-time home ("SONYMA") loans to borrowers who meet the pro- buyer seminars, one SONYMA seminar, and three semigrams' income requirements. Bank has been named one nars entitled "Women and Investing." Bank has also of the top two Small Business Administration ("SBA") participated in housing fairs sponsored by the Long lenders for New York State during 1992 and 1993, and Island Board of Realtors, the Federal National Mortgage continues to hold the SBA's preferred lender status for Association and the New York State Housing Coalition. its commitment to small business lending. In Bingham- In Binghamton, Bank's representatives recently conton, Bank has scheduled another Downtown Loan pro- ducted a seminar for new business owners focusing on gram for the summer of 1995, repeating the program it the commercial loan process, financing options, deposiheld in 1993 in conjunction with the city's Department tory services and trade finance and conducted several of Housing and Planning. This program focusses on seminars at area high schools focusing on credit and small businesses that are located in or willing to relocate banking. In addition, Bank regularly conducts hometo downtown Binghamton, and offers loans at interest buyer seminars in Binghamton. During the period covrates below the prime rate. ered by the 1994 Examination, Bank also advertised in The 1994 Examination found that Bank participates in publications and annual reports by not-for-profit agenvarious community development programs in New York cies. State and provides loans and lines of credit to a wide 12. In addition, the 1994 Examination noted that the directed call 11. A fixed-rate, HUD-insured loan product only available in program reached 66 organizations involved with affordable housing New York. development, community development, and rehabilitation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

742 Federal Reserve Bulletin • July 1995 D. Branch Locations ORDERS ISSUED UNDER INTERNATIONAL BANKING ACT As of February 1995, Bank had 313 branch offices. Banco Bandeirantes, S.A. Branch hours vary by location and are based on cus- Sao Paulo, Brazil tomer convenience and local competition. In Broome County, 20 percent of Bank's branches are in low- to Order Approving Establishment of Representative moderate-income census tracts. The 1994 Examination Office concluded that Bank has an adequate branch closing policy that requires Bank to take actions to minimize the Banco Bandeirantes, S.A. ("Bank"), Sao Paulo, Brazil, impact of a branch closing on the local community. a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a representa- E. Conclusion tive office in Miami, Florida. The Foreign Bank Supervision Enhancement Act of 1991, which amended the IBA, provides that a foreign bank must obtain the approval of The Board has carefully considered the entire record, the Board to establish a representative office in the including Protestant's comments, Bank's responses, and United States. Bank's CRA record of performance. In light of all the Notice of the application, affording interested persons facts of record, the Board concludes that Bank's record an opportunity to submit comments, has been published of performance under the CRA in helping to meet the in a newspaper of general circulation in Miami, Florida credit needs of all segments of its communities, includ- (Miami Herald, May 1, 1992). The time for filing coming low- and moderate-income neighborhoods, is consisments has expired and the Board has considered the tent with approval. application and all comments received. Bank, with total consolidated assets of approximately Other Considerations $2.5 billion, is a commercial bank chartered in Brazil.1 Bank operates approximately 300 branches and agencies in Brazil; a branch in New York, New York; and a The Board has also concluded that the factors it is branch and subsidiary in Grand Cayman. Bank also required to consider under section 9 of the Federal owns subsidiaries in Brazil engaged, among other things, Reserve Act, including Bank's financial condition, the in investment banking, insurance, and leasing activities. general character of its management, and the proposed Administradora Clemente de Faria ("ACF"), Ltda., a exercise of corporate powers, are consistent with ap- Brazilian corporation, owns 7.5 percent of Bank directly, proval of this notice. and an additional 70 percent indirectly through its sub- Based on the foregoing and all other facts of record, sidiary Bandeirantes Participacoes e Administraceos including commitments made by Bank, the Board has ("BPA"), S.A. determined that the notice should be, and hereby is, Bank, ACF, and BPA are subject to the requirements approved. The Board's approval is specifically condiof the Bank Holding Company Act by virtue of Bank's tioned on all commitments made in connection with this New York branch, and each is a qualifying foreign notice. The commitments and conditions relied on by the banking organization under Regulation K (12 C.F.R. Board are deemed conditions imposed in writing by the 211.23(b)). Board in connection with its findings and decision, and, The proposed representative office would engage in as such, may be enforced in proceedings under applicarepresentational functions, including acting as liaison ble law. This approval is subject to completion of the between Bank's head office and customers in the United facilities and their being in operation within one year of States, and providing information to potential customers the date of this order, and to approval by the appropriate about services offered by Bank. state authorities. In acting on an application to establish a representa- By order of the Board of Governors, effective tive office, the IBA and Regulation K provide that the May 25, 1995. Board shall take into account whether the foreign bank engages directly in the business of banking outside of Voting for this action: Chairman Greenspan, Vice Chairman the United States, has furnished to the Board the infor- Blinder, and Governors Kelley, Lindsey, and Phillips. Absent and mation it needs to assess adequately the application, and not voting: Governor Yellen. JENNIFER J. JOHNSON Deputy Secretary of the Board 1. Data are as of December 31, 1994, unless otherwise noted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 743 is subject to comprehensive supervision or regulation on Bank's independent external auditors are required rega consolidated basis by its home country supervisors ularly to audit Bank's financial statements. These audi- (12 U.S.C. § 3105(d)(2); 12 C.F.R. 211.24). The Board tors are required to submit to the Central Bank copies of may also take into account additional standards as set their audit opinions as well as copies of reports on forth in the IBA and Regulation K (12 U.S.C. Bank's internal controls and compliance with financial § 3105(d)(3)-(4)); 12 C.F.R. 211.24(c)). and accounting requirements. If necessary, the Central The Board has previously stated that the standards that Bank may also inspect the external auditor's work apply to the establishment of a branch or agency need papers. not in every case apply to the establishment of a repre- The Central Bank's supervisory procedures are gensentative office, because a representative office does not erally directed to banking activities conducted within engage in a banking business and cannot take deposits or Brazil. The Central Bank also receives quarterly reports make loans.2 In evaluating an application to establish a on earnings, reserves, and degree of leverage of representative office under the IBA and Regulation K, Bank's foreign operations, and semiannual balance the Board will take into account the standards that apply sheets, income statements, and statements of changes to establishment of branches and agencies, subject to the in equity. following considerations. With respect to supervision by Bank monitors its worldwide operations through interhome country authorities, a foreign bank that proposes to nal audits of the head office, foreign branches, and establish a representative office must be subject to a subsidiaries. Bank's internal controls are reviewed by its significant degree of supervision by its home country external auditors. supervisor.3 A foreign bank's financial and managerial Based on all the facts of record, which include the resources are reviewed to determine whether its financial information described above, the Board concludes that condition and performance demonstrate that it is capable factors relating to the supervision of Bank by its home of complying with applicable laws and has an operating country supervisor are consistent with approval of the record that would be consistent with the establishment of proposed representative office. a representative office in the United States. All foreign The Board has also found that Bank engages directly banks, whether operating through branches, agencies, or in the business of banking outside of the United States representative offices, will be required to provide ade- through its commercial banking operations in Brazil. quate assurances of access to information on their opera- Bank has provided the Board with the information necestions and those of their affiliates necessary to determine sary to assess the application through submissions that compliance with U.S. laws. address the relevant issues. In this case, with respect to the issue of supervision by The Board has also taken into account the additional home country authorities, the Board has considered the standards set forth in section 7 of the IBA and Regulafollowing information. The Central Bank of Brazil tion K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. ("Central Bank") is the bank supervisory authority in 211.24(c)(2)). As noted above, the Central Bank has Brazil, and, as such, is the home country supervisor of authorized Bank to establish the proposed representative Bank. The Central Bank has authorized Bank to estab- office. In addition, the Central Bank may share informalish the proposed representative office. tion on Bank's operations with other supervisors, includ- The Central Bank supervises Bank through review of ing the Board. periodic reports, on-site inspections, and review of exter- With respect to the financial and managerial resources nal auditors' reports. The Central Bank requires Bank to of Bank, given Bank's record of operations in its home file periodic reports that address, among other things, country, its overall financial resources, and its standing Bank's liquidity, reserve ratios, adequacy of compulsory with its home country supervisors, the Board has also reserves, information on major borrowers and creditors, determined that financial and managerial factors are confinancial ratios, past due loans, foreign currency opera- sistent with approval of the proposed representative oftions, and the financial condition of Bank's foreign fice. Bank appears to have the experience and capacity branches and its Cayman subsidiary. Regular on-site to support the proposed representative office, and has inspections are conducted by auditors of the Central established controls and procedures for the proposed Bank's inspection division according to a predetermined representative office to ensure compliance with U.S. schedule. Unannounced spot inspections address particu- law. lar operations thought to be problematic. Bank and its ultimate parent have each committed to make available to the Board such information on the operations of Bank and its affiliates that the Board deems necessary to determine and enforce compliance with the 2. See 58 Federal Register 6348, 6351 (1993). IBA, the Bank Holding Company Act of 1956, as 3. See Citizens National Bank, 79 Federal Reserve Bulletin 805 (1993). amended, and other applicable federal law. To the extent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

744 Federal Reserve Bulletin • July 1995 that disclosure of such information may be prohibited by Donghwa Bank law, Bank and its ultimate parent have committed to Seoul, Korea cooperate with the Board in obtaining any necessary consents or waivers that might be required for the Board Order Approving Establishment of a Branch to gain access to information that the Board may request. The Board has reviewed the restrictions on disclosure of Donghwa Bank ("Bank"), Seoul, Korea, a foreign bank information by banks in jurisdictions in which Bank has within the meaning of the International Banking Act material operations. In light of the commitments made ("IBA"), has applied under section 7(d) of the IBA by Bank and its ultimate parent, other facts of record, (12 U.S.C. § 3105(d)) to convert its New York represenand subject to the condition described below, the Board tative office to a state-licensed branch. The Foreign Bank concludes that Bank has provided adequate assurances Supervision Enhancement Act of 1991 ("FBSEA"), of access to any necessary information the Board may which amended the IBA, provides that a foreign bank request. must obtain the approval of the Board to establish a On the basis of all the facts of record, and subject to branch in the United States. the commitments made by Bank and its ultimate parent, Notice of the application, affording interested persons as well as the terms and conditions set forth in this order, an opportunity to submit comments, has been published the Board has determined that Bank's application to in a newspaper of general circulation in New York, New establish a representative office should be, and hereby is, York (New York Times, June 27, 1994). The time for approved. If any restrictions on access to information on filing comments has expired and all comments have the operations or activities of Bank and any of its affili- been considered. ates subsequently interfere with the Board's ability to Bank, with assets of $12.1 billion, is the 12th largest determine the compliance by Bank or its affiliates with bank in Korea.1 No individual shareholder owns more applicable federal statutes, the Board may require termi- than 10 percent of the shares of Bank. Bank operates 59 nation of any of Bank's direct or indirect activities in the branches and 16 other deposit-taking offices throughout United States. Approval of this application is also specif- Korea and has one affiliate, Donghwa Leasing Company, ically conditioned on compliance by Bank and its ulti- Ltd. ("Donghwa Leasing"), Incheon, Korea. In addition mate parent with the commitments made in connection to its office in New York, Bank operates representative with this application, and with the conditions contained offices in London, Tokyo, and Hong Kong. in this order.4 The commitments and conditions referred The activities of the proposed branch would include to above are conditions imposed in writing by the Board providing financing and other banking-related services in connection with its decision and may be enforced in to individuals and U.S.-based companies engaged in proceedings under 12 U.S.C. § 1818 against Bank and its business with Korea. Bank does not engage directly or affiliates. indirectly in any nonbanking activities in the United By order of the Board of Governors, effective May 15, States, and would be a qualifying foreign banking orga- 1995. nization within the meaning of Regulation K after establishing the proposed branch (12 C.F.R. 211.23(b)). Voting for this action: Chairman Greenspan, Vice Chairman Bank has received approvals to establish the proposed Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. branch from the Korean Ministry of Finance ("Ministry") and the Office of Bank Supervision ("OBS") of JENNIFER J. JOHNSON the Bank of Korea, conditioned upon approval of the Deputy Secretary of the Board proposed branch by the relevant regulatory authorities in the United States. The New York State Banking Department has approved the establishment of the proposed branch, conditioned on the Board's approval of the proposal. In order to approve an application by a foreign bank to establish a branch in the United States, the IBA and Regulation K require the Board to determine that the foreign bank applicant engages directly in the business of banking outside of the United States, and has fur- 4. The Board's authority to approve the establishment of the proposed office parallels the continuing authority of the State of nished to the Board the information it needs to ade- Florida to license offices of a foreign bank. The Board's approval of quately assess the application. The Board must also this application does not supplant the authority of the State of Florida and its agent, the Department of Banking and Finance, to license the proposed office of Bank in accordance with any terms or conditions that the State of Florida may impose. 1. All data are as of December 31, 1994, unless otherwise noted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 745 determine that the foreign bank is subject to comprehen- mined that Bank is supervised by the OBS on the same sive supervision or regulation on a consolidated basis by terms and conditions as set forth in the earlier order. its home country supervisor (12 U.S.C. § 3105(d)(2); Based on all the facts of record, the Board has deter- 12 C.F.R. 211.24(c)(1)). The Board may also take into mined that Bank is subject to comprehensive supervision account additional standards as set forth in the IBA and and regulation on a consolidated basis by its home Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. country supervisors. 211.24(c)). The Board has also taken into account the additional Bank engages directly in the business of banking standards set forth in section 7 of the IBA and Regulaoutside of the United States through its banking opera- tion K. (See 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. tions in Korea. Bank also has provided the Board with 211.24(c)(2)). As noted above, Bank has received the the information necessary to assess the application consent of the Ministry and the OBS to establish the through submissions that address the relevant issues. proposed state-licensed branch. Regulation K provides that a foreign bank will be Bank must comply with risk-based capital standards considered to be subject to comprehensive supervision adopted by Korea.4 Bank's capital is in excess of the or regulation on a consolidated basis if the Board deter- minimum levels that would be required by the Basle mines that the bank is supervised and regulated in such a Capital Accord and is considered equivalent to capital manner that its home country supervisor receives suffi- that would be required of a U.S. banking organization. cient information on the foreign bank's worldwide oper- Managerial and other financial resources of Bank are ations, including the relationship of the foreign bank to also considered consistent with approval, and Bank apany affiliate, to assess the overall financial condition of pears to have the experience and capacity to support the the foreign bank and its compliance with law and regula- proposed branch. Bank has established controls and protion (12 C.F.R. 211.24(c)(1)).2 In making its determina- cedures for the proposed branch in order to ensure tion under this standard, the Board has considered the compliance with U.S. law, as well as controls and procefollowing information. dures for its worldwide operations generally. Bank's primary supervisor is the OBS, which moni- Bank has committed to make available to the Board tors Bank's compliance with all banking laws and regu- such information on the operations of Bank and any lations and conducts examinations of Bank. In addition, affiliate of Bank that the Board deems necessary to the Ministry has legal authority over Bank's interna- determine and enforce compliance with the IBA, the tional operations, including approval of the establish- Bank Holding Company Act of 1956, as amended, and ment, regulation, and examination of foreign banking other applicable Federal law. To the extent that the offices. The Ministry has delegated its examination au- provision of such information is prohibited or impeded thority for the international activities of Bank to the by law, Bank has committed to cooperate with the Board OBS. to obtain any necessary consents or waivers that might The Board has previously determined, in connection be required from third parties in connection with the with an application involving another Korean bank, that disclosure of certain information. In addition, subject to the bank was subject to home country supervision on a certain conditions, the Ministry and the OBS may share consolidated basis.3 In this case, the Board has deter- information on Bank's operations with other supervisors, including the Board. In light of these commitments and other facts of record, and subject to the condition described below, the Board concludes that Bank has 2. In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisors: provided adequate assurances of access to any necessary (i) Ensure that the bank has adequate procedures for monitor- information the Board may request. ing and controlling its activities worldwide; On the basis of all the facts of record, and subject to (ii) Obtain information on the condition of the bank and its the commitments made by Bank, as well as the terms subsidiaries and offices through regular examination reports, and conditions set forth in this order, the Board has audit reports, or otherwise; (iii) Obtain information on the dealings with and relationship determined that Bank's application to establish a statebetween the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated on a worldwide basis, or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated basis; 4. The Bank of Korea has required Korean banks to meet (v) Evaluate prudential standards, such as capital adequacy transitional risk-based capital standards until January 1, 1996, and risk asset exposure, on a worldwide basis. when Korean banks must be in conformance with the Basle mini- These are indicia of comprehensive, consolidated supervision. mum capital standards. For the period of January 1, 1994, to No single factor is essential and other elements may inform the December 31, 1995, Korean banks must maintain, at a minimum, a Board's determination. total risk-based capital ratio of at least 7.25 percent. Bank is 3. See KorAm Bank, 80 Federal Reserve Bulletin 184 (1994). currently in full compliance with the 1996 standards. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

746 Federal Reserve Bulletin • July 1995 licensed branch should be, and hereby is, approved.5 If Bank, with assets of $25 billion, is the seventh largest any restrictions on access to information on the opera- commercial bank in Taiwan.1 Bank is owned by the tions or activities of Bank and its affiliates subsequently Provincial Government of Taiwan ("Provincial Governinterfere with the Board's ability to determine the safety ment"), an arm of the Taiwanese central government, and soundness of Bank's U.S. operations or compliance which holds its interest in Bank both directly and by Bank or its affiliates with applicable Federal statutes, through its ownership of several other Taiwanese banks the Board may require termination of any of Bank's that own voting shares of Bank. Bank of Taiwan, which direct or indirect activities in the United States. Ap- is owned by the Provincial Government, owns approxiproval of this application is also specifically conditioned mately 42 percent of the voting shares of Bank.2 on compliance by Bank with the commitments made in Bank operates 108 branches throughout Taiwan and connection with this application, and with the conditions one subsidiary, Union Real Estate Management Corporain this order. The commitments and conditions referred tion ("Union"), Taipei, Taiwan.3 Bank's existing repreto above are conditions imposed in writing by the Board sentative office in Los Angeles, California, was estabin connection with its decision, and may be enforced in lished in June 1993.4 In addition, Bank operates proceedings under 12 U.S.C. § 1818 or 12 U.S.C. § 1847 representative offices in the Netherlands and Hong Kong against Bank, its offices and its affiliates. and an offshore banking unit in Taiwan. By order of the Board of Governors, effective May 8, Bank's primary purpose for converting the existing 1995. representative office to a branch is to better serve its existing clients through the provision of banking ser- Voting for this action: Chairman Greenspan, and Governors vices tailored to trade with Taiwan. In addition to mak- Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chair- ing loans and accepting wholesale deposits, the proposed man Blinder and Governor Kelley. branch would offer other services for Taiwanese companies. Bank does not engage directly or indirectly in any JENNIFER J. JOHNSON nonbanking activities in the United States, and would be Deputy Secretary of the Board a qualifying foreign banking organization within the meaning of Regulation K after establishing the proposed Taiwan Business Bank branch (12 C.F.R. 211.23(b)). Taipei, Taiwan Bank has received approval to establish the proposed branch from the Ministry of Finance of Taiwan ("Minis- Order Approving Establishment of a Branch try"). Bank also has applied to the California State Banking Department for approval to establish the pro- Taiwan Business Bank ("Bank"), Taipei, Taiwan, a forposed branch. eign bank within the meaning of the International Bank- In order to approve an application by a foreign bank to ing Act ("IBA"), has applied under section 7(d) of the establish a branch in the United States, the IBA and IBA (12 U.S.C. § 3105(d)) to convert its representative Regulation K require the Board to determine that the office in Los Angeles, California to a state-licensed foreign bank applicant engages directly in the business branch. The Foreign Bank Supervision Enhancement of banking outside of the United States, and has fur- Act of 1991 ("FBSEA"), which amended the IBA, pronished to the Board the information it needs to adevides that a foreign bank must obtain the approval of the quately assess the application. The Board must also Board to establish a branch in the United States. determine that the foreign bank is subject to comprehen- Notice of the application, affording interested persons sive supervision or regulation on a consolidated basis by an opportunity to submit comments, has been published its home country supervisor (12 U.S.C. § 3105(d)(2)). in a newspaper of general circulation in Los Angeles, The Board may also take into account additional stan- California (Los Angeles Times, September 18, 1994). The time for filing comments has expired and all comments have been considered. 1. All data are as of December 31, 1994, unless otherwise noted. 2. The Board previously approved the establishment of a branch by Bank of Taiwan. See Bank of Taiwan, 79 Federal Reserve 5. The Board's authority to approve the establishment of the Bulletin 541 (1993). proposed branch parallels the continuing authority of the State of 3. Union, with assets of $16 million, engages in construction plan New York to license offices of a foreign bank. The Board's ap- consultation and financial auditing, real estate property appraisal proval of this application does not supplant the authority of the and investigation, real estate brokerage, and escrow services. State of New York, and its agent, the New York State Banking 4. Bank, formerly known as the Medium Business Bank of Department, to license the proposed branch of Bank in accordance Taiwan, received Board approval to establish its Los Angeles with any terms or conditions that the State of New York may representative office on June 25, 1993. See Medium Business Bank impose. of Taiwan, 79 Federal Reserve Bulletin 807 (1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 747 dards as set forth in the IBA (12 U.S.C. § 3105(d)(3)-(4)) The Board has previously determined, in connection and Regulation K (12 C.F.R. 211.24(c)). with applications involving other Taiwanese banks, in- Bank engages directly in the business of banking cluding Bank's parent, Bank of Taiwan, that these banks outside of the United States through its commercial were subject to home country supervision on a consolibanking operations in Taiwan. Bank also has provided dated basis.8 In this case, Bank is supervised by the the Board with the information necessary to assess the Ministry and the Central Bank on the same terms and application through submissions that address the rele- conditions as Bank of Taiwan. Based on all the facts of vant issues. record, the Board has determined that Bank is subject to Regulation K provides that a foreign bank will be comprehensive supervision and regulation on a consoliconsidered to be subject to comprehensive supervision dated basis by its home country supervisors. or regulation on a consolidated basis if the Board deter- The Board has also taken into account the additional mines that the bank is supervised and regulated in such a standards set forth in section 7 of the IBA (see 12 U.S.C. manner that its home country supervisor receives suffi- § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). As noted cient information on the foreign bank's worldwide oper- above, Bank has received the consent of its home counations, including the relationship of the foreign bank to try authorities to establish the proposed state-licensed any affiliate, to assess the overall financial condition of branch. In addition, the Ministry may share information the foreign bank and its compliance with law and regula- on Bank's operations with other supervisors, including tion (12 C.F.R. 211.24(c)(1)).5 In making its determina- the Board. tion under this standard, the Board has considered the Bank must comply with the minimum capital stanfollowing information. dards of the Basle Accord, as implemented by Taiwan. Bank is supervised and regulated by the Ministry and Bank's capital exceeds these minimum standards and the Taiwanese Central Bank ("Central Bank"), which can be considered equivalent to capital that would be share responsibility for the supervision of Taiwanese required of a U.S. banking organization. Managerial and banks. The Banking Law of Taiwan grants the Ministry other financial resources of Bank are also considered overall authority for the regulation and supervision of consistent with approval, and Bank appears to have the Taiwanese banks, including commercial banks, such as experience and capacity to support the proposed branch. Bank.6 The Ministry has delegated the authority to the Bank has established controls and procedures for the Central Bank to act as the primary examiner of banks in proposed branch in order to ensure compliance with U.S. Taiwan, in which capacity the Central Bank conducts law, as well as controls and procedures for its worldwide mandatory annual examinations.7 operations generally. Bank has committed that it will make available to the Board such information on the operations of Bank and any affiliate of Bank that the Board deems necessary to 5. In assessing this standard, the Board considers, among other determine and enforce compliance with the IBA, the factors, the extent to which the home country supervisors: Bank Holding Company Act of 1956, as amended, and (i) Ensure that the bank has adequate procedures for monitorother applicable federal law. To the extent that the proviing and controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its sion of such information is prohibited or impeded by subsidiaries and offices through regular examination reports, law, Bank has committed to cooperate with the Board to audit reports, or otherwise; obtain any consents or waivers that might be required (iii) Obtain information on the dealings with and relationship from third parties in connection with disclosure of cerbetween the bank and its affiliates, both foreign and domestic; tain information. In addition, subject to certain condi- (iv) Receive from the bank financial reports that are consolidated on a worldwide basis, or comparable information that tions, the Ministry and the Central Bank may share permits analysis of the bank's financial condition on a world- information on Bank's operations with other superviwide consolidated basis; sors, including the Board. In light of these commitments (v) Evaluate prudential standards, such as capital adequacy and other facts of record, and subject to the condition and risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. described below, the Board concludes that Bank has No single factor is essential and other elements may inform the provided adequate assurances of access to any necessary Board's determination. information the Board may request. 6. This authority permits the Ministry, among other things, to On the basis of all the facts of record, and subject to issue licenses, limit activities and expansion, conduct examinations, set minimum capital and liquidity ratios, limit credit exten- the commitments made by Bank, as well as the terms sions, restrict director interlocks, define qualifications for management, and take enforcement actions. 7. Bank receives additional oversight by its owner, the Provincial 8. See Taipei Bank, 79 Federal Reserve Bulletin 143 (1993); Government, and by the Ministry of Audit, an auditor of govern- United World Chinese Commercial Bank, 79 Federal Reserve Bulment agencies and government-owned enterprises. This oversight letin 146 (1993); Chiao Tung Bank, 79 Federal Reserve Bulletin is secondary to supervision by the Ministry and the Central Bank. 543 (1993); Bank of Taiwan, supra. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

748 Federal Reserve Bulletin • July 1995 and conditions set forth in this order, the Board has Bank's direct or indirect activities in the United States. determined that Bank's application to establish a state- Approval of this application is also specifically condilicensed branch should be, and hereby is, approved. If tioned on compliance by Bank with the commitments any restrictions on access to information on the opera- made in connection with this application, and with the tions or activities of Bank and its affiliates subsequently conditions in this order.9 The commitments and condiinterfere with the Board's ability to determine the safety tions referred to above are conditions imposed in writing and soundness of Bank's U.S. operations or the compli- by the Board in connection with its decision, and may be ance by Bank or its affiliates with applicable federal enforced in proceedings under 12 U.S.C. § 1818 or statutes, the Board may require termination of any of the 12 U.S.C. § 1847 against Bank, its offices and its affiliates. By order of the Board of Governors, effective May 8, 1995. 9. The Board's authority to approve the establishment of the proposed branch parallels the continuing authority of the State of Voting for this action: Chairman Greenspan and Governors California to license offices of a foreign bank. The Board's ap- Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chairproval of this application does not supplant the authority of the man Blinder and Governor Kelley. State of California, and its agent, the California State Banking Department, to license the proposed branch of Bank in accordance with any terms or conditions that the California State Banking JENNIFER J. JOHNSON Department may impose. Deputy Secretary of the Board INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (JANUARY 1, 1995-MARCH 31,1995) Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page Banc One Corporation, National City Corporation, March 1, 1995 81, 491 Columbus, Ohio Cleveland, Ohio CoreStates Financial Corp, Electronic Payment Services, Inc., Philadelphia, Pennsylvania Wilmington, Delaware PNC Bank Corp., Pittsburgh, Pennsylvania KeyCorp, Cleveland, Ohio Banco Santander, S.A., Santander Investment Securities Inc., March 27, 1995 81, 501 Madrid, Spain New York, New York Bank of Ireland, Great Bay Bancshares, Inc., March 6, 1995 81, 511 Dublin, Ireland Dover, New Hampshire Bank of Ireland First Holdings, Inc., Constitution Trust Company, Manchester, New Hampshire Dover, New Hampshire First NH Bank, Manchester, New Hampshire The Bank of Tokyo, Ltd., The Chicago-Tokyo Bank, January 30, 1995 81, 279 Tokyo, Japan Chicago, Illinois Banque Nationale de Paris, BNP/Cooper Neff, Inc., February 9, 1995 81, 386 Paris, France Radnor, Pennsylvania Banque Nationale de Paris, To establish state-licensed branches in March 27, 1995 81, 515 Paris, France Los Angeles and San Francisco, California Battle Creek State Company, Battle Creek State Bank, January 30, 1995 81, 281 Battle Creek, Nebraska Battle Creek, Nebraska Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 749 Index of Orders—Continued Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page BNCCorp, Inc., JMS Systems, Inc., January 9, 1995 81, 295 Bismarck, North Dakota Bismarck, North Dakota Boatmen's Bancshares, Inc., Worthen Banking Corporation, January 18, 1995 81, 299 St. Louis, Missouri Little Rock, Arkansas Carbon County Holding Company, Hanifen, Imhoff Management Co., Inc., March 6, 1995 81, 504 Englewood, Colorado Denver, Colorado Chase Manhattan Corporation, Chase Savings Bank, March 13, 1995 81, 467 New York, New York New York, New York Cheyenne Banking Corporation, Security State Bank, February 15, 1995 81, 375 Cheyenne, Oklahoma Cheyenne, Oklahoma Cho Hung Bank, Seoul Bank of California, March 1, 1995 81, 475 Seoul, Korea Los Angeles, California Coal City Corporation, Peterson Bank, January 17, 1995 81, 283 Coal City, Illinois Chicago, Illinois Manufacturers National Corporation, Chicago, Illinois Comerica Incorporated, University Bank & Trust Company, March 1, 1995 81, 476 Detroit, Michigan Palo Alto, California Comerica California Incorporated, San Jose, California Commerce Bancshares, Inc., Peoples Mid-Illinois Corporation, February 21, 1995 81, 376 Kansas City, Missouri Bloomington, Illinois CBI-Illinois, Inc., Kansas City, Missouri Commercial Bancorp, West Coast Bancorp, February 13, 1995 81, 378 Salem, Oregon Newport, Oregon Credit Commercial de France S.A., Charterhouse North America Inc., February 21, 1995 81, 390 Paris, France New York, New York Berliner Handels-und Frankfurther Bank, Frankfurt am Main, Germany First Bancshares of Valley City, Inc., Insurance by Strehlow, Inc., January 11, 1995 81, 286 Valley City, North Dakota Casselton, North Dakota First Commerce Corporation, City Bancorp, Inc., February 2, 1995 81, 379 New Orleans, Louisiana New Iberia, Louisiana First Bancshares, Inc., Slidell, Louisiana First Interstate Bank of California, First Trust Bank, March 3, 1995 81, 515 Los Angeles, California Ontario, California Illinois Financial Services, Inc., Alpha Financial Corporation, March 13, 1995 81, 480 Chicago, Illinois Chicago, Illinois Alpha Bancorp, Chicago, Illinois Investors Banking Corporation, BKLA Bancorp, March 6, 1995 81, 483 Salem, Oregon West Hollywood, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

750 Federal Reserve Bulletin • July 1995 Index of Orders—Continued Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page Irving National Bancshares, Inc., Irving National Bank, March 13, 1995 81, 484 Dallas, Texas Irving, Texas First Continental Bank of Grand Prairie, N.A., Grand Prairie, Texas Johnson International, Inc., Seaboard Savings Bank, F.S.B., March 27, 1995 81, 507 Racine, Wisconsin Stuart, Florida KeyCorp, Casco Northern Bank, N.A., January 17, 1995 81, 286 Cleveland, Ohio Portland, Maine Manufacturers and Traders Trust To establish seven branch offices in February 27, 1995 81, 394 Company, Tops Markets stores in the Rochester, Buffalo, New York New York, area Marine Midland Bank, P&C Store #130, January 25, 1995 81, 310 Buffalo, New York Syracuse, New York Northern Trust Corporation, Beach One Financial Services, Inc., March 1, 1995 81, 486 Chicago, Illinois Vero Beach, Florida Northern Trust of Florida Corporation, Miami, Florida North Fork Bancorporation, Inc., Sunrise Bancorp, Inc., March 29, 1995 81, 509 Mattituck, New York Farmingdale, New York Peak Banks of Colorado, Inc., Peak National Bank, January 30, 1995 81, 289 Nederland, Colorado Nederland, Colorado Southern National Corporation, BB&T Financial Corporation, January 17, 1995 81, 307 Lumberton, North Carolina Wilson, North Carolina South Texas Capital Group, Inc., Plaza Bank, N.A., February 8, 1995 81, 384 San Antonio, Texas San Antonio, Texas Standard Bank of South Africa, To establish a representative office in March 22, 1995 81, 517 Johannesburg, South Africa New York, New York State Street Boston Corporation, IFTC Holdings, Inc., January 30, 1995 81, 297 Boston, Massachusetts Kansas City, Missouri Turkiye Vakiflar Bankasi, T.A.O., To establish a state-licensed branch in January 4, 1995 81, 313 Ankara, Turkey New York, New York The Union Bank of Switzerland, UBS Community Development February 13, 1995 81, 392 Zurich, Switzerland Corporation, New York, New York West Merchant Bank Limited, To establish a state-licensed agency in March 29, 1995 81, 519 London, England New York, New York Whitney Holding Corporation, Whitney Bank of Alabama, January 24, 1995 81, 290 New Orleans, Louisiana Mobile, Alabama Peoples Bank, Elba, Alabama Woodforest Bancshares, Inc., Sun Belt Bancshares Corporation, February 15, 1995 81, 385 Houston, Texas Conroe, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 751 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 Applicant(s) Bank(s) Effective Date SouthTrust Corporation, FBC Holding Company, Inc., May 12, 1995 Birmingham, Alabama Crestview, Florida SouthTrust of Florida, Inc., Jacksonville, Florida Section 4 Applicant(s) Bank(s) Effective Date Dacotah Banks, Inc., Huron Title Company, May 31, 1995 Aberdeen, South Dakota Huron, South Dakota First National of Nebraska, Inc. To engage de novo in providing data May 12, 1995 Omaha, Nebraska processing and courier services in connection with the provision of lockbox services. Signet Banking Corporation, Sheffield Management Company, May 5, 1995 Richmond, Virginia Richmond, Virginia Sheffield Investments, Inc., Richmond, Virginia 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 Applicant(s) Bank(s) Reserve Bank Effective Date 1st Jackson Bancshares, Inc.. The North Jackson Bank, Inc., Atlanta May 12, 1995 Stevenson, Alabama Stevenson, Alabama Ace Gas, Inc., Nebraska National Bank, Kansas City May 15, 1995 Deshler, Nebraska Kearney, Nebraska Gibbon Exchange Company, Gibbon, Nebraska Ameribank Corporation, United Oklahoma Bankshares, Inc. Kansas City April 27, 1995 Shawnee, Oklahoma Del City, Oklahoma American River Holdings, American River Bank, San Francisco April 28, 1995 Sacramento, California Sacramento, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

752 Federal Reserve Bulletin • July 1995 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date BancFirst Ohio Corp., Bellbrook Bancorp, Inc., Cleveland April 19, 1995 Zanesville, Ohio Bellbrook, Ohio Bank of Colorado Holding Snow Bankcorp, Inc., Kansas City April 28, 1995 Company, Dillon, Colorado Vail, Colorado BB&T Bancshares Corp., Bloomingdale Bank and Trust, Chicago May 12, 1995 Bloomingdale, Illinois Bloomingdale, Illinois Blumberg BancUnits, Seguin State Bank & Trust Company, Dallas May 19, 1995 Limited Partnership, Seguin, Texas Seguin, Texas Blumberg Family Partnership, Limited Partnership, Seguin, Texas Centura Banks, Inc., Southern Bancorp, Inc., Richmond April 21, 1995 Rocky Mount, North Carolina Asheboro, North Carolina Commerce Bancshares, Inc., CBI Security Corporation, Kansas City May 23, 1995 Kansas City, Missouri Kansas City, Missouri Kansas-CBI, Inc., Kansas City, Missouri CBI-Kansas, Inc., Kansas City, Missouri Community Financial Corporation, Community National Bank, Kansas City May 1, 1995 Topeka, Kansas Topeka, Kansas Community First Bankshares, Inc., Snow Bankcorp, Inc., Minneapolis April 28, 1995 Fargo, North Dakota Dillon, Colorado CRACO, Inc., The First National Bank of Grove, Kansas City May 25, 1995 Vinita, Oklahoma Grove, Oklahoma Duke Financial Group, Inc., First National Bank of North County, Minneapolis May 15, 1995 St. Paul, Minnesota Carlsbad, California Firstar Corporation, Firstar Credit Card Bank, N.A., Chicago May 11, 1995 Milwaukee, Wisconsin Waukegan, Illinois Firstar Corporation of Wisconsin, Milwaukee, Wisconsin First Financial Bancorp., Peoples Bank and Trust Company, Cleveland April 25, 1995 Hamilton, Ohio Sunman, Indiana First Mariner Bancorp, First Mariner Bank, Richmond May 5, 1995 Towson, Maryland Towson, Maryland First Mountain Company, First Mountain State Bank, Kansas City April 26, 1995 Montrose, Colorado Montrose, Colorado First Security Bancorp, Farmers Investment Corporation, St. Louis April 21, 1995 Searcy, Arkansas Little Rock, Arkansas First Southern Bancshares, Inc., First Southern Bank, Atlanta May 23, 1995 Florence, Alabama Florence, Alabama First Southern Bancshares, Inc., First Southern Bank, Atlanta May 16, 1995 Lithonia, Georgia Lithonia, Georgia GreatBanc, Inc., GreatBank, Chicago April 21, 1995 Aurora, Illinois Algonquin, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 753 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Mountain Bancshares, Inc., Mountain Community Bank of Kansas City May 4, 1995 Los Alamos, New Mexico Los Alamos, Los Alamos, New Mexico Mountain Parks Financial Corp., Financial Holdings, Inc., Kansas City May 15, 1995 Minneapolis, Minnesota Louisville, Colorado New Central Illinois Financial Co. Banklllinois Financial Co., Chicago May 17, 1995 Inc., Champaign, Illinois Champaign, Illinois Central Illinois Financial Corporation, Champaign, Illinois North Fork Bancorporation, Inc., Great Neck Bancorp, New York May 12, 1995 Mattituck, New York Great Neck, New York Norwest Corporation, Comfort Bancshares, Inc., Minneapolis May 12, 1995 Minneapolis, Minnesota Comfort, Texas Norwest Corporation, Dickinson Bancorporation, Inc., Minneapolis May 17, 1995 Minneapolis, Minnesota Dickinson, North Dakota Liberty Bank and Trust, N.A., Dickinson, North Dakota Peoples Independent Bancshares, Randolph Bancshares, Inc., Atlanta April 21, 1995 Inc., Roanoke, Alabama Boaz, Alabama Pikeville National Corporation, Commercial Bank, Cleveland May 15, 1995 Pikeville, Kentucky Middlesboro, Kentucky Pikeville National Corporation, Woodford Bancorp, Inc., Cleveland May 12, 1995 Pikeville, Kentucky Versailles, Kentucky Pikeville Acquisition Corp., Pikeville, Kentucky Pleasant Hope Bancshares, Inc., Premier Bancshares, Inc., St. Louis April 28, 1995 Pleasant Hope, Missouri Jefferson City, Missouri Premier Bancshares, Inc., Premier Bank, St. Louis April 28, 1995 Jefferson City, Missouri Jefferson City, Missouri Security Richland Bancorporation, FirstWest Bank, Minneapolis April 21, 1995 Miles City, Montana Billings, Montana Hansen-Lawrence Agency, Inc., Worden, Montana Suburban Illinois Bancorp, Inc., Suburban Bank of Elmhurst, Chicago May 24, 1995 Elmhurst, Illinois Elmhurst, Illinois Sun Capital Bancorp, Sun Capital Bank, San Francisco May 18, 1995 St. George, Utah St. George, Utah Union Illinois Company Employee Union Illinois Company, St. Louis April 27, 1995 Stock Ownership Trust, Swansea, Illinois Swansea, Illinois Vail Bank, Snow Bank, N.A., Kansas City April 28, 1995 Vail, Colorado Dillon, Colorado Whitewater Bancshares, Inc., Bank of Whitewater, Kansas City May 23, 1995 Whitewater, Kansas Whitewater, Kansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

754 Federal Reserve Bulletin • July 1995 Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Banco de Sabadell, S.A., PRS International Investment Advisory Atlanta May 15, 1995 Sabadell, Spain Services, Inc., Miami, Florida PRS International Brokerage, Inc., Miami, Florida Brannen Banks of Florida, Inc., To engage de novo in data processing Atlanta May 10, 1995 Inverness, Florida activities Brazosport Corporation, First Commerce Mortgage Corporation, Dallas May 17, 1995 Corpus Christi, Texas Corpus Christi, Texas Brazosport Corporation-Nevada, Inc., Carson City, Nevada First American Corporation, Heritage Federal Bancshares, Inc., Atlanta May 8, 1995 Nashville, Tennessee Kingsport, Tennessee First Union Corporation, Coral Gables Fedcorp, Richmond April 21, 1995 Charlotte, North Carolina Coral Gables, Florida Fleet Financial Group, Inc., Plaza Home Mortgage Servicing Boston May 5, 1995 Providence, Rhode Island Corporation, Albuquerque, New Mexico Fleet Real Estate Funding Corp., Columbia, South Carolina KeyCorp, To engage in consumer and mortgage Cleveland May 8, 1995 Cleveland, Ohio lending activities Key Bancshares of Wyoming, Cheyenne, Wyoming MSB Holding Company, To commence or to engage de novo Chicago May 2, 1995 Moorhead, Iowa either directly or indirectly, in making and servicing loans New Era Bancorporation, Inc., St. Francois County Financial Corp., St. Louis April 21, 1995 Fredericktown, Missouri Farmington, Missouri Pointe Financial Corporation, To engage de novo in mortgage Atlanta May 2, 1995 Boca Raton, Florida processing activities for unaffiliated third parties Societe Generale, Societe Generale Asset Management New York May 22, 1995 Paris, France Corp., New York, New York South Valley Bancorporation, To directly engage de novo in the San Francisco May 10, 1995 Morgan Hill, California making, acquiring, or servicing of loans or other extensions of credit Summit Financial Corporation, Woodman Enterprises, Inc., Richmond May 11, 1995 Greenville, South Carolina Greenville, South Carolina Union-Calhoun Investments, Ltd., To engage in insurance and tax Chicago April 26, 1995 Rockwell City, Iowa preparation activities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 755 Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Executive Auto Lease, Inc., Fidelity Bank & Trust Company, Boston May 12, 1995 Andover, Massachusetts Salem, New Hampshire First Mutual Bancorp, Inc., First Mutual Bank, S.B., Chicago April 26, 1995 Decatur, Illinois Decatur, Illinois Moundville Bancshares, Inc. To engage de novo in credit insurance Atlanta May 25, 1995 Moundville, Alabama activities APPLICATIONS APPROVED UNDER BANK MERGER 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. Applicant(s) Bank(s) Reserve Bank Effective Date Manufacturers and Traders Trust The Chase Manhattan Bank, N.A., New York May 4, 1995 Company, New York, New York Buffalo, New York 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. Applicant(s) Bank(s) Reserve Bank Effective Date Centura Bank, First Southern Savings Bank, Inc., Richmond April 21, 1995 Rocky Mount, North Carolina SSB, Asheboro, North Carolina Westamerica Bank, CapitolBank Sacramento, San Francisco May 2, 1995 San Rafael, California Sacramento, California PENDING CASES INVOLVING THE BOARD OF Money Station, Inc. v. Board of Governors, No. 95-1182 GOVERNORS (D.C. Cir., filed March 30, 1995). Petition for review of a Board order dated March 1, 1995, approving notices by Bank One Corporation, Columbus, Ohio; CoreStates Fi- This list of pending cases does not include suits against the nancial Corp., Philadelphia, Pennsylvania; PNC Bank Federal Reserve Banks in which the Board of Governors is Corp., Pittsburgh, Pennsylvania; and KeyCorp, Clevenot named a party. land, Ohio, to acquire certain data processing assets of Board of Governors v. Scott, Misc. No. 95-127 (LFO/PJA) National City Corporation, Cleveland, Ohio, through a (D. D.C., filed April 14, 1995). Application to enforce joint venture subsidiary. On May 1, 1995, Banc One, investigatory subpoenas for documents and testimony. CoreStates, PNC, KeyCorp, National City Corporation, Oral argument is scheduled for June 8, 1995. and Electronic Payment Services, Inc., moved to inter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

756 Federal Reserve Bulletin • July 1995 vene in the case. Also on May 1, 1995, Money Station orders of the Comptroller of the Currency imposing a filed a separate petition for review of the Board's March civil money penalty and cease and desist order against 31, 1995, denial of Money Station's request for reconsid- petitioner (Cavallari v. OCC, No. 94-4151). Oral argueration of the Board's March 1 order (D.C. Cir., No. ment was heard on March 23, 1995. On May 11, 1995, 95-1243). the Court of Appeals upheld the Board's prohibition Jones v. Board of Governors, No. 95-1142 (D.C. Cir., filed order and the Comptroller's civil money penalty order, March 3, 1995). Petition for review of a Board order and remanded to the Comptroller for further proceedings dated February 2, 1995, approving the applications by regarding the order to cease and desist. First Commerce Corporation, New Orleans, Louisiana, to Beckman v. Greenspan, No. CV 94-41-BCG-RWA (D. merge with City Bancorp, Inc., New Iberia, Louisiana, Mont., filed April 13, 1994). Action against Board and and First Bankshares, Inc., Slidell, Louisiana. Petitioner others seeking damages for alleged violations of constitufiled a motion for injunctive relief on April 3, 1995. On tional and common law rights. The Board's motion to April 17, 1995, the Board filed its opposition to the dismiss was filed May 19, 1994. On April 24, 1995, the motion. court granted the Board's motion and dismissed the case. Board of Governors v. Interamericas Investments, Ltd., No. Plaintiffs filed a notice of appeal on May 4, 1995. H-95-565 (S.D. Texas, filed February 24, 1995). Action to freeze certain assets of a company pending administra- Board of Governors v. Ghaith R. Pharaon, No. 91-CIVtive adjudication of civil money penalty. On March 1, 6250 (S.D. New York, filed September 17, 1991). Action 1995, the court issued a stipulated order requiring the to freeze assets of individual pending administrative adjucompany to deposit $1 million into the registry of the dication of civil money penalty assessment by the Board. court. On September 17, 1991, the court issued an order tempo- In re Subpoena Duces Tecum, No. 95-5034 (D.C. Cir., filed rarily restraining the transfer or disposition of the individ- January 26, 1995). Appeal of partial denial of plaintiffs ual's assets. motion to compel production of examination and other supervisory material in connection with a shareholder derivative action against a bank holding company. Oral FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD argument is scheduled for November 7, 1995. OF GOVERNORS Kuntz v. Board of Governors, No. 95-3044 (6th Cir., filed January 12, 1995). Petition for review of a Board order A.G. Cummings dated December 19, 1994, approving an application by Lampasas, Texas KeyCorp, Cleveland, Ohio, to acquire BANKVERMONT Corp., Burlington, Vermont. On February 10, 1995, the The Federal Reserve Board announced on May 9, 1995, Board filed its motion to dismiss. the issuance of an Order of Assessment of a Civil Money Zemel v. Board of Governors, No. 95-5007 (D.C. Cir., filed Penalty against A.G. Cummings, Chairman of the board December 30, 1994). Appeal of district court's dismissal of directors and President of Lometa Bancshares, Inc., of Age Discrimination in Employment Act case. On and Chairman of the board of directors, President, sole March 8, 1995, the court granted appellant's motion to director, and principal shareholder of Mid-Texas Bancwithdraw the appeal and dismissed the action. shares, Inc., both of Lampasas, Texas. In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., filed January 6, 1995). Action to enforce subpoena seek- Texas Coastal Bank ing pre-decisional supervisory documents sought in con- Pasadena, Texas nection with an action by Bank of New England Corporation's trustee in bankruptcy against the Federal Deposit The Federal Reserve Board announced on May 30,1995, Insurance Corporation. The Board filed its opposition on the issuance of a Cease and Desist Order against the January 20, 1995. Texas Coastal Bank, Pasadena, Texas; and Charles R. Cavallari v. Board of Governors, No. 94-4183 (2d Cir., Vickery, Jr., the principal shareholder of the bank; G. filed October 17, 1994). Petition for review of Board Warren Coles, Jr., former chairman of the board and a order of prohibition against a former outside counsel to a director of the bank; and B.F. Holcomb, chairman of the national bank (80 Federal Reserve Bulletin 1046 (1994)). board and the president of the bank. The case was consolidated with a petition for review of 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 A25 Prime rate charged by banks on short-term A5 Reserves of depository institutions, Reserve Bank 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— A3 5 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 A3 6 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

133 Federal Reserve Bulletin • July 1995 Domestic Financial Statistics—Continued A54 U.S. reserve assets A54 Foreign official assets held at Federal Reserve Banks REAL ESTATE A55 Selected U.S. liabilities to foreign official A37 Mortgage markets institutions A3 8 Mortgage debt outstanding REPORTED BY BANKS CONSUMER INSTALLMENT CREDIT IN THE UNITED STATES A3 9 Total outstanding A55 Liabilities to and claims on foreigners A3 9 Terms A56 Liabilities to foreigners A58 Banks' own claims on foreigners FLOW OF FUNDS A59 Banks' own and domestic customers' claims on foreigners A40 Funds raised in U.S. credit markets A59 Banks' own claims on unaffiliated foreigners A42 Summary of financial transactions A60 Claims on foreign countries—Combined A43 Summary of credit market debt outstanding domestic offices and foreign branches A44 Summary of financial assets and liabilities REPORTED BY NONBANKING BUSINESS Domestic Nonfinancial Statistics ENTERPRISES IN THE UNITED STATES SELECTED MEASURES A61 Liabilities to unaffiliated foreigners A62 Claims on unaffiliated foreigners A45 Nonfinancial business activity—Selected measures A45 Labor force, employment, and unemployment SECURITIES HOLDINGS AND TRANSACTIONS A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value A63 Foreign transactions in securities A49 Housing and construction A64 Marketable U.S. Treasury bonds and A50 Consumer and producer prices notes—Foreign transactions A51 Gross domestic product and income A52 Personal income and saving INTEREST AND EXCHANGE RATES International Statistics A65 Discount rates of foreign central banks A65 Foreign short-term interest rates SUMMARY STATISTICS A66 Foreign exchange rates A53 U.S. international transactions—Summary A67 Guide to Statistical Releases and A54 U.S. foreign trade Special Tables Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected G-10 Group of Ten e Estimated GNMA Government National Mortgage Association n.a. Not available GDP Gross domestic product n.e.c. Not elsewhere classified HUD Department of Housing and Urban P Preliminary Development r Revised (Notation appears on column heading IMF International Monetary Fund when about half of the figures in that column IO Interest only are changed.) IPCs Individuals, partnerships, and corporations * Amounts insignificant in terms of the last decimal IRA Individual retirement account place shown in the table (for example, less than MMDA Money market deposit account 500,000 when the smallest unit given is millions) 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 • July 1995 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1994 1995 1994 1995r MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q2 Q3 Q4 Q1 Dec. Ian. Feb. Mar. Apr. Reserves of depository institutions2 1 Total -3.1 -1.9 -3.3 -3.7 -1.2 -4.4 -4.2 -7.5 -12.2 2 Required -2.3 -1.9 -3.0 -4.0 -4.5 -8.0 3.9 -4.5 -11.5 3 Nonborrowed -4.2 -3.5 -2.1 -2.4 -.4 -2.9 -2.6 -7.7 -13.0 4 Monetary base3 8.4 7.5 6.9 6.4 4.1 8.1 3.6 8.6 7.8 Concepts of money, liquid assets, and debt* 5 Ml 2.7 2.4 -1.2 .0 .3 1.0 -1.8 .8 1.9 6 M2 1.7 .9 -,3r 1.7r 1.6r 3.9 -1.4 2.5 4.2 7 M3 1.3 2.1 1.7 4.3 3.7r 6.5 2.2 5.8 5.8 8 L 1.6 1.9 3.6r 9.1 11.2r 7.5 11.0 11.2 n.a. 9 Debt 4.8 4.7 5.5 5.5 4.3 5.3 6.9 5.3 n.a. Nontransaction components 10 In M25 1.3 .2 .r 2.4r 2.1r 5.3 -1.2 3.3 5.2 11 In M3 only6 -1.3 8.6r 13.2r 18.4r 14.6r 19.8 21.1 22.5 14.0 Time and savings deposits Commercial banks 12 Savings, including MMDAs -3.7 -4.6 -8.5 -13.2r -10.9 -13.1 -16.0 -17.8 -12.1 13 Small time7 .3 9.4 16.0 24.2r 20.4 23.9 27.2 31.1 23.0 14 Large time8'9 .8 13.1 19.4r 12.5r 18.4r -5.6 27.9 17.8 .4 Thrift institutions 15 Savings, including MMDAs -.4 -11.5 -17.6 -20.5r -19.9 -19.3 -24.9 -19.1 -16.8 16 Small time7 -5.8 .2 10.61 21.4r 5.71 21.2 31.6 33.7 28.9 17 Large time8 -3.5 6.8 12.0 23.6r 7.5 33.6 27.2 33.7 19.0 Money market mutual funds 18 General purpose and broker-dealer 11.9 5.7 7.5 7.9r 17.8 9.6 -1.8 -1.8 15.7 19 Institution-only -15.7 -4.5 7.3 10.0 2.0 36.5 -38.0 57.2 24.8 Debt components4 20 Federal 5.4 3.9 5.9 5.2 1.1 2.5 10.6 7.4 n.a. 21 Nonfederal 4.5 4.9 5.3 5.6 5.4 6.3 5.5 4.6 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 US. 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. Smil 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 1995 Feb. Mar. Apr. Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 400,034 404,515r 411,558 404,383 404,192' 406,148' 408,984 409,370 412,102 414,992 U.S. government securities 2 Bought outright—System account 361,651 364,433 367,512 364,415 364,029 365,474 364,317 368,652 367,303 368,234 3 Held under repurchase agreements 46 1,560 4,257 2,103 1,558 1,925 4,826 1,763 4,627 6,779 Federal agency obligations 4 Bought outright 3,542 3,478 3,404 3,491 3,491 3,455 3,408 3,408 3,408 3,402 5 Held under repurchase agreements 1 438 462 61 843 845 724 193 409 564 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 23 18 30 15 17 24 22 9 31 50 8 Seasonal credit 32 51 81 49 55 62 60 61 76 103 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 651 545r 533 420 448' 387' 329 323 1,158 466 11 Other Federal Reserve assets 34,086 33,991 35,278 33,830 33,751 33,975 35,298 34,962 35,091 35,394 12 Gold stock 11,050 11,052 11,054 11,051 11,053 11,053 11,053 11,053 11,055 11,055 13 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 14 Treasury currency outstanding 23,1 llr 23,187r 23,261 23,176' 23,196' 23,215' 23,234 23,248 23,262 23,276 ABSORBING RESERVE FUNDS 15 Currency in circulation 396,662r 400,531r 405,066 401,289' 401,290' 401,056' 402,521 404,768 406,009 405,805 16 Treasury cash holdings 339 352 361 349 353 358 362 367 363 356 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,753 5,141 6,155 5,175 6,000 4,600 5,138 4,978 6,178 7,065 18 Foreign 183 197 198 173 221 184 259 175 207 190 19 Service-related balances and adjustments .. 4,349 4,325 4,107 4,371 4,395 4,304 4,227 4,019 4,002 4,050 20 Other 426 393 360 384 404 385 411 369 367 318 21 Other Federal Reserve liabilities and capital ., 12,705 12,996 13,498 12,850 12,806 12,789 14,191 14,362 12,922 12,839 22 Reserve balances with Federal Reserve Banks; 21,797 22,837r 24,146 22,037 20,989' 24,757' 24,181 22,652 24,389 26,718 End-of-month figures Wednesday figures Feb. Mar. Apr. Mar. 15 ! Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 405,235 409,448' 411,549 411,183 404,816' 408,224' 408,449 412,365 412,606 419,666 U.S. government securities 2 Bought outright—System account 365,631 363,707 368,554 363,318 364,094 367,394 364,375 369,820 366,014 368,366 3 Held under repurchase agreements 0 5,593 2,750 9,018 1,935 1,930 4,450 3,356 7,346 10,012 Federal agency obligations 4 Bought outright 3,491 3,408 3,388 3,491 3,491 3,408 3,408 3,408 3,408 3,388 5 Held under repurchase agreements 0 1,105 500 325 900 1,171 500 450 400 1,550 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 18 25 43 18 17 52 16 5 25 75 8 Seasonal credit 36 59 112 53 57 63 59 66 84 116 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 1,892 57r 393 1,204 387' 55' 693 549 254 289 11 Other Federal Reserve assets 34,167 35,494r 35,809 33,757 33,935 34,150 34,948 34,711 35,074 35,870 12 Gold stock 11,050 11,053 11,055 11,051 11,053 11,053 11,053 11,054 11,055 11,055 13 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 14 Treasury currency outstanding 23,138r 23,234r 23,290 23,176' 23,196' 23,215' 23,234 23,248 23,262 23,276 ABSORBING RESERVE FUNDS 15 Currency in circulation 397,753r 401,630r 405,272 402,347' 401,836' 402,375' 404,259 406,386 407,017 406,475 16 Treasury cash holdings 340 361 356 352 358 361 367 364 356 356 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,890 4,543 8,241 5,470 4,413 4,389 5,007 4,410 5,923 8,128 18 Foreign 188 370 166 165 162 185 167 187 158 165 19 Service-related balances and adjustments .. 4,171 4,227' 4,395 4,371 4,395 4,304 4,227 4,019 4,002 4,050 20 Other 325 398 339 413 392 397 416 350 335 323 21 Other Federal Reserve liabilities and capital . 13,710 14,449 13,095 12,761 12,581 12,558 14,072 12,748 12,707 12,636 22 Reserve balances with Federal Reserve Banks: 24,062 25,776 22,048 27,550 22,947' 25,942' 22,238 26,221 24,443 29,882 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 U.S. 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 • July 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. Oct. Nov. Dec. Jan. Feb. Mar/ Apr. 1 Reserve balances with Reserve Banks 25,368 29,374 24,658 24,745 24,715 24,658 22,291 21,758 22,649 24,218 2 Total vault cash3 34,541 36,818 40,365 38,231 38,933 40,365 42,291 39,795r 38,518 38,099 3 Applied vault cash4 31,172 33,484 36,682 34,745 35,291 36,682 38,230 35,941 34,934 34,656 4 Surplus vault cash5 3,370 3,334 3,683 3,486 3,642 3,683 4,06 lr 3,855r 3,584 3,442 5 Total reserves6 56,540 62,858 61,340 59,490 60,006 61,340 60,521 57,699 57,583 58,875 6 Required reserves 55,385 61,795 60,172 58,686 58,999 60,172 59,182 56,752 56,789 58,121 7 Excess reserve balances at Reserve Banks7 1,155 1,063 1,168 804 1,008 1,168 1,339 946 794 753 8 Total borrowings at Reserve Banks8 124 82 209 380 249 209 136 59 69 111 9 Seasonal borrowings 18 31 100 339 164 100 46 33 51 82 10 Extended credit9 1 0 0 0 0 0 4 0 0 0 Biweekly averages of daily figures for two week periods ending on dates indicated 1995 Jan. 4 Jan. 18 Feb. 1 Feb. 15 Mar. 1 Mar. 15 Mar. 29r Apr. 12r Apr. 26 May 10 1 Reserve balances with Reserve Banks 25,189 23,958 19,603 21,028 22,710 22,316 22,869 23,412 25,542 22,003 2 Total vault cash3 39,967 42,165 43,143r 41,295r 37,924r 39,318r 37,773 38,433 37,481 39,261 3 Applied vault cash4 36,429 38,223 38,793 37,274 34,286 35,636 34,278 34,941 34,158 35,549 4 Surplus vault cash5 3,539 3,942 4,350r 4,02 lr 3,638r 3,682r 3,496 3,492 3,323 3,712 5 Total reserves6 61,618 62,181 58,396 58,302 56,995 57,952 57,147 58,353 59,700 57,552 6 Requited reserves 60,451 60,822 57,026 57,329 56,111 57,385 56,077 57,939 58,737 56,515 7 Excess reserve balances at Reserve Banks 1,167 1,360 1,370 973 885 566 1,070 414 963 1,037 8 Total borrowings at Reserve Banks8 246 68 176 51 60 59 79 76 130 148 9 Seasonal borrowings 95 38 41 31 36 44 59 61 90 124 10 Extended credit9 0 0 10 0 0 0 0 0 0 0 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 frontc over. 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 Banks1 Millions of dollars, averages of daily figures 1995, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Feb. 27 Mar. 6 Mar. 13 Mar. 20 Mar. 27 Apr. 3 Apr. 10 Apr. 17 Apr. 24 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 69,701 72,625 74,398 69,882 68,115 72,699 73,555 73,752 72,251 2 For all other maturities 14,853 15,823 16,308 16,714 17,463 18,120 19,323 22,179 17,752 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 18,988 18,601 18,407 18,882 21,227 21,250 20,049 18,994 22,459 4 For all other maturities 24,916 25,283 28,095 29,647 29,805 28,469 24,448 29,665 30,673 Repurchase agreements on US. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 21,324 21,213 21,790 27,744 27,267 24,955 24,738 20,415 23,646 6 For all other maturities 34,532 32,729 33,540 34,323 35,356 32,770 35,084 39,301 38,332 All other customers 7 For one day or under continuing contract 37,337 37,718 36,792 36,743 37,187 37,820 37,252 33,711 36,468 8 For all other maturities 18,981 18,979 18,752 17,898 18,557 17,433 16,302 20,032 16,982 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 65,706 66,526 63,537 65,881 60,591 62,801 57,092 61,151 62,282 10 To all other specified customers2 28,604 28,920 25,916 27,201 27,888 26,972 26,557 26,021 27,114 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.5 (507) weekly statistical release. For banks and official institutions, and U.S. 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 • July 1995 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit Seasonal credit Extended credit 6/ O 2/ n 9 5 Effective date 6/ O 2/ n 9 5 Previous rate 6/ O 2/ n 9 5 Previous rate 2/1/95 6.50 2/1/95 2/2/95 2/9/95 2/1/95 2/2/95 2/1/95 2/1/95 2/2/95 2/1/95 2/2/95 2/1/95 5/25/95 6.05 6.50 6.55 Range of rates for adjustment credit in recent years4 Range (or F.R. Range (or F.R. Range (or F.R. Effective date l A ev ll e l F ) . — R. B o an f k Effective date l A ev ll e l F ) . — R. B o an f k Effective date l A ev ll e l F ) . — 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. 1 8 0 11 1 - 2 1 2 1 1 2 2 Nov. 1 2 3 1 8.5 9 - 9 9 8 .5 24 3.5 3.5 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 July 2 1 8 6 10 1 - 1 1 1 1 1 1 0 1986—Mar. 1 7 0 7- 7 7 .5 7 7 Nov. 1 1 8 5 4-4 4 . 75 4 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 Jun. 2,1995 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 Type of deposit2 Net transaction accounts 1 $0 million-$54.0 million.. 12/20/94 2 More than $54.0 million4 . 12/20/94 3 Nonpersonal time deposits2 12/27/90 4 Eurocurrency liabilities6... 12/27/90 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 die 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 Garn-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 1l/2 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 'A 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'/! 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 • July 1995 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1994 1995 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 14,714 17,717 17,484 0 518 6,109 444 0 0 0 2 Gross sales 1,628 0 0 0 0 0 0 0 0 0 3 Exchanges 308,699 332,229 380,327 29,668 29,361 36,543 29,883 37,122 31,530 36,449 4 Redemptions 1,600 0 0 0 0 0 0 0 0 0 Others within one year 5 Gross purchases 1,096 1,223 1,238 151 450 0 125 0 0 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 36,662 31,368 0 961 460 1,790 -2,430 2,835 5,872 0 8 Exchanges -30,543 -36,582 -21,444 -2,203 0 -5,795 1,680 -3,167 -4,881 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 2,530 0 200 2,208 0 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -34,478 -27,140 -6,004 -837 -460 -1,123 2,430 -2,145 -5,115 0 13 Exchanges 25,811 0 17,801 2,203 0 4,192 -1,680 3,167 3,031 0 Five to ten years 14 Gross purchases 2,818 4,168 3,818 938 0 0 660 0 0 0 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -1,915 0 -3,145 -125 0 -278 0 -690 -757 0 17 Exchanges 3,532 0 2,903 0 0 1,603 0 0 1,150 0 More than ten years 18 Gross purchases 2,333 3,457 3,606 840 0 0 1,252 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -269 0 -918 0 0 -389 0 0 0 0 21 Exchanges 1,200 0 775 0 0 0 0 0 700 0 All maturities 22 Gross purchases 34,079 36,915 35,314 4,459 968 6,309 4,689 0 0 0 23 Gross sales 1,628 0 0 0 0 0 0 0 0 0 24 Redemptions 1,600 767 2,337 0 979 0 0 621 0 0 Matched transactions 25 Gross purchase 1,480,140 1,475,941 1,700,836 151,029 136,556 148,425 166,648 160,465 178,877 168,800 26 Gross sales 1,482,467 1,475,085 1,701,309 151,589 137,242 147,858 166,007 167,676 176,232 170,724 Repurchase agreements 27 Gross purchases 378,374 475,447 309,276 4,975 17,088 35,456 29,406 32,201 1,300 22,070 28 Gross sales 386,257 470,723 311,898 9,354 15,613 32,561 26,351 39,756 3,310 16,477 29 Net change in U.S. Treasury securities 20,642 41,729 29,882 -479 778 9,771 8,385 -15,387 634 3,669 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 31 62 70 37 91 55 83 Repurchase agreements 33 Gross purchases 14,565 35,063 52,696 3,620 2,868 8,615 5,090 5,243 25 4,926 34 Gross sales 14,486 34,669 52,696 4,982 2,838 7,360 5,720 4,948 1,345 3,821 35 Net change in federal agency obligations -554 -380 -1,002 -1,393 -32 1,185 -667 204 -1,375 1,022 36 Total net change in System Open Market Account... 20,089 41,348 28,880 -1,872 746 10,956 7,718 -15,183 -741 4,691 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 AAAccccccooouuunnnttt 1995 1995 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 Feb. 28 Mar. 31 Apr. 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,053 11,053 11,054 11,055 11,055 11,050 11,053 11,055 2 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 415 416 412 414 399 429 434 417 Loans 4 To depository institutions 115 75 71 109 191 54 84 115555 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 3,408 3,408 3,408 3,408 33,,338888 33,,449911 33,,440088 33,,338888 8 Held under repurchase agreements 1,171 500 450 400 1,550 0 1,105 500 9 Total U.S. Treasury securities 369,324 368,825 373,176 373,360 378,378 365,631 369,300 371,304 10 Bought outright2 367,394 364,375 369,820 366,014 368,366 365,631 363,707 368,554 11 Bills 180,874 177,855 178,774 175,338 177,690 179,111 177,187 177,878 12 Notes 143,773 143,773 146,824 146,454 146,454 143,773 143,773 146,454 13 Bonds 42,747 42,747 44,222 44,222 44,222 42,747 42,747 44,222 14 Held under repurchase agreements 1,930 4,450 3,356 7,346 10,012 0 5,593 2,750 15 Total loans and securities 374,019 372,808 377,105 377,277 383,507 369,176 373,897 375,347 16 Items in process of collection 4,693 5,699 5,352 5,616 5,273 9,161 3,611 4,312 17 Bank premises 1,081 1,081 1,083 1,085 1,085 1,078 1,080 1,085 Other assets 18 Denominated in foreign currencies3 23,657 24,549 24,017 24,034 24,054 24,743 25,286 2244,,440055 19 All other4 9,407 9,329 9,969 9,974 10,747 8,388 9,129 10,309 20 Total assets 432,342 432,953 437,010 437,474 444,140 432,044 432,508 434,948 LIABILITIES 21 Federal Reserve notes 379,936 381,808 383,914 384,525 383,954 375,385 379,191 382,754 22 Total deposits 35,519 31,920 35,539 34,995 42,626 36,469 35,320 35,085 23 Depository institutions 30,548 26,330 30,591 28,618 34,011 28,754 30,009 26,338 24 U.S. Treasury—General account 4,389 5,007 4,410 5,923 8,128 6,890 4,543 8,241 25 Foreign—Official accounts 185 167 187 158 165 188 370 166 26 Other 397 416 350 335 323 325 398 339 27 Deferred credit items 4,330 5,153 4,809 5,247 4,923 6,479 3,549 4,014 28 Other liabilities and accrued dividends 4,544 4,360 4,687 4,667 4,596 4,510 4,578 4,578 29 Total liabilities 424,328 423,242 428,949 429,434 436,099 422,843 422,638 426,432 CAPITAL ACCOUNTS 30 Capital paid in 3,781 3,789 3,793 3,793 3,793 3,768 3,786 3,794 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 32 Other capital accounts 549 2,239 585 564 564 1,749 2,401 1,039 33 Total liabilities and capital accounts 432,342 432,953 437,010 437,474 444,140 432,044 432,508 434,948 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 429,710 433,735 445,790 447,937 438,611 418,667 429,759 440,236 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 453,497 453,666 455,652 456,960 458,900 457,095 452,980 459,648 36 LESS: Held by Federal Reserve Banks 73,561 71,857 71,738 72,435 74,946 81,710 73,790 76,894 37 Federal Reserve notes, net 379,936 381,808 383,914 384,525 383,954 375,385 379,191 382,754 Collateral held against notes, net 38 Gold certificate account 11,053 11,053 11,054 11,055 11,055 11,050 11,053 11,055 39 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 40 Ctther eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 362,737 364,842 365,452 364,881 356,317 360,119 363,681 360,864 42 Total collateral 381,808 383,914 384,525 383,954 375,385 379,191 382,754 379,936 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 U.S. 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 • July 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 1995 1995 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 Feb. 28 Mar. 31 Apr. 30 1 Total loans 116 75 71 109 191 54 86 153 2 Within fifteen days' 110 28 24 105 184 38 82 146 3 Sixteen days to ninety days 6 47 48 5 7 16 4 7 0 0 0 0 0 9 Total U.S. Treasury securities 367,396 368,825 373,176 373,360 378,378 365,631 363,707 368,554 10 Within fifteen days' 21,375 21,543 17,100 22,528 27,972 11,471 9,764 11,454 11 Sixteen days to ninety days 84,013 89,046 89,164 84,370 83,895 89,928 94,316 94,921 12 Ninety-one days to one year 112,742 109,973 116,328 116,665 116,715 113,264 111,365 112,383 13 One year to five years- 86,730 85,728 88,277 87,850 87,850 87,864 85,728 87,850 14 Five years to ten years 26,990 26,990 25,623 25,263 25,263 27,561 26,990 25,263 15 More than ten years 35,545 35,545 36,683 36,683 36,683 35,545 35,545 36,683 16 Total federal agency obligations 3,409 3,908 3,857 3,808 4,937 3,491 3,408 3,388 17 Within fifteen days' 216 500 470 550 1,680 255 215 160 18 Sixteen days to ninety days 524 524 729 599 617 448 524 587 19 Ninety-one days to one year 782 997 802 802 831 888 782 831 20 One year to five years 1,405 1,405 1,415 1,415 1,368 1,418 1,405 1,368 21 Five years to ten years 457 457 417 417 417 457 457 417 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 NOTE. Total acceptances data have been deleted from this table because data are no in accordance with maximum maturity of the agreements. longer available. 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 IItteemm 1 D 9 e 9 c 1 . 1 D 9 e 9 c 2 . 1 D 9 e 9 c 3 . D 19 e 9 c 4 . Sept. Oct. Nov. Dec. Jan. Feb. Mar/ Apr. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 45.54 54.35 60.50 59.34 59.79 59.50 59.40 59.34 59.12 58.92 58.55 57.96 2 Nonborrowed reserves 45.34 54.23 60.42 59.13 59.31 59.12 59.15 59.13 58.99 58.86 58.48 57.85 3 Nonborrowed reserves plus extended credit 45.34 54.23 60.42 59.13 59.31 59.12 59.15 59.13 58.99 58.86 58.48 57.85 4 Required reserves 44.56 53.20 59.44 58.17 58.73 58.69 58.39 58.17 57.79 57.97 57.76 57.21 5 Monetary base 317.43 351.12 386.60 418.22 411.34 413.85 416.79 418.22 421.05 422.31 425.35 428.12 Not seasonally adjusted 6 Total reserves 46.98 56.06 62.37 61.13 59.73 59.24 59.73 61.13 60.52 57.72 57.62 58.93 7 Nonborrowed reserves 46.78 55.93 62.29 60.92 59.24 58.86 59.48 60.92 60.38 57.66 57.55 58.82 8 Nonborrowed reserves plus extended credir 46.78 55.93 62.29 60.92 59.24 58.86 59.48 60.92 60.39 57.66 57.55 58.82 9 Required reserves8 46.00 54.90 61.31 59.96 58.67 58.44 58.72 59.96 59.18 56.78 56.83 58.18 10 Monetary base 321.07 354.55 390.59 422.51 411.37 413.15 417.08 422.51 421.84 419.25 423.27 428.73 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 55.53 56.54 62.86 61.34 59.95 59.49 60.01 61.34 60.52 57.70 57.58 58.88 12 Nonborrowed reserves 55.34 56.42 62.78 61.13 59.47 59.11 59.76 61.13 60.39 57.64 57.51 58.76 13 Nonborrowed reserves plus extended credit 55.34 56.42 62.78 61.13 59.47 59.11 59.76 61.13 60.39 57.64 57.51 58.76 14 Required reserves 54.55 55.39 61.80 60.17 58.89 58.69 59.00 60.17 59.18 56.75 56.79 58.12 15 Monetary base12. 333.61 360.90 397.62 427.25 416.70 418.19 421.90 427.25 426.31 423.57 427.56 432.79 16 Excess reserves .98 1.16 1.06 1.17 1.06 .80 1.01 1.17 1.34 .95 .79 .75 17 Borrowings from the Federal Reserve .19 .12 .08 .21 .49 .38 .25 .21 .14 .06 .07 .11 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 • July 1995 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1995 1991 1992 1993 1994 Dec. Dec. Dec. Dec. Jan.r Feb.r Mar.r Apr. Seasonally adjusted Measures2 1 Ml 897.3 1,024.4 1,128.6 1,147.8 1,148.8 1,147.1 1,147.9 1,149.7 2 M2 3,457.9 3,515.3 3,583.6 3,615.1r 3,626.9 3,622.7 3,630.3 3,642.9 3 M3 4,176.0 4,182.9 4,242.5 4,304.5r 4,327.7 4,335.8 4,356.8 4,377.9 4 L 4,990.9 5,061.1 5,150.3 5,294^ 5,327.0 5,375.8 5,426.0 n.a. 5 Debt 11,171.1 11,706.1 12,335.3 12,965.0 13,021.9 13,096.8 13,154.9 n.a. Ml components 6 Currency3 267.4 292.8 322.1 354.5 357.7 358.8 362.5 365.7 7 Travelers checks4 7.7 8.1 7.9 8.4 8.4 8.4 8.8 9.2 8 Demand deposits5 289.5 338.9 383.9 382.0 383.4 384.0 383.2 381.2 9 Other checkable deposits6 332.7 384.6 414.7 402.9 399.3 395.9 393.3 393.6 Nontransaction components 10 In M27 2,560.6 2,490.9 2,455.0 2,467.2r 2,478.1 2,475.6 2,482.4 2,493.2 11 In M38 only 718.1 667.6 658.9 689.4r 700.8 713.1 726.5 735.0 Commercial banks 12 Savings deposits, including MMDAs 665.6 754.7 785.8 752.3 744.1 734.2 723.3 716.0 13 Small time deposits 602.5 508.1 468.6 502.4 512.4 524.0 537.6 547.9 14 Large time deposits10' 11 333.3 286.7 271.2 298.3r 296.9 303.8 308.3 308.4 Thrift institutions 15 Savings deposits, including MMDAs 375.6 428.9 429.8 391.9 385.6 377.6 371.6 366.4 16 Small time deposits9 464.1 361.1 316.5 317.3r 322.9 331.4 340.7 348.9 17 Large time deposits10 83.3 67.1 61.6 64.3 66.1 67.6 69.5 70.6 Money market mutual funds 18 General purpose and broker-dealer 374.2 356.9 360.1 389.0 392.1 391.5 390.9 396.0 19 Institution-only 180.0 200.2 198.1 180.8 186.3 180.4 189.0 192.9 Debt components 20 Federal debt 2,763.3 3,067.9 3,328.0 3,497.4 3,504.7 3,535.8 3,557.5 n.a. 21 Nonfederal debt 8,407.8 8,638.1 9,007.3 9,467.6 9,517.2 9,561.0 9,597.4 n.a. Not seasonai lly adjusted Measures2 22 Ml 916.0 1,046.0 1,153.7 1,173.5 1,158.5 1,134.2 1,138.0 1,158.7 23 M2 3,472.7 3,533.6 3,606.1 3,638.6r 3,633.4 3,609.0 3,628.3 3,659.3 24 M3 4,189.4 4,201.4 4,266.3 4,330.6' 4,337.4 4,324.5 4,352.6 4,389.7 25 L 5,015.5 5,090.8 5,184.9 5,331.7r 5,350.1 5,367.5 5,425.4 n.a. 26 Debt 11,168.5 11,708.9 12,327.4 12,956.8 12,996.6 13,043.9 13,106.6 n.a. Ml components 27 Currency3 226699..99 295.0 324.8 357.6 355.9 357.1 361.4 365.5 28 Travelers checks4 7.4 7.8 7.6 8.1 8.1 8.1 8.4 8.8 29 Demand deposits5 302.4 354.4 401.8 400.1 388.7 374.9 374.0 382.0 30 Other checkable deposits6 336.3 388.9 419.4 407.6 405.7 394.1 394.2 402.4 Nontransaction components 31 In M27 2,556.6 2,487.7 2,452.4 2,465. lr 2,475.0 2,474.8 2,490.2 2,500.6 32 In M38 716.7 667.7 660.2 692.0" 704.0 715.6 724.3 730.4 Commercial banks 33 Savings deposits, including MMDAs 664.0 752.9 784.3 751.1 739.5 729.8 723.4 717.8 34 Small time deposits9 601.9 507.8 468.2 502.0 512.9 524.1 537.4 547.3 35 Large time deposits10' 11 332.6 286.2 270.8 298.0r 295.5 302.3 306.2 306.2 Thrift institutions 36 Savings deposits, including MMDAs 374.8 427.9 429.0 391.2 383.2 375.3 371.6 367.4 37 Small time deposits9 463.7 360.9 316.2 317. lr 323.2 331.5 340.6 348.5 38 Large time deposits10 83.1 67.0 61.5 64.3 65.8 67.2 69.1 70.1 Money market mutual funds 39 General purpose and broker-dealer 372.2 355.1 358.3 387.1 392.8 396.3 399.8 404.8 40 Institution-only 180.8 201.7 200.0 183.1 192.4 188.8 190.8 191.3 Repurchase agreements and Eurodollars 41 Overnight and continuing 79.9 83.2 96.5 116.7r 123.4 117.8 117.6 114.9 42 Term 132.7 127.8 144.1 159.0 164.0 170.5 171.4 176.1 Debt components 43 Federal debt 2,765.0 3,069.8 3,329.5 3,499.0 3,499.0 3,525.0 3,551.1 n.a. 44 Nonfederal debt 8,403.5 8,639.1 8,997.9 9,457.7 9,497.6 9,518.9 9,555.5 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 U.S. 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 U.S. 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 U.S. 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 • July 1995 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1994 1995 1992 1993 Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr. Interest rates (annual effective yields)2 INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts 2.33 1.86 1.85 1.87 1.88 1.92 1.96 1.98 2.01 2.00 2.00 2 Savings deposits3 2.88 2.46 2.63 2.67 2.72 2.81 2.91 2.98 3.09 3.14 3.15 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 2.90 2.65 3.29 3.36 3.47 3.65 3.81 3.96 4.19 4.24 4.28 4 92 to 182 days 3.16 2.91 3.61 3.75 3.93 4.22 4.44 4.67 4.83 4.97 4.95 5 183 days to 1 year 3.37 3.13 4.11 4.27 4.50 4.85 5.12 5.39 5.57 5.60 5.60 6 More than 1 year to 2Vi years 3.88 3.55 4.61 4.80 5.08 5.42 5.74 6.00 6.12 6.12 6.05 7 More than 1V2 years 4.77 4.29 5.33 5.47 5.77 6.09 6.30 6.47 6.52 6.45 6.36 BIF-INSURED SAVINGS BANKS4 8 Negotiable order of withdrawal accounts 2.45 1.87 1.89 1.91 1.88 1.91 1.95 1.99 2.04 1.99 2.02 9 Savings deposits3 3.20 2.63 2.74 2.78 2.76 2.83 2.88 2.91 2.95 2.94 2.95 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 3.13 2.70 3.03 3.11 3.32 3.51 3.80 3.98 4.17 4.21 4.20 11 92 to 182 days 3.44 3.02 3.69 3.87 4.10 4.42 4.89 5.13 5.33 5.37 5.36 12 183 days to 1 year 3.61 3.31 4.24 4.47 4.80 5.18 5.52 5.75 5.94 5.94 5.89 13 More than 1 year to 2VI years 4.02 3.66 4.83 5.04 5.39 5.70 6.09 6.29 6.37 6.32 6.23 14 More than 2VS years 5.00 4.62 5.47 5.64 5.79 6.18 6.43 6.68 6.75 6.68 6.59 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts 286,541 305,223 295,320 286,787 294,072 294,282 303,724 291,355 290,188 292,811 287,068 16 Savings deposits3 738,253 766,413 764,035 755,249 751,183 746,605 734,519 723,295 714,955 713,440 699,196 17 Personal 578,757 597,838 600,892 595,175 590,875 584,628 578,459 569,619 564,877 564,086 551,193 18 Nonpersonal 159,496 168,575 163,143 160,074 160,308 161,977 156,060 153,676 150,078 149,354 148,002 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 38,474 29,455 27,959 28,312 31,447 31,077 32,375 32,154 31,777 31,623 31,702 20 92 to 182 days 127,831 110,069 98,085 96,398 95,359 94,692 95,901 96,895 98,248 95,583 94,556 21 183 days to 1 year 163,098 146,565 155,964 157,253 158,753 159,645 161,831 163,939 169,103 176,657 179,579 22 More than 1 year to 2Vi years 152,977 141,223 150,807 152,514 155,111 158,382 162,486 168,515 176,877 183,275 190,197 23 More than 2vi years 169,708 181,528 186,490 190,209 188,479 189,741 190,897 190,215 191,383 194,722 193,324 24 IRA and Keogh plan deposits 147,350 143,985 142,617 142,700 142,896 143,075 143,428 143,900 145,040 145,959 146,649 BIF-INSURED SAVINGS BANKS4 25 Negotiable order of withdrawal accounts 10,871 11,151 11,016 10,769 11,120 11,002 11,317 11,127 10,950 11,218 11,006 26 Savings deposits3 81,786 80,115 75,108 74,659 73,416 72,622 70,642 71,639 69,982 68,595 67,349 27 Personal 78,695 77,035 72,040 71,525 70,215 69,412 67,673 68,760 67,144 65,692 64,445 28 Nonpersonal 3,091 3,079 3,068 3,134 3,201 3,211 2,969 2,878 2,837 2,902 2,904 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 3,867 2,793 2,523 2,402 2,245 2,209 2,166 2,041 2,086 1,943 1,864 30 92 to 182 days 17,345 12,946 12,292 12,276 11,987 11,913 11,793 12,084 11,953 11,707 11,420 31 183 days to 1 year 21,780 17,426 17,593 17,928 18,123 18,509 18,753 19,336 19,979 20,277 20,547 32 More than 1 year to 2Vi years 18,442 16,546 16,824 17,287 17,519 17,999 17,842 20,460 21,870 22,648 23,350 33 More than 2Vz years 18,845 20,464 21,531 21,923 21,624 21,687 21,600 21,888 22,275 22,446 22,934 34 IRA and Keogh plan accounts 21,713 19,356 19,445 19,532 19,550 19,532 19,325 19,802 20,099 20,221 20,420 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 1995 BBaannkk ggrroouupp,, oorr ttyyppee ooff ddeeppoossiitt Sept. Oct. Nov. Dec. Jan/ Feb. DEBITS Seasonally adjusted Demand deposits3 1 All insured banks 313,128.1 334,245.6 367,129.2 368,276.6 352,375.9 369,211.3 371,048.0 364,951.0 381,731.4 2 Major New York City banks 165,447.7 171,227.3 191,169.8 186,074.2 179,396.2 186,350.6 187,955.6 183,419.3 195,142.7 3 Other banks 147,680.4 163,018.3 175,959.4 182,202.4 172,979.7 182,860.7 183,092.4 181,531.6 186,588.7 4 Other checkable deposits4 3,780.3 3,467.1 3,831.4 3,905.1 3,896.7 4,116.4 4,199.0 4,056.6 3,984.6 5 Savings deposits (including MMDAs)5 3,309.1 3,508.8 3,737.1 3,760.0 3,639.6 3,835.7 4,033.1 3,861.2 3,954.3 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 825.9 785.3 813.0 815.5 783.6 826.5 820.6 810.0 851.2 7 Major New York City banks 4,795.3 4,198.1 4,481.6 4,502.1 4,414.6 4,544.7 4,490.8 4,337.5 4,662.4 8 Other banks 428.7 423.6 430.3 444.1 422.9 450.7 446.3 444.7 458.9 9 Other checkable deposits4 14.4 11.8 12.8 13.0 13.0 13.9 14.2 13.8 13.6 10 Savings deposits (including MMDAs)5 4.7 4.6 4.9 4.9 4.8 5.1 5.4 5.3 5.5 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 313,344.9 334,354.6 367,218.8 365,063.0 352,548.5 359,229.9 384,218.7 363,926.8 353,562.1 12 Major New York City banks 165,595.0 171,283.5 191,226.1 186,161.8 181,406.6 184,656.3 194,120.1 181,602.7 181,697.8 13 Other banks 147,749.9 163,071.0 175,992.8 178,901.2 171,141.8 174,573.5 190,098.6 182,324.1 171,864.3 14 Other checkable deposits4 3,783.6 3,467.5 3,827.9 3,960.9 3,797.1 3,845.9 4,365.1 4,404.5 3,671.0 15 Savings deposits (including MMDAs)5 3,310.0 3,509.5 3,734.9 3,716.4 3,472.2 3,640.4 4,244.8 4,036.4 3,579.2 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 826.1 785.4 813.8 811.9 774.5 785.9 814.9 791.1 806.7 17 Major New York City banks 4,803.5 4,197.9 4,490.3 4,539.5 4,435.8 4,391.6 4,343.4 4,128.1 4,334.9 18 Other banks 428.8 423.8 430.6 437.8 413.1 420.6 445.4 438.2 433.6 19 Other checkable deposits4 14.4 11.8 12.7 13.3 12.9 13.0 14.5 14.6 12.5 20 Savings deposits (including MMDAs)5 4.7 4.6 4.9 4.9 4.6 4.8 5.7 5.5 4.9 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 • July 1995 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Billions of dollars Monthly averages Wednesday figures Account 1994r 1995r 1995 Apr. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Apr. 5 Apr. 12 Apr. 19 Apr. 26 ALL COMMERCIAL Seasonally adjusted BANKING INSTITUTIONS Assets 1 Bank credit 3,203.2 3,289.4 3,297.6 3,316.1 3,349.1 3,362.2 3,385.1 3,424.5 3,406.8 3,414.9 3,428.0 3,435.7 2 Securities in bank credit 967.9 959.0 951.4 946.9 945.5 936.9 939.2 951.6 945.9 951.8 955.4 952.8 3 U.S. government securities 756.7 731.8 724.3 720.2 721.7 716.8 704.5 704.4 704.0 704.1 704.5 705.1 4 Other securities 211.2 227.1 227.1 226.7 223.8 220.1 234.7 247.2 242.0 247.7 251.0 247.8 5 Loans and leases in bank credit2 ... 2,235.3 2,330.5 2,346.2 2,369.1 2,403.6 2,425.3 2,445.9 2,472.9 2,460.9 2,463.1 2,472.5 2,482.9 6 Commercial and industrial 603.2 633.9 639.6 644.6 657.7 669.6 673.1 682.0 675.6 680.7 680.9 685.5 7 Real estate 948.5 985.9 991.6 999.8 1,015.1 1,022.8 1,028.4 1,036.0 1,032.2 1,033.9 1,036.3 1,038.7 8 Revolving home equity 73.3 75.1 75.7 76.2 76.7 77.0 77.2 78.0 77.6 77.8 78.1 78.2 9 Other 875.2 910.8 915.8 923.6 938.5 945.9 951.2 958.0 954.6 956.1 958.2 960.5 10 Consumer 408.2 441.6 445.8 452.2 457.5 459.5 465.1 471.0 470.2 470.5 471.2 471.0 11 Security3 79.0 70.4 69.7 70.9 68.6 67.8 69.7 73.2 72.9 68.3 74.2 74.8 12 Other 196.4 198.6 199.6 201.6 204.6 205.5 209.6 210.6 209.9 209.6 209.9 212.9 13 Interbank loans4 149.9 165.6 172.3 175.0 179.0 177.7 180.0 178.5 174.0 177.2 175.2 187.0 14 Cash assets5 210.6 208.9 205.9 208.9 219.4 216.0 207.1 208.6 201.4 207.3 207.0 218.4 15 Other assets6 221.9 221.2 221.1 227.6 236.7 242.3 244.4 253.3 252.7 252.1 253.9 253.0 16 Total assets7 3,7283 3,840.7 3,871.4 3,927.2 3,941.6 3,960.2 4,007.8 3,978.0 3,994.6 4,007.0 4,037.1 Liabilities 17 Deposits 2,507.2 2,526.5 2,522.6 2,528.7 2,544.0 2,547.2 2,548.2 2,556.7 2,546.4 2,552.3 2,554.7 2,568.1 18 Transaction 803.4 804.9 797.7 797.6 808.6 804.9 795.6 791.3 792.7 791.9 789.2 795.0 19 Nontransaction 1,703.8 1,721.7 1,724.9 1,731.1 1,735.3 1,742.2 1,752.6 1,765.4 1,753.7 1,760.4 1,765.5 1,773.2 20 Large time 336.6 354.1 358.3 361.4 365.7 373.0 379.4 385.1 378.7 383.6 385.2 389.3 21 Other 1,367.2 1,367.6 1,366.6 1,369.7 1,369.6 1,369.3 1,373.2 1,380.4 1,375.0 1,376.8 1,380.3 1,383.9 22 Borrowings 569.3 583.6 590.6 606.5 640.1 642.4 647.6 672.7 649.1 661.9 676.6 695.3 23 From banks in the U.S 152.3 165.4 169.3 176.8 181.1 178.5 182.0 181.5 177.4 181.6 177.4 191.0 24 From nonbanks in the U.S 417.1 418.2 421.3 429.7 459.0 464.0 465.6 491.2 471.7 480.3 499.1 504.3 25 Net due to related foreign offices 174.2 214.6 213.5 225.6 244.9 252.5 241.3 235.0 238.5 229.3 238.7 236.2 26 Other liabilities8 174.4 179.7 177.4 181.2 175.7 179.7 197.2 218.5 213.6 216.7 221.1 218.8 27 Total UabiUties 3,425.1 3,504.5 3,504.2 33410 3,604.7 3,621.8 3,634.2 3,6m 3,647.6 3,660.2 3,691.0 3,7184 28 Residual (assets less liabilities)9 303.2 324.0 336.5 329.4 322.5 319.8 326.0 325.0 330.5 334.4 316.0 318.7 Not seasonally adjusted Assets 29 Bank credit 3,203.9 3,289.8 3,306.1 3,332.0 3,345.1 3,358.0 3,385.6 3,425.7 3,409.2 3,413.8 3,436.4 3,429.5 30 Securities in bank credit 973.6 957.8 952.8 942.2 939.5 935.7 946.9 958.3 958.5 960.2 963.0 953.6 31 U.S. government securities 761.2 731.2 725.3 719.1 715.6 712.4 709.4 708.7 711.6 709.1 709.7 706.2 32 Other securities 212.4 226.6 227.5 223.2 224.0 223.2 237.4 249.5 246.9 251.0 253.2 247.4 33 Loans and leases in bank credit2 . . . 2,230.3 2,331.9 2,353.3 2,389.8 2,405.6 2,422.4 2,438.7 2,467.4 22,,445500..77 2,453.6 2,473.5 2,475.9 34 Commercial and industrial 607.1 631.7 639.7 645.3 654.4 668.2 676.3 686.5 668800..88 682.4 686.9 689.5 35 Real estate 944.8 988.6 996.3 1,006.2 1,013.5 1,019.0 1,023.6 1,031.8 1,027.4 1,029.7 1,032.1 1,034.2 36 Revolving home equity 72.8 75.8 76.1 76.3 76.6 76.6 76.5 77.5 76.7 77.0 77.6 77.9 37 Other 872.0 912.8 920.2 930.0 936.8 942.3 947.0 954.4 950.7 952.7 954.5 956.2 38 Consumer 405.4 441.7 446.0 457.2 462.2 460.7 461.6 467.8 465.4 466.0 468.2 469.2 39 Security3 79.9 70.1 71.3 75.5 70.8 71.0 70.9 74.0 68.7 69.6 78.8 75.5 40 Other 193.2 199.8 200.0 205.6 204.8 203.5 206.3 207.3 208.4 205.9 207.4 207.5 41 Interbank loans4 150.1 163.8 173.9 185.7 185.9 179.8 178.3 178.0 180.0 179.5 175.2 179.4 42 Cash assets5 207.0 209.4 212.4 222.8 224.8 212.6 201.4 204.9 198.9 203.8 206.5 207.8 43 Other assets6 218.2 223.1 223.9 233.3 236.5 240.0 239.7 248.8 248.5 246.6 248.3 247.1 44 Total assets7 3,7222 3,829.5 3,859.7 3,9173 3,935.8 3,933.8 3,9483 4,000.6 3,980.1 3,987.1 4,009.6 4,007.1 Liabilities 45 Deposits 2,510.9 2,522.1 2,537.7 2,561.5 2,547.9 2,537.9 2,538.4 2,559.6 2^68.2 2,569.4 2,562.8 2,538.0 46 Transaction 808.6 802.1 811.9 833.3 818.9 796.0 783.4 796.1 808.8 805.4 802.5 774.0 47 Nontransaction 1,702.3 1,720.0 1,725.8 1,728.2 1,728.9 1,741.8 1,755.0 1,763.5 1,759.3 1,763.9 1,760.3 1,764.1 48 Large time 335.7 352.0 357.5 359.9 362.5 373.2 380.6 383.7 377.1 381.0 383.5 388.2 49 Other 1,366.7 1,368.0 1,368.3 1,368.3 1,366.4 1,368.6 1,374.5 1,379.8 1,382.2 1,382.9 1,376.8 1,375.9 50 Borrowings 556.9 591.5 603.9 619.2 633.0 638.6 636.8 655.2 635.2 643.3 663.7 667.8 51 From banks in the U.S 150.2 163.5 173.6 185.7 185.9 179.8 178.3 178.0 180.0 179.5 175.2 179.4 52 From nonbanks in the U.S 406.7 428.0 430.3 433.4 447.2 458.8 458.5 477.1 455.2 463.8 488.5 488.4 53 Net due to related foreign offices 175.5 214.4 213.2 230.3 251.5 249.6 245.2 237.5 231.6 227.9 234.6 253.6 54 Other liabilities8 170.4 181.6 182.6 184.2 178.6 180.4 196.3 213.3 210.2 211.5 214.0 213.0 55 Total liabilities 3,413.6 3,509.6 3,537.5 3,595.2 3,611.0 3,6064 3,616.8 3,665.6 3,645.1 3,652.0 3,675.0 3,6724 56 Residual (assets less liabilities)9 308.6 319.9 322.3 322.1 324.8 327.5 331.5 335.0 335.0 335.1 334.6 334.7 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 1995r 1995 Apr. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Apr. 5 Apr. 12 Apr. 19 Apr. 26 DOMESTICALLY CHARTERED Seasonally adjusted COMMERCIAL BANKS Assets 57 Bank credit 2,854.0 2,940.0 2,950.0 2,966.0 2,997.5 3,000.6 3,019.2 3,051.0 3,038.7 3,044.0 3,054.3 3,058.6 58 Securities in bank credit 884.7 875.5 871.0 868.6 864.3 848.3 851.6 860.5 855.6 860.9 863.5 861.6 59 U.S. government securities 694.8 674.8 670.6 669.0 668.4 656.7 646.1 643.1 643.5 644.0 642.7 642.8 60 Other securities 189.9 200.7 200.4 199.5 195.9 191.5 205.6 217.3 212.1 216.9 220.8 218.8 61 Loans and leases in bank credit2 1,969.3 2,064.5 2,079.0 2,097.4 2,133.2 2,152.3 2,167.6 2,190.5 2,183.1 2,183.0 2,190.9 2,197.1 6? Commercial and industrial 448.3 473.6 476.7 480.3 492.1 499.0 502.3 510.3 505.9 509.1 510.1 513.0 63 Real estate 904.2 944.4 950.2 958.7 974.6 982.8 988.9 997.3 993.6 995.0 997.6 999.9 64 Revolving home equity 73.3 75.1 75.7 76.2 76.7 77.0 77.2 78.0 77.6 77.8 78.1 78.2 65 Other 830.9 869.3 874.5 882.5 897.9 905.8 911.6 919.2 916.0 917.2 919.5 921.7 66 Consumer 408.2 441.6 445.8 452.2 457.5 459.5 465.1 471.0 470.2 470.5 471.2 471.0 67 Security3 50.6 45.5 46.0 45.4 45.5 46.5 45.9 45.4 46.2 42.4 46.4 45.9 68 Other 158.0 159.3 160.2 160.8 163.6 164.4 165.5 166.5 167.2 166.1 165.6 167.2 69 Interbank loans4 125.1 140.6 148.6 151.4 155.0 155.1 156.4 157.2 153.5 159.4 152.9 162.3 70 Cash assets5 184.0 185.1 181.4 181.7 192.1 190.2 181.0 181.3 175.4 180.8 179.6 189.8 71 Other assets6 173.3 167.4 167.3 167.8 171.5 173.2 168.2 165.6 166.9 165.9 166.9 164.4 72 Total assets7 3,279.2 3,3764 3,391.1 3,410.8 3,4593 3,462.7 3,468^ 3,498.1 3,477.6 3,4933 3,496.7 3,518.1 Liabilities 73 Deposits 2,363.1 2,371.2 2,367.8 2,370.8 2,390.3 2,395.7 2,393.9 2,396.0 2391.6 2,393.7 2,393.6 2,402.2 74 793.0 795.0 787.8 787.4 798.6 794.7 784.9 780.9 782.1 781.2 778.9 784.6 75 Nontransaction 1,570.1 1,576.2 1,580.0 1,583.5 1,591.7 1,601.0 1,609.1 1,615.2 1,609.4 1,612.5 1,614.7 1,617.5 76 Large time 207.2 212.9 217.3 218.7 226.1 235.2 239.8 240.9 238.5 240.2 241.4 241.5 77 Other 1,362.9 1,363.3 1,362.7 1,364.8 1,365.6 1,365.9 1,369.3 1,374.3 1,370.9 1,372.3 1,373.3 1,376.0 78 Borrowings 466.9 484.3 491.0 505.4 540.0 539.1 536.7 560.0 541.6 551.3 563.6 579.1 79 From banks in the U.S 133.2 149.6 154.2 162.3 164.5 161.4 164.3 162.5 159.0 163.3 158.5 170.5 80 From nonbanks in the U.S 333.7 334.7 336.8 343.2 375.5 377.7 372.5 397.6 382.6 388.0 405.0 408.6 81 Net due to related foreign offices.... 20.3 65.4 66.4 77.4 91.5 87.9 85.2 82.3 77.4 78.5 81.3 90.7 82 Other liabilities8 132.8 134.6 133.2 129.3 121.0 122.1 132.1 142.9 139.8 143.2 145.0 143.0 83 Total liabilities 24W3.2 3,055.5 3,0584 3,083.0 3,1428 3,144.8 3,148.0 3,181.2 3,1504 3,166.7 3,183.5 3,215.0 84 Residual (assets less liabilities)9 296.0 320.9 332.7 327.8 316.5 317.9 320.5 316.8 327.2 326.5 313.2 303.1 Not seasonally adjusted Assets 85 Bank credit 2,857.7 2,942.0 2,958.1 2,973.6 2,988.4 2,996.0 3,018.5 3,055.2 3,043.9 3,047.6 3,063.0 3,056.4 86 Securities in bank credit 891.6 873.9 871.6 862.3 856.8 847.4 858.4 868.3 868.0 870.6 872.6 864.5 87 U.S. government securities 700.3 673.9 670.4 665.9 660.9 653.6 650.4 648.5 651.4 650.3 649.3 645.5 88 Other securities 191.2 200.0 201.2 196.4 195.9 193.8 208.0 219.8 216.6 220.3 223.3 219.0 89 Loans and leases in bank credit2 1,966.1 2,068.1 2,086.5 2,111.3 2,131.6 2,148.5 2,160.1 2,186.9 2,175.8 2,177.0 2,190.4 2,192.0 90 Commercial and industrial 452.0 472.5 476.9 480.0 488.5 498.5 505.0 514.6 510.2 511.3 515.2 517.2 91 Real estate 900.8 947.0 954.9 965.1 973.0 978.8 984.0 993.4 989.0 991.1 993.7 995.9 97 Revolving home equity 72.8 75.8 76.1 76.2 76.6 76.6 76.5 77.5 76.7 77.0 77.6 77.9 93 Other 828.0 871.3 878.8 888.9 896.4 902.2 907.4 915.9 912.2 914.1 916.2 918.0 94 Consumer 405.4 441.7 446.0 457.2 462.2 460.7 461.6 467.8 465.4 466.0 468.2 469.2 95 Security3 52.0 46.0 47.2 45.9 44.9 47.8 46.6 46.8 44.8 44.8 49.4 46.4 96 Other 155.9 160.9 161.5 163.1 163.0 162.7 163.0 164.3 166.6 163.8 163.9 163.2 97 125.5 137.9 150.3 159.7 160.4 158.1 155.8 157.0 159.6 162.5 153.9 153.9 98 181.2 184.8 188.0 195.4 198.0 187.8 176.0 178.4 173.8 178.1 179.7 180.1 99 Other assets6 170.8 169.6 169.0 170.1 171.0 171.0 165.2 163.2 165.6 163.1 163.2 161.1 100 Total assets7 3,2783 3,377.8 3,408.9 3,442.3 3,461.4 3,4563 3,458.9 3,497.1 3,4864 3,494.7 3,503.1 3494.9 Liabilities 101 2,367.7 2,370.4 2,384.4 2,403.7 2,394.6 2,385.7 2,382.3 2,400.2 2,414.4 2,413.6 2,403.6 2,372.4 10? 798.6 792.0 802.0 822.8 808.8 785.8 773.1 786.1 798.7 795.2 792.8 763.9 103 1,569.1 1,578.4 1,582.5 1,580.9 1,585.8 1,599.9 1,609.1 1,614.1 1,615.7 1,618.4 1,610.7 1,608.5 104 206.6 213.8 217.5 217.1 224.0 235.4 238.6 240.2 237.4 239.9 240.4 240.8 105 Other 1,362.5 1,364.7 1,365.0 1,363.8 1,361.9 1,364.5 1,370.5 1,373.9 1,378.4 1,378.6 1,370.4 1,367.7 106 Borrowings 454.6 492.1 504.5 516.7 533.9 537.6 527.7 542.6 525.9 532.2 549.6 554.4 107 From banks in the U.S 132.2 148.3 158.0 169.8 168.7 163.1 160.6 160.0 160.6 161.7 156.9 162.1 108 From nonbanks in the U.S 322.5 343.8 346.6 347.0 365.2 374.6 367.1 382.6 365.3 370.5 392.7 392.4 109 Net due to related foreign offices .... 21.9 63.2 64.9 74.3 90.2 88.7 90.1 84.6 77.2 78.6 80.1 99.4 110 Other liabilities8 129.9 137.1 137.7 130.5 122.8 121.8 1325 139.8 139.0 140.3 140.5 139.1 111 Total liabilities 2^74.1 3,0628 3,091.6 3,1252 3,141.5 3,133.8 3,1325 3,1673 3,156^ 3,164.7 3,173.7 3,1654 112 Residual (assets less liabilities)9 304.2 315.0 317.3 317.1 319.9 322.5 326.4 329.9 329.9 330.0 329.4 329.5 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • July 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 1995 AAccccoouunntt Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 ASSETS 1 Cash and balances due from depository institutions 129,932 106,190 125,045 104,838 106,016 106,557 110,336 112,903 114,476 ?, U.S. Treasury and government securities 29 2 5 3 , , 5 2 0 8 2 1 29 2 7 5 , , 8 3 3 6 8 5 3 2 0 6 0 , , 3 04 0 8 6 29 2 5 2 , , 3 0 0 6 6 1 29 1 1 9 , , 9 2 7 0 0 1 29 2 8 3 , , 3 8 3 0 6 9 29 2 7 2 , , 1 2 9 7 2 2 2 2 9 2 5, , 5 6 4 6 5 3 29 21 2 , , 8 2 1 6 4 0 4 Investment account 272,221 272,473 273,741 273,245 272,769 274,527 274,920 272,882 270,445 5 Mortgage-backed securities1 95,123r 95,47 lr 94,625r 93,350r 93,100r 93,384 92,714 93,228 93,568 All others, by maturity 6 One year or less 46,023 46,401 45,796 46,598 45,866 47,505 47,613 4466,,999966 4466,,338833 7 One year through five years 69,015 68,507 71,705 72,127 72,397 71,752 72,942 71,699 69,991 8 More than five years 62,060' 62,094r 61,615r 6\,n<f 61,406r 61,886 61,650 60,959 60,504 9 112,120 121,795 123,381 122,865 125,987 131,935 134,997 138,909 134,169 in Trading account 1,858 1,812 1,721 1,561 1,462 1,323 1,341 1,348 1,469 u Investment account 60,720 60,525 60,317 60,397 60,285 60,585 60,920 60,830 60,538 12 State and local government, by maturity 20,311 20,326 20,269 20,307 20,402 20,287 20,262 20,264 20,145 n One year or less 5,475 5,557 5,505 5,553 5,606 5,586 5,553 5,542 5,549 14 More than one year 14,836 14,769 14,764 14,754 14,796 14,702 14,709 14,722 14,595 15 Other bonds, corporate stocks, and securities 40,408 40,199 40,048 40,090 39,884 40,298 40,658 40,566 40,393 16 Other trading account assets 49,543 59,458 61,342 60,907 64,240 70,027 72,735 76,731 72,163 17 Federal funds sold2 119,155 104,567 115,754 103,465 103,143 98,015 103,134 99,747 106,922 18 To commercial banks in the United States 79,993 68,265 81,113 69,309 71,282 65,849 71,025 66,270 74,419 19 To nonbank brokers and dealers in securities 30,870 27,987 27,341 27,724 24,706 25,906 25,685 27,676 26,035 ?n To others3 8,292 8,315 7,299 6,432 7,155 6,260 6,424 5,801 6,467 71 Other loans and leases, gross 1,184,836 1,180,286 1,181,666 1,180,668 1,187,229 1,196,249 1,195,815 1,203,945 1,203,507 ?.?. Co B m a m nk e e rc rs ia a l c a c n e d p t i a n n d c u e s s t r a ia n l d commercial paper 33 2 2 , , 1 9 0 6 9 6 33 2 1 , , 1 1 3 5 6 1 333 1 , , 5 9 2 4 3 5 333 1 , , 4 80 40 2 r 333 1 , ,8 2 2 9 2 9 ' 336 1 , , 8 8 5 34 3 337 1 , , 4 96 0 9 5 34 2 0 , , 1 3 0 6 3 5 341 2 , , 6 01 0 5 4 74 All other 330,857 329,015 331,578 331,638r 331,477' 335,019 335,436 338,262 339,590 75 U.S. addressees 328,649r 326,844' 329,391r 329,361r 329,211' 332,657 333,156 335,858 337,155 26 Non-U.S. addressees 2,207r 2,171r 2,187r 2,217 2,266 2,362 2,280 2,404 2,435 77 468,204 468,119 468,515 468,992 470,201' 471,696 473,161 474,304 475,251 78 Revolving, home equity 46,701 46,647 46,652 46,630 46,644' 46,750 46,902 47,281 47,449 79 All other 421,502 421,471 421,863 422,362 423,557' 424,946 426,259 427,023 427,802 30 To individuals for personal expenditures 237,384 237,066 236,696 237,485 238,412 239,516 239,763 240,097 239,706 31 To depository and financiali nstitutions 54,353 55,167 54,157 52,507 55,606 57,221 56,937 57,356 56,160 3? Commercial banks in the United States 34,685 35,311 34,373 33,395 36,156 37,501 37,172 37,386 36,390 33 Banks in foreign countries 3,233r 3,202r 3,313r 2,822' 2,924' 2,785 3,094 3,291 3,191 34 Nonbank depository and other financial institutions 16,434r 16,654r 16,471r 16,290r 16,526' 16,934 16,671 16,679 16,579 35 For purchasing and carrying securities 15,547 14,506 14,469 14,315 14,668 13,314 13,628 16,397 15,551 36 To finance agricultural production 6,185 6,155 6,194 6,243r 6,241' 6,222 6,247 6,329 6,278 37 To states and political subdivisions 11,204 11,101 11,121 11,050 11,124 11,243 11,205 11,082 11,039 38 To foreign governments and official institutions 1,091 1,187 864 940 1,017 906 927 886 1,020 39 All other loans4 25,147 22,965 23,189 22,673 23,332' 26,085 23,244 23,760 23,429 40 Lease-financing receivables 32,756 32,870 32,938 33,024 33,327 33,192 33,298 33,370 33,469 41 LESS: Unearned income 1,670 1,678 1,673 1,697 1,678 1,630 1,648 1,644 1,648 47 Loan and lease reserve 34,409 34,541 34,583 34,513 34,408 34,311 34,354 34,406 34,276 43 Other loans and leases, net 1,148,758 1,144,068 1,145,409 1,144,458 1,151,143 1,160,307 1,159,813 1,167,895 1,167,583 44 All other assets 140,559 136,293 135,217 134,906 131,797 136,604 135,691 136,759 131,783 45 Total assets6 1,946,025 1,910,752 1,944,853 1,905,836 1,910,056 1,931,755 1,941,162 1,951,758 1,947,193 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 DomesticN onfinancial Statistics • July 1995 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1995 AAccccoouunntt Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 LIABILITIES 4 4 6 7 De D po em sit a s n d deposits7 1, 3 1 1 7 0 5 , , 2 7 6 1 4 3 1, 2 1 8 5 4 1 , , 1 0 5 1 8 6 1, 3 1 0 7 6 3 , , 9 0 9 1 7 7 1, 2 1 7 3 5 5 , , 9 6 3 9 4 6 L, 2 1 7 3 9 6 , ,9 3 0 3 3 9 R 1, 2 1 9 6 5 4 , , 5 4 8 7 9 4 1, 2 1 9 6 4 5 , , 7 0 1 3 3 0 1, 2 1 9 6 4 1 , , 0 1 1 9 3 8 1, 2 1 8 4 5 1 , , 0 05 6 8 0 48 Individuals, partnerships, and corporations 259,089 241,524 253,698 232,871 236,362R 251,574 249,668 246,286 237,513 49 Other holders 51,175 42,635 53,299 43,062 42,978R 44,015 45,045 47,727 47,547 50 States and political subdivisions 9,226 7,412 8,485 8,893 7,465 8,112 7,973 8,243 8,612 51 U.S. government 3,123 1,720 8,236 1,796 L,782R 2,270 2,482 4,670 3,453 52 Depository institutions in the United States 23,734 18,840 21,827 16,744 17,2^ 19,337 18,805 19,496 18,778 53 Banks in foreign countries 5,317 5,096 5,278 5,394 5,362 4,565 4,797 4,784 5,688 54 Foreign governments and official institutions 899 674 748 645 756 646 795 744 775 5 5 6 5 Trans C ac e t r i t o if n ie d ba a la n n d c e o s ff o ic th er e s r ' c th h a e n ck d s e mand deposits4 12 8 8 , ,3 8 6 7 3 7 12 8 7 , , 8 3 9 8 3 3 12 8 7 , , 7 19 2 4 6 12 9 4 , ,4 5 4 9 5 0 12 1 3 0 , , 7 4 9 0 8 3 13 9 1 , , 0 2 8 8 6 9 13 1 0 0 , , 5 1 2 9 6 4 13 9 2 , , 7 10 9 9 0 12 1 3 0 , ,2 8 4 1 1 9 57 Nontransaction balances 737,086 739,474 738,826 735,317 733,765R 737,596 739,791 735,076 732,179 58 Individuals, partnerships, and corporations 713,612 715,445 715,269 711,778 710,398R 714,229 716,347 711,875 708,186 59 Other holders 23,474 24,029 23,557 23,539 23,367 23,367 23,444 23,202 23,993 60 States and political subdivisions 19,151 19,868 19,477 19,477 19,436 19,443 19,554 19,507 19,921 61 U.S. government 1,873 1,804 1,869 1,860 1,852 2,155 2,155 2,080 2,136 62 Depository institutions in the United States 2,095 1,949 1,801 1,784 1,661 1,360 1,333 1,309 1,625 63 Foreign governments, official institutions, and banks .. 355 409 410 418 418 409 402 305 311 64 Liabilities for borrowed money5 390,935 373,801R 381,686 379,856R 379,534R 381,330 386,962 398,540 399,340 65 Borrowings from Federal Reserve Banks 0 0 0 0 0 0 0 0 0 6 6 6 7 T O r t e h a e s r u r li y a b t i a l x it ie an s d f o l r o a b n o r n ro o w te e s d money6 37 1 3 7 , , 8 0 6 6 6 9 366 6 , , 8 9 3 6 7 4 R 376 5 , ,0 6 4 4 1 5 R 372 7 , , 3 4 8 6 8 8 R R 374 4 , , 7 7 6 6 6 8 R R 374 6 , , 4 9 2 0 6 4 383 3 , , 1 8 2 4 2 0 37 2 4 3 , , 8 7 0 3 0 9 38 1 0 8 , , 5 8 1 3 0 0 68 Other liabilities (including subordinated notes and debentures)... 200,672 206,465' 211,855 21 L,723R 215,243R 206,904 209,701 211,644 226,282 69 Total liabilities 1,767,320 1,731,282 1,766,557 1,727,275 1,731,679 1,752,708 1,761,693 1,771,382 1,766,680 70 Residual (total assets less total liabilities)7 178,706 179,470 178,296 178,562 178,377 179,047 179,470 180,376 180,513 MEMO 71 Total loans and leases, gross, adjusted, plus securities8 1,596,936 1,600,911 1,605,362 1,599,599 1,600,891 1,621,185 1,622,941 1,634,490 1,626,049 7 7 3 2 T L i o m an e s d s e o p l o d s i o t u s tr i i n g h am t t o o u n af ts fi l o ia f t e $ s 1 9 0 0,000 or more 109,2 5 2 7 4 2 R 109,1 5 5 7 2 0 R 108, 5 7 6 6 8 4 107, 5 26 6 7 7 105, 5 6 6 7 6 8 105, 5 2 5 0 1 9 107,1 5 2 5 1 1 107, 5 6 4 4 9 8 107, 5 3 6 1 0 2 74 Commercial and industrial 295 295 295 295 295 294 294 294 294 7 7 5 6 Fo O re t i h g e n r branch credit extended to U.S. residents10 23, 2 7 7 8 7 4 23,6 2 0 7 1 5 23, 2 5 7 2 3 9 23, 2 44 7 4 2 23, 2 5 7 9 1 3 24,0 2 0 5 7 7 24,2 2 1 5 3 7 24, 2 4 5 9 5 6 24, 2 6 6 7 5 9 77 Net owed to related institutions abroad 81,260 81,929 87,174 87,535 88,935 73,383 74,935 76,401 95,124 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 analysis. 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 1995 AAccccoouunntt Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 ASSETS 1 Cash and balances due from depository institutions 14,847 15,327 15,820 15,325 16,251 15,347 15,749 16,344 16,931 2 U.S. Treasury and government agency securities 42,243 40,303 40,984 39,989 40,893 4411,,334433 4400,,228866 4411,,336677 4411,,662211 3 Other securities 14,269 14,151 14,059 13,972 14,152 14,448 14,667 14,214 13,526 4 Federal funds sold1 26,442 25,507 28,188 25,741 29,425 25,310 25,125 30,719 33,538 To commercial banks in the United States 5,702 6,087 6,813 4,722 7,638 4,511 3,223 5,582 7,614 6 To others2 20,740 19,419 21,375 21,020 21,787 20,799 21,902 25,136 25,924 7 Other loans and leases, gross 171,226 171,500 171,997 172,612 170,847 169,262 168,889 170,246 170,638 8 Commercial and industrial 111,151 110,112 110,781 110,884 110,432 109,646 109,775 109,935 110,054 9 Bankers acceptances and commercial paper . 3,439 3,430 3,269 3,250 3,229 3,101 3,371 3,171 3,080 in All other 107,712 106,682 107,511 107,634 107,203 106,546 106,404 106,764 106,975 ii U.S. addressees 103,439 102,298 102,780 102,915 102,629 101,905 101,752 102,057 102,119 i? Non-U.S. addressees 4,274 4,384 4,731 4,720 4,575 4,641 4,652 4,707 4,856 13 Loans secured by real estate 25,041 25,048 25,039 25,057 24,275 23,978 24,004 23,860 23,845 14 Loans to depository and financial institutions 26,041 27,444 27,665 27,734 26,964 27,385 26,850 27,649 28,158 15 Commercial banks in the United States 4,994 4,820 4,975 5,206 5,332 5,904 5,421 5,096 5,092 16 Banks in foreign countries 2,212 2,943 2,214 2,296 2,104 2,113 1,976 2,281 2,321 17 Nonbank financial institutions 18,835 19,681 20,476 20,232 19,529 19,368 19,453 20,273 20,745 18 For purchasing and carrying securities 4,636 4,190 4,157 4,700 4,511 3,672 3,673 4,333 4,149 19 To foreign governments and ofiScial institutions 446 576 412 416 413 409 339933 339900 337788 ?n All other 3,912 4,130 3,943 3,821 4,252 4,172 4,193 4,079 4,054 21 Other assets (claims on nonrelated parties) 51,692 55,220 51,619 51,287 52,828 59,555 59,905 60,926 61,854 22 Total assets3 345,435 344,795 345,977 343,514 347,116 350,753 349,152 360,400 366,163 LIABILITIES 73 Deposits or credit balances owed to other than directly related institutions 95,007 97,075 98,251 98,592 100,387 97,136 97,250 100,133 103,948 74 Demand deposits4 3,870 3,717 3,962 3,815 4,516 3,944 3,959 3,643 3,837 25 Individuals, partnerships, and corporations .... 3,166 2,937 3,143 3,077 3,325 3,124 2,843 2,737 2,737 ?6 Other 705 780 819 738 1,191 820 1,116 906 1,100 ?7 Nontransaction accounts 91,137 93,357 94,290 94,777 95,872 93,193 93,291 96,490 100,111 28 Individuals, partnerships, and corporations .... 62,633 65,059 65,202 65,462 65,335 63,386 64,273 64,993 67,915 79 Other 28,504 28,298 29,088 29,316 30,537 29,807 29,018 31,497 32,195 30 Borrowings from other than directly related institutions 83,958 79,963 87,176 83,005 81,277 82,352 8833,,554444 8866,,557788 8866,,118866 31 Federal funds purchased5 47,280 40,792 48,299 43,406 40,973 43,191 45,198 47,317 46,431 3? From commercial banks in the United States .. 8,878 6,093 10,957 7,286 7,325 9,387 7,791 8,852 7,731 33 From others 38,402 34,699 37,341 36,120 33,648 33,804 37,407 38,465 38,700 34 Other liabilities for borrowed money 36,678 39,171 38,878 39,599 40,304 39,161 38,345 39,261 39,755 35 To commercial banks in the United States 5,828 5,756 5,769 5,930 6,028 6,473 6,281 6,235 5,860 36 To others 30,850 33,415 33,108 33,668 34,276 32,689 32,064 33,026 33,895 37 Other liabilities to nonrelated parties 48,454 52,166 49,049 48,052 48,484 55,868 55,143 57,359 57,471 38 Total liabilities6 345,435 344,795 345,977 343,514 347,116 350,753 349,152 360,400 366,163 39 T M o E t M al O l oans (gross) and securities, adjusted 243,485 240,553 243,440 242,386 242,348 239,948 240,323 245,868 246,616 40 Net owed to related institutions abroad 93,300 92,804 88,190 89,276 94,248 89,909 88,683 89,746 90,503 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 US. 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 • July 1995 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1994 1995 IItteemm 1990 1991 1992 1993 1994 Oct. Nov. Dec. Jan. Feb. Mar. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 562,656 528,832 545,619 555,075 595,382 588,271 580,510 595,382 612,554 619,150 632,842 Financial companies' Dealer-placed paper 2 2 Total 214,706 212,999 226,456 218,947 223,038 222,019 215,733 223,038 231,318 232,231 243,467 3 Bank-related (not seasonally adjusted)3 ... n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Directly placed paper4 4 Total 200,036 182,463 171,605 180,389 207,701 206,264 203,584 207,701 215,423 218,570 218,269 5 Bank-related (not seasonally adjusted)3... n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 6 Nonfinancial companies5 147,914 133,370 147,558 155,739 164,643 159,988 161,193 164,643 165,813 168,349 171,106 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 54,771 43,770 38,194 32,348 29,835 30,413 29,760 29,835 By holder 8 Accepting banks 9,017 11,017 10,555 12,421 11,783 11,061 11,689 11,783 9 Own bills 7,930 9,347 9,097 10,707 10,462 9,931 10,548 10,462 10 Bills bought from other banks 11,,008877 1,670 11,,445588 11,,771144 11,,332211 11,,113300 11,,114422 11,,332211 Federal Reserve Banks7 11 Foreign correspondents 918 1,739 1,276 725 410 332 234 410 n.a. n.a. n.a. 12 Others 44,836 31,014 26,364 19,202 17,642 19,020 17,836 17,642 By basis 13 Imports into United States 13,095 12,843 12,209 10,217 10,062 10,674 10,272 10,062 14 Exports from United States 12,703 10,351 8,096 7,293 6,355 6,754 6,688 6,355 15 Allother 28,973 20,577 17,890 14,838 13,417 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. Beginning January 1995, data for insurance underwriting; and other investment activities. Bankers dollar acceptances will be reported annually in September. 2. Includes all financial-company paper sold by dealers in the open market. 7. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances 3. Series were discontinued in January 1989. for its own account. 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 t a e g e Period Av r e a r t a e g e Period Av r e a r t a e g e 1992—July 2 66..0000 1992 6.25 1993— 6.00 1994—Jan 6.00 1993 6.00 Feb 6.00 Feb 6.00 1994—Mar. 24 6.25 1994 7.15 Mar. 6.00 Mar. 6.06 Apr. 19 6.75 Apr. 6.00 Apr. 6.45 May 17 7.25 1992—Jan 6.50 May 6.00 May 6.99 Aug. 16 7.75 Feb 6.50 June 6.00 June 7.25 Nov. 15 8.50 Mar 6.50 July 6.00 July 7.25 Apr. 6.50 Aug 6.00 Aug 7.51 1995—Feb. 1 9.00 May 6.50 Sept 6.00 Sept 7.75 June 6.50 Oct 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 Mar. 9.00 9.00 May 9.00 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 • July 1995 1.35 INTEREST RATES Money and Capital Markets Percent per year; figures are averages of business day data unless otherwise noted 1995 1995, week ending IItteemm 11999922 11999933 11999944 Jan. Feb. Mar. Apr. Mar. 31 Apr. 7 Apr. 14 Apr. 21 Apr. 28 MONEY MARKET INSTRUMENTS 1 Federal funds1'2'3 3.52 3.02 4.21 5.53 5.92 5.98 6.05 6.06 6.20 5.98 6.07 5.99 2 Discount window borrowing2,4 3.25 3.00 3.60 4.75 5.25 5.25 5.25 5.25 5.25 5.25 5.25 5.25 Commercial paper*'5'6 3 1-month 3.71 3.17 4.43 5.86 6.05 6.07 6.06 6.08 6.08 6.08 6.05 6.05 4 3-month 3.75 3.22 4.66 6.22 6.15 6.15 6.12 6.15 6.15 6.13 6.09 6.09 5 6-month 3.80 3.30 4.93 6.63 6.38 6.30 6.19 6.25 6.26 6.23 6.14 6.14 Finance paper, directly placed3'5,7 6 1-month 3.62 3.12 4.33 5.76 5.95 5.95 5.96 5.96 5.99 5.96 5.95 5.95 7 3-month 3.65 3.16 4.53 6.10 6.04 6.03 6.01 6.02 6.05 6.02 6.00 5.99 8 6-month 3.63 3.15 4.56 6.25 6.10 6.04 6.01 6.03 6.06 6.02 5.98 5.97 Bankers acceptances3'5'8 9 3-month 3.62 3.13 4.56 6.12 6.05 6.04 6.00 6.05 6.03 6.00 5.99 5.99 10 6-month 3.67 3.21 4.83 6.45 6.22 6.14 6.06 6.13 6.11 6.08 6.03 6.03 Certificates of deposit, secondary market3,9 11 1-month 3.64 3.11 4.38 5.84 6.01 6.02 6.01 6.04 6.03 6.01 6.01 5.99 12 3-month 3.68 3.17 4.63 6.24 6.16 6.15 6.11 6.15 6.15 6.12 6.10 6.09 13 6-month 3.76 3.28 4.96 6.71 6.44 6.34 6.27 6.34 6.33 6.29 6.23 6.22 14 Eurodollar deposits, 3-month3'10 3.70 3.18 4.63 6.23 6.14 6.15 6.13 6.16 6.18 6.14 6.11 6.09 U.S. Treasury bills Secondary market3'5 15 3-month 3.43 3.00 4.25 5.71 5.77 5.73 5.65 5.69 5.70 5.63 5.61 5.67 16 6-month 3.54 3.12 4.64 6.21 6.03 5.89 5.77 5.81 5.84 5.78 5.71 5.76 17 1-year 3.71 3.29 5.02 6.59 6.28 6.03 5.88 5.98 5.99 5.90 5.80 5.85 Auction average3'5'" 18 3-month 3.45 3.02 4.29 5.81 5.80 5.73 5.67 5.64 5.76 5.70 5.56 5.66 19 6-month 3.57 3.14 4.66 6.31 6.10 5.91 5.80 5.80 5.90 5.84 5.69 5.75 20 1-year 3.75 3.33 4.98 6.86 6.59 6.16 6.02 n.a. 6.02 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 3.89 3.43 5.32 7.05 6.70 6.43 6.27 6.38 6.38 6.28 6.17 6.24 22 2-year 4.77 4.05 5.94 7.51 7.11 6.78 6.57 6.73 6.69 6.61 6.46 6.52 23 3-year 5.30 4.44 6.27 7.66 7.25 6.89 6.68 6.84 6.80 6.72 6.58 6.64 24 5-year 6.19 5.14 6.69 7.76 7.37 7.05 6.86 7.01 6.96 6.89 6.78 6.81 25 7-year 6.63 5.54 6.91 7.79 7.44 7.14 6.95 7.11 7.04 6.98 6.90 6.90 26 10-year 7.01 5.87 7.09 7.78 7.47 7.20 7.06 7.15 7.12 7.08 7.03 7.03 27 20-year n.a. 6.29 7.49 7.97 7.73 7.57 7.45 7.51 7.48 7.46 7.46 7.41 28 30-year 7.67 6.59 7.37 7.85 7.61 7.45 7.36 7.40 7.38 7.37 7.37 7.33 Composite 29 More than 10 years (long-term) 7.52 6.45 7.41 7.93 7.69 7.52 7.41 7.48 7.45 7.42 7.41 7.37 STATE AND LOCAL NOTES AND BONDS Moody's series13 30 6.09 5.38 5.77 6.55 6.05 5.91r 5.74 5.90 5.73 5.75 5.68 5.80 31 Baa 6.48 5.83 6.17 7.05 6.61 6.50r 6.01 6.00 6.00 6.02 5.95 6.08 32 Bond Buyer series14 6.44 5.60 6.18 6.53 6.22 6.10 6.02 6.07 6.03 6.01 5.96 6.06 CORPORATE BONDS 33 Seasoned issues, all industries15 8.55 7.54 8.26 8.71 8.50 8.35 8.25 8.30 8.27 8.26 8.24 8.22 Rating group 34 8.14 7.22 7.97 8.46 8.26 8.12 8.03 8.08 8.05 8.04 8.02 8.00 35 Aa 8.46 7.40 8.15 8.60 8.39 8.24 8.12 8.19 8.15 8.13 8.12 8.09 36 A 8.62 7.58 8.28 8.70 8.48 8.33 8.23 8.28 8.25 8.25 8.23 8.21 37 Baa 8.98 7.93 8.63 9.08 8.85 8.70 8.60 8.65 8.62 8.62 8.60 8.57 38 A-rated, recently offered utility bonds16 8.52 7.46 8.29 8.75 8.55 8.40 8.31 8.40 8.34 8.29 8.29 8.29 MEMO Dividend-price ratio17 39 Common stocks 2.99 2.78 2.82 2.87 2.81 2.76 2.68 2.69 2.68 2.67 2.69 2.65 1. The daily effective federal funds rate is a weighted average of rates on trades issue-date basis. through New York brokers. 12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the Department of the Treasury. current week; monthly figures include each calendar day in the month. 13. General obligation bonds based on Thursday figures; Moody's Investors Service. 3. Annualized using a 360-day year for bank interest. 14. State and local government general obligation bonds maturing in twenty years are 4. Rate for the Federal Reserve Bank of New York. used in compiling this index. The twenty-bond index has a rating roughly equivalent to 5. Quoted on a discount basis. Moodys' A1 rating. Based on Thursday figures. 6. An average of offering rates on commercial paper placed by several leading dealers 15. Daily figures from Moody's Investors Service. Based on yields to maturity on for firms whose bond rating is AA or the equivalent. selected long-term bonds. 7. An average of offering rates on paper directly placed by finance companies. 16. Compilation of the Federal Reserve. This series is an estimate of the yield on 8. Representative closing yields for acceptances of the highest-rated money center recently offered, A-rated utility bonds with a thirty-year maturity and five years of call banks. protection. Weekly data are based on Friday quotations. 9. An average of dealer offering rates on nationally traded certificates of deposit. 17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks 10. Bid rates for Eurodollar deposits at 11:00 a.m. London time. Data are for indication 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.36 STOCK MARKET Selected Statistics 1994 1995 IInnddiiccaattoorr 11999922 11999933 11999944 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 229.00 249.71 254.16 256.08 257.61 255.22 252.48 248.65 253.56 261.86 266.81 274.38 2 Industrial 284.26 300.10 315.32 316.56 322.19 321.53 319.33 313.92 319.93 328.98 337.96 347.69 3 Transportation 201.02 242.68 247.17 244.67 239.10 230.71 227.44 218.93 230.25 237.29 252.37 254.36 4 Utility 99.48 114.55 104.96 105.61 102.30 101.67 100.07 100.01 100.58 103.87 102.08 104.70 5 Finance 179.29 216.55 209.75 214.77 211.90 203.33 198.38 195.25 201.05 211.76 213.29 219.38 6 Standard & Poor's Corporation (1941-43 = 10)1 415.75 451.63 460.42 464.24 466.96 463.81 461.01 455.19 465.25 481.92 493.20 507.91 7 American Stock Exchange (Aug. 31, 1973 = 50)2 391.28 438.77 449.49 444.89 456.31 456.25 445.16 427.39 436.09 446.37 456.06 471.54 Volume of trading (thousands of shares) 8 New York Stock Exchange 202,558 263,374 290,652 277,877 292,356 301,327 297,001 302,049 326,652 333,020 338,733 331,184 9 American Stock Exchange 14,171 18,188 17,951 15,874 18,785 20,731 18,465 18,745 18,829 18,424 17,905 19,404 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealerc 43,990 60,310 61,160 63,070 61,630 62,150 61,000 61,160 64,380 59,800 60,270 62,520 Free credit balances at brokers4 11 Margin accounts5 8,970 12,360 14,095 12,090 12,415 12,875 13,635 14,095 13,225 12,380 12,745 12,440 12 Cash accounts 22,510 27,715 28,870 24,400 25,230 24,180 25,625 28,870 26,440 25,860 26,680 26,670 Margin requirements (percent of market value and eflFective 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, effectively 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 Nonfinancial Statistics • July 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 Nov. Dec. Jan. Feb. Mar. Apr. US. budget1 1 Receipts, total 1,090,453 1,153,226 1,257,187 87,673 130,810 131,801 82,544 92,532 165,392 2 On-budget 788,027 841,292 922,161 62,083 103,859 101,036 54,405 61,971 126,170 3 Off-budget 302,426 311,934 335,026 25,590 26,951 30,765 28,139 30,561 39,222 4 Outlays, total 1,380,856 1,408,532 1,461,067 124,915 134,941 115,172 120,536 142,458 115,673 5 On-budget 1,128,518 1,141,945 1,460,557 99,464 123,643 89,890 94,058 116,508 90,628 6 Off-budget 252,339 266,587 279,372 25,452 11,297 25,282 26,478 25,951 25,045 7 Surplus or deficit (-), total -290,403 -255,306 -203,370 -37,242 -4,130 16,628 -37,992 -49,927 49,720 8 On-budget -340,490 -300,653 -259,024 -37,381 -19,783 11,146 -39,653 -54,537 35,542 9 Off-budget 50,087 45,347 55,654 138 15,653 5,483 1,661 4,610 14,178 Source of financing (total) 10 Borrowing from the public 310,918 248,594 184,998 40,528 -13,316 13,337 38,972 13,645 -27,638 11 Operating cash (decrease, or increase (-)) -17,305 6,283 16,564 9,366 476 -23,264 14,000 17,747 -19,972 12 Other2 -3,210 429 1,808 -12,652 16,970 -6,701 -14,980 18,535 -2,110 MEMO 13 Treasury operating balance (level, end of period) 58,789 52,506 35,942 27,056 26,580 49,844 35,844 18,097 38,069 14 Federal Reserve Banks 24,586 17,289 6,848 5,348 7,161 13,964 6,890 4,543 8,241 15 Tax and loan accounts 34,203 35,217 29,094 21,709 19,419 35,880 28,954 13,554 29,828 1. Since 1990, off-budget items have been the social security trust funds (federal gold; net gain or loss for US. 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 LIS. Government, and U.S. Office of Management and Budget, Budget accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous of the US 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 OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1993 1994 1995 11999933 11999944 HI H2 HI H2 Feb. Mar. Apr. RECEIPTS 1 All sources 1,153,226 1,257,453 593,212 582,038 652,236 625,557 82,544 92,532 165,392 2 Individual income taxes, net 509,680 543,055 255,556 262,073 275,053 273,474 33,863 26,846 76,441 3 Withheld 430,211 459,699 209,517 228,423 225,387 240,062 40,643 44,561 32,447 4 Presidential Election Campaign Fund 28 70 25 2 63 10 4 18 16 5 Nonwithheld 154,989 160,364 113,510 41,768 118,245 42,031 1,061 4,284 64,937 6 Refunds 75,546 77,077 67,468 8,115 68,642 9,207 7,845 22,016 20,959 Corporation income taxes 7 Gross receipts 131,548 154,205 69,044 68,266 80,536 78,392 3,483 1177,,223388 2255,,777799 8 Refunds 14,027 13,820 7,198 6,514 6,933 7,331 1,423 2,375 2,297 9 Social insurance taxes and contributions, net... 428,300 461,475 227,177 206,176 248,301 220,141 38,653 39,379 53,839 10 Employment taxes and contributions 396,939 428,810 208,776 192,749 228,714 206,613 35,667 38,646 50,423 11 Self-employment taxes and contributions3 . 20,604 24,433 16,270 4,335 20,762 4,135 1,718 1,862 12,640 12 Unemployment insurance 26,556 28,004 16,074 11,010 17,301 11,177 2,630 320 3,061 13 Other net receipts4 4,805 4,661 2,326 2,417 2,284 2,349 357 413 354 14 Excise taxes 48,057 55,225 23,398 25,994 26,444 30,062 3,485 5,143 4,602 15 Customs deposits 18,802 20,099 8,860 10,215 9,500 11,042 1,435 1,470 1,349 16 Estate and gift taxes 12,577 15,225 6,494 6,617 8,197 7,071 916 1,218 1,906 17 Miscellaneous receipts 18,273 22,041 9,879 9,227 11,170 13,305 2,131 3,612 3,774 OUTLAYS 18 All types 1,408,532 1,461,067 673,915 727,685 710,620 751,643r 120,536 142,458 115,673 19 National defense 291,086 281,451 140,535 146,672 133,841 141,092 21,461 26,533 17,753 20 International affairs 16,826 17,249 6,565 10,186 5,800 12,056 1,108 425 95 21 General science, space, and technology 17,030 17,602 7,996 8,880 8,502 8,979 1,374 1,628 1,298 22 Energy 4,319 5,398 2,462 1,663 2,036 3,101r 260 569 196 23 Natural resources and environment 20,239 20,902 8,592 11,221 9,934r \2,lXf l,464r 1,951 1,587 24 Agriculture 20,443 15,131 11,872 7,516 7,451 7,697 1,264 1,195 623 25 Commerce and housing credit -22,725 -4,851 -14,537 -1,490 -5,114 -2,678 -2,978 -1,853 -1,092 26 Transportation 35,004 36,835 16,076 19,570 16,754 20,489 2,799 3,167 2,560 27 Community and regional development 9,051 11,877 4,929 4,288 4,748r 6,688r 138r 971 896 28 Education, training, employment, and social services 50,012 44,730 24,080 26,753 19,258 2255,,888877 44,,007788 44,,667788 33,,664477 29 Health 99,415 106,495 49,882 52,958 53,195 54,123 8,918 10,625 9,281 30 Social security and Medicare 435,137 464,314 195,933 223,735 232,777 236,819 39,461 43,209 39,463 31 Income security 207,257 213,972 107,870 102,380 109,080 101,743 20,583 24,708 18,963 32 Veterans benefits and services 35,720 37,637 16,385 19,852 16,686 19,757 3,023 4,642 1,850 33 Administration of justice 14,955 15,283 7,482 7,400 7,718 7,800 1,099 1,488 1,359 34 General government 13,009 11,348 5,205 6,531 5,084 7,393 1,170 1,680 299 35 Net interest6 198,811 202,957 99,635 99,914 99,844 109,435 18,002 19,671 20,017 36 Undistributed offsetting receipts -37,386 -37,772 -17,035 -20,344 -17,308 -20,065 -2,688 -2,829 -3,121 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 US. Government-, and U.S. Office of Management and Budget, Budget 4. Federal employee retirement contributions and civil service retirement and of the US. Government, Fiscal Year 1996. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • July 1995 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1993 1994 1995 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 4,250 4,373 4,436 4,562 4,602 4,673 4,721 4,800 4,864 2 Public debt securities 4,231 4,352 4,412 4,536 4,576 4,646 4,693 n.a. n.a. 3 Held by public 3,188 3,252 3,295 3,382 3,434 3,443 3,480 3,543 n.a. 4 Held by agencies 1,043 1,100 1,117 1,154 1,142 1,203 1,213 1,257 n.a. 5 Agency securities 20 21 25 27 26 28 29 27 n.a. 6 Held by public 20 21 25 27 26 27 29 27 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 4,140 4,256 4,316 4,446 4,491 4,559 4,605 4,711 4,775 9 Public debt securities 4,139 4,256 4,315 4,445 4,491 4,559 4,605 4,711 4,774 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,145 4,370 4,900 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 1995 TTyyppee aanndd hhoollddeerr 11999911 11999922 11999933 11999944 Q2 Q3 Q4 Q1 1 Total gross public debt 3,801.7 4,177.0 4,535.7 n.a. 4,645.8 4,692.8 n.a. n.a. By type 2 Interest-bearing 3,798.9 4,173.9 4,532.3 4,769.2 4,642.5 4,689.5 4,769.2 4,860.5 3 Marketable 2,471.6 2,754.1 2,989.5 3,126.0 3,051.0 3,091.6 3,126.0 3,227.3 4 Bills 590.4 657.7 714.6 733.8 698.5 697.3 733.8 756.5 5 Notes 1,430.8 1,608.9 1,764.0 1,867.0 1,835.7 1,867.5 1,867.0 1,938.2 6 Bonds 435.5 472.5 495.9 510.3 501.8 511.8 510.3 517.7 7 Nonmarketable1 1,327.2 1,419.8 1,542.9 1,643.1 1,591.5 1,597.9 1,643.1 1,633.2 8 State and local government series 159.7 153.5 149.5 132.6 143.4 137.4 132.6 122.9 9 Foreign issues2 41.9 37.4 43.5 42.5 42.2 42.0 42.5 41.8 10 Government 41.9 37.4 43.5 42.5 42.2 42.0 42.5 41.8 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 135.9 155.0 169.4 177.8 174.9 176.4 177.8 178.8 13 Government account series3 959.2 1,043.5 1,150.0 1,259.8 1,200.6 1,211.7 1,259.8 1,259.2 14 Non-interest-bearing 2.8 3.1 3.4 31.0 3.3 3.2 31.0 3.6 By holder4 15 U.S. Treasury and other federal agencies and trust funds 968.7 1,047.8 1,153.5 1,257.1 1,203.0 1,213.1 1,257.1 16 Federal Reserve Banks 1 281.8 302.5 334.2 374.1 357.7 355.2 374.1 17 Private investors 2,563.2 2,839.9 3,047.7 3,088.2 3,127.8 18 Commercial banks 233.4 294.0 316.0 330.7 325.0 19 Money market funds 80.0 79.4 80.5 59.5 59.9 20 Insurance companies 168.7 197.5 216.0 244.1 250.0 21 Other companies 150.8 192.5 213.0 226.3 229.3 22 State and local treasuries 520.3 534.8 564.0 n.a. 520.1 521.0 n.a. a. Individuals 23 Savings bonds 138.1 157.3 171.9 177.1 178.6 24 Other securities 125.8 131.9 137.9 144.0 148.6 25 Foreign and international5 491.8 549.7 623.3 632.5 653.8 26 Other miscellaneous investors6 651.3 702.4 725.0 754.0 761.6 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 1995 1995, week ending Item Jan. Feb. Mar. Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 61,020 58,060 49,948 54,360 57,737 48,177 43,883 43,982 62,780 50,629 46,679 43,008 Coupon securities, by maturity 2 Five years or less 99,720 96,107 120,038 97,277 93,542 92,597 98,140 91,316 73,740 93,459 91,164 3 More than five years 40,543 54,209r 45,128 53,692 43,960 48,317 44,731 43,346 41,242 37,819 39,242 37,199 4 Federal agency 26,320 25,597 23,498 27,499 23,122 22,289 21,670 25,784 24,313 21,446 22,722 20,839 5 Mortgage-backed 27,653 29,731 26,639 20,623 39,430 33,682 19,799 15,160 25,860 38,943 24,649 20,052 By type of counterparty With interdealer broker 6 U.S. Treasury 116,796 131,023 113,505 132,044 120,017 112,382 106,850 110,635 114,578 95,324 104,092 99,410 7 Federal agency 662 964 745 931 761 895 616 631 850 751 713 791 8 Mortgage-backed 10,543 9,433 8,758 6,882 12,172 10,967 6,738 5,825 8,026 11,782 7,967 6,241 With other 9 U.S. Treasury 84,487 95,805 77,677 96,047 78,957 77,654 74,361 74,831 80,760 66,864 75,288 71,961 10 Federal agency 25,658 24,633 22,753 26,569 22,362 21,395 21,054 25,153 23,463 20,694 22,009 20,047 11 Mortgage-backed 17,111 20,299 17,881 13,741 27,258 22,715 13,061 9,335 17,834 27,162 16,682 13,811 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 1,096 1,627 1,785 1,659 3,308 1,904 1,601 716 876 1,201 568 893 Coupon securities, by maturity 13 Five years or less 3,016 3,901 3,390 4,802 3,943 3,825 2,883 2,871 2,781 3,010 2,350 2,126 14 More than five years 11,231 14,344 14,516 16,401 14,695 16,291 14,747 12,501 13,146 10,840 13,165 9,908 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 0 0 0 0 0 Coupon securities, by maturity 18 Five years or less 3,257 3,272 2,491 2,714 2,348 3,111 2,317 2,251 2,225 2,691 2,999 2,530 19 More than five years 4,367 4,616 3,872 4,536 3,506 4,420 3,444 4,220 3,280 3,075 2,731 4,433 20 Federal agency 0 0 0 0 0 0 0 0 0 n.a. 0 0 21 Mortgage-backed 669 1,154 760 1,248 732 711 651 688 1,162 801 612 493 1. Transactions are market purchases and sales of securities as reported 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 delivety 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 • July 1995 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1995 1995, week ending IItteemm Jan. Feb. Mar. Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 5,473 4,561 10,749 6,252 14,838 14,691 7,662 4,875 16,251 9,184 5,215 Coupon securities, by maturity 2 Five years or less -10,046 -11,938 -5,840 -3,119 -6,508 -6,877 -9,472 -1,536 -3,582 -2,384 -6,771 3 More than five years -32,608 -24,446 -28,898 -25,747 -28,178 -29,981 -29,126 -28,708 -29,073 -30,790 -29,279 4 Federal agency 19,998 21,199 23,373 24,196 24,219 25,276 23,574 20,959 21,087 22,121 24,792 5 Mortgage-backed 32,272 32,963 32,766 33,705 33,978 32,513 31,658 33,001 31,995 30,873 30,012 NET FUTURES POSITIONS By type of deliverable security 6 U.S. Treasury bills -1,900 -5,786' -10,230 -3,896' -7,337' -9,329' -11,898 -12,879 -11,569 -10,863 -9,908 Coupon securities, by maturity 7 Five years or less 3,627' 1,425' 1,095 735' 525' 531' 1,331' 1,583 2,716 1,694 3,259 8 More than five years 2,315' -2,213' 396 37' 1,297' 2,260' 6' -2,068 892 3,361 2,185 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 240,357 245,656 228,421 251,649 221,724 236,787 241,780 210,876 225,613 226,080 233,383 12 Term 347,704 332,428 363,635 312,527 339,654 358,199 382,645 386,976 343,926 359,782 380,033 Securities borrowed 13 Overnight and continuing 180,806 178,369 170,809 175,644 171,574 172,561 172,159 167,121 167,771 171,489 167,645 14 Term 50,752 50,906 55,699 52,100 54,938 56,336 57,913 55,062 52,406 54,489 56,333 Securities received as pledge 15 Overnight and continuing 3,637 3,321 3,374 3,259 3,284 3,257 3,332 3,471 3,956 3,922 3,971 16 Term 177 52 54 64 17 37 72 80 88 22 44 Repurchase agreements 17 Overnight and continuing 441,838 473,802 469,337 500,915 466,453 492,039 466,609 445,413 477,462 465,802 473,956 18 Term 307,485 279,666 320,370 256,497 287,499 306,140 346,396 358,430 292,858 315,578 341,903 Securities loaned 19 Overnight and continuing 6,686 5,911 3,927 5,160 4,043 4,082 3,952 3,070 5,267 5,354 4,750 20 Term 1,524 1,301 1,216 659 928 n.a. 1,402 1,091 2,286 2,228 2,338 Securities pledged 21 Overnight and continuing 33,191 28,665 28,568 30,357 28,338 28,362' 28,727 28,827 27,734 29,511 30,173 22 Term 1,684 2,278 3,258 3,016 2,892 3,269 3,391 3,496 3,323 2,995 3,060 Collateralized loans 23 Overnight and continuing 14,662 15,921 13,998 11,486 14,808 13,174 15,485 12,338 15,908 18,131 16,804 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 230,535 227,486 219,569 233,735 211,523 233,798 227,955 204,056 215,786 216,930 218,824 26 Term 321,920 304,497 334,781 286,566 316,804 326,727 354,173 353,860 315,355 331,177 350,856 Securities out 27 Overnight and continuing 278,583 285,050 282,171 296,216 273,465 291,830 291,749 265,355 297,143 286,119 286,605 28 Term 258,389 227,576 263,970 201,480 234,267 250,048 287,650 299,327 241,270 261,852 284,974 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 positions 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 1995 AAggeennccyy 11999900 11999911 11999922 11999933 Oct. Nov. Dec. Jan. Feb. 1 Federal and federally sponsored agencies 434,668 442,772 483,970 570,711 698,792 715,782 741,992 740,521 749,285 2 Federal agencies 42,159 41,035 41,829 45,193 39,037 39,662 39,186 39,196 39,054 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 3,932 3,932 3,455 3,455 3,455 5 Federal Housing Administration4 393 397 374 255 114 117 116 59 60 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 Postal Service6 6,948 8,421 10,660 9,732 7,773 8,073 8,073 8,073 7,873 8 Tennessee Valley Authority 23,435 22,401 23,580 29,885 27,212 27,534 27,536 27,603 27,660 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 392,509 401,737 442,141 525,518 659,755 676,120 702,806 701,325 710,231 11 Federal Home Loan Banks 117,895 107,543 114,733 141,577 185,894 193,920 208,881 210,905 208,843 12 Federal Home Loan Mortgage Corporation 30,941 30,262 29,631 49,993 88,680 90,709 93,279 95,060 101,417 13 Federal National Mortgage Association 123,403 133,937 166,300 201,112 242,575 247,743 257,230 250,467 255,719 14 Farm Credit Banks8 53,590 52,199 51,910 53,123 53,609 54,800 53,175 55,558 53,846 15 Student Loan Marketing Association9 34,194 38,319 39,650 39,784 49,112 49,066 50,335 49,425 50,506 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 debt13 179,083 185,576 154,994 128,187 106,935 105,662 103,817 101,157 100,388 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 11,370 9,803 7,202 5,309 3,926 3,926 3,449 3,449 3,449 21 Postal Service6 6,698 8,201 10,440 9,732 7,773 8,073 8,073 8,073 7,873 22 Student Loan Marketing Association 4,850 4,820 4,790 4,760 n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority 14,055 10,725 6,975 6,325 3,200 3,200 3,200 3,200 3,200 24 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Other lending14 25 Farmers Home Administration 52,324 48,534 42,979 38,619 33,869 33,719 33,719 33,669 33,574 26 Rural Electrification Administration 18,890 18,562 18,172 17,578 17,322 17,365 17,392 17,309 17,360 27 Other 70,896 84,931 64,436 45,864 40,845 39,379 37,984 35,457 34,932 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 • July 1995 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1994r 1995 TTyyppee ooff oo iiss rr ss uu uu ee ssee oo rr iissssuueerr,, 11999922 11999933 11999944rr Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues, new and refunding1 226,818 279,945 153,950 7,903 11,053 11,856 9,541 7,717 7,366 11,844 8,506 By type of issue 2 General obligation 78,611 90,599 54,404 2,334 3,202 5,781 2,272 3,770 3,714r 5,459r 3,545 3 Revenue 136,580 189,346 99,546 5,569 7,851 6,075 7,269 3,947 3,652r 6,385r 4,961 By type of issuer 4 State 24,874 27,999 19,186 1,010 1,004 1,530 151 738r 1,032 2,315 994 5 Special district or statutory authority2 138,327 178,714 88,562 5,155 7,198 6,228 7,352 4,835r 4,889' 6,572r 5,815 6 Municipality, county, or township 63,617 73,232 38,868 1,738 2,851 4,098 2,038 2,144r l,445r 2,957r 1,697 7 Issues for new capital 101,865 91,434 105,972 6,195 9,108 9,629 8,444 5,737r 5,670 10,538 6,510 By use of proceeds 8 Education 18,852 16,831 21,267 833 1,632 1,780 1,701 1,411 1,464 1,666 1,826 9 Transportation 14,357 9,167 10,836 335 1,380 623 307 625 671 454 615 10 Utilities and conservation 12,164 12,014 10,192 454 979 974 1,292 538 249 633 345 11 Social welfare 16,744 13,837 20,289 1,919 2,060 1,416 2,208 1,182 869 2,556 1,547 12 Industrial aid 6,188 6,862 8,161 428 450 981 1,046 384 215 1,011 482 13 Other purposes 33,560 32,723 35,227 2,226 2,607 3,855 1,890 l,597r 2,202 4,218 1,695 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 1995r TTyyppee ooff oo rr ii ss ii ss ss uu ss ee uu ,, ee oo rr ffffeerriinngg,, 11999922 11999933 11999944 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 All issues1 559,827 754,969 n.a. 37,870r 29,407r 34,481 38,811 23,261r 37,016 41,527 39,379 2 Bonds2 471,502 641,498 n.a. 34,495 25,983 30,909 33,286 20,493 34,037 36,698 36,495 By type of offering 3 Public, domestic 378,058 486,879 365,050 30,088 22,736 25,192 27,278 17,809 24,078 28,750 32,278 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 56,238 4,406 3,248 5,718 6,008 2,684 9,959 7,948 4,216 By industry group 6 Manufacturing 82,058 88,002 31,981 2,596 2,167 2,498 2,491 1,508 1,497 4,305 2,171 7 Commercial and miscellaneous 43,111 60,293 27,900 3,570 2,112 2,204 1,578 2,469 2,334 3,038 1,941 8 Transportation 9,979 10,756 4,573 315 229 227 239 269 0 199 403 9 Public utility 48,055 56,272 11,713 575 707 695 744 273 734 215 839 10 Communication 15,394 31,950 11,986 345 526 279 333 419 813 1,122 399 11 Real estate and financial 272,904 394,226 333,135 27,094 20,242 25,007 27,902 15,556 28,659 27,818 30,742 12 Stocks2 88,325 113,472 n.a. 3,375 3,444r 3,572 4,972r 2,774r 2,904 4,841 2,884 By type of offering 13 Public preferred 21,339 18,897 12,504 710 555 713 279 178 430 296 205 14 Common 57,118 82,657 47,884r 2,665 2,888f 2,859 4,693r 2,595r 2,474 4,544 2,679 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 C M o a m nu m fa e c rc tu ia r l i n a g n d miscellaneous 2 2 0 2 , , 2 7 3 2 1 3 2 22 5 , , 2 7 7 6 1 1 T 5 8 6 3 9 8 9 8 0 2 8 1 r 1, 7 1 4 0 5 5 1 l, , 7 9 8 6 9 3 r 1, 8 2 5 0 7 3 r 1, 3 0 9 8 2 6 1 1 , , 4 5 2 8 1 3 11,, 88 00 88 00 88 99 18 Transportation 2,595 2,237 n.a. 50 154 79 76 0 19 15 60 19 Public utility 6,532 7,050 1 180 78 4 333 165 134 258 137 20 Communication 2,366 3,439 I 0 0 0 20r 21 496 0 23 21 Real estate and financial 33,879 52,021 \ 1,734 1,481' 1,639 791r 527r 776 1,564 768 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 1995 IItteemm 11999933 11999944 Aug. Sept. Oct. Nov. Dec. Jan. Feb.r Mar. 1 Sales of own shares2 851,885 841,286 64,833 62,263 59,285 56,849 73,183 75,099 59,121 69,898 2 Redemptions of own shares 567,881 699,823 53,242 53,383 53,743 55,757 70,747 63,737 50,738 60,970 3 Net sales3 284,004 141,463 1,592 8,880 5,543 1,092 2,436 11,362 8,383 8,928 4 Assets4 1,510,209 1,550,490 1,604,961 1,588,277 1,601,363 1,549,186 1,550,490 1,563,187 1,619,705 1,657,370 5 Cash5 100,209 121,296 120,315 121,575 126,766 125,843 121,296 124,351 126,307 121,424 6 Other 1,409,838 1,429,195 1,484,646 1,466,702 1,474,597 1,423,344 1,429,195 1,438,836 1,493,399 1,535,946 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 1995 AAccccoouunntt 11999922 11999933 11999944 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 1 Profits with inventory valuation and capital consumption adjustment 405.1 485.8 542.7 473.1 493.5 533.9 508.2 546.4 556.0 560.3 n.a. 2 Profits before taxes 395.9 462.4 524.5 456.6 458.7 501.7 483.5 523.1 538.1 553.5 n.a. 3 Profits-tax liability 139.7 173.2 202.5 171.8 169.9 191.5 184.1 201.7 208.6 215.6 n.a. 4 Profits after taxes 256.2 289.2 322.0 284.8 288.9 310.2 299.4 321.4 329.5 337.9 n.a. 5 Dividends 171.1 191.7 205.2 190.7 193.2 194.6 196.3 202.5 207.9 213.9 217.1 6 Undistributed profits 85.1 97.5 116.9 94.1 95.6 115.6 103.0 118.9 121.6 124.0 n.a. 7 Inventory valuation -6.4 -6.2 -19.5 -10.0 3.0 -6.5 -12.3 -14.1 -19.6 -32.1 -36.5 8 Capital consumption adjustment 15.7 29.5 37.7 26.5 31.7 38.8 37.0 37.4 37.5 38.8 38.1 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.50 NONFARM BUSINESS EXPENDITURES New Plant and Equipment Billions of dollars; quarterly data at seasonally adjusted annual rates 1993 1994 IInndduussttrryy 11999922 11999933 1199994411 Q1 Q2 Q3 Q4 Q1 Q2 Q31 Q41 1 Total nonfarm business 546.60 586.73 638.37 563.48 578.95 594.56 604.51 619.34 637.08 651.92 645.13 Manufacturing 2 Durable goods industries 73.32 81.45 92.78 78.19 80.33 82.74 83.64 86.03 91.71 98.97 94.44 3 Nondurable goods industries 100.69 98.02 99.77 95.80 97.22 99.74 98.51 99.02 102.28 98.39 99.39 Nonmanufacturing 4 Mining 8.88 10.08 11.24 8.98 9.10 11.09 10.92 11.43 10.70 11.57 11.27 Transportation 5 Railroad 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 Electric 48.22 52.55 52.25 49.98 50.61 52.96 55.60 48.68 53.55 54.15 52.60 9 Gas and other 23.99 23.43 24.20 23.79 23.83 22.98 23.27 24.51 22.96 24.35 24.97 10 Commercial and other 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 • July 1995 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1993 1994 AAccccoouunntt 11999922 11999933 11999944rr Q2 Q3 04 Q1 Q2 Q3 Q4r ASSETS 1 Accounts receivable, gross2 491.8 482.8 551.0 473.7 474.0 482.8 494.5 511.3 524.1 551.0 2 Consumer 118.3 116.5 134.8 110.6 111.0 116.5 120.1 124.3 130.3 134.8 3 Business 301.3 294.6 337.6 291.8 291.9 294.6 302.3 313.2 317.2 337.6 4 Real estate 72.2 71.7 78.5 71.4 71.1 71.7 72.1 73.8 76.6 78.5 5 LESS: Reserves for unearned income 53.2 50.7 51.6 49.7 49.5 50.7 51.2 51.9 51.1 51.6 6 Reserves for losses 16.2 11.2 11.6 10.8 11.2 11.2 11.6 12.1 12.1 11.6 7 Accounts receivable, net 422.4 420.9 487.7 413.2 413.3 420.9 431.7 447.3 460.9 487.7 8 All other 142.5 170.9 180.8 151.5 163.9 170.9 171.2 174.6 177.2 180.8 9 Total assets 564.9 591.8 668.5 564.7 577.3 591.8 602.9 621.9 638.1 668.5 LIABILITIES AND CAPITAL 10 Bank loans 37.6 25.3 21.2 29.4 25.8 25.3 24.2 23.3 21.6 21.2 11 Commercial paper 156.4 159.2 184.6 144.5 149.9 159.2 165.9 171.2 171.0 184.6 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 39.5 42.7 50.8 45.0 44.6 42.7 41.1 44.7 50.0 50.8 15 Not elsewhere classified 196.3 206.0 237.2 199.9 204.2 206.0 211.7 219.6 228.2 237.2 16 All other liabilities 68.0 87.1 99.1 77.8 83.8 87.1 90.5 89.9 95.0 99.1 17 Capital, surplus, and undivided profits 67.1 71.4 75.5 68.1 68.9 71.4 69.5 73.2 72.3 75.5 18 Total liabilities and capital 564.9 591.8 668.5 564.7 577.3 591.8 602.9 621.9 638.1 668.5 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 1994 1995 Oct. Nov. Dec. Jan. Feb. Mar. Seasonally adjusted 1 Total 540,679 546,020 610,710 596,397 602,463 610,710 619,785r 624,526r 629,386 2 Consumer 157,857 160,802 174,059 173,178 174,324 174,059 176,358r 174,779r 175,739 3 Real estate2 72,496 71,991 78,774 76,971 77,991 78,774 79,097 80,539 80,033 4 Business 310,325 313,226 357,877 346,248 350,148 357,877 364,329r 369,208 373,614 Not seasonally adjusted 5 Total 544,691 550387 615,758 596,054 603,305 615,758 619,171r 624,161r 630,356 6 Consumer 159,558 162,770 176,316 172,813 174,118 176,316 177,353r 175,623r 176,628 7 Motor vehicles 57,259 56,057 61,609 60,750 61,372 61,609 62,321 61,067 61,256 8 Other consumer 61,020 60,396 73,221 70,812 71,502 73,221 75,147r 73,69 lr 74,534 9 Securitized motor vehicles4 29,734 36,024 31,861 31,592 31,494 31,861 30,261 31,303 32,155 10 Securitized other consumer4 11,545 10,293 9,625 9,659 9,750 9,625 9,624 9,562 8,683 11 Real estate2 72,243 71,727 78,479 77,235 77,907 78,479 79,592 80,754 79,425 12 Business 312,890 315,890 360,963 346,006 351,280 360,963 362,226r 367,784 374,303 13 Motor vehicles 89,011 95,173 118,197 110,089 113,222 118,197 118,979 121,818 126,345 14 Retail5 20,541 18,091 21,514 21,645 22,113 21,514 21,809 21,577 21,652 15 Wholesale6 29,890 31,148 35,037 29,302 30,614 35,037 34,493 36,759 38,868 16 Leasing 38,580 45,934 61,646 59,142 60,495 61,646 62,677 63,482 65,825 17 Equipment 151,424 145,452 157,953 152,675 154,312 157,953 158,820r 159,333 161,306 18 Retail 33,521 35,513 39,680 38,584 38,912 39,680 40,387 40,329 42,024 19 Wholesale6 8,680 8,001 9,678 9,134 9,484 9,678 9,372 9,462 8,913 20 Leasing 109,223 101,938 108,595 104,957 105,916 108,595 109,061r 109,542 110,369 21 Other business 60,856 53,997 61,495 59,314 59,893 61,495 61,304 63,339 62,420 22 Securitized business assets4 11,599 21,268 23,318 23,928 23,853 23,318 23,123 23,294 24,232 23 Retail 1,120 2,483 3,065 2,956 2,853 3,065 2,901 2,764 2,612 24 Wholesale 5,756 10,584 14,499 15,173 15,311 14,499 14,621 15,144 16,435 25 Leasing 4,723 8,201 5,754 5,799 5,689 5,754 5,601 5,386 5,185 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. Digitized for FvRehAicSlesE. R http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A37 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1994 1995 IItteemm 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 158.1 163.1 170.4 173.4 178.2 184.9 176.5 175.6 173.3 174.7 2 Amount of loan (thousands of dollars) 118.1 123.0 130.8 131.9 136.2 136.2 134.2 135.6 132.6 134.6 3 Loan-to-price ratio (percent) 76.6 78.0 78.8 78.3 78.0 76.9 78.0 79.3 78.2 79.2 4 Maturity (years) 25.6 26.1 27.5 27.6 27.9 28.0 28.0 28.3 28.6 28.1 5 Fees and charges (percent of loan amount) 1.60 1.30 1.29 1.22 1.30 1.38 1.31 1.32 1.18 1.14 Yield (percent per year) 6 Contract rate1 7.98 7.03 7.26 7.55 7.59 7.61 7.96 8.07 8.02 7.96 7 Effective rate1,3 8.25 7.24 7.47 7.76 7.81 7.83 8.18 8.28 8.21 8.15 8 Contract rate (HUD series)4 8.43 7.37 8.58 9.19 9.34 9.32 9.11 8.79 8.60 8.44 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.46 7.46 8.68 9.23 9.53 9.54 9.10 9.05 8.60 8.56 10 GNMA securities6 7.71 6.65 7.96 8.67 8.86 8.76 8.69 8.38 8.08 7.96 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 158,119 190,861 222,057 218,479 220,377 222,057 222,774 223,137 223,956 226,197 12 FHA/VA insured 22,593 23,857 28,377 26,226 27,118 28,377 28,368 28,420 28,672 28,664 13 Conventional 135,526 167,004 194,499 192,253 193,259 194,499 195,170 195,439 195,998 198,161 Mortgage transactions (during period) 14 Purchases 75,905 92,037 62,389 5,003 3,549 3,399 2,154 1,802 2,390 3,709 Mortgage commitments (during period) 15 Issued7 74,970 92,537 54,038 3,421 2,696 2,910 1,720 1,683 3,372 3,277 16 To sell8 10,493 5,097 1,820 48 20 55 57 82 64 22 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)* 17 Total 33,665 55,012 72,693 69,340 70,757 72,693 73,553 75,184 77,313 79,147 18 FHA/VA insured 352 321 276 284 279 276 272 270 266 262 19 Conventional 33,313 54,691 72,416 69,057 70,477 72,416 73,281 74,914 77,047 78,885 Mortgage transactions (during period) 20 Purchases 191,125 229,242 124,697 8,351 3,022 4,890 3,254 5,537 4,609 4,530 21 Sales 179,208 208,723 117,110 8,139 2,865 3,769 2,862 4,806 3,546 3,805 Mortgage commitments (during periodf 22 Contracted 261,637 274,599 136,067 7,288 3,454 2,412 6,541 7,741 12,704 13,437 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

A169 Domestic Nonfinancial Statistics • July 1995 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1993 1994 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999911 11999922 11999933 Q4 Q1 Q2 Q3 Q4 1 All holders 3,926,154 4,056,233 4,215,480 4,215,480 4,242,350 4,300,086 4,361,119 4,409,390 By type of property 2 One- to four-family residences 2,781,327 2,963,391 3,147,255 3,147,255 3,181,125 3,234,663 3,291,915 3,339,190 3 Multifamily residences 306,551 295,417 290,489 290,489 289,236 290,807 292,180 292,151 4 Commercial 759,154 716,687 696,542 696,542 690,718 692,764 694,736 695,548 5 79,122 80,738 81,194 81,194 81,272 81,853 82,288 82,500 By type of holder 6 Major financial institutions 1,846,726 1,769,187 1,767,835 1,767,835 1,746,474 1,763,296 1,786,171 1,813,751 7 Commercial banks2 876,100 894,513 940,444 940,444 937,944 956,840 981,365 1,004,237 8 One- to four-family 483,623 507,780 556,538 556,538 553,894 569,512 592,021 609,521 9 Multifamily 36,935 38,024 38,635 38,635 38,690 38,609 38,004 39,289 10 Commercial 337,095 328,826 324,409 324,409 324,106 326,800 328,931 332,859 11 Farm 18,447 19,882 20,862 20,862 21,254 21,918 22,408 22,567 12 Savings institutions 705,367 627,972 598,330 598,330 584,531 585,671 587,538 596,035 13 One- to four-family 538,358 489,622 469,959 469,959 458,057 462,219 466,697 477,144 14 Multifamily 79,881 69,791 67,362 67,362 66,924 66,281 65,530 64,557 15 Commercial 86,741 68,235 60,704 60,704 59,253 56,872 55,019 54,048 16 Farm 388 324 305 305 297 299 291 286 17 Life insurance companies 265,258 246,702 229,061 229,061 223,999 220,785 217,269 213,479 18 One- to four-family 11,547 11,441 9,458 9,458 9,245 9,107 8,956 8,794 19 Multifamily 29,562 27,770 25,814 25,814 25,232 24,855 24,442 24,002 20 Commercial 214,105 198,269 184,305 184,305 180,152 177,463 174,514 171,368 21 Farm 10,044 9,222 9,484 9,484 9,370 9,360 9,357 9,315 22 Federal and related agencies 266,146 286,263 317,486 317,486 323,464 327,690 334,359 335,228 23 Government National Mortgage Association 19 30 22 22 20 12 12 6 24 One- to four-family 19 30 15 15 13 12 12 6 25 Multifamily 0 0 7 7 7 0 0 0 26 Fanners Home Administration4 41,713 41,695 41,386 41,386 41,209 41,370 41,587 41,781 27 One- to four-family 18,496 16,912 15,303 15,303 14,870 14,459 14,084 13,826 28 Multifamily 10,141 10,575 10,940 10,940 11,037 11,147 11,243 11,319 29 Commercial 4,905 5,158 5,406 5,406 5,399 5,526 5,608 5,670 30 Farm 8,171 9,050 9,739 9,739 9,903 10,239 10,652 10,966 31 Federal Housing and Veterans' Administrations 10,733 12,581 12,215 12,215 11,344 11,169 10,533 10,964 32 One- to four-family 4,036 5,153 5,364 5,364 4,738 4,826 4,321 4,753 33 Multifamily 6,697 7,428 6,851 6,851 6,606 6,343 6,212 6,211 34 Resolution Trust Corporation 45,822 32,045 17,284 17,284 14,241 13,908 15,403 10,428 35 One- to four-family 14,535 12,960 7,203 7,203 6,308 6,045 6,998 5,200 36 Multifamily 15,018 9,621 5,327 5,327 4,208 4,230 4,569 2,859 37 Commercial 16,269 9,464 4,754 4,754 3,726 3,633 3,836 2,369 38 Farm 0 0 0 0 0 0 0 0 39 Federal National Mortgage Association 112,283 137,584 166,642 166,642 172,343 175,377 177,200 178,059 40 One- to four-family 100,387 124,016 151,310 151,310 156,576 159,437 161,255 162,160 41 Multifamily 11,896 13,568 15,332 15,332 15,767 15,940 15,945 15,899 42 Federal Land Banks 28,767 28,664 28,460 28,460 28,181 28,475 28,538 28,565 43 One- to four-family 1,693 1,687 1,675 1,675 1,658 1,675 1,679 1,681 44 Farm 27,074 26,977 26,785 26,785 26,523 26,800 26,859 26,885 45 Federal Home Loan Mortgage Corporation 26,809 33,665 51,476 51,476 56,127 57,379 61,087 65,424 46 One- to four-family 24,125 31,032 48,929 48,929 53,571 54,799 58,432 62,594 47 Multifamily 2,684 2,633 2,547 2,547 2,556 2,580 2,655 2,830 48 Mortgage pools or trusts5 1,250,666 1,425,546 1,550,818 1,550,818 1,604,449 1,643,627 1,668,496 1,683,946 49 Government National Mortgage Association 425,295 419,516 414,066 414,066 423,446 435,709 444,976 450,934 50 One- to four-family 415,767 410,675 404,864 404,864 414,194 426,363 435,511 441,198 51 Multifamily 9,528 8,841 9,202 9,202 9,251 9,346 9,465 9,736 52 Federal Home Loan Mortgage Corporation 359,163 407,514 443,029 443,029 459,949 470,183 469,062 467,071 53 One- to four-family 351,906 401,525 438,494 438,494 455,779 466,361 465,614 463,945 54 Multifamily 7,257 5,989 4,535 4,535 4,170 3,822 3,448 3,126 55 Federal National Mortgage Association 371,984 444,979 495,525 495,525 507,376 514,855 523,512 530,343 56 One- to four-family 362,667 435,979 486,804 486,804 498,489 505,730 514,375 520,763 57 Multifamily 9,317 9,000 8,721 8,721 8,887 9,125 9,137 9,580 58 Farmers Home Administration4 47 38 28 28 26 22 20 19 59 One- to four-family 11 8 5 5 5 4 4 3 60 Multifamily 0 0 0 0 0 0 0 0 61 Commercial 19 17 13 13 12 10 9 9 62 Farm 17 13 10 10 9 8 7 7 63 Private mortgage conduits 94,177 153,499 198,171 198,171 213,653 222,858 230,926 235,579 64 One- to four-family 84,000 132,000 164,000 164,000 177,000 179,500 182,300 183,600 65 Multifamily 3,698 6,305 8,701 8,701 9,202 11,514 13,891 14,850 66 Commercial 6,479 15,194 25,469 25,469 27,451 31,844 34,735 37,129 67 Farm 0 0 0 0 0 0 0 0 68 Individuals and others6 562,616 575,237 579,341 579,341 567,963 565,473 572,092 576,465 69 One- to four-family 370,157 382,572 387,334 387,334 376,728 374,612 379,656 384,001 70 Multifamily 83,937 85,871 86,516 86,516 86,700 87,014 87,638 87,893 71 Commercial 93,541 91,524 91,482 91,482 90,621 90,617 92,084 92,096 72 14,981 15,270 14,009 14,009 13,915 13,229 12,714 12,474 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 1995 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb.r Mar. Seasonally adjusted 1 Total 731,098 794,300 911,311 891,603 904,757 911,311 920,338r 928,010 941,815 7. Automobile 257,678 282,036 324,519 318,036 323,447 324,519 324,855 327,720 330,405 3 Revolving 257,304 287,875 337,694 327,707 334,843 337,694 343,184 349,487 356,161 4 Other 216,117 224,389 249,098 245,860 246,467 249,098 252,299r 250,803 255,250 Not seasonally adjusted 5 Total 747,690 812,782 932,890 891,442 906,436 932,890 929,330r 928,123 936,936 By major holder 6 Commercial banks 330,088 368,549 434,790 414,833 421,790 434,790 431,745 432,883 443366,,110022 7 Finance companies 118,279 116,453 134,830 131,562 132,874 134,830 136,699r 134,439 135,790 8 Credit unions 91,694 101,634 120,158 116,325 117,984 120,158 120,668 121,116 122,565 9 Savings institutions 37,049 37,855 38,750 38,122 38,275 38,750 39,250 39,399 39,500 10 Nonfinancial business 49,184 57,637 64,944 56,020 58,247 64,944 61,382 59,169 57,863 11 Pools of securitized assets2 121,396 130,654 139,418 134,580 137,266 139,418 139,586r 141,117 145,116 By major type of credit 17. Automobile 258,226 282,825 325,536 320,182 323,744 325,536 324,826 332266,,777700 329,598 13 Commercial banks 109,623 123,358 148,117 146,456 148,004 148,117 147,319 148,355 148,733 14 Finance companies 57,259 56,057 61,609 60,750 61,372 61,609 62,321 61,067 61,256 15 Pools of securitized assets2 33,888 39,490 34,515 34,394 34,301 34,515 32,902 33,936 34,587 16 Revolving 271,368 303,444 355,859 325,872 336,575 355,859 350,035 349,185 352,249 17 Commercial banks 132,966 149,527 180,530 165,561 171,318 180,530 176,635 177,241 177,389 18 Nonfinancial business 43,974 52,113 58,870 50,332 52,475 58,870 55,405 53,257 51,986 19 Pools of securitized assets 74,931 79,887 93,545 88,762 91,469 93,545 95,015 95,734 99,851 70 Other 218,096 226,513 251,495 245,388 246,117 251,495 254,469r 252,168 255,089 7.1 Commercial banks 87,499 95,664 106,143 102,816 102,468 106,143 107,791 107,287 109,980 22 Finance companies 61,020 60,396 73,221 70,812 71,502 73,221 74,378r 73,372 74,534 23 Nonfinancial business 5,210 5,524 6,074 5,688 5,772 6,074 5,977 5,912 5,877 24 Pools of securitized assets 12,577 11,277 11,358 11,424 11,496 11,358 11,669r 11,447 10,678 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 statistica lrelease. For available. ordering address, see inside front cover. 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent per year except as noted 1994 1995 IItteemm 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. Mar. INTEREST RATES Commercial banks2 1 48-month new car 9.29 8.09 8.12 n.a. n.a. 8.75 n.a. n.a. 99..7700 n.a. 2 24-month personal 14.04 13.47 13.19 n.a. n.a. 13.59 n.a. n.a. 14.10 n.a. Credit card plan 3 All accounts n.a. n.a. 15.91 n.a. n.a. 15.91 n.a. n.a. 1166..2244 n.a. 4 Accounts assessed interest n.a. n.a. 15.74 n.a. n.a. 15.74 n.a. n.a. 15.29 n.a. Auto finance companies 9.93 9.48 9.79 1100..1133 10.39 1100..5533 1100..7722 1111..3355 1111..8899 1111..9955 6 Used car 13.80 12.79 13.49 13.98 14.01 14.19 14.48 14.57 15.06 15.10 OTHER TERMS3 Maturity (months) 7 New car 54.0 54.5 54.0 5544..33 54.9 5544..66 53.9 53.9 5544..11 54.5 8 Used car 47.9 48.8 50.2 50.2 50.2 50.3 50.3 52.0 52.0 52.1 Loan-to-value ratio 9 New car 89 91 92 93 92 93 92 92 92 92 10 Used car 97 98 99 100 100 100 100 99 99 99 Amount financed (dollars) 13,584 14,332 15,375 15,419 1155,,882277 15,971 1166,,118877 16,068 1155,,777744 1155,,882266 12 Used car 9,119 9,875 10,709 10,906 10,554 11,202 11,309 11,185 11,181 11,220 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 • July 1995 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1993 1994 Transaction ratponrv nr cprtnr 11999900 11999922 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors.... 635.6 475.8 536.1 628.1 619.5 740.5 613.3 677.2 657.1 550.6 620.8 649.5 By sector and instrument 2 US. government 246.9 278.2 304.0 256.1 155.9 336.4 173.4 274.2 210.5 122.9 135.0 155.0 3 Treasury securities 238.7 292.0 303.8 248.3 155.7 332.3 157.2 266.5 211.8 118.2 130.7 162.1 4 Budget agency issues and mortgages 8.2 -13.8 .2 7.8 .2 4.1 16.2 7.7 -1.3 4.7 4.3 -7.1 5 Private 388.7 197.5 232.1 372.0 463.7 404.1 439.9 403.0 446.6 427.7 485.8 494.5 By instrument 6 Tax-exempt obligations 48.7 68.7 31.1 78.1 -15.1 130.3 66.2 27.4 22.6 -9.8 -41.2 -32.1 7 Corporate bonds 47.1 78.8 67.5 75.2 21.9 75.7 72.0 67.4 35.5 35.8 14.0 2.4 8 Mortgages 199.5 161.4 123.9 155.7 194.1 152.2 222.2 148.5 163.0 188.6 239.8 185.0 9 Home mortgages 185.6 163.8 179.5 183.9 191.9 193.5 236.5 184.5 191.2 172.3 224.8 179.5 10 Multifamily residential 4.8 -3.1 -11.2 -6.1 1.7 -11.4 -4.9 -2.6 -5.1 6.1 5.5 .4 11 Commercial 9.3 .4 -45.5 -22.5 -.9 -30.9 -9.9 -33.6 -23.4 7.8 7.8 4.3 12 Farm -.3 .4 1.1 .5 1.3 1.0 .4 .2 .3 2.3 1.7 .8 13 Consumer credit 16.0 -15.0 5.5 62.3 117.5 41.6 76.2 111.3 72.7 121.9 125.9 149.4 14 Bank loans n.e.c .4 -40.9 -13.8 5.0 77.6 -.2 7.8 28.5 68.2 57.9 89.4 94.8 15 Commercial paper 9.7 -18.4 8.6 10.0 21.4 33.2 17.2 3.8 8.0 16.4 33.8 27.2 16 Other loans 67.4 -37.1 9.2 -14.4 46.3 -28.6 -21.7 16.2 76.5 16.9 24.1 67.8 By borrowing sector 17 Household 218.9 170.9 217.7 284.5 349.6 264.1 368.5 337.7 304.3 316.0 387.7 390.5 18 Nonfinancial business 123.7 -35.9 -2.0 21.9 143.3 26.7 24.1 48.2 135.8 139.9 146.8 150.7 19 Farm 2.3 2.1 1.0 2.0 2.3 2.7 4.1 3.6 2.6 8.1 1.7 -3.2 20 Nonfarm noncorporate 10.1 -28.5 -43.9 -26.0 19.8 -33.4 -26.2 -15.6 8.4 18.5 28.9 23.2 21 Corporate 111.3 -9.6 40.9 45.8 121.2 57.4 46.3 60.2 124.7 113.2 116.2 130.7 22 State and local government 46.0 62.6 16.4 65.7 -29.3 113.2 47.3 17.1 6.5 -28.2 -48.7 -46.6 23 Foreign net borrowing in United States 23.9 13.9 21.3 46.9 -12.1 42.8 83.1 22.9 -66.3 -10.1 4.1 23.9 24 Bonds 21.4 14.1 14.4 59.4 17.1 45.3 84.5 41.4 29.0 9.4 4.9 25.2 25 Bank loans n.e.c -2.9 3.1 2.3 .7 1.4 6.6 1.0 -6.3 6.0 -4.5 4.7 -.5 26 Commercial paper 12.3 6.4 5.2 -9.0 -27.3 -.6 -1.6 -12.0 -101.8 -5.2 -8.1 5.9 27 U.S. government and other loans -7.0 -9.8 -.6 -4.2 -3.3 -8.4 -.8 -.1 .5 -9.8 2.8 -6.6 28 Total domestic plus foreign 659.4 489.6 557.4 675.0 607.4 783.3 696.4 700.2 590.8 540.5 624.9 673.4 Financial sectors 29 Total net borrowing by financial sectors 202.9 152.6 237.1 286.1 419.9 175.5 438.9 349.8 488.9 343.5 367.7 479.6 By instrument 30 US. government-related 167.4 145.7 155.8 161.2 268.2 56.6 287.3 131.3 320.8 245.2 224.9 281.7 31 Government-sponsored enterprises securities 17.1 9.2 40.3 80.6 177.2 68.8 167.8 53.4 160.0 146.6 152.1 250.2 32 Mortgage pool securities 150.3 136.6 115.6 80.6 95.7 -12.2 119.5 77.9 180.0 98.6 72.8 31.5 33 Loans from U.S. government -.1 .0 .0 .0 -4.8 .0 .0 .0 -19.2 .0 .0 .0 34 35.5 6.8 81.3 125.0 151.8 118.9 151.6 218.5 168.2 98.3 142.8 197.9 35 Corporate bonds 46.3 67.6 78.5 118.3 103.3 92.4 143.4 138.3 154.5 91.9 84.3 82.8 36 Mortgages .6 .5 .6 3.6 -.2 1.4 6.2 5.5 .2 .6 .1 -1.5 37 Bank loans n.e.c 4.7 8.8 2.2 -14.0 -15.8 12.8 -16.1 -18.0 -12.3 -30.1 -14.6 -6.2 38 Open market paper 8.6 -32.0 -.7 -6.2 41.6 -16.2 -9.4 76.0 36.6 3.6 42.3 84.0 39 Loans from Federal Home Loan Banks -24.7 -38.0 .8 23.3 22.8 28.4 27.4 16.8 -10.8 32.3 30.7 38.8 By borrowing sector 40 Government-sponsored enterprises 17.0 9.1 40.2 80.6 172.4 68.8 167.8 53.4 140.8 146.6 152.1 250.2 41 Federally related mortgage pools 150.3 136.6 115.6 80.6 95.7 -12.2 119.5 77.9 180.0 98.6 72.8 31.5 42 35.5 6.8 81.3 125.0 151.8 118.9 151.6 218.5 168.2 98.3 142.8 197.9 43 Commercial banks -.7 -11.7 8.8 5.6 10.0 11.3 6.5 1.2 2.0 12.4 22.8 2.9 44 Bank holding companies -27.7 -2.5 2.3 8.8 8.4 1.3 .5 12.2 3.5 10.1 11.5 8.5 45 Funding corporations 15.4 -6.5 13.2 2.9 25.8 -1.6 7.9 36.7 48.2 -17.9 46.5 26.3 46 Savings institutions -30.2 -44.5 -6.7 11.1 12.8 12.6 13.5 8.8 -5.6 5.8 14.8 36.1 47 Credit unions .0 .0 .0 .2 .2 .3 .3 .1 .1 .2 .5 .2 48 Life insurance companies .0 .0 .0 .2 .3 .6 -.1 .4 .0 .0 .0 1.3 49 Finance companies 24.0 18.6 -3.6 .2 50.3 -13.6 17.5 16.3 63.3 67.0 16.9 54.0 50 Mortgage companies .0 -2.4 8.0 -1.0 -13.0 32.4 -.8 -10.4 -21.6 -18.2 -7.0 -5.0 51 Real estate investment trusts (REITs) .8 1.2 .3 3.5 1.7 1.3 6.0 6.2 1.2 2.2 2.3 1.1 52 Issuers of asset-backed securities (ABSs) 52.3 51.0 56.3 81.5 54.7 60.5 85.8 117.6 86.9 36.5 42.2 53.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 11999944 Q2 Q3 Q4 Q1 Q2 Q3 Q4 All sectors 53 Total net borrowing, all sectors 862.3 642.2 794.5 961.2 1,027.3 958.8 1,135.3 1,050.0 1,079.7 884.0 992.6 1,153.0 54 U.S. government securities 414.4 424.0 459.8 417.3 428.8 393.0 460.7 405.5 550.5 368.1 359.9 436.7 55 Tax-exempt securities 48.7 68.7 31.1 78.1 -15.1 130.3 66.2 27.4 22.6 -9.8 -41.2 -32.1 56 Corporate and foreign bonds 114.7 160.5 160.4 252.9 142.4 213.4 299.9 247.1 219.0 137.0 103.1 110.3 57 Mortgages 200.1 161.9 124.5 159.2 193.9 153.5 228.3 154.0 163.2 189.1 239.9 183.5 58 Consumer credit 16.0 -15.0 5.5 62.3 117.5 41.6 76.2 111.3 72.7 121.9 125.9 149.4 59 Bank loans n.e.c 2.2 -29.1 -9.4 -8.3 63.2 19.2 -7.3 4.2 61.9 23.3 79.5 88.1 60 Open market paper 30.7 -44.0 13.1 -5.1 35.7 16.4 6.3 67.7 -57.2 14.8 68.0 117.1 61 Other loans 35.6 -84.9 9.5 4.7 61.0 -8.7 4.9 32.9 47.0 39.4 57.6 100.0 Funds raised through mutual funds and corporate equities 62 Total net share issues 19.7 215.4 296.0 437.1 159.8 471.9 498.0 434.5 312.3 236.4 126.7 -36.0 63 Mutual funds 65.3 151.5 211.9 317.0 128.3 358.0 348.9 292.0 204.5 167.0 129.3 12.3 64 Corporate equities -45.6 64.0 84.1 120.1 31.6 113.9 149.1 142.4 107.8 69.4 -2.6 -48.3 65 Nonfinancial corporations -63.0 18.3 27.0 21.3 -40.9 23.2 32.3 21.5 -9.6 -2.0 -50.0 -102.0 66 Financial corporations 10.0 15.1 26.4 38.2 28.6 38.6 38.2 40.9 47.9 24.8 23.7 17.9 67 Foreign shares purchased in United States 7.4 30.7 30.7 60.6 43.9 52.1 78.6 80.0 69.4 46.7 23.7 35.7 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Financial Statistics • July 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 11999900 11999911 11999922 11999933 11999944 Q2 Q3 Q4 Q1 Q2 Q3 Q4 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 862.3 642.2 794.5 961.2 1,027.3 958.8 1,135.3 1,050.0 1,079.7 884.0 992.6 1,153.0 2 Private domestic nonfinancial sectors 190.1 -7.5 72.0 4.8 296.5 -4.6 -39.5 86.3 391.3 340.1 152.0 302.5 3 Households 157.2 -39.6 70.7 -11.5 378.3 -76.5 -69.7 174.7 394.3 408.3 246.6 464.1 4 Nonfarm noncorporate business -1.7 -3.7 -1.1 -3.2 -2.0 -3.2 -3.3 -3.5 -3.6 -1.8 -1.9 -.5 5 Nonfinancial corporate business -3.7 6.7 29.2 18.0 18.2 17.3 41.2 16.0 22.3 16.9 21.8 11.7 6 State and local governments 38.3 29.2 -26.8 1.5 -98.0 57.7 -7.7 -101.0 -21.6 -83.2 -114.4 -172.7 7 U.S. government 33.7 10.5 -11.9 -18.4 -19.6 -27.1 -15.4 -7.9 -40.8 -11.1 -.9 -25.7 8 Foreign 85.5 26.6 100.5 126.0 129.0 93.4 123.5 221.2 127.6 49.4 119.6 219.6 9 Financial sectors 553.0 612.5 633.9 848.8 621.4 897.1 1,066.6 750.4 601.6 505.5 721.9 656.6 10 Government sponsored enterprises 13.9 15.2 69.0 90.2 118.9 128.0 144.8 71.2 92.4 101.1 125.6 156.5 11 Federally related mortgage pools 150.3 136.6 115.6 80.6 95.7 -12.2 119.5 77.9 180.0 98.6 72.8 31.5 12 Monetary authority 8.1 31.1 27.9 36.2 31.5 35.7 28.2 38.5 48.8 17.9 24.0 35.4 13 Commercial banking 125.1 80.8 95.3 142.2 162.1 133.4 146.7 188.1 184.7 109.1 191.3 163.3 14 U.S. commercial banks 94.9 35.7 69.5 149.6 148.1 137.4 160.3 197.3 120.6 128.4 164.6 178.7 15 Foreign banking offices 28.4 48.5 16.5 -9.8 11.0 -14.3 -16.9 -6.5 59.0 -21.5 22.1 -15.7 16 Bank holding companies -2.8 -1.5 5.6 .0 1.1 7.9 1.2 -4.8 3.1 .2 2.7 -1.5 17 Banks in U.S. affiliated areas 4.5 -1.9 3.7 2.4 1.9 2.4 2.2 2.1 2.1 1.9 1.9 1.8 18 Funding corporations 16.1 15.8 23.5 18.1 12.6 1.1 32.4 42.6 17.8 35.3 21.4 -24.1 19 Thrift institutions -154.0 -123.5 -61.3 -1.7 35.6 16.1 21.0 -13.3 13.6 42.6 52.0 34.1 20 Life insurance companies 94.4 83.2 79.1 105.1 55.4 109.4 111.8 86.4 53.7 6.1 83.4 78.3 21 Other insurance companies 26.5 32.6 12.8 33.3 21.1 36.0 37.6 32.1 27.9 20.8 16.0 19.7 22 Private pension funds 17.2 85.7 37.3 40.2 -42.8 11.1 91.9 -60.1 -97.7 -30.7 -17.5 -25.5 23 State and local government retirement funds 34.9 46.0 34.4 25.5 43.8 47.5 27.4 36.9 30.3 51.2 41.5 52.1 24 Finance companies 29.0 -12.7 1.7 -9.0 66.8 -34.7 9.4 22.6 72.1 49.8 58.9 86.4 25 Mortgage companies .0 11.2 .1 .0 -26.0 65.1 -1.6 -13.3 -43.5 -36.3 -14.0 -10.0 26 Mutual funds 41.4 90.3 123.7 164.0 -14.0 194.4 174.6 138.4 18.0 11.3 -18.7 -66.5 27 Closed-end funds .2 14.7 17.4 10.2 3.5 10.5 5.9 7.7 8.3 3.2 1.4 1.0 28 Money market funds 80.9 30.1 1.3 14.7 30.5 33.3 25.3 57.3 -44.5 33.7 54.4 78.4 29 Real estate investment trusts (REITs) -.7 -.7 1.1 .6 .7 .8 1.0 .2 .7 .7 .7 .7 30 Brokers and dealers 2.8 17.5 -6.9 9.2 -32.0 52.5 -7.8 -82.8 -56.1 -52.6 -11.8 -7.6 31 Asset-backed securities issuers (ABSs) 51.1 48.9 53.8 80.1 51.8 59.4 88.6 111.1 86.0 38.7 37.4 45.1 32 Bank personal trusts 15.9 10.0 8.0 9.5 6.3 10.0 9.9 8.9 9.3 5.2 2.9 7.7 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Net flows through credit markets 862.3 642.2 794.5 961.2 1,027J 958.8 1,135.3 1,050.0 1,079.7 884.0 992.6 1,153.0 Other financial sources 34 Official foreign exchange 2.0 -5.9 -1.6 .8 -5.6 -4.0 1.7 2.2 -.2 -14.6 .2 -7.8 35 Special drawing rights certificates 1.5 .0 -2.0 .0 .0 .0 .0 .0 .0 .0 .0 .0 36 Treasury currency 1.0 .0 .2 .4 .7 .4 .4 .7 .7 .6 .8 .7 37 Life insurance reserves 25.7 25.7 27.3 35.2 20.1 35.3 36.6 35.5 20.0 8.1 23.8 28.7 38 Pension fund reserves 165.1 360.3 249.7 309.2 113.9 313.7 349.9 251.6 -8.8 64.3 214.4 185.6 39 Interbank claims 35.4 -3.9 61.7 44.7 85.0 128.9 -5.0 -13.7 150.9 184.9 -26.6 30.8 40 Checkable deposits and currency 43.3 86.4 113.8 117.3 -10.3 214.4 73.1 81.9 173.1 -66.1 -87.4 -60.6 41 Small time and savings deposits 63.7 1.5 -57.2 -70.3 -39.8 -67.8 -68.1 -36.6 2.5 -62.4 -56.4 -42.9 42 Large time deposits -66.1 -58.5 -73.2 -23.5 20.7 -26.8 -59.5 13.7 -39.6 -4.4 83.8 42.9 43 Money market fund shares 70.3 41.2 3.9 15.3 46.3 61.8 .6 45.7 -33.5 67.8 50.3 100.8 44 Security repurchase agreements -24.2 -16.5 35.5 65.5 79.1 37.9 67.8 -14.4 14.3 175.9 76.9 49.3 45 Foreign deposits 38.2 -16.7 -7.2 -11.0 13.1 -17.1 -50.7 35.7 16.4 14.6 -8.4 29.6 46 Mutual fund shares 65.3 151.5 211.9 317.0 128.3 358.0 348.9 292.0 204.5 167.0 129.3 12.3 47 Corporate equities -45.6 64.0 84.1 120.1 31.6 113.9 149.1 142.4 107.8 69.4 -2.6 -48.3 48 Security credit 3.5 51.4 4.2 61.9 -3.0 40.0 76.6 86.5 29.7 -17.5 -61.7 37.3 49 Trade debt 37.0 3.6 41.5 49.0 75.6 51.0 49.6 51.9 35.6 87.2 92.2 87.4 50 Taxes payable -4.8 -6.2 8.5 4.6 2.3 7.3 -1.8 4.9 14.2 -11.6 2.7 3.9 51 Noncorporate proprietors' equity -28.3 -3.3 18.4 -10.2 -44.8 -14.9 6.3 -25.6 -50.3 -44.6 -40.7 -43.8 52 Investment in bank personal trusts 29.7 16.1 -7.1 1.6 4.6 -7.2 .1 17.6 15.4 -15.5 6.7 11.9 53 Miscellaneous 135.7 197.2 257.6 289.7 260.0 402.1 221.4 342.0 359.6 272.3 289.2 118.9 54 Total financial sources 1,410.6 1,530.2 1,764.5 2,278.5 1,805.1 2,585.6 2,332.5 2,364.0 2,092.0 1,759.5 1,679.0 1,689.9 Floats not included in assets (-) 55 US. government checkable deposits 3.3 -13.1 .7 -1.5 -4.7 2.9 2.1 -15.5 -2.4 -1.4 15.2 -30.3 56 Other checkable deposits 8.5 4.5 1.6 -1.3 -2.8 8.3 -5.2 -6.2 .6 -1.1 -6.2 -4.3 57 Trade credit 9.1 9.7 4.1 16.5 -.9 25.7 22.2 12.5 -25.7 5.6 14.1 2.3 Liabilities not identified as assets (—) 58 Treasury currency .2 -.6 -.2 -.2 -.2 -.2 -.2 -.2 -.2 -.2 -.2 -.2 59 Interbank claims 1.6 26.2 -4.9 4.2 -2.7 .5 -10.4 24.0 -29.1 5.3 11.3 1.7 60 Security repurchase agreements -24.0 6.2 27.9 82.2 41.7 60.8 66.6 21.6 4.4 117.3 62.1 -17.1 61 Taxes payable .1 1.3 14.0 1.0 -1.1 18.2 1.2 -8.6 -.3 4.2 -4.6 -3.8 62 Miscellaneous -35.4 -45.3 -46.0 -41.9 -7.3 -98.0 -20.9 48.2 -66.0 -171.5 147.5 61.0 63 Total identified to sectors as assets 1,447.2 1,541.2 1,767.2 2,219.5 1,783.2 2,567.4 2,277.1 2,288.2 2,210.9 1,801.3 1,439.9 1,680.5 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 F.6 and F.7. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999911 11999922 11999933 11999944 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 11,181.5 11,720.7 12,363.1 12,982.5 12,008.9 12,1553 12,363.1 12,487.0 12,633.0 12,780.4 12,982.5 By sector and instrument 2 US. government 2,776.4 3,080.3 3,336.5 3,492.3 3,201.2 3,247.3 3,336.5 3,387.7 3,395.4 3,432.6 3,492.3 3 Treasury securities 2,757.8 3,061.6 3,309.9 3,465.6 3,180.6 3,222.6 3,309.9 3,361.4 3,368.0 3,404.1 3,465.6 4 Budget agency issues and mortgages 18.6 18.8 26.6 26.7 20.6 24.7 26.6 26.3 27.4 28.5 26.7 5 Private 8,405.1 8,640.4 9,026.6 9,490.2 8,807.7 8,908.1 9,026.6 9,099.3 9,237.6 9,347.7 9,490.2 By instrument 6 Tax-exempt obligations 1,108.6 1,139.7 1,217.8 1,202.7 1,202.2 1,210.0 1,217.8 1,222.3 1,229.5 1,209.9 1,202.7 7 Corporate bonds 1,086.9 1,154.4 1,229.6 1,251.6 1,194.8 1,212.8 1,229.6 1,238.5 1,247.5 1,251.0 1,251.6 8 Mortgages 3,920.0 4,043.9 4,206.5 4,400.6 4,109.9 4,166.6 4,206.5 4,233.3 4,290.9 4,351.9 4,400.6 9 Home mortgages 2,780.0 2,959.6 3,147.3 3,339.2 3,038.1 3,098.3 3,147.3 3,181.1 3,234.7 3,291.9 3,339.2 10 Multifamily residential 304.8 293.6 287.5 289.2 289.4 288.2 287.5 286.3 287.8 289.1 289.2 11 Commercial 755.8 710.3 690.6 689.7 701.4 699.0 690.6 684.7 686.6 688.6 689.7 1? Farm 79.3 80.4 81.2 82.5 81.0 81.1 81.2 81.3 81.9 82.3 82.5 n Consumer credit 797.4 803.0 866.5 984.0 800.2 824.3 866.5 863.6 895.3 931.8 984.0 14 Bank loans n.e.c 686.0 672.1 677.2 754.7 666.3 665.6 677.2 687.3 707.4 726.4 754.7 n Commercial paper 98.5 107.1 117.8 139.2 124.0 123.2 117.8 129.9 135.7 138.7 139.2 16 Other loans 707.8 720.2 711.1 757.4 710.2 705.5 711.1 724.3 731.2 738.1 757.4 By borrowing sector 17 Household 3,784.7 4,002.3 4,292.0 4,641.3 4,093.0 4,190.9 4,292.0 4,331.7 4,425.0 4,527.1 4,641.3 18 Nonfinancial business 3,709.3 3,710.5 3,741.5 3,885.0 3,729.8 3,729.1 3,741.5 3,774.0 3,816.3 3,845.8 3,885.0 19 Farm 135.0 136.0 138.3 140.6 136.7 138.7 138.3 136.6 141.3 142.8 140.6 20 Nonfarm noncorporate 1,116.4 1,074.1 1,049.1 1,068.8 1,059.4 1,052.2 1,049.1 1,050.4 1,055.6 1,062.2 1,068.8 21 Corporate 2,458.0 2,500.4 2,554.1 2,675.6 2,533.7 2,538.3 2,554.1 2,586.9 2,619.3 2,640.9 2,675.6 22 State and local government 911.1 927.5 993.2 963.9 984.9 988.0 993.2 993.6 996.3 974.8 963.9 23 Foreign credit market debt held in United States 298.8 310.9 357.8 345.8 332.0 3513 357.8 3403 339.2 338.8 345.8 74 129.5 143.9 203.4 220.4 171.9 193.0 203.4 210.6 212.9 214.2 220.4 75 Bank loans n.e.c 21.6 23.9 24.6 26.1 25.9 26.2 24.6 26.2 25.1 26.3 26.1 7,6 Commercial paper 81.8 77.7 68.7 41.4 72.1 71.7 68.7 43.3 42.0 39.9 41.4 27 U.S. government and other loans 65.9 65.3 61.1 57.8 62.0 60.3 61.1 60.3 59.2 58.4 57.8 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 11,4803 12,031.6 12,720.8 13,328.3 12,340.9 12,506.6 12,720.8 12,8273 12,972.2 13,119.2 13,3283 Financial sectors 79 Total credit market debt owed by financial sectors 2,752.1 3,004.7 3,297.3 3,722.4 3,096.6 3,204.7 3,2973 3,4153 3,507.6 3,597.7 3,722.4 By instrument 30 U.S. government-related 1,564.2 1,720.0 1,881.1 2,149.3 1,774.5 1,845.2 1,881.1 1,954.5 2,021.1 2,075.9 2,149.3 31 Government-sponsored enterprises securities 402.9 443.1 523.7 700.9 468.4 510.3 523.7 563.7 600.3 638.3 700.9 32 Mortgage pool securities 1,156.5 1,272.0 1,352.6 1,448.4 1,301.3 1,330.1 1,352.6 1,390.8 1,420.8 1,437.6 1,448.4 33 Loans from U.S. government 4.8 4.8 4.8 .0 4.8 4.8 4.8 .0 .0 .0 .0 34 1,187.9 1,284.8 1,416.1 1,573.2 1,322.2 1,359.5 1,416.1 1,460.9 1,486.6 1,521.8 1,573.2 35 CCoorrppoorraattee bboonnddss 640.0 724.8 844.1 944.9 774.8 810.5 844.1 880.8 904.5 925.4 944.9 36 4.8 5.4 8.9 8.8 6.0 7.6 8.9 9.0 9.1 9.2 8.8 37 78.4 80.5 66.5 50.7 73.3 69.2 66.5 61.8 54.1 50.5 50.7 38 Open market paper 385.7 394.3 393.5 442.8 375.9 373.2 393.5 408.8 410.3 420.5 442.8 39 Loans from Federal Home Loan Banks 79.1 79.9 103.1 125.9 92.1 98.9 103.1 100.4 108.5 116.2 125.9 By borrowing sector 40 Government-sponsored enterprises 407.7 447.9 528.5 700.9 473.2 515.1 528.5 556633..77 600.3 663388..33 770000..99 41 Federally related mortgage pools 1,156.5 1,272.0 1,352.6 1,448.4 1,301.3 1,330.1 1,352.6 1,390.8 1,420.8 1,437.6 1,448.4 47 Private financial sectors 1,187.9 1,284.8 1,416.1 1,573.2 1,322.2 1,359.5 1,416.1 1,460.9 1,486.6 1,521.8 1,573.2 43 Commercial banks 65.0 73.8 79.5 89.5 76.6 77.9 79.5 78.4 82.1 87.5 89.5 44 Bank holding companies 112.3 114.6 123.4 131.8 120.2 120.3 123.4 124.2 126.8 129.6 131.8 45 Funding corporations 139.1 161.6 169.9 200.9 166.5 166.3 169.9 190.6 191.1 200.1 200.9 46 Savings institutions 94.6 87.8 99.0 111.7 93.4 96.8 99.0 97.6 99.0 102.7 111.7 47 Credit unions .0 .0 .2 .5 .1 .2 .2 .3 .3 .4 .5 48 Life insurance companies .0 .0 .2 .6 .2 .1 .2 .3 .3 .3 .6 49 Finance companies 393.0 389.4 390.5 440.8 373.8 380.0 390.5 401.9 414.2 420.9 440.8 50 Mortgage companies 22.2 30.2 29.2 16.3 32.0 31.8 29.2 23.8 19.3 17.5 16.3 51 Real estate investment trusts (REITs) 13.6 13.9 17.4 19.1 14.4 15.8 17.4 17.7 18.3 18.8 19.1 52 Issuers of asset-backed securities (ABSs) 329.1 391.7 473.2 527.8 422.3 443.8 473.2 494.9 504.0 514.5 527.8 All sectors 53 Total credit market debt, domestic and foreign.... 14,232.3 15,0363 16,018.1 17,050.7 15,437.5 15,7113 16,018.1 16,242.6 16,479.8 16,716.9 17,050.7 54 U.S. government securities 4,335.7 4,795.5 5,212.8 5,641.6 4,970.9 5,087.7 5,212.8 5,342.2 5,416.5 5,508.6 5,641.6 55 Tax-exempt securities 1,108.6 1,139.7 1,217.8 1,202.7 1,202.2 1,210.0 1,217.8 1,222.3 1,229.5 1,209.9 1,202.7 56 CCoorrppoorraattee aanndd ffoorreeiiggnn bboonnddss 1,856.5 2,023.1 2,277.0 2,416.9 2,141.5 2,216.3 2,277.0 2,329.9 2,364.9 2,390.5 2,416.9 57 3,924.8 4,049.3 4,215.5 4,409.4 4,116.0 4,174.2 4,215.5 4,242.4 4,300.1 4,361.1 4,409.4 58 797.4 803.0 866.5 984.0 800.2 824.3 866.5 863.6 895.3 931.8 984.0 59 785.9 776.6 768.4 831.6 765.5 761.0 768.4 775.4 786.6 803.2 831.6 60 Open market paper 565.9 579.0 580.0 623.5 572.0 568.2 580.0 582.0 587.9 599.2 623.5 61 Other loans 857.5 870.2 880.1 941.1 869.1 869.6 880.1 884.9 898.9 912.7 941.1 Digitized for FR1A. SDaEtaR in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Financial Statistics • July 1995 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1993 1994 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999911 11999922 11999933 11999944 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 14,232.3 15,036.3 16,018.1 17,050.7 15,437.5 15,711.3 16,018.1 16,242.6 16,479.8 16,716.9 17,050.7 2 Private domestic nonfinancial sectors 2,240.2 2,318.0 2,338.9 2,663.4 2,296.1 2,284.8 2,338.9 2,432.9 2,513.8 2,551.1 2,663.4 3 Households 1,446.5 1,523.1 1,525.9 1,932.3 1,473.3 1,459.6 1,525.9 1,631.1 1,723.4 1,789.3 1,932.3 4 Nonfarm noncorporate business 44.1 42.9 39.7 37.7 41.4 40.6 39.7 38.8 38.4 37.9 37.7 5 Nonfinancial corporate business 196.2 225.4 248.1 266.2 227.3 234.7 248.1 243.8 250.9 253.9 266.2 6 State and local governments 553.3 526.5 525.2 427.2 554.2 549.9 525.2 519.2 501.1 470.0 427.2 7 U.S. government 246.9 235.0 216.6 197.0 223.1 218.8 216.6 206.3 204.0 203.3 197.0 8 Foreign 958.1 1,052.7 1,175.1 1,304.1 1,084.0 1,118.1 1,175.1 1,206.8 1,218.5 1,251.3 1,304.1 9 Financial sectors 10,787.2 11,430.6 12,287.5 12,886.2 11,834.2 12,089.6 12,287.5 12,396.5 12,543.5 12,711.1 12,886.2 10 Government-sponsored enterprises 390.7 459.7 549.8 668.7 495.5 531.8 549.8 572.0 597.9 629.4 668.7 11 Federally related mortgage pools 1,156.5 1,272.0 1,352.6 1,448.4 1,301.3 1,330.1 1,352.6 1,390.8 1,420.8 1,437.6 1,448.4 12 Monetary authority 272.5 300.4 336.7 368.2 318.2 324.2 336.7 341.5 351.6 356.8 368.2 13 Commercial banking 2,853.3 2,948.6 3,090.8 3,252.9 2,998.8 3,036.4 3,090.8 3,120.2 3,156.2 3,204.2 3,252.9 14 U.S. commercial banks 2,502.5 2,571.9 2,721.5 2,869.6 2,628.5 2,670.2 2,721.5 2,743.8 2,780.3 2,822.4 2,869.6 15 Foreign banking offices 319.2 335.8 326.0 337.0 327.1 322.3 326.0 331.8 330.8 335.5 337.0 16 Bank holding companies 11.9 17.5 17.5 18.6 18.4 18.7 17.5 18.2 18.3 19.0 18.6 17 Banks in U.S. affiliated areas 19.7 23.4 25.8 27.8 24.8 25.3 25.8 26.4 26.8 27.3 27.8 18 Funding corporations 51.5 75.0 93.1 105.6 74.3 82.4 93.1 97.5 106.3 111.7 105.6 19 Thrift institutions 1,192.6 1,134.5 1,132.7 1,168.3 1,130.0 1,136.5 1,132.7 1,134.2 1,146.1 1,160.1 1,168.3 20 Life insurance companies 1,199.6 1,278.8 1,383.9 1,439.3 1,343.9 1,372.1 1,383.9 1,404.2 1,409.1 1,430.3 1,439.3 21 Other insurance companies 376.6 389.4 422.7 443.8 405.3 414.6 422.7 429.6 434.8 438.8 443.8 22 Private pension funds 693.0 730.4 770.6 727.7 762.6 785.6 770.6 746.2 738.5 734.1 727.7 23 State and local government retirement funds 479.9 514.3 542.6 586.4 526.5 533.4 542.6 550.2 563.0 573.3 586.4 24 Finance companies 484.9 486.6 482.8 549.6 473.7 474.0 482.8 494.5 511.3 524.1 549.6 25 Mortgage companies 60.3 60.5 60.4 34.5 64.1 63.8 60.4 49.5 40.4 37.0 34.5 26 Mutual funds 450.5 574.2 738.2 701.6 659.9 703.6 738.2 720.1 722.9 718.2 701.6 27 Closed-end funds 50.3 67.7 77.9 81.4 74.5 76.0 77.9 80.0 80.8 81.1 81.4 28 Money market funds 402.7 404.1 418.8 449.2 403.9 400.6 418.8 422.2 422.0 425.1 449.2 29 Real estate investment trusts (REITs) 7.0 8.1 8.6 9.3 8.3 8.6 8.6 8.8 9.0 9.1 9.3 30 Brokers and dealers 124.0 117.1 126.3 94.3 149.0 147.1 126.3 112.3 99.2 96.2 94.3 31 Asset-backed securities issuers (ABSs) 317.8 377.9 458.0 509.8 408.1 430.2 458.0 479.5 489.2 498.5 509.8 32 Bank personal trusts 223.5 231.5 240.9 247.2 236.2 238.7 240.9 243.3 244.6 245.3 247.2 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Total credit market debt 14,232.3 15,0363 16,018.1 17,050.7 15,437.5 15,711.3 16,018.1 16,242.6 16,479.8 16,716.9 17,050.7 Other liabilities 34 Official foreign exchange 55.4 51.8 53.4 53.2 53.9 55.6 53.4 56.4 54.9 55.5 53.2 35 Special drawing rights certificates 10.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 36 Treasury currency 16.3 16.5 17.0 17.6 16.7 16.8 17.0 17.1 17.3 17.5 17.6 37 Life insurance reserves 405.7 433.0 468.2 488.4 450.2 459.4 468.2 473.2 475.2 481.2 488.4 38 Pension fund reserves 4,138.3 4,516.5 4,974.7 5,061.2 4,730.8 4,887.8 4,974.7 4,923.0 4,915.8 5,045.5 5,061.2 39 Interbank claims 96.4 132.8 177.7 263.8 145.2 166.9 177.7 204.2 223.8 243.4 263.8 40 Deposits at financial institutions 5,044.8 5,059.1 5,152.4 5,261.5 5,097.1 5,088.5 5,152.4 5,158.9 5,180.5 5,198.2 5,261.5 41 Checkable deposits and currency 1,020.6 1,134.4 1,251.7 1,241.4 1,168.0 1,181.9 1,251.7 1,220.5 1,229.7 1,205.4 1,241.4 42 Small time and savings deposits 2,350.7 2,293.5 2,223.2 2,183.4 2,255.0 2,236.6 2,223.2 2,233.8 2,214.1 2,198.9 2,183.4 43 Large time deposits 488.4 415.2 391.7 412.4 401.1 389.4 391.7 382.6 379.0 402.9 412.4 44 Money market fund shares 539.6 543.6 558.9 605.3 549.8 547.9 558.9 576.2 570.3 579.9 605.3 45 Security repurchase agreements 355.8 392.3 457.8 536.9 450.4 472.5 457.8 472.7 510.6 536.4 536.9 46 Foreign deposits 289.6 280.1 269.1 282.1 272.8 260.2 269.1 273.2 276.8 274.7 282.1 47 Mutual fund shares 813.9 1,042.1 1,429.3 1,463.0 1,225.8 1,342.4 1,429.3 1,438.7 1,443.6 1,505.7 1,463.0 48 Security credit 188.9 217.3 279.3 276.2 234.7 254.5 279.3 282.7 278.0 263.3 276.2 49 Trade debt 935.9 977.4 1,026.4 1,102.0 989.7 1,009.6 1,026.4 1,023.6 1,045.7 1,076.6 1,102.0 50 Taxes payable 71.2 79.6 84.2 86.5 81.2 82.8 84.2 89.0 82.4 85.4 86.5 51 Investment in bank personal trusts 608.3 629.6 660.9 655.6 637.6 651.2 660.9 655.3 640.2 656.8 655.6 52 Miscellaneous 2,992.2 3,160.2 3,402.3 3,687.8 3,248.3 3,314.6 3,402.3 3,510.9 3,571.1 3,662.8 3,687.8 53 Total liabilities 29,609.6 31,360.1 33,751.8 35,475.6 32,356.5 33,049.4 33,751.8 34,083.7 34,416.5 35,016.8 35,475.6 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 22.3 19.6 20.1 21.1 20.0 20.3 20.1 20.4 20.8 21.0 21.1 55 Corporate equities 4,863.6 5,462.9 6,186.5 6,048.8 5,683.7 5,941.7 6,186.5 6,052.2 5,877.7 6,135.1 6,048.8 56 Household equity in noncorporate business 2,444.4 2,411.5 2,421.7 2,485.0 2,407.1 2,420.3 2,421.7 2,460.2 2,473.6 2,482.9 2,485.0 Floats not included in assets (—) 57 U.S. government checkable deposits 3.8 6.8 5.6 3.4 3.5 2.2 5.6 .3 .9 1.2 3.4 58 Other checkable deposits 40.4 42.0 40.7 38.0 41.6 33.7 40.7 36.3 38.7 30.6 38.0 59 Trade credit -129.3 -124.6 -101.7 -102.3 -135.0 -130.4 -101.7 -121.2 -130.7 -127.2 -102.3 Liabilities not identified as assets (-) 60 Treasury currency -4.8 -4.9 -5.1 -5.4 -5.0 -5.1 -5.1 -5.2 -5.2 -5.3 -5.4 61 Interbank claims -4.2 -9.3 -4.7 -6.5 -5.7 -7.8 -4.7 -7.7 -7.4 -3.5 -6.5 62 Security repurchase agreements 9.2 38.1 120.2 162.3 108.0 132.6 120.2 133.4 160.0 186.1 162.3 63 Taxes payable 17.8 25.2 26.2 25.1 24.3 24.3 26.2 15.3 21.7 21.0 25.1 64 Miscellaneous -330.7 -398.4 -477.2 -519.4 -436.1 -480.5 -477.2 -491.2 -461.4 -481.2 -519.4 65 Total identified to sectors as assets 37,337.6 39,679.1 42,776.1 44,435.1 40,871.8 41,862.8 42,776.1 43,056.7 43,171.9 44,034.1 44,435.1 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 1995r MMeeaassuurree 11999922 11999933 11999944 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Industrial production1 107.6 112.0 118.1 119.1 119.0 119.5 120.3 121.7 122.0 122.0 121.6 121.1 Market groupings 7 Products, total 106.5 110.7 115.9 116.7 116.4 116.9 117.5 118.7 119.1 119.0 111188..66 118.0 3 Final, total 109.0 113.4 118.4 119.2 118.9 119.2 119.8 121.2 121.6 121.7 121.2 120.7 4 Consumer goods 105.9 109.4 113.2 113.8 113.0 113.0 113.9 115.5 115.7 115.7 114.7 114.1 5 Equipment 113.4 119.3 126.5 127.5 128.0 128.8 128.9 130.1 130.9 131.0 131.3 131.0 6 98.8 102.4 108.1 109.2 108.6 109.9 110.6 110.9 111.3 110.8 110.5 109.8 7 Materials 109.2 114.1 121.5 122.8 122.9 123.4 124.6 126.3 126.5 126.5 126.2 126.0 Industry groupings 8 Manufacturing 108.0 112.9 119.7 120.9 120.9 121.5 122.6 124.2 112244..55 112244..22 112244..00 112233..33 9 Capacity utilization, manufacturing (percent)2.. 79.2 80.9 83.4 83.8 83.6 83.8 84.4 85.2 85.2 84.7 84.3 83.5 10 Construction contracts3 97.7 104.4 108.8r 110.0 109.0 107.0 111.0 101.0 104.0 111.0 108.0 99.0 11 Nonagricultural employment, total4 106.5 108.4 111.3 111.7 112.0 112.2 112.7 112.9 113.1 113.4 113.6 113.6 12 Goods-producing, total 94.2 94.3 95.6 95.8 95.9 96.1 96.6 96.8 97.1 97.0 97.3 97.1 13 Manufacturing, total 95.3 94.8 95.1 95.2 95.3 95.5 95.7 95.9 96.2 96.3 96.2 96.1 14 Manufacturing, production workers 94.9 94.9 96.1 96.3 96.4 96.7 97.1 97.3 97.6 97.8 97.8 97.6 15 Service-producing 110.5 112.9 116.3 116.8 117.1 117.3 117.8 118.1 118.2 118.6 118.8 118.9 16 Personal income, total 135.6 141.4 150.0 150.7 151.7 153.7 153.7 154.7 156.0 156.8 157.7 n.a. 17 Wages and salary disbursements 131.6 136.2 145.0 145.5 146.4 148.2 148.1 149.0 150.0 150.6 150.9 n.a. 18 Manufacturing 118.0 120.0 126.0 126.2 126.7 128.8 127.9 128.6 129.1 131.2 130.7 n.a. 19 Disposable personal income5 137.0 142.5 150.8 151.6 152.6 154.8 154.7 155.8 156.9 157.7 158.6 n.a. 20 Retail sales5 126.4 134.7 145.lr 146.5 147.6 149.3 149.8 150.0 150.7 149.6 150.8 150.2 Prices6 ?1 Consumer (1982-84=100) 140.3 144.5 148.2 149.0 149.4 149.5 149.7 149.7 150.3 150.9 151.4 151.9 22 Producer finished goods (1982=100) 123.2 124.7 125.5 126.5 125.6 125.8 126.1 126.2 126.5 126.9 126.9 127.6 1. Data in this table also appear in the Board's G.17 (419) monthly statistica lrelease. 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 1994 1995r CCaatteeggoorryy 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 126,982 128,040 131,056 131,291 131,646 131,718 131,725 132,136 132,308 132,511 132,737 Employment ? Nonagricultural industries3 114,391 116,232 119,651 120,233 120,647 120,903 121,038 121,064 121,469 121,576 121,478 3 Agriculture 3,207 3,074 3,409 3,411 3,494 3,500 3,532 3,575 3,656 3,698 3,594 4 9,384 8,734 7,996 7,647 7,505 7,315 7,155 7,498 7,183 7,237 7,665 5 Rate (percent of civilian labor force) 7.4 6.8 6.1 5.8 5.7 5.6 5.4 5.7 5.4 5.5 5.8 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 108,604 110,525 113,423 114,186 114,348 114,882 115,113 115,282 115,637 115,814 115,805 7 18,104 18,003 18,064 18,096 18,142 18,183 18,226 18,271 18,291 18,280 18,252 8 635 611 604 605 599 600 597 595 592 592 589 9 Contract construction 4,492 4,642 4,916 4,972 4,974 5,044 5,050 5,092 5,062 5,130 5,110 10 Transportation and public utilities 5,721 5,787 5,842 5,865 5,867 5,888 5,911 5,913 5,931 5,940 5,953 11 Trade 25,354 25,675 26,362 26,565 26,629 26,772 26,887 26,939 27,029 27,007 27,028 1? 6,602 6,712 6,789 6,794 6,786 6,791 6,785 6,779 6,782 6,795 6,796 13 29,052 30,278 31,805 32,138 32,231 32,414 32,506 32,564 32,786 32,906 32,912 14 Government 18,653 18,817 19,041 19,151 19,120 19,190 19,151 19,129 19,164 19,164 19,165 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 • July 1995 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1994 1995 1994 1995 1994 1995 SSeerriieess Q2 Q3 Q4 Qlr Q2 Q3 Q4 Q1 Q2 Q3 Q4 Qlr Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 1 Total industry 117.4 118.8 120.5 121.8 140.0 140.9 141.9 143.1 83.8 84.3 84.9 85.1 2 Manufacturing 118.9 120.5 122.7 124.2 143.1 144.2 145.3 146.6 83.1 83.6 84.5 84.7 3 Primary processing3 114.7 115.9 118.4 119.3 131.0 131.6 132.3 133.2 87.6 88.1 89.5 89.6 4 Advanced processing4 120.9 122.7 124.8 126.5 148.7 150.0 151.3 152.9 81.3 81.8 82.5 82.8 5 Durable goods 124.1 126.5 129.4 131.5 150.2 151.6 153.1 154.9 82.6 83.4 84.6 84.9 6 Lumber and products 105.4 106.6 107.9 108.8 115.5 116.0 116.5 117.1 91.2 91.9 92.7 92.9 7 Primary metals 114.4 114.1 119.4 120.0 125.0 125.2 125.4 126.7 91.6 91.1 95.2 94.7 8 Iron and steel 120.2 115.8 123.3 125.4 127.9 128.4 128.8 130.9 93.9 90.2 95.8 95.8 9 Nonferrous 106.9 111.4 113.9 112.9 120.5 120.5 120.5 120.9 88.7 92.4 94.5 93.4 10 Industrial machinery and equipment 157.6 162.6 167.5 171.5 179.0 181.6 184.1 187.8 88.0 89.6 91.0 91.3 11 Electrical machinery 156.8 163.5 169.4 173.8 179.9 184.1 188.5 193.8 87.1 88.8 89.9 89.7 12 Motor vehicles and parts 133.3 135.0 141.5 146.2 158.5 160.3 162.2 164.2 84.1 84.2 87.2 89.0 13 Aerospace and miscellaneous transportation equipment. . . 84.2 82.1 80.8 80.5 129.8 129.4 129.1 128.8 64.9 63.5 62.6 62.5 14 Nondurable goods 113.1 113.8 115.3 116.1 134.8 135.5 136.3 137.1 83.9 84.0 84.6 84.7 15 Textile mill products 108.7 108.9 111.6 111.8 120.8 121.4 122.0 122.7 90.1 89.7 91.4 91.1 16 Paper and products 115.9 118.5 120.6 120.0 126.6 127.1 127.7 128.4 91.6 93.2 94.4 93.5 17 Chemicals and products 123.6 124.4 126.0 129.3 151.9 153.3 154.7 156.2 81.4 81.1 81.4 82.8 18 Plastics materials 124.3 126.9 130.2 130.0 130.8 131.6 95.6 97.0 98.9 19 Petroleum products 106.3 104.9 106.5 108.5 115.3 115.2 115.1 115.1 92.2 91.1 92.5 94.3 20 Mining 100.7 100.1 99.2 100.2 111.5 111.5 111.4 111.4 90.3 89.8 89.0 89.9 21 Utilities 117.2 118.1 116.3 116.8 135.0 135.4 135.8 136.3 86.8 87.2 85.6 85.7 22 Electric 118.0 118.2 117.3 117.4 132.6 133.1 133.6 134.1 89.0 88.8 87.8 87.5 1973 1975 Previous cycle5 Latest cycle6 1994 1994 1995 High Low High Low High Low Apr. Nov. Dec. Jan.r Feb.r Mar. Apr? Capacity utilization rate (percent^2 1 Total industry 89.2 72.6 87.3 71.8 84.9 78.0 83.6 84.8 85.5 85.5 85.2 84.7 84.1 2 Manufacturing 88.9 70.8 87.3 70.0 85.2 76.6 83.0 84.4 85.2 85.2 84.7 84.3 83.5 3 Primary processing3 92.2 68.9 89.7 66.8 89.0 77.9 87.2 89.5 90.8 90.2 89.4 89.2 88.3 4 Advanced processing4 87.5 72.0 86.3 71.4 83.5 76.2 81.3 82.4 83.0 83.2 82.8 82.4 81.6 5 Durable goods 88.8 68.5 86.9 65.0 84.0 73.7 82.6 84.3 85.4 85.3 84.9 84.4 83.3 6 Lumber and products 90.1 62.2 87.6 60.9 93.3 76.3 90.0 91.6 94.7 94.3 92.4 91.9 90.0 7 Primary metals 100.6 66.2 102.4 46.8 92.8 74.0 91.9 95.0 98.0 95.6 94.0 94.5 93.5 8 Iron and steel 105.8 66.6 110.4 38.3 95.7 72.1 95.1 94.6 100.3 96.5 94.9 96.1 94.9 9 Nonferrous 92.9 61.3 90.5 62.2 88.7 75.0 88.1 95.6 95.2 94.6 93.0 92.6 91.7 10 Industrial machinery and equipment 96.4 74.5 92.1 64.9 84.0 72.5 87.6 91.0 91.1 92.0 91.2 90.8 90.3 11 Electrical machinery 87.8 63.8 89.4 71.1 84.9 76.6 86.4 89.6 90.8 90.1 89.7 89.2 88.4 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 85.1 57.6 86.2 87.2 88.8 89.4 89.7 88.0 83.7 13 Aerospace and miscellaneous transportation equipment 77.0 66.6 81.1 66.9 88.4 79.4 64.7 62.6 62.5 62.4 62.5 62.5 62.6 14 Nondurable goods 87.9 71.8 87.0 76.9 86.7 80.4 83.6 84.6 85.2 85.1 84.7 84.3 84.0 15 Textile mill products 92.0 60.4 91.7 73.8 92.1 78.9 90.1 91.7 91.8 92.5 90.1 90.7 90.2 16 Paper and products 96.9 69.0 94.2 82.0 94.8 86.5 90.5 95.0 95.2 93.5 93.5 93.4 94.1 17 Chemicals and products 87.9 69.9 85.1 70.1 85.9 78.9 80.8 81.6 82.5 83.8 82.6 82.1 81.8 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 92.7 98.5 105.0 105.6 100.6, 19 Petroleum products 96.7 81.1 89.5 68.2 88.5 83.7 93.2 93.5 93.7 93.4 93.5 95.9 95.9 20 Mining 94.4 88.4 96.6 80.6 86.5 86.0 90.3 88.2 89.8 89.7 90.3 89.8 90.0 21 Utilities 95.6 82.5 88.3 76.2 92.6 83.2 85.1 85.8 84.7 85.6 86.8 84.7 85.9 22 Electric 99.0 82.7 88.3 78.7 94.8 86.5 87.9 88.0 87.1 87.5 88.7 86.4 87.5 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; synthetic For the ordering address, see die inside front cover. The latest historical revision of the materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and industrial production index and the capacity utilization rates was released in November glass; primary metals; and fabricated metals. 1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; print- Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial ing and publishing; chemical products such as drugs and toiletries; agricultural chemicals; production index, see "Industrial Production: 1989 Developments and Historical Revi- leather and products; machinery; transportation equipment; instruments; and miscellasion," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. neous manufactures. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally 5. Monthly highs, 1978-80; monthly lows, 1982. adjusted index of industrial production to the corresponding index of capacity. 6. Monthly highs, 1988-89; monthly lows, 1990-91. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1994 1995 1994 GGrroouupp por- avg. tion Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.r Feb/ Mar. Apr.p Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 118.1 116.7 117.4 118.0 118.2 119.1 119.0 119.5 120.3 121.7 122.0 122.0 121.6 121.1 ? Products 60.9 115.9 114.7 115.3 115.9 116.2 116.7 116.4 116.9 117.5 118.7 119.1 119.0 118.6 118.0 Final products 46.6 118.4 117.3 117.8 118.4 118.5 119.2 118.9 119.2 119.8 121.2 121.6 121.7 121.2 120.7 4 Consumer goods, total 28.5 113.2 112.3 112.8 113.5 113.3 113.8 113.0 113.0 113.9 115.5 115.7 115.7 114.7 114.1 Durable consumer goods 5.5 119.4 117.8 116.4 118.0 118.0 120.7 119.1 119.4 120.5 123.4 124.5 123.8 121.3 118.0 6 Automotive products 2.5 125.5 124.1 120.1 121.0 119.5 124.9 123.8 124.5 127.1 131.1 131.7 133.2 130.2 125.1 7 Autos and trucks 1.6 125.4 125.0 118.1 118.5 115.0 126.0 122.5 122.3 126.5 131.4 132.7 134.8 131.4 124.5 8 Autos, consumer .9 94.9 96.0 90.4 89.6 86.5 91.7 90.2 92.9 94.0 100.5 103.6 103.6 103.1 93.6 9 Trucks, consumer .7 180.7 177.2 168.0 170.7 166.6 189.0 181.5 175.5 185.8 187.3 184.6 191.0 181.7 180.6 10 Auto parts and allied goods .9 123.2 119.8 121.9 123.8 126.6 120.0 123.9 126.6 125.7 127.8 126.9 127.0 125.2 123.9 11 Other 3.0 114.1 112.5 113.2 115.4 116.7 117.1 115.2 115.2 115.0 116.8 118.3 115.9 113.8 111.9 n Appliances televisions and air conditioners .7 126.0 120.7 125.6 132.8 129.7 135.1 130.2 124.9 126.9 131.5 132.1 125.7 121.3 118.6 N Carpeting and furniture .8 105.0 104.5 103.3 103.6 108.4 106.9 104.1 107.4 105.9 108.0 110.2 107.9 106.2 104.6 14 Miscellaneous home goods 1.5 113.8 113.2 113.1 114.2 115.3 114.6 114.6 114.9 114.5 114.9 116.5 115.7 114.4 112.8 15 Nondurable consumer goods 23.0 111.8 111.0 112.0 112.5 112.2 112.2 111.7 111.5 112.4 113.7 113.6 113.8 113.2 113.3 16 Foods and tobacco 10.3 110.5 110.2 110.9 110.5 110.6 111.2 111.9 112.2 112.4 114.3 113.1 113.8 113.3 112.8 17 Clothing 2.4 95.9 96.4 97.2 96.3 96.5 95.9 95.5 96.2 96.2 96.8 96.1 94.7 94.3 92.9 18 Chemical products 4.5 129.7 128.4 129.5 131.4 131.1 129.8 127.5 127.2 130.5 134.0 137.0 135.0 133.9 134.7 19 Paper products 2.9 104.7 105.1 105.6 105.8 105.2 105.9 105.2 103.6 104.6 104.3 103.4 104.1 104.2 105.0 70 Energy 2.9 113.9 110.0 112.4 115.5 114.3 113.1 110.5 109.8 110.6 109.6 110.4 112.7 110.9 112.8 ?1 Fuels .9 106.7 108.3 107.4 106.5 105.8 105.8 107.4 103.9 109.8 107.4 107.4 109.1 113.7 112.5 22 Residential utilities 2.1 116.8 110.5 114.4 119.3 117.8 116.1 111.8 112.2 110.7 110.3 111.6 114.2 109.5 112.7 73 Equipment 18.1 126.5 124.9 125.4 125.8 126.4 127.5 128.0 128.8 128.9 130.1 130.9 131.0 131.3 131.0 74 Business equipment 14.0 146.7 143.5 144.5 145.5 146.9 148.9 149.5 150.9 151.0 152.6 153.7 154.1 154.7 154.1 75 Information processing and related 5.7 176.4 170.2 171.8 173.7 177.1 179.7 181.1 183.2 184.2 188.3 188.7 189.0 191.6 192.8 76 Computer and office equipment 1.5 284.2 270.8 271.6 276.5 282.6 288.9 295.8 300.5 305.7 311.9 318.0 325.3 331.8 338.4 71 Industrial 4.0 120.9 119.2 120.7 120.6 122.1 122.3 123.0 124.4 124.1 124.1 125.9 126.5 126.3 126.0 ?8 Transit 2.6 137.9 138.0 135.3 136.1 132.6 137.9 136.8 137.1 137.5 137.8 139.7 140.9 139.5 135.2 79 Autos and trucks 1.2 148.0 145.9 140.0 141.7 138.2 149.4 147.7 149.2 151.6 152.6 157.2 158.5 155.4 146.7 30 Other 1.7 129.4 127.1 129.4 130.5 132.6 133.5 133.3 134.3 133.1 133.1 133.5 132.9 132.6 130.8 31 Defense and space equipment 3.4 71.0 73.6 72.4 71.3 69.9 69.2 68.8 68.7 69.0 68.7 68.6 68.0 68.0 67.9 37 Oil and gas well drilling .5 90.8 93.2 94.6 94.2 93.7 89.6 93.9 88.3 86.0 86.0 86.7 89.1 85.7 89.2 33 Manufactured homes .2 137.3 132.4 135.2 137.8 133.3 134.5 138.4 142.0 143.1 153.6 153.6 147.4 148.3 34 Intermediate products, total 14.3 108.1 106.9 107.7 108.5 109.1 109.2 108.6 109.9 110.6 110.9 111.3 110.8 110.5 109.8 35 Construction supplies 5.3 106.8 104.7 106.1 106.4 107.9 108.2 108.6 109.7 109.8 111.6 112.2 111.3 111.4 109.7 36 Business supplies 9.0 109.1 108.5 108.8 110.1 110.0 109.9 108.7 110.1 111.3 110.7 110.9 110.6 110.2 110.0 37 39.1 121.5 119.7 120.5 121.2 121.4 122.8 122.9 123.4 124.6 126.3 126.5 126.5 126.2 126.0 38 Durable goods materials 20.6 131.2 129.2 129.8 130.0 130.9 132.6 133.3 134.2 136.0 138.6 139.1 139.0 139.0 138.3 39 Durable consumer parts 3.9 132.2 130.1 129.7 129.2 130.4 133.2 133.1 133.8 135.8 139.7 139.1 138.9 137.3 134.7 40 Equipment parts 7.5 143.1 139.6 140.5 142.1 143.8 145.2 146.7 149.0 150.7 152.3 153.6 155.1 156.1 156.6 41 Other 9.1 121.3 120.4 121.2 120.8 121.1 122.3 122.8 122.7 124.6 127.3 127.6 126.5 126.5 125.5 4? Basic metal materials 3.0 119.7 119.7 120.0 119.6 118.8 119.3 121.1 121.3 123.2 126.0 125.6 124.1 124.7 123.9 43 Nondurable goods materials 8.9 118.4 115.9 118.2 118.1 118.6 120.3 119.8 120.3 121.5 122.8 122.3 121.6 121.7 121.7 44 Textile materials 1.1 105.3 104.4 104.2 104.8 104.8 105.7 105.9 106.9 110.3 108.7 109.8 107.9 108.9 109.1 45 Paper materials 1.8 118.7 116.1 118.9 118.4 117.5 122.5 121.5 120.5 122.1 121.3 120.8 122.0 122.8 124.6 46 Chemical materials 4.0 123.2 120.6 123.8 122.9 123.4 124.8 124.0 124.6 125.9 127.5 128.6 128.1 127.9 127.1 47 Other 2.0 116.9 113.3 114.8 116.5 118.6 118.1 118.2 119.5 119.3 123.4 119.1 116.9 116.3 116.2 48 Energy materials 9.6 105.2 104.8 104.6 106.7 105.2 106.1 105.6 105.2 104.9 105.3 105.6 106.4 105.1 105.7 49 Primary energy 6.3 100.3 100.9 100.4 100.2 100.3 100.9 100.8 100.3 100.7 101.7 101.7 102.0 100.8 101.2 50 Converted fuel materials 3.3 114.9 112.5 112.8 119.9 114.9 116.3 115.1 115.1 113.4 112.3 113.4 115.1 113.4 114.8 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.2 117.6 116.2 117.1 117.7 118.1 118.7 118.6 119.1 119.8 121.1 121.4 121.3 121.0 120.8 52 Total excluding motor vehicles and parts 95.2 117.1 115.7 116.6 117.3 117.7 118.2 118.0 118.5 119.2 120.5 120.8 120.7 120.4 120.2 53 Total excluding computer and office equipment 98.3 115.4 114.1 114.8 115.4 115.5 116.4 116.1 116.6 117.4 118.7 118.9 118.8 111188..33 117.8 54 Consumer goods excluding autos and trucks . 26.9 112.4 111.5 112.4 113.2 113.2 113.0 112.4 112.4 113.1 114.5 114.6 114.5 113.6 113.4 55 Consumer goods excluding energy 25.6 113.1 112.5 112.8 113.2 113.2 113.8 113.3 113.3 114.2 116.2 116.3 116.1 115.1 114.2 56 Business equipment excluding autos and trucks 12.8 146.5 143.2 144.8 145.7 147.7 148.8 149.5 151.0 150.9 152.5 153.3 153.6 115544..66 154.7 57 Business equipment excluding computer and office equipment 12.5 130.7 128.5 129.4 130.0 131.1 132.7 132.7 113333..88 113333..66 113344..77 113355..44 113355..33 113355..44 113344..22 58 Materials excluding energy 29.5 127.3 125.1 126.2 126.4 127.2 128.8 129.2 129.9 131.6 133.8 134.0 133.7 133.7 133.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • July 1995 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 SIC pro- 1994 Group code por- avg. tion Apr. May June July Aug. Sept. Oct. Nov. Dec, Jan.r Feb/ Apr.p Index (1987 = 100) MAJOR INDUSTRIES 59 Tbtal index 100.0 118.1 116.7 117.4 118.0 118.2 119.1 119.0 119.5 1203 121.7 122.0 122.0 121.6 121.1 60 Manufacturing 85.5 119.7 118.4 119.0 119.3 119.8 120.9 120.9 121.5 122.6 124.2 124.5 124.2 124.0 123.3 61 Primary processing 26.5 115.3 114.0 115.2 114.7 115.3 116.3 116.2 116.6 118.4 120.3 119.8 119.1 119.0 118.2 62 Advanced processing 59.0 121.8 120.5 120.8 121.5 121.9 123.1 123.1 123.8 124.6 126.0 126.6 126.6 126.4 125.8 63 Durable goods 45.1 125.5 123.7 124.0 124.6 125.2 127.0 127.2 128.0 129.1 131.2 131.6 131.5 131.4 130.3 64 Lumber and products 24 2.0 106.0 103.9 106.0 106.2 106.8 105.5 107.6 106.7 106.7 110.4 110.2 108.3 107.9 105.9 65 Furniture and fixtures 25 1.4 111.4 110.2 110.1 111.8 114.0 115.5 112.4 114.8 113.0 114.7 116.0 115.5 113.7 111.9 66 Stone, clay, and glass products 32 2.1 104.9 105.0 105.5 104.4 104.3 105.8 105.8 105.4 106.9 110.1 108.7 107.4 108.2 107.1 67 Primary metals 33 3.1 114.5 114.8 114.8 113.7 112.7 113.5 116.0 115.9 119.1 123.0 120.9 119.2 120.0 118.9 68 Iron and steel 331,2 1.7 118.3 121.5 120.9 118.2 116.1 113.0 118.2 118.8 121.9 129.3 125.9 124.2 126.0 124.7 69 Raw steel .1 107.9 105.3 105.7 106.3 104.7 107.0 109.9 109.0 114.2 121.9 114.6 117.2 117.2 70 Nonferrous 333-6,9 1.4 109.3 106.2 106.9 107.6 108.0 113.6 112.7 111.8 115.2 114.8 114.2 112.4 112.1 1113 71 Fabricated metal products... 34 5.0 110.8 109.6 110.0 110.2 111.7 112.4 111.6 112.2 113.3 115.3 115.3 114.9 114.0 112.5 72 Industrial machinery and equipment 35 7.9 159.9 156.1 157.7 158.9 160.6 162.6 164.6 166.5 167.5 168.5 171.4 171.2 172.0 172.5 73 Computer and office equipment 357 1.7 284.2 270.8 271.6 276.5 282.6 288.9 295.8 300.5 305.7 311.9 318.0 325.3 331.8 338.4 74 Electrical machinery 36 7.3 160.0 154.3 156.5 159.5 161.5 164.1 165.0 166.9 168.8 172.5 172.9 173.8 174.7 174.9 75 Transportation equipment... 37 9.6 109.7 109.5 107.6 107.5 105.7 109.5 108.8 109.0 110.5 111.9 112.6 113.2 112.1 109.0 76 Motor vehicles and parts . 371 4.8 137.9 136.2 131.6 132.2 129.6 138.1 137.4 138.4 141.4 144.6 146.1 147.3 145.1 138.8 77 Autos and light trucks . 371 2.5 131.9 131.7 124.4 124.6 120.8 131.9 128.4 128.6 132.7 138.4 140.0 142.0 138.8 130.9 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.8 82.6 84.1 84.6 83.8 82.8 82.3 81.4 80.8 80.9 80.6 80.4 80.5 80.5 80.5 79 Instruments 38 5.4 107.4 106.6 106.4 106.8 108.5 108.7 108.0 108.2 107.7 108.9 108.4 107.9 108.1 108.1 80 Miscellaneous 39 1.3 116.2 115.2 115.4 115.8 118.6 117.1 117.0 118.4 118.6 117.6 119.1 120.2 118.7 117.2 81 Nondurable goods 40.5 113.3 112.4 113.4 113.4 113.6 114.0 113.7 114.2 115.4 116.4 116.5 116.1 115.8 115.6 82 Foods 20 9.4 112.8 111.9 112.8 112.8 113.4 113.7 114.6 113.4 113.9 114.7 115.9 115.6 115.4 114.6 83 Tobacco products 21 "1.6 96.5 98.1 98.5 95.9 93.7 96.2 96.1 104.5 101.5 108.0 97.3 101.7 100.4 102.2 84 Textile nil! products 22 1.8 109.0 108.6 108.9 108.7 109.4 109.0 108.3 110.6 112.0 112.2 113.3 110.6 111.5 111.2 85 Apparel products 23 2.2 96.3 96.2 97.1 97.0 97.0 96.8 96.8 96.9 96.8 97.0 96.6 95.7 94.8 93.3 86 Paper and products 26 3.6 117.4 114.4 116.7 116.6 116.6 120.2 118.7 118.9 121.3 121.7 119.8 120.1 120.2 121.3 87 Printing and publishing 27 6.8 101.1 101.7 101.6 102.4 102.1 101.5 100.9 101.4 102.0 101.6 101.3 100.8 100.7 101.0 88 Chemicals and products .... 28 9.9 124.1 122.4 124.0 124.4 124.7 124.7 123.7 123.8 126.2 128.0 130.4 129.0 128.6 128.5 89 Petroleum products 29 1.4 105.3 107.5 107.0 104.5 104.3 105.2 105.3 104.0 107.6 107.7 107.4 107.7 110.4 110.5 90 Rubber and plastic products . 30 3.5 133.5 130.8 132.4 132.8 134.5 134.5 134.7 136.7 138.3 140.0 140.2 140.5 138.7 137.4 91 Leather and products 31 .3 85.8 87.6 85.9 85.5 86.3 85.5 85.4 85.6 84.5 84.4 82.9 82.7 82.8 81.3 92 Mining 6.8 99.8 100.7 100.7 100.6 100.1 100.0 100.1 99.2 98.3 100.1 100.0 100.6 100.0 100.2 93 Metal "10 .4 159.4 157.0 156.4 162.8 159.5 156.6 160.0 158.9 154.3 156.2 158.5 161.2 161.6 162.4 94 Coal 12 1.0 112.0 118.3 111.5 113.4 108.6 111.4 110.7 110.2 110.1 117.8 117.9 118.6 117.4 114.1 95 Oil and gas extraction 13 4.7 93.0 93.2 94.3 93.8 93.9 93.5 93.7 92.2 91.2 92.2 91.2 92.3 91.2 92.5 96 Stone and earth minerals 14 .6 107.0 105.9 108.1 105.6 107.9 106.6 106.7 109.3 109.9 109.9 115.1 111.4 115.3 111.1 97 Utilities 7.7 118.1 114.7 115.8 121.1 119.0 118.8 116.5 117.2 116.5 115.2 116.5 118.3 115.5 117.3 98 Electric 491,3PT 6.1 117.8 116.4 116.2 121.4 119.0 118.4 117.1 117.9 117.5 116.5 117.2 119.0 116.0 117.7 99 Gas 492,3PT 1.6 119.2 107.9 114.1 120.0 118.9 120.4 114.2 114.4 112.3 109.8 113.7 115.7 113.5 115.6 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.7 118.6 117.3 118.2 118.6 119.2 119.8 119.9 120.5 121.5 122.9 123.2 122.8 122.8 122.4 101 Manufacturing excluding office and computing machines . .. 83.8 116.5 115.3 115.9 116.2 116.6 117.6 117.5 118.1 119.1 120.6 120.8 120.5 120.2 119.5 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 2,006.2 1,985.8 1,990.7 2,002.5 2,002.1 2,020.2 2,015.6 2,020.4 2,037.2 2,056.5 2,063.2 2,064.8 2,061.1 2,048.3 103 Final 1,314.6 1,576.3 1,559.9 1,561.7 1,571.1 1,569.3 1,586.6 1,584.2 1,584.4 1,598.4 1,615.1 1,621.1 1,625.2 1,622.8 1,612.6 101 Consumer goods 866.6 982.5 976.0 977.1 983.0 979.0 987.3 981.5 977.0 988.5 999.6 1,000.2 1,001.6 997.1 988.8 105 Equipment 448.0 593.8 583.9 584.5 588.1 590.3 599.3 602.7 607.3 609.9 615.5 620.9 623.6 625.6 623.8 106 Intermediate 392.5 429.8 425.9 429.0 431.4 432.9 433.5 431.4 436.0 438.8 441.4 442.0 439.6 438.4 435.7 1. Data in this table also appear in the Board's G.17 (419) monthly statistica lrelease. 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 1995 IItteemm 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Dec. Jan.r Feb.' Mar. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,095 1,199 l,372r l,350r 1,347 l,386r l,426r i,4or l,358r l,420r 1,293 1,282 1,235 7. One-family 911 987 l,068r 1,062r l,049r l,063r 1,066r l,046r l,025r l,105r 990 931 911 3 Two-family or more 184 213 303r 288r 298r 323r 3601 355r 333r 315r 303 351 324 4 Started 1,200 1,288 1,457 1,370 1,440 1,463 1,511 1,451 1,536 1,545 1,366 1,319 1,231 One-family 1,030 1,126 1,198 1,174 1,219 1,174 1,235 1,164 1,186 1,250 1,055 1,048 984 6 Two-family or more 170 162 259 196 221 289 276 287 350 295 311 271 247 7 Under construction at end of period1 612 680 762 751 757 770 773 779 787 791 792 800 774 8 One-family 473 543 558 585 585 589 590 587 587 584 578 581 558 9 Two-or-more-family 140 137 204 166 172 181 183 192 200 207 214 219 216 10 Completed 1,158 1,193 1,347 1,333 1,280 1,337 1,400 1,376 1,371 1,388 1,436 1,305 1,433 11 One-family 964 1,040 1,160 1,151 1,157 1,144 1,158 1,169 1,136 1,173 1,209 1,084 1,204 12 Two-or-more-family 194 153 187 182 123 193 242 207 235 215 227 221 229 13 Mobile homes shipped 210 254 304 295 289 295 307 314 322 347 361 335 333 Merchant builder activity in one-family units 14 Number sold 610 666 670 632 630 672 691 707 642 627r 640 560 577 15 Number for sale at end of period1 265 293 338r 313 317 322 328 330 335 338r 342 347 349 Price of units sold (thousands of dollars)2 16 Median 121.3 126.1 130.4 133.5 124.4 133.3 129.7 132.0 129.9 135.0 127.5 133.9 130.0 17 Average 144.9 147.6 153.7r 158.4 144.4 154.9 157.2 153.0 155.4 159.6r 147.0 159.0 158.5 EXISTING UNITS (one-family) 18 Number sold 3,520 3,800 3,946 4,010 3,940 3,910 3,870 3,820 3,690 3,760 3,610 3,420 3,620 Price of units sold (thousands of dollars)2 19 Median 103.6 106.5 109.6 113.3 112.4 113.0 108.9 107.5 108.7 109.1 108.1 107.0 107.9 20 Average 130.8 133.1 136.4 141.3 139.7 141.2 135.8 133.0 134.7 135.6 135.3 133.4 134.5 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 435,355 466,365 506,315 506,144 505,445 505,470 514,197 519,336 522,106 528,613 527,314 527,178 525,127 77 Private 316,115 341,101 377,136 379,345 376,463 376,216 382,287 383,044 390,729 393,171 394,037 393,643 392,544 73 Residential 187,870 210,455 237,767 240,694 237,775 236,871 238,529 239,136 241,320 243,768 244,628 244,850 240,116 74 Nonresidential 128,245 130,646 139,369 138,651 138,688 139,345 143,758 143,908 149,409 149,403 149,409 148,793 152,428 7.5 Industrial buildings 20,720 19,533 21,600 20,960 21,117 22,012 22,621 22,190 25,050 23,074 23,316 24,962 25,505 7.6 Commercial buildings 41,523 42,627 48,268 48,410 48,607 48,185 50,180 50,583 51,993 53,272 54,247 54,798 56,356 7.7 Other buildings 21,494 23,626 23,835 24,439 23,838 23,648 24,784 24,103 24,325 24,851 24,430 24,723 24,060 28 Public utilities and other 44,508 44,860 45,666 44,842 45,126 45,500 46,173 47,032 48,041 48,206 47,416 44,310 46,507 79 Public 119,238 125,262 129,175 126,799 128,982 129,255 131,910 136,292 131,377 135,443 133,277 133,535 132,584 30 Military 2,502 2,454 2,315 2,277 2,351 2,357 2,364 2,329 2,247 2,481 2,629 2,677 2,206 31 Highway 34,899 37,355 40,185 40,300 40,305 40,057 40,797 41,685 40,011 39,256 39,193 38,742 39,895 37, Conservation and development 6,021 5,976 6,236 4,605 5,935 5,754 7,521 7,135 6,658 7,765 6,927 7,216 7,100 33 Other 75,816 79,477 80,439 79,617 80,391 81,087 81,228 85,143 82,461 85,941 84,528 84,900 83,383 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 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • July 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 1994 1995 1994 1995 lll AAA eeevvv ppp eee rrr lll ,,, 11999944 11999955 111999999555''' AApprr.. AApprr.. June Sept. Dec. Mar. Dec. Jan. Feb. Mar. Apr. CONSUMER PRICES2 (1982-84=100) 1 All items 2.4 3.1 2.7 3.6 1.9 3.2 .2 .3 .3 .2 .4 151.9 2 2.0 3.5 2.8 5.1 3.9 .0 .8 -.3 .3 .0 .7 148.4 3 Energy items -1.1 1.9 -3.0 9.2 .4 -1.1 -.1 .3 -.1 -.5 .4 103.9 4 All items less food and energy 2.8 3.1 3.1 2.6 2.0 4.1 .1 .4 .3 .3 .4 160.7 5 Commodities .9 1.8 3.9 .9 .3 2.6 .1 .4 .1 .1 .2 139.7 6 Services 3.7 3.7 2.7 3.6 2.6 4.8 .2 .5 .4 .4 .4 172.7 PRODUCER PRICES (1982=100) 7 Finished goods -.4 2.1 .0 1.9 2.2 2.6 .3 .3 .3 .0 .5 127.6 8 Consumer foods .5 1.1 -5.5 1.9 9.2 -1.8 1.3 -.6 .3 -.2 -.2 128.5 9 Consumer energy -3.6 4.4 -2.6 3.2 .0 9.1 -.9 2.3 .4 -.5 2.3 78.8 10 Other consumer goods -1.1 2.0 2.0 1.7 .6 2.6 .2 .1 .3 .2 .3 141.3 11 Capital equipment 2.0 1.9 3.0 2.1 -,3r 2.4r .3r A' .3 -.1 .3 136.3 Intermediate materials 12 Excluding foods and feeds .3 7.3 2.8 6.2 7.2r 9.9r ,4r I.R 1.0 .3 .8 125.4 13 Excluding energy 1.0 7.8 3.9 6.8 8.3 9.8 .5 1.0 1.0 .4 .7 135.2 Crude materials 14 Foods 2.4 -9.9 -18.0 -13.5 — 1.2r -5.0r -,lr ,OR 1.2 -2.4 -.9 101.9 15 Energy -7.1 .6 21.0 -19.2 -7.6r -3.9r .9' -1.9r 1.7 -.9 5.3 72.9 16 Other 9.0 17.9 -.8 20.3 27.9r 20.C 2.2' 2.8r 1.4 .5 1.2 180.7 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 1994 1995 AAccccoouunntt 11999922 11999933 11999944 Q1 Q2 Q3 Q4 Q1 GROSS DOMESTIC PRODUCT 1 Total 6,020.2 6,3433 6,738.4 6,574.7 6,689.9 6,791.7 6,897.2 6,982.9 By source 2 Personal consumption expenditures 4,136.9 4,378.2 4,628.4 4,535.0 4,586.4 4,657.5 4,734.8 4,780.8 3 Durable goods 492.7 538.0 591.5 576.2 580.3 591.5 617.7 613.4 4 Nondurable goods 1,295.5 1,339.2 1,394.3 1,368.9 1,381.4 1,406.1 1,420.7 1,429.5 5 Services 2,348.7 2,501.0 2,642.7 2,589.9 2,624.7 2,659.9 2,696.4 2,737.9 6 Gross private domestic investment 788.3 882.0 1,032.9 966.6 1,034.4 1,055.1 1,075.6 1,119.3 7 Fixed investment 785.2 866.7 980.7 942.5 967.0 992.5 1,020.8 1,051.2 8 Nonresidential 561.4 616.1 697.6 665.4 683.3 709.1 732.8 766.6 9 Structures 171.1 173.4 182.8 172.7 181.8 184.6 192.0 199.8 10 Producers' durable equipment 390.3 442.7 514.8 492.7 501.5 524.5 540.7 566.8 11 Residential structures 223.8 250.6 283.0 277.1 283.6 283.4 288.0 284.6 12 Change in business inventories 3.0 15.4 52.2 24.1 67.4 62.6 54.8 68.1 13 Nonfarm -2.7 20.1 45.9 22.3 60.4 53.4 47.4 64.7 14 Net exports of goods and services -30.3 -65.3 -98.2 -86.7 -97.6 -109.6 -98.9 -112.9 15 Exports 638.1 659.1 718.7 674.2 704.5 730.5 765.5 770.9 16 Imports 668.4 724.3 816.9 760.9 802.1 840.1 864.4 883.8 17 Government purchases of goods and services 1,125.3 1,148.4 1,175.3 1,159.8 1,166.7 1,188.8 1,185.8 1,195.6 18 Federal 449.0 443.6 437.3 437.8 435.1 444.3 431.9 433.1 19 State and local 676.3 704.7 738.0 722.0 731.5 744.5 753.8 762.6 By major type of product 20 Final sales, total 6,017.2 6,327.9 6,686.2 6,550.6 6,622.5 6,729.1 6,842.4 6,914.8 21 Goods 2,292.0 2,390.4 2,532.4 2,489.1 2,493.7 2,543.6 2,603.3 2,630.8 77 Durable 968.6 1,032.4 1,118.8 1,098.2 1,099.4 1,125.8 1,151.8 1,170.2 73 Nondurable 1,323.4 1,358.1 1,413.6 1,390.9 1,394.3 1,417.8 1,451.5 1,460.6 74 Services 3,227.2 3,405.5 3,576.2 3,503.8 3,555.4 3,603.6 3,641.9 3,682.5 25 Structures 498.1 532.0 577.6 557.7 573.4 581.9 597.3 601.4 26 Change in business inventories 3.0 15.4 52.2 24.1 67.4 62.6 54.8 68.1 77 Durable goods -13.0 8.6 34.8 20.6 38.2 44.1 36.3 47.5 28 Nondurable goods 16.0 6.7 17.4 3.5 29.2 18.5 18.5 20.6 MEMO 29 Total GDP in 1987 dollars 4,979.3 5,134.5 5,344.0 5,261.1 5,314.1 5,367.0 5,433.8 5,471.7 NATIONAL INCOME 30 4,829.5 5,1314 5,458.4 5,308.7 5,430.7 5,494.9 5,599.4 n.a. 31 Compensation of employees 3,591.2 3,780.4 4,004.6 3,920.0 3,979.3 4,023.7 4,095.3 4,157.0 32 Wages and salaries 2,954.8 3,100.8 3,279.0 3,208.3 3,257.2 3,293.9 3,356.4 3,403.2 33 Government and government enterprises 567.3 583.8 602.8 595.7 601.9 604.4 609.0 615.6 34 Other 2,387.5 2,517.0 2,676.2 2,612.6 2,655.4 2,689.6 2,747.4 2,787.6 35 Supplement to wages and salaries 636.4 679.6 725.6 711.7 722.0 729.7 738.9 753.8 36 Employer contributions for social insurance 307.7 324.3 344.6 338.5 343.6 346.0 350.2 354.2 37 Other labor income 328.7 355.3 381.0 373.2 378.4 383.7 388.7 399.6 38 418.7 441.6 473.7 471.0 471.3 467.0 485.7 493.8 39 Business and professional1 374.4 404.3 434.2 423.8 431.9 437.1 444.0 448.7 40 Farm1 44.4 37.3 39.5 47.2 39.3 29.8 41.7 45.1 41 Rental income of persons2 -5.5 24.1 27.7 15.3 34.1 32.6 29.0 25.6 47 Corporate profits1 405.1 485.8 542.7 508.2 546.4 556.0 560.3 n.a. 43 Profits tefore tax3 395.9 462.4 524.5 483.5 523.1 538.1 553.5 n.a. 44 Inventory valuation adjustment -6.4 -6.2 -19.5 -12.3 -14.1 -19.6 -32.1 -36.5 45 Capital consumption adjustment 15.7 29.5 37.7 37.0 37.4 37.5 38.8 38.1 46 Net interest 420.0 399.5 409.7 394.2 399.7 415.7 429.2 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 • July 1995 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1994 1995 11999922 11999933 11999944 Q1 Q2 Q3 Q4 Q1 PERSONAL INCOME AND SAVING 1 Total personal income 5,1543 5,375.1 5,701.7 5,555.8 5,659.9 5,734.5 5,856.6 5,963.1 2 Wage and salary disbursements 2,974.8 3,080.8 3,279.0 3,208.3 3,257.2 3,293.9 3.356.4 3,403.2 4 6 7 3 5 C G D Se o o i M s r m v v tr e i a m i c r b n n e o u u m d t f i i n a i e v t c d n y e t u - t u p i s r a n r t i r n o n d i d d e u g u s s g t c r o i i n e v g s e rn in m d e u n st t r i e e n s t erprises 7 9 5 6 5 5 6 7 8 6 7 7 8 2 7 . . . . . 6 6 3 3 3 1, 7 5 7 5 0 7 8 0 8 2 3 8 1 3 1 . . . . . 8 4 9 8 4 1, 8 6 7 6 1 1 4 1 0 0 7 8 8 2 9 . . . . . 5 5 2 8 5 1, 8 6 7 5 0 0 0 2 9 8 1 9 8 5 2 . . . . . 9 4 7 6 0 1, 6 7 8 6 1 1 4 1 0 0 2 2 1 1 1 . . . . . 8 5 6 9 2 1, 8 6 7 6 1 5 1 2 0 1 3 8 1 4 4 . . . . . 5 3 8 4 3 1. 8 6 7 6 1 2 6 3 0 4 9 9 7 0 9 . . . . . 5 6 3 5 0 1, 6 7 8 6 1 3 7 4 1 6 8 8 8 5 0 . . . . . 8 8 8 6 0 8 Other labor income 328.7 355.3 381.0 373.2 378.4 383.7 388.7 399.6 9 Proprietors' income1 418.7 441.6 473.7 471.0 471.3 467.0 485.7 493.8 10 Business and professional1 374.4 404.3 434.2 423.8 431.9 437.1 444.0 448.7 11 Farm1 44.4 37.3 39.5 47.2 39.3 29.8 41.7 45.1 12 Rental income of persons -5.5 24.1 27.7 15.3 34.1 32.6 29.0 25.6 13 Dividends 161.0 181.3 194.3 185.7 191.7 196.9 202.7 205.5 14 Personal interest income 665.2 637.9 664.0 631.1 649.4 674.2 701.1 724.5 15 Transfer payments 860.2 915.4 963.4 947.4 957.6 969.0 979.7 1,004.6 16 Old-age survivors, disability, and health insurance benefits 414.0 444.4 473.5 463.8 470.7 476.5 483.1 496.2 17 LESS: Personal contributions for social insurance 248.7 261.3 281.4 276.3 279.9 282.9 286.6 293.7 18 EQUALS: Personal income 5,154.3 5,375.1 5,701.7 5,555.8 5,659.9 5,734.5 5,856.6 5,963.1 19 LESS: Personal tax and nontax payments 648.6 686.4 742.1 723.0 746.4 744.1 754.7 774.3 20 EQUALS: Disposable personal income 4,505.8 4,688.7 4,959.6 4,832.8 4,913.5 4,990.3 5,101.9 5,188.8 21 LESS: Personal outlays 4,257.8 4,496.2 4,756.5 4,657.3 4,712.4 4,787.0 4,869.3 4,918.8 22 EQUALS: Personal saving 247.9 192.6 203.1 175.5 201.1 203.3 232.6 270.0 MEMO 2 2 2 3 4 5 P P G D e e r i r s o r s p s o c o s n a s a d a p l o b i m l t c e a o e n p s ( s t e 1 i u r c 9 s m o 8 p p n 7 r t a o io l d d n u o in c l c e l t a o x m r p s e e ) n ditures 1 1 1 9 3 4 , , , 4 1 2 8 1 7 9 0 9 . . . 7 4 0 1 1 1 9 3 4 , , , 8 3 3 7 9 4 8 0 1 . . . 8 8 0 2 1 1 0 3 4 , , , 4 7 6 7 1 9 5 5 6 . . . 8 4 0 2 1 1 0 3 4 , , , 2 6 5 3 3 3 5 9 5 . . . 2 8 0 2 1 1 0 3 4 , , , 3 6 6 8 5 2 9 0 5 . . . 7 9 0 2 1 1 0 4 3 . , . 5 6 7 3 9 1 6 7 6 . . . 5 0 6 2 1 1 0 3 4 , , , 7 8 9 3 5 2 9 3 7 . . . 8 5 0 2 1 1 0 3 5 , , , 8 8 0 4 7 5 2 2 7 . . . 5 9 0 26 Saving rate (percent) 5.5 4.1 4.1 3.6 4.1 4.1 4.6 5.2 GROSS SAVING 27 Gross saving 722.9 787.5 920.6 886.2 923.3 922.6 9503 n.a. 28 Gross private saving 980.8 1,002.5 1,053.5 1,037.3 1,041.4 1,052.7 1,082.7 n.a. 29 Personal saving 247.9 192.6 203.1 175.5 201.1 203.3 232.6 270.0 30 Undistributed corporate profits 94.3 120.9 135.1 127.7 142.3 139.5 130.7 n.a. 31 Corporate inventory valuation adjustment -6.4 -6.2 -19.5 -12.3 -14.1 -19.6 -32.1 -36.5 Capital consumption allowances 32 Corporate 396.8 407.8 432.2 432.2 425.9 432.6 438.0 445.3 33 Noncorporate 261.8 261.2 283.1 301.8 272.1 277.3 281.3 284.8 34 Government surplus, or deficit (-), national income and product accounts -257.8 -215.0 -132.9 -151.1 -118.1 -130.1 -132.3 n.a. 35 Federal -282.7 -241.4 -159.1 -176.2 -145.1 -154.0 -161.1 n.a. 36 State and local 24.8 26.3 26.2 25.2 27.0 23.9 28.8 n.a. 37 Gross investment 731.7 789.8 889.7 850.2 8993 901.5 907.9 n.a. 38 Gross private domestic investment 788.3 882.0 1,032.9 966.6 1,034.4 1,055.1 1,075.6 1,119.3 39 Net foreign investment -56.6 -92.3 -143.2 -116.4 -135.1 -153.6 -167.7 n.a. 40 Statistical discrepancy 8.8 23 -30.9 -36.1 -24.0 -21.1 -42.4 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1993 1994 IItteemm ccrreeddiittss oorr ddeebbiittss 11999922 11999933 11999944 Q4 Q1 Q2 Q3 Q4P 1 Balance on current account -67,886 -103,896 -155,672 -30,587 -32,238 -37,827 -40,848 -44,758 7 Merchandise trade balance2 -96,097 -132,575 -166,364 -33,169 -37,052 -41,721 -44,615 -42,976 3 Merchandise exports 440,361 456,866 502,729 119,679 117,848 122,510 127,632 134,739 4 Merchandise imports -536,458 -589,441 -669,093 -152,848 -154,900 -164,231 -172,247 -177,715 Military transactions, net -3,034 -763 268 -444 -338 177 230 199 6 Other service transactions, net 58,747 57,613 59,726 13,637 13,070 14,907 15,647 16,102 7 Investment income, net 4,540 3,946 -15,181 -590 -820 -2,819 -4,037 -7,504 8 U.S. government grants -15,010 -14,620 -14,532 -5,591 -2,371 -3,590 -2,839 -5,731 9 U.S. government pensions and other transfers -3,735 -3,785 -4,246 -987 -889 -895 -1,474 -988 10 Private remittances and other transfers -13,297 -13,712 -15,343 -3,443 -3,838 -3,886 -3,760 -3,860 11 Change in U.S. government assets other than official reserve assets, net (increase, -) -1,652 -306 -277 -321 490 446622 --227700 --996611 12 Change in U.S. official reserve assets (increase, —) 3,901 -1,379 5,346 -673 -59 3,537 -165 2,033 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) 2,316 -537 -441 -113 -101 -108 -111 -121 15 Reserve position in International Monetary Fund -2,692 -44 494 -80 -3 251 273 -27 16 Foreign currencies 4,277 -797 5,293 -480 45 3,394 -327 2,181 17 Change in U.S. private assets abroad (increase, -) -63,759 -146,213r -130,756 -62,628 -48,887 -11,250 -25,414 -45,208 18 Bank-reported claims3 22,314 32,238 -2,033 -9,293 -1,236 15,248 1,268 -17,313 19 Nonbank-reported claims 45 -598 -9,679 -303 1,941 -4,264 -7,356 70 U.S. purchases of foreign securities, net -45,114 -119,983 -60,621 -30,349 -24,605 -14,007 -8,103 --II 33,,990066 21 U.S. direct investments abroad, net -41,004 -57,870r -58,423 -22,683 -24,987 -8,227 -11,223 -13,989 77 Change in foreign official assets in United States (increase, +) 40,858 71,681 38,912 23,962 11,530 8,925 19,460 -1,003 73 U.S. Treasury securities 18,454 48,702 30,441 22,856 1,193 6,033 15,841 7,374 7.4 Other U.S. government obligations 3,949 4,062 5,988 970 50 2,355 2,003 1,580 75 Other U.S. government liabilities4 2,572 1,666 2,514 825 938 252 700 624 76 Other U.S. liabilities reported by U.S. banks 16,571 14,666 2,317 -587 10,139 1,241 1,695 -10,758 27 Other foreign official assets5 -688 2,585 -2,348 -102 -790 -956 -779 177 78 Change in foreign private assets in United States (increase, +) 105,646 159,017 275,702 66,200 83,600 40,384 60,794 90,924 79 U.S. bank-reported liabilities3 15,461 18,452 106,189 7,370 35,200 25,539 18,353 27,097 30 U.S. nonbank-reported liabilities 13,573 14,282 17,955 4,733 5,867 3,662 8,426 31 Foreign private purchases of U.S. Treasury securities, net 36,857 24,849 32,925 7,996 9,260 -7,434 5,111 25,988 37 Foreign purchases of other U.S. securities, net 29,867 80,068 58,562 38,008 21,258 13,152 14,168 9,984 33 Foreign direct investments in United States, net 9,888 21,366 60,071 8,093 12,015 5,465 14,736 27,855 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy -17,108 21,096 -33,255 4,047 -14,436 -4,231 -13,557 -1,027 36 Due to seasonal adjustment 103 5,899 728 -6,686 62 37 Before seasonal adjustment -17,108 21,096 -33,255 3,944 -20,335 -4,959 -6,871 -1,089 MEMO Changes in official assets 38 U.S. official reserve assets (increase, —) 3,901 -1,379 5,346 --667733 --5599 33,,553377 --116655 22,,003333 39 Foreign official assets in United States, excluding line 25 (increase, +) 38,286 70,015 36,398 23,137 10,592 88,,667733 1188,,776600 --11,,662277 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 5,942 -3,847 --11,,004499 --222299 --11,,667744 --44,,114499 33,,772266 11,,004488 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 • July 1995 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1994 1995 IItteemm 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. Mar.p 1 Goods and services, balance -40,384 -75,725 -106,571 -8,879 -9,996 -9,628 -7,261 -11,953 -9,151 -9,115 2 Merchandise -96,097 -132,575 -166,565 -14,517 -15,117 -15,170 -12,896 -16,853 -14,303 -14,249 3 Services 55,713 56,850 59,994 5,638 5,121 5,542 5,635 4,900 5,152 5,134 4 Goods and services, exports 616,924 641,677 697,877 60,510 59,881 61,909 63,611 60,964 62,251 65,344 5 Merchandise 440,361 456,866 502,590 43,485 43,289 44,814 46,490 44,299 45,421 48,202 6 Services 176,563 184,811 195,287 17,025 16,592 17,095 17,121 16,665 16,830 17,142 7 Goods and services, imports -657,308 -717,402 -804,448 -69,389 -69,877 -71,537 -70,872 -72,917 -71,402 -74,459 8 Merchandise -536,458 -589,441 -669,155 -58,002 -58,406 -59,984 -59,386 -61,152 -59,724 -62,451 9 Services -120,850 -127,961 -135,293 -11,387 -11,471 -11,553 -11,486 -11,765 -11,678 -12,008 MEMO 10 Balance on merchandise trade, Census basis -84,501 -115,568 -151,308 -13,418 -13,845 -14,092 -11,644 —15,910 -13384 -12,595 1. Data show monthly values consistent with quarterly figures in the U.S. balance of SOURCE. FT900, U.S. Department of Commerce, Bureau tohfe Census and Bureau of payments accounts. Economic Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1994 1995 AAsssseett 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.p 1 Total 77,719 71,323 73,442 76,532 78,172 74,000 74,335 76,027 81,439 86,761 88,756 2 Gold stock, including Exchange Stabilization Fund1 11,057 11,056 11,053 11,054 11,053 11,052 11,051 11,050 11,050 11,053 11,055 3 Special drawing rights2'3 11,240 8,503 9,039 9,971 10,088 10,017 10,039 10,154 11,158 11,651 11,743 4 Reserve position in International Monetary Fund2 9,488 11,759 11,818 12,067 12,339 12,037 12,030 12,120 12,853 13,418 14,206 5 Foreign currencies4 45,934 40,005 41,532 43,440 44,692 40,894 41,215 42,703 46,378 50,639 51,752 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.p 1 Deposits 968 205 386 342 223 230 250 185 188 370 166 Held in custody 2 U.S. Treasury securities2 281,107 314,481 379,394 429,819 439,854 444,339 441,866 439,139 447,206 459,694 469,482 3 Earmarked gold3 13,303 13,118 12,327 12,044 12,039 12,037 12,033 12,033 12,033 11,964,301 11,897 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 1994r Sept. Jan.r 1 Total1 412,624 483,002' 521,316 531,397 523,915 520,204 516,713 526,678 By type 2 Liabilities reported by banks in the United States' 54,967 69,808 82,587 79,361 73,507 72,731 74,094 80,041 3 U.S. Treasury bills and certificates 104,596 151,100 138,451 148,039 143,222 139,570 133,014 134,341 U.S. Treasury bonds and notes 4 Marketable 210,931 212,237r 247,804 250,695 253,455 254,037 255,784 257,846 5 6 U.S N . o s n e m cu a r r i k ti e e t s a b o l t e h 4 e r than U.S. Treasury securities v 1 3 4 7 , ,5 5 9 3 8 2 44 5 , , 2 6 0 5 5 2 r 46 5 , , 4 9 8 9 4 0 47 6 , , 2 0 7 3 1 1 47 6 , , 6 0 6 6 2 9 47 6 , , 7 1 5 0 7 9 47 6 , , 6 1 8 3 4 7 48 6 , , 3 0 5 9 5 5 By area 7 Europe1 189,230 207,121 225,481 222,833 217,018 214,908 212,029 213,518 8 Canada 13,700 15,285 19,382 18,497 17,528 17,235 18,041 18,655 9 Latin America and Caribbean 37,973 55,898 44,348 47,765 45,206 41,189 36,979 41,953 10 Asia 164,690 197,702r 223,805 232,871 234,344 236,864 240,054 244,623 11 Africa 3,723 4,052 4,388 4,232 4,673 4,179 4,335 4,066 12 Other countries6 3,306 2,942 3,910 5,197 5,144 5,827 5,273 3,861 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. 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 U.S. 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 States1 Payable in Foreign Currencies Millions of dollars, end of period 1994 IItteemm 11999911 11999922 11999933 Mar. June Sept. Dec. 1 Banks' liabilities 75,129 72,796 78,120 86,706 72,490 82,293 89,616r 2 Banks' claims 73,195 62,799 60,649 74,670 56,669 59,261 54,448 3 Deposits 26,192 24,240 20,284 21,139 21,490 20,419 19,798 4 Other claims 47,003 38,559 40,365 53,531 35,179 38,842 34,650 5 Claims of banks' domestic customers2 3,398 4,432 4,100 4,696 4,732 5,466 10,773r 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 • July 1995 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1994 1995 IItteemm 11999922 11999933 11999944RR Sept. Oct. Nov. Dec.r Jan.' Feb. Mar.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 810,259 921,796 1,015,860 l,000,200r l,012,336r 989,094r 1,015,860 1,009,899 1,017,843 1,026,867 7.B anks' own liabilities 606,444 623,432 721,047 707,452 709,734 686,602 721,047 722,047 723,730 721,787 3 Demand deposits 21,828 21,573 25,831 23,522 24,614 23,954 25,831 23,424 24,083 22,656 4 Time deposits2 160,385 175,078 186,392 178,277 181,406 178,348 186,392 187,975 185,715 183,968 Other3 93,237 110,144 113,850 134,762 133,805 124,309 113,850 123,987 125,231 119,885 6 Own foreign offices4 330,994 316,637 394,974 370,891 369,909 359,991 394,974 386,661 388,701 395,278 7 Banks' custodial liabilities5 203,815 298,364 294,813 292,748R 302,602R 302,492R 294,813 287,852 294,113 305,080 8 U.S. Treasury bills and certificates6 127,644 176,739 162,825 164,555 174,441 169,056 162,825 156,664 160,353 170,190 9 Other negotiable and readily transferable instruments7 21,974 36,289 42,177 38,988 37,661 39,834 42,177 40,442 43,378 44,749 10 Other 54,197 85,336 89,811 89,205R 90,500R 93,602R 89,811 90,746 90,382 90,141 11 Nonmonetary international and regional organizations8 ... 9,350 10,936 7,474 7,619 7,824 6,207 7,474 9,112 7,854 8,793 12 Banks' own liabilities 6,951 5,639 7,044 6,642 6,047 5,441 7,044 8,646 7,205 8,169 13 Demand deposits 46 15 29 28 83 35 29 24 35 31 14 Time deposits2 3,214 2,780 3,198 2,989 3,095 2,817 3,198 3,715 3,484 3,699 15 Other3 3,691 2,844 3,817 3,625 2,869 2,589 3,817 4,907 3,686 4,439 16 Banks' custodial liabilities5 2,399 5,297 430 977 1,777 766 430 466 649 624 17 U.S. Treasury bills and certificates6 1,908 4,275 281 767 1,572 501 281 280 407 314 18 Other negotiable and readily transferable instruments7 486 1,022 149 205 205 265 149 181 242 307 19 Other 5 0 0 5 0 0 0 5 0 3 20 Official institutions9 159,563 220,908 212,301 221,038 227,400 216,729 212,301 207,108 214,382 224,829 21 Banks' own liabilities 51,202 64,231 59,280 72,114 67,505 60,717 59,280 62,082 67,029 68,612 22 Demand deposits 1,302 1,601 1,564 1,691 2,028 1,682 1,564 1,598 1,587 1,705 23 Time deposits2 17,939 21,654 23,175 26,920 23,812 20,626 23,175 22,622 25,063 23,615 24 Other3 31,961 40,976 34,541 43,503 41,665 38,409 34,541 37,862 40,379 43,292 25 Banks' custodial liabilities5 108,361 156,677 153,021 148,924 159,895 156,012 153,021 145,026 147,353 156,217 26 U.S. Treasury bills and certificates 104,596 151,100 139,570 138,451 148,039 143,222 139,570 133,014 134,341 141,716 27 Other negotiable and readily transferable instruments7 3,726 5,482 13,245 10,407 11,820 12,773 13,245 11,972 12,943 14,351 28 Other 39 95 206 66 36 17 206 40 69 150 29 Banks10 547,320 589,077 681,724 652,456' 658,315R 647,28 LR 681,724 676,071 676,798 683,635 30 Banks' own liabilities 476,117 477,050 568,243 538,600 545,707 532,625 568,243 562,500 560,585 564,174 31 Unaffiliated foreign banks 145,123 160,413 173,269 167,709 175,798 172,634 173,269 175,839 171,884 168,896 32 Demand deposits 10,170 9,719 13,080 10,555 11,023 11,259 13,080 10,243 10,979 10,796 33 Time deposits2 90,296 105,192 111,461 101,715 106,646 106,043 111,461 112,193 107,469 107,828 34 Other3 44,657 45,502 48,728 55,439 58,129 55,332 48,728 53,403 53,436 50,272 35 Own foreign offices4 330,994 316,637 394,974 370,891 369,909 359,991 394,974 386,661 388,701 395,278 36 Banks' custodial liabilities5 71,203 112,027 113,481 113,856R 112,608R 114,656R 113,481 113,571 116,213 119,461 37 U.S. Treasury bills and certificates6 11,087 10,712 11,218 10,975 10,783 11,792 11,218 10,992 12,328 15,785 38 Other negotiable and readily transferable instruments7 7,555 17,020 14,234 15,343 13,228 13,530 14,234 14,137 15,232 15,192 39 Other 52,561 84,295 88,029 87,538R 88,597R 89,334R 88,029 88,442 88,653 88,484 40 Other foreigners 94,026 100,875 114,361 119,087 118,797 118,877 114,361 117,608 118,809 109,610 41 Banks' own liabilities 72,174 76,512 86,480 90,096 90,475 87,819 86,480 88,819 88,911 80,832 42 Demand deposits 10,310 10,238 11,158 11,248 11,480 10,978 11,158 11,559 11,482 10,124 43 Time deposits2 48,936 45,452 48,558 46,653 47,853 48,862 48,558 49,445 49,699 48,826 44 Other3 12,928 20,822 26,764 32,195 31,142 27,979 26,764 27,815 27,730 21,882 45 Banks' custodial liabilities5 21,852 24,363 27,881 28,991 28,322 31,058 27,881 28,789 29,898 28,778 46 U.S. Treasury bills and certificates 10,053 10,652 11,756 14,362 14,047 13,541 11,756 12,378 13,277 12,375 47 Other negotiable and readily transferable instruments7 10,207 12,765 14,549 13,033 12,408 13,266 14,549 14,152 14,961 14,899 48 Other 1,592 946 1,576 1,596 1,867 4,251 1,576 2,259 1,660 1,504 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 9,111 17,567 17,895 19,115 16,793 17,397 17,895 16,442 17,137 16,759 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 bauriks, 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 States1—Continued 1994 1995 IItteemm 11999922 11999933 11999944rr Sept. Oct. Nov. Dec.r Jan.r Feb. Mar.p AREA 1 Total, all foreigners 810,259 921,796 1,015,860 l,000,200r 1,012,336r 989,094r 1,015,860 1,009,899 1,017,843 1,026,867 2 Foreign countries 800,909 910,860 1,008,386 992,581r l,004,512r 982,887r 1,008,386 1,000,787 1,009,989 1,018,074 3 Europe 307,670 377,193 392,761 406,909 413,440 393,156 392,761 393,587 386,589 380,458 4 Austria 1,611 1,917 3,649 3,014 3,610 4,264 3,649 3,236 4,021 4,012 5 Belgium and Luxembourg 20,567 28,621 21,738 27,568 23,566 22,322 21,738 21,679 22,094 23,886 6 Denmark 3,060 4,517 2,784 2,128 2,374 2,307 2,784 2,662 1,971 2,396 7 Finland 1,299 1,872 1,436 2,319 2,601 1,587 1,436 2,403 1,754 1,223 8 41,411 39,746 44,716 43,143 44,209 41,160 44,716 42,325 44,314 41,300 9 Germany 18,630 26,613 27,175 31,889 33,136 31,050 27,175 28,521 27,497 28,276 10 Greece 913 1,519 1,392 1,227 1,711 1,477 1,392 1,231 2,064 2,264 11 Italy 10,041 11,759 10,884 10,975 10,893 9,777 10,884 10,269 12,021 8,673 1? Netherlands 7,365 16,096 16,748 18,754 18,034 17,310 16,748 15,629 15,891 15,784 13 Norway 3,314 2,966 2,338 2,861 3,400 2,807 2,338 2,309 2,147 2,066 14 Portugal 2,465 3,366 2,846 3,023 2,861 2,919 2,846 2,863 4,007 2,810 15 Russia 577 2,511 2,714 2,899 2,337 2,367 2,714 2,047 2,642 3,467 16 Spain 9,793 20,493 14,657 14,198 16,325 15,038 14,657 15,149 11,106 11,671 17 Sweden 2,953 2,572 3,093 4,651 3,467 3,361 3,093 2,258 2,247 2,474 18 Switzerland 39,440 41,561 41,882 41,050 41,834 41,756 41,882 39,516 40,100 39,337 19 Turkey 2,666 3,227 3,341 3,023 3,143 3,032 3,341 3,621 2,701 2,513 7.0 United Kingdom 111,805 133,936 163,577 160,154 171,938 162,760 163,577 173,870 162,629 159,733 71 Yugoslavia11 504 570 245 224 220 240 245 261 258 213 22 Other Europe and other former U.S.S.R. 29,256 33,331 27,746 33,909 27,981 27,822 27,746 23,938 27,325 28,460 23 Canada 22,420 20,227 24,609 24,660 23,115 23,295 24,609 26,498 26,564 27,030 7,4 Latin America and Caribbean 317,228 358,040 422,768 391,219r 391,971r 397,141r 422,768 407,905 419,496 419,546 75 Argentina 9,477 14,477 17,201 13,783 15,577 15,950 17,201 12,789 11,886 9,957 76 Bahamas 82,284 73,800 106,058 87,007 88,668 90,091 106,058 95,226 98,833 100,457 77 Bermuda 7,079 7,841 8,467 10,334 8,936 7,615 8,467 8,904 8,554 8,711 78 Brazil 5,584 5,301 9,140 5,670 6,196 6,723 9,140 9,001 10,627 10,848 79 British West Indies 153,033 190,445 227,175 213,949r 210,248r 215,186r 227,175 227,816 231,469 233,451 30 Chile 3,035 3,183 3,114 3,407 3,078 3,741 3,114 2,965 3,327 3,587 31 Colombia 4,580 3,171 4,607 4,027 4,475 4,417 4,607 4,308 4,037 3,643 3? Cuba 3 33 13 13 7 7 13 12 5 5 33 Ecuador 993 880 875 823 830 825 875 1,339 1,511 1,117 34 Guatemala 1,377 1,207 1,121 1,103 1,077 1,036 1,121 1,056 1,079 1,061 35 Jamaica 371 410 529 565 589 513 529 447 464 491 36 Mexico 19,454 28,018 12,243 19,941 21,263 19,199 12,243 12,608 16,779 15,749 37 Netherlands Antilles 5,205 4,195 4,539 4,275 4,153 4,845 4,539 3,838 4,498 4,015 38 Panama 4,177 3,582 4,549 4,082 4,077 4,598 4,549 4,832 4,281 4,360 39 Peru 1,080 926 900 1,079 1,027 935 900 901 892 893 40 Uruguay 1,955 1,611 1,596 1,399 1,472 1,190 1,596 1,797 1,609 1,754 41 Venezuela 11,387 12,786 13,979 13,297 13,809 13,833 13,979 13,460 12,970 12,629 42 Other 6,154 6,174 6,662 6,465 6,489 6,437 6,662 6,606 6,675 6,818 43 143,540 144,575 155,357 158,217 163,316 157,153 155,357 159,465 165,765 178,438 China 44 People's Republic of China 3,202 4,011 10,063 5,062 5,625 8,017 10,063 12,908 15,658 12,025 45 Republic of China (Taiwan) 8,408 10,627 9,792 8,853 9,473 10,919 9,792 9,135 9,910 10,033 46 Hong Kong 18,499 17,178 17,181 18,750 18,217 17,552 17,181 18,460 18,157 19,935 47 1,399 1,114 2,336 2,187 2,376 2,377 2,336 2,293 2,117 2,357 48 Indonesia 1,480 1,986 1,576 1,838 1,734 1,613 1,576 1,601 1,946 2,092 49 Israel 3,773 4,435 5,155 3,204 6,607 5,066 5,155 5,471 4,953 5,021 "in Japan 58,435 61,466 64,039 68,200 66,152 63,309 64,039 61,612 62,951 77,830 51 Korea (South) 3,337 4,913 5,104 4,622 4,740 5,016 5,104 4,771 4,165 4,348 5? Philippines 2,275 2,035 2,714 3,135 3,158 3,064 2,714 2,616 2,363 2,293 53 Thailand 5,582 6,137 6,466 6,503 5,682 5,946 6,466 8,216 9,906 9,559 54 Middle Eastern oil-exporting countries 21,437 15,824 15,474 17,138 17,232 17,678 15,474 16,181 14,934 15,545 55 Other 15,713 14,849 15,457 18,725 22,320 16,596 15,457 16,201 18,705 17,400 56 5,884 6,633 6,511 6,299 6,389 6,939 6,511 6,363 6,203 6,817 57 2,472 2,208 1,867 2,014 1,996 2,097 1,867 1,749 1,830 1,781 58 Morocco 76 99 97 72 66 67 97 92 73 70 59 South Africa 190 451 433 197 245 693 433 285 400 706 60 Zaire 19 12 9 9 9 10 9 10 10 9 61 Oil-exporting countries14 1,346 1,303 1,343 1,186 1,176 1,227 1,343 1,409 1,122 1,599 62 Other 1,781 2,560 2,762 2,821 2,897 2,845 2,762 2,818 2,768 2,652 63 4,167 4,192 6,380 5,277 6,281 5,203 6,380 6,969 5,372 5,785 64 Australia 3,043 3,308 5,141 3,966 5,114 4,094 5,141 5,395 4,351 5,024 65 Other 1,124 884 1,239 1,311 1,167 1,109 1,239 1,574 1,021 761 66 Nonmonetary international and regional organizations.... 9,350 10,936 7,474 7,619 7,824 6,207 7,474 9,112 7,854 8,793 67 International15 7,434 6,851 6,467 5,390 5,844 4,358 6,467 7,746 6,701 7,822 68 Latin American regional 1,415 3,218 551 1,108 950 1,094 551 865 582 376 69 Other regional17 501 867 456 1,121 1,030 755 456 501 571 595 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 • July 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 1995 AArreeaa oorr ccoouunnttrryy 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan.' Feb. Mar." 1 Total, all foreigners 499,437 484,584 478,213r 475,742 479,426 464,360 478,213' 480,606 474,639 489,343 2 Foreign countries 494,355 482,179 473,919r 472,478 477,421 463,026 473,919r 477,611 473,755 486,010 3 Europe 123,377 121,550 123,689' 120,550 131,985 120,045 123,689' 125,891 122,609 128,252 4 Austria 331 413 705 293 440 369 705 350 425 612 5 Belgium and Luxembourg 6,404 6,535 6,651 7,279 6,370 6,274 6,651 5,558 4,833 7,280 6 Denmark 707 382 1,039 521 880 668 1,039 488 646 727 7 Finland 1,418 594 695' 594 587 718 695' 720 456 575 S France 14,723 11,519 12,186' 14,846 16,354 12,906 12,186' 12,615 11,958 13,201 9 Germany 4,222 7,703 6,658' 8,655 8,501 8,452 6,658' 8,530 7,640 6,983 10 Greece 717 679 592 613 520 518 592 668 751 586 11 Italy 9,047 8,918 6,140* 5,376 6,693 5,950 6,140' 6,703 6,694 6,391 12 Netherlands 2,468 3,073 3,709' 2,908 3,402 3,426 3,709' 3,741 4,200 4,076 13 Norway 355 396 504 650 903 1,004 504 1,069 988 1,442 14 Portugal 325 834 938 1,182 1,056 1,006 938 988 1,045 907 15 Russia 3,147 2,310 949 1,272 1,220 1,172 949 1,148 759 770 16 Spain 2,755 2,766 3,552 2,211 2,731 2,174 3,552 2,989 2,803 3,205 17 Sweden 4,923 4,086 4,101' 3,903 3,156 3,596 4,101' 3,831 4,043 3,377 18 Switzerland 4,717 6,566 7,491 5,853 7,670 6,544 7,491 9,025 8,060 7,844 19 Turkey 962 1,294 862 1,046 1,147 914 862 548 869 678 20 United Kingdom 63,430 61,169 65,487' 61,084 68,512 62,616 65,487' 64,914 64,628 67,898 21 Yugoslavia2 569 536 265 258 266 266 265 265 265 645 22 Other Europe and other former U.S.S.R.3 2,157 1,777 1,165 2,006 1,577 1,472 1,165 1,741 1,546 1,055 23 Canada 13,845 18,432 17,978 19,239 16,433 17,788 17,978 18,812 18,907 20,255 24 Latin America and Caribbean 218,078 223,649 219,343' 219,772 221,055 215,948 219,343' 220,387 219,282 223,227 25 Argentina 4,958 4,422 5,776' 5,587 5,588 5,718 5,776' 5,832 6,304 6,238 26 Bahamas 60,835 64,410 65,951 62,351 64,841 60,786 65,951 63,996 63,787 64,964 27 Bermuda 5,935 8,034 7,482' 5,444 5,199 6,710 7,482' 14,551 10,900 8,491 28 Brazil 10,773 11,812 9,452 10,299 10,216 9,784 9,452 9,735 9,998 10,748 29 British West Indies 101,507 98,149 94,082' 100,840 99,311 95,922 94,082' 89,974 91,283 95,860 30 Chile 3,397 3,616 3,787 3,401 3,431 3,628 3,787 3,866 4,190 4,336 31 Colombia 2,750 3,179 4,003 3,463 3,671 3,768 4,003 3,816 3,818 3,975 32 Cuba 0 0 0 0 12 0 0 0 0 0 33 Ecuador 884 680 685 625 628 635 685 712 664 564 34 Guatemala 262 286 366 310 337 335 366 346 349 377 35 Jamaica 162 195 254 204 255 251 254 253 278 262 36 Mexico 14,991 15,834 17,517 16,329 16,954 17,406 17,517 17,306 17,270 17,148 37 Netherlands Antilles 1,379 2,411 1,055 1,332 1,195 1,818 1,055 1,205 1,437 1,188 38 Panama 4,654 2,892 2,179 2,384 2,307 2,304 2,179 2,155 2,340 2,465 39 Peru 730 653 959 946 857 884 959 998 1,055 1,039 40 Uruguay 936 952 485 711 800 652 485 420 390 344 41 Venezuela 2,525 2,907 1,827' 2,055 1,934 1,921 1,827' 1,702 1,724 1,653 42 Other 1,400 3,217 3,483 3,491 3,519 3,426 3,483 3,520 3,495 3,575 43 131,789 111,787 106,714' 106,261 101,412 103,346 106,714' 110055,,771199 110066,,885555 108,562 China 44 People's Republic of China 906 2,299 835 1,177 822 817 835 923 859 835 45 Republic of China (Taiwan) 2,046 2,628 1,381 1,258 1,464 1,479 1,381 1,245 1,213 1,476 46 Hong Kong 9,642 10,881 9,272 13,057 10,362 11,336 9,272 10,305 11,322 14,464 47 India 529 589 986 972 971 1,021 986 1,103 1,059 1,039 48 Indonesia 1,189 1,527 1,454 1,371 1,328 1,366 1,454 1,488 1,426 1,504 49 Israel 820 826 691 663 863 696 691 673 684 812 50 Japan 79,172 59,945 59,152' 53,145 50,140 53,550 59,152' 55,251 57,182 55,481 51 Korea (South) 6,179 7,569 10,002' 8,932 9,048 8,933 10,002' 10,929 10,845 11,552 52 Philippines 2,145 1,408 636 562 639 583 636 564 548 548 53 Thailand 1,867 2,154 2,818 2,698 2,756 2,676 2,818 2,835 2,590 2,727 54 Middle Eastern oil-exporting countries4 18,540 15,110 13,732 15,302 15,425 14,454 13,732 14,044 13,341 13,096 55 Other 8,754 6,851 5,755 7,124 7,594 6,435 5,755 6,359 5,786 5,028 56 Africa 4,279 3,867 3,033 3,526 3,177 3,115 3,033 2,966 2,928 2,835 57 Egypt 186 196 225 254 237 229 225 227 234 205 58 Morocco 441 481 429 497 468 480 429 415 442 424 59 South Africa 1,041 633 665 569 480 454 665 657 597 626 60 Zaire 4 4 2 3 3 3 2 2 2 2 61 Oil-exporting countries5 1,002 1,139 872 1,133 985 909 872 854 801 730 62 Other 1,605 1,414 840 1,070 1,004 1,040 840 811 852 848 63 Other 2,987 2,894 3,162' 3,130 3,359 2,784 3,162' 3,836 3,174 2,879 64 Australia 2,243 2,071 2,219' 1,810 2,158 1,687 2,219' 2,198 1,912 1,758 65 Other 744 823 943 1,320 1,201 1,097 943 1,638 1,262 1,121 66 Nonmonetary international and regional organizations6... 5,082 2,405 4,294' 3,264 2,005 1,334 4,294' 2,995 884 3,333 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 1995 TTyyppee ooff ccllaaiimm Sept. Oct. Nov. Dec.' Jan.r Feb. Mar.p 1 Total 559,495 535,393 548,949 530,308 548,949 2 Banks' claims 499,437 484,584 478,213 475,742 479,426 464,360 478,213 480,606 474,639 489,343 3 Foreign public borrowers 31,367 29,115 23,110 24,741 22,373 20,649 23,110 22,992 17,850 23,233 4 Own foreign offices2 303,991 286,382 282,393 282,657 286,539 276,040 282,393 278,954 279,203 293,311 5 Unaffiliated foreign banks 109,342 98,433 109,591 101,174 107,035 103,639 109,591 104,386 105,301 103,503 6 Deposits 61,550 47,167 58,402 50,900 52,914 50,490 58,402 53,786 53,542 52,484 7 Other 47,792 51,266 51,189 50,274 54,121 53,149 51,189 50,600 51,759 51,019 8 All other foreigners 54,737 70,654 63,119 67,170 63,479 64,032 63,119 74,274 72,285 69,296 9 Claims of banks' domestic customers3 60,058 50,809 70,736 54,566 70,736 10 Deposits 15,452 20,241 34,863 25,087 34,863 11 Negotiable and readily transferable instruments4 31,474 16,885 22,565 16,263 2222,,556655 12 Outstanding collections and other claims 13,132 13,683 13,308 13,216 13,308 MEMO 13 Customer liability on acceptances 8,655 7,863 8,226 7,614 8,226 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 38,623 26,370 27,347 24,876 23,337 27,912 27,347 27,863 28,690 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 1994 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999911 11999922 11999933 Mar. June Sept. Dec.P 1 Total 195,302 195,119 196,552 194,581 186,711 191,770 194,716 By borrower 2 Maturity of one year or less 162,573 163,325 167,919 168,028 161,594 166,244 169,765 3 Foreign public borrowers 21,050 17,813 17,773 16,150 12,951 16,986 15,006 4 All other foreigners 141,523 145,512 150,146 151,878 148,643 149,258 154,759 5 Maturity of more than one year 32,729 31,794 28,633 26,553 25,117 25,526 24,951 6 Foreign public borrowers 15,859 13,266 10,821 9,229 8,051 7,375 7,693 7 All other foreigners 16,870 18,528 17,812 17,324 17,066 18,151 17,258 By area Maturity of one year or less 8 Europe 51,835 53,300 56,605 59,209 51,204 58,406 56,354 9 Canada 6,444 6,091 7,564 7,306 8,285 7,217 7,251 10 Latin America and Caribbean 43,597 50,376 56,755 58,998 56,758 57,034 58,906 11 Asia 51,059 45,709 41,382 36,875 38,891 36,766 40,043 12 Africa 2,549 1,784 1,820 1,613 1,798 1,519 1,364 13 All other3 7,089 6,065 3,793 4,027 4,658 55,,330022 55,,884477 Maturity of more than one year 14 Europe 3,878 5,367 4,428 3,842 3,355 3,637 3,641 15 Canada 3,595 3,287 2,553 2,548 2,451 2,607 2,373 16 Latin America and Caribbean 18,277 15,312 13,866 13,009 12,420 12,146 11,992 17 Asia 4,459 5,038 5,402 4,704 4,607 4,838 4,583 18 Africa 2,335 2,380 1,936 2,001 1,849 1,836 1,549 19 All other3 185 410 448 449 435 462 813 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 • July 1995 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1992 1993 1994 AArreeaa oorr ccoouunnttrryy 11999900 11999911 Dec. Mar. June Sept. Dec. Mar. June Sept. Dec. 1 Total 320.1 343.6 346.5 361.1 377.1 388.4 404.7 478.41" 502.7r 509.7' 499.41" 2 G-10 countries and Switzerland 132.2 137.6 132.9 142.5 150.0 153.3 161.6 178.8r 174.2r 188.4r 176. r 3 Belgium and Luxembourg 5.9r 6.0 5.6 6.1 7.0 7.1 7.4 8.0" 8.8 9.7 6.91 4 France 10.4 11.0 15.3 13.5 14.0 12.3 11.7 16.4 18.8 20.7 19.1 5 Germany 10.6 8.3 9.3 9.9 10.8 12.4 12.6 29.0r 26.0* 25.2r 24.5r 6 Italy 5.0 5.6 6.5 6.7 7.9 8.7 7.7 15.5 14.0 11.6 11.8 7 Netherlands 3.(f 4.7 2.8 3.6 3.7 3.7 4.7 4.1 3.6 3.5 3.6 8 Sweden 2.2 1.9 2.3 3.0 2.5 2.5 2.5 2.8 2.9 2.6 2.7 9 Switzerland 4.4 3.4 4.8 5.3 4.7 5.6 5.9 6.3 6.5 6.2 6.9 10 United Kingdom 60.9 68.5 60.8 65.7 73.5 74.7 84.7 70.1 63.4 82.8r 70.3' 11 Canada 5.9 5.8 6.3 8.2 8.0 9.7 6.7 7.7 9.6 9.8 9.5 12 Japan 24.0 22.6 19.3 20.4 17.9 16.8 17.8 18.9 20.5 16.4 20.7 13 Other industrialized countries 22.9 22.8 24.0 25.4 27.2 26.0 24.6 41.2 41.7 41.5 45.2r 14 Austria 1.4 .6 1.2 1.2 1.3 .6 .4 1.0 1.0 1.0 1.1 15 Denmark 1.1 .9 .9 .8 1.0 1.1 1.0 1.1 1.1 .8 1.2 16 Finland .7 .7 .7 .7 .9 .6 .4 1.0 .8 .8 1.0 17 Greece 2.7 2.6 3.0 2.7 3.1 3.2 3.2 3.8 4.6 4.3 4.5 18 Norway 1.6 1.4 1.2 1.8 1.8 2.1 1.7 1.6 1.6 1.6 2.0 19 Portugal .6 .6 .4 .7 .9 1.0 .8 1.2 1.1 1.0 1.2 20 Spain 8.3 8.3 8.9 9.5 10.5 9.3 8.9 12.3 11.7 13.1 13.6 21 Turkey 1.7 1.4 1.3 1.4 2.1 2.1 2.1 2.4 2.1 1.8 1.6 22 Other Western Europe 1.2 1.8 1.7 2.0 1.7 2.2 2.6 3.0 2.8 1.0 2.7 23 South Africa 1.8 1.9 1.7 1.6 1.3 1.2 1.1 1.2 1.2 1.2 1.0 24 Australia 1.8 2.7 2.9 2.9 2.5 2.8 2.3 12.7 13.7 15.0 15.4r 25 OPEC2 12.8 14.5 16.1 16.6 15.7 14.8 17.4 22.9 21.5 21.7' 22.1 26 Ecuador 1.0 .7 .6 .6 .6 .5 .5 .5 .5 .4 .5 27 Venezuela 5.0 5.4 5.2 5.1 5.5 5.4 5.1 4.7 4.4 3.9 3.7 28 Indonesia 2.7 2.7 3.0 3.1 3.1 2.8 3.3 3.4 3.2 3.3 3.6 29 Middle East countries 2.5 4.2 6.2 6.6 5.4 4.9 7.4 13.2 12.4 13.1r 13.4 30 African countries 1.7 1.5 1.1 1.1 1.1 1.1 1.2 1.1 1.1 1.0 .9 31 Non-OPEC developing countries 65.4 63.9 72.1 74.4 76.7 77.0 82.6 93.6 94.1 94.3r 98.0r Latin America 32 Argentina 5.0 4.8 6.6 7.1 6.6 7.2 7.7 8.7 9.8 10.5 11.1 33 Brazil 14.4 9.6 10.8 11.6 12.3 11.7 12.0 12.6 11.9 9.2 8.2 34 Chile 3.5 3.6 4.4 4.6 4.6 4.7 4.7 5.1 5.1 5.4 6.1 35 Colombia 1.8 1.7 1.8 1.9 1.9 2.0 2.1 2.2 2.4 2.4 2.6 36 Mexico 13.0 15.5 16.0 16.8 16.8 17.5 17.7 18.8 18.5 19.6 18.1 37 Peru .5 .4 .5 .4 .4 .3 .4 .5 .6 .6 .5 38 Other 2.3 2.1 2.6 2.7 2.7 2.7 3.0 2.7 2.7 2.7 2.5 Asia China 39 Peoples Republic of China .2 .3 .7 .6 1.6 .5 2.0 .8 .7 1.0 1.1 40 Republic of China (Taiwan) 3.5 4.1 5.2 5.3 5.9 6.4 7.3 7.5 7.1 6.9 9.1 41 India 3.3 3.0 3.2 3.1 3.1 2.9 3.2 3.6 3.7 3.9 4.2 42 Israel .5 .5 .4 .5 .4 .4 .5 .4 .4 .4 .4 43 Korea (South) 6.2 6.8 6.6 6.5 6.9 6.5 6.7 13.9 14.1 14.1 15.9r 44 Malaysia 1.9 2.3 3.1 3.4 3.7 4.1 4.4 5.2 5.2 6.0r 4.6r 45 Philippines 3.8 3.7 3.6 3.4 2.9 2.6 3.1 3.4 3.2 2.9 3.3 46 Thailand 1.5 1.7 2.2 2.2 2.4 2.8 3.1 2.9 3.3 3.5 3.7 47 Other Asia 1.7 2.0 2.7 2.7 2.6 3.0 2.9 3.1 3.5 3.6 4.8 Africa 48 Egypt .4 .4 .2 .2 .2 .2 .4 .4 .5 .3 .3 49 Morocco .8 .7 .6 .5 .6 .6 .7 .7 .7 .7 .6 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.0 .7 1.0 .8 .9 .8 .8 1.0 .9 .9 .8 52 Eastern Europe 2.3 2.4 3.1 2.9 3.2 3.0 3.1 3.4 3.0 3.0 2.7r 53 Russia4 .2 .9 1.9 1.7 1.9 1.7 1.6 1.5 1.2 1.1 .8 54 Yugoslavia5 1.2 .9 .6 .6 .6 .6 .6 .5 .5 .5 .5 55 Other .9 .7 .6 .7 .8 .7 .9 1.4 1.4 1.5 1.4' 56 Offshore banking centers 44.7 54.2 58.3 60.3 58.0 67.9 71.9 78.4r 76.8r 74.9r 68.1' 57 Bahamas 2.9 11.9 6.9 9.7 7.1 12.7 11.9 15.1r 13.5r 13.5r 9.7 58 Bermuda 4.4 2.3 6.2 4.1 4.5 5.5 8.1 8.4 6.1 5.3 7.4 59 Cayman Islands and other British West Indies 11.7 15.8 21.8 17.6 15.6 15.1 17.0 17.2r 20.3 20.2 18.5' 60 Netherlands Antilles 7.9 1.2 1.1 1.6 2.5 2.8 2.3 2.8 2.5 1.7 1.0 61 Panama6 1.4 1.4 1.9 2.0 2.1 2.1 2.4 2.0 1.9 1.9 1.3' 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 9.7 14.4 13.8 16.7 16.9 19.1 18.7 19.7 21.7 20.3 19.9 64 Singapore 6.6 7.1 6.5 8.4 9.3 10.4 11.2 13.1 10.7 11.8 10.2' 65 Other' .0 .0 .0 .0 .0 .0 .1 .0 .0 .0 .1 66 Miscellaneous and unallocated8 39.9 48.0 39.7 38.8 46.2 46.3 43.4 59.9r 91.1 85.5r 87.<y 1. The banking offices covered by these data include U.S. offices and foreign branches by the Federal Financial Institutions Examination Council. of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not 2. Organization of Petroleum Exporting Countries, shown individually; other members covered include U.S. agencies and branches of foreign banks. Beginning March 1994, the of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and data include large foreign subsidiaries of U.S. banks. The data also include other types of United Arab Emirates); and Bahrain and Oman (not formally members of OPEC). U.S. depository institutions as well as some types of brokers and dealers. To eliminate 3. Excludes Liberia. Beginning March 1994 includes Namibia. duplication, the data are adjusted to exclude the claims on foreign branches held by a U.S. 4. As of December 1992, excludes other republics of the former Soviet Union. office or another foreign branch of the same banking institution. 5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia. These data are on a gross claims basis and do not necessarily reflect the ultimate 6. Includes Canal Zone. country risk or exposure of U.S. banks. More complete data on the country risk exposure 7. Foreign branch claims only. of U.S. banks are available in the quarterly Country Exposure Lending Survey published 8. Includes New Zealand, Liberia, and international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1993 1994 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999911 11999922 11999933 Sept. Dec. Mar. June Sept. Dec. 1 44,708 45,511 49,996 48,954 49,996 51,988 55,478 57,197 54,644 7 Payable in dollars 39,029 37,456 38,758 39,711 38,758 38,549 43,114 42,754 39,700 3 Payable in foreign currencies 5,679 8,055 11,238 9,243 11,238 13,439 12,364 14,443 14,944 By type 4 Financial liabilities 22,518 23,841 28,586 27,172 28,586 30,344 33,340 35,843 32,848 5 Payable in dollars 18,104 16,960 18,553 19,146 18,553 18,929 22,976 23,282 19,792 6 Payable in foreign currencies 4,414 6,881 10,033 8,026 10,033 11,415 10,364 12,561 13,056 7 Commercial liabilities 22,190 21,670 21,410 21,782 21,410 21,644 22,138 21,354 21,796 8 9,252 9,566 8,811 9,215 8,811 8,974 9,913 9,552 10,013 9 Advance receipts and other liabilities 12,938 12,104 12,599 12,567 12,599 12,670 12,225 11,802 11,783 10 Payable in dollars 20,925 20,496 20,205 20,565 20,205 19,620 20,138 19,472 19,908 11 Payable in foreign currencies 1,265 1,174 1,205 1,217 1,205 2,024 2,000 1,882 1,888 By area or country Financial liabilities 1? Europe 12,003 13,387 18,437 16,886 18,437 20,442 23,627 23,765 20,870 13 Belgium and Luxembourg 216 414 175 278 175 525 524 661 495 14 2,106 1,623 2,377 2,077 2,377 2,606 1,590 2,241 1,727 15 682 889 975 855 975 1,214 939 1,467 1,961 16 Netherlands 1,056 606 534 573 534 564 533 648 552 17 408 569 634 378 634 1,200 631 633 688 18 United Kingdom 6,528 8,610 13,121 12,135 13,121 13,725 18,193 16,800 14,709 19 Canada 292 544 859 663 859 508 698 618 625 20 Latin America and Caribbean 4,784 4,053 3,359 3,719 3,359 3,553 3,282 3,159 3,021 71 Bahamas 537 379 1,148 1,301 1,148 1,157 1,052 1,112 926 7? 114 114 0 114 0 120 115 15 80 73 6 19 18 18 18 18 18 7 207 74 British West Indies 3,524 2,850 1,533 1,600 1,533 1,613 1,454 1,364 1,160 75 Mexico 7 12 17 15 17 14 13 15 0 26 Venezuela 4 6 5 5 5 5 5 5 5 77 5,381 5,818 5,689 5,754 5,689 5,650 5,694 8,149 8,147 78 Japan 4,116 4,750 4,620 4,725 4,620 4,638 4,760 6,947 7,013 29 Middle Eastern oil-exporting countries 13 19 23 23 23 24 24 31 35 30 6 6 133 132 133 133 9 133 135 31 Oil-exporting countries 4 0 123 124 123 124 0 123 123 32 Mother5 52 33 109 18 109 58 30 19 50 Commercial liabilities 33 8,701 7,398 6,835 7,048 6,835 6,550 6,921 6,867 66,,885555 34 Belgium and Luxembourg 248 298 239 257 239 251 254 287 231 35 1,039 700 655 642 655 554 712 742 763 36 1,052 729 684 571 684 577 670 552 611 37 Netherlands 710 535 688 600 688 628 649 674 723 38 575 350 375 536 375 388 473 391 335 39 United Kingdom 2,297 2,505 2,047 2,319 2,047 2,151 2,311 2,351 2,450 40 Canada 1,014 1,002 879 845 879 1,037 1,070 1,068 1,038 41 Latin America and Caribbean 1,355 1,533 1,666 1,754 1,666 1,908 2,007 1,790 1,865 47 Bahamas 3 3 21 4 21 8 2 6 19 43 Bermuda 310 307 350 340 350 493 418 200 345 44 Brazil 219 209 216 214 216 211 217 148 163 45 British West Indies 107 33 27 35 27 20 24 33 23 46 307 457 483 576 483 556 705 673 576 47 Venezuela 94 142 126 173 126 150 194 192 279 48 Asia2 9,334 10,594 10,992 10,915 10,992 10,939 10,979 10,514 11,077 49 3,721 3,612 4,314 3,726 4,314 4,617 4,389 4,235 4,808 50 Middle Eastern oil-exporting countries 1,498 1,889 1,542 1,968 1,542 1,542 1,841 1,688 1,610 51 715 568 464 641 464 490 523 482 442 52 Oil-exporting countries 327 309 171 320 171 199 247 271 262 53 Other5 1,071 575 574 579 574 720 638 633 519 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 • July 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 11999911 11999922 11999933 Sept. Dec. Mar. June Sept. Dec. 1 Total 45,262 45,073 47,643 46,030 47,643 48,404 47,925 49,830 55,269 2 Payable in dollars 42,564 42,281 44,318 42,342 44,318 44,978 44,324 46,284 52,125 3 Payable in foreign currencies 2,698 2,792 3,325 3,688 3,325 3,426 3,601 3,546 3,144 By type 4 Financial claims 27,882 26,509 26,995 26,902 26,995 27,814 26,576 28,214 32,227 5 Deposits 20,080 17,695 15,795 14,509 15,795 15,864 15,637 17,510 18,973 6 Payable in dollars 19,080 16,872 15,246 13,503 15,246 15,353 15,009 16,934 18,522 7 Payable in foreign currencies 1,000 823 549 1,006 549 511 628 576 451 8 Other financial claims 7,802 8,814 11,200 12,393 11,200 11,950 10,939 10,704 13,254 9 Payable in dollars 6,910 7,890 9,974 11,282 9,974 10,725 9,711 9,466 12,192 10 Payable in foreign currencies 892 924 1,226 1,111 1,226 1,225 1,228 1,238 1,062 11 Commercial claims 17,380 18,564 20,648 19,128 20,648 20,590 21,349 21,616 23,042 12 Trade receivables 14,468 16,007 17,647 16,150 17,647 17,697 18,530 18,836 20,178 13 Advance payments and other claims 2,912 2,557 3,001 2,978 3,001 2,893 2,819 2,780 2,864 14 Payable in dollars 16,574 17,519 19,098 17,557 19,098 18,900 19,604 19,884 21,411 15 Payable in foreign currencies 806 1,045 1,550 1,571 1,550 1,690 1,745 1,732 1,631 By area or country Financial claims 16 Europe 13,441 9,331 7,187 8,376 7,187 7,118 6,564 8,060 7,606 17 Belgium and Luxembourg 13 8 134 70 134 125 83 114 86 18 France 269 764 785 708 785 753 859 825 780 19 Germany 283 326 526 362 526 466 459 413 540 20 Netherlands 334 515 502 485 502 503 472 503 429 21 Switzerland 581 490 515 512 515 520 495 747 523 22 United Kingdom 11,534 6,252 3,543 5,230 3,543 3,629 3,089 4,370 4,388 23 Canada 2,642 1,833 2,024 2,103 2,024 2,198 3,062 3,156 3,785 24 Latin America and Caribbean 10,717 13,893 15,639 12,965 15,639 15,497 14,279 14,363 18,306 25 Bahamas 827 778 1,006 980 1,006 1,157 1,193 1,006 2,259 26 Bermuda 8 40 125 197 125 34 39 52 27 27 Brazil 351 686 654 590 654 672 466 411 520 28 British West Indies 9,056 11,747 12,448 10,000 12,448 12,371 11,578 11,772 14,466 29 Mexico 212 445 868 882 868 850 614 655 605 30 Venezuela 40 29 161 25 161 26 33 32 35 31 Asia 640 864 1,591 2,754 1,591 2,522 2,210 2,152 1,813 32 Japan 350 668 853 2,213 853 1,655 1,349 662 909 33 Middle Eastern oil-exporting countries2 5 3 3 5 3 5 2 19 141 34 Africa 57 83 99 88 99 76 74 87 249 35 Oil-exporting countries3 1 9 1 1 1 0 1 1 0 36 All other4 385 505 455 616 455 403 387 396 468 Commercial claims 37 Europe 8,193 8,451 9,077 8,211 9,077 8,734 8,904 8,768 9,562 38 Belgium and Luxembourg 194 189 184 163 184 176 179 174 217 39 France 1,585 1,537 1,947 1,438 1,947 1,827 1,778 11,,776666 1,886 40 Germany 955 933 1,018 935 1,018 944 937 888800 1,046 41 Netherlands 645 552 422 410 422 354 293 329 313 42 Switzerland 295 362 429 377 429 413 685 537 558 43 United Kingdom 2,086 2,094 2,369 2,288 2,369 2,330 2,427 2,483 2,545 44 Canada 1,121 1,286 1,358 1,362 1,358 1,451 1,466 1,501 1,541 45 Latin America and Caribbean 2,655 3,043 3,283 3,073 3,283 3,569 3,901 3,965 4,146 46 Bahamas 13 28 11 20 11 13 18 34 9 47 Bermuda 264 255 182 225 182 222 295 246 234 48 Brazil 427 357 463 407 463 422 502 473 614 49 British West Indies 41 40 71 39 71 58 67 49 83 50 Mexico 842 924 994 866 994 1,013 1,047 1,133 1,244 51 Venezuela 203 345 295 287 295 294 303 392 354 52 4,591 4,866 5,909 5,544 5,909 5,852 6,145 6,425 6,735 53 Japan 1,899 1,903 2,173 2,519 2,173 2,353 2,359 2,448 2,497 54 Middle Eastern oil-exporting countries2 620 693 715 458 715 667 615 615 699 55 Africa 430 554 521 501 521 516 492 462 473 56 Oil-exporting countries3 95 78 85 107 85 102 90 68 76 57 Other4 390 364 500 437 500 468 441 495 585 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 1995 1994r 1995 Transaction, and area or country 1993r 1994r Jan.- Sept. Oct. Nov. Dec. Jan.r Feb. Mar.p Mar. U.S. corporate securities STOCKS 1 Foreign purchases 319,664 350,558 89,649 28,819 27,811 28,696 28,094 24,999 29,428 35,222 2 Foreign sales 298,086 348,648 93,231 30,463 29,852 27,653 29,727 25,893 29,685 37,653 3 Net purchases, or sales (—) 21,578 1,910 -3,582 -1,644 -2,041 1,043 -1,633 -894 -257 -2,431 4 Foreign countries 21,306 1,900 -3,543 -1,658 -2,073 1,020 -1,635 -930 -212 -2,401 5 Europe 10,658 6,717 -1,955 -1,191 -1,382 226 -1,110 -516 -25 -1,414 6 France -103 -201 -532 -61 -198 -25 -119 -255 -27 -250 7 Germany 1,642 2,110 -455 -104 -161 -55 -158 -157 -55 -243 8 Netherlands -602 2,251 696 -130 320 265 652 278 232 186 9 Switzerland 2,986 -30 -942 -106 -655 -551 8 -389 -78 -475 10 United Kingdom 4,559 840 -122 -643 -542 566 -1,265 • 253 -66 -309 11 Canada -3,213 -1,160 -177 61 -415 -109 175 129 27 -333 12 Latin America and Caribbean 5,719 -2,108 1,514 -688 -536 650 -577 991 766 -243 13 Middle East1 -321 -1,142 -228 -445 -74 1 -86 -22 -133 -73 14 Other Asia 8,198 -1,207 -2,662 576 346 251 -171 -1,469 -851 -342 15 Japan 3,825 1,190 -1,722 748 258 262 -174 -860 -541 -321 16 Africa 63 29 -46 10 12 -4 -25 -36 0 -10 17 Other countries 202 771 11 19 -24 5 159 -7 4 14 18 Nonmonetary international and regional organizations 272 10 -39 14 32 23 2 36 -45 -30 BONDS2 19 Foreign purchases 283,824 291,193 67,412 19,274 19,932 22,379 18,911 19,267 22,804 25,341 20 Foreign sales 217,824 229,640 46,706 17,012 16,609 15,462 14,760 12,800 16,354 17,552 21 Net purchases, or sales (—) 66,000 61,553 20,706 2,262 3,323 6,917 4,151 6,467 6,450 7,789 22 Foreign countries 65,462 60,668 20,869 2,295 3,324 6,933 3,811 6,263 6,504 8,102 23 Europe 22,587 38,585 17,618 2,885 3,285 4,383 2,635 6,653 6,052 4,913 74 France 2,346 242 368 -17 105 -106 4 157 296 -85 25 Germany 887 657 1,866 -355 449 201 451 1,516 526 -176 26 Netherlands -290 3,322 39 243 19 346 28 -241 126 154 7,7 Switzerland -627 1,055 158 283 5 488 12 -85 304 -61 7,8 United Kingdom 19,686 33,212 15,406 2,229 1,469 3,529 1,943 5,406 4,815 5,185 ?9 Canada 1,668 3,054 709 214 496 207 443 245 175 289 30 Latin America and Caribbean 15,691 5,402 150 -1,577 -1,189 1,305 662 -655 -480 1,285 31 Middle East1 3,248 771 506 -86 51 -96 -193 59 119 328 3? Other Asia 20,846 12,153 1,717 814 607 1,137 240 -28 595 1,150 33 Japan 11,569 5,486 306 325 375 497 -174 -396 132 570 34 Africa 1,149 49 40 2 19 -2 8 8 -4 36 35 Other countries 273 654 129 43 55 -1 16 -19 47 101 36 Nonmonetary international and regional organizations 538 885 -163 -33 -1 -16 340 204 -54 -313 Foreign securities 37 Stocks, net purchases, or sales (-) -62,691 -46,818 -4,477 720 -4,427 -2,547 -2,212 -210 -1,528 -2,739 38 Foreign purchases 245,490 386,334 86,229 37,791 29,867 28,444 25,742 27,948 29,180 29,101 39 Foreign sales 308,181 433,152 90,706 37,071 34,294 30,991 27,954 28,158 30,708 31,840 40 Bonds, net purchases, or sales (-) -80,377 -5,853 -2,747 -1,095 -5,200 -1,997 1,135 1,246 -2,515 -1,478 41 Foreign purchases 745,952 898,550 220,999 78,182 66,202 66,907 68,887 71,948 65,292 83,759 42 Foreign sales 826,329 904,403 223,746 79,277 71,402 68,904 67,752 70,702 67,807 85,237 43 Net purchases, or sales (—), of stocks and bonds .... -143,068 -52,671 -7,224 -375 -9,627 -4,544 -1,077 1,036 -4,043 -4,217 44 Foreign countries -143,232 -53,191 -7,035 152 -9,477 -4,497 -1,832 972 -3,879 -4,128 45 Europe -100,872 4,778 1,307 -2,532 -5,507 -790 -857 3,404 -1,165 -932 46 Canada -15,664 -7,525 -428 339 -857 -525 1,637 -165 877 -1,140 47 Latin America and Caribbean -7,600 -22,133 -5,048 5,079 -1,464 -2,241 -421 -436 -2,685 -1,927 48 -15,159 -24,080 -3,315 -1,958 -1,477 511 -2,180 -1,749 -1,087 -479 49 -185 -475 -41 -22 -72 -267 -96 -2 -124 85 50 Other countries -3,752 -3,756 490 -754 -100 -1,185 85 -80 305 265 51 Nonmonetary international and regional organizations 164 520 -189 -527 -150 -47 755 64 -164 -89 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 • July 1995 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales (—) during period 1995 1994r 1995 AArreeaa oorr ccoouunnttrryy 11999933rr 11999944rr J M an a . r - . Sept. Oct. Nov. Dec. Jan. Feb. Mar.p 1 Total estimated 23,552 78,653 32,418 11,941 10,530 13,105 11,535 9,216 14,043 9,159 2 Foreign countries 23,368 78,610 32,270 12,029 9,435 13,068 11,938 9,890 13,325 9,055 3 Europe -2,373 38,544 19,234 3,889 -1,566 7,763 8,274 2,906 13,271 3,057 4 Belgium and Luxembourg 1,218 1,098 292 -15 32 24 434 134 107 51 5 Germany -9,976 5,709 1,050 -243 254 924 725 60 -543 1,533 6 Netherlands -515 1,254 2,142 -68 954 -2 156 2,388 -239 -7 7 Sweden 1,421 794 92 105 -37 211 61 -35 97 30 8 Switzerland -1,501 456 -87 353 -718 -1,512 656 166 165 -418 9 United Kingdom 6,197 23,438 13,834 3,577 -1,958 7,706 6,243 299 10,436 3,099 10 Other Europe and former U.S.S.R 783 5,795 1,911 180 -93 412 -1 -106 3,248 -1,231 11 Canada 10,309 3,491 5,097 1,610 -420 -1,350 -559 3,177 1,486 434 12 Latin America and Caribbean -4,561 -10,182 -4,964 136 6,710 725 978 636 -3,268 -2,332 13 Venezuela 390 -319 505 -5 7 43 91 -211 329 387 14 Other Latin America and Caribbean -5,795 -20,496 -3,655 2,308 -419 -2,074 74 3,028 -3,325 -3,358 15 Netherlands Antilles .. 844 10,633 -1,814 -2,167 7,122 2,756 813 -2,181 -272 639 16 Asia 20,582 47,087 13,705 6,763 4,435 4,944 3,640 3,567 1,693 8,445 17 Japan 17,070 29,518 9,927 3,225 2,189 4,551 2,067 3,444 2,316 4,167 18 Africa 1,156 240 31 200 135 -11 58 -9 49 -9 19 Other -1,745 -570 -833 -569 141 997 -453 -387 94 -540 20 Nonmonetary international and regional organizations 184 43 148 -88 1,095 37 -403 -674 718 104 21 International -330 170 358 -75 1,074 73 -322 -708 608 458 22 Latin American regional 653 75 -174 -1 6 4 -3 -6 199 -367 MEMO 23 Foreign countries 23,368 78,610 32,270 12,029 9,435 13,068 11,938 9,890 13,325 9,055 24 Official institutions 1,306 41,800 7,779 4,671 2,891 2,760 582 1,747 2,062 3,970 25 Other foreign2 22,062 36,810 24,491 7,358 6,544 10,308 11,356 8,143 11,263 5,085 Oil-exporting countries 26 Middle East2 -8,836 -38 -297 3 445 623 -405 -360 -89 152 27 Africa3 -5 0 1 0 0 0 -1 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 May 31, 1995 Rate on May 31, 1995 Rate on May 31, 1995 Country Country Country Month Month effective effective Month effective Austria.. 4.0 Mar. 1995 Germany... 4.0 Mar. 1995 Norway 4.75 Feb. 1994 Belgium. 4.0 Mar. 1995 Italy 8.25 Feb. 1995 Switzerland 3.0 Mar. 1995 Canada.. 7.64 May 1995 Japan 1.0 Apr. 1995 United Kingdom 12.0 Sept. 1992 Denmark 6.0 Mar. 1995 Netherlands 4.0 Mar. 1995 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 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Eurodollars 3.70 3.18 4.63 5.78 6.27 6.23 6.14 6.15 6.13 6.03 2 United Kingdom 9.56 5.88 5.45 5.98 6.30 6.50 6.68 6.61 6.64 6.64 3 Canada 6.76 5.14 5.57 5.77 6.75 7.86 8.14 8.32 8.16 7.56 4 Germany 9.42 7.17 5.25 5.10 5.29 5.04 5.00 4.96 4.58 4.49 5 Switzerland 7.67 4.79 4.03 3.86 4.07 3.95 3.77 3.62 3.33 3.29 6 Netherlands 9.25 6.73 5.09 5.15 5.35 5.09 5.03 5.03 4.60 4.41 7 France 10.14 8.30 5.72 5.49 5.82 5.76 5.70 7.77 7.60 7.29 8 Italy 13.91 10.09 8.45 8.72 8.98 9.10 9.07 10.98 10.94 10.38 9 Belgium 9.31 8.10 5.65 5.09 5.42 5.29 5.33 6.21 5.22 5.16 10 Japan 4.39 2.96 2.24 2.33 2.34 2.31 2.27 2.11 1.55 1.31 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 • July 1995 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1994 1995 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999922 11999933 11999944 Dec. Jan. Feb. Mar. Apr. May 1 Australia/dollar2 73.521 67.993 73.161 77.389 76.469 74.473 73.452 73.564 72.716 2 Austria/schilling 10.992 11.639 11.409 11.063 10.769 10.573 9.898 9.720 9.912 3 Belgium/franc 32.148 34.581 33.426 32.329 31.542 30.908 29.035 28.419 29.009 4 Canada/dollar 1.2085 1.2902 1.3664 1.3893 1.4132 1.4005 1.4077 1.3762 1.3609 5 China, P.R./yuan 5.5206 5.7795 8.6404 8.5119 8.4608 8.4553 8.4483 8.4421 8.3370 6 Denmark/krone 6.0372 6.4863 6.3561 6.1614 6.0311 5.9302 5.6281 5.4391 5.5194 7 Finland/markka 4.4865 5.7251 5.2340 4.8590 4.7506 4.6547 4.3967 4.2884 4.3386 8 France/franc 5.2935 5.6669 5.5459 5.4132 5.2912 5.2252 4.9756 4.8503 4.9869 9 Germany/deutsche mark 1.5618 1.6545 1.6216 1.5716 1.5302 1.5022 1.4061 1.3812 1.4096 10 Greece/drachma 190.81 229.64 242.50 242.96 238.21 236.17 228.53 225.19 228.46 11 Hong Kong/dollar 7.7402 7.7357 7.7290 7.7379 7.7439 7.7314 7.7318 7.7336 7.7351 12 India/rupee 28.156 31.291 31.394 31.389 31.374 31.380 31.587 31.407 31.418 13 Ireland/pound2 170.42 146.47 149.69 153.36 155.67 156.20 159.76 162.80 161.98 14 Italy/lira 1,232.17 1,573.41 1,611.49 1,633.71 1,611.53 1,620.58 1,688.99 1,710.89 1,652.78 15 Japan/yen 126.78 111.08 102.18 100.18 99.77 98.24 90.52 83.69 85.11 16 Malaysia/ringgit 2.5463 2.5738 2.6237 2.5626 2.5556 2.5526 2.5464 2.4787 2.4684 17 Netherlands/guilder 1.7587 1.8585 1.8190 1.7601 1.7159 1.6844 1.5774 1.5474 1.5779 18 New Zealand/dollar2 53.792 54.127 59.358 63.726 64.018 63.448 64.598 66.723 66.740 19 Norway/krone 6.2142 7.1009 7.0553 6.8561 6.6968 6.5974 6.2730 6.2050 6.2980 20 Portugal/escudo 135.07 161.08 165.93 161.21 157.86 155.36 147.92 145.89 148.40 21 Singapore/dollar 1.6294 1.6158 1.5275 1.4657 1.4532 1.4541 1.4216 1.3986 1.3947 22 South Africa/rand 2.8524 3.2729 3.5526 3.5614 3.5404 3.5629 3.6013 3.6035 3.6574 23 South Korea/won 784.66 805.75 806.93 794.81 793.08 793.19 781.81 770.61 764.43 24 Spain/peseta 102.38 127.48 133.88 132.31 132.62 130.52 128.58 124.14 123.22 25 Sri Lanka/rupee 44.013 48.211 49.170 49.531 49.870 49.895 49.627 49.371 49.558 26 Sweden/krona 5.8258 7.7956 7.7161 7.5161 7.4775 7.3914 7.2787 7.3455 7.3072 27 Switzerland/franc 1.4064 1.4781 1.3667 1.3289 1.2863 1.2715 1.1709 1.1384 1.1693 28 Taiwan/dollar 25.160 26.416 26.465 26.381 26.300 26.339 26.102 25.491 25.537 29 Thailand/baht 25.411 25.333 25.161 25.109 25.133 25.020 24.760 24.572 24.663 30 United Kingdom/pound2 176.63 150.16 153.19 155.87 157.46 157.20 160.02 160.73 158.74 MEMO 31 United States/dollar3 86.61 93.18 91.32 89.64 88.30 87.29 83.69 81.81 82.73 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 June 1995 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 May 1994 August 1994 A68 August 1994 November 1994 A68 November 1994 February 1995 A68 February 1995 May 1995 A68 Assets and liabilities of U.S. branches and agencies of foreign banks March 31, 1994 August 1994 A72 June 30, 1994 November 1994 A72 September 30, 1994 February 1995 A72 December 31, 1994 May 1995 All Pro forma balance sheet and income statements for priced service operations June 30, 1991 November 1991 A80 September 30, 1991 January 1992 A70 March 31, 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) Depository institutions Agricultural loans, commercial banks, 21, 22 Reserve requirements, 9 Assets and liabilities (See also Foreigners) Reserves and related items, 4, 5, 6, 13 Banks, by classes, 18—23 Deposits (See also specific types) Domestic finance companies, 36 Banks, by classes, 4, 18—23 Federal Reserve Banks, 11 Federal Reserve Banks, 5,11 Financial institutions, 28 Interest rates, 16 Foreign banks, U.S. branches and agencies, 23 Turnover, 17 Automobiles Discount rates at Reserve Banks and at foreign central banks and Consumer installment credit, 39 foreign countries (See Interest rates) Production, 47, 48 Discounts and advances by Reserve Banks (See Loans) Dividends, corporate, 35 BANKERS acceptances, 11, 12, 21-24, 26 Bankers balances, 18-23. (See also Foreigners) EMPLOYMENT, 45 Bonds (See also U.S. government securities) Eurodollars, 26 New issues, 34 Rates, 26 FARM mortgage loans, 38 Branch banks, 23 Federal agency obligations, 5, 10, 11, 12, 31, 32 Business activity, nonfinancial, 45 Federal credit agencies, 33 Business expenditures on new plant and equipment, 35 Federal finance Business loans (See Commercial and industrial loans) Debt subject to statutory limitation, and types and ownership of gross debt, 30 CAPACITY utilization, 46 Receipts and outlays, 28, 29 Capital accounts Treasury financing of surplus, or deficit, 28 Banks, by classes, 18 Treasury operating balance, 28 Federal Reserve Banks, 11 Federal Financing Bank, 33 Central banks, discount rates, 65 Federal funds, 7, 21, 22, 23, 26, 28 Certificates of deposit, 26 Federal Home Loan Banks, 33 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 33, 37, 38 Commercial banks, 21, 22 Federal Housing Administration, 33, 37, 38 Weekly reporting banks, 21-23 Federal Land Banks, 38 Commercial banks Federal National Mortgage Association, 33, 37, 38 Assets and liabilities, 18-23 Federal Reserve Banks Commercial and industrial loans, 18-23 Condition statement, 11 Consumer loans held, by type and terms, 39 Discount rates (See Interest rates) Deposit interest rates of insured, 16 U.S. government securities held, 5, 11, 12, 30 Loans sold outright, 22 Federal Reserve credit, 5, 6, 11, 12 Real estate mortgages held, by holder and property, 38 Federal Reserve notes, 11 Time and savings deposits, 4 Federally sponsored credit agencies, 33 Commercial paper, 24, 26, 36 Finance companies Condition statements (See Assets and liabilities) Assets and liabilities, 36 Construction, 45, 49 Business credit, 36 Consumer installment credit, 39 Loans, 39 Consumer prices, 45 Paper, 24, 26 Consumption expenditures, 52, 53 Financial institutions, loans to, 21, 22, 23 Corporations Float, 5 Profits and their distribution, 35 Flow of funds, 40, 42, 43, 44 Security issues, 34, 65 Foreign banks, assets and liabilities of U.S. branches and Cost of living (See Consumer prices) agencies, 22, 23 Credit unions, 39 Foreign currency operations, 11 Currency in circulation, 5, 14 Foreign deposits in U.S. banks, 5, 22 Customer credit, stock market, 27 Foreign exchange rates, 66 Foreign trade, 54 DEBITS to deposit accounts, 17 Foreigners Debt (See specific types of debt or securities) Claims on, 55, 58, 59, 60, 62 Demand deposits Liabilities to, 22, 54, 55, 56, 61, 63, 64 Banks, by classes, 18-23 Ownership by individuals, partnerships, and GOLD corporations, 22, 23 Certificate account, 11 Turnover, 17 Stock, 5, 54 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Government National Mortgage Association, 33, 37, 38 REAL estate loans Gross domestic product, 51 Banks, by classes, 21, 22, 38 Terms, yields, and activity, 37 Type of holder and property mortgaged, 38 HOUSING, new and existing units, 49 Repurchase agreements, 7 Reserve requirements, 9 INCOME, personal and national, 45, 51, 52 Reserves Industrial production, 45, 47 Commercial banks, 18 Installment loans, 39 Depository institutions, 4, 5, 6,13 Insurance companies, 30, 38 Federal Reserve Banks, 11 Interest rates U.S. reserve assets, 54 Bonds, 26 Residential mortgage loans, 37 Consumer installment credit, 39 Retail credit and retail sales, 39, 45 Deposits, 16 Federal Reserve Banks, 8 SAVING Foreign central banks and foreign countries, 65 Flow of funds, 40,42,43, 44 Money and capital markets, 26 National income accounts, 51 Mortgages, 37 Savings institutions, 38, 39, 40 Prime rate, 25 Savings deposits (See Time and savings deposits) International capital transactions of United States, 53-65 Securities (See also specific types) International organizations, 55, 56, 58, 61, 62 Federal and federally sponsored credit agencies, 33 Inventories, 51 Foreign transactions, 63 Investment companies, issues and assets, 35 New issues, 34 Investments (See also specific types) Prices, 27 Banks, by classes, 18-23 Special drawing rights, 5,11, 53, 54 Commercial banks, 4, 18-23 State and local governments Federal Reserve Banks, 11, 12 Deposits, 21, 22 Financial institutions, 38 Holdings of U.S. government securities, 30 New security issues, 34 LABOR force, 45 Ownership of securities issued by, 21, 23 Life insurance companies (See Insurance companies) Rates on securities, 26 Loans (See also specific types) Stock market, selected statistics, 27 Banks, by classes, 18—23 Stocks (See also Securities) Commercial banks, 18-23 New issues, 34 Federal Reserve Banks, 5,6, 8, 11, 12 Prices, 27 Financial institutions, 38 Insured or guaranteed by United States, 37, 38 Student Loan Marketing Association, 33 TAX receipts, federal, 29 MANUFACTURING Thrift institutions, 4. (See also Credit unions and Savings Capacity utilization, 46 institutions) Production, 46,48 Margin requirements, 27 Time and savings deposits, 4, 14,16,18-23 Member banks (See also Depository institutions) Trade, foreign, 54 Federal funds and repurchase agreements, 7 Treasury cash, Treasury currency, 5 Reserve requirements, 9 Treasury deposits, 5, 11, 28 Mining production, 48 Treasury operating balance, 28 Mobile homes shipped, 49 UNEMPLOYMENT, 45 Monetary and credit aggregates, 4, 13 U.S. government balances Money and capital market rates, 26 Commercial bank holdings, 18-23 Money stock measures and components, 4, 14 Treasury deposits at Reserve Banks, 5,11, 28 Mortgages (See Real estate loans) U.S. government securities Mutual funds, 35 Bank holdings, 18-23, 30 Mutual savings banks (See Thrift institutions) Dealer transactions, positions, and financing, 32 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, 30, 31 OPEN market transactions, 10 Rates, 26 U.S. international transactions, 53-66 Utilities, production, 48 PERSONAL income, 52 Prices VETERANS Administration, 37, 38 Consumer and producer, 45, 50 Stock market, 27 Prime rate, 25 WEEKLY reporting banks, 18-23 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 LAWRENCE B. LINDSEY 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 DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel DAVID J. STOCKTON, Deputy Director KATHLEEN M. O'DAY, Associate General Counsel MARTHA BETHEA, Associate Director ROBERT DEV. FRIERSON, Assistant General Counsel WILLIAM R. JONES, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel MYRON L. KWAST, Associate Director PATRICK M. PARKINSON, Associate Director OFFICE OF THE SECRETARY THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director WILLIAM W. WILES, Secretary JENNIFER J. JOHNSON, Deputy Secretary MARTHA S. SCANLON, Deputy Associate Director PETER A. TINSLEY, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary DAY W. RADEBAUGH, JR., Assistant Secretary1 FLINT BRAYTON, Assistant Director DAVID S. JONES, Assistant Director DIVISION OF BANKING STEPHEN A. RHOADES, Assistant Director CHARLES S. STRUCKMEYER, Assistant Director SUPERVISION AND REGULATION ALICE PATRICIA WHITE, Assistant Director RICHARD SPILLENKOTHEN, Director JOYCE K. ZICKLER, Assistant Director STEPHEN C. SCHEMERING, Deputy Director JOHN J. MINGO, Senior Adviser DON E. KLINE, Associate Director GLENN B. CANNER, Adviser WILLIAM A. RYBACK, Associate Director 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 die Division of Information Resources Management Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 SUSAN M. PHILLIPS JANET L. YELLEN 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 JOHN H. PARRISH, Assistant Director JOSEPH H. HAYES, JR., Assistant Director FRED HOROWITZ, Assistant Director FLORENCE M. YOUNG, Assistant Director OFFICE OF THE INSPECTOR GENERAL OFFICE OF THE CONTROLLER BRENT L. BOWEN, Inspector General GEORGE E. LIVINGSTON, Controller DONALD L. ROBINSON, Assistant Inspector General STEPHEN J. CLARK, Assistant Controller (Programs and BARRY R. SNYDER, Assistant Inspector General Budgets) DARRELL R. PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director DIVISION OF INFORMATION RESOURCES MANAGEMENT STEPHEN R. MALPHRUS, Director MARIANNE M. EMERSON, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director ELIZABETH B. RIGGS, Assistant Director RICHARD C. STEVENS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

203 Federal Reserve Bulletin • July 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 ALTERNATE MEMBERS EDWARD G. BOEHNE ROBERT D. MCTEER GARY H. STERN JERRY L. JORDAN ERNEST T. PATRIKIS STAFF DONALD L. KOHN, Secretary and Economist WILLIAM G. DEWALD, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary WILLIAM C. HUNTER, 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 THOMAS C. BAXTER, JR., 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 THOMAS E. DAVIS, 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, Baltimore, Maryland 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, Hillsborough, 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. INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. ANNUAL STATISTICAL DIGEST: period covered, release date, 440 pp. $9.00 each. number of pages, and price. FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. 1981 October 1982 239 pp. $ 6.50 December 1986. 264 pp. $10.00 each. 1982 December 1983 266 pp. $ 7.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1983 October 1984 264 pp. $11.50 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 1986 November 1987 288 pp. $15.00 EDUCATION PAMPHLETS 1987 October 1988 272 pp. $15.00 Short pamphlets suitable for classroom use. Multiple copies are 1988 November 1989 256 pp. $25.00 available without charge. 1980-89 March 1991 712 pp. $25.00 1990 November 1991 185 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1991 November 1992 215 pp. $25.00 Consumer Handbook to Credit Protection Laws 1992 December 1993 215 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small 1993 December 1994 281 pp. $25.00 Businesses Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES The Federal Open Market Committee OF CHARTS. Weekly. $30.00 per year or $.70 each in the Federal Reserve Bank Board of Directors United States, its possessions, Canada, and Mexico. Else- Federal Reserve Banks where, $35.00 per year or $.80 each. Organization and Advisory Committees A Consumer's Guide to Mortgage Lock-Ins THE FEDERAL RESERVE ACT and other statutory provisions A Consumer's Guide to Mortgage Settlement Costs affecting the Federal Reserve System, as amended through A Consumer's Guide to Mortgage Refinancings August 1990. 646 pp. $10.00. Home Mortgages: Understanding the Process and Your Right REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL to Fair Lending RESERVE SYSTEM. How to File a Consumer Complaint ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Making Deposits: When Will Your Money Be Available? Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Making Sense of Savings Vol. II (Irregular Transactions). 1969. 116 pp. Each vol- SHOP: The Card You Pick Can Save You Money ume $2.25. Welcome to the Federal Reserve 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 FHOM 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. 21pp. 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 US. Virgin by number and Reserve Bank city (shown on both Islands; the San Francisco Bank serves American pages) and by letter (shown on the facing page). Samoa, Guam, and the Commonwealth of the In the 12th District, the Seattle Branch serves Northern Mariana Islands. The Board of Governors Alaska, and the San Francisco Bank serves Hawaii. revised the branch boundaries of the System most The System serves commonwealths and terri- recently in December 1991. tories as follows: the New York Bank serves the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimore MD . yi •Charlotte Buffalo • f \ MA NJ NY CT RI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H Birmingham • j:. j m / Louisville A* P •Memphis Liule ATLANTA CHICAGO ST. LOUIS 9-1 MINNEAPOLIS 10-J 12-L KANSAS CITY 11-K Salt Lake City San Antonio Digitized for FRASER DALLAS SAN FRANCISCO 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 Ernest T. Patrikis 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 Walter A. Varvel Baltimore 21203 Michael R. Watson William J. Tignanelli1 Charlotte 28230 James O. Roberson Dan M. Bechter1 Culpeper 22701 Julius Malinowski, Jr.2 ATLANTA 30303 Leo Benatar Robert P. Forrestal Hugh M. Brown JJaacckk GGuuyynnnn 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 KentM. Scott1 Oklahoma City 73125 Ernest L. Holloway Mark L. Mullinix 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 Raymond H. Laurence 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 A Consumer's Guide to Guide to Mortgage Lock-Ins Settlement Costs 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 US. 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