Federal Reserve Bulletin, 1995-08

VOLUME 81 • NUMBER 8 • AUGUST 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 757 MONETARY POLICY REPORT TO THE financial organizations to operate over a wider CONGRESS range of activities and that this bill has the strong support of the Board of Governors, Spending by U.S. households and businesses before the Subcommittee on Telecommunicagrew at an exceptionally rapid pace during tions and Finance and the Subcommittee on 1994, and by the end of the year, demands Commerce, Trade, and Hazardous Materials clearly were taxing the productive capacity of of the House Committee on Commerce, the economy. To damp inflationary pressures, June 6, 1995. the Federal Open Market Committee in February 1995 tightened policy somewhat, and the Board of Governors approved a Vi percentage 784 ANNOUNCEMENTS point increase in the discount rate. Growth Amendment to Regulation O. began to moderate in the first quarter of 1995, Proposed changes to the staff commentary to and as businesses trimmed stocks, growth by Regulation C; proposed amendments to Reguthe end of the second quarter had probably lation T; request for comments on ways in about stalled. By July it appeared likely that which rules for credit advertising in Regulapressures on resources, and hence on prices, tion Z could be modified to increase consumer were in the process of easing. With the threat benefit and decrease creditor costs; and proof future inflation thus reduced, the FOMC posed rules to simplify the process for reporteased the stance of policy slightly at its July ing suspected crimes and suspicious financial meeting. transactions by banking organizations supervised by the Federal Reserve. 775 INDUSTRIAL PRODUCTION AND Publication of Supplement No. 8 to the Bank CAPACITY UTILIZATION FOR JUNE 1995 Holding Company Supervision Manual. Industrial production in June was little changed for a second month. At 121.0 percent Availability of table of factors to adjust interof its 1987 average, it was 2.5 percent above est income of section 20 subsidiaries. its level of June 1994. Capacity utilization edged down another 0.2 percentage point in 787 LEGAL DEVELOPMENTS June, to 83.5 percent, bringing the cumulative Various bank holding company, bank service decrease to 2 percentage points since the corporation, and bank merger orders; and recent peak at the turn of the year. pending cases. 778 STATEMENT TO THE CONGRESS A1 FINANCIAL AND BUSINESS STATISTICS Alan Greenspan, Chairman, Board of Gover- These tables reflect data available as of nors of the Federal Reserve System, presents June 28, 1995. the views of the Board on the Financial Services Competitiveness Act of 1995, a bill that A3 GUIDE TO TABULAR PRESENTATION would expand permissible affiliations between banks and other financial services providers, A4 Domestic Financial Statistics and says that the Board believes that modern A45 Domestic Nonfinancial Statistics global financial markets call for permitting A53 International Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 GUIDE TO STATISTICAL RELEASES AND A84 FEDERAL RESERVE BOARD SPECIAL TABLES PUBLICATIONS A78 INDEX TO STATISTICAL TABLES A86 MAPS OF THE FEDERAL RESERVE SYSTEM A80 BOARD OF GOVERNORS AND STAFF A88 FEDERAL RESERVE BANKS, BRANCHES, A82 FEDERAL OPEN MARKET COMMITTEE AND OFFICES AND STAFF; ADVISORY COUNCILS Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 19, 1995, sured by real gross domestic product. The invenpursuant to the Full Employment and Balanced tory adjustment was especially large in the motor Growth Act of 1978 vehicle sector, which accounted for much of the downswing in manufacturing activity in the spring. Homebuilding also showed marked weakness, in part because builders hesitated to start new projects MONETARY POUCY AND THE ECONOMIC until they could work down stocks of unsold new OUTLOOK FOR 1995 AND 1996 homes. During 1994, spending by U.S. households and While output growth was stalling in the first half businesses grew at an exceptionally rapid pace, and of this year, the still-high level of resource utilizaby the end of the year, demands clearly were taxing tion of the economy, as well as the effects of rapid the productive capacity of the economy. Pressures increases in materials prices, contributed to a on resources were particularly intense in sectors of pickup in inflation from its 1994 pace. Nonetheless, manufacturing that provide inputs for other produc- by July it appeared likely that pressures on ers, and sharp increases in the prices of materials resources and hence on prices were in the process and supplies signaled what could have been the of easing. Materials prices were showing signs of first stage of a broader inflationary process. A softening, and a period of greater stability in the weakening of the dollar on foreign exchange mar- exchange value of the dollar suggested that the rise kets as 1995 began heightened that risk. To damp of import prices might soon slow. With the threat these inflationary pressures and foster a sustainable of future inflation thus reduced, the FOMC elected economic expansion, the Federal Open Market to ease the stance of policy slightly at its meeting in Committee in February tightened policy somewhat, July. extending the series of actions undertaken during The moderation in economic growth and 1994, and the Board of Governors approved a improvement in inflation prospects over the first Vi percentage point increase in the discount rate. half of 1995 sparked a considerable decline in The economy's growth began to moderate in the market interest rates. The greater likelihood of sigfirst quarter of 1995. Among the factors contribut- nificant progress toward a balanced federal budget ing to the slowing were the lagged effects of 1994's also seemed to contribute to the decrease in longerincreases in interest rates on housing and other term interest rates. Intermediate- and long-term rate-sensitive sectors and the impact on U.S. yields have fallen VA to 13A percentage points exports of the sharp contraction in Mexico's econ- since year-end 1994, with the decline in thirty-year omy and fall in the foreign exchange value of the fixed mortgage rates this year reversing most of the peso. As final sales moderated, businesses scaled increases registered since early 1994. Lower interback their desired inventory accumulation. In some est rates, solid earnings growth, and prospects for key sectors, the slackening in sales was greater sustained economic expansion helped push most than anticipated, leaving firms with excess inven- broad stock price indexes to record highs. tories. As businesses took steps to trim stocks, The drop in longer-term interest rates in the aggregate production decelerated further in the sec- United States contributed to downward pressure on ond quarter and was probably about flat, as mea- the foreign exchange value of the dollar in 1995. In terms of the currencies of the other G-10 countries, the dollar has declined 7V2 percent on balance. NOTE. The charts for the report are available upon request from Over the past half-year, foreign long-term interest Publications Services, Mail Stop 127, Board of Governors of the rates have fallen significantly as growth prospects Federal Reserve System, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

758 Federal Reserve Bulletin • August 1995 abroad have weakened, but by less than U.S. long- usual fashion, yields on small time deposits and term interest rates. In addition, the Mexican crisis money market mutual funds have adjusted with a was seen by market participants as having adverse lag to the declines in market interest rates this year. implications for U.S. growth, especially exports, Investors have responded by shifting their portand it contributed to the dollar's decline in terms of folios toward these assets, boosting M2 growth currencies other than the peso in early 1995. With from the fourth quarter through June to 3 lA percent the dollar at times under greater downward pres- at an annual rate. M2 velocity over the first half of sure than seemed justified by fundamentals, the 1995 is estimated to have held about steady, in Federal Reserve, acting on behalf of the Treasury marked contrast to the rise in M2 velocity over the and for its own account, joined other central banks previous five years. in concerted intervention in support of the currency Unlike the broad monetary aggregates, Ml has on several occasions in 1995. In recent weeks, the grown quite sluggishly this year. Low interest dollar has fluctuated in a range somewhat above returns on transaction deposits have encouraged the lows reached in the spring. households and businesses to move excess bal- Despite the slower expansion of nominal spend- ances into higher-yielding M2 assets and also into ing this year, net borrowing by households and market instruments. This process has been amplibusinesses remained substantial. In fact, total pri- fied by the expansion of retail sweep accounts vate credit flows strengthened, offsetting slower offered by a few banks that allow customers to hold growth of federal debt and an outright decline in a lower average level of transaction balances. Curstate and local government debt; as a result, total rency growth—although slower than the doubledomestic nonfinancial debt expanded at a 5V2 per- digit pace of the last two years—has remained cent pace from the fourth quarter of 1994 through strong, boosted again by heavy foreign demands. May, a little faster than in 1994. Credit supply conditions remained quite favorable, with banks continuing to ease terms and conditions of lending Money and Debt Ranges for 1995 and 1996 and with risk spreads in securities markets persisting at quite low levels. Household borrowing this In setting ranges for money and debt in 1995 and year has been a bit more subdued than in 1994 1996, the Committee noted that the velocities of but still appreciable. Nonfinancial businesses have the monetary aggregates have been behaving more stepped up their borrowing considerably, a move in line with historical patterns than was the case reflecting a widening gap between capital expendi- earlier in the decade. However, financial innovatures (including inventory investment) and inter- tion, technological change, and deregulation have nally generated funds, and also reflecting the bal- blurred distinctions among various financial instruance sheet restructuring associated with stock ments that can serve as savings vehicles and repurchases and a surge in merger and acquisition sources of credit. As a consequence, considerable activity. Although the decline in long-term interest uncertainty remains about the future relationships rates this year has spurred a significant pickup in of money and debt to the fundamental objectives of bond issuance and fixed rate mortgage borrowing monetary policy; the Committee will thus continue very recently, the increase in credit this year has been concentrated in short-term or floating-rate debt. 1. Ranges for growth of monetary and credit aggregates Depository institutions, as traditional providers Percent of short-term and floating-rate credit, have enjoyed a sharp increase in loan demand. To fund the Aggregate 1994 1995 Provisional for 1996 growth of their loan portfolios, banks and thrift institutions pulled in more deposits, providing a M2 1111----5555 1111----5555 1111----5555 M3 0000----4444 2222----6666 lift to growth of the broad monetary aggregates. Debt 4444----8888 3333----7777 3333----7777 Indeed, M3 expanded at a 6XA percent pace from NOTE. Change from average for fourth quarter of preceding year to the fourth quarter through June, slightly exceeding average for fourth quarter of year indicated. Figures for debt are monitoring the upper bound of its revised annual range. In their ranges for debt of the domestic nonfinancial sector. 1. Revised at the July 1995 FOMC meeting. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 759 to rely primarily on a wide range of other informa- Committee, generally anticipate that, after a weak tion in determining the stance of policy. second quarter, the economy will experience mod- The Committee retained its current range of 1 to erate growth in the second half of 1995 and in 5 percent for M2 for 1995 and chose the same 1996. For all of 1995, this would produce growth range for 1996. If M2 velocity continues on a more that was somewhat below forecasts made for the normal track, growth of M2 in the upper half of February meeting. In line with these expectations, this range in 1995 and near the upper bound of the the unemployment rate in the second half of 1995 provisional range in 1996 would be consistent with may move up somewhat from its recent relatively the Committee's expectations for nominal income low level. growth. The existing range was retained for next A number of factors should contribute to a year in view of the lingering uncertainties about the pickup in demand and production over coming money-income relationship and to serve as a months. Lower interest rates, in particular, likely benchmark for the rate of growth of M2 that would will directly stimulate spending on housing, motor be expected under conditions of reasonable price vehicles and consumer durables, and business stability and historical velocity behavior. The Com- investment. Moreover, increases in the value of mittee also reaffirmed the 3-to-7 percent range for bond and stock portfolios that have accompanied the debt aggregate and carried this range forward the decline in interest rates should strengthen on a provisional basis for 1996, concluding that aggregate demand more generally. The strong comdebt growth within this range would be expected to petitive position of the United States likely will accompany the moderate economic expansion it bolster net export growth on balance over the was seeking to foster. remainder of 1995. To be sure, the level of U.S. With regard to M3, the Committee had noted in exports to Mexico probably will remain depressed its February 1995 report to the Congress that the for some time, but Mexico's external adjustment depressed growth of this aggregate in recent years has already been substantial and further declines in reflected the balance sheet adjustments of banks and thrift institutions in response to the extraor- 2. Economic projections for 1995 and 1996 dinary strains they experienced in the early 1990s. Percent The Committee observed that, as these institutions returned to health and intermediation resumed more normal patterns, M3 growth could pick up appreciably and the velocity of M3 might begin to stabilize or even decline, as it had on average over several decades before 1990. In the event, M3 has strengthened considerably so far in 1995, apparently for the reasons noted by the Committee in February. As a consequence, the Committee made a technical adjustment in its M3 range at the July meeting—to 2 to 6 percent for 1995—and carried that range forward on a provisional basis into 1996. The Committee stressed that this change simply recognized the return of historical financing patterns and bore no implications for the underlying thrust of monetary policy. Economic Projections for 1995 and 1996 1. Change from average for fourth quarter of preceding year to average The members of the Board of Governors and the for fourth quarter of year indicated. Reserve Bank presidents, all of whom participate 2. All urban consumers. 3. Civilian labor force. Figures for the Administration are annual in the deliberations of the Federal Open Market averages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

760 Federal Reserve Bulletin • August 1995 U.S. export demands from this source are likely to Moreover, economic expansion was still brisk, with be less severe than in the first half of 1995. Finally, real gross domestic product growing at a 5 percent the anticipated pickup in spending will help busi- annual rate in the fourth quarter. Although inflation nesses work off excess inventories more rapidly for 1994 as a whole remained moderate, commodand reduce the need for further production cutbacks ity prices, which can signal the onset of inflationary to bring inventories back in line with final sales. pressures, were rising rapidly at the end of last The Board members and the Reserve Bank presi- year. dents generally expect the rise in the consumer A deceleration in activity was widely anticiprice index over the four quarters of 1995 to end up pated, and growth in real GDP did moderate to a at around 3lA percent, the same as in the first half 23/4 percent annual pace in the first quarter of 1995. of the year. For 1996, inflation is projected to edge But the slowing did not stop there: Spending in down, to the neighborhood of 3 percent. The first- several sectors of the economy softened in the half slowdown in the industrial sector has reduced spring, industrial production fell, and employment pressure on materials prices; moreover, wage trends grew relatively little. The level of real GDP have been stable, suggesting that labor costs are appears to have been essentially flat in the second unlikely to provide an impetus to inflation. quarter. The Administration has not released an update of A slackening in household demand for big-ticket the economic projections contained in the February items was a significant element in the drop-off in Economic Report of the President. Those earlier economic growth in the first half. After registering forecasts pointed to real GDP growth of 2.4 percent sizable gains last year, spending on consumer for 1995, well within the central tendency range in durables weakened considerably early this year. the Federal Reserve's February report. Given the And residential construction, which continued to slow start this year, that growth pace for the year grow in the face of rising mortgage rates last year, appears less likely, and the average unemployment began to fall this winter and was off sharply in the rate for the year probably will be around the upper second quarter. These domestic drags were reinend of the 5.5 to 5.8 percent range in the Adminis- forced by the effects of the plunge in net exports to tration's February report. The Administration's Mexico, which came in the wake of that nation's 3.2 percent CPI forecast is in line with the Federal financial crisis. Reserve's central tendency. With domestic sales and exports softening, busi- The inflation rates anticipated by the FOMC are nesses cut orders and production. However, in marginally above those prevailing in 1993 and some cases, the adjustments were not quick 1994 but are considerably below rates of only a enough to avoid an unwanted accumulation of few years ago—and lower than many observers inventories—especially for cars and light trucks, seemed to anticipate for the current economic but for some other goods as well. Efforts to trim expansion only a few months ago. Nonetheless, stocks reinforced the contractionary forces in the they should be regarded as only a milepost along manufacturing sector of the economy. the path toward the long-term goal of price stabil- Despite the falloff in growth in the first half, the ity. The Federal Reserve recognizes that eliminat- unemployment rate edged up only slightly, and ing the economic distortions associated with infla- although manufacturing capacity utilization fell tion is the most important long-run contribution it considerably, it remained above historical avercan make to the economic growth and welfare of ages. Under the circumstances, it is not surprising the nation. that the mounting inflationary pressures of the latter part of 1994 carried over into the first part of this year and that materials prices surged further. Rising import prices, related to the depreciation of THE PERFORMANCE OF THE ECONOMY the dollar, also contributed to domestic inflation. At the end of 1994, resource utilization in the U.S. Reflecting these and other factors, the consumer economy was high: Manufacturing capacity utiliza- price index increased at a VA percent annual rate in the first half of this year, up from a 23/4 percent tion equaled its 1989 peak, and the unemployment increase for 1994 as a whole. rate was close to the low point of the late 1980s. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 761 Nonetheless, increases in hourly wages and bene- salary income faded in the spring, reflecting slow fits remained moderate, holding down unit labor growth in employment and a drop in the workcosts. Furthermore, the drop in manufacturing week. The deceleration in labor income was only activity in the first half of the year contributed to a partially offset by rapid growth in interest and flattening in industrial commodity prices, suggest- dividend income in the first half of 1995. Dividend ing some lessening of inflationary pressures "in the income benefited from the improvement in corpopipeline." These favorable factors were reflected rate profits. Growth in interest income was strong in some moderation of price increases toward in the first quarter, reflecting the lagged effects of midyear. increases in market interest rates in 1994, but began to flag in the second quarter as the decline in market interest rates this year showed through to The Household Sector interest earnings. Surveys suggest that consumer confidence After advancing at more than a 4 percent annual remained high through the first half of 1995. Moverate in the second half of 1994, growth in consumer ments in both of the major surveys—from the spending slowed appreciably on average in the first Michigan Survey Research Center and the Conferhalf of this year. Real personal consumption expen- ence Board—were similar in the first half of 1995: ditures increased at just a IV2 percent annual rate in Both spent part of the first half above their 1994 the first quarter, before picking up moderately in average values, but by June, both had moved back the second. down to their 1994 averages. Outlays for consumer durables moved up sharply Early this year, residential construction activity in 1994, and by the end of the year, the level of weakened significantly, and single-family housing spending was high relative to income. Many house- starts in the first quarter were 14 percent (not an holds may have brought their stocks of durables up annual rate) below their fourth-quarter average. to desired levels, limiting further purchases this Sales of new and existing homes also fell in the year. In addition, by early this year, the stimulus to first quarter, although not quite so steeply. Singleconsumer spending from the massive mortgage family starts edged up in April but more than refinancing wave of 1993 and early 1994 likely had reversed this gain inf May; however, building perbeen exhausted. The downturn in interest rates this mits, a more reliable indicator, moved up in May. year has led to a comparatively modest rebound in New home sales jumped 20 percent in May, to the refinancings recently, which may free up some highest level since late 1993. Although reported income for additional spending in coming months. new home sales are volatile, and the initial readings The slackening in consumer demand in the first are often revised substantially, other indicators of quarter was concentrated in motor vehicles, where housing activity also point in a favorable direction: sales fell off after surging in the fourth quarter of Applications for mortgages to purchase homes rose 1994. However, real spending on goods other than sharply in May and remained elevated in June, and motor vehicles also grew less rapidly in the first attitudes of households and builders toward the quarter than in the second half of 1994. Some of housing market became more positive in the the deceleration in other consumer durables may second quarter. have reflected the weakness in home sales because Like single-family homebuilding, multifamily families often purchase new furnishings and appli- construction fell early this year, with starts off ances when they change houses. Among non- 11 percent in the first quarter. The drop this year durable goods, outlays for apparel were especially follows a two-year period of recovery, during weak, following rapid growth in spending in the which starts doubled from their thirty-five-year low second half of 1994. reached at the beginning of 1993. Multifamily The slowing of consumer spending growth so far starts turned back up in April and May. Prospects this year has been about in line with the slowing in for a continued gradual increase in multifamily income growth. Through the first quarter, wage and starts appear good, as newly built apartments were salary income posted solid gains, bolstered by a quickly filled last year and vacancy rates for aparthealthy pace of hiring. But increases in wage and ments continued to move down in the first quarter Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

762 Federal Reserve Bulletin • August 1995 of this year. However, continuing overhangs of cent annual rate. With the exception of motor empty apartments in some markets are likely to vehicles, the growth in equipment spending was keep total multifamily starts well below the levels widespread in the first quarter. For structures, real of the 1980s. outlays increased at a 12 percent annual rate in the first quarter, following a Axh percent gain over the four quarters of 1994. The first-quarter The Business Sector increase in construction was also widespread across components. In the second half of 1994, nonfarm inventories Indicators for the second quarter suggest that increased nearly 5 percent at an annual rate, about growth in capital spending continued to be brisk keeping pace with growth in final sales, as firms although not quite as fast as in the first quarter. built stocks to ensure adequate supplies—or, in Shipments of capital goods by domestic manufacsome instances, to beat anticipated price increases. turers in April and May were up moderately from In the first quarter, inventory growth continued at their first-quarter average. And permits for nonresiabout its late 1994 pace, but growth in final sales dential structures, which tend to lead construction moved down to a 2xh percent annual rate, leaving by a few months, indicate that construction should many firms with stocks they did not want. continue to trend upward although at a slower pace The first-quarter inventory run-up was dispropor- than in the early part of this year. tionately in motor vehicles, as production increased The surge in capital spending in recent years has while sales were falling. To bring inventories back pushed growth of the capital stock to its fastest in line, manufacturers cut production sharply; pace since the late 1970s. This improvement in the between February and May, output dropped 10 per- rate of capital accumulation may lead to a pickup cent. The decline in output of motor vehicles, parts, in productivity growth, but there is as yet little and related inputs was the most important factor in indication of a significant break with past trends. the 1 percent drop in overall industrial production Indeed, when output is measured using the new in this period. Motor vehicle inventories accumu- chain-type alternative index—which will become lated further in April when sales fell sharply, but the official measure later this year—trends in prothere was some progress in trimming excess stocks ductivity growth in the nonfarm business sector in in May and June. Nonetheless, much of the over- the 1990s are little changed from those of the hang of vehicles that developed earlier this year 1970s and 1980s. remains. Corporate operating profits increased at a 7 per- The inventory buildup outside the motor-vehicle cent annual rate in the first quarter, a somewhat sector was also quite large in the first quarter, and it faster pace than in the second half of 1994. Howcontinued at a rapid pace in April. The available ever, first-quarter profits were boosted by an data for May suggest a somewhat smaller rate of increase in earnings of U.S. corporations on foreign increase. Although stocks of most goods remained operations; profits on private domestic operations in better alignment with sales than in the motor- were about unchanged. The increase in profits on vehicle sector, inventory accumulation has been foreign operations resulted in part from the decline running ahead of sales in a few sectors, particularly in the exchange value of the dollar, which pushed in apparel, furniture, and appliances. In response, up the value of profits earned abroad. Private manufacturers have cut production in these areas. domestic financial profits improved in the first The accumulation of furniture and appliances is quarter, in part because of a surge in bank earnings, likely related to the drop-off in home sales in early which were boosted by strong loan growth. First- 1995, and the revival in home sales that appears to quarter earnings on domestic operations of U.S. be under way should boost sales in these areas, nonfinancial corporations declined slightly, followhelping to trim inventories further. ing solid gains in 1994. Profits were 10.6 percent of Business fixed investment rose at an extraor- the output of nonfinancial corporate businesses in dinary pace in the first quarter, with strong gains in the first quarter, about the same as in 1994 as a both the equipment and structures components. whole, when the profit share was the highest since Real spending on equipment increased at a 25 per- the late 1970s. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 763 In the farm sector, indications are that production In real terms, federal purchases of goods and will fall well short of last year's exceptionally high services—the part of federal spending included in levels. Weather conditions have been less favorable gross domestic product—fell at an annual rate of than those of 1994, with unusually heavy rains 4 percent in the first quarter of 1995. Falling keeping plantings behind schedule across large defense spending more than accounted for the parts of the Midwest. Also, with stocks relatively decline. As of the first quarter, the level of real high after last year's large harvests, the U.S. federal purchases was 17 percent below the peak Department of Agriculture reduced the amount of reached four years ago. acreage that farmers contracting for subsidy pay- State and local government deficits on combined ments were allowed to plant. However, livestock capital and operating accounts (that is, excluding production has remained strong so far in 1995, social insurance funds) totaled $37 billion in the which will help cushion the effects of smaller har- first quarter of 1995, a small improvement from the vests on total agricultural production. Because of deficit a year earlier. Excluding social insurance, the likelihood that production will fall this year, tax receipts increased 7 percent between the first farm inventory investment will probably be smaller quarter of 1994 and the first quarter of 1995, while this year than in 1994, and stocks of some crops expenditures were up 6lA percent. Transfer paywill likely be drawn down appreciably. ments continue to grow faster than other spending, although the rate of increase is well below that earlier in the 1990s. The Government Sector Real purchases of goods and services by state The federal government deficit has continued to and local governments have been rising only modshrink in the current fiscal year. For the first eight erately for some time; in the first quarter of 1995, months of the 1995 fiscal year, the budget deficit they were little changed. The slowing in the first was 19 percent below the same period a year quarter was concentrated in construction spending, earlier. Nominal expenditures over this period were which fell after three quarters of solid increases. 4 percent higher than a year earlier, while receipts Purchases of other goods and services remained on were up 8V2 percent. In addition to the strong the gradual uptrend that has been evident over the economic growth of 1994, receipts were boosted past few years. State and local employment by changes in rules that allowed some individuals increased about 14,000 per month, on average, to defer until 1995 certain tax payments that would over the first six months of 1995, considerably have been due in 1994 under previous rules. below the pace of the 1992-94 period. Higher interest outlays contributed to the The small improvement in the budget situation increase in federal spending in the first part of the for the state and local sector as a whole masks 1995 fiscal year. Excluding interest outlays, nomi- important differences across levels of government. nal federal spending in the first eight months of this Available evidence suggests that while state budfiscal year increased about 2 percent, compared gets are in relatively good shape, budgets at the with the year-earlier period. Defense expenditures local level remain under pressure. State aid to continued to decline in nominal terms; they have localities, particularly to school districts, has been been the main factor holding down federal spend- eroding relative to expenses for several years. Also, ing in recent years. Spending on income security local governments rely more heavily than state programs, such as unemployment insurance and governments on property taxes, and while sales and welfare benefits, also edged down, mostly reflect- incomes have rebounded in the current business ing the economic expansion. Spending on Medicare cycle expansion, property values have lagged and other health programs was up 9 percent in the behind, limiting property tax receipts. first eight months of the fiscal year; while still quite rapid, this growth is slower than that of the early 1990s, when these expenditures were rising 10 to The External Sector 20 percent per year. Spending on social security and on other nondefense functions increased less The nominal trade deficit on goods and serthan the recent trend in nominal GDP. vices widened somewhat in the first quarter, to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

764 Federal Reserve Bulletin • August 1995 $120 billion at an annual rate. However, net in Mexico's current account deficit during the first investment income improved in the first quarter, quarter of the year. In the wake of the Mexican as did net transfers, and as a consequence, there crisis, the Argentine authorities chose to tighten was a narrowing of the current account deficit macroeconomic policies, which has led to a weakin the first quarter from its fourth-quarter level, to ening of economic activity in Argentina. In con- $162 billion at an annual rate. Nonetheless, the trast, Brazil experienced very strong growth of real first-quarter current account deficit exceeded the output in the first quarter as consumption spending 1994 average of $151 billion. In April, the trade surged; available indicators suggest some slowing deficit increased further from the first-quarter of growth in the second quarter. average. In Japan, recovery from the recent recession The quantity of U.S. imports of goods and ser- remains tentative. First-quarter real GDP growth vices expanded 10 percent at an annual rate during was only 0.3 percent at an annual rate; data for the the first quarter, somewhat less rapidly than in second quarter also suggest that the recovery may 1994. The slower pace of U.S. income growth be stalling. Asset prices have continued to fall, contributed to the lower import growth; increased adding to concerns about the lack of progress in imports from Mexico were a partial offset. In April, improving banks' balance sheets and limiting the real imports continued to grow at about the first- capacity of banks to extend credit in support of quarter pace. The increases in imports in the first the recovery. In May, the Japanese government four months of the year were widespread across announced another package of structural reforms major trade categories. and measures to boost domestic demand. The slug- Non-oil import prices rose at a 3V2 percent gish pace of activity in Japan and the rise in the annual rate in the first quarter, somewhat less than value of the yen have eliminated inflation: Conduring the second half of 1994, when they were sumer prices were unchanged over the twelve pushed up by large increases in world commodity months through June. prices, especially for coffee. In April and May, In other industrial countries, the rate of econon-oil import prices rose at a nearly 6 percent nomic expansion appears to have slowed from its annual rate, with increases for most major trade rapid 1994 pace. In Canada, real GDP growth categories. The pickup in price increases for slowed to less than 1 percent at an annual rate in imported goods reflected, in part, the recent dollar the first quarter; second-quarter indicators suggest depreciation. continued sluggishness. In the United Kingdom, The quantity of U.S. exports of goods and ser- where the expansion has been vigorous over the vices rose at a 5 percent annual rate in the first past three years, real GDP continued to grow quarter, more slowly than the double-digit rate of strongly in the first quarter, although at less than growth over the four quarters of 1994. In large part, the 1994 pace. In most continental European counthe weaker export performance was the result of tries, the rate of real output growth in the first half the macroeconomic adjustments taking place in of 1995 was somewhat lower than the rapid pace Mexico and the reduced Mexican demand for U.S. during the second half of 1994. In Canada and exports. Preliminary data for April indicated that several major European countries, measures the quantity of exports expanded a bit further from intended to reduce government deficits as a share the first-quarter average. For the first four months of GDP have been announced. of the year, exports to Mexico fell while they Inflation rates in the industrial countries generincreased moderately to most other areas of the ally remain low. However, in the United Kingdom world. and Italy, currency depreciation has added upward Real output in Mexico declined sharply in the pressure on prices, and consumer prices in the first quarter as instability in the financial markets twelve months through June rose 3V2 percent in the weakened confidence and the government imple- United Kingdom and nearly 6 percent in Italy. In mented a program of fiscal and monetary restraint. western Germany, exchange rate appreciation The Mexican economy apparently continued to helped offset domestic inflationary pressures, and contract in the second quarter. The crisis and ensu- consumer prices rose only 2lA percent in the twelve ing policy responses induced a dramatic reduction months through June. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 765 Among our Asian trading partners other than rolls fell during the second quarter after posting Japan, real GDP growth has remained near the strong gains in the early months of the year. In rapid 1994 pace, in part because substantial depre- construction, payroll growth averaged 30,000 per ciations of those countries' currencies against the month in 1994 and through the first quarter of Japanese yen and the German mark stimulated 1995, but employment then fell 8,000 per month in exports. However, economic activity decelerated the second quarter. Manufacturing job growth also somewhat in China and Singapore, reflecting past averaged 30,000 per month in 1994. Factory hiring tightening of monetary policy and the reduction of slowed in the first quarter, and in the second quarspare capacity in these economies. ter, 35,000 jobs per month were lost. The decline in Net capital flows into the United States were manufacturing employment was widespread across large in the first quarter of 1995. Foreign official industries. Employers have also trimmed the facholdings in the United States rose more than tory workweek, which in 1994 had reached the $20 billion, as foreign governments made large highest level since 1945. intervention purchases of dollars in March in Although employment continued to rise in most response to strong upward pressure on the foreign service-producing industries in the first half of exchange value of their currencies. Sizable official 1995, the rate of growth slowed by the second inflows continued in April and May. In addition, quarter. In wholesale and retail trade, where 75,000 net private foreign purchases of U.S. securities jobs per month were added in the second half of were considerable in the first quarter, particularly 1994, the pace of job gains fell in the first quarter, purchases of Treasury bonds and notes and new and only 12,000 jobs per month were added in the Eurobond issues by U.S. corporations. Private for- second quarter. Similarly, in business services, eign net purchases of U.S. securities moderated a where 46,000 jobs per month were added in 1994, bit in April and May. In contrast, U.S. net pur- employment decelerated in the first quarter and was chases of foreign securities, which had fallen sub- about flat in the second. Among sectors showing stantially last year from their 1993 peak, continued employment gains in the first half of this year, to decline on balance over the first five months of entertainment industries posted considerable 1995. growth, and increases in employment in the health U.S. direct investment abroad was considerable sector continued to run at about the same pace as in in the first quarter, at $18 billion. Investment in the second half of 1994. Western Europe was particularly strong. Foreign The rate of increase in hourly compensation direct investment in the United States, at $10 bil- moved down further early this year. The employlion, remained substantial. On net, there was a ment cost index for private industry workers, a large outflow of direct investment in the first quar- measure of hourly labor costs that includes both ter, after netting to about zero in 1994. wages and benefits, rose 2.9 percent over the twelve months ended in March 1995, down from a 3.3 percent increase over the preceding twelve- Labor Markets month period. The increase in wages and salaries was the same in both periods, but the pace of Employment grew rapidly in 1994, and labor mar- benefits gains declined significantly. kets tightened considerably. Although job growth The largest contribution to the deceleration in slowed in the first quarter of this year, it was still benefits costs in recent years has come from health large enough—at 226,000 per month—to keep the insurance. Among the factors restraining the unemployment rate at about the same level as in increase in health insurance costs are slower the fourth quarter of 1994. In the second quarter, medical-sector inflation, increased use of managedgrowth of nonfarm payroll employment slowed care plans, and efforts by employers to shift a to only 60,000 per month and the quarterly aver- greater proportion of health care costs to employage unemployment rate edged up, from 5.5 percent ees. Costs of workers' compensation programs to 5.7 percent. have also contributed to the deceleration in benefits The deceleration in employment was particularly costs; these costs, too, have been affected by lower marked in the goods-producing sector, where pay- medical inflation, although regulatory reform has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

766 Federal Reserve Bulletin • August 1995 played a role as well. Unemployment insurance to affect finished goods prices in early 1995, and costs decelerated sharply over the past two years; the PPI for finished goods other than food and firms pay into the unemployment insurance pro- energy, which covers domestically produced congram on the basis of their recent layoff experience, sumer goods and capital equipment, increased at a and the improved economy through the first part of 3 percent annual rate over the first six months of this year lowered these payments. 1995, up from a IVi percent rate of increase over Output per hour in the nonfarm business sector— the twelve months of 1994. measured in 1987 dollars—increased at an annual The consumer price index for commodities other rate of 2.7 percent in the first quarter of 1995. than food and energy increased at a IV2 percent Output per hour increased 2.0 percent over the four annual rate over the first six months of 1995, about quarters ended in the first quarter, down slightly the same as in 1994. Prices accelerated at the retail from the rate of growth over the preceding four- level for some items for which producer prices quarter period. have been rising rapidly, such as household paper products. But this pickup was partly offset by declines in prices where there have been large Price Developments inventory buildups. Notably, apparel prices continued to decline in the first half, and prices of appli- The pickup in consumer price inflation so far this ances, which had increased in 1994, fell in the first year was a bit larger for the index that excludes half of 1995. food and energy than for overall prices: The CPI The slowdown in the industrial sector has begun excluding food and energy increased at a 3.6 per- to relieve pressure on materials prices, and the PPI cent annual rate over the first six months of 1995, for intermediate materials other than food and up from a 2.6 percent increase in 1994. The accel- energy increased just 0.2 percent per month in May eration in the first half was mostly in non-energy and again in June, suggesting reduced pressures on services prices, which increased at a AVi percent finished goods prices in the near term. annual rate over the first six months of 1995, up Consumer food prices increased at a 13A percent from a 3lA percent increase over the twelve months annual rate over the first six months of 1995, down of 1994. Airfares increased sharply in the first half about a percentage point from 1994. Coffee prices, of 1995, rising at more than a 40 percent annual which had increased 64 percent in 1994, fell 12 perrate after falling 10 percent in 1994; this accelera- cent over the first six months of this year. The tion accounted for two-thirds of the pickup in ser- swing in coffee prices can more than account for vices inflation in the first half. Auto finance rates the deceleration in food prices. Prices of meats also increased rapidly early in 1995—rising at a continued to fall in the first half of 1995, as produc- 38 percent annual rate in the first four months tion remained strong. the year—following a large increase in the second Energy prices increased at a 2 percent annual half of 1994. However, the CPI for auto finance rate in the first half of 1995, about the same as last declined sharply in May and June as interest rates year. Natural gas prices have continued to decline. on auto loans began to reflect the declines in mar- Regulatory changes have led to increased competiket rates in the first half of 1995. Price increases tion among suppliers of natural gas; in addition, for other services were, on balance, roughly in line natural gas prices were depressed early this year with their rate of increase in 1994. by the relatively warm winter, which held down As a result of the brisk expansion of the indus- demand. Gasoline prices increased at a 12 percent trial sector in 1994 and the consequent rapid annual rate in the second quarter, reflecting the increases in prices of basic manufactured products, run-up in crude oil prices that occurred between the producer price index for intermediate materials December and April. Since April, crude oil prices other than food and energy increased at a IVi per- have reversed nearly all of their earlier run-up, cent annual rate over the second half of 1994. In indicating that gasoline prices will move down in the first quarter of this year, these materials prices coming months. rose even faster—nearly 10 percent at an annual Survey data suggest that expectations of inflation rate. The rapid increases in materials prices began have changed little since the end of 1994. Accord- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 767 ing to the survey of households conducted by the downward pressures seemed also to arise from the Survey Research Center of the University of Michi- growing conviction of market participants of the gan, as of the first half of 1995, the expected commitment of the Congress and Administration to increase in consumer prices over the coming twelve making progress toward a balanced budget. On months was the same as it was in the fourth quarter balance, most longer-term interest rates have of 1994. In the Conference Board survey of house- declined 120 to 180 basis points since the end of holds, the expected rate of inflation over the com- last year, with the sharpest drops at intermediate ing year remained at 4lA percent in the first half of maturities. The trade-weighted exchange value of 1995, the same as in each of the four quarters of the dollar has depreciated about IV2 percent against 1994. Expectations of inflation over longer periods the other G-10 currencies—in large part reflecting also have not changed much on balance this year. the decline in U.S. long-term interest rates relative In the University of Michigan survey, the expecta- to those in the other G-10 countries. In addition, tion in the second quarter of 1995 for the rate of the fall in interest rates, coupled with continued consumer price inflation over the next five to ten strong corporate earnings, fueled a run-up in equity years was the same as it was in the fourth quarter of prices; most major stock price indexes have 1994. Similarly, in the May 1995 survey of profes- climbed 15 to 35 percent since the beginning of the sional forecasters conducted by the Federal Reserve year. Bank of Philadelphia, expectations of inflation over Despite slower economic expansion this year, the coming ten years were about 3lA percent, the growth rates of broad money and credit have same as in the survey taken at the end of 1994. picked up, and the decline in intermediate- and long-term interest rates has only recently begun to leave an imprint on the composition of borrowing. FINANCIAL, CREDIT, AND MONETARY Total domestic nonfinancial debt increased 5 V2 percent from the fourth quarter of 1994 through DEVELOPMENTS May—a little above last year's pace—as stronger In charting the course of monetary policy this year, private sector borrowing more than offset slower the Federal Reserve has sought to promote sustain- growth of the federal debt and a decline in state and able economic growth and continued progress local government debt. Borrowing in the nonfinantoward price stability. Despite the tightening cial business sector has been largely concentrated actions undertaken during 1994, economic data at in short-term or floating-rate debt such as bank the beginning of 1995 suggested that the economy loans and commercial paper. Recently, however, was operating beyond its long-run potential and declines in longer-term interest rates have stimumight continue to do so for some time—a situation lated a sharp jump in corporate bond issuance. that would no doubt lead to a significant pickup Household borrowing this year has been considerin inflation if allowed to persist. Against this back- able, although below the pace of 1994. Tax-exempt drop, the Federal Open Market Committee voted in debt is estimated to have declined outright again February to tighten reserve conditions somewhat this year as many state and local units have called further, resulting in a Vi percentage point increase securities that had been advance refunded. Federal in the federal funds rate. In the months following debt growth has edged down a bit this year, extendthe February FOMC meeting, economic activity ing the trend toward slower expansion of federal seemed to be leveling out, at least temporarily, debt that began in 1991. considerably reducing pressures on resources. In Depository institutions have been especially early July, with the risks of a prolonged upturn in important suppliers of credit to both businesses and inflation fading, the FOMC decided to ease reserve households this year. Borrowers' demands were pressures slightly, resulting in a decline in the concentrated in the types of credit in which deposifederal funds rate of XA percentage point. tories are traditional lenders and, on the supply As incoming data in 1995 increasingly suggested side, commercial banks continued to pursue new slower economic growth and an attendant relief of lending opportunities aggressively. The health and inflation pressures, intermediate- and long-term profitability of depositories have remained solid to interest rates moved down substantially. Additional date, although federal regulators have cautioned Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

768 Federal Reserve Bulletin • August 1995 depositories that their lending standards should take increase in the discount rate, and the Committee account of the potential for deterioration of loan agreed to allow this increase to show through fully performance in a less favorable economic climate. to the federal funds rate. In light of the tightening The surge in bank lending and the flattening of of policy called for at this meeting and the anticithe yield curve this year have provided a significant pated lagged effects of previous tightenings, the impetus for growth of the broad monetary aggre- Committee viewed the odds of a need for further gates. M3 advanced 6XA percent at an annual rate policy action developing over the intermeeting from the fourth quarter of 1994 through June— period as relatively small and evenly balanced, and slightly above the upper bound of its revised 2 to therefore issued a symmetric directive to guide any 6 percent annual range set at the July FOMC intermeeting changes in reserve conditions. meeting—as banks pulled in deposits to fund loans. In subsequent weeks, evidence suggested that The drop in market interest rates has enhanced the economic activity was moderating, especially in attractiveness of M2, which increased at a 33A per- the interest-sensitive sectors. Financial markets cent rate over the same period—a little above the appeared to view these signs as indicating that the midpoint of its annual range. In contrast to the previous policy actions of the Federal Reserve had expansion of the broad monetary aggregates, Ml substantially reduced the odds of rising inflation growth has been quite weak, reflecting the low and thus also the need for additional monetary yields on these assets and the implementation by a restraint. Indeed, yields on Treasury securities at few banks of retail sweep accounts, which move maturities ranging from one to ten years fell 60 to funds out of NOW accounts and into nontransac- 70 basis points between the February and March tion balances. FOMC meetings. At its meeting in late March, it was not clear to the Committee whether the deceleration in eco- The Course of Policy and Interest Rates nomic activity was only temporary or was a lasting shift toward a sustainable rate of economic expan- The Federal Reserve entered 1995 having tightened sion. On balance, the Committee viewed the econpolicy appreciably during 1994, thereby boosting omy as retaining considerable upward momentum short-term rates 2xh percentage points. Nonethe- and observed that the decline in longer-term interless, data reviewed at the FOMC meeting in est rates, the rise in stock prices, and the sharp December 1994 suggested that pressures on depreciation of the exchange value of the dollar resources were intensifying and that inflation could be expected to buoy aggregate demand in the threatened to move higher. Although the Commit- months ahead. Moreover, consumer ^prices, as tee took no action to increase rates further at this anticipated, had risen more rapidly in 1995. In meeting, it did adopt a directive indicating a bias these circumstances, the Committee determined toward additional tightening in the intermeeting that it would be prudent to await further informaperiod. tion before taking any additional policy actions, but Information reviewed at the February meeting the Committee's directive included a bias toward suggested that despite some fragmentary evidence additional monetary restraint over the intermeeting of slowing, the economic expansion remained brisk period. The asymmetric directive was considered in an economy already operating at or beyond its appropriate to emphasize the Committee's commitlong-run potential. The demand for consumer ment to containing and ultimately reducing infladurables and homes was softening, but output and tion, in a period when it seemed to be moving employment had posted substantial gains near year- higher. end, and capacity utilization had moved up from Following the March meeting, incoming data already high levels. In addition, a marked rise in signaled a further deceleration of economic activmaterials prices during the second half of 1994 ity. In addition, financial markets appeared to view posed a threat of increased consumer price inflation budget discussions in the Congress as foreshadowin coming months. In these circumstances, the ing significant fiscal restraint over the balance of Board of Governors approved the pending requests the decade. Shorter-term interest rates began to of several Reserve Banks for a Vi percentage point incorporate the possibility of an easing of monetary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 769 policy, and yields on longer-term securities— thirty-year Treasury bond yield and the federal especially those at intermediate maturities—moved funds rate reached a low of 48 basis points but down sharply as well. edged higher in subsequent weeks. Information reviewed at the May FOMC meet- From the information reviewed at the July meeting provided persuasive evidence that the pace of ing of the FOMC, it appeared that the economy the economic expansion had slowed, relieving pres- flattened out during the second quarter as busisures on resources and reducing the threat of a nesses sought to pare inventories to desired levels. pickup in inflation. The Committee observed that This pause in the expansion, in turn, had alleviated an adjustment to inventory imbalances that had the inflation pressures that had loomed large earlier developed earlier in the year was contributing to in the year. In these circumstances, the Committee the slowdown and that the underlying trajectory of voted to ease reserve pressures slightly, resulting in final sales was still unclear. The Committee deter- a VA percentage point decline in the federal funds mined that the existing stance of policy was appro- rate. Although financial markets had anticipated a priate in these circumstances and adopted a decline in the federal funds rate at some point, both symmetric directive regarding potential policy bond and equity markets rallied strongly after the adjustments during the intermeeting period. change in policy was announced. At the close on Employment data released shortly after the May July 7, the thirty-year bond rate was down about FOMC meeting were surprisingly weak, prompting 165 basis points from its recent high of last considerable speculation in financial markets of an November. imminent monetary policy easing. The sharpness of the downward movement in longer-term rates seemed to reflect, in addition to economic funda- Credit and Money Flows mentals, trading dynamics associated with the attempts of investors to rebalance their portfolios in The debt of domestic nonfinancial sectors grew light of the substantial change in interest rates. At 5!/2 percent at an annual rate from the fourth quarone point in late June, the spread between the ter of 1994 through May of this year—a modest 3. Growth of money and debt Percent Domestic Measurement period Ml M2 M3 debt 7.4 89 9.6 9.1 5.4 (2.5)2 9.3 12.4 9.9 8.8 9.2 9.9 9.6 10.4 12.2 9.9 11.8 5.5 8.1 10.9 14.4 12.0 8.7 7.6 14.1 15.5 9.3 8.9 13.5 63 • 4.3 5.7 10.2 4.3 ' 5.3 6.3 9.0 .6 4.8 3.8 7.9 4.2 4.0 1.7 6.5 7.9 2.9 1.2 4.6 14.3 2.0 .5 4.7 10.5 1.7 1.0 5.2 2.3 1.0 1.4 5.1 5.5 1.8 .6 mm 1.7 1.3 5.4 11 .9 2.1 4.2 -1.2 -.3 1.7 5.2 .0 1.6 4.3 5.5 -.9 4.2 6.7 5,4* 1. From average for fourth quarter of preceding year to average for fourth 3. From average for preceding quarter to average for quarter indicated. quarter of year indicated. 4. Based on data through May. 2. Adjusted for shift to NOW accounts in 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

770 Federal Reserve Bulletin • August 1995 pickup over the pace of recent years but well of revolving credit—principally credit card debt— within its annual range of 3 to 7 percent. Slower trended higher from the already brisk pace growth of federal debt and a decline in the debt of recorded last year. The proliferation of incentive state and local governments in 1995 were more programs offered with many credit cards has likely than offset by strength in business and household encouraged greater convenience use for transborrowing. Although declines in longer-term inter- actions in recent quarters. est rates and the flattening of the yield curve have Growth of home mortgage debt moderated somestimulated long-term, fixed rate borrowing of late, what in the first quarter, a pattern consistent with both households and businesses continued during the overall sluggish demand for housing. As longmuch of the year to favor borrowing that was term rates moved down this year, the pronounced short-term or floating-rate. In part, the reliance on shift toward adjustable rate mortgages (ARMs) evisuch debt contributed to the larger share of private dent last year dissipated. As of May, 60 percent of debt intermediated through the depository sector. new mortgage originations were fixed rate mort- In meeting increased credit demands, depositories gages (FRMs). In addition, the decline in long-term turned more heavily to time deposits and other rates in recent months has sparked renewed interest liabilities included in M2 and M3. Stronger fund- in refinancing. Households carrying ARMs with ing needs and increased reliance on deposits pro- rates that are (or soon will be) above rates offered vided a considerable lift to growth of the broad on FRMs have reportedly begun to refinance with monetary aggregates. FRMs. Slower growth of federal debt this year relative Household debt-service burdens—measured as to 1994 reflects stronger tax revenues and dimin- the ratio of scheduled principal and interest payished growth of expenditures, especially defense- ments on debt relative to income—have risen in related outlays. In the state and local sector, debt 1995 but remain well below levels reached in the outstanding has continued to decline, largely driven late 1980s and early 1990s. Mortgage refinancings by calls of higher-cost debt issued during the undertaken at lower interest rates in recent years 1980s.1 Yields on municipal bonds relative to Trea- have helped to keep the level of debt-service bursuries had moved up considerably after Orange dens relatively low despite the growth of household County defaulted on its debt late in 1994 but debt relative to income. In fact, some measures of reversed much of this increase early in 1995. The delinquency rates on home mortgages have edged ratio of municipal yields to Treasury bond yields down this year to the lowest levels in more than has climbed again more recently as various budget twenty years. The picture for delinquency rates on proposals before the Congress raised the prospect consumer credit is less clear: Some measures such of reduced federal tax advantages for municipal as the delinquency rates on consumer installment debt. In addition, the recent decision by Orange credit remain quite low, while others—especially County voters not to raise taxes to cover the coun- auto loans booked at finance companies—have ty's losses has tended to boost risk premiums for moved up considerably. the obligations of many municipalities in Califor- Borrowing by nonfinancial businesses has nia and, to a lesser extent, for other borrowers in increased in 1995, propelled in large part by a rise the municipal bond market. in capital expenditures in excess of internal sources Borrowing by households—although off a bit of funds and a jump in merger activity. In addition, from last year's pace—has generally remained a number of firms have initiated stock repurchases strong this year. Weaker auto sales and the asso- financed in part with debt. As in 1994, the compociated slower growth of auto loans resulted in sition of business borrowing this year has been a modest deceleration of consumer credit. Growth heavily weighted toward short-term commercial paper and bank loans. Lower long-term interest rates, however, have stimulated a flurry of new 1. Many state and local units took advantage of historically low bond issues very recently. long-term interest rates in 1993 to issue bonds that were targeted to replace existing high-cost debt issued during the 1980s as the call Various unsettling developments in financial dates on those bonds arrived. Calls on previously issued debt likely markets, including the Orange County debacle, will continue to depress net state and local borrowing for some losses associated with complex derivatives and time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 111 cash instruments, the failure of Barings Brothers, enjoyed a prominent role as suppliers of credit over and the financial crisis in Mexico, have had some the past year. To date, there are few indications that limited effects on the specific companies or sectors the health of these institutions has deteriorated. involved. They have not, however, had a large Credit ratings for finance companies have been impact on broad market perceptions of credit risks; stable, and bank profitability and capital ratios have spreads of yields on short- and long-term corporate been solid. debt over Treasuries have widened only a bit this An important factor contributing to the overall year, a situation that likely reflects the elevated strength of depository credit has been the stabilizasupply of new corporate debt and perhaps a small tion of the thrift industry, especially savings and uptick in risk premiums. loan associations. After several years of sharp con- The gap between the capital expenditures and traction, thrift assets expanded slightly over the internal cash flow of nonfinancial corporations (the second half of 1994 and continued a modest recovfinancing gap) began widening in mid-1994 and ery in 1995. The number of thrift institutions conhas grown even larger in 1995. In part, the bulge in tinues to decline, however, with many filing for the financing gap is the result of the large buildup bank charters or being acquired by banks. of inventories earlier in the year. Most external The growth of bank credit picked up appreciably funding for the purpose of carrying inventories during the first half of 1995, with strength espeapparently has taken the form of commercial paper cially evident in bank loans. Indeed, over the past or bank loans. twelve months, the share of the increase in nonfed- A surge in merger activity beginning in late 1994 eral domestic debt funded by bank loans climbed has also spurred business borrowing. Many of the to record levels. Surveys of bank lending officers largest mergers have been strategic, intra-industry have indicated banks' increased willingness to combinations, concentrated especially in areas such extend consumer credit as well as continued easing as defense, pharmaceuticals, telecommunications, of terms and standards applied to business loans. and (most recently) banking. In contrast to the Data from the Federal Reserve's Survey of Terms merger and acquisition wave during the late 1980s, of Bank Lending to Business show that spreads of the current acquisition boom has not entailed loan rates over the federal funds rate for large highly leveraged takeovers financed heavily with commercial loans have been about the same as last junk bonds. Indeed, until quite recently, junk bond year but well below those prevailing through much issuance this year had been anemic. Merger activ- of the late 1980s and early 1990s. Comparable ity in recent quarters has involved substantial use spreads for smaller commercial loans are wider of stock swaps coupled with reductions in financial than in the late 1980s but have continued the narassets and new investment-grade debt issuance rowing trend of recent years. The strength of bank (often in the form of commercial paper). Survey lending has been viewed favorably in financial evidence indicates that banks have played only a markets—bank stock prices have risen this year modest role in directly funding recent mergers, about in line with or faster than the climb in broad although they have facilitated transactions by pro- stock price indexes, while spreads on bank debt viding backup lines for merger-related commercial relative to Treasuries have widened only slightly. paper. The continued easing of bank lending standards Equity retirements associated with mergers have after more than a year of monetary policy restraint accounted for a sizable portion of the decline in net has attracted the attention of federal regulators. The equity shares outstanding. In addition, gross issu- Office of the Comptroller of the Currency warned ance of new equity has ebbed as price-earnings banks against allowing their standards to fall to ratios have fallen and many firms have repurchased a point that could expose them to heavy losses in their stock with both accumulated cash and the an economic downturn. In the same spirit, the proceeds of new debt. Federal Reserve issued a supervisory letter caution- The shift to short-term funding in the business ing banks that loan terms and standards should be sector has been a boon to intermediaries that tend set with a long-term view that takes loan perforto specialize in short-term lending. Finance compa- mance in less favorable economic conditions into nies and commercial banks, in particular, have account. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

772 Federal Reserve Bulletin • August 1995 Banks have funded the bulge in their loan port- Sizable inflows to stock mutual funds have continfolios this year in part by liquidating a portion of ued, but the flatter yield curve has damped the the large holdings of securities they had accumu- demand for other long-term investments. Inflows to lated earlier in the 1990s.2 In addition, banks have bond mutual funds—while stronger than during the increased their liabilities. Last year, banks relied bond market rout last year—have been much heavily on borrowings from their non-U.S. offices smaller than inflows earlier in the 1990s. Also, to fund growth of their domestic assets. Deposit judging from noncompetitive tenders at recent growth at the foreign offices of U.S. banks has Treasury auctions, households' direct investments slowed considerably this year. Consistent with this in Treasury securities have dwindled sharply this development, borrowing by domestically chartered year. At least a portion of the flows that previously banks from their foreign offices has increased in had been directed to mutual funds and direct invest- 1995 but not at the pace of last year. ments in securities appears to have boosted M2 Depositories' shift back into funding with growth. Growth of money market mutual funds and domestic liabilities has helped spur the growth of small time deposits, in particular, has been espethe broad monetary aggregates this year. From the cially brisk. Indeed, more than half of the increase fourth quarter of 1994 through June, growth of M3 in M2 since April is attributable to a steep climb in has averaged 6V4 percent, placing the level of M3 M2 money funds. above the upper bound of its annual range. Over In contrast to the marked expansion of the the same period, M2 growth has averaged 33 A per- broader aggregates, Ml growth has weakened this cent, placing the level of M2 in the upper half of its year, primarily as a result of wide opportunity costs annual range. on transaction deposits and the introduction and The pickup in M3 growth this year reflects expansion of retail sweep accounts at some large stronger expansion in both its M2 and non-M2 banks. Interest rates offered on other checkable components. The acceleration of "wholesale" deposits (OCDs) have edged up only slightly since funding sources, especially large time deposits, has the beginning of 1994 despite the sharp rise in been quite marked this year. Banks' heavier reli- short-term market interest rates. Households have ance on wholesale funds is typical during periods responded by reducing balances in these accounts in which bank loan portfolios are expanding in favor of higher-yielding assets. swiftly. The non-M2 portion of M3 has also been The development of sweep accounts by a few boosted by a sharp jump in institution-only money large banks for their retail customers has facilitated funds. The yields on these funds tend to lag move- the shift away from transaction balances. Sweep ments in short-term market interest rates and, as a accounts transfer a customer's OCD account balresult, became especially attractive to investors ances in excess of a certain threshold into a money when short-term market interest rates began falling market deposit account (MMDA). Automatic transon expectations of a near-term easing of monetary fers from the customer's MMDA account back to policy. the OCD account are initiated as checks and other The acceleration of M2 this year results chiefly withdrawals deplete OCD balances. Such sweep from the waning influence of previous increases in accounts may allow customers to earn more intershort-term interest rates and a marked flattening of est and benefit the bank by reducing its required the yield curve. On balance this year, the returns on reserves.3 Estimates suggest that retail sweep assets in M2 have become more attractive relative accounts have reduced Ml by about $12 billion so to both short- and long-term market instruments. far this year. These programs affect the composition but not the level of M2 because balances are swept from transaction deposits into other accounts 2. Published data on changes in securities portfolios at banks may not accurately portray funding strategies because recent included in M2. accounting changes have increased the share of securities and off-balance-sheet contracts that must be marked to market on banks' balance sheets. Estimates suggest that changes in the market valuation of securities and off-balance-sheet contracts under these 3. Under the current structure of reserve requirements, OCD accounting rules have added about 1 percentage point at an annual accounts are subject to a 10 percent reserve requirement at banks rate to the growth of bank credit from the fourth quarter of 1994 with more than $54 million of net transaction deposits. By law, through June of this year. personal MMDAs are exempt from reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 773 The expansion of retail sweep accounts poses value of the dollar in terms of the other G-10 some potential problems for the implementation of currencies has depreciated about IV2 percent since monetary policy by the Federal Reserve. To date, the end of December 1994. The dollar declined as such accounts have been offered by large banks economic indicators began to suggest that ecothat must maintain a balance at a Federal Reserve nomic growth in the United States was slowing, Bank to meet their reserve requirements. As a lowering the likelihood of further increases in U.S. result, the reduction in required reserves associated market interest rates. In addition, the Mexican with sweep accounts has implied a nearly equiva- crisis appeared to weigh on the dollar in early lent reduction in aggregate required reserve bal- 1995. External adjustment by Mexico was rightly ances; estimates suggest that the $12 billion dollar expected to involve, to an important extent, a corredecline in OCDs this year translates to a reduction sponding decrease in U.S. net exports. Primarily for in required reserve balances of nearly $1.2 billion.4 that reason, financial turmoil in Mexico and depre- In early 1991, following the cut in reserve require- ciation of the peso were seen as having possible ments at the end of 1990, unusually low levels of adverse implications for U.S. growth and external aggregate reserve balances were associated with accounts and, in general, as negative for dollargreater variability in the federal funds rate as denominated assets. banks' volatile clearing needs began to dominate The dollar was supported only briefly by the the demand for reserves. If many banks begin to increase in the discount rate and the federal funds offer retail sweep programs in the future, the aggre- rate at the February FOMC meeting. With the U.S. gate level of required reserve balances would likely economic expansion softening, market participants fall substantially, potentially leading to instability came to expect that no further increases in these in the aggregate demand for reserves. rates were likely in the near term. Downward pres- The monetary base expanded at a 5V2 percent sure on the dollar intensified in late February, and rate from the fourth quarter of 1994 through June. on March 2, in somewhat thin and disorderly mar- Currency growth this year—at llA percent from ket conditions, the dollar fell sharply further against 1994:Q4 through June—is off a bit from last year's the mark and the yen. The foreign exchange Tradpace but still quite robust. Foreign demands for ing Desk at the New York Federal Reserve Bank U.S. currency have generally remained strong this entered the market, selling both marks and yen on year. In concert with the decline in transaction behalf of the Treasury and the Federal Reserve deposits, total reserves contracted at a 6 percent System. The next day several other central banks rate from 1994:Q4 through June. In the absence of joined the Desk in concerted intervention in supthe increase in sweep accounts, the decline in total port of the dollar. Intervention by the Desk on reserves over this period would have been 2Vi per- behalf of the Treasury and the Federal Reserve cent at an annual rate. System totaled $1.42 billion. In a statement confirming the intervention, Secretary Rubin highlighted official concern about the dollar's exchange value. Downward pressure on the dollar continued, International Financial Developments particularly against the yen, and on April 3 and 5 At the turn of the year, the foreign exchange value the Desk, acting on behalf of the Treasury and of the dollar was under downward pressure, and Federal Reserve System, again joined several other that pressure continued through the first months of central banks in intervention to support the dollar. 1995. On balance, the multilateral trade-weighted Secretary Rubin issued a statement that these actions were in response to recent movement on exchange markets and that the Administration was 4. The reduction in required reserve balances is not necessarily identical to the reduction in required reserves because banks typi- committed to a strong dollar. cally use vault cash in addition to reserve balances to satisfy The dollar fell further through mid-April, parreserve requirements. The level of vault cash held by banks is primarily determined by their customers' needs. Required reserves ticularly against the yen, and on April 19 it touched for some banks are nearly or even completely satisfied by vault a record low of less than 80 yen per dollar. After cash. In these cases, a reduction in required reserves due to sweeps recovering slightly and remaining fairly stable would not show through to a decline in required reserve balances through mid-May, the dollar rebounded sharply but on a one-for-one basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

11A Federal Reserve Bulletin • August 1995 subsequently relinquished some of those gains. On ment of that surplus, through yen appreciation, is May 31, the Desk—on behalf of the Treasury and inevitable, especially given the slow growth of the the Federal Reserve—joined the central banks of Japanese economy. Japanese financial markets the other G-10 countries in intervention purchases more broadly have reflected the weak state of the of dollars. Secretary Rubin stated that the interven- Japanese economy. Stock prices have fallen considtion was in keeping with the objectives of the erably so far this year, with the Nikkei down about April 28 communique of the G-7 finance ministers 16 percent since the end of December, and land and central bank governors, which endorsed the prices have fallen further. These declines in asset orderly reversal of the decline in the dollar in terms prices have added to the perceived risks in the of other G-7 currencies. Through May and June, Japanese banking system and concerns that the the dollar fluctuated in a range somewhat above its recovery in economic activity is stalling. lows of mid-April and early May. On July 7, fol- Net depreciation of the dollar in terms of the lowing moves by both the Federal Reserve and the German mark over this period has been about Bank of Japan to ease monetary conditions, the 10 percent. Some of the upward pressure on the Desk joined the Japanese monetary authorities in mark over the past several months resulted from intervention purchases of dollars; the dollar moved shifts within the Exchange Rate Mechanism (ERM) up a bit in response. of the European Monetary System, as political Long-term (ten-year) interest rates in the major uncertainties and fiscal problems in Italy, Sweden, foreign industrial countries have, on average, Spain, and later France, led at times to the selling declined about 100 basis points since December as of their respective currencies for marks. Realigneconomic indicators have suggested some slowing ment within the ERM on March 5 that lowered the of real output growth abroad as well as in the values of the Spanish peseta and the Portuguese United States. With U.S. long-term rates falling escudo contributed to the upward movement of the much more, about 170 basis points on balance, the mark. In contrast to the dollar's movement against change in the long-term interest differential is con- the yen and the mark since December, the dollar is sistent with some decline in the exchange value of down only 3 percent in terms of the Canadian the dollar. Long-term rates have dropped about dollar. Early in the year, the U.S. dollar appreciated 150 basis points in Japan, nearly as much as the against the Canadian dollar; uncertainty about decline in U.S. long-term rates. Rates in Germany whether fiscal problems in Canada would be are down about 90 basis points. Three-month mar- addressed and spillover from the Mexican crisis ket interest rates in these countries have declined caused the Canadian dollar to fall. Since then, the about 90 basis points on average since year-end Canadian dollar has regained those losses. 1994; central bank official lending rates were low- Over the past several months, the Mexican peso ered in 1995 in several countries, including Japan, has recovered somewhat in terms of the U.S. dollar Germany, and Canada. Following the Federal from the lows reached during the height of the Reserve easing on July 6, the central banks of crisis. On balance, the peso has depreciated 40 per- Canada and Japan lowered overnight lending rates. cent in nominal terms from December 19, 1994, Since December 1994, the dollar has depreciated before the crisis broke out. Mexican officials have about 12 percent on balance against the Japanese drawn on the Treasury Department's Exchange Stayen, despite declines in Japanese long-term rates bilization Fund facility and the Federal Reserve's that nearly matched the decline in U.S. rates. The swap line in addressing Mexico's international yen fluctuated in response to progress, or lack of liquidity problems. Outstanding net drawings to progress, in the resolution of trade disputes with date total $12.5 billion. The outstanding total of the United States. Persistent strength in the yen tesebonos, the government's dollar-denominated appears to reflect the large Japanese current account short-term obligations, has been reduced below surplus and market perceptions that some adjust- $10 billion. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

775 Industrial Production and Capacity Utilization for June 1995 Released for publication July 14 sharply in each of the three previous months. In other sectors, production again was sluggish, on Industrial production in June was little changed for balance. At 121.0 percent of its 1987 average, a second month. The output of motor vehicles and industrial production in June was 2.5 percent above parts was about unchanged after having declined its level of June 1994. For the second quarter, Industrial production indexes Twelve-month percent change Twelve-month percent change 5 + 0 5 10 10 Materials 5 5 + Products 0 Nondurable 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 industry Capacity 140 — Manufacturing Capacity — 140 120 - .— 120 ^ Production - 100 100 — Production 80 80 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing Utilization 90 Utilization 90 80 w-w^" ^^ ^ - 80 70 70 1 1 1 1 1981 1983 1985 1987 1989 1991 1993 1995 1981 1983 1985 1987 1989 1991 1993 1995 All series are seasonally adjusted. Latest series, June. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

776 Federal Reserve Bulletin • August 1995 Industrial production and capacity utilization, June 1995 Industrial production, index, 1987=100 Percentage change Category 1995 19951 June 1994 to Mar.' Apr.r May1 June? Mar.' Apr.r May' June? June 1995 Total 122.0 121.1 120.9 121.0 -.1 -.7 -.1 .1 2.5 Previous estimate 121.9 121.2 120.9 -.2 -.5 -.2 Major market groups Products, total2 118.9 117.8 117.7 117.7 -.1 -.9 -.1 .0 1.5 Consumer goods ... 114.9 113.9 113.7 113.9 -.6 -.9 -.2 .2 .4 Business equipment 155.9 154.8 154.5 155.2 .9 -.7 -.2 .4 6.7 Construction supplies 110.5 109.0 108.1 107.9 -.4 -1.4 -.8 -.2 1.4 Materials 126.7 126.1 125.9 126.2 .0 -.4 -.2 .2 4.1 Major industry groups Manufacturing 124.2 123.2 123.0 123.0 .0 -.8 -.2 .1 3.1 Durable 131.6 130.4 130.0 130.4 .1 -.9 -.3 .3 4.7 Nondurable 115.8 115.2 115.1 114.8 -.2 -.6 -.1 -.2 1.2 Mining 100.2 100.7 100.5 101.5 -.4 .6 -.2 1.0 .8 Utilities 118.9 118.4 119.1 118.1 -.3 -.4 .6 -.9 -2.5 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1994 1995 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, JJJuuunnneee 111999999444 11996677--9944 11998822 11998888--8899 June Mar.r Apr.r May' June? tttooo JJJuuunnneee 111999999555 Total 82.0 71.8 84.9 84.1 84.9 84.1 83.7 83.5 3.3 Previous estimate 84.9 84.2 83.7 Manufacturing 81.3 70.0 85.2 83.2 84.4 83.4 83.0 82.7 3.7 Advanced processing 80.7 71.4 83.5 81.5 82.5 81.6 81.2 81.2 4.2 Primary processing . 82.5 66.8 89.0 87.5 89.0 88.0 87.4 86.8 2.5 Mining 87.4 80.6 86.5 90.3 89.9 90.4 90.2 91.1 -.1 Utilities 86.7 76.2 92.6 89.6 87.1 86.7 87.1 86.2 1.4 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. industrial production fell 3.2 percent at an annual by gains in the production of food, tobacco, and rate, with the decrease in the output of motor chemical products. vehicles and parts accounting for nearly half of the The production of business equipment excluding overall decline. Capacity utilization edged down motor vehicles rose nearly Vi percent. Even so, another 0.2 percentage point in June, to 83.5 per- output growth in the second quarter, at 33A percent cent, bringing the cumulative decrease to 2 percent- at an annual rate, was well below the average gain age points since the recent peak at the turn of the of nearly 10 percent over the previous five quarters. year. The overall slowdown in growth in the second When analyzed by market group, the data show quarter reflects weakness in the output of industrial that the production of consumer goods posted a and other equipment; the production of information small increase last month after several months of processing equipment grew at a 10 percent annual declines. The output of durables other than motor rate in the second quarter, just a bit less than in the vehicles increased a bit but remained more than previous quarter. 4 percent below its recent high in January. Overall The output of intermediate products weakened production of nondurables was about unchanged; further in June. The production of construction sizable declines in the output of clothing, paper supplies contracted slightly further and has fallen products, and energy products were about matched more than 4 percent since its recent high last Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 111 January. The output of business supplies, which duction in the manufacturing sector fell 3.8 percent flattened out during the first quarter, declined in the at an annual rate. second quarter, in part because of a sharp drop in With overall factory output little changed in June. June, the operating rate drifted down 0.3 percent- The production of materials posted a small gain, age point further, to 82.7 percent. The utilization led by increases in the output of coal and computer- rate in primary-processing industries again fell related parts. The production of parts for consumer sharply. A sizable decline in the operating rate in durables, which had fallen sharply in both May and the paper industry contributed significantly to the April, was about unchanged in June. The sharp overall decrease, but many other industries also decline in the output of nondurables reflected showed declines. The utilization rate for advancedweakness in the production of paper. processing industries was unchanged. When analyzed by industry group, the data show The output of utilities fell nearly 1 percent, leavthat factory output edged up after a cumulative ing the operating rate 0.5 percentage point below decline of 1 percent during the preceding three its long-run average. Output at mines increased months. Among the major industries, output 1 percent, and the utilization rate, which had been changes were relatively small except for large little changed on balance since the end of last year, declines in apparel and paper and a notable rise in rose noticeably. • electrical machinery. For the second quarter, pro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

778 Statement to the Congress Statement by Alan Greenspan, Chairman, Board of shaping our evolving financial system—forces that Governors of the Federal Reserve System, before require that we modernize our statutory framework the Subcommittee on Telecommunications and for financial institutions and markets. The most Finance and the Subcommittee on Commerce, profound is, of course, technology: the rapid Trade, and Hazardous Materials of the Committee growth of computers and telecommunications. on Commerce, U.S. House of Representatives, June Their spread has lowered the cost and broadened 6, 1995 the scope of financial services, making possible new products that would have been inconceivable a short time ago and, in the process, challenging the I am pleased to be here today to present the views institutional and market boundaries that in an earof the Board of Governors of the Federal Reserve lier day seemed so well defined. The business of System on expanding permissible affiliations be- financial intermediation has always been the meatween banks and other financial services providers. surement, acceptance, and management of risk. In The bill before the subcommittees, the Financial the past, commercial and investment banks per- Services Competitiveness Act of 1995, H.R.1062, formed these basic functions with quite different would authorize the affiliation of banks and secu- tools and strategies. Today, the tools and strategies rities firms as well as permit banks to have affiliates increasingly overlap, blurring traditional distincengaged in most other financial activities. tions between commercial and investment banks. This bill would reform outdated statutory prohi- Examples abound. Securities firms have for some bitions established for a financial system that no time offered checking-like accounts linked to mulonger exists, continuing the modernization of our tual funds, and their affiliates routinely extend financial system begun with last year's passage of significant credit directly to business. On the bank the landmark interstate banking legislation. It pro- side, the economics of a typical bank loan syndivides the Congress with the opportunity to make cation do not differ essentially from the economics the financial system more competitive and more of a best-efforts securities underwriting. Indeed, responsive to consumer needs, all within a frame- investment banks are themselves becoming inwork that would maintain the safety and soundness creasingly important in the syndicated loan market. of insured depository institutions and permit both With regard to derivatives instruments, the experbanks and securities firms to operate more effi- tise required to manage prudently the writing of ciently. The Board believes that modern global over-the-counter derivatives, a business dominated financial markets call for permitting financial orga- by banks, is similar to that required for using nizations to operate over a wider range of activities. exchange-traded futures and options, instruments Distinctions among financial products and institu- used extensively by both commercial and investtions have become increasingly difficult to make, ment banks. The list could go on. It is sufficient to undermining the statutory and regulatory structures say that a strong case can be made that the established more than three generations ago. The evolution of financial technology alone has approach contained in the bill before you would be changed forever our ability to place commercial a major step, providing realistic reform and facili- and investment banking into neat, separate boxes. tating a wider range of activities for both securities Technological innovation has accelerated the firms and banking institutions, and it thus has the second major trend—financial globalization—that strong support of the Board of Governors of the has been in process for at least three decades. Both Federal Reserve System. developments have expanded cross-border asset There is, I think, general agreement on the forces holdings, trading, and credit flows, and, in re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

779 sponse, both securities firms and U.S. and foreign have been removing restrictions on the activities of banks have increased their cross-border operations. state-chartered banks. The Federal Deposit Insur- Foreign offices of U.S. banking organizations have ance Corporation, as required by the Federal Defor some time been permitted, within limits, to posit Insurance Corporation Improvement Act, remeet the competitive pressures of the local markets views such activities, but it has not rejected an in which they operate by conducting activities not application to exercise any of these powers from permitted to them at home. In the evolving inter- adequately or well-capitalized banks. According to national environment, these offshore activities have the most recent report of the Conference of State included global securities underwriting and deal- Bank Supervisors, seventeen states—including seving, through subsidiaries, an activity in which U.S. eral large ones—had authorized banks to engage in banking organizations have been among the world securities underwriting and dealing, with about half leaders, despite limitations on their authority to requiring such activity in an affiliate. At the federal distribute securities in the United States. Similarly, level, the Office of the Comptroller of the Currency foreign offices of securities firms have engaged in has proposed a process to allow national bank banking abroad. subsidiaries to conduct activities not permitted for Such a response to competition abroad is an the bank. example of the third major trend reshaping finan- And so it goes on. Technological change, globcial markets—market innovation—which has been alization, and regulatory erosion will eventually as much a reaction to technological change and make it impossible to sustain outdated restrictions globalization as an independent factor. These de- without mounting inefficiencies and dead-weight velopments make it virtually impossible to main- costs, and these forces will be supplemented by tain some of the rules and regulations established piecemeal revisions to federal regulation and for a different economic environment. As a result, sweeping changes in state laws. This was the there is broad agreement that statutes governing the pattern that we observed in the evolution of interactivities of banking organizations increasingly state banking and branching, a pattern that finally form an inconsistent patchwork. led the Congress to repeal artificial restrictions on For example, under federal standards, banking the ability of banking organizations to expand organizations may act as agents in private place- geographically. And this is what we are here today ments of securities and, in fact, have done so quite to discuss—the need to remove outdated separasuccessfully, accounting recently for one-third of tions between commercial and investment banking all corporate bonds and one-seventh of all equity and thereby take the next logical step in rationalprivately placed. Banking organizations may also izing our system for delivering financial services in act as brokers of securities, and as investment a more efficient manner. I might note that in this advisers for individuals and mutual funds. For regard the United States is, as it was with geographmany years, they have acted as major dealers in ical restrictions, behind the rest of the industrial U.S. government and municipal general obligation world. Virtually all the other Group of Ten nations bonds. Banking organizations are also the leading now permit banking organizations to affiliate with innovators and dealers in derivatives, and banking securities firms and with insurance and other finanorganizations operate futures commission mer- cial entities. We are among the last who have not chants as holding company subsidiaries. As just statutorily adjusted our system. That might be noted, banking organizations underwrite and deal acceptable, or even desirable, if there were a good in securities abroad, and since 1987, banking orga- reason to do so. We do not think there is such a nizations with the necessary infrastructure may reason. apply for authority to engage in limited underwrit- Let me be clear that the Board's position in favor ing and dealing of securities through special bank of expanding the permissible range of affiliations holding company subsidiaries under a Federal Re- for banking and securities organizations is not a serve Board interpretation of section 20 of the reflection of a concern for banks, securities firms, Glass-Steagall Act. their management, or their stockholders. Manage- In a pattern that is reminiscent of interstate ments of U.S. financial organizations have been branching developments, the states for some time quite creative—indeed have led others—in devel- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

780 Federal Reserve Bulletin • August 1995 oping and using both technology and the globaliza- banking on the credit side. It is also clearly true that tion of financial markets for profitable innovations securities firms have built up a considerable inforthat have greatly benefited their customers. Rather, mation base on their investment and merchant the Board's support for the expansion of permissi- banking customers. Accordingly, the financial inble activities for both banks and securities firms novations of recent years have facilitated investreflects the desirability of removing outdated re- ment banks' development of commercial banking strictions that serve no useful purpose, that de- expertise through money market and other mutual crease economic efficiency, and that, as a result, funds, bridge loans, and loan syndications. And limit choices and options for the consumer of their expertise has been applied to affiliated finanfinancial services. Such statutory prohibitions result cial firms in the United States and abroad. in higher costs and lower quality services for the An increasing number of customers of commerpublic and should be removed. That their removal cial banks and securities firms want to deal with a would permit both commercial and investment full-service provider that can handle their entire banking organizations to compete more effectively range of financing needs. This preference for "onein their natural markets is an important and desir- stop shopping" is easy to understand. Starting a able by-product but not the major objective, new financial relationship is costly for companies which ought to be a more efficient financial sys- and, by extension, for the economy as a whole. It tem providing better services to the public. Re- takes considerable time and effort for a company to moval of such prohibitions moves us closer to convey to an outsider a deep understanding of its such a system. financial situation. This process, however, can be Indeed, the Board urges that, as you consider the short-circuited by allowing the company to rely on reforms before you, the focus not be on which set a single organization for loans, strategic advice, the of financial institutions should be permitted to take underwriting of its debt and equity securities, and on a new activity, or which would, as a result, get other financial services. As evidence that there are a new competitor. As I noted, all are doing similar economies from this sharing of information, most things now and are now in competition with each of the section 20 underwriting has been for comother, offering similar products. The Board believes panies that had a prior relationship with the bankthat the focus should be as follows: Do the pro- ing organization. posed bills promote a financial system that makes Our discussions with section 20 officials suggest the maximum contribution to the growth and sta- that the economic benefits of "one-stop shopping" bility of the U.S. economy? Are existing restraints are probably greatest for small and medium-sized serving a useful purpose? Do they increase the firms, the very entities that contribute so much to compatibility of our laws and regulations with the the growth of our economy. These firms, as a rule, changing technological and global market realities do not attract the interest of major investment to ensure that these goals are achieved? Are they banks, and regional brokerage houses do not proconsistent with increased alternatives and conve- vide the full range of financial services these nience for the public at a manageable risk to the companies require. Rather, their primary financial safety net? Are buyers of securities—particularly relationship is with the commercial bank where retail buyers—continuing to be protected by clear they borrow and obtain their services. Thus, from and full disclosures and antifraud rules? the firm's perspective, it makes sense to leverage Banking organizations are in a particularly good this relationship when the time comes to access the position to provide underwriting and other financial capital markets for financing. It is reasonable to services to investors. They are knowledgeable anticipate that if securities activities are authorized about the institutional structure of the market and for bank affiliates, banking organizations, espeskilled at evaluating risk. Moreover, for centuries, cially regional and smaller banking organizations, banks' special expertise has been to accumulate would use their information base to facilitate secuborrower-specific information that they can use to rities offerings by smaller, regional firms as well as make credit judgments that issue-specific lenders local municipal revenue bond issues. Many of these and investors cannot make. Overcoming such in- banking organizations cannot engage in such activformation asymmetries has been the value added of ities now because they do not have a sufficient base Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 781 of eligible securities business revenue to take ad- relative to the market value of its assets, constrainvantage of the section 20 option that limits their ing the size of any disturbance to the market or ineligible revenues to 10 percent of the total. affiliates. The SEC now applies such supervision to Investment banking services are now available for section 20 affiliates, and it would do so to securities some of these smaller issues but at a relatively high affiliates under the bill before you. Section 20 cost. Section 20 subsidiaries at regional banks affiliates have operated during a period in which indicate that they are eager to expand their invest- sharp swings have occurred in world financial ment banking services to small and moderate-sized markets, but they still were able to manage their companies. These section 20 subsidiaries view such risk exposures well with no measurable risks to firms as underserved in the current market environ- their parent or affiliated banks. Indeed, to limit the ment and see an opportunity to provide a greater exposure of the safety net, the supervisors have range of services at lower prices than those now insisted that securities affiliates have risk manageprevailing. ment and control systems that ensure that risk can Some financial organizations in recent years be managed and contained. As would be the case have found that providing the full range of financial with H.R.1062, the Federal Reserve has required services is not compatible with either their man- that such an infrastructure exist before individual agement expertise or their market position. There section 20 affiliates are authorized and that organiare, as a result, frequent reports of divestitures and zations engaging in these activities through nonan increasing number of niche participants operat- bank affiliates have bank subsidiaries with strong ing alongside wide-ranging financial supermarkets. capital positions. The authorization to engage in broader activities The bill passed overwhelmingly by the House does not necessarily mean that all banks will Banking Committee continues the holding comengage in securities activities or that all securities pany framework, which we believe is important in firms will engage in banking. But efficient markets order to limit the direct risk of securities activities providing better services should permit market to banks and to the safety net. The Board is of the participants to choose the best way for them to view that the risks from securities and most other distribute financial services. financial activities are manageable using the hold- Organizations that choose to offer new services ing company framework proposed in that bill. But may do so in part to diversify their risks. Indeed, there is another risk: the risk of transference to almost all bank holding companies that have set up affiliates of the subsidy implicit in the federal safety section 20 subsidiaries believe that the diversifica- net—deposit insurance, the discount window, and tion of revenues will result in lower risks for the access to Fedwire—with the attendant moral hazorganization. Although the empirical literature is ard and risk of loss to the taxpayers. The Board inconclusive and the section 20s themselves have believes that the holding company structure creates not been around very long and have operated under the best framework for limiting the transference of significant restrictions, it seems likely that some that subsidy. We recognize that foreign subsidiaries bank holding companies could achieve risk reduc- of U.S. banks have managed such activities for tion through diversification of their financial ser- years virtually without significant incident. Nonevices. theless, we have concluded that the further the To be sure, with the benefits of expanded powers separation from the bank the better the insulation. comes some risk, but I read the evidence as saying We are concerned that conducting these activities that the risks in securities underwriting and dealing without limit in subsidiaries of U.S. banks does not are manageable. Underwriting is a deals-oriented, create sufficient distance from the bank. Moreover, purchase and rapid resale, mark-to-market business even though the risks of underwriting and dealing in which losses, if any, are quickly cut as the firm are manageable, any losses in a securities subsidmoves to the next deal. Since the enactment of the iary of a bank would—under generally accepted Securities Acts of 1933 and 1934—with their focus accounting principles—be consolidated into the on investor protection—the broker-dealer regula- bank's position, an entity protected by the safety tor, the Securities Exchange Commission (SEC), is net. Although it is true that the profits of a bank quick to liquidate a firm with insufficient capital subsidiary would directly strengthen the bank, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

782 Federal Reserve Bulletin • August 1995 profits of a holding company subsidiary can be Some are concerned that an umbrella supervisor rechanneled to the bank without exposing the bank is incompatible with a financial services holding to the risk of subsidiary losses. company encompassing an increasing number of An additional safeguard to protect the bank from subsidiaries that would be unregulated if they were any risk from wider financial activities is the independent. The Board too is concerned that if adoption of prudential limitations through firewalls bank-like regulation were applied to an expanded and rules that prohibit or limit certain bank and range of activities, the market would believe that affiliate transactions. Although firewalls may tem- the government is as responsible for their operaporarily bend under stress, they nonetheless serve a tions as it is for banks. This subtle transference of useful purpose. It would be counterproductive, if the appearance of safety-net support to financial not folly, if to avoid the risk of failure of firewalls, affiliates of banks creates a kind of moral hazard we sought to establish prohibitions and firewalls so that is corrosive and potentially dangerous. rigid that they would eliminate the economic syn- Nonetheless, it is crucial to understand that both ergies between banks and their affiliates. Moreover, the public and management now think—and will if we create such inflexible firewalls we run the risk continue to think—of bank holding companies (and of reducing the safety of the financial system by financial services holding companies, if authorized) inhibiting its ability to respond to shocks. Clearly, as one integrated unit, especially if they enjoy the there is a need for balance here. The bill before you economic synergies that are the purpose of the retains reasonable firewalls and other prudential reform proposals. Moreover, experience and the limitations but provides the Board with the author- new computer technology are already adding cenity to adjust them up or down. Such flexibility is tralized risk management to the existing centralized highly desirable because it permits the rules to policy development for bank holding companies. adjust in reflection of both changing market reali- The purpose of the umbrella supervisor is to have ties and experience. H.R.1062 also makes excep- an overview of the risks in the organization so that tions to firewalls and other prudential limitations if the risks to the bank—the entity with access to the the bank affiliates are well capitalized. Such banks safety net—can be evaluated and, if needed, adcan tolerate additional risk. dressed by supervisors. The umbrella supervisor, it H.R.1062 attempts to accommodate the mer- seems to us, becomes more crucial, not less, as the chant banking business currently conducted by risk management and policy control moves from independent securities firms. Both bank holding the bank to the parent. But the umbrella supervisor companies with section 20 subsidiaries and inde- need not be so involved in the affairs of the pendent securities firms engage in securities under- nonbank affiliates and the parent that regulatory writing and dealing activities. However, indepen- costs are excessive or that the market perceives that dent securities firms also directly provide equity the safety net has been expanded to the nonbank capital to a wide variety of companies without any activities of the organization. Indeed, we applaud intention to manage or operate them. The bill the continuation of functional regulators embodied would permit securities firms that acquire commer- in H.R.1062. cial banks, as well as securities firms acquired by In an effort to eliminate unnecessary regulatory bank holding companies, to engage in all these constraints and burdens, the bill before you would activities—underwriting and dealing in securities, require that the banking agencies rely on examinaas well as merchant and investment banking tion reports and other information collected by through equity investment in any business without functional regulators. In addition, it would require becoming involved in the day-to-day operations of that the banking agencies defer to the SEC in that business. These powers are crucial to permit interpretations and enforcement of the federal sesecurities firms to remain competitive domestically curities laws. The bill goes further and eliminates and internationally. Under the bill, the Board could the current application procedure for holding comestablish rules to ensure that these activities do not pany acquisitions by well-capitalized and wellpose significant risks to banks affiliated with secu- managed banking organizations whose proposed rities firms or serve as a back door to the commin- nonbank acquisitions or de novo entry are both gling of banking and commerce. authorized and pass some reasonable test of scale. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 783 The bill would also require no consolidated Such provisions would greatly enhance the twocapital supervision of the holding company, and way street provisions by eliminating unnecessary minimal nonbank supervision so long as the unin- regulatory burden and red tape. We believe that sured bank subsidiaries have in total less than $15 this concept could also quite usefully be extended billion of risk-weighted assets and the banks are to bank acquisition proposals. It is worth underless than 25 percent of consolidated risk-weighted lining, however, that there is nothing in the bill assets. Similar treatment is available to holding that reduces the prudential supervision of the companies if the insured bank subsidiaries have bank subsidiaries—whether insured or uninsured. less than $5 billion in risk-weighted assets and are Indeed, H.R.1062 quite properly emphasizes the less than 10 percent of consolidated risk-weighted necessity for the parent holding company of inassets. More stringent consolidated supervision sured or uninsured banks to maintain the strength would be imposed if the banks increase to a size of their banks if they wish to maintain their secuthat raises systemic concerns, or if the Federal rities affiliate. If they are unable or unwilling to Reserve concludes that the holding company would do so, they must exit either the banking or the not honor its guarantee of the insured bank subsid- securities business. Entities unwilling to accept iaries, as required in H.R.1062, or if the bank the responsibility of maintaining strong bank subportion of the total organization is so large that the sidiaries are thus provided incentives to consider rest of the organization might have difficulty sup- whether they should enter or maintain their bankporting the bank. That is to say, organizations that ing business. have bank subsidiaries with access to the safety net, In conclusion, on more than one occasion bills to which is available, in part, even for the wholesale permit at least securities affiliates were approved by uninsured banks, are made subject to more super- the banking committees in both Houses, as well as vision when their banks approach sizes that may by the full Senate on several occasions. In the pose systemic risk should they fail or when there is meantime, technological change, globalization, and concern that the overall organization might be market innovations have continued. In such a unable to adequately support its banks. The bill context, modernization of our financial system approved by the Banking Committee also stream- should be of high priority in order to better serve lines the process for evaluating the permissibility of the U.S. public. H.R.1062 authorizes the next lognew financial activities for holding companies with ical step in the modernization of our financial strong banks. In addition, organizations with unin- system, providing benefits to commercial and insured bank subsidiaries are authorized a basket of vestment banking firms, but most importantly to the investments in activities not permitted to those U.S. consumers of financial services. The Board holding companies with insured bank subsidiaries. believes its adoption would be a major step in the These are extremely important modifications evolution and strengthening of our financial sysboth for existing bank holding companies and for tem, which sadly now operates under increasingly securities firms that wish to affiliate with banks. outdated restrictions and prohibitions. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

784 Announcements REGULATION O: AMENDMENT tions by banking organizations supervised by the Federal Reserve. Public comment on the Board's The Federal Reserve Board issued on June 8, 1995, proposal was requested by September 1, 1995. an amendment to Regulation O (Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks) to conform the definition of PUBLICATION OF SUPPLEMENT NO. 8 unimpaired capital and unimpaired surplus in the TO THE BANK HOLDING COMPANY regulation's definition of lending limit to the defini- SUPERVISION MANUAL tion of capital and surplus recently adopted by the Office of the Comptroller of the Currency in calcu- The June 1995 update to the Bank Holding Comlating the limit on loans by a national bank to a pany Supervision Manual has been published by single borrower. The rule became effective July 1, the Board's Division of Banking Supervision and 1995. It will reduce the recordkeeping burden for Regulation and is now available for purchase by member banks that are monitoring lending to their the public. The Manual is used by Federal Reserve insiders and their related interests. examiners in the supervision, regulation, and inspection of bank holding companies and their subsidiaries. New topics in the Manual include the following: PROPOSED ACTIONS (1) examiner guidance on the sharing of corporate facilities and staff within banking organizations; The Federal Reserve Board issued for comment on and (2) examiner inspection guidance on nontrad- June 2, 1995, proposed changes to its staff com- ing activities of bank holding company banking mentary to Regulation C (Home Mortgage Disclo- subsidiaries and Edge Act corporations (evaluating sure). Comments were requested by August 7. the risk management practices and internal controls The Federal Reserve Board on June 22, 1995, used by banking organizations in acquiring and requested comment on proposed amendments to managing securities and off-balance-sheet deriva- Regulation T (Credit by Brokers and Dealers). This tive contracts for nontrading purposes). action is part of the Board's program to review Other sections were revised to reflect the followperiodically all regulations. Comments were ing new policies. requested by August 28. The Federal Reserve Board announced on 1. The Board's December 1994 and February June 23, 1995, that it was seeking public comment 1995 revisions to the Capital Adequacy Guidelines on how rules for credit advertising in Regulation Z for bank holding companies: (Truth in Lending) could be modified to increase • A revised definition of common stockholders' consumer benefit and decrease creditor costs. Com- equity that excludes net unrealized holding gains ments were also requested on the ways in which (losses) on securities available for sale current rules could be modified for radio and • A limit on the amount of deferred tax assets television advertisements without diminishing that can be included in tier 1 capital consumer protection. Comments were requested by • A decision to allow bank holding companies August 11. with qualifying bilateral netting contracts to net The Federal Reserve Board on June 28, 1995, positive and negative mark-to-market values of proposed rules to simplify the process for reporting interest rate and exchange rate contracts in detersuspected crimes and suspicious financial transac- mining the current exposure portion of the credit- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

785 equivalent amount of such contracts to be included companies with regard to infrastructure inspections in risk-weighted assets and also Board guidance with respect to the mar- • A revision of the treatment of recourse transac- keting activities of section 20 companies and the tions whereby a banking organization no longer types of securities that can be underwritten (the must hold capital in excess of the maximum 1987 Board Order). amount of loss possible under the contractual These and other topics are described in a summary terms. of changes included with the revision package. 2. Additional exceptions to the Board's anti- The June 1995 supplement may be obtained from tying prohibitions of Regulation Y: Publications Services, Mail Stop 127, Board of • The December 15, 1994, exception permits a Governors of the Federal Reserve System, Washbank holding company or its nonbank subsidiary to ington, DC 20551. A copy of the Manual is availoffer a discount on its product or service on the able at a cost of $50.00. Supplements are available condition that a customer obtain any other product for an annual charge of $20.00. For information or service from that company or from any of its on purchasing the Manual or supplements, call nonbank affiliates. (202) 452-3244. • The April 20, 1995, "safe harbor" exception permits any bank or nonbank subsidiary of a bank holding company to offer a "combined-balance FACTORS TO ADJUST INTEREST INCOME discount," that is, a discount based on a customer OF SECTION 20 SUBSIDIARIES maintaining a combined minimum balance in products specified by the company offering the The Federal Reserve Board released on June 30, discount. 1995, its quarterly table of factors to adjust interest income to be used by section 20 companies that 3. The Board's revised June 1994 real estate adopt the Board's alternative index revenue test to appraisal regulation, inclusive of revised examiner measure compliance with the 10 percent limit on guidance and inspection procedures, and the Octo- bank-ineligible securities activities. ber 1994 Interagency Appraisal guidelines. The table of factors is available on request from Publications Services, Mail Stop 127, Board of 4. Revised inspection procedures pertaining to Governors of the Federal Reserve System, Washsection 20 nonbanking subsidiaries of bank holding ington, DC 20551. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

787 Legal Developments FINAL RULE—AMENDMENT TO REGULATION B the applicant applied in accordance with the creditor's procedures. The Board of Governors is amending 12 C.F.R. Part 202, its official staff commentary to Regulation B (Equal Paragraph 2(c)(l)(ii) Credit Opportunity). The commentary applies and inter- 1. Move from service area. * * * prets the requirements of Regulation B and is a substitute for individual staff interpretations. The revisions to Paragraph 2(c)(2)(iii) the commentary provide guidance on several issues including disparate treatment, special purpose credit programs, credit scoring systems, and marital status discrim- 2. Application for increase in available credit. A refusal ination. or failure to authorize an account transaction at the point Effective June 5, 1995, 12 C.F.R. Part 202 is amended of sale or loan is not adverse action, except when the as follows: refusal is a denial of an application, submitted in accordance with the creditor's procedures, for an increase in Part 202—Equal Credit Opportunity (Regulathe amount of credit. tion B) 1. The authority citation for Part 202 continues to read as 2(p) Empirically derived and other credit scoring sysfollows: tems. Authority: 15 U.S.C. 1691-169If. 3. Pooled data scoring systems. A scoring system or the data from which to develop such a system may be 2. In Supplement I to Part 202, Section 202.2— obtained from either a single credit grantor or multiple Definitions, is amended as follows: credit grantors. The resulting system will qualify as an empirically derived, demonstrably and statistically a. Under 2(c) Adverse action., preceding 1. Move from sound, credit scoring system provided the criteria set service area., a new paragraph heading 2(c)(l)(i), a forth in paragraph (p)(l)(i) through (iv) of this section new paragraph 1., and a new paragraph heading are met. 2(c)(1)(h) are added; 4. Effects test and disparate treatment. An empirically b. Under Paragraph (2)(c)(2)(iii), a new paragraph 2. derived, demonstrably and statistically sound, credit is added; and scoring system may include age as a predictive factor c. Under 2(p), the paragraph heading for 2(p) is re- (provided that the age of an elderly applicant is not vised and new paragraphs 3. and 4. are added. assigned a negative factor or value). Besides age, no other prohibited basis may be used as a variable. Gener- The additions and revision read as follow: ally, credit scoring systems treat all applicants objectively and thus avoid problems of disparate treatment. In Supplement I to Part 202—Official Staff cases where a credit scoring system is used in conjunc- Interpretations tion with individual discretion, disparate treatment could conceivably occur in the evaluation process. In addition, neutral factors used in credit scoring systems could Section 202.2—Definitions nonetheless be subject to challenge under the effects test. (See comment 6(a)-2 for a discussion of the effects test). 2(c) Adverse action. Paragraph 2(c)(l)(i) 1. Application for credit. A refusal to refinance or extend 3. In Supplement I to Part 202, under Section 202.4— the term of a business or other loan is adverse action if General Rule Prohibiting Discrimination, four new sen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

788 Federal Reserve Bulletin • August 1995 tences are added at the end of paragraph 1. to read as 1. Reimbursement. Creditors may charge for photocopy follows: and postage costs incurred in providing a copy of the appraisal report, unless prohibited by state or other law. If the consumer has already paid for the report—for example, as part of an application fee—the creditor may not require additional fees for the appraisal (other than Section 202.4—General Rule Prohibiting photocopy and postage costs). Discrimination 5a(c) Definitions. 1. Scope of section. * * * Disparate treatment on a 1. Appraisal reports. Examples of appraisal reports are: prohibited basis is illegal whether or not it results from a i. A report prepared by an appraiser (whether or not conscious intent to discriminate. Disparate treatment licensed or certified), including written comments would be found, for example, where a creditor requires a and other documents submitted to the creditor in minority applicant to provide greater documentation to support of the appraiser's estimate or opinion of obtain a loan than a similarly situated nonminority applivalue. cant. Disparate treatment also would be found where a ii. A document prepared by the creditor's staff creditor waives or relaxes credit standards for a nonmiwhich assigns value to the property, if a third-party nority applicant but not for a similarly situated minority appraisal report has not been used. applicant. Treating applicants differently on a prohibited iii. An internal review document reflecting that the basis is unlawful if the creditor lacks a legitimate nondiscreditor's valuation is different from a valuation in criminatory reason for its action, or if the asserted reason a third party's appraisal report (or different from is found to be a pretext for discrimination. valuations that are publicly available or valuations such as manufacturers' invoices for mobile homes). 2. Other reports. The term "appraisal report" does not 4. In Supplement I to Part 202, a new Section 202.5a, is cover all documents relating to the value of the appliadded in numerical order to read as follows: cant's property. Examples of reports not covered are: i. Internal documents, if a third-party appraisal report was used to establish the value of the property. ii. Governmental agency statements of appraised Section 202.5a—Rules on Providing Appraisal value. Reports iii. Valuations lists that are publicly available (such as published sales prices or mortgage amounts, tax 5a(a) Providing appraisals. assessments, and retail price ranges) and valuations 1. Coverage. This section covers applications for credit such as manufacturers' invoices for mobile homes. to be secured by a lien on a dwelling, as that term is defined in section 202.5a(c), whether the credit is for a business purpose (for example, a loan to start a business) 5. In Supplement I to Part 202, Section 202.6—Rules or a consumer purpose (for example, a loan to finance a Concerning Evaluation of Applications, is amended as child's education). follows: 2. Renewals. If an applicant requests that a creditor a. Under 6(a) General rule concerning use of informarenew an existing extension of credit, and the creditor tion., the first sentence in paragraph 2. is revised; and obtains a new appraisal report to evaluate the request, b. Under Paragraph 6(b)(1), three new sentences are this section applies. This section does not apply to a added at the end of paragraph 1. renewal request if the creditor uses the appraisal report previously obtained in connection with the decision to The additions and revision read as follow: grant credit. 5a(a)(2)(i) Notice. 1. Multiple applicants. When an application that is sub- Section 202.6—Rules Concerning Evaluation of ject to this section involves more than one applicant, the Applications notice about the appraisal report need only be given to one applicant, but it must be given to the primary applicant where one is readily apparent. 6(a) General rule concerning use of information. 5a(a)(2)(ii) Delivery. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 789 2. Effects test. The effects test is a judicial doctrine that 7. In Supplement I to Part 202, Section 202.9— was developed in a series of employment cases decided Notifications, a new paragraph 5. is added to read as by the Supreme Court under Title VII of the Civil Rights follows: Act of 1964 (42 U.S.C. 2000e et seq.), and the burdens of proof for such employment cases were codified by Congress in the Civil Rights Act of 1991 (42 U.S.C. 2000e-2). * * * Section 202.9—Notifications Paragraph 6(b)(1) 1. Prohibited basis—marital status. * * * Except to the extent necessary to determine rights and remedies for a specific credit transaction, a creditor that offers joint 5. Prequalification and preapproval programs. Whether credit may not take the applicants' marital status into a creditor must provide a notice of action taken for a account in credit evaluations. Because it is unlawful for prequalification or preapproval request depends on the creditors to take marital status into account, creditors are creditor's response to the request, as discussed in the barred from applying different standards in evaluating commentary to section 202.2(f). For instance, a creditor married and unmarried applicants. In making credit deci- may treat the request as an inquiry if the creditor prosions, creditors may not treat joint applicants differently vides general information such as loan terms and the based on the existence, the absence, or the likelihood of maximum amount a consumer could borrow under varia marital relationship between the parties. ous loan programs, explaining the process the consumer must follow to submit a mortgage application and the information the creditor will analyze in reaching a credit 6. In Supplement I to Part 202, Section 202.8—Special decision. On the other hand, a creditor has treated a Purpose Credit Programs, under 8(a) Standards for pro- request as an application, and is subject to the adverse grams., new paragraphs 5. and 6. are added to read as action notice requirements of section 202.9 if, after follows: evaluating information, the creditor decides that it will not approve the request and communicates that decision to the consumer. For example, if in reviewing a request for prequalification, a creditor tells the consumer that it would not approve an application for a mortgage be- Section 202.8—Special Purpose Credit Programs cause of a bankruptcy in the consumer's record, the creditor has denied an application for credit. (8)(a) Standards for programs 8. In Supplement I to Part 202, a new Appen- 5. Determining need. In designing a special-purpose dix C—Sample Notification Forms is added at the end to program under section 202.8(a), a for-profit organization read as follows: must determine that the program will benefit a class of people who would otherwise be denied credit or would receive it on less favorable terms. This determination can be based on a broad analysis using the organization's own research or data from outside sources including governmental reports and studies. For example, a APPENDIX C—SAMPLE NOTIFICATION FORMS bank could review Home Mortgage Disclosure Act data along with demographic data for its assessment area and Form C-9. Creditors may design their own form, add to, conclude that there is a need for a special-purpose credit or modify the model form to reflect their individual program for low-income minority borrowers. policies and procedures. For example, a creditor may 6. Elements of the program. The written plan must want to add: contain information that supports the need for the partic- i. A telephone number that applicants may call to ular program. The plan also must either state a specific leave their name and the address to which an apperiod of time for which the program will last, or contain praisal report should be sent. a statement regarding when the program will be reevalu- ii. A notice of the cost the applicant will be required ated to determine if there is a continuing need for it. to pay the creditor for the appraisal or a copy of the report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

790 Federal Reserve Bulletin • August 1995 FINAL RULE—AMENDMENT TO REGULATION O FINAL RULE—AMENDMENT TO REGULATION Y The Board of Governors is amending 12 C.F.R. Part 215, The Board of Governors is amending 12 C.F.R. Part 225, its Regulation O (Loans to Executive Officers, Directors, its Regulation Y (Bank Holding Companies and Change and Principal Shareholders of Member Banks; Loans to in Bank Control), to eliminate the need for a bank Holding Companies and Affiliates) to conform the defi- holding company to file a request with the Board for a nition of unimpaired capital and unimpaired surplus used determination under section 2(g)(3) of the Bank Holding in calculating a bank's Regulation O lending limit to the Company Act that it no longer controls shares or assets definition of capital and surplus recently adopted by the that it has sold to a third party with financing if the Office of the Comptroller of the Currency in calculating purchaser is not an affiliate or principal shareholder of the limit on loans by a national bank to a single bor- the divesting holding company, or a company controlled rower. The final rule will reduce the regulatory burden by the principal shareholder, and there are no officers, for member banks monitoring lending to their insiders. directors, trustees or beneficiaries of the acquiror in Effective July 1, 1995, 12 C.F.R. Part 215 is amended common with or subject to control by the divesting as follows: company. The Board believes that the elimination of the requirement for a determination of control for these types of divestitures will reduce the regulatory burden Part 215—Loans to Executive Officers, Directors, on bank holding companies without undermining the and Principal Shareholders of Member Banks purposes of the Bank Holding Company Act. This pro- (Regulation O) posal has been identified in connection with the Board's continuing effort to eliminate obsolete or unnecessary 1. The authority citation for Part 215 is revised to read as regulations or applications. follows: Effective July 6, 1995, 12 C.F.R. Part 225 is amended as follows: Authority: 12 U.S.C. 248(i), 375a(10), 375b(9) and (10), 1817(k)(3) and 1972(2)(G)(ii); Pub. L. 102-242, 105 Part 225—Bank Holding Companies and Change Stat. 2236. in Bank Control (Regulation Y) 2. Section 215.2 is amended as follows: 1. The authority citation for 12 C.F.R. Part 225 continues a. The last sentence of paragraph (i) introductory text to read as follows: is revised; b. Paragraphs (i)(l) and (i)(2) are revised; and Authority: 12 U.S.C. 1817(j)(13), 1818, 1831i, 1831p-l, c. Paragraph (i)(3) is removed. 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331- 3351, 3907, and 3909. The revisions read as follows: 2. In section 225.32, paragraph (a)(2) is redesignated as paragraph (a)(3) and a new paragraph (a)(2) is added to read as follows: Section 215.2—Definitions. Section 225.32—Divestiture proceedings. (j) * * * a member bank's unimpaired capital and unimpaired surplus equals: (cl) ^ (1) The bank's Tier 1 and Tier 2 capital included in (2) Except in the case of a proceeding initiated under the bank's risk-based capital under the capital guide- paragraph (f) of this section or section 225.31 of this lines of the appropriate Federal banking agency, based subpart, the Board will regard the presumption of on the bank's most recent consolidated report of con- control in paragraph (a)(l)(i) of this section and secdition filed under 12 U.S.C. 1817(a)(3); and tion 2(g)(3) of the Bank Holding Company Act as (2) The balance of the bank's allowance for loan and inapplicable in the case of the sale or divestiture of lease losses not included in the bank's Tier 2 capital assets or voting securities by a divesting company if: for purposes of the calculation of risk-based capital by (i) The acquiring person is not an affiliate or a the appropriate Federal banking agency, based on the principal shareholder of the divesting company, or a bank's most recent consolidated report of condition company controlled by such a principal sharefiled under 12 U.S.C. 1817(a)(3). holder; and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 791 (ii) The acquiring person does not have any officer, tion, or similar organization . . . , but shall not include director, trustee, or beneficiary in common with or any corporation the majority of the shares of which are subject to control by the divesting company. owned by the United States or by any state."2 The list of types of entities that are within the definition of "company" does not include a reference to any type of sovereign government, indicating that Congress did not intend the definition to include sovereign governments. While ORDERS ISSUED UNDER BANK HOLDING COMPANY the definition specifically excludes a company the major- ACT ity of which is owned by the United States or by any state, it does not specifically exclude the sovereign gov- Orders Issued Under Section 3 of the Bank ernment owner of a company. This suggests that Con- Holding Company Act gress believed that an exclusion for sovereign governments was not necessary because sovereign governments Bay Bancorporation were not included within the definition. Green Bay, Wisconsin The Board has used this reasoning in determining not to define foreign governments as companies for pur- Order Approving the Formation of a Bank Holding poses of the BHC Act.3 Native American tribes are Company unique, domestic sovereign entities that possess extensive self-government powers and have many of the Bay Bancorporation, Green Bay, Wisconsin ("Appli- attributes of a sovereign government.4 The Supreme cant"), has applied under section 3(a)(1) of the Bank Court has characterized Native American tribes as "do- Holding Company Act (12U.S.C. § 1842(a)(1) et seq.) mestic, dependent nations"5 and, thus, "much more than ("BHC Act") to become a bank holding company by private, voluntary organizations."6 acquiring all the voting shares of Bay Bank, Green Bay, As noted above, the Tribe is a federally recognized Wisconsin ("Bay Bank"). Native American tribe government organized under the Notice of the application, affording interested persons Indian Reorganization Act of 1934,7 which is governed an opportunity to submit comments, has been published by a constitution and by-laws adopted by the Tribe's (59 Federal Register 33,772 (1994)). The time for filing General Tribal Council. For these reasons, the Board comments has expired, and the Board has considered the believes that the Tribe should be considered to be a application and all comments received in light of the sovereign government excluded from the BHC Act's factors set forth in section 3(c) of the BHC Act. definition of "company."8 In this case, the Tribe would Applicant is a nonoperating corporation formed for the purpose of acquiring Bay Bank, a de novo bank. Based on all the facts of record, the Board believes that 2. 12 U.S.C. § 1841(b). consummation of the proposal would not result in any 3. Although the Board has approved applications in which forsignificantly adverse effects on competition or the con- eign government ownership of an applicant was noted, the Board has not applied the BHC Act to a foreign government that controls centration of banking resources in any relevant banking a bank or bank holding company. See Letter dated August 19, 1988, market. Accordingly, the Board concludes that competi- from William W. Wiles, Secretary of the Board, to Patricia S. tive considerations are consistent with approval. Skigen; see also Corporation Bancaria de Espana, 81 Federal As part of this proposal, the Oneida Tribe of Indians Reserve Bulletin 598 (1995); Societe Generale, 67 Federal Reserve of Wisconsin ("Tribe"), a federally recognized Native Bulletin 453 (1981). 4. Native American tribes and the Federal government share a American tribe with approximately 11,000 enrolled unique relationship—while tribes retain certain attributes of sovermembers, would acquire up to 100 percent of the shares eignty, "11 aspects of Indian sovereignty are subject to defeasance of Applicant.1 The Tribe's ownership of more than by Congress." National Farmers Union Ins. Co. v. Crow Tribe of 25 percent of the voting shares of Applicant raises the Indians, 471 U.S. 845, 851 n.16 (1985) (quoting Escondido Mutual Water Co. v. LaJolla Bands of Mission Indians, 466 U.S. 765, 788 issue of whether the Tribe would be considered a "comn.30 (1984)); see United States v. Wheeler, 435 U.S. 313, 323 pany" within the meaning of the BHC Act and, there- (1977). fore, a bank holding company. 5. Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1 (1831). Section 2(b) of the BHC Act defines "company" as 6. United States v. Mazurie, 419 U.S. 544, 557 (1975). 7. Act of June 18, 1934, ch. 576, § 16, 48 Stat. 987 (codified at "any corporation, partnership, business trust, associa- 25 U.S.C. §§ 461-178). 8. On the other hand, if a company or similar organization that was controlled by a Native American tribe owned a U.S. bank, that 1. The Tribe has entered into a stock option agreement under organization would be, as in the case of a foreign-governmentwhich it would initially purchase 38.03 percent of Applicant's controlled company, a "company" under the BHC Act. See Letter voting shares and, in six years, be entitled to purchase all of dated August 19, 1988, from William W. Wiles, Secretary of the Applicant's outstanding shares. Board, to Patricia S. Skigen. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

792 Federal Reserve Bulletin • August 1995 hold Applicant's shares communally for the benefit of Board in connection with its findings and decision, and, the Tribe members.9 Based on these and all the facts of as such, may be enforced in proceedings under applicarecord, the Board concludes that the Tribe would not ble law. become a bank holding company by acquiring more than This transaction shall not be consummated before the 25 percent of the voting shares of Applicant. fifteenth calendar day following the effective date of this The Tribe would own and control Bank through Ap- order, or later than three months after the effective date plicant, a registered bank holding company. The Tribe, of this order, unless such period is extended for good its affiliates, Applicant, and Bank have made a number cause by the Federal Reserve Bank of Chicago, acting of commitments to ensure that the activities of Applicant pursuant to delegated authority. and Bank would be consistent with the purposes of the By order of the Board of Governors, effective BHC Act and other federal banking laws. These commit- June 14, 1995. ments separate the Bank's activities from the commercial activities of the Tribe,10 subject the Tribe and its Voting for this action: Chairman Greenspan, Vice Chairman affiliates to limitations imposed by sections 23A and 23B Blinder, and Governors Kelley and Yellen. Absent and not voting: of the Federal Reserve Act and the Board's Regula- Governors Lindsey and Phillips. tion O (Loans to Insiders), and provide the Board with adequate assurances that the Tribe and its affiliates will JENNIFER J. JOHNSON Deputy Secretary of the Board make available the information on their operations and activities that is necessary for the Board to determine Farmington Finance Corporation and enforce compliance with applicable federal banking Tortola, British Virgin Islands laws. In light of these commitments, and based on all facts of record, the Board concludes that the future Farmington Bancorp prospects of Bank and Applicant and all other supervi- Seattle, Washington sory factors the Board must consider under section 3 of the BHC Act are consistent with approval. Order Approving Formation of Bank Holding Financial and managerial considerations are also con- Companies sistent with approval. In addition, the Board believes that Applicant's plan to provide full-service banking to Farmington Finance Corporation, Tortola, British Virgin Tribe members, local community residents, and small Islands, and its wholly owned subsidiary, Farmington businesses, from a location next to the Tribe's Reserva- Bancorp, Seattle, Washington (together, "Applicants"), tion presents favorable considerations under the factor have applied under section 3(a)(1) of the Bank Holding relating to the convenience and needs of the communi- Company Act (12 U.S.C. § 1842(a)(1)) ("BHC Act") to ties served. become bank holding companies by acquiring all the Based on the foregoing and all the facts of record, the voting shares of Farmington State Bank, Farmington, Board has determined that this application should be, Washington ("Bank"). and hereby is, approved. The Board's approval is specif- Notice of the applications, affording interested persons ically conditioned on compliance by Applicant with all an opportunity to submit comments, has been published the commitments made in connection with this applica- (60 Federal Register 10,085 (1995)). The time for filing tion, including those made by the Tribe and its affiliates. comments has expired, and the Board has considered the For purposes of this action, the commitments and condiapplications and all comments received in light of the tions relied on by the Board in reaching this decision are factors set forth in section 3(c) of the BHC Act. deemed to be conditions imposed in writing by the Applicants are nonoperating companies formed for the purpose of acquiring Bank. Bank is the 82d largest 9. The Tribe's Business Committee would be authorized to vote commercial banking organization in Washington, conthe shares under the constitution and by-laws of the Tribe. Al- trolling deposits of approximately $1.8 million, reprethough the Business Committee members share certain attributes senting less than 1 percent of total deposits in commerwith trustees, the Board believes that no regulatory purpose would cial banking organizations in the state.1 Based on all the be served in requiring a notice under the Change in Bank Control for changes in the Business Committee's membership in light of facts of record, the Board believes that consummation of the unique form and structure of the Tribe's proposed stock hold- this proposal would not result in significantly adverse ings, the recognized sovereignty of the Tribe, and other facts of effects on competition or the concentration of banking record. resources in any relevant banking market. Accordingly, 10. The Tribe engages in a number of commercial activities that are impermissible for bank holding companies. These activities, which include construction, hotel, and casino activities, are conducted through various tribal divisions and other business entities authorized by the Tribe's constitution and by-laws. 1. Deposit data are as of December 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 793 the Board concludes that competitive considerations are First Commerce is the second largest commercial consistent with approval. banking organization in Louisiana, controlling deposits The Board also concludes that the financial and mana- of $5.5 billion, representing approximately 15.5 percent gerial resources and future prospects of Applicants and of the total deposits in commercial banking organiza- Bank are consistent with approval, as are the conve- tions in the state.1 Lakeside is the 27th largest commernience and needs and other supervisory factors the Board cial banking organization in Louisiana, controlling deis required to consider under section 3 of the BHC Act. posits of $159.6 million, representing less than 1 percent Based on the foregoing and all the facts of record, the of total deposits in commercial banking organizations in Board has determined that the applications should be, the state. Upon consummation of this proposal and all and hereby are, approved. The Board's approval is ex- proposed divestitures, First Commerce would become pressly conditioned on compliance with all the commit- the largest commercial banking organization in Louisiments made by Applicants, including commitments ana, controlling deposits of $5.6 billion, representing made by the principals of Applicants and related parties, approximately 15.8 percent of total deposits in commerin connection with these applications. The commitments cial banking organizations in the state. and conditions relied on by the Board in reaching this decision are deemed to be conditions imposed in writing Competitive Considerations by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under First Commerce and Lakeside compete directly in the applicable law. Lake Charles, Louisiana, banking market ("Lake This transaction shall not be consummated before the Charles banking market").2 The Board has carefully fifteenth calendar day following the effective date of this considered the effects that consummation of this proorder, or later than three months after the effective date posal would have on competition in the Lake Charles of this order, unless such period is extended for good banking market in light of all the facts of record, includcause by the Federal Reserve Bank of San Francisco, ing the number of competitors that would remain in this pursuant to delegated authority. market, the increase in the concentration of total deposits By order of the Board of Governors, effective June 14, in depository institutions3 in this market ("market depos- 1995. its") as measured by the Herfindahl-Hirschman Index ("HHI"),4 and certain commitments made by First Com- Voting for this action: Chairman Greenspan, Vice Chairman merce. Blinder, and Governors Kelley and Yellen. Absent and not voting: Governors Lindsey and Phillips. 1. State deposit data are as of December 31, 1994. JENNIFER J. JOHNSON 2. The Lake Charles banking market is approximated by Calca- Deputy Secretary of the Board sieu and Cameron Parishes, and the southern half of Beauregard Parish, all in Louisiana. 3. Market deposit data are as of June 30, 1994. In this context, First Commerce Corporation depository institutions include commercial banks and savings asso- New Orleans, Louisiana ciations. Market share data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board Order Approving Acquisition of a Bank Holding previously has indicated that thrift institutions have become, or Company have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulle- First Commerce Corporation, New Orleans, Louisiana tin 743 (1984). Thus, the Board has regularly included thrift ("First Commerce"), a bank holding company within deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., First Hawaiian Inc., 11 Federal Reserve Bulletin the meaning of the Bank Holding Company Act ("BHC 52 (1991). Act"), has applied under section 3 of the BHC Act 4. Under the revised Department of Justice Merger Guidelines, (12 U.S.C. § 1842) to acquire all the voting shares of 49 Federal Register 26,823 (June 29, 1984), a market in which the Lakeside Bancshares ("Lakeside"), and thereby acquire post-merger HHI is above 1800 is considered to be highly concentrated. In such markets, the Justice Department is likely to chal- Lakeside National Bank of Lake Charles, both of Lake lenge a merger that increases the HHI by more than 50 points. The Charles, Louisiana. Justice Department has informed the Board that a bank merger or Notice of the application, affording interested persons acquisition generally will not be challenged (in the absence of other an opportunity to submit comments, has been published factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than (60 Federal Register 17,063 (1995)). The time for filing 200 points. The Justice Department has stated that the higher than comments has expired, and the Board has considered the normal HHI thresholds for screening bank mergers for anticompetiapplication and all comments received in light of the tive effects implicitly recognize the competitive effect of limitedfactors set forth in section 3 of the BHC Act. purpose lenders and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

794 Federal Reserve Bulletin • August 1995 Upon consummation of the proposal, First Commerce Louisiana allows reciprocal interstate banking and perwould remain the second largest depository institution in mits inter-parish branching. the Lake Charles banking market. The HHI would in- As in other cases, the Board also sought comments crease 442 points to 2609 and First Commerce would from the Department of Justice on the competitive efcontrol 30.4 percent of market deposits upon consumma- fects of this proposal. The Department of Justice has tion. In order to mitigate the adverse competitive effect indicated that consummation of the proposal, with the that may result from consummation of this proposal, proposed divestitures, would not have a significantly First Commerce has committed to divest two branches in adverse effect on competition. Lake Charles with deposits totalling $38.5 million.5 For the reasons discussed above, and based on all the Upon completion of the proposed divestitures, First facts of record, including the proposed divestitures, the Commerce would control 27.5 percent of market depos- Board concludes that consummation of this proposal its, and the HHI would increase 288 points to 2455. would not have a significantly adverse effect on competi- A number of factors indicate that the increased level tion or concentration of banking resources in the Lake of concentration in the Lake Charles banking market, as Charles banking market or any other relevant banking measured by the HHI, tends to overstate the competitive market. effects of this proposal. Upon consummation of this proposal, six depository institutions would remain in the Lake Charles banking market, including the third largest Other Considerations banking organization in Louisiana. The Board also notes that the Lake Charles banking The Board also concludes that the financial and managemarket is attractive for entry. The Lake Charles Metrorial resources and future prospects of First Commerce, politan Statistical Area ("MSA") is part of the Lake Lakeside, and their respective subsidiaries, are consis- Charles banking market, which has a relatively high tent with approval of this proposal, as are other supervipopulation per banking office and household income sory factors the Board must consider under section 3 of compared to the other seven MSAs in the state. The the BHC Act. Considerations relating to the convenience Lake Charles MSA also has experienced increased job and needs of the communities to be served are also growth and a declining unemployment rate, while its labor force increased in 1993.6 In addition, several of the consistent with approval. Based on the foregoing, including the commitments remaining competitors have increased their presence in made to the Board by First Commerce in connection the market by opening new branches and aggressively seeking greater market share since 1988.7 Moreover, with the application, and in light of all the facts of record, the Board has determined that this application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by First Commerce with all the commitments made in connection with this application. For the purpose of this action, 5. First Commerce has executed binding sales agreements for the the commitments and conditions relied on by the Board sale of two of Lakeside's branches located in Lake Charles ("Diin reaching its decision are deemed to be conditions vestiture Branches"). First Commerce has committed to complete these divestitures within 180 days of consummation of this pro- imposed in writing by the Board in connection with its posal. If First Commerce is unsuccessful in completing the sale of findings and decision, and, as such, may be enforced in the Divestiture Branches within 180 days of consummation, First proceedings under applicable law. Commerce will transfer the Divestiture Branches to an independent The acquisition shall not be consummated before the trustee with instructions to sell the Divestiture Branches immediately to one or more alternative purchasers without regard to price. fifteenth calendar day following the effective date of this First Commerce also has committed to submit to the Board, prior to order, or later than three months after the effective date consummation of the acquisition, a trust agreement acceptable to of this order, unless such period is extended for good the Board stating the terms of this divestiture. The Board's action cause by the Board, or by the Federal Reserve Bank of on the application is expressly conditioned on compliance with Atlanta, acting pursuant to delegated authority. these commitments. 6. The Lake Charles area had Louisiana's fastest growth rate for By order of the Board of Governors, effective June 19, jobs in 1993. The unemployment rate decreased from 9.3 percent in 1995. 1992 to 8.7 percent in 1993, while its total labor force increased. See Louisiana Annual Planning Report, Louisiana Department of Voting for this action: Chairman Greenspan, Vice Chairman Labor, Office of Employment Security, September 1994. Blinder, and Governors Kelley, Lindsey, and Yellen. Absent and 7. For example, one bank holding company increased its market not voting: Governor Phillips. share in the Lake Charles banking market from approximately 8.7 percent in 1990 to approximately 16.2 percent in 1994. In addition, another bank holding company opened three new JENNIFER J. JOHNSON branches in the market between 1988 and 1994. Deputy Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 795 Hemisphere Financial, Ltd. This transaction shall not be consummated before the Road Town, British Virgin Islands fifteenth calendar day following the effective date of this order, or later than three months after the effective date Mercantile Financial Enterprises, Inc. of this order, unless such period is extended for good Wilmington, Delaware cause by the Board or by the Federal Reserve Bank of Dallas, acting pursuant to delegated authority. Order Approving Formation of Bank Holding By order of the Board of Governors, effective Companies June 19, 1995. Hemisphere Financial, Ltd., Road Town, British Virgin Voting for this action: Chairman Greenspan, Vice Chairman Islands, and its wholly owned subsidiary, Mercantile Blinder, and Governors Kelley, Lindsey, and Yellen. Absent and not voting: Governor Phillips. Financial Enterprises, Inc., Wilmington, Delaware (together, "Applicants"), have applied under section 3(a)(1) JENNIFER J. JOHNSON of the Bank Holding Company Act (12 U.S.C. Deputy Secretary of the Board § 1842(a)(1)) ("BHC Act") to become bank holding companies by acquiring 95.78 percent of the voting Marshall & Ilsley Corporation shares of Mercantile Bank, N.A., Brownsville, Texas Milwaukee, Wisconsin ("Bank"). Notice of the applications, affording interested persons Order Approving Acquisition of a Bank Holding an opportunity to submit comments, has been published Company and Banks (59 Federal Register 46,255 (1994)). The time for filing comments has expired, and the Board has considered the Marshall & Ilsley Corporation, Milwaukee ("M&I"), applications and all comments received in light of the has applied under section 3 of the Bank Holding Comfactors set forth in section 3 of the BHC Act. pany Act (12 U.S.C. § 1842) ("BHC Act")) to acquire Applicants are nonoperating companies formed for the all the voting shares of Citizens Bancorp of Delavan, purpose of acquiring Bank. Bank is the 21st largest Inc., Delavan ("Citizens Bancorp"), and thereby indicommercial banking organization in Texas, with deposrectly acquire Citizens Bank of Delavan, Delavan ("Citits of $679.4 million, representing less than 1 percent of izens Bank"), and to acquire all the voting shares of total deposits in commercial banking organizations in Sharon State Bank, Sharon ("Sharon Bank"), all in the state.1 Based on all the facts of record, the Board Wisconsin. Citizens Bancorp and Sharon Bank are affiliconcludes that consummation of this proposal would not ated through common ownership.1 have a significantly adverse effect on competition or the Notice of the applications, affording interested persons concentration of banking resources in any relevant bankan opportunity to submit comments, has been published ing market. (60 Federal Register 7202 (1995)). The time for filing Considerations relating to the financial and managerial comments has expired, and the Board has considered the resources and future prospects of Applicants and Bank applications and all comments received in light of the and the convenience and needs of the communities to be factors set forth in section 3(c) of the BHC Act. served are consistent with approval of this application, M&I owns 33 banks in Wisconsin and one bank in as are the other supervisory factors that the Board is Arizona. M&I is the largest bank holding company in required to consider under section 3 of the BHC Act. Wisconsin, controlling total deposits of $8.7 billion, Based on the foregoing and after a review of all the representing approximately 20.6 percent of total deposits facts of record, the Board has determined that these in commercial banking organizations in the state.2 Citiapplications should be, and hereby are, approved. The zens Bancorp is the 58th largest commercial banking Board's approval is specifically conditioned on compli- organization in Wisconsin, controlling deposits of apance by Applicants, their sole shareholder, and related proximately $86.8 million, representing less that 1 perparties with all the commitments made in connection cent of total deposits in commercial banking organizawith these applications. For purposes of this action, the tions in the state. Upon consummation of this proposal, commitments and conditions relied on by the Board in reaching this decision are deemed to be conditions imposed in writing by the Board in connection with its 1. M&I would acquire Citizens Bancorp by merger with M&I findings and decision, and, as such, may be enforced in Interim Corporation, a subsidiary formed to effect this proposal, proceedings under applicable law. which would then merge with M&I and cause Citizens Bank to become a direct subsidiary of M&I. Sharon Bank would then consolidate with Citizens Bank under Citizens Bank's charter and be renamed M&I Bank of Delavan. 1. Deposit and market data are as of December 31, 1994. 2. State deposit data are as of June 30, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

796 Federal Reserve Bulletin • August 1995 M&I would control deposits of approximately $8.8 bil- credit needs of its entire community, including low- and lion, representing 20.8 percent of total deposits in moderate-income neighborhoods, consistent with the commercial banking organizations in the state. safe and sound operation of such institutions," and to M&I and Citizens Bank compete directly in the take that record into account in its evaluation of these Walworth, Wisconsin, banking market.3 Upon consum- applications.6 mation of this proposal, the market would remain moder- The Statement of the Federal Financial Supervisory ately concentrated,4 as measured by the Herfindahl- Agencies Regarding the Community Reinvestment Act7 Hirschman Index ("HHI"), and this proposal would not provides that a CRA examination is an important and exceed the Department of Justice merger guidelines.5 In often controlling factor in the consideration of an instituaddition, numerous competitors would remain in the tion's CRA record and that reports of these examinations market. After considering the competition offered by the will be given great weight in the applications process. commercial banking institution that would remain in the The Board notes that all of M&I's subsidiary banks market, the increase in concentration as measured by the received "satisfactory" or "outstanding" ratings from HHI, and all other facts of record, the Board concludes their primary federal supervisors at their most recent that consummation of this proposal is not likely to result CRA performance examinations. in significantly adverse effects on competition or the One M&I subsidiary, M&I Northern Bank, Brookconcentration of banking resources in the Walworth field, Wisconsin ("Northern Bank"), which accounts for banking market, or any other relevant banking market. approximately 3 percent of M&I's total assets, received In acting on applications to acquire a depository insti- a "satisfactory" rating from its primary federal supervitution, the Board must consider the convenience and sor, the Federal Deposit Insurance Corporation needs of the communities to be served, and take into ("FDIC"), at its most recent CRA performance examiaccount the records of the relevant depository institu- nation as of July 8, 1994 ("1994 Examination"). The tions under the Community Reinvestment Act (12 U.S.C. 1994 Examination noted substantive but isolated in- § 2901 et seq.) ("CRA"). The CRA requires the federal stances of disparate treatment involving four applicafinancial supervisory agencies to encourage financial tions from minority applicants in apparent violation of institutions to help meet the credit needs of the local the Fair Housing Act and the Equal Credit Opportunity communities in which they operate, consistent with their Act (together, "fair lending laws").8 Most of the cited safe and sound operation. To accomplish this end, the transactions occurred during the initial implementation CRA requires the appropriate federal supervisory author- of Northern Bank's Neighborhood Home Loan Program ity to "assess the institution's record of meeting the ("NHLP"), which was introduced in February 1993. The NHLP focuses on low- and moderate-income communities and features low down payments and flexible underwriting criteria. 3. The Walworth, Wisconsin, banking market is approximated by Walworth County excluding East Troy township; plus Burlington In light of these findings, examiners noted that Northtownship in Racine County; and Wheatland and Randall townships ern Bank took steps to address these deficiencies and in Kenosha County. prevent future occurrences. These initiatives are focused 4. Market share data are as of June 30, 1994. Market share data are based on calculations in which the deposits of thrift institution on strengthening the bank's compliance with fair lending are included at 50 percent. The Board previously has indicated that laws. In particular, the bank has increased NHLP file thrift institution have become, or have the potential to become, documentation requirements to ensure that consistent significant competitors of commercial banks. See WM Bancorp, underwriting standards are applied to all applications. 76 Federal Reserve Bulletin 788 (1990); National City Corpora- Moreover, Northern Bank has established centralized tion, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share second review procedures. Under these procedures, all on a 50-percent weighted basis. See, e.g., First Hawaiian Inc., housing-related loan applications receive a second re- 77 Federal Reserve Bulletin 52 (1991). view before they are approved or denied. Other retail 5. Under the revised Department of Justice Merger Guidelines, credit decisions require a second review of all denied 49 Federal Register 26,823 (June 29, 1984), a market in which the applications and applications that are approved in varipost-merger HHI is between 1000 and 1800 is considered moderately concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) 6. 12 U.S.C. § 2903. unless the post-merger HHI is at least 1800 and the merger in- 7. 54 Federal Register 13,742, 13,745 (1989). creases the HHI by more than 200 points. The Justice Department 8. Two of the transactions were identified before the 1994 has stated that the higher than normal HHI thresholds for screening Examination by the bank's internal fair lending review. In addition, bank mergers for anticompetitive effects implicitly recognize the Northern Bank has offered to extend credit to each of the affected competitive effect of limited-purpose lenders and other non- loan applicants that qualify on the terms available at the time of the depository financial entities. The HHI for the Walworth banking denial if more favorable than current terms, and to reimburse any market would increase from 1113 to 1300 as a result of this cost incurred by these applicants as a result of the denial, including transaction. costs associated with obtaining a loan from another lender. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 797 ance from established underwriting criteria. Both of JENNIFER J. JOHNSON these review procedures provide for ongoing compari- Deputy Secretary of the Board sons of approved and denied applications. Northern Bank has also initiated continuing fair lend- Northern Trust Corporation ing training for employees to emphasize the bank's Chicago, Illinois policies and procedures for assuring that assistance is consistently provided to all loan applicants and that all Order Approving Acquisition of a Bank Holding borrowers are provided with equivalent information and Company encouragement when inquiring about loans. The bank's training efforts include diversity training for all staff and Northern Trust Corporation, Chicago, Illinois ("Northmanagement. ern Trust"), a bank holding company within the mean- Based on these and all facts of record, including ing of the Bank Holding Company Act ("BHC Act"), supervisory information provided by the FDIC and has applied under section 3(a)(3) of the BHC Act M&I's record of compliance and of addressing (12 U.S.C. § 1842(a)(3)) to acquire Tanglewood Banccompliance-related issues, the Board believes that the shares, Inc. ("Tanglewood"), and thereby indirectly acconvenience and needs considerations, including consid- quire all the voting shares of Tanglewood Bank, Naerations relating to M&I's record of performance under tional Association ("Tanglewood Bank"), both of the CRA, are consistent with approval. The Board ex- Houston, Texas. pects Northern Bank to fully implement all its initia- Notice of the application, affording interested persons tives, and, in particular, the steps designed to address its an opportunity to submit comments, has been published compliance with fair lending laws. The Board will mon- (60 Federal Register 17,063 (1995)). The time for filing itor M&I's progress in these areas in its supervision of comments has expired, and the Board has considered the M&I and in future applications to establish depository application and all comments received in light of the facilities. factors set forth in section 3 of the BHC Act. Northern Trust, with total consolidated assets of $18.6 billion, controls eight banks in Illinois, Florida, Other Considerations Texas, Arizona, and California, and engages through other subsidiaries in various permissible nonbanking activities.1 Northern Trust is the 114th largest commer- The financial and managerial resources and future proscial banking organization in Texas, controlling approxipects of M&I, Citizens Bancorp and its subsidiary bank, mately $149.5 million in deposits, representing less than and Sharon Bank, as well as the other supervisory fac- 1 percent of total deposits in commercial banks in the tors that the Board must consider under section 3 of the state. Tanglewood is the 73d largest commercial banking BHC Act, are consistent with approval of this proposal. organization in the state, controlling approximately Based on the foregoing and all the facts of record, the $203.8 million in deposits, representing less than 1 per- Board has determined that the applications should be, cent of total deposits in commercial banks. Upon conand hereby are, approved. The Board's approval is exsummation of this proposal, Northern Trust would bepressly conditioned on M&I's compliance with all the come the 34th largest commercial banking organization commitments made in connection with these applicain Texas, controlling approximately $353.3 million in tions. The commitments and conditions relied on by the deposits, representing approximately 1 percent of total Board in reaching this decision shall be deemed to be deposits in commercial banking organizations in the conditions imposed in writing by the Board in connec- state.2 tion with its findings and decision, and, as such, may be Northern Trust and Tanglewood do not compete dienforced in proceedings under applicable law. rectly in any relevant banking market. Based on all the The acquisition shall not be consummated before the facts of record, the Board concludes that consummation fifteenth calendar day following the effective date of this of this proposal would not have a significantly adverse order, or later than three months after the effective date of this order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of 1. Asset and deposit data are as of December 31, 1994. Chicago, acting pursuant to delegated authority. 2. The Board has previously determined for purposes of section 3(d) of the BHC Act (the "Douglas Amendment") that the inter- By order of the Board of Governors, effective June 12, state banking laws of Texas authorize acquisitions by banking 1995. organizations located anywhere in the United States without any requirement of reciprocity. See Chemical New York Corporation, Voting for this action: Vice Chairman Blinder, and Governors 73 Federal Reserve Bulletin 378 (1987). Accordingly, the Board Kelley, Lindsey, and Yellen. Absent and not voting: Chairman concludes that the Douglas Amendment does not bar this transac- Greenspan and Governor Phillips. tion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • August 1995 effect on competition or the concentration of banking objective rules that address many issues concerning an resources in any relevant banking market. applicant's income level, outstanding debts and obligations, and borrowing capacity, that were not addressed or Convenience and Needs and Managerial inconsistently handled under the previous guidelines. Considerations Chicago Bank adopted a uniform loan summary sheet that serves as a checklist to ensure that consistent bor- In acting upon an application to acquire a depository rower information has been obtained and consistent loan institution under the BHC Act, the Board must consider approval criteria have been used in every case. Chicago the convenience and needs of the communities to be Bank also adopted a uniform installment loan applicaserved, and take into account the records of the relevant tion form that replaced several previously used forms depository institutions under the Community Reinvest- and provides the loan underwriter more complete informent Act (12 U.S.C. § 2901 et seq.) ("CRA"). The mation.5 The bank expanded its loan tracking system to Board is also required to consider the managerial re- monitor the information obtained and assistance rensources of an applicant bank holding company, including dered during the loan underwriting process. All home management's record of compliance with applicable mortgage and consumer lenders have been trained in the laws and regulations. use of the new guidelines, forms, and procedures. The Board recently considered these statutory factors Northern Trust has hired a new corporate consumer in light of issues raised in connection with an investiga- compliance officer with overall responsibility to design, tion by the Department of Justice ("DOJ") of Northern implement, and manage a corporate consumer compli- Trust's Illinois banking subsidiaries for past compliance ance program. Chicago Bank has hired two new quality with the Fair Housing Act (42 U.S.C. § 3601 et seq.) and control officers, one for mortgage lending and the other the Equal Credit Opportunity Act (15 U.S.C. § 1691 for installment lending, with responsibility for reviewing et seq.) (together, "fair lending laws").3 The DOJ inves- and monitoring all changes in procedures and recomtigation covered the period from January 1992 through mending further improvements. The success of these January 1994, and the review in the Northern Order initiatives will be assessed by Chicago Bank's audit considered the records of Northern Trust's lead subsid- department, which has been restructured to assign a iary bank, The Northern Trust Company, Chicago, Illi- specially trained team to conduct quarterly consumer nois ("Chicago Bank"), and its other Illinois subsidiary compliance audits and report its findings to the bank's banks in light of the pending investigation.4 board of directors. In the Northern Order, the Board carefully considered To further ensure compliance with these measures, a number of steps taken by Northern Trust and Chicago Northern Trust has increased the responsibility of its Bank to strengthen their fair lending compliance pro- corporate fair lending policy committee in the areas of grams and underwriting procedures. For example, in setting fair lending policy and overseeing the implemen- April 1994, Chicago Bank, in consultation with the DOJ, tation of its policy at the holding company's subsidiary enhanced its loan denial review process to provide for a banks. For example, the committee directed each of second review of all mortgage and installment loan Northern Trust's Illinois subsidiary banks to adopt the applications that receive a preliminary recommendation loan denial review policy and structure developed at of denial. Prior to any adverse action, the complete loan Chicago Bank, and oversaw the adoption of a modified file is reviewed by a senior management committee, with loan denial review policy at all banking subsidiaries members of diverse racial and ethnic backgrounds who outside Illinois. represent several operational areas of the bank. For each Chicago Bank also has revised its incentive compensaloan file it reviews, the committee considers the ade- tion program to encourage lending to low- and moderatequacy of the information obtained, the accuracy of the income borrowers. To increase the bonus opportunities loan processing, and the availability of any alternative for loan officers making loans under the bank's affordlending programs. In addition, Chicago Bank revised its able mortgage programs, the bank broadened the loan loan underwriting guidelines to incorporate detailed and product base upon which sales credit is given. In addition, in December 1994, Chicago Bank opened its first branch in the Chatham neighborhood on Chicago's south side, which is a predominantly minority and low- and 3. See Northern Trust Corporation, 81 Federal Reserve Bulletin 486 (1995) ("Northern Order"). moderate-income area. 4. These bank subsidiaries are: Northern Trust Bank/DuPage, Oakbrook Terrace, Illinois ("DuPage Bank"); Northern Trust Bank/Lake Forest, N.A., Lake Forest, Illinois ("Lake Forest 5. In addition, Chicago Bank has instituted new procedures to Bank"); and Northern Trust Bank/O'Hare, N.A., Chicago, Illinois ensure that its home mortgage loan underwriters reach independent ("O'Hare Bank"). Chicago Bank represents approximately 81 per- decisions on applications requiring private mortgage insurance and cent of Northern Trust's total assets. avoid reliance on the decision of the private mortgage insurer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 799 In considering the present application, the Board also tions, both before and during underwriting of the loans. has reviewed Northern Trust's first quarterly report to In addition, Northern Trust agreed in the Consent Decree the Federal Reserve Bank of Chicago ("Reserve Bank") to maintain the loan denial review program and corpoconcerning Northern Trust's continuing efforts to im- rate fair lending policy committee described above to prove its compliance with fair lending laws, and the oversee the implementation of nondiscriminatory lendresults of the Reserve Bank's subsequent visit to North- ing policies. Chicago Bank agreed to retain its Commuern Trust to verify its ongoing compliance efforts. The nity Mortgage Team to solicit and originate loans to lowreport and the visitation confirm that Northern Trust's and moderate-income and minority applicants, and coninitiatives are in place and are improving the bank's tinue to solicit loans under Northern Trust's various compliance with fair lending laws. For example, during special loan programs.6 the final three quarters of 1994, Chicago Bank's second Since the period covered by the DOJ investigation, all review loan committee reviewed 714 loans, and, in ap- of Northern Trust's Illinois banking subsidiaries have proximately one-fourth of the cases, referred the file received either "outstanding" or "satisfactory" ratings back to the loan officer with instructions to gather addi- from their primary federal supervisors in their most tional information, explore alternative loan arrange- recent examinations for CRA performance,7 and examinments, or correct processing errors. Similarly, during the ers did not find any pattern or practice of illegal discrimfirst quarter of 1995, the committee reviewed 175 loans ination or other illegal practices intended to discourage and returned 36 loan files for further processing. In applications for credit during the time periods covered addition, approximately 27 percent of all home mortgage by these examinations. Tanglewood Bank received a and home improvement loans made by Chicago Bank "satisfactory" rating from the OCC at its most recent during the first quarter of 1995 were in low- and CRA examination as of August 31, 1992. In addition, the moderate-income census tracts in Cook County, Illinois. Board notes that it has received no comment from the Chicago Bank made 15 loans for approximately public opposing this proposal or contending that North- $1.2 million during this period under its First Time ern Trust does not serve the credit needs of its many Home Buyers Program, a low- cost mortgage program local communities, including low- and moderate-income for first-time low- and moderate-income borrowers that neighborhoods. features no points, no application fees, a reduced down payment, and an optional financial counseling and sav- Conclusion and Other Considerations ings program to help applicants accumulate a down payment. Based on all the facts of record, and for the reasons Preliminary data submitted by Chicago Bank for 1994 discussed in this order and those discussed in the Northunder the Home Mortgage Disclosure Act ("HMDA") ern Order, which are incorporated herein, the Board also indicate a continuing reduction in the denial rates concludes that considerations relating to the convenience for home mortgage loans for minority applicants when and needs of the communities to be served and managecompared to data for 1990 through 1993. For example, rial resources of Northern Trust are consistent with from 1990 through 1994, the denial rate for African- approval of this proposal. The Board expects Northern American applicants for home purchase and refinance Trust to continue to improve its record of lending to loans declined from 66 percent to 13.1 percent, and the minority and low- and moderate-income applicants in its denial rate for Hispanic applicants declined from community and to comply with all commitments regard- 23.5 percent to 7.1 percent, while the denial rate for ing its activities related to CRA and fair lending law non-minority applicants declined from 13.3 percent to compliance given in connection with this application. 4.1 percent. By comparison, during 1993, the most re- Any reports on Northern Trust's progress in implementcent year for which such data are available, the denial rates among lenders in the market in the aggregate for 6. The Consent Decree also provides for a $700,000 fund to African-American, Hispanic, and non-minority appliredress any fair lending violations in loan applications from minorcants were 19.0 percent, 12.5 percent, and 6.7 percent, ities from January 1992 through December 1993. No punitive respectively. damages were assessed under the Consent Decree. Northern Trust recently entered into a consent decree, 7. Northern Trust's Illinois banking subsidiaries received the following ratings for CRA performance: Chicago Bank, "satisfaceffective June 1, 1995, with the DO J to resolve the tory" as of April 25, 1994, by the Reserve Bank; Lake Forest Bank, investigation of Northern Trust's fair lending compli- "outstanding" as of March 21, 1994, by the Office of the Comptrolance ("Consent Decree"). The Consent Decree notes ler of the Currency ("OCC"); O'Hare Bank, "satisfactory" as of that the procedural and substantive changes initiated by March 21, 1994, by the OCC; and DuPage Bank, "outstanding" as Northern Trust since the investigation began have helped of November 21, 1994, by the Federal Deposit Insurance Corporation ("FDIC"). Northern Trust's banking subsidiaries in Texas, to serve the goal of nondiscriminatory treatment of mi- Florida, Arizona, and California also received "satisfactory" ratnority loan applicants in the processing of their applica- ings in their most recent CRA performance examinations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 Federal Reserve Bulletin • August 1995 ing the programs and procedures described in this order meaning of the Bank Holding Company Act ("BHC that are prepared under the terms of the Consent Decree Act"), has applied under section 3 of the BHC Act must be provided to the Board and the Reserve Bank (12 U.S.C. § 1842) to acquire all the voting shares of simultaneously with their submission to the DOJ. The First State Bancorporation, Inc. ("First State"), and Board and the Reserve Bank will also monitor Northern thereby indirectly acquire its subsidiary bank, First Ex- Trust's progress and the effects of those efforts through change Bank ("Bank"), both of Tiptonville, Tennessee. the submission of quarterly reports to the Reserve Bank Notice of the application, affording interested persons as provided for in the Northern Order. The Board retains an opportunity to submit comments, has been published authority to take appropriate supervisory action, includ- (60 Federal Register 14,942 (1995)). The time for filing ing action on future applications by Northern Trust or comments has expired and the Board has considered the Chicago Bank, if warranted. application and all comments received in light of the The Board also concludes that the financial resources factors set forth in section 3 of the BHC Act. and future prospects of Northern Trust, Tanglewood, and Union Planters, with total consolidated assets of their respective subsidiary banks, and other supervisory $10.1 billion, operates subsidiary banks in Alabama, factors the Board must consider under section 3 of the Arkansas, Kentucky, Louisiana, Mississippi, and Tennes- BHC Act, are consistent with approval of this proposal. see.1 Union Planters is the fourth largest commercial Based on the foregoing, including the conditions de- banking organization in Tennessee, controlling deposits scribed in this order, commitments by Northern Trust in of $4.4 billion, representing approximately 9.2 percent connection with this application, and in light of all the of the total deposits in commercial banking organizafacts of record, the Board has determined that this appli- tions in the state. First State, with total consolidated cation should be, and hereby is, approved. The Board's assets of $112.3 million, is the 65th largest commercial approval is specifically conditioned on compliance by banking organization in Tennessee, controlling deposits Northern Trust with all conditions and commitments of $99.5 million, representing less than 1 percent of total made in connection with this application as well as the deposits in commercial banking organizations in the conditions discussed in this order. The commitments and state. Upon consummation of this proposal, Union Plantconditions relied on by the Board in reaching this deci- ers would remain the fourth largest commercial banking sion are both deemed to be conditions imposed in writ- organization in Tennessee, controlling deposits of ing by the Board in connection with its findings and $4.5 billion, representing approximately 9.4 percent of decision, and, as such, may be enforced in proceedings total deposits in commercial banking organizations in under applicable law. the state. This transaction shall not be consummated before the fifteenth calendar day following the effective date of this Competitive Considerations order, and shall not be consummated later than three months following the effective date of this order, unless Union Planters and Bank compete directly in the Dyer2 such period is extended for good cause by the Board or and Union City3 banking markets. The Board has careby the Federal Reserve Bank of Chicago, acting pursuant fully considered the effects that consummation of this to delegated authority. proposal would have on competition in these banking By order of the Board of Governors, effective June 19, markets in light of all the facts of record, including the 1995. number of competitors remaining in these markets, and the increase in the concentration of total deposits in Voting for this action: Chairman Greenspan, Vice Chairman depository institutions4 in these markets as measured by Blinder, and Governors Kelley, Lindsey, and Yellen. Absent and not voting: Governor Phillips. 1. Asset and state deposit data are as of December 31, 1994. JENNIFER J. JOHNSON 2. The Dyer banking market is comprised of Dyer County, Deputy Secretary of the Board Tennessee. 3. The Union City banking market is approximated by Obion and Weakly Counties in Tennessee, and Fulton and Hickman Counties Union Planters Corporation in Kentucky. Memphis, Tennessee 4. In this context, depository institutions include commercial banks and savings associations. Market deposit data are as of June 30, 1994. Market share data are based on calculations in which the Order Approving Acquisition of a Bank Holding deposits of thrift institutions are included at 50 percent. The Board Company previously has indicated that thrift institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin Union Planters Corporation, Memphis, Tennessee 386 (1989); National City Corporation, 70 Federal Reserve Bulle- ("Union Planters"), a bank holding company within the tin 743 (1984). Thus, the Board has regularly included thrift Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 801 the Herfindahl-Hirschman Index ("HHI").5 Based on all affluent, nonminority customers, and has an insufficient the facts of record, the Board has concluded that con- number of branches to serve the needs of less affluent summation of this proposal would not result in any areas in Memphis. significantly adverse effect on competition or the concen- The Board has carefully reviewed the CRA perfortration of banking resources in the Dyer or Union County mance records of Union Planters, First State, and their banking markets or any other relevant banking market. respective subsidiary banks and thrifts, as well as all comments received regarding this application, responses Convenience and Needs Considerations to those comments submitted by Union Planters, and all other relevant facts of record in light of the CRA, the In acting on an application to acquire a depository insti- Board's regulations, and the Statement of the Federal tution under the BHC Act, the Board must consider the Financial Supervisory Agencies Regarding the Commuconvenience and needs of the communities to be served, nity Reinvestment Act ("Agency CRA Statement").8 and take into account the records of the relevant deposi- The Board recently reviewed the CRA performance of tory institutions under the Community Reinvestment Act Union Planters in light of substantially similar comments (12 U.S.C § 2901 et seq.) ("CRA"). The CRA requires made by Protestant in the context of another applicathe federal financial supervisory agencies to encourage tion.9 In evaluating that proposal, the Board carefully financial institutions to help meet the credit needs of the considered Union Planters's CRA performance record local communities in which they operate, consistent with and, in particular, the record of its lead subsidiary bank, their safe and sound operation. To accomplish this end, Union Planters National Bank, Memphis, Tennessee the CRA requires the appropriate federal supervisory ("UPNB"). This review included UPNB's 1992 "satisauthority to "assess the institution's record of meeting factory" CRA performance rating by the Office of the the credit needs of its entire community, including low- Comptroller of the Currency ("OCC"), UPNB's priand moderate-income neighborhoods, consistent with mary federal supervisor,10 consideration of 1993 and the safe and sound operation of such institution," and to preliminary 1994 data filed by the bank under the Home take that record into account in its evaluation of bank Mortgage Disclosure Act ("HMDA"),11 and steps initiexpansion proposals.6 ated by UPNB to increase lending to low- and moderate- The Board has received comments from the Mid- income borrowers.12 UPNB's ascertainment and out- South Peace and Justice Center, Memphis, Tennessee ("Protestant"), criticizing the CRA performance of Union Planters in attempting to meet the credit needs of of its size, and that CRA performance examination ratings awarded by federal supervisors to Union Planters affiliates are inflated. its entire community, and in particular, Union Planters's 8. 54 Federal Register 13,742 (1989). efforts to address the housing-related and other credit 9. Union Planters Corporation, 81 Federal Reserve Bulletin 49 needs of low- and moderate-income individuals in Mem- (1995) ("Grenada Order"). phis, Tennessee.7 Protestant also contends that Union 10. The Agency CRA Statement provides that a CRA examina- Planters focuses its marketing and lending efforts on tion is an important and often controlling factor in the consideration of an institution's CRA record, and that reports of these examinations will be given great weight in the applications process. See 54 Federal Register 13,745 (1989). deposits in the calculation of market share on a 50-percent weighted 11. Protestant continues to maintain that this consideration was basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve Bulletin flawed because of errors in calculations submitted by Union Plant- 52(1991). ers in connection with the Grenada application. According to 5. The HHI would increase 100 points to 3324 in the Dyer Protestant, these calculations inaccurately interpreted Union Plantbanking market, and would increase 73 points to 927 in the Union er's 1993 HMDA data and resulted in overstating the percentage City banking market. Under the revised Department of Justice of loans to low- and moderate-income borrowers as a percentage of Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a total HMDA-related loans and understated this same comparison market in which the post-merger HHI is above 1800 is considered for high-income borrowers. The Board reviewed the corrected to be highly concentrated. In such markets, the Justice Department calculations filed by Union Planters as part of Protestant's request is likely to challenge a merger that increases the HHI by more than for reconsideration of the Grenada Order and, for the reasons 50 points. The Justice Department has informed the Board that a stated in denying that request, concluded that these errors did not bank merger or acquisition generally will not be challenged (in the warrant reconsideration or modification of the Board's decision. absence of other factors indicating anticompetitive effects) unless See letter dated December 6, 1994, from William W. Wiles, Secrethe post-merger HHI is at least 1800 and the merger increases the tary of the Board, to Protestant. HHI by more than 200 points. The Justice Department has stated 12. Examples of Union Planters's initiatives discussed in the that the higher than normal HHI thresholds for screening bank Grenada Order were a second review program for any denied mergers for anticompetitive effects implicitly recognize the compet- mortgage application, special mortgage lending programs (originatitive effect of limited-purpose lenders and other non-depository ing approximately $3.4 million in loans to low- and moderatefinancial entities. income borrowers), lending programs for low- and moderate- 6. 12 U.S.C. § 2903. income borrowers in Memphis ($15 million commitment to 7. Protestant maintains that the level of CRA-related activity by originate down payment assistance and mortgage loans in the Union Planters is disproportionately low for a banking organization Raleigh-Frayser area), and small business lending activities (ap- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

802 Federal Reserve Bulletin • August 1995 reach efforts13 and branch locations in downtown The 1994 Examination also indicates that UPNB has a Memphis14 were also considered in the Grenada Order. satisfactory record of ascertaining community credit In this case, the Board has considered the results of needs. UPNB ascertains community credit needs through the OCC's most recent CRA examination of UPNB its affiliations with community groups representing which was concluded after consideration of the Grenada neighborhoods, nonprofit organizations, city and county proposal ("1994 Examination"). UPNB received a "sat- governments, and professional organizations. UPNB also isfactory" CRA performance rating in that examination. conducts quarterly surveys to determine the effective- OCC examiners concluded that UPNB has made suffi- ness of the bank's marketing, determine community cient efforts to affirmatively address a significant portion credit needs, and gauge public perception of local finanof the credit needs of its communities through several cial institutions. Based on information gathered through types of loan products.15 In addition, the 1994 Examina- these ascertainment efforts, UPNB has developed prodtion concluded that the bank's distribution of loans, ucts and services, such as mortgage loan and small applications and declinations is reasonable. Moreover, business loan products designed to provide additional UPNB was found to be in compliance with anti- credit to low- and moderate-income individuals, to atdiscrimination laws and its policies and procedures were tempt to meet identified community credit needs. found not to discourage consumers from applying for Examiners also concluded that UPNB's marketing any credit product.16 Examiners also noted that the bank program is effective and designed to inform all segments has undertaken an internal fair lending review and pro- of its delineated community of the availability of credit vides staff with diversity training. products and services. UPNB advertises available credit products and services throughout its delineated community and conducts credit seminars to assist individuals and groups to understand and apply for credit. The 1994 proximately $16 million to small businesses located in low- and moderate-income census tracts, including almost $5 million to Examination also indicates that UPNB has a satisfactory businesses owned by African Americans). record of opening and closing its branches, and that 13. The Grenada Order noted that UPNB ascertains the credit UPNB maintains offices that are reasonably accessible to needs of its communities through several methods, including quesall segments of its delineated community, including lowtionnaires and direct contacts with civic and community-based and moderate-income neighborhoods. organizations. The bank's outreach efforts include joint efforts with community-oriented organizations and projects such as the Black In addition, all of Union Planters's other subsidiary Business Association of Memphis, the Memphis Multi-Bank Com- banks and thrifts have received either "outstanding" or munity Development Corporation and the Shelby County Reinvest- "satisfactory" ratings from their primary federal superment Coalition. The Grenada Order also noted that UPNB convisors in the most recent examinations of their CRA ducts free seminars on home buying, credit improvement, and financial budgeting. Credit products are marketed through a num- performance.17 Moreover, Bank received a "satisfactober of print and electronic media, including minority-owned media ry" rating for CRA performance from its primary federal companies that conduct advertising campaigns to reach minority supervisor, the FDIC, in May 1994. customers. The Board has carefully considered the entire record 14. The Grenada Order considered that UPNB has continued to maintain a branch located one block from the location of its in reviewing the convenience and needs factors under previous headquarters in downtown Memphis. Moreover, the bank the BHC Act. Based on this review, including informareceived approval from the OCC in 1994 to open another full-ser- tion provided by Protestant and Union Planters, the CRA vice branch in Memphis, has two full-service branches in the performance examinations and other information from Whitehaven area of Memphis that serve low- and moderate-income the FDIC and the OCC, and the facts and review in the census tracts, and installed five new ATMs in low- and moderateincome and minority areas in Memphis. Furthermore, the Grenada Grenada Order which are incorporated by reference in Order noted that several Union Planters branches in the Memphis this order, the Board believes that the efforts of Union area had been designated as "Home Buyer Centers" and staffed Planters to help meet the credit needs of all segments of with personnel with additional training in housing-related financthe communities served by its subsidiary banks and ing. thrifts, including low- and moderate-income neighbor- 15. UPNB has initiated a special incentive plan for managers of its Home Buyer Centers to encourage them to focus on property located in low- and moderate-income areas. In addition, the 1994 Examination favorably noted the bank's governmentally sponsored 17. In the Grenada Order, the Board noted that Sunburst Bank, lending activities which, as of the date of the examination, totalled Grenada, Mississippi ("SBM"), received a "needs to improve" approximately $4 million in guaranteed housing loans and approxi- CRA rating from its primary federal supervisor, the Federal Demately $8 million in Small Business Administration loans. posit Insurance Corporation ("FDIC"), in October 1993. The FDIC 16. Examiners conducted a review, which included a comparison recently completed a CRA examination of SBM and has assigned of approved white applicants with denied black applicants, of all the bank a preliminary CRA performance rating of "satisfactory." first mortgage and home improvement applications for the first six Since the FDIC has terminated its quarterly reporting requirements months of 1994. This review discovered no instances, practices or for SBM, copies of these reports are no longer required to be policies to indicate that customers were treated in an illegal or submitted to the Federal Reserve Bank of St. Louis as provided in prohibited manner. the Grenada Order. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 803 hoods, are consistent with approval. For these reasons, Orders Issued Under Section 4 of the Bank and for the reasons discussed in the Grenada Order, and Holding Company Act based on all the facts of record, the Board concludes that convenience and needs considerations, including the CS Holding CRA performance records of the companies and banks Zurich, Switzerland involved in this proposal, are consistent with approval of this application. Credit Suisse Zurich, Switzerland Other Considerations Order Approving a Notice to Engage in The Board also concludes that the financial and manage- Futures-Related Advisory Activities rial resources and future prospects of Union Planters, First State, and their respective subsidiaries, and other CS Holding and Credit Suisse, both of Zurich, Switzersupervisory factors the Board must consider under sec- land (together, "CS Holding"), foreign banking organition 3 of the BHC Act, are consistent with approval of zations subject to the provisions of the Bank Holding this proposal.18 Company Act ("BHC Act"), have given notice pursuant to section 4(c)(8) of the BHC Act (12 U.S.C. Conclusion § 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), of their intention to engage Based on all the facts of record, the Board has deter- de novo, through their subsidiary, BEA Associates, New mined that this application should be, and hereby is, York, New York ("Company"),1 in providing investapproved. The Board's approval is specifically condi- ment advisory services with respect to futures and optioned on compliance by Union Planters with all com- tions on futures on financial and non-financial commodimitments made in connection with this application as ties, including providing discretionary portfolio well as the conditions discussed in this order and in the management services to institutional customers.2 Grenada Order. For purposes of this action, these com- Notice of the proposal, affording interested persons an mitments and conditions will both be considered condi- opportunity to submit comments, has been published tions imposed in writing and, as such, may be enforced (60 Federal Register 3867 (1995)). The time for filing in proceedings under applicable law. comments has expired, and the Board has considered the The acquisition shall not be consummated before the notice and all comments received in light of the factors fifteenth calendar day following the effective date of this set forth in section 4(c)(8) of the BHC Act. order, or later than three months after the effective date Credit Suisse, with total consolidated assets of approxof this order, unless such period is extended for good imately $158.7 billion, is the second largest banking cause by the Board or by the Federal Reserve Bank of organization in Switzerland and the 36th largest banking St. Louis, acting pursuant to delegated authority. organization in the world.3 In the United States, Credit By order of the Board of Governors, effective June 12, Suisse operates branches in New York, New York, and 1995. Los Angeles, California; agencies in Atlanta, Georgia, and Miami, Florida; and representative offices in Chi- Voting for this action: Vice Chairman Blinder and Governors cago, Illinois; Houston, Texas; Miami, Florida; and San Kelley, Lindsey, and Yellen. Absent and not voting: Chairman Francisco, California. In addition, CS Holding engages Greenspan and Governor Phillips. indirectly in a number of permissible nonbanking activities in the United States, and, pursuant to section 8(c) of JENNIFER J. JOHNSON Deputy Secretary of the Board 1. CS Holding owns 80 percent of the equity interest in Company. Company currently is engaged in providing a variety of 18. Protestant cites testimony taken during discovery proceed- investment advisory services. See CS Holding, 81 Federal Reserve ings in connection with pending civil lawsuits to support its allega- Bulletin 46 (1995). tions of discriminatory and other improper lending practices at 2. Company does not trade futures or options on futures for its SBM. Based on all the facts of record, including evaluations by own account and is not engaged in providing futures commission federal supervisory agencies of the policies and managerial re- merchant execution or clearance services. In addition, CS Holding sources of Union Planters and SBM, the Board does not believe has committed that Company will not provide futures-related disthat these matters warrant denial of this proposal. Furthermore, the cretionary portfolio management services to FDIC-insured affili- Board has referred Protestant's comments to the FDIC, the bank's ates. primary federal supervisor, for investigation and appropriate super- 3. Asset and ranking data are as of December 31, 1993, and visory action if Protestant's allegations are substantiated. employ exchange rates then in effect. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

804 Federal Reserve Bulletin • August 1995 the International Banking Act of 1978 (12 U.S.C. efficiency, that outweigh possible adverse effects, such as § 3105(c)), engages in certain securities activities. undue concentration of resources, decreased or unfair Section 4(c)(8) of the BHC Act provides that a bank competition, conflicts of interests or unsound banking holding company may, with Board approval, engage in practices." 12 U.S.C. § 1843(c)(8). any activity that the Board determines to be "so closely The Board expects that consummation of the proposal related to banking or managing or controlling banks as would provide added convenience and services to CS to be a proper incident thereto."4 The Board previously Holding's customers and that de novo entry of Company has determined that all the proposed activities, with the into the market for the proposed services would increase exception of providing discretionary portfolio manage- the level of competition among providers of those serment services with respect to futures and options on vices. In addition, Company would provide the proposed futures on non-financial commodities, are closely related futures-related discretionary portfolio management serto banking.5 Company would conduct these activities in vices in accordance with the limitations and conditions accordance with the limitations and conditions previ- that would apply if Company were providing portfolio ously relied on by the Board. management services with respect to securities.9 In this The Board has permitted bank holding companies to regard, CS Holding has committed that Company will provide investment advice with respect to futures and provide the proposed futures-related discretionary portoptions on futures on both financial and non-financial folio management services only to institutional customcommodities.6 The Board has also determined that pro- ers and only at the request of the customer. CS Holding viding discretionary portfolio management services to also has committed that Company will comply with institutional customers with respect to futures and op- applicable law, including fiduciary principles, and obtain tions on futures on financial commodities is closely the consent of its customers before engaging, as princirelated to banking for purposes of the BHC Act.7 In pal or as agent in a transaction in which an affiliate acts addition, the Office of the Comptroller of the Currency as principal, in transactions on the customer's behalf. In permits national banks to engage in discretionary portfo- addition, CS Holding proposes that Company exercise lio management with respect to futures and options on its discretionary management authority only in purchasfutures on non-financial commodities.8 For these rea- ing and selling exchange-traded futures and options on sons, and based on all the facts of record, the Board futures contracts previously approved by the Board.10 concludes that providing discretionary portfolio manage- In every case under section 4 of the BHC Act, the ment services with respect to futures and options on Board also must consider the financial condition and futures on non-financial commodities is closely related resources of the notificant and its subsidiaries and the to banking. effect of the proposal on these resources.11 In this case, In order to approve this proposal, the Board also must the Board notes that CS Holding's capital ratios satisfy determine that the proposed activities "can reasonably applicable risk-based standards established under the be expected to produce benefits to the public, such as Basle Accord, and are considered equivalent to the capigreater convenience, increased competition, or gains in tal levels that would be required of a U.S. banking organization. In view of these and other facts of record, the Board has determined that financial factors are con- 4. An activity may be deemed to be closely related to banking if sistent with approval of this proposal. The managerial it is demonstrated that banks generally provide the proposed serresources of CS Holding also are consistent with apvices; banks generally provide services that are operationally or proval. functionally so similar to the proposed services as to equip them particularly well to provide the proposed services; or banks gener- Under these circumstances, and based on all the comally provide services that are so integrally related to the proposed mitments made by CS Holding, the Board has deterservices as to require their provision in a specialized form. See mined that CS Holding's proposal to provide investment National Courier Association v. Board of Governors of the Federal advisory services, including discretionary portfolio man- Reserve System, 516 F.2d 1229, 1237 (D.C. Cir. 1975). In addition, the Board may consider any other basis that may demonstrate that agement services, with respect to futures and options on the proposed activity has a reasonable or close connection or futures on financial and non-financial commodities is a relationship to banking or managing or controlling banks. See proper incident to.banking for purposes of section 4(c)(8) Board Statement Regarding Regulation Y, 49 Federal Register 805 of the BHC Act. (1984); Securities Industry Association v. Board of Governors of the Federal Reserve System, 468 U.S. 206, 210-211 n.5 (1984). 5. See J.P. Morgan & Co. Incorporated, 80 Federal Reserve Bulletin 151 (1994) ("J.P. Morgan )\ Banque Nationale de Paris, 81 Federal Reserve Bulletin 386 (1995) ("BNP"). 9. See 12 C.F.R. 225.25(b)(15) n.17. 6. See J.P. Morgan and 12 C.F.R. 225.25(b)(19). 10. See SR Letter No. 93-27 (FIS) (May 21, 1993). 7. See BNP. 11. 12 C.F.R. 225.24; The Fuji Bank, Limited, 75 Federal Re- 8. See OCC Interpretive Letter No. 494 (December 20, 1989), serve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal reprinted in Fed. Banking L. Rep. (CCH) f 83,073. Reserve Bulletin 155 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 805 Based on all the facts of record, including all the (60 Federal Register 28,151 (1995)). The time for filing commitments made by CS Holding, the Board has deter- comments has expired, and the Board has considered the mined that the notice should be, and hereby is, approved. notice and all comments received in light of the factors The Board's approval is specifically conditioned on CS set forth in section 4(c)(8) of the BHC Act. Holding's compliance with all the commitments made in Applicant, with total consolidated assets of approxiconnection with this notice and with the conditions and mately $178 million, controls one subsidiary bank in limitations discussed in this order. The Board's determi- Iowa.2 Applicant also engages directly and through its nation also is subject to all the conditions set forth in subsidiaries in certain nonbanking activities. Regulation Y, including those in sections 225.7 and 225.23(b), and to the Board's authority to require such Proposed Activities modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board Real estate title abstracting, as proposed by Applicant, is finds necessary to assure compliance with, and to pre- limited to reporting factual information concerning the vent evasion of, the provisions of the BHC Act and the interests or ownership of selected real property. An Board's regulations and orders issued thereunder. For abstracter obtains this information by performing a "title purposes of this action, the commitments and conditions search" of records maintained at a local public records relied on in reaching this decision are deemed to be office to determine the ownership history of the property, conditions imposed in writing by the Board in connec- including any liens, encumbrances, mortgages, or future tion with its findings and decision, and, as such, may be interests affecting the property. The abstracter then preenforced in proceedings under applicable law. pares a written report, also known as an "abstract of This transaction shall not be consummated later than title," that recites the results of the title search.3 Because three months after the effective date of this order, unless Iowa law does not permit the sale of title insurance, real such period is extended for good cause by the Board or estate lenders in Iowa obtain the opinion of an attorney by the Federal Reserve Bank of New York, acting pursu- certifying that title to a particular parcel of real property ant to delegated authority. is free of defects. The abstract of title provides the factual information necessary for the attorney to deter- By order of the Board of Governors, effective June 30, mine whether a lender would have an unencumbered 1995. security interest in the property to be mortgaged. Voting for this action: Chairman Greenspan, Vice Chairman Applicant proposes to provide real estate title abstract- Blinder, and Governors Phillips and Yellen. Absent and not voting: ing services to affiliated and unaffiliated lenders in Buena Governors Kelley and Lindsey. Vista County. Company would perform the proposed activities in connection with real estate loans made by JENNIFER J. JOHNSON affiliates or unaffiliated companies, and, in certain cases, Deputy Secretary of the Board when no financing is provided, such as in connection with intra-family transfers of real estate and property The First National Company distributed as part of estate planning. Storm Lake, Iowa In connection with the proposed activities, Applicant would not provide any insurance against title defects, Order Approving a Notice to Engage in Real Estate guarantee any title, or provide any certification with Title Abstracting respect to a title. Applicant would be liable for damages caused by negligence in performing a title search but The First National Company, Storm Lake, Iowa ("Appliwould not be responsible for any defects in the title.4 cant"), a bank holding company within the meaning of The equivalent of title insurance in Iowa is provided by the Bank Holding Company Act ("BHC Act"), has the attorney who certifies that the title is free from given notice under section 4(c)(8) of the BHC Act defects. (12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board's Regulation Y (12 C.F.R. 225.23), of its intention to acquire Buena Vista Abstracting, Storm Lake, Iowa ("Company"), and thereby engage in real estate title 2. Asset data are as of March 31, 1995. abstracting in Buena Vista County, Iowa.1 3. An abstract of title is a comprehensive summary of all consecutive grants, conveyances, wills, records, and judicial processing Notice of the proposal, affording interested persons an affecting title to a specific parcel of real estate, together with a opportunity to submit comments, has been published statement of all recorded liens and encumbrances affecting the property and their present status. John W. Reilly, The Language of Real Estate (Real Estate Education Company) (1989). 1. Applicant would merge Company into its wholly owned 4. Title abstracters may insure against liability for negligence by subsidiary, The First Leasing Company, Storm Lake, Iowa. purchasing an errors and omission policy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

806 Federal Reserve Bulletin • August 1995 In order to approve a proposal under section 4(c)(8) of are necessary parts of the real estate lending process, and the BHC Act, the Board is required to determine that the that it would be convenient and useful under the applicaproposed activity is "so closely related to banking or ble standards in the National Bank Act for national managing or controlling banks as to be a proper incident banks to be able to perform these tasks themselves.8 thereto."5 The Board has not previously determined that The proposed activities are not equivalent to providproviding real estate title abstracting is closely related to ing title insurance—an activity that is not generally banking under section 4(c)(8) of the BHC Act and permissible under section 4(c)(8) of the BHC Act.9 Title permissible for bank holding companies. insurance generally includes providing an indemnification against losses resulting from a title defect discov- Closely Related to Banking Analysis ered after the conveyance of property. Title insurance typically protects a purchaser or lender against claims Under the National Courier test, the Board may find that not identified by a title search or claims not specifically an activity is closely related to banking for purposes of exempted by the title insurance policy. Applicant does section 4(c)(8) if it concludes that banks generally: not propose to certify or guarantee title and would not be (1) Provide the proposed services; liable to the purchaser or the lender for any title defects. (2) Provide services that are operationally or function- Accordingly, and based on all the facts of record, the ally so similar to the proposed services as to equip Board concludes that the proposed activities are closely them particularly well to provide the proposed ser- related to banking under the National Courier standard. vices; or (3) Provide services that are so integrally related to Proper Incident to Banking Analysis the proposed services as to require their provision in a specialized form.6 In determining whether an activity is a proper incident to banking, the Board must consider whether the activity The Board believes that the proposed real estate title "can reasonably be expected to produce benefits to the abstracting activities are integrally related to the provi- public, such as greater convenience, increased competision of loans secured by real estate. A bank must be tion, or gains in efficiency, that outweigh possible adaware of any encumbrances on property that serves as verse effects, such as undue concentration of resources, collateral for a loan made by the bank. Iowa banks decreased or unfair competition, conflicts of interests, or typically rely on an attorney's opinion, based on infor- unsound banking practices."10 Applicant indicates that mation in an abstract of title, to determine that the bank its data processing expertise would lead to faster and has a secured position in real estate serving as collateral. more accurate preparation of abstracts of title at a lower The abstract of title provides information necessary to cost. Moreover, there is no evidence in the record to determine the adequacy of the real estate collateral for indicate that the proposed activity would lead to any the loan and is an integral part of secured real estate undue concentration of resources, unsound banking praclending in Iowa. Thus, the bank has a particular need for tices, or other adverse effects. Company would remain the information in the abstract of title. Accordingly, the one of two companies offering real estate title abstract- Board believes that the proposed activities are integrally ing in Buena Vista County. related to the provision of secured real estate lending For these reasons, the Board believes that Applicant's and, therefore, are closely related to banking. provision of real estate title abstracting, as described The Office of the Comptroller of the Currency above, is not likely to result in significantly adverse ("OCC") has authorized national banks to conduct this effects that would outweigh the public benefits. The activity.7 The OCC has concluded that the performance financial and managerial resources of Applicant and of a title search and the preparation of an abstract of title Company also are consistent with approval. 5. 12 U.S.C. § 1843(c)(8). 6. See National Courier Association v. Board of Governors, 516 F.2d 1229, 1237 (D.C. Cir. 1975) ("National Courier"). In addi- 8. National banks are not permitted to sell title insurance. See tion, the Board may consider any other basis that may demonstrate American Land Title Association v. Clarke, 968 F.2d 150 (2d cir. that the proposed activity has a reasonable or close connection or 1992), cert, denied, 113 S.Ct. 2959 (1993). relationship to banking or managing and controlling banks. See 9. Section 4(c)(8) of the BHC Act provides that insurance agency, Board Statement Regarding Regulation Y, 49 Federal Register 794, brokerage and underwriting activities are not "closely related to 805 (1984); Securities Association v. Board of Governors, 468 U.S. banking" and, thus, are not permissible activities for bank holding 206, 210-211 n. 5(1984). companies, unless the activities are included within one of seven 7. OCC Interpretative Letter No. 450, September 22, 1988, specific exemptions (A through G) in section 4(c)(8). 12 U.S.C. reprinted in [1988-1989 Transfer Binder] Fed. Banking L. Rep. § 1843(c)(8)(A)-(G). (CCH) 185,674. 10. 12 U.S.C. § 1843(c)(8). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 807 Conclusion limitation, corporate debt securities, sovereign debt securities, securities issued by a trust or other vehicle secured Based on the foregoing and all the facts of record, the by or representing interests in debt obligations, common Board has determined that the notice should be, and stock, American Depositary Receipts, convertible debt hereby is, approved. Approval of this proposal is specif- securities, and other direct and indirect equity ownership ically conditioned on compliance by Applicant with the interests in corporations and other entities. National City commitments made in connection with this notice. The would engage in the proposed activities through its sec- Board's determination also is subject to all the terms and tion 20 subsidiary, NatCity Investments, Inc., Cleveland, conditions set forth in Regulation Y, including those in Ohio ("NatCity"). sections 225.7 and 225.23(b) of Regulation Y (12 C.F.R. Notice of the proposal, affording interested persons an 225.7 and 225.23(b)), and to the Board's authority to opportunity to submit comments, has been published require such modification or termination of the activities (60 Federal Register 19,260 (1995)). The time for filing of a bank holding company or any of its subsidiaries as comments has expired, and the Board has considered the the Board finds necessary to ensure compliance with, notice and all comments received in light of the factors and to prevent evasion of, the provisions of the BHC Act set forth in section 4(c)(8) of the BHC Act. and the Board's regulations and orders issued thereun- National City, with total consolidated assets of der. For purposes of this transaction, these commitments $32.6 billion, operates subsidiary banks in Ohio, Kenand conditions shall be deemed to be conditions imposed tucky and Indiana.1 NatCity currently is engaged in in writing by the Board in connection with its findings limited underwriting and dealing activities that are perand decision, and, as such, may be enforced in proceed- missible under section 20 of the Glass-Steagall Act ings under applicable law. (12 U.S.C. § 377).2 NatCity is, and will continue to be, a These activities shall not be commenced later than broker-dealer registered with the Securities and Exthree months after the effective date of this order, unless change Commission ("SEC") under the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) and is a such period is extended for good cause by the Board or member of the National Association of Securities Dealby the Federal Reserve Bank of Chicago, pursuant to ers, Inc. ("NASD"). Accordingly, NatCity is subject to delegated authority. the record-keeping and reporting obligations, fiduciary By order of the Board of Governors, effective June 30, standards, and other requirements of the Securities 1995. Exchange Act of 1934, the SEC, and the NASD. Voting for this action: Chairman Greenspan, Vice Chairman The Board previously has determined that, subject to Blinder, and Governors Phillips and Yellen. Absent and not voting: the prudential framework of limitations established in Governors Kelley and Lindsey. previous decisions to address the potential for conflicts of interests, unsound banking practices, or other adverse JENNIFER J. JOHNSON effects ("section 20 firewalls"), the proposed activities Deputy Secretary of the Board of underwriting and dealing in bank-ineligible securities are so closely related to banking as to be proper inci- National City Corporation dents thereto within the meaning of section 4(c)(8) of the Cleveland, Ohio BHC Act.3 National City has committed that NatCity Order Approving a Notice to Engage in Underwriting and Dealing in Bank-Ineligible Securities on a Limited 1. Asset data are as of March 31, 1995. Basis 2. NatCity has authority to underwrite and deal in, to a limited extent, certain municipal revenue bonds, 1-4 family mortgagerelated securities, commercial paper, and consumer-receivable- National City Corporation, Cleveland, Ohio ("National related securities (together with the types of securities in which City"), a bank holding company within the meaning of NatCity now seeks authority to underwrite and deal, "bankthe Bank Holding Company Act ("BHC Act"), has ineligible securities"). NatCity also is authorized to engage in a provided notice under section 4(c)(8) of the BHC Act variety of other nonbanking activities. See National City Corporation, 80 Federal Reserve Bulletin 346 (1994) ("National City"). (12 U.S.C. § 1843(c)(8)) and section 225.23 of the 3. See Canadian Imperial Bank of Commerce, 76 Federal Re- Board's Regulation Y (12 C.F.R. 225.23) of its proposal serve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al„ to acquire certain assets and assume certain liabilities of 75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities Raffensperger, Hughes & Company, Inc., Indianapolis, Industries Ass'n v. Board of Governors of the Federal Reserve Indiana ("Raffensperger"), and thereby engage in under- System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve Bulletin 473 (1987), aff'd sub nom. Securities Industry writing and dealing, to a limited extent, in all types of Ass'n v. Board of Governors of the Federal Reserve System, 839 debt and equity securities (other than ownership interests F.2d 47 (2d Cir.), cert, denied, 486 U.S. 1049 (1988) (collectively, in open-end investment companies), including, without "Section 20 Orders"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

808 Federal Reserve Bulletin • August 1995 will conduct the proposed underwriting and dealing ac- activities in bank-ineligible securities subject to the tivities using the same methods and procedures, and 10-percent revenue test.7 subject to the same prudential limitations as those estab- In order to approve this notice, the Board also must lished by the Board in the Section 20 Orders and other determine that the performance of the proposed activities previous cases,4 with two exceptions. National City has by National City can reasonably be expected to produce requested authority to continue the director and officer public benefits that would outweigh possible adverse interlocks between NatCity and its affiliated banks that effects under the proper incident to banking standard of the Board authorized in National City. National City section 4(c)(8) of the BHC Act. Under section 4(c)(8) of would continue to be subject to the commitments relied the BHC Act, the Board considers the financial and on by the Board in approving the director and officer managerial resources of the notificant and its subsidiarinterlocks in National City. In addition, National City ies and the effect of the transaction upon such resources.8 has proposed to act through National City Investments The Board has reviewed the capitalization of National Corporation, a subsidiary of National City Bank, both of City and NatCity in accordance with the standards set Cleveland, Ohio, as an introducing broker for securities forth in the Section 20 Orders, and finds the capitalizatransactions that would be forwarded to NatCity for tion of each to be consistent with approval. The determiexecution and clearance. The Board previously has per- nation on the capitalization of NatCity is based on all the mitted a section 20 company to execute and clear trades facts of record, including National City's projections of for which an affiliate bank is the introducing broker.5 the volume of NatCity's underwriting and dealing activ- National City has committed that it will conduct the ities in bank-ineligible securities. The Federal Reserve proposed activities in accordance with the limitations Bank of Cleveland ("Reserve Bank") has reviewed the and conditions relied on by the Board in First of Amer- operational and managerial infrastructure of NatCity, ica. Accordingly, the Board finds that the limited direc- including its computer, audit, and accounting systems tor and officer interlocks and proposed introducing bro- and internal risk management procedures and controls ker activities should be permitted. with respect to the proposed underwriting and dealing in The Board also has determined that the conduct of debt and equity securities, and has determined that these securities underwriting and dealing activities is NatCity has established an adequate operational and consistent with section 20 of the Glass-Steagall Act managerial infrastructure to ensure compliance with the (12 U.S.C. § 377), provided that the company engaged requirements of the Section 20 Orders. On the basis of in the underwriting and dealing activities derives no the Reserve Bank's review and all the facts of record, the more than 10 percent of its total gross revenue from Board has determined that NatCity has in place the underwriting and dealing in bank-ineligible securities managerial and operational infrastructure and other poliover any two-year period.6 National City has committed cies and procedures necessary to comply with the rethat NatCity will conduct its underwriting and dealing quirements of the Section 20 Orders and this order. Accordingly, the Board concludes that financial and managerial considerations are consistent with approval of this proposal. Under the framework established in this and prior 4. In addition, National City would be subject to conditions and decisions, consummation of this proposal is not likely to limitations set forth in the letter dated June 19, 1989, from William result in any significantly adverse effects, such as undue W. Wiles, Secretary of the Board, to Rachel F. Robbins, Managing concentration of resources, decreased or unfair competi- Director and General Counsel, J.R Morgan Securities, Inc., and the letter dated October 3, 1989, from J. Virgil Mattingly, General tion, conflicts of interests, or unsound banking practices. Counsel, to James J. Baechle, Executive Vice President and Gen- The Board expects that consummation of the proposal eral Counsel, Bankers Trust New York Corporation. would provide added convenience to National City's and 5. See First of America Bank Corporation, 80 Federal Reserve Raffensperger's customers and would increase the level Bulletin 1120 (1994) ("First of America"). of competition among existing providers of these ser- 6. See Section 20 Orders. Compliance with the 10-percent revenue limitation shall be calculated in accordance with the method stated in the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve 7. The Board notes that NatCity may engage in activities that are Bulletin 751 (1989), the Order Approving Modifications to the necessary incidents to the proposed underwriting and dealing activ- Section 20 Orders, 79 Federal Reserve Bulletin 226 (1993), and the ities, provided that any such activities are treated as part of the Supplement to Order Approving Modifications to Section 20 Or- bank-ineligible securities activities unless NatCity has received ders, 79 Federal Reserve Bulletin 360 (1993) (collectively, "Modi- specific approval under section 4(c)(8) of the BHC Act to conduct fication Orders"). The Board notes that National City has not them independently. Until such approval is obtained, any revenues adopted the Board's alternative indexed-revenue test to measure from the incidental activities must be counted as ineligible revecompliance with the 10-percent limitation on bank-ineligible secu- nues subject to the 10-percent revenue limitation set forth in the rities activities, and, absent such election, National City will con- Section 20 Orders, as modified by the Modification Orders. tinue to employ the Board's original 10-percent revenue test. 8. See 12 C.F.R. 225.24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 809 vices. Accordingly, the Board has determined that the Voting for this action: Chairman Greenspan and Governors performance of the proposed activities by National City Kelley, Lindsey, Phillips, and Yellen. Absent and not voting: Vice Chairman Blinder. could reasonably be expected to produce public benefits that would outweigh possible adverse effects under the JENNIFER J. JOHNSON proper incident to banking standard of section 4(c)(8) of Deputy Secretary of the Board the BHC Act. Accordingly, and for the reasons set forth in this order Orders Issued Under Sections 3 and 4 of the and in the Section 20 Orders, the Board has concluded Bank Holding Company Act that National City's proposal to engage through NatCity in the proposed activities is consistent with the Glass- National City Corporation Steagall Act, and that the proposed activities are so Cleveland, Ohio closely related to banking as to be proper incidents thereto within the meaning of section 4(c)(8) of the BHC Order Approving Merger of Bank Holding Companies Act, provided that National City limits NatCity's activities as specified in this order and the Section 20 Orders, National City Corporation, Cleveland, Ohio ("National as modified by the Modification Orders. City"), a bank holding company within the meaning of On the basis of the record, the Board has determined the Bank Holding Company Act ("BHC Act"), has to, and hereby does, approve this notice subject to all the applied under section 3 of the BHC Act (12 U.S.C. terms and conditions discussed in this order and in the § 1842) to merge with United Bancorp of Kentucky, Section 20 Orders, as modified by the Modification Inc., Lexington, Kentucky ("United"), and thereby ac- Orders. The Board's approval of this proposal extends quire all of United's subsidiary banks.1 National City only to activities conducted within the limitations of also has given notice under section 4(c)(8) of the BHC those orders and this order, including the Board's reser- Act (12 U.S.C. § 1843(c)(8)) of its intention to acquire vation of authority to establish additional limitations to United's nonbanking subsidiaries, American Fidelity ensure that NatCity's activities are consistent with safety Bank, FSB, Lexington, Kentucky, and thereby engage in and soundness, conflicts of interests, and other relevant operating a savings and loan association pursuant to considerations under the BHC Act. NatCity is not authosection 225.25(b)(9) of the Board's Regulation Y, and rized to engage in underwriting and dealing in any Computer Bank Services Inc., Lexington, Kentucky, and manner other than as approved in this order or the thereby engage in data processing activities pursuant to Section 20 Orders as modified by the Modification section 225.25(b)(7) of Regulation Y. Orders. Notice of the proposal, affording interested persons an The Board's determination is also subject to all the opportunity to submit comments, has been published (60 terms and conditions set forth in Regulation Y, including Federal Register 14,433 (1995)). The time for filing those in sections 225.7 and 225.23(b), and to the Board's comments has expired, and the Board has considered the authority to require modification or termination of the applications and all comments received in light of the activities of a bank holding company or any of its factors set forth in sections 3 and 4 of the BHC Act. subsidiaries as the Board finds necessary to assure compliance with, and to prevent evasion of, the provisions of Douglas Amendment Analysis the BHC Act and the Board's regulations and orders issued thereunder. The Board's decision is specifically Section 3(d) of the BHC Act, the Douglas Amendment, conditioned on compliance with all the commitments prohibits the Board from approving an application by a made in connection with this notice, including the combank holding company to acquire control of any bank mitments discussed in this order and the conditions set located outside the bank holding company's home state, forth in the above noted Board regulations and orders. unless such acquisition is "specifically authorized by the These commitments and conditions shall be deemed to be conditions imposed in writing by the Board in connection with its findings and decisions, and may be 1. National City proposes to acquire the following banks: First enforced in proceedings under applicable law. State Bank, Manchester; The London Bank & Trust Company, London; Bank of Danville, Danville; The First National Bank and This transaction shall not be consummated later than Trust Company, Nicholasville; Richmond Bank and Trust Comthree months after the effective date of this order unless pany, Richmond; First National Bank & Trust Company of Woodsuch period is extended for good cause by the Board or ford County, Versailles; and American Fidelity Bank and Trust by the Federal Reserve Bank of Cleveland, acting pursu- Company, Corbin, all in Kentucky. On May 23, 1995, the Office of the Comptroller of the Currency ("OCC") approved the applicaant to delegated authority. tion by National City's subsidiary, National City Bank, Kentucky, By order of the Board of Governors, effective June 26, Louisville, Kentucky, to merge with all of United's banks and 1995. American Fidelity Bank FSB. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

810 Federal Reserve Bulletin • August 1995 statute laws of the State in which such bank is located, tions in the market ("market deposits").6 United is the by language to that effect and not merely by implica- ninth largest depository institution in the market, controltion."2 For purposes of the Douglas Amendment, Na- ling $115.1 million in deposits, representing approxitional City's home state is Ohio, and United's home state mately 3.2 percent of market deposits. Upon consumis Kentucky. The Board previously has determined that mation of this proposal, National City would control the interstate banking statutes of Kentucky permit the $435.4 million in deposits, representing approximately acquisition of Kentucky banking organizations by Ohio 12.2 percent of market deposits, and would become the banking organizations.3 Based on all the facts of record, largest depository institution in the market. The Lexingthe Board has determined that approval of this proposal ton banking market would remain moderately concenis not prohibited by the Douglas Amendment. Approval trated, as measured by the Herfindahl-Hirschman Index of this proposal is conditioned upon National City re- ("HHI"), and numerous competitors would remain in ceiving all required state regulatory approvals. the market.7 Based on these and all the facts of record, the Board has concluded that consummation of United's Competitive Considerations proposal would not result in any significantly adverse effects on competition in the Lexington banking market National City, with total consolidated assets of approxi- or any other relevant banking market. mately $33 billion,4 is a multi-state bank holding company that controls ten banks in Indiana, Kentucky, and Other Considerations Ohio. National City is the second largest depository institution in Kentucky, controlling $4 billion in depos- The financial and managerial resources and future prosits, representing approximately 10 percent of the total pects of the institutions involved, and other supervisory deposits in depository institutions in the state. United, factors that the Board is required to consider under with total consolidated assets of approximately section 3 of the BHC Act, are consistent with approval.8 $619.1 million, is the 17th largest depository institution in Kentucky, controlling deposits of $490.2 million, representing approximately 1.2 percent of the total de- 6. In this context, depository institutions include commercial banks, savings banks, and savings associations. Market deposit data posits in depository institutions in the state. Upon conare as of December 31, 1994, and are based on calculations in summation of this proposal, National City would remain which the deposits of thrift institutions are included at 50 percent. the second largest depository institution in Kentucky, The Board previously has indicated that thrift institutions have controlling deposits of $4.5 billion, representing approx- become, or have the potential to become, major competitors of imately 11.3 percent of deposits in depository institu- commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletions in Kentucky. tin 143 (1984). National City and United compete directly in the 7. Under the revised Department of Justice Merger Guidelines, Lexington, Kentucky, banking market.5 National City is 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is between 1000 and 1800 is considered moderthe third largest depository institution in the Lexington ately concentrated. The Justice Department has informed the Board market, controlling $320.3 million in deposits, representthat a bank merger or acquisition generally will not be challenged ing 9 percent of the total deposits in depository institu- (in the absence of other factors indicating anti-competitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by 200 points. The Justice Department has stated 2. 12 U.S.C. § 1842(d). A bank holding company's home state is that the higher than normal HHI thresholds for screening bank that state in which the operations of the bank holding company's mergers for anti-competitive effects implicitly recognize the combanking subsidiaries were principally conducted on July 1, 1966, or petitive effect of limited-purpose lenders and other non-depository the date on which the company became a bank holding company, financial entities. Upon consummation of this proposal, the HHI for whichever is later. the market would increase by 58 points to 1631. 3. See Banc One Corporation, 78 Federal Reserve Bulletin 699 8. The Board received comments from a former officer ("Protes- (1992) (concluding that the Kentucky statute met the reciprocity tant") of United's subsidiary bank, Richmond Bank and Trust requirements of Ohio law). Under Kentucky law, each bank to be Company, Richmond, Kentucky ("Richmond Bank"), alleging imacquired must have been in existence for at least five years, and the proper actions by the bank's management, including loans to proposed transaction must not result in the acquiring organization's insiders on favorable terms, imposition of excessive fees for bankcontrolling more than 15 percent of total deposits held by deposi- ing services, and conspiracy to conceal illegal activities occurring tory institutions in Kentucky. Ky. Rev. Stat. Ann. § § 287.900(2) at the bank. Protestant also contends that his employment with the and (3). United's subsidiary banks have been in existence for five bank was illegally terminated because of his age and because he years, and upon consummation of this proposal, National City provided information on gross mismanagement at Richmond Bank would control approximately 11.3 percent of the total deposits in to agents of the United States Attorney General. depository institutions in Kentucky. The Board has carefully considered these comments in light of 4. Asset, deposit, and ranking data are as of December 31, 1994. all the facts of record, including examination and other supervisory 5. The Lexington, Kentucky, banking market consists of Bour- information from Richmond Bank's primary federal supervisor, the bon, Clark, Fayette, Jessamine, Powell, Scott and Woodford Coun- Federal Deposit Insurance Corporation ("FDIC"), and information ties in Kentucky. provided by federal and local law enforcement agencies. This Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 811 Considerations relating to convenience and needs of the ness customers. Accordingly, the Board has determined communities to be served are also consistent with ap- that the balance of public interest factors it must conproval.9 sider under section 4(c)(8) of the BHC Act is favorable National City also has provided notice, pursuant to and consistent with approval of National City's notice to section 4 of the BHC Act, to acquire the nonbanking acquire United's nonbanking subsidiaries. subsidiaries of United that engage in data processing and the operations of a savings and loan association. The Board previously has determined that these activities are Conclusion permissible for bank holding companies under section 4(c)(8) of the BHC Act, Regulation Y, and prior Board orders, and National City proposes to conduct these Based on the foregoing and all the facts of record, the activities in accordance with those regulations and or- Board has determined that this transaction should be, ders. The record in this case indicates that there are and hereby is, approved. The Board's approval of this numerous providers of these nonbanking services, and proposal is specifically conditioned on compliance by there is no evidence in the record to indicate that con- National City with all the commitments made in connecsummation of this proposal is likely to result in any tion with this proposal and with the conditions refersignificantly adverse effects, such as undue concentra- enced in this order. The Board's determination on the tion of resources, decreased or unfair competition, con- proposed nonbanking activities also is subject to all the flicts of interests, or unsound banking practices that conditions set forth in Regulation Y, including those in would outweigh the public benefits of this proposal, such sections 225.4(d) and 225.23(b) of Regulation Y, and to as an increased selection of services to retail and busi- the Board's authority to require such modification or termination of the activities of a bank holding company information does not support Protestant's allegations of misman- or any of its subsidiaries as the Board finds necessary to agement or illegal activity at Richmond Bank. The Board also has ensure compliance with, and to prevent evasion of, the carefully reviewed the record of performance by management of provisions of the BHC Act and the Board's regulations National City Bank, Louisville, Kentucky ("National City Bank— Kentucky"), which would acquire Richmond Bank by merger as and orders issued thereunder. For purposes of this action, part of the proposed transaction. Based on these and other facts of these commitments and conditions shall be deemed to be record, the Board concludes that Protestant's allegations do not conditions imposed in writing by the Board in connecwarrant denial of this proposal. The Board also notes that Protestion with its findings and decision, and, as such, may be tant's pending federal and state civil lawsuits, which are in the enforced in proceedings under applicable law. early stages of the discovery of facts to establish his allegations, should provide Protestant with an adequate remedy if his claims of The acquisition of United's subsidiary banks may not personal damages can be sustained. be consummated before the fifteenth calendar day after 9. Protestant also contends that Richmond Bank violated statutes the effective date of this order, and this proposal may not requiring fair lending and fair credit practices. FDIC examiners be consummated later than three months after the effecfound no evidence of discrimination or other illegal credit practices during Richmond Bank's most recent examination for performance tive date of this order, unless such period is extended by under the Community Reinvestment Act (12 U.S.C. § 2901 et seq.) the Board or by the Federal Reserve Bank of Cleveland, ("CRA") as of April 1993. These examiners also noted isolated acting pursuant to delegated authority. violations of technical notice and similar requirements under fair By order of the Board of Governors, effective June 6, lending laws, but determined that these incidences were not discriminatory in effect. In addition, bank management took corrective 1995. action as part of the implementation of its compliance program. Moreover, both Richmond Bank and the bank that proposes to Voting for this action: Chairman Greenspan, Vice Chairman acquire it, National City Bank—Kentucky, received "outstanding" Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. CRA performance ratings from the FDIC and the OCC (as of June 1993), respectively. Based on all the facts of record, the Board has concluded that these allegations do not warrant denial of this JENNIFER J. JOHNSON proposal. Deputy Secretary of the Board Legal Developments continued on next page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

812 Federal Reserve Bulletin • August 1995 ACTIONS TAKEN UNDER SECTIONS 5(d)(3) AND 18(c) OF THE FEDERAL DEPOSIT INSURANCE 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. Acquiring Bank(s) Acquired Thrift Approval Date West One Bank, Idaho, Washington Federal Savings and Loan June 1, 1995 Boise, Idaho Association, Seattle, Washington 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 of Georgia, Inc., Southern Bank Group, Inc., June 5, 1995 Atlanta, Georgia Roswell, Georgia Section 4 Applicant(s) Bank(s) Effective Date Wachovia Corporation, To engage de novo in leasing personal June 7, 1995 Winston-Salem, North Carolina or real property or acting as agent, broker, or adviser in leasing such property, and in making, acquiring or servicing loans or other extensions of credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 813 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 Baylor Bancshares, Inc., Memphis State Bank, Dallas May 31, 1995 Seymour, Texas Memphis, Texas Baylor/Delaware Corp., Wilmington, Delaware BOK Financial Corporation, Security National Bancshares of Kansas City May 31, 1995 Tulsa, Oklahoma Sapulpa, Inc., Sapulpa, Oklahoma Central Bancompany, Inc., Jeffries Insurance Agency, Inc., St. Louis June 6, 1995 Jefferson City, Missouri Buckner, Missouri First State Bank, Buckner, Missouri Commerce Bankshares, Inc., National Bank of Commerce of Atlanta June 2, 1995 Birmingham, Alabama Birmingham, Birmingham, Alabama Community Capital Corporation, Clemson Bank & Trust, Richmond May 25, 1995 Greenwood, South Carolina Clemson, South Carolina Farmers & Merchants Bank Community Bancshares of Mississippi, Atlanta June 5, 1995 Employee Stock Ownership Inc., Plan, Forest, Mississippi Forest, Mississippi Georgia Bancshares, Inc., DeKalb State Bank, Atlanta June 21, 1995 Tucker, Georgia Tucker, Georgia Greater Brazos Valley Bancorp, Greater Brazos Valley Delaware Dallas June 5, 1995 Inc., Bancorp, Inc., College Station, Texas Dover, Delaware Commerce National Bank, College Station, Texas Greater Brazos Valley Delaware Commerce National Bank, Dallas June 5, 1995 Bancorp, Inc., College Station, Texas Dover, Delaware Mercantile Bancorporation Inc., AmeriFirst Bancorporation, Inc., St. Louis May 31, 1995 St. Louis, Missouri Sikeston, Missouri Panhandle Aviation, Inc., Essex Iowa Bancorporation, Inc., Chicago June 22, 1995 Clarinda, Iowa Essex, Iowa Royal Bancshares of Pennsylvania, Royal Bank of Pennsylvania, Philadelphia June 2, 1995 Inc., Narberth, Pennsylvania Narberth, Pennsylvania IJB Financial Corp., Bancorp New Jersey, Inc., New York June 9, 1995 Princeton, New Jersey Somerville, New Jersey Western Oklahoma Financial First National Bank & Trust of Elk Kansas City June 2, 1995 Services, Inc., City, Elk City, Oklahoma Elk City, Oklahoma Windsor Bancshares, Inc., Bank Windsor II, Minneapolis May 30, 1995 Minneapolis, Minnesota Chisholm, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

814 Federal Reserve Bulletin • August 1995 Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date AMCORE Financial, Inc., Rockford Mercantile Agency, Inc., Chicago June 1, 1995 Rockford, Illinois Rockford, Illinois Deutsche Bank AG, Deutsche Bank Futures Corporation, New York June 9, 1995 Frankfurt, Federal Republic of New York, New York Germany Deutsche Bank AG, Deutsche Bank Securities New York May 30, 1995 Frankfurt, Federal Republic of Corporation, Germany New York, New York First Call Corporation, Boston, Massachusetts Farmers & Merchants Bank Bankers Capital Corporation, Atlanta June 5, 1995 Employee Stock Ownership Forest, Mississippi Plan, Forest, Mississippi First Union Corporation, STATCO, Inc., Richmond June 22, 1995 Charlotte, North Carolina Rome, Georgia HSBC Holdings pic, Samuel Montagu Inc., New York May 26, 1995 London, United Kingdom New York, New York Midland International Trade Services (USA) Corporation, New York, New York Mellon Bank Corporation, Certus Financial Corporation, Cleveland June 5, 1995 Pittsburgh, Pennsylvania San Francisco, California Mid Am, Inc., Certified Credit Systems, Inc., Cleveland May 25, 1995 Bowling Green, Ohio Sarasota, Florida MWN Corporation, d.b.a. CCB Services, St. Petersburg, Florida National Commerce Corporation, Talladega Federal Savings and Loan Atlanta June 2, 1995 Birmingham, Alabama Association, Commerce Bankshares, Inc., Talladega, Alabama Birmingham, Alabama National Westminster Bank Pic, To engage de novo in the provision of New York June 5, 1995 London, England execution, clearance and advisory services with respect to futures and options on futures on nonfinancial commodities both for affiliated and nonaffiliated persons Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Mercantile Bancorporation Inc., Southwest Bancshares, Inc., St. Louis June 9, 1995 St. Louis, Missouri Bolivar, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 815 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 The Fifth Third Bank, Bank One, Dayton, N.A., Cleveland May 31, 1995 Cincinnati, Ohio Dayton, Ohio First-Citizens Bank & Trust Crestar Bank, Richmond June 21, 1995 Company, Richmond, Virginia Lawrenceville, Virginia The Home Bank, Bank of Albertville, Atlanta June 2, 1995 Guntersville, Alabama Albertville, Alabama Mercantile Bank of Kansas City, Citizens-Jackson County Bank, Kansas City June 14, 1995 Kansas City, Missouri Warrensberg, Missouri United Jersey Bank, New Jersey Savings Bank, New York June 9, 1995 Hackensack, New Jersey Somerville, New Jersey PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the April 17, 1995, the Board filed its opposition to the Federal Reserve Banks in which the Board of Governors is motion. not named a party. Board of Governors v. Interamericas Investments, Ltd., No. H-95-565 (S.D. Texas, filed February 24, 1995). Action Board of Governors v. Scott, Misc. No. 95-127 (LFO/PJA) to freeze certain assets of a company pending administra- (D. D.C., filed April 14, 1995). Application to enforce tive adjudication of civil money penalty. On March 1, investigatory subpoenas for documents and testimony. 1995, the court issued a stipulated order requiring the Oral argument took place on June 8, 1995. company to deposit $1 million into the registry of the Money Station, Inc. v. Board of Governors, No. 95-1182 court. (D.C. Cir., filed March 30, 1995). Petition for review of a In re Subpoena Duces Tecum, No. 95-5034 (D.C. Cir., filed Board order dated March 1, 1995, approving notices by January 26, 1995). Appeal of partial denial of plaintiff's Bank One Corporation, Columbus, Ohio; CoreStates Fimotion to compel production of examination and other nancial Corp., Philadelphia, Pennsylvania; PNC Bank supervisory material in connection with a shareholder Corp., Pittsburgh, Pennsylvania; and KeyCorp, Clevederivative action against a bank holding company. Oral land, Ohio, to acquire certain data processing assets of argument is scheduled for November 7, 1995. National City Corporation, Cleveland, Ohio, through a joint venture subsidiary. On May 1, 1995, Money Station Kuntz v. Board of Governors, No. 95-3044 (6th Cir., filed filed a separate petition for review of the Board's January 12, 1995). Petition for review of a Board order March 31, 1995 denial of Money Station's request for dated December 19, 1994, approving an application by reconsideration of the Board's March 1 order (D.C. Cir., KeyCorp, Cleveland, Ohio, to acquire BANKVERMONT No. 95-1243). The cases were consolidated on June 2, Corp., Burlington, Vermont. On February 10, 1995, the 1995. Board filed its motion to dismiss. Jones v. Board of Governors, No. 95-1142 (D.C. Cir., filed In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., March 3, 1995). Petition for review of a Board order filed January 6, 1995). Action to enforce subpoena seekdated February 2, 1995, approving the applications by ing pre-decisional supervisory documents sought in con- First Commerce Corporation, New Orleans, Louisiana, to nection with an action by Bank of New England Corporamerge with City Bancorp, Inc., New Iberia, Louisiana, tion's trustee in bankruptcy against the Federal Deposit and First Bankshares, Inc., Slidell, Louisiana. Petitioner Insurance Corporation. The Board filed its opposition on filed a motion for injunctive relief on April 3, 1995. On January 20, 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

816 Federal Reserve Bulletin • August 1995 Cavallari v. Board of Governors, No. 94-^183 (2d Cir., FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD filed October 17, 1994). Petition for review of Board OF GOVERNORS order of prohibition against a former outside counsel to a national bank (80 Federal Reserve Bulletin 1046 (1994)). James J. Long The case was consolidated with a petition for review of Wellington, Kansas orders of the Comptroller of the Currency imposing a civil money penalty and cease and desist order against The Federal Reserve Board announced on June 14,1995, petitioner (Cavallari v. OCC, No. 94-4151). Oral argu- the issuance of an Order of Assessment of a Civil Money ment was heard on March 23, 1995. On May 11, 1995, Penalty against James J. Long. The Order was issued in the Court of Appeals upheld the Board's prohibition settlement of a civil money penalty proceeding relating order and the Comptroller's civil money penalty order, to Mr. Long's alledged participation in violations of the and remanded to the Comptroller for further proceedings Bank Holding Company Act by Cedar Vale Bank Holdregarding the order to cease and desist. ing Company, Wellington, Kansas. Beckman v. Greenspan, No. CV 94-41-BCG-RWA (D. Mont., filed April 13, 1994). Action against Board and others seeking damages for alleged violations of constitutional and common law rights. The Board's motion to WRITTEN AGREEMENTS APPROVED BY FEDERAL dismiss was filed May 19, 1994. On April 24, 1995, the RESERVE BANKS court granted the Board's motion and dismissed the case. Plaintiffs filed a notice of appeal on May 4, 1995. Execufirst Bancorp, Inc. Board of Governors v. Ghaith R. Pharaon, No. 91-CIV- Philadelphia, Pennsylvania 6250 (S,D. New York, filed September 17, 1991). Action to freeze assets of individual pending administrative adju- The Federal Reserve Board announced on June 14,1995, dication of civil money penalty assessment by the Board. the execution of a Written Agreement among the Federal On September 17, 1991, the court issued an order tempo- Reserve Bank of Philadelphia, Execufirst Bancorp, Inc., rarily restraining the transfer or disposition of the individ- Philadelphia, Pennsylvania, and the First Executive ual's assets. Bank, Philadelphia, Pennsylvania. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

63 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities A3 Guide to Tabular Presentation A21 Large reporting banks A23 Branches and agencies of foreign banks Domestic Financial Statistics MONEY STOCK AND BANK CREDIT FINANCIAL MARKETS A4 Reserves, money stock, liquid assets, and debt A24 Commercial paper and bankers dollar measures acceptances outstanding A5 Reserves of depository institutions, Reserve Bank A25 Prime rate charged by banks on short-term credit business loans A6 Reserves and borrowings—Depository A26 Interest rates—money and capital markets institutions A27 Stock market—Selected statistics A7 Selected borrowings in immediately available funds—Large member banks FEDERAL FINANCE POLICY INSTRUMENTS A28 Federal fiscal and financing operations A29 U.S. budget receipts and outlays A8 Federal Reserve Bank interest rates A30 Federal debt subject to statutory limitation A9 Reserve requirements of depository institutions A30 Gross public debt of U.S. Treasury—Types A10 Federal Reserve open market transactions and ownership A31 U.S. government securities dealers—Transactions FEDERAL RESERVE BANKS A32 U.S. government securities dealers—Positions and financing All Condition and Federal Reserve note statements A3 3 Federal and federally sponsored credit A12 Maturity distribution of loan and security agencies—Debt outstanding holdings MONETARY AND CREDIT AGGREGATES SECURITIES MARKETS AND CORPORATE FINANCE A13 Aggregate reserves of depository institutions and monetary base A34 New security issues—Tax-exempt state and local A14 Money stock, liquid assets, and debt measures governments and corporations A16 Deposit interest rates and amounts outstanding— A35 Open-end investment companies—Net sales commercial and BIF-insured banks and assets A17 Bank debits and deposit turnover A35 Corporate profits and their distribution A35 Nonfarm business expenditures on new plant and equipment COMMERCIAL BANKING INSTITUTIONS A36 Domestic finance companies—Assets and liabilities, and consumer, real estate, and business A18 Assets and liabilities, Wednesday figures credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Federal Reserve Bulletin • August 1995 Domestic Financial Statistics—Continued REPORTED BY BANKS IN THE UNITED STATES REAL ESTATE A55 Liabilities to and claims on foreigners A37 Mortgage markets A56 Liabilities to foreigners A3 8 Mortgage debt outstanding A58 Banks' own claims on foreigners A59 Banks' own and domestic customers' claims on foreigners CONSUMER INSTALLMENT CREDIT A59 Banks' own claims on unaffiliated foreigners A39 Total outstanding A60 Claims on foreign countries—Combined A3 9 Terms domestic offices and foreign branches FLOW OF FUNDS REPORTED BY NONBANKING BUSINESS A40 Funds raised in U.S. credit markets ENTERPRISES IN THE UNITED STATES A42 Summary of financial transactions A43 Summary of credit market debt outstanding A61 Liabilities to unaffiliated foreigners A44 Summary of financial assets and liabilities A62 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics SECURITIES HOLDINGS AND TRANSACTIONS SELECTED MEASURES A63 Foreign transactions in securities A45 Nonfinancial business activity—Selected A64 Marketable U.S. Treasury bonds and measures notes—Foreign transactions A45 Labor force, employment, and unemployment A46 Output, capacity, and capacity utilization A47 Industrial production—Indexes and gross value INTEREST AND EXCHANGE RATES A49 Housing and construction A50 Consumer and producer prices A65 Discount rates of foreign central banks A51 Gross domestic product and income A65 Foreign short-term interest rates A52 Personal income and saving A66 Foreign exchange rates International Statistics A67 Guide to Statistical Releases and Special Tables SUMMARY STATISTICS A53 U.S. international transactions—Summary SPECIAL TABLES A54 U.S. foreign trade A54 U.S. reserve assets A68 Terms of lending at commercial banks, May 1995 A54 Foreign official assets held at Federal Reserve A72 Assets and liabilities of U.S. branches and agencies Banks of foreign banks, March 31, 1995 A55 Selected U.S. liabilities to foreign official A76 Pro forma financial statements for Federal Reserve institutions priced services, March 31, 1995 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A4 Domestic Nonfinancial Statistics • August 1995 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1994 1995 1995 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q2 Q3 Q4 Q1 Jan. Feb. Mar. Apr. May Reserves of depository institutions2 1 Total -3.1 -1.9 -3.3 -3.7 -4.4 -4.2 -7.5 -12.2 -3.9 2 Required -2.3 -1.9 -3.0 -4.0 -8.0 3.9 -4.5 -11.5 -6.8 3 Nonborrowed -4.2 -3.5 -2.1 -2.4 -2.9 -2.6 -7.7 -13.0 -4.8 4 Monetary base3 8.4 7.5 6.9 6.4 8.1 3.6 8.6 7.8 7.1 Concepts of money, liquid assets, and debt4 5 Ml 2.7 2.4 -1.2 .0 1.0 -1.8 .7' 2.0' -7.1 6 M2 1.7 .9 -.3 1.6r 3.9 -1.5r 2.5 4.1' 5.2 7 M3 1.3 2.1 1.7 4.4r 6.4r 2.4' 6.1' 5.9' 8.0 8 L 1.7r 2.2r 3.4r 7.9r 6.2r 9.5' 10.0' 9.9 n.a. 9 Debt 5.4r 4.2r 5.2' 5.4r 4.6r 7.4' 5.1' 4.6 n.a. Nontransaction components 10 In M25 1.3 .2 .1 2.4 5.2r -1.4' 3.2' 5.2 10.8 11 In M3 only6 -1.3 8.6 13.2 18.9r 19.8 22.3r 24.4' 14.8' 22.0 Time and savings deposits Commercial banks 12 Savings, including MMDAs -3.7 -4.6 -8.5 -13.2 -13.1 -16.0 -17.8 -12.1 2.7 13 Small time7 .3 9.4 16.0 24.2 23.9 27.2 31.1 23.0 17.3 14 Large time8,9 .8 13.1 19.4 12.5 -5.6 27.9 17.8 -.8' 25.7 Thrift institutions 15 Savings, including MMDAs -.4 -11.5 -17.6 -20.5 -19.3 -24.9 -19.4' -16.5' -7.2 16 Small time7 -5.8 .2 10.6 20.9r 20.4r 30.5' 33.4' 28.9 19.6 17 Large time8 -3.5 6.8 12.0 23.6 33.6 27.2 33.7 19.0 -13.6 Money market mutual funds 18 General purpose and broker-dealer 11.9 5.7 7.5 7.9 9.6 -1.8 -1.8 15.7 28.2 19 Institution-only -15.7 -4.5 7.3 10.0 36.5 -38.0 57.2 24.8 11.8 Debt components4 20 Federal 5.4 3.9 5.9 5.2 2.5 10.6 7.4 .7 n.a. 21 Nonfederal 5.3r 4.3r 5.0' 5.5r 5.4r 6.2' 5.1' 6.1 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts Kingdom and Canada, and (3) balances in both taxable and tax-exempt, institution-only outstanding during preceding month or quarter. money market funds. Excludes amounts held by depository institutions, the U.S. govern- 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with ment, money market funds, and foreign banks and official institutions. Also excluded is regulatory changes in reserve requirements. (See also table 1.20.) the estimated amount of overnight RPs and Eurodollars held by institution-only money 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally market funds. Seasonally adjusted M3 is computed by adjusting its non-M2 component as adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency a whole and then adding this result to seasonally adjusted M2. component of the money stock, plus (3) (for all quarterly reporters on the "Report of L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters securities, commercial paper, and bankers acceptances, net of money market fund holdwhose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted ings of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, difference between current vault cash and the amount applied to satisfy current reserve short-term Treasury securities, commercial paper, and bankers acceptances, each seasonrequirements. ally adjusted separately, and then adding this result to M3. 4. Composition of the money stock measures and debt is as follows: Debt: The debt aggregate is the outstanding credit market debt of the domestic Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of nonfinancial sectors—the federal sector (U.S. government, not including governmentdepository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all sponsored enterprises or federally related mortgage pools) and the nonfederal sectors commercial banks other than those owed to depository institutions, the U.S. government, (state and local governments, households and nonprofit organizations, nonfinancial corpoand foreign banks and official institutions, less cash items in the process of collection and rate and nonfarm noncorporate businesses, and farms). Nonfederal debt consists of Federal Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable mortgages, tax-exempt and corporate bonds, consumer credit, bank loans, commercial order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository paper, and other loans. The data, which are derived from the Federal Reserve Board's flow institutions, credit union share draft accounts, and demand deposits at thrift institutions. of funds accounts, are break-adjusted (that is, discontinuities in the data have been Seasonally adjusted Ml is computed by summing currency, travelers checks, demand smoothed into the series) and month-averaged (that is, the data have been derived by deposits, and OCDs, each seasonally adjusted separately. averaging adjacent month-end levels). M2: Ml plus (1) overnight (and continuing contract) repurchase agreements (RPs) 5. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund issued by all depository institutions and overnight Eurodollars issued to U.S. residents by balances (general purpose and broker-dealer), (3) savings deposits (including MMDAs), foreign branches of U.S. banks worldwide, (2) savings (including MMDAs) and small and (4) small time deposits. time deposits (time deposits—including retail RPs—in amounts of less than $100,000), 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents, and (3) balances in both taxable and tax-exempt general-purpose and broker-dealer and (4) money market fund balances (institution-only), less (5) a consolidation adjustment money market funds. Excludes individual retirement accounts (IRAs) and Keogh balances that represents the estimated amount of overnight RPs and Eurodollars held by institutionat depository institutions and money market funds. Also excludes all balances held by only money market funds. This sum is seasonally adjusted as a whole. U.S. commercial banks, money market funds (general purpose and broker-dealer), foreign 7. Small time deposits—including retail RPs—are those issued in amounts of less governments and commercial banks, and the U.S. government. Seasonally adjusted M2 is than $100,000. All IRA and Keogh account balances at commercial banks and thrift computed by adjusting its non-Mi component as a whole and then adding this result to institutions are subtracted from small time deposits. seasonally adjusted Ml. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or those booked at international banking facilities. more) issued by all depository institutions, (2) term Eurodollars held by U.S. residents at 9. Large time deposits at commercial banks less those held by money market funds, foreign branches of U.S. banks worldwide and at all banking offices in the United depository institutions, the U.S. government, and foreign banks and official institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures Apr. May Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 404,515 411,557r 411,139 412,102 414,992 412,620 411,012 410,575 410,252 U.S. government securities 2 Bought outright—System account 364,433 367,512 368,962 367,303 368,234 369,017 368,990 369,414 368,386 3 Held under repurchase agreements 1,560 4,257 2,773 4,627 6,779 3,491 1,838 1,663 3,201 Federal agency obligations 4 Bought outright 3,478 3,404 3,367 3,408 3,402 3,388 3,384 3,358 3,358 5 Held under repurchase agreements 4308 4602 5901 4009 5604 4209 2903 4209 8300 6 Acceptances Loans to depository institutions 7 Adjustment credit 18 30 31 50 35 12 5 4 8 Seasonal credit 501 801 1400 706 1003 1210 1207 1304 1405 9 Extended credit 10 Float 545 53 lr 364 1,158 466 399 540 400 272 11 Other Federal Reserve assets 33,991 35,278 34,934 35,091 35,394 35,742 35,829 35,172 34,056 12 Gold stock 11,052 11,054 11,055 11,055 11,055 11,055 11,055 11,055 11,055 1 1 3 4 T Sp re e a c s i u al r y d r c a u w rr i e n n g c r y i g o h u t t s s t c a e n r d ti i f n ic g a te account 2 8 3 , ,1 0 8 18 7 23 8, ,2 0 6 1 8 8 r 23 8, ,3 0 3 18 5 23 8, ,2 0 6 18 9 r 23 8, ,2 0 8 18 6 r 23 8, ,3 0 0 18 4 23 8, ,3 0 1 18 8 23 8, ,3 0 3 18 2 23 8, ,3 0 4 18 6 ABSORBING RESERVE FUNDS 15 Currency in circulation 400,531 405,072r 408,336 406,016r 405,815r 406,105 407,691 408,540 408,040 16 Treasury cash holdings 352 361 340 363 356 355 350 345 335 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,141 6,155 5,791 6,178 7,065 9,402 4,876 5,582 4,823 18 Foreign 197 198 184 207 190 180 175 185 196 19 Service-related balances and adjustments ... 4,325 4,107 4,227 4,002 4,050 4,390 4,130 4,182 4,186 20 Other 393 360 312 367 318 334 316 320 316 21 Other Federal Reserve liabilities and capital 12,996 13,498 12,926 12,922 12,839 12,993 13,102 12,925 12,880 22 Reserve balances with Federal Reserve Banks 22,837 24,145r 21,431 24,389 26,718 21,236 22,763 20,899 21,893 End-of-month figures Wednesday figures Apr. May Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 409,448 411,541r 412,804 412,606 419,666 412,514 412,789 412,011 414,353 U.S. government securities 2 Bought outright—System account 363,707 368,554 370,047 366,014 368,366 368,211 370,672 368,850 367,388 3 Held under repurchase agreements 5,593 2,750 3,531 7,346 10,012 4,304 1,955 3,880 7,214 Federal agency obligations 4 5 B H o e u ld g h u t n o d u e t r r i r g e h p t u rchase agreements 3 1 , , 4 10 0 05 8 3, 5 3 0 8 00 8 3,3 70 5 00 8 4000 3 1 , , 3 5 8 50 8 0 3,380 0 8 3,350 0 8 3 1 , , 3 0 5 00 8 0 3 1 , , 3 65 5 00 8 6 Acceptances Loans to depository institutions 7 Adjustment credit 25 43 9 25 75 30 32 4 6 8 Seasonal credit 509 1102 1600 804 1160 1204 1300 1308 1503 9 Extended credit 10 Float 57 384r 994 254 289 716 663 713 217 11 Other Federal Reserve assets 35,494 35,809 34,006 35,074 35,870 35,742 35,980 34,069 34,367 12 Gold stock 11,053 11,055 11,054 11,055 11,055 11,055 11,055 11,055 11,054 13 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 14 Treasury currency outstanding 23,234 23,304r 23,360 23,269r 23,286r 23,304 23,318 23,332 23,346 ABSORBING RESERVE FUNDS 15 Currency in circulation 401,630 405,285r 411,104 407,024r 406,485r 407,684 409,220 409,144 409,324 16 Treasury cash holdings 361 356 322 356 356 350 347 336 326 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,543 8,241 4,646 5,923 8,128 8,513 4,876 5,835 4,901 18 Foreign 370 166 227 158 165 169 156 179 164 19 Service-related balances and adjustments ... 4,227 4,390r 4,339 4,002 4,050 4,390 4,130 4,182 4,186 20 Other 398 339 215 335 323 321 314 320 328 21 Other Federal Reserve liabilities and capital 14,449 13,095 12,181 12,707 12,636 12,665 12,738 12,688 12,690 22 Reserve balances with Federal Reserve Banks 25,776 22,045r 22,202 24,443 29,882 20,799 23,397 21,731 24,850 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 • August 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. Nov. Dec. Jan. Feb. Mar. Apr. May 1 Reserve balances with Reserve Banks2 25,368 29,374 24,658 24,715 24,658 22,291 21,758 22,649 24,217r 21,477 2 Total vault cash3 34,541 36,818 40,365 38,933 40,365 42,291 39,795 38,518 38,099 39,038 3 Applied vault cash4 31,172 33,484 36,682 35,291 36,682 38,230 35,941 34,934 34,657r 35,287 4 Surplus vault cash5 3,370 3,334 3,683 3,642 3,683 4,061 3,855 3,584 3,442 3,751 5 Total reserves6 56,540 62,858 61,340 60,006 61,340 60,521 57,699 57,583 58,874r 56,763 6 Required reserves 55,385 61,795 60,172 58,999 60,172 59,182 56,752 56,789 58, 55,876 7 Excess reserve balances at Reserve Banks7 1,155 1,063 1,168 1,008 1,168 1,339 946 794 753 888 8 Total borrowings at Reserve Banks8 124 82 209 249 209 136 59 69 111 150 9 Seasonal borrowings 18 31 100 164 100 46 33 51 82 137 10 Extended credit9 1 0 0 0 0 4 0 0 0 0 Biweekly averages of daily figures for two week periods ending on dates indicated 1995 Feb. 1 Feb. 15 Mar. 1 Mar. 15 Mar. 29 Apr. 12 Apr. 26 May 10r May 24 June 7 1 Reserve balances with Reserve Banks2 19,603 21,028 22,710 22,316 22,869 23,412 25,542 21,994 21,406 20,878 2 Total vault cash3 43,143 41,295 37,924 39,318 37,773 38,433 37,481 39,261 38,711 39,373 3 Applied vault cash4 38,793 37,274 34,286 35,636 34,278 34,941 34,158 35,550 34,955 35,576 4 Surplus vault cash5 4,350 4,021 3,638 3,682 3,496 3,492 3,323 3,712 3,756 3,797 5 Total reserves6 58,396 58,302 56,995 57,952 57,147 58,353 59,700 57,543 56,361 56,453 6 Required reserves 57,026 57,329 56,111 57,385 56,077 57,939 58,737 56,508 55,552 55,621 7 Excess reserve balances at Reserve Banks7 1,370 973 885 566 1,070 414 963 1,035 810 832 8 Total borrowings at Reserve Banks8 176 51 60 59 79 76 130 148 144 165 9 Seasonal borrowings 41 31 36 44 59 61 90 124 140 150 10 Extended credit9 10 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For cash applied during the maintenance period by "nonbound" institutions (that is, those ordering address, see inside front cover. whose vault cash exceeds their required reserves) to satisfy current reserve requirements. 2. Excludes required clearing balances and adjustments to compensate for float and 5. Total vault cash (line 2) less applied vault cash (line 3). includes other off-balance-sheet "as-of' adjustments. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 3. Total "lagged" vault cash held by depository institutions subject to reserve (line 3). requirements. Dates refer to the maintenance periods during which the vault cash may be 7. Total reserves (line 5) less required reserves (line 6). used to satisfy reserve requirements. The maintenance period for weekly reporters ends 8. Also includes adjustment credit. sixteen days after the lagged computation period during which the vault cash is held. 9. Consists of borrowing at the discount window under the terms and conditions Before Nov. 25, 1992, the maintenance period ended thirty days after the lagged established for the extended credit program to help depository institutions deal with computation period. sustained liquidity pressures. Because there is not the same need to repay such borrowing 4. All vault cash held during the lagged computation period by "bound" institutions promptly as with traditional short-term adjustment credit, the money market impact of (that is, those whose required reserves exceed their vault cash) plus the amount of vault extended credit is similar to that of nonborrowed reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A7 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks' Millions of dollars, averages of daily figures 1995, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Apr. 3r Apr. 10 Apr. 17 Apr. 24r May 1 May 8 May 15 May 22 May 29 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 72,699 73,555 73,752 72,248 69,011 70,032 73,783 74,449 74,345 2 For all other maturities 19,139 19,323 22,179 17,752 17,801 18,272 18,673 18,903 18,242 From other depositoiy institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 21,250 20,049 18,994 22,458 19,489 22,258 20,877 25,502 22,007 4 For all other maturities 28,419 24,448 29,665 30,673 31,644 29,667 30,035 30,041 32,946 Repurchase agreements on US. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 24,955 24,738 20,415 23,646 23,793 23,211 24,516 21,952 21,963 6 For all other maturities 32,770 35,084 39,301 38,332 36,810 41,578 41,498 41,078 39,816 All other customers 7 For one day or under continuing contract 37,820 37,252 33,711 36,466 38,404 35,816 37,061 38,061 37,314 8 For all other maturities 17,423 16,293r 20,022r 16,973 17,186 17,423 17,000 17,579 18,925 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 62,819 57,109r 61,168r 62,300 65,791 62,208 62,760 59,955 61,464 10 To all other specified customers2 26,953 26,540r 25,746r 27,099 26,765 28,062 31,005 26,904 27,906 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 • August 1995 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 7/ O 7/ n 9 5 Effective date Previous rate 7/ O 7/ n 9 5 Effective date Previous rate 7/ O 7/ n 9 5 Effective date Previous rate Boston 5.25 2/1/95 4.75 6.00 7/6/95 5.95 6.50 7/6/95 6.45 New York 2/1/95 Philadelphia 2/2/95 Cleveland 2/9/95 Richmond 2/1/95 Atlanta 2/2/95 Chicago 2/1/95 St. Louis 2/1/95 Minneapolis 2/2/95 Kansas City 2/1/95 Dallas 2/2/95 San Francisco 5.25 2/1/95 4.75 6.00 7/6/95 5.95 6.50 7/6/95 6.45 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. Ba o n f k Effectiv l A ev ll e l F ) . — R. Ba o n f k Effective date l A ev ll e l F ) . — R. B o an f k N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1977 6 6 1981—Nov. 2 13-14 13 1987—Sept. 4 5.5-6 6 13 13 11 6 6 1978—Jan. 9 6-6.5 6.5 Dec. 4 12 12 20 6.5 6.5 1988—Aug. 9 6-6.5 6.5 May 11 6.5-7 7 1982—July 20 11.5-12 11.5 11 6.5 6.5 12 7 7 23 11.5 11.5 July 3 7-7.25 7.25 Aug. 2 11-11.5 11 1989—Feb. 24 6.5-7 7 10 7.25 7.25 3 11 11 27 7 7 Aug. 21 7.75 7.75 16 10.5 10.5 Sept. 22 8 8 27 10-10.5 10 1990—Dec. 19 6.5 6.5 Oct. 16 8-8.5 8.5 30 10 10 20 8.5 8.5 Oct. 12 9.5-10 9.5 1991—Feb. 1 6-6.5 6 Nov. 1 8.5-9.5 9.5 13 9.5 9.5 4 6 6 3 9.5 9.5 Nov. 22 9-9.5 9 Apr. 30 5.5-6 5.5 26 9 9 May 2 5.5 5.5 1979—July 20 10 10 Dec. 14 8.5-9 9 Sept. 13 5-5.5 5 Aug. 17 10-10.5 10.5 15 8.5-9 8.5 17 5 5 20 10.5 10.5 17 8.5 8.5 Nov. 6 4.5-5 4.5 Sept. 19 10.5-11 11 7 4.5 4.5 21 11 11 1984—Apr. 9 8.5-9 9 Dec. 20 3.5-4.5 3.5 Oct. 8 11-12 12 13 9 9 24 3.5 3.5 10 12 12 Nov. 21 8.5-9 8.5 26 8.5 8.5 1992—July 2 3-3.5 3 1980—Feb. 15 12-13 13 Dec. 24 8 8 7 3 3 19 13 13 May 29 12-13 13 1985—May 20 7.5-8 7.5 1994—May 17 3-3.5 3.5 30 12 12 24 7.5 7.5 18 3.5 3.5 June 13 11-12 11 Aug. 16 3.5-4 4 16 11 11 1986—Mar. 7 7-7.5 7 18 4 4 July 28 10-11 10 10 7 7 Nov. 15 4-4.75 4.75 29 10 10 Apr. 21 6.5-7 6.5 17 4.75 4.75 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 11998811——MMaayy 55 13-14 14 In effect July 7, 1995 5.25 5.25 88 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 1941-197Q-, 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 industiy 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 deposit Net transaction accounts3 1 $0 million-$54.0 million.. 12/20/94 2 More than $54.0 million4 . 12/20/94 3 Nonpersonal time deposits1 12/27/90 4 Eurocurrency liabilities6... 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve no more than three may be checks (accounts subject to such limits are considered savings Banks or vault cash. Nonmember institutions may maintain reserve balances with a deposits). Federal Reserve Bank indirectly, on a pass-through basis, with certain approved The Monetary Control Act of 1980 requires that the amount of transaction accounts institutions. For previous reserve requirements, see earlier editions of the Annual against which the 3 percent reserve requirement applies be modified annually by 80 Report or the Federal Reserve Bulletin. Under provisions of the Monetary Control Act percent of the percentage change in transaction accounts held by all depository instituof 19S0, 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 cm 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 reseryable 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 l'/i years was reduced from 3 percent to the percentage increase in the total reservable liabilities of all depository institutions, 1 Vi percent for the maintenance period that began Dec. 13, 1990, and to zero for the measured on an annual basis as of June 30. No corresponding adjustment is to be made in maintenance period that began Dec. 27, 1990. The reserve requirement on nonpersonal the event of a decrease. On Dec. 20, 1994, the exemption was raised from $4.0 million to time deposits with an original maturity of l'/i 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 Vi 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 l'/i years (see note 5). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • August 1995 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1994 1995 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 14,714 17,717 17,484 518 6,109 444 0 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 29,361 36,543 29,883 37,122 31,530 36,449 30,983 4 Redemptions 1,600 0 0 0 0 0 0 0 0 0 Others within one year 5 Gross purchases 1,096 1,223 1,238 450 0 125 0 0 0 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shifts 36,662 31,368 0 460 1,790 -2,430 2,835 5,872 0 0 8 Exchanges -30,543 -36,582 -21,444 0 -5,795 1,680 -3,167 -4,881 0 0 9 Redemptions 0 0 0 0 0 0 0 0 0 0 One to five years 10 Gross purchases 13,118 10,350 9,168 0 200 2,208 0 0 0 2,549 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -34,478 -27,140 -6,004 -460 -1,123 2,430 -2,145 -5,115 0 0 13 Exchanges 25,811 0 17,801 0 4,192 -1,680 3,167 3,031 0 0 Five to ten years 14 Gross purchases 2,818 4,168 3,818 0 0 660 0 0 0 839 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -1,915 0 -3,145 0 -278 0 -690 -757 0 0 17 Exchanges 3,532 0 2,903 0 1,603 0 0 1,150 0 0 More than ten years 18 Gross purchases 2,333 3,457 3,606 0 0 1,252 0 0 0 1,138 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -269 0 -918 0 -389 0 0 0 0 0 21 Exchanges 1,200 0 775 0 0 0 0 700 0 0 All maturities 22 Gross purchases 34,079 36,915 35,314 968 6,309 4,689 0 0 0 4,526 23 Gross sales 1,628 0 0 0 0 0 0 0 0 0 24 Redemptions 1,600 767 2,337 979 0 0 621 0 0 370 Matched transactions 25 Gross purchase 1,480,140 1,475,941 1,700,836 136,556 148,425 166,648 160,465 178,877 168,800 148,306 26 Gross sales 1,482,467 1,475,085 1,701,309 137,242 147,858 166,007 167,676 176,232 170,724 147,616 Repurchase agreements 27 Gross purchases 378,374 475,447 309,276 17,088 35,456 29,406 32,201 1,300 22,070 36,314 28 Gross sales 386,257 470,723 311,898 15,613 32,561 26,351 39,756 3,310 16,477 39,157 29 Net change in U.S. Treasury securities 20,642 41,729 29,882 778 9,771 8,385 -15,387 634 3,669 2,004 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 62 70 37 91 55 83 20 Repurchase agreements 33 Gross purchases 14,565 35,063 52,696 2,868 8,615 5,090 5,243 25 4,926 4,415 34 Gross sales 14,486 34,669 52,696 2,838 7,360 5,720 4,948 1,345 3,821 5,020 35 Net change in federal agency obligations -554 -380 -1,002 -32 1,185 -667 204 -1,375 1,022 -625 36 Total net change in System Open Market Account... 20,089 41,348 28,880 746 10,956 7,718 -15,183 -741 4,691 1,379 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1995 1995 May 3 May 10 May 17 May 24 May 31 Mar. 31 Apr. 30 May 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,055 11,055 11,055 11,054 11,054 11,053 11,055 11,054 2 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 3 400 408 414 401 380 434 417 380 Loans 4 To depository institutions 153 162 141 159 169 84 155 169 5 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 3,388 3,358 3,358 3,358 33,,335588 33,,440088 33,,338888 33,,335588 8 Held under repurchase agreements 0 0 1,000 1,650 700 1,105 500 700 9 Total U.S. Treasury securities 372,515 372,627 372,730 374,602 373,578 369,300 371,304 373,578 10 Bought outright2 368,211 370,672 368,850 367,388 370,047 363,707 368,554 370,047 11 Bills 177,535 179,996 178,173 176,711 179,371 177,187 177,878 179,371 n Notes 146,454 146,454 146,998 146,998 146,998 143,773 146,454 146,998 n Bonds 44,222 44,222 43,679 43,679 43,679 42,747 44,222 43,679 14 Held under repurchase agreements 4,304 1,955 3,880 7,214 3,531 5,593 2,750 3,531 15 Total loans and securities 376,056 376,147 377,229 379,769 377,805 373,897 375,347 377,805 16 Items in process of collection 5,954 5,779 5,833 4,632 8,361 3,611 4,312 8,361 17 Bank premises 1,085 1,086 1,090 1,090 1,090 1,080 1,085 1,090 Other assets 18 Denominated in foreign currencies 24,396 24,411 24,428 24,447 24,122 25,286 24,405 24,122 19 All other4 10,253 10,475 8,500 8,792 8,702 9,129 10,309 8,702 20 Total assets 437,217 437,378 436,566 438,203 439,533 432,508 434,948 439,533 LIABILITIES 21 Federal Reserve notes 385,130 386,657 386,563 386,705 388,447 379,191 382,754 388,447 22 Total deposits 34,111 33,167 32,167 34,520 31,718 35,320 35,085 31,718 73 Depository institutions 25,108 27,820 25,833 29,126 26,630 30,009 26,338 26,630 24 U.S. Treasury—General account 8,513 4,876 5,835 4,901 4,646 4,543 8,241 4,646 25 Foreign—Official accounts 169 156 179 164 227 370 166 227 26 321 314 320 328 215 398 339 215 ?7 Deferred credit items 5,310 4,816 5,148 4,288 7,187 3,549 4,014 7,187 28 Other liabilities and accrued dividends5 4,473 4,674 4,619 4,594 4,481 4,578 4,578 4,481 29 Total liabilities 429,024 429,313 428,498 430,107 431,832 422,638 426,432 431,832 CAPITAL ACCOUNTS 30 Capital paid in 3,799 3,804 3,810 3,815 3,807 3,786 3,794 3,807 31 Surplus 3,683 3,683 3,683 3,683 3,670 3,683 3,683 3,670 32 Other capital accounts 710 578 576 598 222 2,401 1,039 222 33 Total liabilities and capital accounts 437,217 437,378 436,566 438,203 439,533 432,508 434,948 439,533 MEMO 34 Marketable US. Treasury securities held in custody for foreign and international accounts 446,896 440,471 444,649 447,256 446,653 429,759 440,236 446,653 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 460,488 462,311 464,074 465,960 465,987 452,980 459,648 465,987 36 LESS: Held by Federal Reserve Banks 75,358 75,654 77,511 79,254 77,541 73,790 76,894 77,541 37 Federal Reserve notes, net 385,130 386,657 386,563 386,705 388,447 379,191 382,754 388,447 Collateral held against notes, net 38 Gold certificate account 11,055 11,055 11,055 11,054 11,054 11,053 11,055 11,054 39 Special drawing rights certificate account 8,018 8,018 8,018 8,018 8,018 8,018 8,018 8,018 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 366,057 367,584 367,490 367,633 369,374 360,119 363,681 369,374 42 Total collateral 385,130 386,657 386,563 386,705 388,447 379,191 382,754 388,447 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 Domestic Nonfinancial Statistics • August 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 May 3 May 10 May 17 May 24 May 31 Mar. 31 Apr. 30 May 31 1 Total loans 153 162 141 159 169 86 153 163 2 Within fifteen days' 46 55 135 144 81 82 146 134 3 Sixteen days to ninety days 107 107 6 15 88 4 7 29 4 Total U.S. Treasury securities 372,515 372,627 372,730 374,602 373,578 363,707 368,554 373,578 5 Within fifteen days' 26,885 22,433 22,576 24,456 22,173 9,764 11,454 22,173 6 Sixteen days to ninety days 83,310 83,424 85,169 85,161 89,258 94,316 94,921 89,258 7 Ninety-one days to one year 113,547 117,997 115,070 115,070 112,151 111,365 112,383 112,151 8 One year to five years 86,827 86,827 86,449 86,449 86,530 85,728 87,850 86,530 9 Five years to ten years 25,263 25,263 28,511 28,511 28,511 26,990 25,263 28,511 10 More than ten years 36,683 36,683 34,955 34,955 34,955 35,545 36,683 34,955 11 Total federal agency obligations 3388 3,358 4,358 5,008 4,057 3,408 3,388 4,057 12 Within fifteen days' 30 0 1,366 2,026 1,134 215 160 1,134 13 Sixteen days to ninety days 687 697 389 379 408 524 587 408 14 Ninety-one days to one year 861 861 861 861 790 782 831 790 15 One year to five years 1,368 1,358 1,300 1,300 1,284 1,405 1,368 1,284 16 Five years to ten years 417 417 417 417 417 457 417 417 17 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 DD 1199 ee 99 cc 11 .. DD 1199 ee 99 cc 22 .. 1 D 1 D 99 ee 99 cc 33 .. DD 1199 ee 99 cc 44 .. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS2222 1111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss3333 45.54 54.35 60.50 59.34 59.50 59.40 59.34 59.12 58.92 58.55 57.96 57.77 2222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss4444 45.34 54.23 60.42 59.13 59.12 59.15 59.13 58.99 58.86 58.48 57.85 57.62 3333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 45.34 54.23 60.42 59.13 59.12 59.15 59.13 58.99 58.86 58.48 57.85 57.62 4444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 44.56 53.20 59.44 58.17 58.69 58.39 58.17 57.79 57.97 57.76 57.20r 56.88 5555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee6666 317.43 351.12 386.60 418.22 413.85 416.79 418.22 421.05 422.31 425.35 428.13r 430.68 Not seasonally adjusted 6666 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss7777 46.98 56.06 62.37 61.13 59.24 59.73 61.13 60.52 57.72 57.62 58.93 56.83 7777 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 46.78 55.93 62.29 60.92 58.86 59.48 60.92 60.38 57.66 57.55 58.82 56.68 8888 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt 46.78 55.93 62.29 60.92 58.86 59.48 60.92 60.39 57.66 57.55 58.82 56.68 9999 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss8888 46.00 54.90 61.31 59.96 58.44 58.72 59.96 59.18 56.78 56.83 58.18 55.94 11110000 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee9999 321.07 354.55 390.59 422.51 413.15 417.08 422.51 421.84 419.25 423.27 428.74r 429.28 NNNNOOOOTTTT AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS11110000 11111111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss"""" 55.53 56.54 62.86 61.34 59.49 60.01 61.34 60.52 57.70 57.58 58.87r 56.76 11112222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 55.34 56.42 62.78 61.13 59.11 59.76 61.13 60.39 57.64 57.51 58.76 56.61 11113333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 55.34 56.42 62.78 61.13 59.11 59.76 61.13 60.39 57.64 57.51 58.76 56.61 11114444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 54.55 55.39 61.80 60.17 58.69 59.00 60.17 59.18 56.75 56.79 58.12 55.88 11115555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee11112222 333.61 360.90 397.62 427.25 418.19 421.90 427.25 426.31 423.57 427.56 432.79 433.46 11116666 EEEExxxxcccceeeessssssss rrrreeeesssseeeerrrrvvvveeeessss11113333 .98 1.16 1.06 1.17 .80 1.01 1.17 1.34 .95 .79 .75 .89 11117777 BBBBoooorrrrrrrroooowwwwiiiinnnnggggssss ffffrrrroooommmm tttthhhheeee FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee .19 .12 .08 .21 .38 .25 .21 .14 .06 .07 .11 .15 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 o fthe 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 • August 1995 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1995 I-tem 1991 1992 1993 1994 Dec. Dec. Dec. Dec. Feb. Mar. Apr. May Seasonally adjusted Measures2 1 Ml 897.3 1,024.4 1,128.6 1,147.8 1,147.1 1,147.8' 1,149.7 1,142.9 2 M2 3,457.9 3,515.3 3,583.6 3,615.1 3,622.2' 3,629.7' 3,642.2' 3,657.9 3 M3 4,176.0 4,182.9 4,242.5 4,304.5 4,336.1' 4,358.0' 4,379.5' 4,408.7 4 L 4,990.9 5,061.1 5,150.3 5,294.0 5,363.6' 5,408.2' 5,452.8 n.a. 5 Debt ll,178.2r 11,716.7' 12,343.8' 12,955.5' 13,085.3' 13,147.8' 13,198.3 n.a. Ml components 6 Currency3 267.4 292.8 322.1 354.5 358.8 362.5 365.7 368.1 7 Travelers checks4 7.7 8.1 7.9 8.4 8.4 8.8 9.2 9.2 8 Demand deposits5 289.5 338.9 383.9 382.0 384.0 383.2 381.2 380.6 9 Other checkable deposits6 332.7 384.6 414.7 402.9 395.9 393.3 393.6 385.0 Nontransaction components 10 In M27 2,560.6 2,490.9 2,455.0 2,467.2 2,475.1' 2,481.8' 2,492.6' 2,515.0 11 In M38 only 718.1 667.6 658.9 689.4 713.8' 728.3' 737.3' 750.8 Commercial banks 12 Savings deposits, including MMDAs 665.6 754.7 785.8 752.3 734.2 723.3 716.0 717.6 13 Small time deposits 602.5 508.1 468.6 502.4 524.0 537.6 547.9 555.8 14 Large time deposits10, 11 333.3 286.7 271.2 298.3 303.8 308.3 308.1' 314.7 Thrift institutions 15 Savings deposits, including MMDAs 375.6 428.9 429.8 391.9 377.6 371.5' 366.4 364.2 16 Small time deposits9 464.1 361.1 316.5 317.3 330.91 340.1' 348.3' 354.0 17 Large time deposits10 83.3 67.1 61.6 64.3 67.6 69.5 70.6 69.8 Money market mutual funds 18 General purpose and broker-dealer 374.2 356.9 360.1 389.0 391.5 390.9 396.0 405.3 19 Institution-only 180.0 200.2 198.1 180.8 180.4 189.0 192.9 194.8 Debt components 20 Federal debt 2,763.3 3,067.9 3,328.0 3,497.4 3,535.8 3,557.5 3,559.5 n.a. 21 Nonfederal debt 8,414.8r 8,648.8' 9,015.9' 9,458.1' 9,549.5' 9,590.3' 9,638.8 n.a. Not seasonally adjusted Measures2 22 Ml 916,0 1,046.0 1,153.7 1,173.5 1,134.2 1,138.0 1.158.61 1,132.0 23 M2 3,472.7 3,533.6 3,606.1 3,638.6 3,608.5' 3,627.7' 3,658.6' 3,645.5 24 M3 4,189.4 4,201.4 4,266.3 4,330.6 4,324.8' 4,353.8' 4,391.2' 4,398.4 25 L 5,015.5 5,090.8 5,184.9 5,331.7 5,355.4' 5,407.4' 5,462.9 n.a. 26 Debt 11,175.5' 11,719.5' n&s.cf 12,947.2' 13,032.4' 13,099.5' 13,131.3 n.a. Ml components 27 Currency3 269.9 295.0 324.8 357.6 357.1 361.4 365.5 367.9 28 Travelers checks4 7.4 7.8 7.6 8.1 8.1 8.4 8.8 8.9 29 Demand deposits5 302.4 354.4 401.8 400.1 374.9 374.0 382.0 372.8 30 Other checkable deposits6 336.3 388.9 419.4 407.6 394.1 394.2 402.3' 382.4 Nontransaction components 31 In M27 2,556.6 2,487.7 2,452.4 2,465.1 2,474.3' 2,489.7' 2,500.0' 2,513.5 32 In M38 716.7 667.7 660.2 692.0 716.3' 726.1' 732.6' 752.9 Commercial banks 33 Savings deposits, including MMDAs 664.0 752.9 784.3 751.1 729.8 723.4 717.8 718.2 34 Small time deposits 601.9 507.8 468.2 502.0 524.1 537.4 547.3 554.7 35 Large time deposits10, 11 332.6 286.2 270.8 298.0 302.3 306.2 306.0' 317.2 Thrift institutions 36 Savings deposits, including MMDAs 374.8 427.9 429.0 391.2 375.3 371.6 367.3' 364.5 37 Small time deposits9 463.7 360.9 316.2 317.1 331.0' 340.01 347.9' 353.3 38 Large time deposits10 83.1 67.0 61.5 64.3 67.2 69.1 70.1 70.3 Money market mutual funds 39 General purpose and broker-dealer 372.2 355.1 358.3 387.1 396.3 399.8 404.8 407.8 40 Institution-only 180.8 201.7 200.0 183.1 188.8 190.8 191.3 193.8 Repurchase agreements and Eurodollars 41 Overnight and continuing 79.9 83.2 96.5 116.7 117.8 117.6 114.8' 114.9 42 Term 132.7 127.8 144.1 159.0 171.2' 173.1' 177.8' 183.8 Debt components 43 Federal debt 2,765.0 3,069.8 3,329.5 3,499.0 3,525.0 3,551.1 3,544.1 44 Nonfederal debt 8,410.5' 8,649.7' 9,006.5' 9,448.2' 9,507.4' 9,548.4' 9,587.2 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 • August 1995 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1994 1995 1992 1993 Dec. Dec. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May Interest rates (annual effective yields)2 INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts 2.33 1.86 1.87 1.88 1.92 1.96 1.98 2.01 2.00 1.95 1.95 2 Savings deposits3 2.88 2.46 2.67 2.72 2.81 2.91 2.98 3.09 3.14 3.17 3.21 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 2.90 2.65 3.36 3.47 3.65 3.81 3.96 4.19 4.24 4.28 4.25 4 92 to 182 days 3.16 2.91 3.75 3.93 4.22 4.44 4.67 4.83 4.97 4.94 4.93 5 183 days to 1 year 3.37 3.13 4.27 4.50 4.85 5.12 5.39 5.57 5.60 5.60 5.49 6 More than 1 year to 2V5 years 3.88 3.55 4.80 5.08 5.42 5.74 6.00 6.12 6.12 6.05 5.83 7 More than 2 vi years 4.77 4.29 5.47 5.77 6.09 6.30 6.47 6.52 6.45 6.37 6.11 BIF-INSURED SAVINGS BANKS4 8 Negotiable order of withdrawal accounts 2.45 1.87 1.91 1.88 1.91 1.95 1.99 2.04 1.99 1.99 2.00 9 Savings deposits3 3.20 2.63 2.78 2.76 2.83 2.88 2.91 2.95 2.94 2.93 2.95 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 3.13 2.70 3.11 3.32 3.51 3.80 3.98 4.17 4.21 4.18 4.24 11 92 to 182 days 3.44 3.02 3.87 4.10 4.42 4.89 5.13 5.33 5.37 5.38 5.31 12 183 days to 1 year 3.61 3.31 4.47 4.80 5.18 5.52 5.75 5.94 5.94 5.87 5.83 13 More than 1 year to 2V4 years 4.02 3.66 5.04 5.39 5.70 6.09 6.29 6.37 6.32 6.25 6.08 14 More than 2v5 years 5.00 4.62 5.64 5.79 6.18 6.43 6.68 6.75 6.68 6.59 6.32 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts 286,541 305,223 286,787 294,072 294,282 303,724 291,355 290,188 292,811 286,987 273,775 16 Savings deposits3 738,253 766,413 755,249 751,183 746,605 734,519 723,295 714,955 713,440 698,963 714,515 17 Personal 578,757 597,838 595,175 590,875 584,628 578,459 569,619 564,877 564,086 550,674 559,963 18 Nonpersonal 159,4% 168,575 160,074 160,308 161,977 156,060 153,676 150,078 149,354 148,289 154,553 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 38,474 29,455 28,312 31,447 31,077 32,375 32,154 31,777 31,623 31,530 31,454 20 92 to 182 days 127,831 110,069 96,398 95,359 94,692 95,901 96,895 98,248 95,583 94,368 93,183 21 183 days to 1 year 163,098 146,565 157,253 158,753 159,645 161,831 163,939 169,103 176,657 179,625 184,550 22 More than 1 year to 2'/4 years 152,977 141,223 152,514 155,111 158,382 162,486 168,515 176,877 183,275 189,652 194,962 23 More than 2V5 years 169,708 181,528 190,209 188,479 189,741 190,897 190,215 191,383 194,722 194,426 192,529 24 IRA and Keogh plan deposits 147,350 143,985 142,700 142,896 143,075 143,428 143,900 145,040 145,959 146,679 147,294 BIF-INSURED SAVINGS BANKS4 25 Negotiable order of withdrawal accounts 10,871 11,151 10,769 11,120 11,002 11,317 11,127 10,950 11,218 11,005 11,015 26 Savings deposits3 81,786 80,115 74,659 73,416 72,622 70,642 71,639 69,982 68,595 67,453 67,307 27 Personal 78,695 77,035 71,525 70,215 69,412 67,673 68,760 67,144 65,692 64,204 64,470 28 Nonpersonal 3,091 3,079 3,134 3,201 3,211 2,969 2,878 2,837 2,902 3,248 2,837 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 3,867 2,793 2,402 2,245 2,209 2,166 2,041 2,086 1,943 1,780 1,882 30 92 to 182 days 17,345 12,946 12,276 11,987 11,913 11,793 12,084 11,953 11,707 11,245 11,456 31 183 days to 1 year 21,780 17,426 17,928 18,123 18,509 18,753 19,336 19,979 20,277 21,051 20,975 32 More than 1 year to 2 '/i years 18,442 16,546 17,287 17,519 17,999 17,842 20,460 21,870 22,648 23,445 24,026 33 More than 2Vi years 18,845 20,464 21,923 21,624 21,687 21,600 21,888 22,275 22,446 22,671 22,830 34 IRA and Keogh plan accounts 21,713 19,356 19,532 19,550 19,532 19,325 19,802 20,099 20,221 20,388 20,464 1. B1F, 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 Oct. Nov. Dec. Jan.r Feb/ Mar. DEBITS Seasonally adjusted Demand deposits1 1 All insured banks 313,128.1 334,245.6 367,129.2 352,375.9 369,211.3 371,048.0 370,353.2 384,428.6 394,340.0 2 Major New York City banks 165,447.7 171,227.3 191,169.8 179,396.2 186,350.6 187,955.6 183,457.9 195,127.7 197,655.9 3 Other banks 147,680.4 163,018.3 175,959.4 172,979.7 182,860.7 183,092.4 186,895.3 189,300.9 196,684.1 4 Other checkable deposits4 , 3,780.3 3,467.1 3,831.4 3,896.7 4,116.4 4,199.0 4,001.8 3,901.2 4,037.1 5 Savings deposits (including MMDAs) 3,309.1 3,508.8 3,737.1 3,639.6 3,835.7 4,033.1 3,930.3 3,994.4 3,893.8 DEPOSIT TURNOVER Demand deposits* 6 All insured banks 825.9 785.3 813.0 783.6 826.5 820.6 822.2 857.6 882.4 7 Major New York City banks 4,795.3 4,198.1 4,481.6 4,414.6 4,544.7 4,490.8 4,338.4 4,662.0 4,753.8 8 Other banks 428.7 423.6 430.3 422.9 450.7 446.3 457.9 465.8 485.2 9 Other checkable deposits4 14.4 11.8 12.8 13.0 13.9 14.2 13.6 13.3 13.9 10 Savings deposits (including MMDAs) 4.7 4.6 4.9 4.8 5.1 5.4 5.4 5.5 5.4 DEBITS Not seasonally adjusted Demand deposits* 11 All insured banks 313,344.9 334,354.6 367,218.8 352,548.5 359,229.9 384,218.7 369,313.9 356,060.3 413,260.4 12 Major New York City banks 165,595.0 171,283.5 191,226.1 181,406.6 184,656.3 194,120.1 181,602.7 181,697.8 209,255.5 13 Other banks 147,749.9 163,071.0 175,992.8 171,141.8 174,573.5 190,098.6 187,711.1 174,362.5 204,004.9 14 Other checkable deposits4 3,783.6 3,467.5 3,827.9 3,797.1 3,845.9 4,365.1 4,345.0 3,594.2 4,076.1 15 Savings deposits (including MMDAs)3 3,310.0 3,509.5 3,734.9 3,472.2 3,640.4 4,244.8 4,108.6 3,615.5 3,994.0 DEPOSIT TURNOVER Demand depositP 16 All insured banks 826.1 785.4 813.8 774.5 785.9 814.9 803.0 812.8 948.5 17 Major New York City banks 4,803.5 4,197.9 4,490.3 4,435.8 4,391.6 4,343.4 4,128.1 4,334.9 5,145.1 18 Other banks 428.8 423.8 430.6 413.1 420.6 445.4 451.3 440.1 516.4 19 Other checkable deposits4 14.4 11.8 12.7 12.9 13.0 14.5 14.4 12.3 14.0 20 Savings deposits (including MMDAs)3 4.7 4.6 4.9 4.6 4.8 5.7 5.6 5.0 5.6 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 • August 1995 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Billions of dollars Monthly averages Wednesday figures Account 1994 1994 1995r 1995 May Nov. Dec. Jan. Feb. Mar. Apr. May May 10 May 17 May 24 May 31 ALL COMMERCIAL Seasonally adjusted BANKING INSTITUTIONS Assets 1 Bank credit •hZB.9 3,297.7r 3,316.1 3,349.0 3,362.5 3,385.7 3,425.5 3,451.8 3,449.1 3,441.2 3,455.6 3,467.1 2 Securities in bank credit 966.5r 951.4 947.0' 945.5 937.3 939.9 952.9 949.9 949.1 946.6 951.4 952.0 3 U.S. government securities 751.6 724.3 720.2 721.8 716.9 704.5 704.5 707.3 704.9 705.2 709.0 711.3 4 Other securities 214.9' 227.2' 226.8r 223.7 220.4 235.4 248.4 2426 244.2 241.5 242.4 240.7 5 Loans and leases in bank credit2 ... 2243.4 2,346.2 2,369.1 2,403.5 2425.2 2,445.8 2,472.6 2,501.9 2,500.0 2,494.5 2,504.1 2,515.2 6 Commercial and industrial 608.0 639.6 644.6 657.6 669.5 673.0 681.9 690.1 690.0 690.0 690.5 691.0 7 Real estate 951.2 991.6 999.8 1,015.1 1,022.8 1,028.4 1,036.0 1,040.4 1,039.1 1,039.3 1,041.3 1,042.3 8 Revolving home equity 73.5 75.7 76.2 76.7 77.0 77.2 77.9 78.7 78.4 78.6 78.8 79.0 9 Other 877.7 915.8 923.6 938.4 945.8 951.2 958.1 961.7 960.7 960.7 962.6 963.3 10 Consumer 412.2 445.8 452.2 457.5 459.6 465.1 471.0 472.7 471.8 471.3 472.3 475.5 11 Security3 78.1 69.7 70.9 68.6 67.8 69.7 73.2 84.5 85.5 81.2 86.2 88.1 12 Other 193.9 199.6 201.6 204.6 205.5 209.6 210.5 214.2 213.5 212.8 213.9 218.3 13 Interbank loans4 157.2 172.3 175.0 179.0 177.8 180.2 178.7 184.0 186.2 178.9 191.2 182.3 14 Cash assets5 216.7r 206.0' 209.0' 219.4 215.9 207.0 208.5 211.1 210.0 207.2 211.9 217.7 15 Other assets6 225.1r 221.0' 227.4' 237.1 242.5 244.4 253.3 252.4 252.0 253.1 248.3 254.7 16 Total assets7 3,751.7r 3,840.7 3,871.4 3,927.7 3^42^ 3,960.9 4,009.0 4.042J 4,0403 4,0234 4,049.8 4,064.9 Liabilities 17 Deposits 2515.8 2522.6 2,528.7 2544.0 2,547.2 2,548.1 2,556.7 2,570.8 2,567.4 2,563.7 2,576.5 2,579.9 18 Transaction 812.1 797.7 797.6 808.6 804.9 795.5 791.2 788.4 789.5 783.0 792.2 790.1 19 Nontransaction 1,703.7 1,724.9 1,731.1 1,735.4 1,742.3 1,752.6 1,765.5 1,782.4 1,778.0 1,780.6 1,784.3 1,789.8 20 Large time 337.0 358.3 361.4 365.8 373.0 379.3 385.1 388.9 387.5 389.2 388.4 390.8 21 Other 1,366.7 1,366.6 1,369.7 1,369.6 1,369.3 1,373.3 1,380.5 1,393.5 1,390.4 1,391.4 1,395.9 1,399.0 22 Borrowings 571.lr 591.9 taiff 641.9 644.2 649.2 674.2 679.6 690.8 671.5 676.3 681.1 23 From banks in the U.S 157.1 169.3 176.8 181.1 178.5 182.0 181.5 183.5 185.0 178.3 192.6 180.9 24 From nonbanks in the U.S 414. r 422.6' 431.1' 460.8 465.7 467.3 492.7 496.1 505.8 493.1 483.8 500.2 25 Net due to related foreign offices 178.2 213.5 225.6 244.8 252.5 241.3 234.9 240.0 234.1 237.7 250.0 241.6 26 Other liabilities8 Wff I16.(f 179.8' 174.3 178.2 195.7 217.5 214.0 217.0 211.9 208.6 215.3 27 Total liabilities 3,4422r 3,504.0" 3,542.0 3,605.0 3^224 3,6344 3,6834 3,7044 3,7094 3,684.8 3,7114 3,717.9 28 Residual (assets less liabilities)9 309.5r 336.7' 329.4 322.7 320.1 326.5 325.6 337.8 331.0 338.6 338.4 347.0 Not seasonally adjusted Assets 29 Bank credit 3,201.6' 3,306.2' 3,332.1' 3,345.1 3,358.3 3,386.2 3,426.7 3,443.0 3,441.7 3,433.8 3,434.6 3,462.2 30 Securities in bank credit 966.7' 952.V 942.3' 939.5 936.0 947.7 959.6 950.9 953.2 947.2 948.0 953.3 31 U.S. government securities 750.9' 1253 719.1 715.7 712.5 709.5 708.8 706.5 705.2 704.7 706.1 709.4 32 Other securities 215.8' 221.8 223.2 223.8 223.5 238.1 250.7 244.5 248.0 242.4 241.8 243.9 33 Loans and leases in bank credit2 . .. 2034.9 2,353.3 2,389.8 2,405.5 2422.3 2,438.6 2,467.2 2,492.1 2,488.5 2,486.6 2486.7 2,508.9 34 Commercial and industrial 610.7 639.7 645.3 654.3 668.1 676.2 686.3 693.2 693.9 692.8 691.8 693.9 35 Real estate 949.8 996.3 1,006.2 1,013.4 1,018.9 1,023.5 1,031.8 1,038.7 1,037.9 1,038.0 1,039.0 1,040.8 36 Revolving home equity 73.4 76.1 76.3 76.6 76.6 76.5 77.4 78.5 78.3 78.5 78.6 78.8 37 Other 876.4 920.2 930.0 936.8 942.3 947.1 954.5 960.2 959.6 959.6 960.4 962.0 38 Consumer 410.9 446.0 457.2 4622 460.8 461.6 467.8 471.2 470.0 470.3 470.8 473.8 39 Security3 73.2 71.3 75.5 70.8 71.0 70.9 74.0 78.9 78.5 77.1 78.2 82.5 40 Other 190.3 200.0 205.6 204.7 203.5 206.3 207.2 210.0 208.2 208.4 206.9 217.9 41 Interbank loans4 152.3 173.9 185.7 185.9 179.9 178.4 178.3 178.6 179.5 173.6 181.8 180.6 42 Cash assets5 214.5' 212.5' 222.9' 224.8 212.6 201.3 204.8 208.6 199.7 200.3 196.8 238.4 43 Other assets6 224.2' 223.7' 233.2' 236.9 240.2 239.6 248.7 251.6 253.4 251.1 243.4 256.3 44 Total assets7 3,735^ 3,859.7 3,917-3 3,9363 3,934.3 3^48.9 4,001.8 4,024.7 4,017.2 4,001.7 3,999.5 4,080.5 Liabilities 45 Deposits 2,506.4 2537.7 2,561.5 2,547.9 2537.9 2538.4 2559.7 2,561.8 2,552.4 2551.5 2538.8 2603.3 46 Transaction 800.8 811.9 833.3 818.9 796.0 783.3 796.1 777.2 771.3 769.0 753.1 809.2 47 Nontransaction 1,705.6 1,725.8 1,728.2 1,729.0 1,741.9 1,755.0 1,763.6 1,784.6 1,781.1 1,782.5 1,785.7 1,794.2 48 Large time 340.8 357.5 360.0" 3626 373.2 380.5 383.7 393.1 391.7 393.5 394.1 395.1 49 Other 1,364.8 1,368.4' 1,368.3 1,366.4 1,368.6 1,374.5 1,380.0 1,391.5 1,389.5 1,389.0 1,391.6 1,399.1 50 Borrowings 562.5' 605.3' 620.6' 634.7 640.3 638.4 656.6 665.8 673.7 657.0 657.6 675.0 51 From banks in the U.S 152.5 173.6 185.7 185.9 179.8 178.3 178.0 178.3 179.2 173.3 181.5 180.4 52 From nonbanks in the U.S 410.1' 431.7' 434.8' 448.9 460.5 460.1 478.6 487.5 494.5 483.7 476.2 494.6 53 Net due to related foreign offices 182.0 213.2 230.3 251.4 249.5 245.2 237.4 246.0 236.0 245.6 258.8 247.0 54 Other liabilities8 175.1' 181.1' 182.8' 177.1 178.9 194.9 212.4 212.3 216.5 209.6 205.7 214.5 55 Total liabilities 3,425.9" 3,5374' 3,595.2 3,611.1 3,606^ 3,616.9 3,666J 3,685.9 3,678.6 3,663.7 3,660.9 3,739.8 56 Residual (assets less liabilities)9 309.6' 322.3 322.1 325.1 327.8 332.1 335.7 338.8 338.6 338.0 338.6 340.7 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 1994 1995r May Nov. Dec. Jan. Feb. Mar. Apr. May May 10 May 17 May 24 May 31 DOMESTICALLY CHARTERED Seasonally adjusted COMMERCIAL BANKS Assets 57 Bank credit 2,863.8r 2,950.0 22,,996666..00 2,997.5 3,001.0 3,020.0 3,052.3 3,073.9 3,065.2 3,066.2 3,081.7 3,088.2 58 Securities in bank credit 883^ 871.lr 886688..66 864.3 848.7 852.4 861.8 858.4 856.2 855.4 861.6 859.6 59 US. government securities . 692.6 670.6 669.0 668.5 656.8 646.2 643.2 644.1 640.9 642.0 647.3 647.1 60 Other securities 191.3r 200.5r 199.6r 195.7 191.8 206.3 218.6 214.2 215.3 213.4 214.3 212.5 61 Loans and leases in bank credit2. 1,979.9 2,079.0 2,097.4 2,133.2 2,152.3 2,167.6 2,190.5 2,215.5 2,209.0 2,210.7 2,220.1 2,228.6 62 Commercial and industrial . 451.9 476.7 480.3 492.1 499.0 502.3 510.4 516.3 515.7 516.0 516.7 517.9 63 Real estate 907.4 950.2 958.7 974.6 982.7 988.8 997.3 1,002.3 1,001.0 1,001.3 1,003.5 1,004.3 64 Revolving home equity. . 73.5 75.7 76.2 76.7 77.0 112 77.9 78.7 78.4 78.6 78.8 79.0 65 Other 833.9 874.5 882.5 897.9 905.8 911.7 919.4 923.6 922.5 922.7 924.7 925.3 66 Consumer 412.2 445.8 452.2 457.5 459.6 465.1 471.0 472.7 471.8 471.3 472.3 475.5 67 Security3 51.0 46.0 45.4 45.5 46.5 45.9 45.4 54.0 51.7 52.3 57.3 57.7 68 Other 157.4 160.2 160.8 163.5 164.4 165.5 166.4 170.2 168.8 169.8 170.4 173.3 69 Interbank loans4 131.4 148.6 151.4 155.0 155.1 156.4 157.2 160.2 164.9 157.0 164.4 156.4 70 Cash assets5 188.6 181.5r 181.8r 192.2 190.1 180.9 181.2 181.5 180.2 177.0 181.9 188.5 71 Other assets6 173-tf" 167.2r 167.7r 171.9 173.4 168.1 165.6 164.5 164.0 165.6 164.2 164.6 72 Total assets7 3,299.7r 3,391.1 3,410.8 3,459.7 3,463.2 3,469.1 3,499J! 3,523.1 3,517.4 3£08£ 3,535.1 3,540.7 Liabilities 73 Deposits 2,371.3 2,367.8 2,370.8 2,390.3 2,395.7 2,393.9 2,396.1 2,406.8 2,403.2 2,400.6 2,413.3 2,413.1 74 Transaction 801.8 787.8 787.3r 798.6 794.6 784.8 780.8 778.2 779.2 773.7 782.0 779.2 75 Nontransaction 1,569.5 1,580.0 1,583.5 1,591.7 1,601.0 1,609.1 1,615.3 1,628.6 1,624.1 1,626.9 1,631.3 1,634.0 76 Large time 207.6 217.3 218.7 226.1 235.2 239.7 240.8 243.1 242.3 243.9 243.6 242.6 77 Other 1,361.9 1,362.7 1,364.8 1,365.6 1,365.9 1,369.3 1,374.4 1,385.5 1,381.8 1,383.1 1,387.7 1,391.4 78 Borrowings 468.3r 492.3' 506.8r 541.8 540.8 538.4 561.5 566.6 568.2 561.0 572.1 568.0 79 From banks in the U.S 138.0 154.2 162.3 164.6 161.5 164.4 162.5 163.2 161.3 159.4 174.5 159.7 80 From nonbanks in the U.S.... 330.2r 338.tf 344.5r 377.2 379.3 374.0 399.0 403.5 406.9 401.6 397.6 408.3 81 Net due to related foreign offices 26.9 66.4 77.4 91.5 87.9 85.2 82.3 84.3 84.5 84.3 86.9 82.2 82 Other liabilities8 133.8r 131.8r uisf 119.5 120.6 130.6 141.9 137.5 139.2 136.0 134.8 138.7 83 Total liabilities 3,000.2r 3,0583r 3,083.0 3,143.1 3,145.0 3,148.1 3,181.8 3,195.2 3,195.2 3,181.9 3,207.0 3,202.0 84 Residual (assets less liabilities)9. 299.4r 332.8r 327.8 316.7 318.2 321.0 317.4 327.9 322.2 326.9 328.1 338.7 Not seasonally adjusted Assets 85 Bank credit 2,862.0" 2,958.1 2,973.6 2,988.5 2,996.4 3,019.3 3,056.5 3,072.3 3,065.6 3,065.7 3,070.3 3,089.5 86 Securities in bank credit .... 885.5r 871.7r 862.3 856.8 847.8 859.2 869.6 860.8 860.7 857.7 860.1 862.6 87 US. government securities . 693.4 670.4 665.9 661.0 653.7 650.5 648.6 645.0 642.4 643.6 646.3 647.4 88 Other securities 192. lr 201.3r 196.5r 195.8 194.1 208.7 221.1 215.8 218.3 214.2 213.8 215.2 89 Loans and leases in bank credit2. 1,976.4 2,086.5 2,111.3 2,131.6 2,148.5 2,160.1 2,186.9 2,211.5 2,204.9 2208.0 2,210.1 2,226.8 90 Commercial and industrial . 455.3 476.9 480. lr 488.5 498.5 505.1 514.7 520.1 520.4 519.7 519.2 521.1 91 Real estate 906.1 954.9 965.1 973.0 978.8 983.9 993.4 1,000.7 999.7 1,000.1 1,001.3 1,003.0 92 Revolving home equity.. 73.4 76.1 76.2 76.6 76.6 76.5 77.3 78.5 78.3 78.5 78.6 78.8 93 Other 832.8 878.8 888.9 896.4 902.1 907.5 916.1 922.2 921.4 921.6 922.7 924.2 94 Consumer 410.9 446.0 457.2 462.2 460.8 461.6 467.8 471.2 470.0 470.3 470.8 473.8 95 Security3 49.0 47.2 45.9 44.9 47.8 46.6 46.8 51.9 49.4 51.1 529 55.4 96 Other 155.2 161.5 163.1 162.9 162.6 163.0 164.3 167.6 165.4 166.8 165.8 173.5 97 Interbank loans4 126.8 150.3 159.7 160.4 158.1 155.8 157.0 155.3 158.3 151.8 154.7 156.6 98 Cash assets5 187.6 188.0 195.5r 198.0 187.7 175.9 178.3 180.3 171.4 171.8 168.5 210.0 99 Other assets6 172.3r 168^ noxf 171.3 171.2 165.1 163.2 163.8 164.4 163.9 160.2 166.4 100 Total assets7 3J91& 3,408.9 3,4413 3,461.8 3,456£ 3,459.6 3,498.3 3,514.7 3,502.7 3^962 3,496.6 3,565.5 Liabilities 101 Deposits 2,359.9 2,384.5r 2,403.7 2,394.6 2,385.7 2,382.2 2,400.2 2,395.8 2,387.1 2,386.9 2,372.8 2,433.7 102 Transaction 790.9 802.0 822.8 808.7 785.8 773.1 786.1 767.5 761.7 760.2 743.5 798.5 103 Nontransaction 1,569.0 1,582.5 1,580.9 1,585.9 1,599.9 1,609.1 1,614.2 1,628.3 1,625.4 1,626.7 1,629.3 1,635.2 104 Large time 208.9 217.5 217.1 224.0 235.4 238.6 240.2 244.7 244.2 245.3 245.8 244.0 105 Other 1,360.1 1,365.0 1,363.8 1,361.9 1,364.5 1,370.6 1,374.0 1,383.6 1,381.2 1,381.3 1,383.5 1,391.1 106 Borrowings 462.9r 505.9? 518.1r 535.5 539.3 529.3 544.1 557.1 554.8 552.4 558.7 565.5 107 From banks in the U.S 135.3 158.0 169.8 168.8 163.2 160.7 160.1 159.9 158.0 156.5 165.9 159.9 108 From nonbanks in the U.S.... 327.61 348.(/ 348.4r 366.7 376.1 368.6 384.0 397.3 396.9 396.0 392.8 405.6 109 Net due to related foreign offices 32.4 64.9 74.3 90.2 88.7 90.1 84.6 92.6 90.0 90.7 99.4 92.9 110 Other liabilities8 131.8r 136./ 129.1r 121.3 120.3 131.0 138.9 135.5 137.3 133.3 132.3 137.9 111 Total liabilities 2^87.0r 3,091^ 3,125.2 3,141.6 3,134.0 3,1326 3,167.8 3,181.0 3,1693 3,1633 3,163.1 3,229.9 112 Residual (assets less liabilities)9. 304.5r 317.3 317.1 320.2 322.9 326.9 330.5 333.7 333.4 332.9 333.5 335.6 Footnotes appear on following page. 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A20 Domestic Nonfinancial Statistics • August 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 Apr. 5 Apr. 12' Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 ASSETS 1 Cash and balances due from depository institutions 106,557 110,336 112,903 114,476 110,882 106,287 106,818 105,225 132,854 7 US. Treasury and government securities 298,336 297,192 295,545 292,260 294,122 291,243 295,674 298,499 303,390 Trading account 23,809 22,272 22,663 21,814 21,656 20,644 22,787 22,872 24,832 4 Investment account 274,527 274,920 272,882 270,445 272,467 270,599 272,888 275,627 278,558 5 Mortgage-backed securities1 93,315r 92,659 93,228 93,568 94,065 94,475 93,892 96,006 97,134 All others, by maturity 6 One year or less 47,576r 47,671 46,996 46,383 47,852 46,735 47,223 4466,,441177 4466,,770044 7 One year through five years 71,747r 72,938 71,699 69,991 69,271 69,144 71,329 71,843 72,804 8 More than five years 61,889r 61,653 60,959 60,504 61,280 60,245 60,443 61,361 61,915 9 Other securities 132,283r 135,344 139,257' 134,516' 133,896 133,226 128,836 128,507 129,902 10 Trading account 1,323 1,341 1,348 1,469 1,575 1,475 1,313 1,277 1,392 11 Investment account 60,585 60,920 60,830 60,538 60,818 61,853 62,240 62,610 63,011 17 State and local government, by maturity 20,287 20,262 20,264 20,145 20,007 20,867 20,878 20.898 21,055 n One year or less 5,583r 5,550 5,542 5,549 5,554 5,537 5,552 5,562 5,607 14 More than one year 14,705' 14,712 14,722 14,595 14,452 15,330 15,326 15,336 15,449 IS Other bonds, corporate stocks, and securities 40,298 40,658 40,566 40,393 40,811 40,986 41,361 41,712 41,955 16 Other trading account assets 70,375' 73,082 77,079' 72,510' 71,503 69,898 65,284 64,620 65,499 17 98,015 103,134 99,747 106,922 105,209 109,162 104,452 108,442 110,584 18 To commercial banks in the United States 65,849 71,025 66,270 74,419 70,158 72,949 66,393 70,194 67,921 19 To nonbank brokers and dealers in securities 25,906 25,685 27,676 26,035 29,294 29,752 31,392 32,003 32,484 ?0 To others3 6,260 6,424 5,801 6,467 5,756 6,461 6,666 6,245 10,179 ?1 Other loans and leases, gross 1,196,257' 1,195,824 1,203,945 1,203,507 1,208,744 1,208,417 1,207,698 1,210,259 1,224,565 77 Commercial and industrial 336,908' 337,461 340,405' 341,644' 344,001 343,875 342,993 342,298 344,213 73 Bankers acceptances and commercial paper 1,834 1,969 2,103 2,015 1,965 2,022 1,733 1,748 1,786 74 All other 335,074' 335,492 338,302' 339,629' 342,035 341,853 341,260 340,550 342,427 75 332,711' 333,211 335,831' 337,130' 339,389 339,224 338,618 337,814 339,738 ?6 Non-U.S. addressees 2,363' 2,281 2,471' 2,50C 2,646 2,629 2,643 2,736 2,689 77 471,810' 473,274 474,319' 475,267' 476,831 477,893 477,338 477,632 481,264 78 46,725' 46,843 47,152' 47,321' 47,726 47,858 47,928 47,948 48,555 79 All other 425,085' 426,431 427,167' 427,946' 429,105 430,035 429,410 429,684 432,709 30 To individuals for personal expenditures 239,410' 239,657 240,097 239,706 241,477 240,331 240,701 241,270 244,520 31 To depository and financial institutions 57,211' 56,927 57,356 56,160 55,470 56,508 55,497 57,241 57,808 3? Commercial banks in the United States 37,501 37,172 37,386 36,390 35,462 35,758 35,395 36,778 37,083 33 Banks in foreign countries 2,775' 3,084 3,291 3,191 2,873 3,346 3,114 3,446 3,144 34 Nonbank depository and other financial institutions 16,934 16,671 16,679 16,579 17,135 17,404 16,988 17,017 17,580 35 For purchasing and carrying securities 13,314 13,628 16,397 15,551 14,183 14,410 14,439 15,735 17,550 36 To finance agricultural production 6,222 6,248 6,329 6,278 6,317 6,284 6,373 6,396 6,500 37 To states and political subdivisions 11,243 11,206 11,082 11,039 11,128 11,091 11,161 11,053 11,139 38 To foreign governments and official institutions 916' 937 886 1,020 904 890 941 930 1,040 39 26,030' 23,189 23,705' 23,374' 24,734 23,342 24,337 23,680 26,013 40 Lease-financing receivables 33,192 33,298 33,370 33,469 33,699 33,793 33,919 34,025 34,517 41 LESS: Unearned income 1,630 1,648 1,644 1,648 1,632 1,640 1,630 1,667 1,646 47 Loan and lease reserve5 34,311 34,354 34,406 34,276 34,546 34,534 34,527 34,512 34,490 43 Other loans and leases, net 1,160,316' 1,159,821 1,167,895 1,167,583 1,172,566 1,172,243 1,171,541 1,174,080 1,188,429 44 136,501' 135,598 136,759 131,783 134,431 134,373 135,016 130,184 135,214 45 Total assets6 1,932,007' 1,941,425 1,952,106' 1,947,540' 1,951,105 1,946,533 1,942,338 1,944,939 2,000,373 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • August 1995 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1995 AAccccoouunntt Apr. 5 Apr. 12' Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 LIABIUTIES 46 Deposits l,164,379r 1,164,927 1,161,166' 1,141,046' 1,157,987 1,145,821 1,147,480 1,137,953 1,184,022 47 Demand deposits7 295,580r 294,686 293,972' 285,048' 293,518 282,000 284,993 278,505 315,230 48 Individuals, partnerships, and corporations 251,565r 249,949 246,558' 237,814' 247,812 239,647 243,584 236,211 264,974 49 Other holders 44,015 44,736 47,414' 47,234' 45,705 42,353 41,409 42,294 50,257 50 States and political subdivisions 8,112 7,973 8,243 8,612 9,301 7,788 7,695 8,127 8,473 51 U.S. government 2,270 2,482 4,670 3,453 2,131 1,638 1,595 1,719 1,919 52 Depository institutions in the United States 19,337 18,809 19,496 18,778 19,692 17,613 17,401 17,871 22,489 53 Banks in foreign countries 4,565 4,797 4,784 5,688 5,264 5,818 5,139 5,376 5,880 54 Foreign governments and official institutions 646 795 744 775 623 633 633 581 866 55 Certified and officers' checks 9,086 9,881 9,477' 9,928' 8,694 8,863 8,947 8,619 10,629 56 Transaction balances other than demand deposits4 131,298r 130,535 132,117' 123,819 123,845 120,684 119,760 115,252 114,653 57 Nontransaction balances 737,501r 739,706 735,076 732,179 740,625 743,138 742,727 744,196 754,139 58 Individuals, partnerships, and corporations 714,134' 716,262 711,875 708,186 716,864 718,753 719,002 720,480 730,137 59 Other holders 23,367 23,444 23,202 23,993 23,761 24,384 23,725 23,715 24,002 60 States and political subdivisions 19,443 19,554 19,507 19,921 19,730 20,055 19,817 19,792 20,251 61 U.S. government 2,155 2,155 2,080 2,136 2,038 2,059 2,022 2,033 2,001 62 Depository institutions in the United States 1,360 1,333 1,309 1,625 1,682 1,959 1,575 1,577 1,439 63 Foreign governments, official institutions, and banks .. 409 402 305 311 311 311 312 313 312 64 Liabilities for borrowed money5 382,239r 387,871 399,449' 400,249' 395,920 401,188 400,292 405,609 412,421 65 Borrowings from Federal Reserve Banks 0 0 0 0 15 0 0 0 0 66 Treasury tax and loan notes 6,904 3,840 23,726' 18,832' 22,834 17,446 10,968 6,929 14,539 67 Other liabilities for borrowed money 375,335' 384,031 375,723' 381,417' 373,072 383,743 389,324 398,680 397,882 68 Other liabilities (including subordinated notes and debentures)... 206,343' 209,140 211,108' 226,176' 215,570 216,551 212,088 218,617 219,431 69 Total liabiUties 1,752,961' 1,761,937 1,771,722' 1,767,471' 1,769,477 1,763,560 1,759,860 1,762,179 1,815,874 70 Residual (total assets less total liabilities)7 179,047 179,488 180,383' 180,070' 181,628 182,973 182,477 182,760 184,498 MEMO 71 Total loans and leases, gross, adjusted, plus securities8 1,621,541' 1,623,297 1,634,837' 1,626,396' 1,636,351 1,633,340 1,634,872 1,638,736 1,663,436 72 Time deposits in amounts of $100,000 or more 105,092' 107,014 107,627' 107,312 108,470 108,823 108,969 108,585 108,075 73 Loans sold outright to affiliates9 551 551 549 560 563 562 562 564 561 74 Commercial and industrial 294 294 294 294 294 294 294 294 292 75 Other 257 257 255 265 269 268 268 270 268 76 Foreign branch credit extended to U.S. residents10 24,045' 24,251 24,537' 24,848' 24,941 24,875 25,019 25,487 25,334 77 Net owed to related institutions abroad 73,383 74,935 76,401 95,124 82,624 85,809 86,410 95,627 89,030 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 cf 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 Apr. 5 Apr. 12 Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 ASSETS 1 Cash and balances due from depository institutions 15,347 15,749 16,344 16,931 16,471 17,304 1177,,551100 1177,,443399 1177,,443344 7. U.S. Treasury and government agency 41,343 40,286 41,367 41,621 42,244 4433,,000033 4422,,001166 4411,,227711 4422,,555577 3 Other securities 14,448 14,667 14,214 13,526 13,754 14,124 13,495 13,441 13,683 4 25,310 25,125 30,719 33,538 30,457 30,648 27,013 28,182 29,208 5 To commercial banks in the United States 4,511 3,223 5,582 7,614 5,653 5,577 5,919 8,737 7,301 6 To others2 20,799 21,902 25,136 25,924 24,804 25,071 21,094 19,445 21,908 7 Other loans and leases, gross 169,26lr 168,887r 170,245r 170,638 170,136 170,579 171,101 171,675 172,421 8 Commercial and industrial 109,635r 109,775 109,974r 110,114r 110,855 110,926 111,058 111,219 110,709 9 Bankers acceptances and commercial paper . 3,101 3,371 3,171 3,080 3,010 2,993 2,882 3,133 2,889 10 All other 106,534r 106,404 106,803r 107,035r 107,845 107,932 108,176 108,086 107,821 11 U.S. addressees 101,893r 101,752 102,096r 102,179r 103,089 103,240 103,467 103,249 102,926 1? Non-U.S. addressees 4,641 4,652 4,707 4,856 4,756 4,692 4,709 4,837 4,894 13 Loans secured by real estate 23,989r 24,003r 23,859r 23,845 23,887 23,770 23,689 23,645 23,593 14 Loans to depository and financial institutions 27,385 26,850 27,609r 28,098r 27,374 27,080 27,364 2277,,221155 2277,,338899 15 Commercial banks in the United States 5,904 5,421 5,096 5,092 4,847 4,866 4,892 4,659 4,561 16 Banks in foreign countries 2,113 1,976 2,281 2,321 2,143 2,321 2,229 2,169 2,312 17 Nonbank financial institutions 19,368 19,453 20,233r 20,685r 20,385 19,893 20,244 20,387 20,516 18 For purchasing and carrying securities 3,672 3,673 4,333 4,149 3,790 4,319 4,728 5,239 6,150 19 To foreign governments and official 409 393 390 378 378 392 337700 338811 338866 70 All other 4,172 4,193 4,079 4,054 3,852 4,092 3,891 3,975 4,194 21 Other assets (claims on nonrelated parties) 59,555 59,905 60,926 61,854 66,451 64,055 62,929 60,016 64,808 22 Total assets3 350,751r 349,151r 360,399' 366,163 366,650 366,837 360,648 359,141 371,230 LIABILITIES ?3 Deposits or credit balances owed to other than directly related institutions 97,136 97,250 100,133 103,948 101,206 102,503 102,604 110044,,334499 110077,,008800 74 Demand deposits4 3,944 3,959 3,643 3,837 3,649 3,521 3,158 3,637 4,224 25 Individuals, partnerships, and corporations .... 3,124 2,843 2,737 2,737 2,901 2,607 2,493 2,910 3,336 ?6 Other 820 1,116 906 1,100 748 914 665 727 888 77 93,193 93,291 96,490 100,111 97,557 98,982 99,447 100,712 102,856 ?8 Individuals, partnerships, and corporations .... 63,386 64,273 64,993 67,915 66,013 67,268 67,433 69,136 69,367 79 Other 29,807 29,018 31,497 32,195 31,543 31,714 32,013 31,576 33,489 30 Borrowings from other than directly 82,352 83,544 86,578 86,186 87,436 8899,,665599 7788,,886644 7755,,776699 8844,,225577 31 Federal funds purchased 43,191 45,198 47,317 46,431 48,634 50,613 43,972 41,832 48,118 3? From commercial banks in the United States .. 9,387 7,791 8,852 7,731 8,375 11,844 8,372 7,559 11,919 33 33,804 37,407 38,465 38,700 40,259 38,768 35,600 34,272 36,199 34 Other liabilities for borrowed money 39,161 38,345 39,261 39,755 38,802 39,046 34,892 33,938 36,139 35 To commercial banks in the United States 6,473 6,281 6,235 5,860 5,535 5,655 5,378 4,715 5,046 36 32,689 32,064 33,026 33,895 33,267 33,391 29,514 29,223 31,093 37 Other liabilities to nonrelated parties 55,870"^ 55,145r 57,361r 57,471 61,932 60,918 58,974 57,131 59,972 38 Total liabilities6 350,751r 349,151r 360r399r 366,163 366,650 366,837 360,648 359,141 371,230 39 T M o E t M al O lo ans (gross) and securities, adjusted 239,947r 240,321' 245,866r 246,616 246,091 247,910 242,813 241,173 246,008 40 Net owed to related institutions abroad 89,906r 88,679r 89,742r 90,503 88,939 86,632 93,621 94,775 88,803 1. Includes securities purchased under agreements to resell. 5. Includes securities sold under agreements to repurchase. 2. Includes transactions with nonbank brokers and dealers in securities. 6. For U.S. branches and agencies of foreign banks having a net "due to" position, 3. For U.S. branches and agencies of foreign banks having a net "due from" position, includes net owed to related institutions abroad. includes net due from related institutions abroad. 7. Excludes loans to and federal funds transactions with commercial banks in the 4. Includes other transaction deposits. United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • August 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 Nov. Dec. Jan. Feb. Mar. Apr. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 562,656 528,832 545,619 555,075 595,382 580,510 595,382 612,554 619,150 633,324r 651,128 Financial companies' Dealer-placed paper2 2 Total 214,706 212,999 226,456 218,947 223,038 215,733 223,038 231,318 232,231 243,949* 252,846 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 220077,,770011 203,584 207,701 215,423 218,570 218,269 219,281 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 companies3 147,914 133,370 147,558 155,739 164,643 161,193 164,643 165,813 168,349 171,106 179,001 Bankers dollar acceptances (not seasonally adjusted)6 7 Total 54,771 43,770 38,194 32,348 29,835 29,760 29,835 By holder 8 Accepting banks 9,017 11,017 10,555 12,421 11,783 11,689 11,783 9 Own bills 7,930 9,347 9,097 10,707 10,462 10,548 10,462 10 Bills bought from other banks 1,087 1,670 1,458 1,714 1,321 1,142 1,321 Federal Reserve Banks7 11 Foreign correspondents 918 1,739 1,276 725 410 234 410 n.a. n.a. n.a. n.a. 12 Others 44,836 31,014 26,364 19,202 17,642 17,836 17,642 By basis 13 Imports into United States 13,095 12,843 12,209 10,217 10,062 10,272 10,062 14 Exports from United States 12,703 10,351 8,096 7,293 6,355 6,688 6,355 15 All other 28,973 20,577 17,890 14,838 13,417 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 Period Av r e a r t a e g e Period Av r e a r t a e g e Period Av ra er t a e g e 1992—Jan. 1 6.50 1992 6.25 1993—Jan. . 6.00 1994—Jan. . 6.00 July 2 6.00 1993 6.00 Feb. 6.00 Feb. 6.00 1994 7.15 Mar. 6.00 Mar. 6.06 1994—Mar. 24 6.25 Apr. 6.00 Apr. 6.45 Apr. 19 6.75 1992—Jan. . 6.50 May 6.00 May 6.99 May 17 7.25 Feb. 6.50 June 6.00 June 7.25 Aug. 16 7.75 Mar. 6.50 July . 6.00 July . 7.25 Nov. 15 8.50 Apr. 6.50 Aug. 6.00 Aug. 7.51 May 6.50 Sept. 6.00 Sept. 7.75 1995—Feb. 1 9.00 June 6.50 Oct. . 6.00 Oct. . 7.75 July 7 8.75 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 Apr. . 9.00 May . 9.00 June . 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 • August 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 Feb. Mar. Apr. May Apr. 28 May 5 May 12 May 19 May 26 MONEY MARKET INSTRUMENTS 1 Federal funds1,2'3 3.52 3.02 4.21 5.92 5.98 6.05 6.01 5.99 6.05 6.00 6.02 5.99 2 Discount window borrowing2'4 3.25 3.00 3.60 5.25 5.25 5.25 5.25 5.25 5.25 5.25 5.25 5.25 Commercial paperiif' 3 1-month 3.71 3.17 4.43 6.05 6.07 6.06 6.05 6.05 6.07 6.03 6.06 6.05 4 3-month 3.75 3.22 4.66 6.15 6.15 6.12 6.06 6.09 6.11 6.05 6.06 6.04 5 6-month 3.80 3.30 4.93 6.38 6.30 6.19 6.07 6.14 6.16 6.06 6.06 6.02 Finance paper, directly placed3 5,1 6 1-month 3.62 33..1122 4.33 5.95 5.95 5.96 5.94 5.95 5.94 5.93 5.94 5.93 7 3-month 3.65 3.16 4.53 6.04 6.03 6.01 5.91 5.99 5.97 5.89 5.91 5.89 8 6-month 3.63 3.15 4.56 6.10 6.04 6.01 5.81 5.97 5.95 5.82 5.79 5.74 Bankers acceptances3'5'8 9 3-month 3.62 3.13 4.56 6.05 6.04 6.00 5.91 5.99 5.96 5.91 5.91 5.89 10 6-month 3.67 3.21 4.83 6.22 6.14 6.06 5.90 6.03 6.00 5.90 5.88 5.85 Certificates of deposit, secondary market3,9 11 1-month 3.64 3.11 4.38 6.01 6.02 6.01 5.98 5.99 6.00 5.98 5.98 5.98 12 3-month 3.68 3.17 4.63 6.16 6.15 6.11 6.02 6.09 6.07 6.01 6.03 6.00 13 6-month 3.76 3.28 4.96 6.44 6.34 6.27 6.07 6.22 6.20 6.06 6.06 6.02 14 Eurodollar deposits, 3-month3'10 3.70 3.18 4.63 6.14 6.15 6.13 6.03 6.09 6.09 6.03 6.02 6.00 U.S. Treasury bills Secondary market3'5 15 3-month 3.43 3.00 4.25 5.77 5.73 5.65 5.67 5.67 5.65 5.64 5.69 5.69 16 6-month 3.54 3.12 4.64 6.03 5.89 5.77 5.67 5.76 5.71 5.66 5.67 5.66 17 1-year 3.71 3.29 5.02 6.28 6.03 5.88 5.65 5.85 5.79 5.65 5.64 5.59 Auction average3'5'" 18 3-month 3.45 3.02 4.29 5.80 5.73 5.67 5.70 5.66 5.74 5.63 5.71 5.72 19 6-month 3.57 3.14 4.66 6.10 5.91 5.80 5.73 5.75 5.84 5.65 5.69 5.72 20 1-year 3.75 3.33 4.98 6.59 6.16 6.02 5.90 n.a. 5.90 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 3.89 3.43 5.32 6.70 6.43 6.27 6.00 6.24 6.16 6.00 5.98 5.92 22 2-year 4.77 4.05 5.94 7.11 6.78 6.57 6.17 6.52 6.43 6.15 6.15 6.06 23 3-year 5.30 4.44 6.27 7.25 6.89 6.68 6.27 6.64 6.54 6.27 6.25 6.14 24 5-year 6.19 5.14 6.69 7.37 7.05 6.86 6.41 6.81 6.70 6.41 6.40 6.28 25 7-year 6.63 5.54 6.91 7.44 7.14 6.95 6.50 6.90 6.79 6.52 6.46 6.37 26 10-year 7.01 5.87 7.09 7.47 7.20 7.06 6.63 7.03 6.93 6.66 6.59 6.49 27 20-year n.a. 6.29 7.49 7.73 7.57 7.45 7.01 7.41 7.29 7.04 6.95 6.86 28 30-year 7.67 6.59 7.37 7.61 7.45 7.36 6.95 7.33 7.22 6.98 6.90 6.81 Composite 29 More than 10 years (long-term) 7.52 6.45 7.41 7.69 7.52 7.41 6.99 7.37 7.26 7.01 6.94 6.85 STATE AND LOCAL NOTES AND BONDS Moody's series13 30 6.09 5.38 5.77 6.05 5.91 5.74 5.68 5.80 5.74 5.68 5.61 5.68 31 BBaaaa 6.48 5.83 6.17 6.61 6.50 6.01 5.98 6.08 6.01 5.98 5.94 5.99 32 BBoonndd BBuuyyeerr sseerriieess1144 6.44 5.60 6.18 6.22 6.10 6.02 5.95 6.06 6.10 5.96 5.92 5.83 CORPORATE BONDS 33 Seasoned issues, all industries15 8.55 7.54 8.26 8.50 8.35 8.25 7.86 8.22 8.11 7.90 7.81 7.73 Rating group 34 Aaa 8.14 7.22 7.97 8.26 8.12 8.03 7.65 8.00 7.89 7.69 7.60 7.51 35 Aa 8.46 7.40 8.15 8.39 8.24 8.12 7.74 8.09 7.99 7.78 7.69 7.61 36 A 8.62 7.58 8.28 8.48 8.33 8.23 7.86 8.21 8.11 7.89 7.81 7.72 37 Baa 8.98 7.93 8.63 8.85 8.70 8.60 8.20 8.57 8.45 8.25 8.15 8.07 38 A-rated, recently offered utility bonds16 8.52 7.46 8.29 8.55 8.40 8.31 7.89 8.29 7.97 7.95 7.87 7.71 MEMO Dividend-price ratio11 39 Common stocks 2.99 2.78 2.82 2.81 2.76 2.68 2.60 2.65 2.63 2.61 2.60 2.60 1. The daily effective federal funds rate is a weighted average of rates on trades 12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. through New York brokers. Department of the Treasury. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the 13. General obligation bonds based on Thursday figures; Moody's Investors Service. current week; monthly figures include each calendar day in the month. 14. State and local government general obligation bonds maturing in twenty years are 3. Annualized using a 360-day year for bank interest. used in compiling this index. The twenty-bond index has a rating roughly equivalent to 4. Rate for the Federal Reserve Bank of New York. Moodys' A1 rating. Based on Thursday figures. 5. Quoted on a discount basis. 15. Daily figures from Moody's Investors Service. Based on yields to maturity on 6. An average of offering rates on commercial paper placed by several leading dealers selected long-term bonds. for firms whose bond rating is AA or the equivalent. 16. Compilation of the Federal Reserve. This series is an estimate of the yield on 7. An average of offering rates on paper directly placed by finance companies. recently offered, A-rated utility bonds with a thirty-year maturity and five years of call 8. Representative closing yields for acceptances of the highest-rated money center protection. Weekly data are based on Friday quotations. banks. 17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks 9. An average of dealer offering rates on nationally traded certificates of deposit. in the price index. 10. Bid rates for Eurodollar deposits at 11:00 a.m. London time. Data are for indication NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and purposes only. G.13 (415) monthly statistical releases. For ordering address, see inside front cover. 11. Auction date for daily data; weekly and monthly averages computed on an issue-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.36 STOCK MARKET Selected Statistics 1994 1995 IInnddiiccaattoorr 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 229.00 249.71 254.16 257.61 255.22 252.48 248.65 253.56 261.86 266.81 274.38 281.81 2 Industrial 284.26 300.10 315.32 322.19 321.53 319.33 313.92 319.93 328.98 337.96 347.69 357.01 3 Transportation 201.02 242.68 247.17 239.10 230.71 227.44 218.93 230.25 237.29 252.37 254.36 254.70 4 Utility 99.48 114.55 104.96 102.30 101.67 100.07 100.01 100.58 103.87 102.08 104.70 106.02 5 Finance 179.29 216.55 209.75 211.90 203.33 198.38 195.25 201.05 211.76 213.29 219.38 228.45 6 Standard & Poor's Corporation (1941-43 = 10)1 415.75 451.63 460.42 466.96 463.81 461.01 455.19 465.25 481.92 493.20 507.91 523.83 7 American Stock Exchange (Aug. 31, 1973 = 50) 391.28 438.77 449.49 456.31 456.25 445.16 427.39 436.09 446.37 456.06 471.54 487.03 Volume of trading (thousands of shares) 8 New York Stock Exchange 202,558 263,374 290,652 292,356 301,327 297,001 302,049 326,652 333,020 338,733 331,184 341,905 9 American Stock Exchange 14,171 18,188 17,951 18,785 20,731 18,465 18,745 18,829 18,424 17,905 19,404 19,266 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers' 43,990 60,310 61,160 61,630 62,150 61,000 61,160 64,380 59,800 60,270 62,520 64,070 Free credit balances at brokers4 11 Margin accounts5 8,970 12,360 14,095 12,415 12,875 13,635 14,095 13,225 12,380 12,745 12,440 13,403 12 Cash accounts 22,510 27,715 28,870 25,230 24,180 25,625 28,870 26,440 25,860 26,680 26,670 27,464 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. In July 1976 a financial group, composed of banks and insurance companies, was credit is collateralized by securities. Margin requirements on securities other than options added to the group of stocks on which the index is based. The index is now based on 400 are the difference between the market value (100 percent) and the maximum loan value of industrial stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility collateral as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934; (formerly 60), and 40 financial. Regulation U, effective May 1, 1936; Regulation G, effective Mar. 11, 1968; and 2. On July 5,1983, the American Stock Exchange rebased its index, 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 Financial Statistics • August 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 Dec. Jan. Feb. Mar. Apr. May U.S. budget1 1 Receipts, total 1,090,453 1,153,226 1,257,187 130,810 131,801 82,544 92,532 165,392 90,405 2 On-budget 788,027 841,292 922,161 103,859 101,036 54,405 61,971 126,170 61,027 3 Off-budget 302,426 311,934 335,026 26,951 30,765 28,139 30,561 39,222 29,378 4 Outlays, total 1,380,856 1,408,532 1,461,067 134,941 115,172 120,527r 142,458 115,673 129,355 5 On-budget 1,128,518 1,141,945 1,460,557 123,643 89,890 94,050" 116,508 90,628 102,581 6 Off-budget 252,339 266,587 279,372 11,297 25,282 26,478 25,951 25,045 26,774 7 Surplus or deficit (-), total -290,403 -255,306 -203,370 -4,130 16,628 -37,983r -49,927 49,720 -38,950 8 On-budget -340,490 -300,653 -259,024 -19,783 11,146 —39,644r -54,537 35,542 -41,554 9 Off-budget 50,087 45,347 55,654 15,653 5,483 1,661 4,610 14,178 2,604 Source of financing (total) 10 Borrowing from the public 310,918 248,594 184,998 -13,316 13,337 38,972 13,645 -27,638 44,740 11 Operating cash (decrease, or increase (-)) -17,305 6,283 16,564 476 -23,264 14,000 17,747 -19,972 11,841 12 Other2 -3,210 429 1,808 16,970 -6,701 -14,980 18,535 -2,110 22,578 MEMO 13 Treasury operating balance (level, end of period) 58,789 52,506 35,942 26,580 49,844 35,844 18,097 38,069 26,228 14 Federal Reserve Banks 24,586 17,289 6,848 7,161 13,964 6,890 4,543 8,241 4,646 15 Tax and loan accounts 34,203 35,217 29,094 19,419 35,880 28,954 13,554 29,828 21,582 1. Since 1990, off-budget items have been the social security trust funds (federal gold; net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF old-age survivors insurance and federal disability insurance) and the U.S. Postal Service. loan-valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; and Outlays of the U.S. Government; and U.S. Office of Management and Budget, Budget accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous of the U.S. Government. liability (including checks outstanding) and asset accounts; seigniorage; increment on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 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 Mar. Apr. May RECEIPTS 1 AIL sources 1,153,226 1,257,453 593,212 582,038 652,236 625,557 92,532 165,392 90,405 2 Individual income taxes, net 509,680 543,055 255,556 262,073 275,053 273,474 26,846 76,441 29,729 3 Withheld 430,211 459,699 209,517 228,423 225,387 240,062 44,561 32,447 43,414 4 Presidential Election Campaign Fund 28 70 25 2 63 10 18 16 12 5 Nonwithheld 154,989 160,364 113,510 41,768 118,245 42,031 4,284 64,937 8,691 6 Refunds 75,546 77,077 67,468 8,115 68,642 9,207 22,016 20,959 22,388 Corporation income taxes 7 Gross receipts 131,548 154,205 69,044 68,266 80,536 78,392 17,238 25,779 3,572 8 Refunds 14,027 13,820 7,198 6,514 6,933 7,331 2,375 2,297 1,379 9 Social insurance taxes and contributions, net... 428,300 461,475 227,177 206,176 248,301 220,141 39,379 53,839 48,183 10 Employment taxes and contributions 396,939 428,810 208,776 192,749 228,714 206,613 38,646 50,423 37,226 11 Self-employment taxes and contributions . 20,604 24,433 16,270 4,335 20,762 4,135 1,862 12,640 1,898 12 Unemployment insurance 26,556 28,004 16,074 11,010 17,301 11,177 320 3,061 10,601 13 Other net receipts4 4,805 4,661 2,326 2,417 2,284 2,349 413 354 355 14 Excise taxes 48,057 55,225 23,398 25,994 26,444 30,062 5,143 4,602 4,770 15 Customs deposits 18,802 20,099 8,860 10,215 9,500 11,042 1,470 1,349 1,471 16 Estate and gift taxes 12,577 15,225 6,494 6,617 8,197 7,071 1,218 1,906 1,339 17 Miscellaneous receipts 18,273 22,041 9,879 9,227 11,170 13,305 3,612 3,774 2,719 OUTLAYS 18 All types 1,408,532 l,460,722r 673,915 727,685 710,620 751,645r 142,458 115,673 129,355 19 National defense 291,086 281,451 140,535 146,672 133,841 141,108' 26,533 17,753 22,194 20 International affairs 16,826 17,249 6,565 10,186 5,800 12,056 425 95 1,282 21 General science, space, and technology 17,030 17,602 7,996 8,880 8,502 8,979 1,628 1,298 1,596 22 Energy 4,319 5,398 2,462 1,663 2,036 3,101 569 196 244 23 Natural resources and environment 20,239 20,902 8,592 11,221 9,978r 12,750 1,951 1,587 1,820 24 Agriculture 20,443 15,131 11,872 7,516 7,451 7,697 1,195 623 236 25 Commerce and housing credit -22,725 -4,851 -14,537 -1,490 -5,114 —4,094r -1,853 -1,092 -1,988 26 Transportation 35,004 36,835 16,076 19,570 16,745r 20,489 3,167 2,560 3,154 27 Community and regional development 9,051 11,877 4,929 4,288 4,705r 6,688 971 896 860 28 Education, training, employment, and social services 50,012 44,730 24,080 26,753 19,258 25,887 4,678 33,,664477 44,,220055 29 Health 99,415 106,495 49,882 52,958 53,195 54,123 10,625 9,281 9,952 30 Social security and Medicare 435,137 464,314 195,933 223,735 232,777 236,819 43,209 39,463 42,387 31 Income security 207,257 213,972 107,870 102,380 109,080 101,743 24,708 18,963 20,633 32 Veterans benefits and services 35,720 37,637 16,385 19,852 16,686 19,757 4,642 1,850 3,204 33 Administration of justice 14,955 15,283 7,482 7,400 7,718 7,800 1,488 1,359 1,129 34 General government 13,009 11,348 5,205 6,531 5,084 7,384r 1,680 299 1,109 35 Net interest6 198,811 202,957 99,635 99,914 99,844 109,435 19,671 20,017 20,295 36 Undistributed offsetting receipts' -37,386 -37,772 -17,035 -20,344 -17,308 -20,065 -2,829 -3,121 -2,956 1. Functional details do not sum to total outlays for calendar year data because 5. Deposits of earnings by Federal Reserve Banks and other miscellaneou sreceipts. 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 U.S. Government, Fiscal Year 1996. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • August 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 4,827r 4,864 2 Public debt securities 4,231 4,352 4,412 4,536 4,576 4,646 4,693 4,800 4 T 3 Held by public 3,188 3,252 3,295 3,382 3,434 3,443 3,480 3,543 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 1 6 Held by public 20 21 25 27 26 27 29 27 1 7 Held by agencies 0 0 0 0 0 0 0 0 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 4,800.2 4,645.8 4,692.8 4,800.2 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 Nonmarketable' 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 issues 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 holder 4 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 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. n.a. Individuals 23 Savings bonds 138.1 157.3 171.9 177.1 178.6 2 2 2 5 4 6 F O o th O re e t i r h g e n m r i a s s n e c d c e u ll i r a n i n t t i e e e r o s n u a s t io in n v a e l5 s tors6 4 6 1 9 5 2 1 1 5 . . . 8 3 8 5 7 1 4 0 3 9 2 1 . . . 7 4 9 6 7 1 2 2 3 3 5 7 . . . 3 0 9 6 7 1 3 5 4 2 4 4 . . . 5 0 0 6 7 1 5 6 4 3 1 8 . . . 8 6 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 A31 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1995 1995, week ending IItteemm Feb. Mar. Apr. Apr. 5 Apr. 12 Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 May 31 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 58,060 49,948 49,515 62,780 50,629 46,679 43,008 50,191 55,258 53,988 47,285 56,666 Coupon securities, by maturity 2 Five years or less 114,559 96,107 86,779 91,316 73,740 93,459 91,164 84,904 121,759 106,732 98,410 93,934 3 More than five years 54,209 45,128 38,590 41,242 37,819 39,242 37,199 38,391 80,621 60,340 48,827 58,883 4 Federal agency 25,593r 23,485r 22,120* 24,266* 21,432* 22,696* 20,818* 22,431 22,095 22,791 19,767 22,584 5 Mortgage-backed 29,730r 26,637r 26,963* 25,859* 38,925* 24,606* 20,049* 21,890 48,781 31,367 21,861 19,788 By type of counterparty With interdealer broker 6 U.S. Treasury 131,023 113,505 102,048 114,578 95,324 104,092 99,410 101,552 146,327 132,562 116,186 121,191 7 Federal agency 964 745 778 850 751 713 791 865 1,143 761 698 872 S Mortgage-backed 9,433 8,758 8,353 8,026 11,782 7,967 6,241 6,512 15,179 11,645 8,541 6,960 With other 9 U.S. Treasury 95,805 77,677 72,836 80,760 66,864 75,288 71,961 71,934 111,310 88,498 78,337 88,292 10 Federal agency 24,630* 22,740* 21,342* 23,416* 20,680* 21,983* 20,027* 21,567 20,952 22,030 19,069 21,712 11 Mortgage-backed 20,297r 17,879r 18,610* 17,833* 27,143* 16,639* 13,808* 15,378 33,602 19,721 13,320 12,828 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 1,627 1,785 910 876 1,201 568 893 1,133 1,730 1,392 1,636 867 Coupon securities, by maturity 13 Five years or less 3,052r 2,512r 2,280* 22,,112200** 2,337* 2,350 2,126 2,584 3,848 2,908 3,104 2,901 14 More than five years 15,193r 15,394r 11,654* 13,807* 11,513* 13,165 9,908 9,368 24,129 17,176 14,792 17,358 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 3,272 2,491 2,620 2,225 2,691 2,999 2,530 2,314 3,577 2,225 2,471 2,765 19 More than five years 4,616 3,872 3,389 3,280 3,075 2,731 4,433 3,377 7,353 4,736 5,133 4,770 20 Federal agency 0 0 0 0 n.a. 0 0 0 0 0 0 0 21 Mortgage-backed 1,154 760 726 1,162 801 612 493 752 2,495 723 834 1,014 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 delivery Major changes in the report form filed by primary dealers induced a break in the dealer of mortgage-backed agency securities include purchases and sales for which delivery is scheduled data series as of the week ending July 6, 1994. in thirty business days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • August 1995 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1995 1995, week ending IItteemm Feb. Mar. Apr. Apr. 5 Apr. 12 Apr. 19 Apr. 26 May 3 May 10 May 17 May 24 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 4,561 10,749 7,472 16,251 9,184 5,215 3,314 4,730 6,234 7,102 -1,443 Coupon securities, by maturity 2 Five years or less -11,938 -5,840 -1,887 -3,582 -2,384 -6,771 2,342 2,245 3,685 -4,108 4,525 3 More than five years -24,446 -28,898 -30,458 -29,073 -30,790 -29,279 -31,848 -31,238 -19,902 -20,133 -19,869 4 Federal agency 21,199 23,373 22,961 21,087 22,121 24,787r 24,134 21,524 24,332 23,744 21,592 5 Mortgage-backed 32,963 32,766 30,809 31,995 30,873 30,012 30,968 30,334 35,417 34,895 36,454 NET FUTURES POSITIONS4 By type of deliverable security 6 U.S. Treasury bills -5,786 -10,230 -10,906 -11,569 -10,863 -9,908 -11,052 -11,647 -11,816 -11,035 -10,826 Coupon securities, by maturity 7 Five years or less 2,235r 11..44000011 2,334 2,376r l,073r 3,259 2,225 3,063 1,667 1,736 1,495 8 More than five years —3,023r 92r 2,383 l,232r 3,982r 2,185 2,142 1,795 -3,486 -5,457 -5,566 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 242,544r 225,309r 227,539 222,501' 222,968' 230,271' 219,850 250,508 221,649 225,460 208,143 12 Term 329,3901 360,597' 370,576 340,888' 356,744' 376,995' 394,439 378,900 416,466 353,483 368,132 Securities borrowed 13 Overnight and continuing 181,481r 173,921' 170,977 170,883' 174,601' 170,757' 167,713 170,853 167,201 167,764 158,299 14 Term 53,944r 58,737' 59,415 55,444' 57,527' 59,371' 63,143 61,233 58,505 54,996 57,720 Securities received as pledge 15 Overnight and continuing 3,321 3,374 3,526 3,956 3,922 3,971 2,884 2,639 2,560 2,640 2,405 16 Term 52 54 64 88 22 44 39 187 203 46 56 Repurchase agreements 17 Overnight and continuing 473,176r 468,711' 469,832 476,836' 465,176' 473,330' 454,615 489,735 469,837 476,041 440,719 18 Term 279,666 320,370 330,717 292,858 315,578 341,903 358,349 336,599 374,489 311,086 317,486 Securities loaned 19 Overnight and continuing 5,911 3,927 4,946 5,267 5,354 4,750 4,632 4,723 4,651 4,769 4,627 20 Term 1,301 1,216 2,146 2,286 2,228 2,338 1,841 2,022 1,754 1,835 1,837 Securities pledged 21 Overnight and continuing 29,292r 29,195' 29,139 28,361' 30,138' 30,80c 27,976 27,493 29,671 28,731 27,214 22 Term 2,278 3,258 3,184 3,323 2,995 3,060 3,180 3,565 3,498 3,073 4,427 Collateralized loans 23 Overnight and continuing 15,921 13,998 16,973 15,908 18,131 16,804 18,016 14,747 12,264 12,439 15,373 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 227,486 219,569 219,256 215,786 216,930 218,824 213,100 239,196 215,699 215,418 198,568 26 Term 304,497 334,781 344,373 315,355 331,177 350,856 365,143 356,047 384,117 326,509 352,595 Securities out 27 Overnight and continuing 285,050 282,171 289,764 297,143 286,119 286,605 278,563 312,051 274,864 275,662 262,320 28 Term 227,576 263,970 275,791 241,270 261,852 284,974 300,064 284,786 323,542 257,719 269,823 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 A33 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1994 1995 AAggeennccyy 11999900 11999911 11999922 11999933 Nov. Dec. Jan. Feb. Mar. 1 Federal and federally sponsored agencies 434,668 442,772 483,970 570,711 715,782 741,992 740,521 749,285 757,859 2 Federal agencies 42,159 41,035 41,829 45,193 39,662 39,186 39,196 39,054 38,759 3 Defense Department1 7 7 7 6 6 6 6 6 6 4 Export-Import Bank • 11,376 9,809 7,208 5,315 3,932 3,455 3,455 3,455 3,156 5 Federal Housing Administration4 393 397 374 255 117 116 59 60 65 6 Government National Mortgage Association certificates of participation 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 8,073 8,073 8,073 7,873 7,873 8 Tennessee Valley Authority 23,435 22,401 23,580 29,885 27,534 27,536 27,603 27,660 27,659 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 392,509 401,737 442,141 525,518 676,120 702,806 701,325 710,231 719,100 11 Federal Home Loan Banks 117,895 107,543 114,733 141,577 193,920 208,881 210,905 208,843 213,373 12 Federal Home Loan Mortgage Corporation 30,941 30,262 29,631 49,993 90,709 93,279 95,060 101,417 101,673 13 Federal National Mortgage Association 123,403 133,937 166,300 201,112 247,743 257,230 250,467 255,719 258,653 14 Farm Credit Banks8 53,590 52,199 51,910 53,123 54,800 53,175 55,558 53,846 53,947 15 Student Loan Marketing Association 34,194 38,319 39,650 . 39,784 49,066 50,335 49,425 50,506 51,554 16 Financing Corporation 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation 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 179,083 185,576 154,994 128,187 105,662 103,817 101,157 100,388 98,266 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 11,370 9,803 7,202 5,309 3,926 3,449 3,449 33,,444499 3,150 21 Postal Service6 6,698 8,201 10,440 9,732 8,073 8,073 8,073 7,873 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 Association 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 4488,,&&44 42,979 38,619 33,719 33,719 33,669 33,574 32,759 26 Rural Electrification Administration 18,890 18,562 18,172 17,578 17,365 17,392 17,309 17,360 17,293 27 Other 70,896 84,931 64,436 45,864 39,379 37,984 35,457 34,932 33,991 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 • August 1995 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1994 1995 TTyyppee ooff oo iiss rr ss uu uu ee ssee oo rr iissssuueerr,, 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May 1 All issues, new and refunding1 226,818 279,945 153,950 11,053 11,856 9,541 7,717 7366 11,844 8,552 11,804 By type of issue 2 General obligation 78,611 90,599 54,404 3,202 5,781 2,272 3,770 3,714 5,459 3,536 4,332 3 Revenue 136,580 189,346 99,546 7,851 6,075 7,269 3,947 3,652 6,385 5,016 7,472 By type of issuer 4 State 24,874 27,999 19,186 1,004 1,530 151 738 1,032 2,315 994 1,315 5 Special district or statutory authority2 138,327 178,714 95,896r 7,198 6,228 7,352 4,835 4,889 6,572 5,814 8,039 6 Municipality, county, or township 63,617 73,232 38,868 2,851 4,098 2,038 2,144 1,445 2,957 1,744 2,450 7 Issues for new capital 101,865 91,434 105,972 9,108 9,629 8,444 5,737 5,670 10,538 6,497 8,406 By use of proceeds 8 Education 18,852 16,831 21,267 1,632 1,780 1,701 1,411 1,464 1,666 1,863 2,594 9 Transportation 14,357 9,167 10,836 1,380 623 307 625 671 454 615 606 10 Utilities and conservation 12,164 12,014 10,192 979 974 1,292 538 249 633 345 1,282 11 Social welfare 16,744 13,837 20,289 2,060 1,416 2,208 1,182 869 2,556 1,547 1,738 12 Industrial aid 6,188 6,862 8,161 450 981 1,046 384 215 1,011 391 416 13 Other purposes 33,560 32,723 35,227 2,607 3,855 1,890 1,597 2,202 4,218 1,736 1,770 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 1995 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999922 11999933 11999944 oorr iissssuueerr Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues' 559,827 754,969 n.a. 29,427r 34,481 38,258r 23,267r 36,941r 41,529r 40,642r 22,360 2 Bonds2 471,502 641,498 n.a. 25,983 30,909 33,286 20,493 33,962r 36,698 36,978r 18,833 By type of offering 3 Public, domestic 378,058 486,879 365,050 22,736 25,192 27,278 17,809 24,003' 28,750 32,762' 22,000 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 3,248 5,718 6,008 2,684 9,959 7,948 4,216 4,000 By industry group 6 Manufacturing 82,058 88,002 31,981 2,167 2,498 2,491 1,508 1,497 4,404r 2,171 2,201 7 Commercial and miscellaneous 43,111 60,293 27,900 2,112 2,204 1,578 2,469 2,334 3,038 1,941 1,696 8 Transportation 9,979 10,756 4,573 229 227 239 269 0 100* 403 800 9 Public utility 48,055 56,272 11,713 707 695 744 273 659r 215 839 210 10 Communication 15,394 31,950 11,986 526 279 333 419 813 1,122 399 25 11 Real estate and financial 272,904 394,226 333,135 20,242 25,007 27,902 15,556 28,659 27,818 31,226' 13,901 12 Stocks2 88,325 113,472 n.a. 3,444 3,572 4,972 2,774 2,904 4,831r 2,914r 3,487 By type of offering 13 Public preferred 21,339 18,897 12,145r 555 713 279 178 430 296 205 375 14 Common 57,118 82,657 50,737r 2,888 2,859 4,693 2,595 2,474 4,534r 2,709' 3,112 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 16 Manufacturing 22,723 22,271 n.a. 908 745 1,963 1,203 1,086 1,583 1,010' 604 17 Commercial and miscellaneous 20,231 25,761 n.a. 821 1,105 1,789 857 392 1,41 lr 901' 1,812 18 Transportation 2,595 2,237 n.a. 154 79 76 0 19 15 60 48 19 Public utility 6,532 7,050 n.a. 78 4 333 165 134 258 137 141 20 Communication 2,366 3,439 n.a. 0 0 0" 21 496 0 20' 0 21 Real estate and financial 33,879 52,021 n.a. 1,481 1,639 791 527 776 1,564 786' 881 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 Assets' Millions of dollars 1994 1995 IItteemm 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Sales of own shares2 851,885 841,286 62,263 59,285 56,849 73,183 75,099 59,121 69,898 68,294 2 Redemptions of own shares 567,881 699,823 53,383 53,743 55,757 70,747 63,737 50,738 60,970 59,957 3 Net sales3 284,004 141,463 8,880 5,543 1,092 2,436 11,362 8,383 8,928 8,337 4 Assets4 1,510,209 1,550,490 1,588,277 1,601,363 1,549,186 1,550,490 1,563,187 1,619,705 1,657,370 1,710,280 5 Cash5 100,209 121,296 121,575 126,766 125,843 121,296 124,351 126,307 121,424 124,092 6 Other 1,409,838 1,429,195 1,466,702 1,474,597 1,423,344 1,429,195 1,438,836 1,493,399 1,535,946 1,586,187 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 405.1 485.8 542.7 473.1 493.5 533.9 508.2 546.4 556.0 560.3 568.8 2 Profits before taxes 395.9 462.4 524.5 456.6 458.7 501.7 483.5 523.1 538.1 553.5 569.5 3 Profits-tax liability 139.7 173.2 202.5 171.8 169.9 191.5 184.1 201.7 208.6 215.6 220.2 4 Profits after taxes 256.2 289.2 322.0 284.8 288.9 310.2 299.4 321.4 329.5 337.9 349.4 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 95.6 115.6 103.0 118.9 121.6 124.0 132.2 7 Inventory valuation -6.4 -6.2 -19.5 -10.0 3.0 -6.5 -12.3 -14.1 -19.6 -32.1 —38.7r 8 Capital consumption adjustment 15.7 29.5 37.7 26.5 31.7 38.8 37.0 37.4 37.5 38.8 38.01 SOURCE. US. 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 Q3 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 1111..2244 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 other2 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 • August 1995 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1993 1994 AAccccoouunntt 11999922 11999933 11999944 Q2 Q3 Q4 QL Q2 Q3 Q4 ASSETS 2 1 Ac C co o u n n su ts m r e e r c eivable, gross2 4 1 9 1 1 8 . . 8 3 4 1 8 1 2 6 . . 8 5 5 1 5 3 1 4 . . 0 8 4 1 7 1 3 0 . . 7 6 417141..00 4 1 8 1 2 6 . . 8 5 4 1 9 2 4 0 . . 5 1 5 1 1 2 1 4 . . 3 3 5 1 2 3 4 0 . . 1 3 5 1 5 3 1 4 . . 0 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 577J 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 TTyyppee ooff ccrreeddiitt 11999922 11999933 11999944 Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted 1 Total .... 540,679 546,020 610,710 602,463 610,710 619,785 624,526 632,285r 636,925 2 Consumer., 157,857 160,802 174,059 174,324 174,059 176,358 174,779 175,739 177,131 3 Real estate^ 72,496 71,991 78,774 77,991 78,774 79,097 80,539 81,381r 81,731 4 Business.. 310,325 313,226 357,877 350,148 357,877 364,329 369,208 375,166r 378,064 Not seasonally adjusted 5 Total 544,691 550,387 615,758 603,305 615,758 619,171 624,161 633,248r 639,035 6 Consumer 159,558 162,770 176,316 174,118 176,316 177,353 175,623 176,628 177,691 7 Motor vehicles 57,259 56,057 61,609 61,372 61,609 62,321 61,067 61,256 62,434 8 Other consumer3 61,020 60,396 73,221 71,502 73,221 75,147 73,691 74,534 75,447 9 Securitized motor vehicles4 29,734 36,024 31,861 31,494 31,861 30,261 31,303 32,155 31,261 10 Securitized other consumer 11,545 10,293 9,625 9,750 9,625 9,624 9,562 8,683 8,549 11 Real estate2 72,243 71,727 78,479 77,907 78,479 79,592 80,754 80,762r 82,011 12 Business 312,890 315,890 360,963 351,280 360,963 362,226 367,784 375,858r 379,333 13 Motor vehicles 89,011 95,173 118,197 113,222 118,197 118,979 121,818 125,805r 128,052 14 Retail5 20,541 18,091 21,514 22,113 21,514 21,809 21,577 21,652 22,303 15 Wholesale6 29,890 31,148 35,037 30,614 35,037 34,493 36,759 38,868 39,617 16 Leasing 38,580 45,934 61,646 60,495 61,646 62,677 63,482 65,285r 66,132 17 Equipment 151,424 145,452 157,953 154,312 157,953 158,820 159,333 161,306 162,225 18 Retail 33,521 35,513 39,680 38,912 39,680 40,387 40,329 42,024 41,195 19 Wholesale6 8,680 8,001 9,678 9,484 9,678 9,372 9,462 8,913 9,660 20 Leasing 109,223 101,938 108,595 105,916 108,595 109,061 109,542 110,369 111,370 21 Other business7 60,856 53,997 61,495 59,893 61,495 61,304 63,339 64,815r 64,475 22 Securitized business assets4 11,599 21,268 23,318 23,853 23,318 23,123 23,294 23,932r 24,581 23 Retail 1,120 2,483 3,065 2,853 3,065 2,901 2,764 2,612 3,229 24 Wholesale 5,756 10,584 14,499 15,311 14,499 14,621 15,144 16,135r 16,336 25 Leasing 4,723 8,201 5,754 5,689 5,754 5,601 5,386 5,185 5,016 1. Includes finance company subsidiaries of bank holding companies but not of 4. Outstanding balances of pools upon which securities have been issued; these retailers and banks. Data are before deductions for unearned income and losses. Data in balances are no longer carried on the balance sheets of the loan originator. this table also appear in the Board's G.20 (422) monthly statistical release. For ordering 5. Passenger car fleets and commercial land vehicles for which licenses are required. address, see inside front cover. 6. Credit arising from transactions between manufacturers and dealers, that is, floor 2. Includes all loans secured by liens on any type of real estate, for example, first and plan financing. junior mortgages and home equity loans. 7. Includes loans on commercial accounts receivable, factored commercial accounts, 3. Includes personal cash loans, mobile home loans, and loans to purchase other types and receivable dealer capital; small loans used primarily for business or farm purposes; of consumer goods such as appliances, apparel, general merchandise, and recreation and wholesale and lease paper for mobile homes, campers, and travel trailers. vehicles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A3 7 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1994 1995 IItteemm 11999922 11999933 11999944 Nov. Dec. Jan. Feb. Mar. Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 158.1 163.1 170.4 178.2 184.9 176.5 175.6 173.3 174.7 178.1 2 Amount of loan (thousands of dollars) 118.1 123.0 130.8 136.2 136.2 134.2 135.6 132.6 134.6 136.3 3 Loan-to-price ratio (percent) 76.6 78.0 78.8 78.0 76.9 78.0 79.3 78.2 79.2 78.7 4 Maturity (years) 25.6 26.1 27.5 27.9 28.0 28.0 28.3 28.6 28.1 28.4 5 Fees and charges (percent of loan amount)2 1.60 1.30 1.29 1.30 1.38 1.31 1.32 1.18 1.14 1.30 Yield (percent per year) 6 Contract rate1 7.98 7.03 7.26 7.59 7.61 7.96 8.07 8.02 7.96 7.79 7 Effective rate1-3 8.25 7.24 7.47 7.81 7.83 8.18 8.28 8.21 8.15 7.99 8 Contract rate (HUD series)4 8.43 7.37 8.58 9.34 9.32 9.11 8.79 8.60 8.44 7.84 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.46 7.46 8.68 9.53 9.54 9.10 9.05 8.60 8.56 8.03 10 GNMA securities 7.71 6.65 7.96 8.86 8.76 8.69 8.38 8.08 7.96 7.53 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 158,119 190,861 222,057 220,377 222,057 222,774 223,137 223,956 226,197 228,078 12 FHA/VA insured 22,593 23,857 28,377 27,118 28,377 28,368 28,420 28,672 28,664 28,576 13 Conventional 135,526 167,004 194,499 193,259 194,499 195,170 195,439 195,998 198,161 200,004 Mortgage transactions (during period) 14 Purchases 75,905 92,037 62,389 3,549 3,399 2,154 1,802 2,390 3,709 3,787 Mortgage commitments (during period) 15 Issued7 74,970 92,537 54,038 2,696 2,910 1,720 1,683 3,372 3,277 6,085 16 To sell8 10,493 5,097 1,820 20 55 57 82 64 22 28 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 33,665 55,012 72,693 70,757 72,693 73,553 75,184 77,313 79,147 81,008 18 FHA/VA insured 352 321 276 279 276 272 270 266 262 260 19 Conventional 33,313 54,691 72,416 70,477 72,416 73,281 74,914 77,047 78,885 80,748 Mortgage transactions (during period) 20 Purchases 191,125 229,242 124,697 3,022 4,890 3,254 5,537 4,609 4,530 10,982 21 Sales 179,208 208,723 117,110 2,865 3,769 2,862 4,806 3,546 3,805 10,479 Mortgage commitments (during periodf 22 Contracted 261,637 274,599 136,067 3,454 2,412 6,541 7,741 12,704 13,437 4,549 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

A100 Domestic Nonfinancial Statistics • August 1995 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1994 1995 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999911 11999922 11999933 Ql Q2 Q3 04 Ql 1 All holders 3,926,154 4,056,233 4,229,592r 4,258,823r 4,314,991' 4,374,353' 4,425,886' 4,466,957 By type of property 2 One- to four-family residences 2,781,327 2,963,391 3,149,634r 3,185,330r 3,236,909r 3,293,166' 3,345,755' 3,379,380 3 Multifamily residences 306,551 295,417 291,985r 292,533r 294,709r 297,315' 296,633' 297,691 4 Commercial 759,154 716,687 706,780* 699,690r 701,541r 701,617' 700,997' 707,217 5 Farm 79,122 80,738 81,194 81,269r 81,832r 82,255' 82,500 82,669 By type of holder 6 Major financial institutions 1,846,726 1,769,187 1,767,835 1,746,474 1,763,296 1,786,178' 1,815,949' 1,839,114 7 Commercial banks 876,100 894,513 940,444 937,944 956,840 981,365 1,004,280' 1,024,772 8 One- to four-family 483,623 507,780 556,538 553,894 569,512 592,021 611,697' 625,335 9 Multifamily 36,935 38,024 38,635 38,690 38,609 38,004 38,916' 39,734 10 Commercial 337,095 328,826 324,409 324,106 326,800 328,931 331,IOC 336,767 11 Farm 18,447 19,882 20,862 21,254 21,918 22,408 22,567 22,935 12 Savings institutions 705,367 627,972 598,330 584,531 585,671 587,545' 596,198' 601,636 13 One- to four-family 538,358 489,622 469,959 458,057 462,219 466,704' 477,499' 483,476 14 Multifamily 79,881 69,791 67,362 66,924 66,281 65,532' 64,400' 63,748 IS Commercial 86,741 68,235 60,704 59,253 56,872 55,017' 54,011' 54,120 16 Farm 388 324 305 297 299 291 289' 292 17 Life insurance companies 265,258 246,702 229,061 223,999 220,785 217,269 215,471' 212,706 18 One- to four-family 11,547 11,441 9,458 9,245 9,107 8,956 8,876' 8,756 19 Multifamily 29,562 27,770 25,814 25,232 24,855 24,442 24,224' 23,898 70 Commercial 214,105 198,269 184,305 180,152 177,463 174,514 172,957' 170,624 21 Farm 10,044 9,222 9,484 9,370 9,360 9,357 9,414' 9,429 22 Federal and related agencies 266,146 286,263 328,598r 329,160' 329,725r 329,304' 323,491' 319,770 23 Government National Mortgage Association 19 30 22 20 12 12 6 15 24 One- to four-family 19 30 15 13 12 12 6 15 25 Multifamily 0 0 7 7 0 0 0 0 76 Farmers Home Administration4 41,713 41,695 41,386 41,209 41,370 41,587 41,781 41,857 77 One- to four-family 18,496 16,912 15,303 14,870 14,459 14,084 13,826 13,507 78 Multifamily 10,141 10,575 10,940 11,037 11,147 11,243 11,319 11,418 79 Commercial 4,905 5,158 5,406 5,399 5,526 5,608 5,670 5,807 30 Farm 8,171 9,050 9,739 9,903 10,239 10,652 10,966 11,124 31 Federal Housing and Veterans' Administrations 10,733 12,581 12,215 11,344 11,169 10,533 10,964 10,890 37 One- to four-family 4,036 5,153 5,364 4,738 4,826 4,321 4,753 4,715 33 Multifamily 6,697 7,428 6,851 6,606 6,343 6,212 6,211 6,175 34 Resolution Trust Corporation 45,822 32,045 17,284 14,241 13,908 15,403 10,428 9,342 35 One- to four-family 14,535 12,960 7,203 6,308 6,045 6,998 5,200 4,755 36 Multifamily 15,018 9,621 5,327 4,208 4,230 4,569 2,859 2,494 37 Commercial 16,269 9,464 4,754 3,726 3,633 3,836 2,369 2,092 38 Farm 0 0 0 0 0 0 0 0 39 Federal Deposit Insurance Corporation 0 0 14,112 12,696 11,407 9,169 7,821 6,730 40 One- to four-family 0 0 2,367 1,956 1,706 1,241 1,049 840 41 Multifamily 0 0 1,426 2,167 1,701 2,090 1,595 1,310 47 Commercial 0 0 10,319 8,573 8,000 5,838 5,177 4,580 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 112,283 137,584 166,642 172,343 175,377 177,200 178,059 177,615 45 One- to four-family 100,387 124,016 151,310 156,576 159,437 161,255 162,160 161,780 46 Multifamily 11,896 13,568 15,332 15,767 15,940 15,945 15,899 15,835 47 Federal Land Banks 28,767 28,664 28,460 28,181 28,475 28,538 28,555' 28,065 48 One- to four-family 1,693 1,687 1,675 1,658 1,675 1,679 1,671' 1,651 49 Farm 27,074 26,977 26,785 26,523 26,800 26,859 26,885 26,414 50 Federal Home Loan Mortgage Corporation 26,809 33,665 48,476r 49,127r 48,007r 46,863' 45,876' 45,256 SI One- to four-family 24,125 31,032 45,929 46,571r 45,427r 44,208' 43,046' 42,122 52 Multifamily 2,684 2,633 2,547 2,556 2,580 2,655 2,830 3,134 53 Mortgage pools or trusts5 1,250,666 1,425,546 l,553,818r l,611,449r l,652,999r 1,682,421' 1,703,076' 1,714,357 54 Government National Mortgage Association 425,295 419,516 414,066 423,446 435,709 444,976 450,934 454,401 SS One- to four-family 415,767 410,675 404,864 414,194 426,363 435,511 441,198 444,632 56 Multifamily 9,528 8,841 9,202 9,251 9,346 9,465 9,736 9,769 57 Federal Home Loan Mortgage Corporation 359,163 407,514 446,029r 466,949r 479,555r 482,987' 486,480' 488,723 58 One- to four-family 351,906 401,525 441,494' 462,779r 475,733' 479,539' 483,354' 485,643 59 Multifamily 7,257 5,989 4,535 4,170 3,822 3,448 3,126 3,080 60 Federal National Mortgage Association 371,984 444,979 495,525 507,376 514,855 523,512 530,343 533,262 61 One- to four-family 362,667 435,979 486,804 498,489 505,730 514,375 520,763 523,903 62 Multifamily 9,317 9,000 8,721 8,887 9,125 9,137 9,580 9,359 6.3 Farmers Home Administration 47 38 28 26 22 20 19 14 64 One- to four-family 11 8 5 5 4 4 3 2 65 Multifamily 0 0 0 0 0 0 0 0 66 Commercial 19 17 13 12 10 9 9 7 67 Farm 17 13 10 9 8 7 7 5 68 Private mortgage conduits 94,177 153,499 198,171 213,653 222,858 230,926 235,300' 237,957 69 One- to four-family 84,000 132,000 164,000 177,000 179,500 182,300 183,600 184,400 70 Multifamily 3,698 6,305 8,701 9,202 11,514 13,891 14,925' 15,743 71 Commercial 6,479 15,194 25,469 27,451 31,844 34,735 36,774' 37,814 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others6 562,616 575,237 579,341 571,739r 568,970* 576,450' 583,370' 593,715 74 One- to four-family 370,157 382,572 387,345r 378,977' 375,152r 379,959' 387,055' 393,848 75 Multifamily 83,937 85,871 86,586r 87,829r 89,216r 90,681' 91,013' 91,991 76 Commercial 93,541 91,524 91,401r 91,020r 91,393r 93,130' 92,929' 95,406 77 14,981 15,270 14,009 13,912r 13,209r 12,681' 12,373' 12,470 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 Nov. Dec. Jan. Feb. Mar/ Apr. Seasonally adjusted 1 Total 731,098 794,300 911,311 904,757 911,311 920,338 928,010 942,149 953,188 2 Automobile 257,678 282,036 324,519 323,447 324,519 324,855 327,720 330,187 332,693 3 Revolving 257,304 287,875 337,694 334,843 337,694 343,184 349,487 356,185 362,644 4 Other 216,117 224,389 249,098 246,467 249,098 252,299 250,803 255,778 257,850 Not seasonally adjusted 5 Total 747,690 812,782 932,890 906,436 932,890 929,330 928,123 937,270 947,674 By major holder 6 Commercial banks 330,088 368,549 434,790 421,790 434,790 431,745 432,883 436,069 443,140 7 Finance companies 118,279 116,453 134,830 132,874 134,830 136,699 134,439 135,790 137,911 8 Credit unions 91,694 101,634 120,158 117,984 120,158 120,668 121,116 122,932 124,198 9 Savings institutions 37,049 37,855 38,750 38,275 38,750 39,250 39,399 39,500 39,500 10 Nonfinancial business 49,184 57,637 64,944 58,247 64,944 61,382 59,169 57,863 57,898 11 Pools of securitized assets2 121,396 130,654 139,418 137,266 139,418 139,586 141,117 145,116 145,027 By major type of credit3 12 Automobile 258,226 282,825 325,536 323,744 325,536 324,826 326,770 329,381 331,328 13 Commercial banks 109,623 123,358 148,117 148,004 148,117 147,319 148,355 148,682 149,215 14 Finance companies 57,259 56,057 61,609 61,372 61,609 62,321 61,067 61,256 62,434 15 Pools of securitized assets2 33,888 39,490 34,515 34,301 34,515 32,902 33,936 34,587 33,542 16 Revolving 271,368 303,444 355,859 336,575 355,859 350,035 349,185 352,273 358,375 17 Commercial banks 132,966 149,527 180,530 171,318 180,530 176,635 177,241 177,373 182,258 18 Nonfinancial business 43,974 52,113 58,870 52,475 58,870 55,405 53,257 51,986 52,066 19 Pools of securitized assets2 74,931 79,887 93,545 91,469 93,545 95,015 95,734 99,851 100,964 20 Other 218,096 226,513 251,495 246,117 251,495 254,469 252,168 255,616 257,971 21 Commercial banks 87,499 95,664 106,143 102,468 106,143 107,791 107,287 110,014 111,667 22 Finance companies 61,020 60,396 73,221 71,502 73,221 74,378 73,372 74,534 75,477 23 Nonfinancial business 5,210 5,524 6,074 5,772 6,074 5,977 5,912 5,877 5,832 24 Pools of securitized assets2 12,577 11,277 11,358 11,496 11,358 11,669 11,447 10,678 10,521 1. The Board's series on amounts of credit covers most short- and intermediate-term 2. Outstanding balances of pools upon which securities have been issued; these credit extended to individuals that is scheduled to be repaid (or has the option of balances are no longer carried on the balance sheets of the loan originator. repayment) in two or more installments. 3. Totals include estimates for certain holders for which only consumer credit totals are Data in this table also appear in the Board's G.19 (421) monthly statistical release. For available. ordering address, see inside front cover. 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent per year except as noted 1994 1995 IItteemm 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb. Mar. Apr. INTEREST RATES Commercial banks2 1 48-month new car 9.29 8.09 8.12 n.a. 8.75 n.a. n.a. 9.70 n.a. n.a. 2 24-month personal 14.04 13.47 13.19 n.a. 13.59 n.a. n.a. 14.10 n.a. n.a. Credit card plan 3 All accounts n.a. n.a. 15.91 n.a. 15.91 n.a. n.a. 16.24 n.a. n.a. 4 Accounts assessed interest n.a. n.a. 15.74 n.a. 15.74 n.a. n.a. 15.29 n.a. n.a. Auto finance companies 5 New car 9.93 9.48 9.79 10.39 10.53 10.72 11.35 11.89 11.95 11.74 6 Used car 13.80 12.79 13.49 14.01 14.19 14.48 14.57 15.06 15.10 14.99 OTHER TERMS3 Maturity (months) 7 New car 54.0 54.5 54.0 54.9 54.6 53.9 53.9 54.1 54.5 54.6 8 Used car 47.9 48.8 50.2 50.2 50.3 50.3 52.0 52.0 52.1 52.2 Loan-to-value ratio 9 New car 89 91 92 92 93 92 92 92 92 92 10 Used car 97 98 99 100 100 100 99 99 99 100 Amount financed (dollars) 11 New car 13,584 14,332 15,375 15,827 15,971 16,187 16,068 15,774 15,826 16,029 12 Used car 9,119 9,875 10,709 10,554 11,202 11,309 11,185 11,181 11,220 11,505 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 • August 1995 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1993 1994' 1995 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Nonfinancial sectors 1 Total net borrowing by domestic nonflnancial sectors 635.6 475.8 536.1 622.1' 595.0 613.8r 659.6r 634.7 530.2 580.8 634.4 816.0 By sector and instrument 2 US. government 246.9 278.2 304.0 256.1 155.9 173.4 274.2 210.5 122.9 135.0 155.0 271.8 3 Treasury securities 238.7 292.0 303.8 248.3 155.7 157.2 266.5 211.8 118.2 130.7 162.1 273.0 4 Budget agency issues and mortgages 8.2 -13.8 .2 7.8 .2 16.2 7.7 -1.3 4.7 4.3 -7.1 -1.2 5 Private 388.7 197.5 232.1 366.0r 439.2 440.4r 385.5' 424.1 407.3 445.8 479.4 544.2 By instrument 6 Tax-exempt obligations 48.7 68.7 31.1 75.5r -34.1 65.2r 27.3' 2.6 -25.4 -63.2 -50.4 -65.6 7 CCoorrppoorraattee bboonnddss 47.1 78.8 67.5 75.2 22.0 72.0 67.4 35.4 35.9 14.2 2.7 41.4 8 MMoorrttggaaggeess 199.5 161.4 123.9 155.7 186.5 222. lr 148.5 162.8 170.4 221.2 191.6 213.0 9 Home mortgages 185.6 163.8 179.5 183.9 196.1 236.5 184.6' 198.5 164.5 220.8 200.7 188.3 10 Multifamily residential 4.8 -3.1 -11.2 1.4 -4.9 -2.3' -1.0 4.6 6.5 -4.3 2.6 11 Commercial 9.3 .4 -45.5 —22.6' -12.3 -9.9 -33.9' -34.9 -.9 -7.7 -5.8 21.5 12 Farm -.3 .4 1.1 .5 1.3 .4 .2 .3 2.3 1.7 1.0 .7 13 Consumer credit 16.0 -15.0 5.5 62.3 117.5 76.2 111.3 72.7 121.9 125.9 149.4 83.4 14 Bank loans n.e.c .4 -40.9 -13.8 5.0 74.0 7.8 28.5 65.8 55.5 86.8 88.0 156.7 15 Commercial paper 9.7 -18.4 8.6 10.0 21.4 17.2 3.8 8.2 16.4 33.8 27.2 1.1 16 Other loans 67.4 -37.1 9.2 — 17.7' 51.8 -20.2r -1.3' 76.6 32.7 27.1 70.9 114.3 By borrowing sector 17 Household 218.9 170.9 217.7 284.5 351.6 368.5 337.7 310.3 307.3 381.9 407.0 304.7 18 Nonfinancial business 123.7 -35.9 -2.0 18.5r 135.8 25.6' 30.8' 127.3 144.3 134.0 137.5 302.7 19 Farm 2.3 2.1 1.0 2.0 2.4 4.1 3.6 2.6 8.1 1.6 -2.8 -.5 20 Nonfarm noncorporate 10.1 -28.5 -43.9 -24.7r 13.5 -23.2' -15.6 5.4 12.5 17.9 18.2 68.8 21 Corporate 111.3 -9.6 40.9 41.2' 119.9 44.8' 42.7' 119.3 123.7 114.5 122.1 234.3 22 State and local government 46.0 62.6 16.4 63.C -48.2 46.3' \i.of -13.4 -44.3 -70.2 -65.1 -63.1 23 Foreign net borrowing in United States 23.9 13.9 21.3 46.9 -9.8 83.1 22.9 -66.3 -10.1 8.3 29.0 55.7 24 Bonds 21.4 14.1 14.4 59.4 17.6 84.5 41.4 29.0 9.4 8.6 23.4 11.0 25 Bank loans n.e.c -2.9 3.1 2.3 .7 1.4 1.0 -6.3 6.0 -4.5 4.7 -.5 8.3 26 Commercial paper 12.3 6.4 5.2 -9.0 -27.3 -1.6 -12.0 -101.8 -5.2 -8.1 5.9 37.9 27 U.S. government and other loans -7.0 -9.8 -.6 -4.2 -1.5 -.8 -.1 .5 -9.8 3.2 .2 -1.5 28 Total domestic phis foreign 659.4 489.6 557.4 669.1r 585.2 696.9r 682.6r 568.3 520.1 589.1 663.3 871.7 Financial sectors 29 Total net borrowing by financial sectors 202.9 152.6 237.1 289.1r 451.8 438.9 361.6r 518.7 366.7 403.1 518.5 282.5 By instrument 30 U.S. government-related 167.4 145.7 155.8 164.2r 284.3 287.3 143.3' 336.8 254.7 243.1 302.4 125.4 31 Government-sponsored enterprises securities 17.1 9.2 40.3 80.6 176.9 167.8 53.4 160.0 146.6 152.1 249.0 62.9 32 Mortgage pool securities 150.3 136.6 115.6 83.6r 112.1 119.5 89.9' 196.0 108.1 91.0 53.4 62.5 33 Loans from U.S. government -.1 .0 .0 .0 -4.8 .0 .0 -19.2 .0 .0 .0 .0 34 35.5 6.8 81.3 124.9r 167.5 151.6 218.4' 182.0 112.0 160.0 216.1 157.1 35 CCoorrppoorraattee bboonnddss 46.3 67.6 78.5 118.2r 105.6 143.4 138.1' 156.3 91.4 86.9 87.9 115.2 36 MMoorrttggaaggeess .6 .5 .6 3.6 9.8 6.2 5.5 9.8 12.4 12.0 4.9 5.1 37 Bank loans n.e.c 4.7 8.8 2.2 -14.0 -12.3 -16.1 -18.0 -9.9 -27.7 -11.9 .5 11.6 38 Open market paper 8.6 -32.0 -.7 -6.2 41.6 -9.4 76.0 36.6 3.6 42.3 84.0 48.9 39 Loans from Federal Home Loan Banks -24.7 -38.0 .8 23.3 22.8 27.4 16.8 -10.8 32.3 30.7 38.8 -23.6 By borrowing sector 40 Government-sponsored enterprises 17.0 9.1 40.2 8800..66 172.1 167.8 53.4 140.8 146.6 152.1 249.0 62.9 41 Federally related mortgage pools 150.3 136.6 115.6 83.6r 112.1 119.5 89.9' 196.0 108.1 91.0 53.4 62.5 42 35.5 6.8 81.3 124.9" 167.5 151.6 218.4' 182.0 112.0 160.0 216.1 157.1 43 Commercial banks -.7 -11.7 8.8 5.6 10.0 6.5 1.2 2.0 12.4 22.8 2.9 9.6 44 Bank holding companies -27.7 -2.5 2.3 8.8 10.3 .5 12.2 3.5 10.1 11.5 16.0 9.5 45 Funding corporations 15.4 -6.5 13.2 2.9 24.2 7.9 36.7 48.8 -17.2 47.2 17.9 62.9 46 Savings institutions -30.2 -44.5 -6.7 11.1 12.8 13.5 8.8 -5.6 5.8 14.8 36.1 -21.7 47 Credit unions .0 .0 .0 .2 .2 .3 .1 .1 .2 .5 .2 -.3 48 Life insurance companies .0 .0 .0 .2 .3 -.1 .4 .0 .0 .0 1.3 .0 49 Finance companies 24.0 18.6 -3.6 .2 52.4 17.5 16.3 63.3 67.0 16.9 62.6 72.5 50 Mortgage companies .0 -2.4 8.0 -1.0 -11.5 -.8 -10.4 -21.6 -18.2 -7.0 1.0 2.0 51 Real estate investment trusts (REITs) .8 1.2 .3 3.4r 13.7 6.0 6.1' 14.5 15.3 18.8 6.3 6.9 52 Issuers of asset-backed securities (ABSs) 52.3 51.0 56.3 81.5 54.5 85.8 117.6 86.9 36.5 42.1 52.5 45.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1993 1994r 1995 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 11999944rr Q3 Q4 Ql Q2 Q3 Q4 Ql All sectors 53 Total net borrowing, all sectors 862.3 642.2 794.5 958.2r 1,037.0 l,135.8r l,044.2r 1,087.1 886.8 992.2 1,181.9 1,154.2 54 U.S. government securities 414.4 424.0 459.8 420.3r 444.9 460.7 417.5r 566.5 377.6 378.1 457.4 397.2 55 Tax-exempt securities 48.7 68.7 31.1 75.5r -34.1 65.2r 27.3r 2.6 -25.4 -63.2 -50.4 -65.6 56 Corporate and foreign bonds 114.7 160.5 160.4 252.9 145.2 299.9 246.9' 220.6 136.6 109.7 114.0 167.5 57 Mortgages 200.1 161.9 124.5 159.2 196.3 228.3 154.0 172.6 182.8 233.2 196.5 218.1 58 Consumer credit 16.0 -15.0 5.5 62.3 117.5 76.2 111.3 72.7 121.9 125.9 149.4 83.4 59 Bank loans n.e.c 2.2 -29.1 -9.4 -8.3 63.2 -7.3 4.2 61.9 23.3 79.5 88.0 176.6 60 Open market paper 30.7 -44.0 13.1 -5.1 35.7 6.3 67.7 -57.0 14.8 68.0 117.1 87.9 61 Other loans 35.6 -84.9 9.5 1.3r 68.3 6.4r 15.4' 47.1 55.2 61.1 109.9 89.2 Funds raised through mutual funds and corporate equities 62 Total net share issues 19.7 215.4 296.0 440.1r 169.1 513.0r 430.1r 344.4 213.1 162.9 -44.1 100.9 63 Mutual funds 65.3 151.5 211.9 320.0r 138.3 363.9r 287.7r 236.2 144.0 165.4 7.7 113.9 64 Corporate equities -45.6 64.0 84.1 120.1 30.7 149.1 142.4 108.1 69.1 -2.5 -51.8 -13.0 65 Nonfinancial corporations -63.0 18.3 27.0 21.3 -40.9 32.3 21.5 -9.6 -2.0 -50.0 -102.0 -46.8 66 Financial corporations 10.0 15.1 26.4 38.2 28.6 38.2 40.9 48.3 24.4 23.7 17.9 15.9 67 Foreign shares purchased in United States 7.4 30.7 30.7 60.6 43.0 78.6 80.0 69.4 46.7 23.8 32.2 17.9 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 Nonfinancial Statistics • August 1995 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1993 1994' 1995 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 11999944RR Q3 Q4 Ql Q2 Q3 Q4 Ql NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 862.3 642.2 794.5 958.2r 1,037.0 l,135.8r l,044.2r 1,087.1 886.8 992.2 1,181.9 1,154.2 2 Private domestic nonfinancial sectors 190.1 -7.5 72.0 -3.4R 235.8 -52.8R 85.8R 295.0 299.1 109.5 239.7 -26.0 3 Households 157.2 -39.6 70.7 -19.7R 319.4 -83.0R 174.3R 350.1 400.0 183.5 344.0 81.1 4 Nonfarm noncorporate business -1.7 -3.7 -1.1 -3.2 -2.0 -3.3 -3.5 -3.6 -1.8 -1.9 -.5 -.1 5 Nonfinancial corporate business -3.7 6.7 29.2 18.0 25.5 41.2 16.0 23.0 16.8 25.5 36.6 15.4 6 State and local governments 38.3 29.2 -26.8 1.5 -107.1 -7.7 -101.0 -74.4 -115.9 -97.6 -140.5 -122.3 7 US. government 33.7 10.5 -11.9 -18.4 -24.1 -15.4 -7.9 -46.5 -16.2 -9.4 -24.3 -19.2 8 Foreign 85.5 26.6 100.5 122.6R 133.3 125.0R 203.7' 127.7 65.1 124.1 216.1 267.9 9 Financial sectors 553.0 612.5 633.9 857.3R 692.0 L,079.0R 762.5' 710.9 538.8 768.0 750.4 931.5 10 Government sponsored enterprises 13.9 15.2 69.0 90.2 123.3 144.8 71.2 92.4 101.1 125.6 174.3 12.2 11 Federally related mortgage pools 150.3 136.6 115.6 83.6R 112.1 119.5 89.9' 196.0 108.1 91.0 53.4 62.5 12 Monetary authority 8.1 31.1 27.9 36.2 31.5 28.2 38.5 48.8 17.9 24.0 35.4 24.8 13 Commercial banking 125.1 80.8 95.3 142.2 162.0 146.7 188.1 184.7 109.1 191.3 163.0 337.1 14 U.S. commercial banks 94.9 35.7 69.5 149.6 148.1 160.3 197.3 120.6 128.4 164.6 178.7 177.2 15 Foreign banking offices 28.4 48.5 16.5 -9.8 11.2 -16.9 -6.5 59.0 -21.5 22.1 -15.0 157.8 16 Bank holding companies -2.8 -1.5 5.6 .0 .9 1.2 -4.8 3.1 .2 2.7 -2.4 .4 17 Banks in U.S. affiliated areas 4.5 -1.9 3.7 2.4 1.9 2.2 2.1 2.1 1.9 1.9 1.8 1.7 18 Funding corporations 16.1 15.8 23.5 18.1 13.8 32.4 42.6 19.5 33.5 25.1 -23.0 11.3 19 Thrift institutions -154.0 -123.5 -61.3 -1.7 35.2 21.0 -13.3 13.6 42.6 50.9 33.5 36.2 20 Life insurance companies 94.4 83.2 79.1 105.1 61.1 111.8 86.4 53.7 6.1 83.4 101.1 72.3 21 Other insurance companies 26.5 32.6 12.8 33.3 21.1 37.6 32.1 27.9 20.8 16.0 19.7 13.0 22 Private pension funds 17.2 85.7 37.3 40.2 -42.4 91.9 -60.1 -97.7 -30.7 -17.6 -23.6 97.6 23 State and local government retirement funds 34.9 46.0 34.4 25.5 60.8 27.4 36.9 72.9 69.3 26.3 74.6 67.4 24 Finance companies 29.0 -12.7 1.7 -9.0 68.2 9.4 22.6 72.1 49.8 58.9 91.8 95.7 25 Mortgage companies .0 11.2 .1 .0 -22.9 -1.6 -13.3 -43.5 -36.3 -14.0 2.1 4.0 26 Mutual funds 41.4 90.3 123.7 169.6R 7.6 186.9R 138.9' 61.5 9.3 24.3 -64.7 -5.3 27 Closed-end funds .2 14.7 17.4 10.2 3.5 5.9 7.7 8.3 3.2 1.4 1.0 .8 28 Money market funds 80.9 30.1 1.3 14.6r 28.5 25.3 56.9' -45.0 32.2 50.0 76.7 26.5 29 Real estate investment trusts (REITs) -.7 -.7 1.1 .6 4.7 1.0 .2 6.6 6.6 5.5 .2 2.5 30 Brokers and dealers 2.8 17.5 -6.9 9.2 -34.0 -7.8 -82.8 -55.7 -52.6 -19.3 -8.6 32.2 31 Asset-backed securities issuers (ABSs) 51.1 48.9 53.8 80.1 51.0 88.6 111.1 86.0 38.7 37.3 42.1 38.9 32 Bank personal trusts 15.9 10.0 8.0 9.5 7.1 9.9 8.9 8.9 10.2 7.7 1.4 1.6 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Net flows through credit markets 862.3 642.2 794.5 958.2r 1,037.0 l,135.8r l,044.2r 1,087.1 886.8 992.2 1,181.9 1,154.2 Other financial sources 34 Official foreign exchange 2.0 -5.9 -1.6 .8 -5.8 1.7 2.2 -.2 -14.6 .2 -8.6 27.7 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 .7 .7 .6 .8 .7 .7 37 Life insurance reserves 25.7 25.7 27.3 35.2 20.1 36.6 35.5 20.0 8.1 23.8 28.7 25.4 38 Pension fund reserves 165.1 360.3 249.7 309.2 96.1 349.9 251.6 -.7 90.1 147.9 147.1 323.0 39 Interbank claims 35.4 -3.9 61.7 44.6R 94.0 -5.0 -14.0' 156.0 180.5 -22.1 61.5 23.1 40 Checkable deposits and currency 43.3 86.4 113.8 117.3 -10.1 73.1 81.9 173.1 -66.1 -89.2 -58.0 118.0 41 Small time and savings deposits 63.7 1.5 -57.2 -70.3 -40.5 -68.1 -36.6 2.5 -62.4 -57.2 -44.9 52.8 42 Large time deposits -66.1 -58.5 -73.2 -23.5 19.0 -59.5 13.7 -39.6 -4.4 81.2 39.0 94.3 43 Money market fund shares 70.3 41.2 3.9 19.2r 45.4 .6 61.1' -35.1 68.5 49.9 98.4 -7.3 44 Security repurchase agreements -24.2 -16.5 35.5 65.5 84.3 67.8 -14.4 23.0 176.4 82.9 54.8 159.6 45 Foreign deposits 38.2 -16.7 -7.2 -11.7' 30.1 -50.7 32.8' 16.0 16.9 23.2 64.3 5.0 46 Mutual fund shares 65.3 151.5 211.9 320.0r 138.3 363.9R 287.7' 236.2 144.0 165.4 7.7 113.9 47 Corporate equities -45.6 64.0 84.1 120.1 30.7 149.1 142.4 108.1 69.1 -2.5 -51.8 -13.0 48 Security credit 3.5 51.4 4.2 61.9 -2.3 76.6 86.5 29.9 -17.7 -62.3 40.9 -33.4 49 Trade debt 37.0 3.6 41.5 49.0 92.2 49.6 51.9 35.3 96.3 116.0 121.3 118.2 50 Taxes payable -4.8 -6.2 8.5 4.6 3.4 -1.8 4.9 14.9 -12.7 5.9 5.5 18.9 51 Noncorporate proprietors' equity -28.3 -3.3 18.4 — 11.6R -27.4 3.4r -27.2' -43.1 -24.1 -15.5 -26.9 -45.8 52 Investment in bank personal trusts 29.7 16.1 -7.1 1.6 18.8 .1 17.6 15.0 24.7 23.6 11.9 21.0 53 Miscellaneous 135.7 197.2 257.6 290.4' 260.9 221.4 344.7' 377.4 262.6 299.1 104.7 301.0 54 Total financial sources 1,410.6 1,530.2 1,764.5 2,280.9r 1,885.1 2,345.2r 2,367.2r 2,176.6 1,822.6 1,763.2 1,778.1 2,457.2 Floats not included in assets (—) 55 U.S. government checkable deposits 3.3 -13.1 .7 -1.5 -4.8 2.1 -15.5 -2.4 -1.4 15.2 -30.7 18.8 56 Other checkable deposits 8.5 4.5 1.6 -1.3 -2.8 -5.2 -6.2 .6 -1.1 -6.2 -4.3 -5.0 57 Trade credit 9.1 9.7 4.1 16.5 5.3 22.2 12.5 -26.9 16.2 29.0 2.8 9.1 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 -10.4 24.0 -29.1 5.3 11.3 1.5 -3.5 60 Security repurchase agreements -24.0 6.2 27.9 82.5r 50.1 66.6 23.1' 12.2 118.7 66.3 3.0 74.1 61 Taxes payable .1 1.3 14.0 1.0 -1.6 1.2 -8.6 .4 3.1 -1.4 -8.7 -23.5 62 Miscellaneous -35.4 -45.3 -46.0 -49. lr 2.5 -19.6' 15.4' 3.2 -197.4 157.6 46.6 -191.7 63 Total identified to sectors as assets 1,447.2 1,541.2 1,767.2 2,228.8r 1,839.5 2,288.6r 2,322.7r 2,218.9 1,879.3 1,491.7 1,768.1 2,579.2 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" 1995 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999911 11999922 11999933 11999944rr Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 11,181.5 11,720.7 12,370.7' 12,965.6 12,1533' 12,370.7" 12,488.9 12,629.9 1122,,776677..33 1122,,996655..66 1133,,112288..55 By sector and instrument ? U.S. government 2,776.4 3,080.3 3,336.5 3,492.3 3,247.3 3,336.5 3,387.7 3,395.4 3,432.6 3,492.3 33,,555577..99 3 Treasury securities 2,757.8 3,061.6 3,309.9 3,465.6 3,222.6 3,309.9 3,361.4 3,368.0 3,404.1 3,465.6 3,531.5 4 Budget agency issues and mortgages 18.6 18.8 26.6 26.7 24.7 26.6 26.3 27.4 28.5 26.7 26.4 5 Private 8,405.1 8,640.4 9,034.2r 9,473.3 8,906.0" 9,034.2" 9,101.2 9,234.4 9,334.6 9,473.3 9,570.5 By instrument Tax-exempt obligations 1,108.6 1,139.7 l,215.2r 1,181.1 1,207.4" 11,,221155..22"" 1,214.6 1,218.0 1,192.9 1,181.1 1,163.4 7 1,086.9 1,154.4 1,229.6 1,251.7 1,212.8 1,229.6 1,238.5 1,247.4 1,251.0 1,251.7 1,262.0 8 3,920.0 4,043.9 4,220.6r 4,407.2 4,166.6 4,220.6" 4,247.4 4,300.5 4,356.8 4,407.2 4,447.0 9 Home mortgages 2,780.0 2,959.6 3,149.6r 3,345.8 3,098.3 3,149.6" 3,185.3 3,236.9 3,293.2 3,345.8 3,379.4 10 Multifamily residential 304.8 293.6 289.0r 290.4 288.2 289.0" 288.8 289.9 291.5 290.4 291.1 11 755.8 710.3 700.8r 688.5 699.0 700.8" 692.1 691.8 689.9 688.5 693.8 1? Farm 79.3 80.4 81.2 82.5 81.1 81.2 81.3 81.8 82.3 82.5 82.7 13 Consumer credit 797.4 803.0 866.5 984.0 824.3 866.5 863.6 895.3 931.8 984.0 983.8 14 Bank loans n.e.c 686.0 672.1 677.2 751.1 665.6 677.2 686.7 706.2 724.5 751.1 783.9 15 Commercial paper 98.5 107.1 117.8 139.2 123.2 117.8 129.9 135.7 138.7 139.2 149.8 16 Other loans 707.8 720.2 101.2' 759.0 706.0" 707.2" 720.4 731.3 738.9 759.0 780.7 By borrowing sector 17 Household 3,784.7 4,002.3 4,294.3r 4,645.6 4,190.9 44,,229944..33"" 4,335.5 4,426.7 4,527.4 4,645.6 44,,668866..66 18 Nonfinancial business 3,709.3 3,710.5 3,749.3r 3,885.4 3,729.7" 3,749.3" 3,779.7 3,823.1 3,849.5 3,885.4 3,958.7 19 135.0 136.0 138.3 140.7 138.7 138.3 136.6 141.3 142.8 140.7 138.2 70 Nonfarm noncorporate 1,116.4 1,074.1 l,050.3r 1,063.8 1,053.4" 1,050.3" 1,050.9 1,054.6 1,058.4 1,063.8 1,080.2 71 Corporate 2,458.0 2,500.4 2,560.7r 2,680.8 2,537.5" 2,560.7" 2,592.2 2,627.2 2,648.3 2,680.8 2,740.3 22 State and local government 911.1 927.5 990.6r 942.3 985.4" 990.6" 986.0 984.6 957.8 942.3 925.3 73 Foreign credit market debt held in United States 298.8 310.9 357.8 348.1 351.3 357.8 340.3 339.2 339.8 334488..11 336611..11 74 129.5 143.9 203.4 220.9 193.0 203.4 210.6 212.9 215.1 220.9 223.7 75 Bank loans n.e.c 21.6 23.9 24.6 26.1 26.2 24.6 26.2 25.1 26.3 26.1 28.2 26 Commercial paper 81.8 77.7 68.7 41.4 71.7 68.7 43.3 42.0 39.9 41.4 50.9 27 U.S. government and other loans 65.9 65.3 61.1 59.6 60.3 61.1 60.3 59.2 58.6 59.6 58.3 78 Total credit market debt owed by nonfinancial sectors, domestic and foreign 11,480J 12,031.6 12,728.5r 13,313.7 12,504.5' 12,728.5" 12,829-3 12,969.0 13,107.1 13,313.7 1133,,448899..55 Financial sectors 29 Total credit market debt owed by financial sectors 2,752.1 3,004.7 3,300.2' 3,757-3 3,204.7 3,300.2' 3,425.7 3,523.9 3,622.8 3,7573 3,818.4 By instrument 30 US. government-related 1,564.2 1,720.0 1,884.1" 2,168.4 1,845.2 1,884.1" 1,961.5 2,030.5 2,089.8 2,168.4 2,192.7 31 Government-sponsored enterprises securities 402.9 443.1 523.7 700.6 510.3 523.7 563.7 600.3 638.3 700.6 716.3 32 Mortgage pool securities 1,156.5 1,272.0 1,355.6" 1,467.8 1,330.1 1,355.6" 1,397.8 1,430.1 1,451.5 1,467.8 1,476.4 33 Loans from US. government 4.8 4.8 4.8 .0 4.8 4.8 .0 .0 .0 .0 .0 34 Private 1,187.9 1,284.8 1,416.1 1,588.9 1,359.5 1,416.1 1,464.3 1,493.4 1,532.9 t,588.9 1,625.7 35 Corporate braids 640.0 724.8 844.0" 947.2 810.5 844.0" 881.2 904.8 926.3 947.2 976.6 36 Mortgages 4.8 5.4 8.9 18.7 7.6 8.9 11.4 14.5 17.5 18.7 20.0 37 Bank loans n.e.c 78.4 80.5 66.5 54.3 69.2 66.5 62.4 55.3 52.4 54.3 55.5 38 Open market paper 385.7 394.3 393.5 442.8 373.2 393.5 408.8 410.3 420.5 442.8 453.6 39 Loans from Federal Home Loan Banks ... 79.1 79.9 103.1 125.9 98.9 103.1 100.4 108.5 116.2 125.9 120.0 By borrowing sector 40 Government-sponsored enterprises 407.7 447.9 528.5 700.6 515.1 528.5 563.7 600.3 638.3 700.6 716.3 41 Federally related mortgage pools 1,156.5 1,272.0 1,355.6" 1,467.8 1,330.1 1,355.6" 1,397.8 1,430.1 1,451.5 1,467.8 1,476.4 42 Private financial sectors 1,187.9 1,284.8 1,416.1 1,588.9 1,359.5 1,416.1 1,464.3 1,493.4 1,532.9 1,588.9 1,625.7 43 Commercial banks 65.0 73.8 79.5 89.5 77.9 79.5 78.4 82.1 87.5 89.5 90.4 44 Bank holding companies 112.3 114.6 123.4 133.6 120.3 123.4 124.2 126.8 129.6 133.6 136.0 45 Funding corporations 139.1 161.6 169.9 199.3 166.3 169.9 190.7 191.5 200.6 199.3 218.7 46 Savings institutions 94.6 87.8 99.0 111.7 96.8 99.0 97.6 99.0 102.7 111.7 106.3 47 Credit unions .0 .0 .2 .5 .2 .2 .3 .3 .4 .5 .4 48 Life insurance companies .0 .0 .2 .6 .1 .2 .3 .3 .3 .6 .6 49 Finance companies 393.0 389.4 390.5 443.0 380.0 390.5 401.9 414.2 420.9 443.0 456.4 50 Mortgage companies 22.2 30.2 29.2 17.8 31.8 29.2 23.8 19.3 17.5 17.8 18.3 51 Real estate investment trusts (REITs) 13.6 13.9 17.4 31.1 15.8 17.4 21.0 24.8 29.5 31.1 32.8 52 Issuers of asset-backed securities (ABSs) .. 329.1 391.7 473.2 527.6 443.8 473.2 494.9 504.0 514.5 527.6 539.0 All sectors 53 Total credit market debt, domestic and foreign.. 14,232.3 15,0363 16,028.7' 17,071.0 15,709.2' 16,028.7' 16,255.0 16,492.9 16,729.9 17,071.0 17,307.9 54 U.S. government securities 4.335.7 4,795.5 5,215.8" 5,660.7 5,087.7 5,215.8" 5,349.2 5,425.9 5,522.5 5,660.7 5,750.6 55 Tax-exempt securities 1,108.6 1,139.7 1,215.2" 1,181.1 1,207.4" 1,215.2" 1,214.6 1,218.0 1,192.9 1,181.1 1,163.4 56 Corporate and foreign bonds 1,856.5 2,023.1 2,277.0 2,419.8 2,216.3 2,277.0 2,330.3 2,365.2 2,392.4 2,419.8 2,462.2 57 Mortgages 3.924.8 4,049.3 4,229.6" 4,425.9 4,174.2 4,229.6" 4,258.8 4,315.0 4,374.4 4,425.9 4,467.0 58 Consumer credit 797.4 803.0 866.5 984.0 824.3 866.5 863.6 895.3 931.8 984.0 983.8 59 Bank loans ae.c 785.9 776.6 768.4 831.5 761.0 768.4 775.4 786.6 803.2 831.5 867.7 60 Open market paper 565.9 579.0 580.0 623.5 568.2 580.0 582.0 587.9 599.2 623.5 654.2 61 Other loans 857.5 870.2 876.2" 944.5 870.1" 876.2" 881.1 899.0 913.7 944.5 959.0 1. Data in this table also appear in the Board's Z.1 (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • August 1995 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1993 1994' 1995 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999911 11999922 11999933 11999944'' Q3 Q4 Ql Q2 Q3 Q4 Ql CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 14,232.3 15,036.3 16,028.7r 17,071.0 15,709.2r 16,028.7' 16,255.0 16,492.9 16,729.9 17,071.0 17,307.9 2 Private domestic nonfinancial sectors 2,240.2 2,318.0 2,330.7' 2,571.8 2,276.8' 2,330.7' 2,378.0 2,448.6 2,475.3 2,571.8 2,533.0 3 Households 1,446.5 1,523.1 1,517.8' 1,873.0 1,451.6' 1,517.8' 1,619.7 1,710.0 1,760.2 1,873.0 1,872.4 4 Nonfarm noncorporate business 44.1 42.9 39.7 37.7 40.6 39.7 38.8 38.4 37.9 37.7 37.7 5 Nonfinancial corporate business 196.2 225.4 248.1 273.5 234.7 248.1 244.0 251.1 255.0 273.5 266.7 6 State and local governments 553.3 526.5 525.2 387.5 549.9 525.2 475.5 449.2 422.3 387.5 356.2 7 U.S. government 246.9 235.0 230.7' 206.6 218.8 230.7' 219.0 215.4 212.6 206.6 201.7 8 Foreign 958.1 1,052.7 1,171.3' 1,304.6 1,118.6' 1,171.3' 1,203.0 1,218.6 1,252.5 1,304.6 1,370.7 y Financial sectors 10,787.2 11,430.6 12,296.0' 12,988.0 12,095.0' 12,296.0' 12,455.0 12,610.3 12,789.4 12,988.0 13,202.5 10 Government-sponsored enterprises 390.7 459.7 549.8 673.2 531.8 549.8 572.0 597.9 629.4 673.2 675.3 n Federally related mortgage pools 1,156.5 1,272.0 1,355.6' 1,467.8 1,330.1 1,355.6' 1,397.8 1,430.1 1,451.5 1,467.8 1,476.4 12 Monetary authority 272.5 300.4 336.7 368.2 324.2 336.7 341.5 351.6 356.8 368.2 367.1 13 Commercial banking 2,853.3 2,948.6 3,090.8 3,252.8 3,036.4 3,090.8 3,120.2 3,156.2 3,204.2 3,252.8 3,320.5 14 U.S. commercial banks 2,502.5 2,571.9 2,721.5 2,869.6 2,670.2 2,721.5 2,743.8 2,780.3 2,822.4 2,869.6 2,906.4 15 Foreign banking offices 319.2 335.8 326.0 337.1 322.3 326.0 331.8 330.8 335.5 337.1 367.4 16 Bank holding companies 11.9 17.5 17.5 18.4 18.7 17.5 18.2 18.3 19.0 18.4 18.5 17 Banks in U.S. affiliated areas 19.7 23.4 25.8 27.8 25.3 25.8 26.4 26.8 27.3 27.8 28.2 18 Funding corporations 51.5 75.0 93.1 106.9 82.4 93.1 97.9 106.3 112.6 106.9 109.7 19 Thrift institutions 1,192.6 1,134.5 1,132.7 1,167.9 1,136.5 1,132.7 1,134.2 1,146.1 1,159.9 1,167.9 1,175.1 20 Life insurance companies 1,199.6 1,278.8 1,383.9 1,445.0 1,372.1 1,383.9 1,404.2 1,409.1 1,430.3 1,445.0 1,470.4 21 Other insurance companies 376.6 389.4 422.7 443.8 414.6 422.7 429.6 434.8 438.8 443.8 447.0 22 Private pension funds 693.0 730.4 770.6 728.2 785.6 770.6 746.2 738.5 734.1 728.2 752.6 23 State and local government retirement funds 479.9 514.3 542.6 603.3 533.4 542.6 560.8 578.1 584.7 603.3 620.2 24 Finance companies 484.9 486.6 482.8 551.0 474.0 482.8 494.5 511.3 524.1 551.0 568.5 25 Mortgage companies 60.3 60.5 60.4 37.5 63.8 60.4 49.5 40.4 37.0 37.5 38.5 26 Mutual funds 450.5 574.2 743.8' 751.4 709.0' 743.8' 759.2 761.5 767.5 751.4 750.1 27 Closed-end funds 50.3 67.7 77.9 81.4 76.0 77.9 80.0 80.8 81.1 81.4 81.6 28 Money market funds 402.7 404.1 418.7' 447.1 400.6 418.7' 422.0 421.4 423.4 447.1 468.1 29 Real estate investment trusts (REITs) 7.0 8.1 8.6 13.3 8.6 8.6 10.3 11.9 13.3 13.3 13.9 30 Brokers and dealers 124.0 117.1 126.3 92.3 147.1 126.3 112.4 99.3 94.5 92.3 100.4 31 Asset-backed securities issuers (ABSs) 317.8 377.9 458.0 509.0 430.2 458.0 479.5 489.2 498.5 509.0 518.8 32 Bank personal trusts 223.5 231.5 240.9 248.0 238.7 240.9 243.2 245.7 247.7 248.0 248.4 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Total credit market debt 14,232.3 15,036.3 16,028.7r 17,071.0 15,709.2' 16,028.7' 16,255.0 16,492.9 16,729.9 17,071.0 17,307.9 Other liabilities 34 Official foreign exchange 55.4 51.8 53.4 53.2 55.6 53.4 56.4 54.9 55.5 53.2 64.1 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 16.8 17.0 17.1 17.3 17.5 17.6 17.8 37 Life insurance reserves 405.7 433.0 468.2 488.4 459.4 468.2 473.2 475.2 481.2 488.4 494.7 38 Pension fund reserves 4,138.3 4,516.5 4,974.7 5,009.5 4,887.8 4,974.7 4,894.5 4,893.5 5,006.5 5,009.5 5,228.1 39 Interbank claims 96.4 132.8 177.7 272.6 166.9 177.7 205.4 223.9 244.6 272.6 267.5 40 Deposits at financial institutions 5,044.8 5,059.1 5,155.5' 5,283.8 5,088.5 5,155.5' 5,163.7 5,186.2 5,211.9 5,283.8 5,361.2 41 Checkable deposits and currency 1,020.6 1,134.4 1,251.7 1,241.6 1,181.9 1,251.7 1,220.5 1,229.7 1,204.9 1,241.6 1,193.6 42 Small time and savings deposits 2,350.7 2,293.5 2,223.2 2,182.7 2,236.6 2,223.2 2,233.8 2,214.1 2,198.7 2,182.7 2,206.3 43 Large time deposits 488.4 415.2 391.7 410.7 389.4 391.7 382.6 379.0 402.2 410.7 435.0 44 Money market fund shares 539.6 543.6 562.7' 608.2 547.9 562.7' 579.7 573.9 583.5 608.2 632.9 45 Security repurchase agreements 355.8 392.3 457.8 542.1 472.5 457.8 474.9 512.9 540.2 542.1 593.6 46 Foreign deposits 289.6 280.1 268.4' 298.5 260.2 268.4' 272.4 276.6 282.4 298.5 299.7 47 Mutual fund shares 813.9 1,042.1 1,446.3' 1,563.9 1,351.7' 1,446.3' 1,484.8 1,507.8 1,588.6 1,563.9 1,656.4 48 Security credit 188.9 217.3 279.3 277.0 254.5 279.3 282.8 278.0 263.2 277.0 264.2 49 Trade debt 935.9 977.4 1,026.4 1,118.6 1,009.6 1,026.4 1,023.6 1,047.9 1,084.7 1,118.6 1,136.2 50 Taxes payable 71.2 79.6 84.2 87.6 82.8 84.2 89.1 82.3 86.1 87.6 93.4 51 Investment in bank personal trusts 608.3 629.6 660.9 670.0 651.2 660.9 655.2 650.1 671.5 670.0 707.2 52 Miscellaneous 2,992.2 3,160.2 3,403.0' 3,717.2 3,314.6 3,403.0' 3,515.9 3,573.5 3,668.4 3,717.2 3,714.7 53 Total UaWUties 29,609.6 31,360.1 33,783.1r 35,6383 33,056.5' 33,783.1' 34,124.7 34,491.7 35,117.5 35,638-3 36,321.3 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 22.3 19.6 20.1 21.1 20.3 20.1 20.4 20.8 21.0 21.1 22.7 55 Corporate equities 4,863.6 5,462.9 6,186.5 6,048.8 5,941.7 6,186.5 6,052.2 5,877.7 6,135.1 6,048.8 6,573.6 56 Household equity in noncorporate business 2,444.4 2,411.5 2,420.5' 2,510.7 2,446.1' 2,420.5' 2,471.4 2,500.1 2,524.4 2,510.7 2,474.6 Floats not included in assets (-) 57 U.S. government checkable deposits 3.8 6.8 5.6 3.4 2.2 5.6 .3 .9 1.2 3.4 4.2 58 Other checkable deposits 40.4 42.0 40.7 38.0 33.7 40.7 36.3 38.7 30.6 38.0 32.3 59 Trade credit -129.3 -124.6 -101.7 -96.4 -130.4 -101.7 -120.9 -128.3 -121.4 -96.4 -108.5 Liabilities not identified as assets (-) 60 Treasury currency -4.8 -4.9 -5.1 -5.4 -5.1 -5.1 -5.2 -5.2 -5.3 -5.4 -5.4 61 Interbank claims -4.2 -9.3 -4.7 -6.5 -7.8 -4.7 -7.7 -7.4 -3.5 -6.5 -2.8 62 Security repurchase agreements 9.2 38.1 120.6' 170.8 132.6 120.6' 135.7 162.7 189.4 170.8 201.6 63 Taxes payable 17.8 25.2 26.2 24.6 24.3 26.2 15.4 21.6 21.7 24.6 6.4 64 Miscellaneous -330.7 -398.4 -484.8' -469.6 -480.0' -484.8' -453.1 -442.7 -449.9 -469.6 -559.7 65 Total identified to sectors as assets 37,337.6 39,679.1 42,813.4r 44,560.0 41,895.2' 42,813.4' 43,068.0 43,250.0 44,135.2 44,560.0 45,824.1 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 1 Industrial production' 107.6 112.0 118.1 119.0 119.5 1203 121.7 122.0 122.1 121.9 121.2 120.9 Market groupings ?. 106.5 110.7 115.9 116.4 116.9 117.5 118.7 111199..11 119.1 111188..88 111188..00 111177..88 3 Final, total 109.0 113.4 118.4 118.9 119.2 119.8 121.2 121.6 121.8 121.4 120.8 120.6 4 Consumer goods 105.9 109.4 113.2 113.0 113.0 113.9 115.5 115.7 115.7 114.8 113.9 113.6 5 Equipment 113.4 119.3 126.5 128.0 128.8 128.9 130.1 130.9 131.2 131.8 131.6 131.7 6 Intermediate 98.8 102.4 108.1 108.6 109.9 110.6 110.9 111.3 110.9 110.6 109.5 109.2 7 Materials 109.2 114.1 121.5 122.9 123.4 124.6 126.3 126.5 126.7 126.7 126.2 125.8 Industry groupings 8 Manufacturing 108.0 112.9 119.7 120.9 121.5 122.6 124.2 112244..55 112244..22 112244..11 112233..33 112233..00 9 Capacity utilization, manufacturing (percent)2.. 79.2 80.9 83.4 83.6 83.8 84.4 85.2 85.2 84.7 84.3 83.5 83.0 10 Construction contracts3 97.7 104.4 109.3r 109.0 107.0 111.0 101.0 104.0 111.0 108.0 99.0 109.0 11 Nonagricultural employment, total4 106.5 108.4 111.3 112.6r 112.7r 113.2r 113.4r 113.6 113.9 114.1 114.1 114.0 17 Goods-producing, total 94.2 94.3 95.6 97.4r 97.6r 98.0r 98.2r 98.5 98.6 98.8 98.6 98.1 13 Manufacturing, total 95.3 94.8 95.1 96.6r 96.8r 97.lr 97.2r 97.4 97.5 97.5 97.4 97.1 14 Manufacturing, production workers 94.9 94.9 96.1 97.8r 98. lr 98.5r 98.7r 98.9 99.1 99.1 99.0 98.6 15 Service-producing 110.5 112.9 116.3 117.4r 117.6r 118.1r 118.3r 118.4 118.8 119.0 119.0 119.0 16 Personal income, total 135.6 141.4 150.0 151.7 153.7 153.7 154.7 156.0 156.8 157.7 158.1 n.a. 17 Wages and salary disbursements 131.6 136.2 145.0 146.4 148.2 148.1 149.0 150.1 150.7 150.9 151.8 n.a. 18 Manufacturing 118.0 120.0 126.0 126.7 128.8 127.9 128.6 129.1 131.1 130.4 128.8 n.a. 19 Disposable personal income 137.0 142.5 150.8 152.6 154.8 154.7 155.8 157.0 157.8 158.6 157.5 n.a. 20 Retail sales5 126.4 134.7 145.2r 147.6 149.3 149.8 150.0 150.7 149.6 150.6 150.1 150.4 Prices6 71 Consumer (1982-84=100) 140.3 144.5 148.2 149.4 149.5 149.7 149.7 150.3 150.9 151.4 151.9 152.2 22 Producer finished goods (1982=100) 123.2 124.7 125.5 125.6 125.8 126.1 126.2 126.6r 126.9 126.9 127.6 128.0 1. Data in this table also appear in the Board's G.17 (419) monthly statistica lrelease. 5. Based on data from U.S. Department of Commerce, Survey of Current Business. For the ordering address, see the inside front cover. The latest historical revision of the 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the industrial production index and the capacity utilization rates was released in November price indexes can be obtained from the U.S. Department of Labor, Bureau of Labor 1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve Statistics, Monthly Labor Review. Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for production index, see "Industrial Production: 1989 Developments and Historical Revi- series mentioned in notes 3 and 6, can also be found in the Survey of Current Business. sion," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. Figures for industrial production for the latest month are preliminary, and many figures 2. Ratio of index of production to index of capacity. Based on data from the Federal for the three months preceding the latest month have been revised. See "Recent Develop- Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources. ments in Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 3. Index of dollar value of total construction contracts, including residential, nonresi- 1990), pp. 411-35. See also "Industrial Production Capacity and Capacity Utilization dential, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. since 1987," Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605. Dodge Division. 4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers employees only, excluding personnel in the armed forces. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted except as noted 1994r 1995r CCaatteeggoorryy 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 126,982 128,040 131,056 131,646 131,718 131,725 132,136 132,308 132,511 132,737 131,811 2 Nonagricultural industries3 114,391 116,232 119,651 120,647 120,903 121,038 121,064 121,469 121,576 121,478 120,962 3 Agriculture 3,207 3,074 3,409 3,494 3,500 3,532 3,575 3,656 3,698 3,594 3,357 4 Number 9,384 8,734 7,996 7,505 7,315 7,155 7,498 7,183 7,237 7,665 7,492 5 Rate (percent of civilian labor force) 7.4 6.8 6.1 5.7 5.6 5.4 5.7 5.4 5.5 5.8 5.7 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 108,604 110,525 113,423 114,935 115,427 115,624 115,810 116,123 116,302 116,295 116,194 7 Manufacturing 18,104 18,003 18,064 18,398 18,439 18,472 18,502 18,523 18,525 18,500 18,444 8 Mining 635 611 604 595 592 592 590 588 589 583 581 9 Contract construction 4,492 4,642 4,916 5,088 5,144 5,166 5,201 5,213 5,256 5,237 5,180 10 Transportation and public utilities 5,721 5,787 5,842 6,061 6,092 6,121 6,129 6,156 6,175 6,186 6,182 11 Trade 25,354 25,675 26,362 26,775 26,913 26,988 27,011 27,069 27,047 27,064 27,047 17 Finance 6,602 6,712 6,789 6,935 6,937 6,931 6,927 6,929 6,938 6,919 6,916 13 29,052 30,278 31,805 31,888 32,035 32,135 32,228 32,404 32,524 32,559 32,619 14 Government 18,653 18,817 19,041 19,195 19,275 19,219 19,222 19,241 19,248 19,247 19,225 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 • August 1995 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1994 1995 1994 1995 1994 1995 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 117.4 118.8 120.5 122.0 140.0 140.9 141.9 143.1 83.8 84.3 84.9 85.2 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 120.9 122.7 124.8 126.6 148.7 150.0 151.3 152.9 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 105.4 106.6 107.9 107.7 115.5 116.0 116.5 117.1 91.2 91.9 92.7 91.9 7 Primary metals 114.4 114.1 119.4 120.4 125.0 125.2 125.4 126.7 91.6 91.1 95.2 95.0 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 95.9 9 Nonferrous 106.9 111.4 113.9 113.6 120.5 120.5 120.5 120.9 88.7 92.4 94.5 94.0 10 Industrial machinery and equipment 157.6 162.6 167.5 171.4 179.0 181.6 184.1 187.8 88.0 89.6 91.0 91.3 11 Electrical machinery 156.8 163.5 169.4 174.0 179.9 184.1 188.5 193.8 87.1 88.8 89.9 89.8 12 Motor vehicles and parts 133.3 135.0 141.5 145.8 158.5 160.3 162.2 164.2 84.1 84.2 87.2 88.8 13 Aerospace and miscellaneous transportation equipment. . . . 84.2 82.1 80.8 81.4 129.8 129.4 129.1 128.8 64.9 63.5 62.6 63.2 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 108.7 108.9 111.6 111.9 120.8 121.4 122.0 122.7 90.1 89.7 91.4 91.2 16 Paper and products 115.9 118.5 120.6 120.3 126.6 127.1 127.7 128.4 91.6 93.2 94.4 93.6 17 Chemicals and products 123.6 124.4 126.0 129.8 151.9 153.3 154.7 156.2 81.4 81.1 81.4 83.1 18 Plastics materials 124.3 126.9 130.2 134.3 130.0 130.8 131.6 132.6 95.6 97.0 98.9 101.3 19 Petroleum products 106.3 104.9 106.5 107.8 115.3 115.2 115.1 115.1 92.2 91.1 92.5 93.7 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 117.2 118.1 116.3 118.3 135.0 135.4 135.8 136.3 86.8 87.2 85.6 86.8 22 Electric 118.0 118.2 117.3 118.5 132.6 133.1 133.6 134.1 89.0 88.8 87.8 88.4 1973 1975 Previous cycle5 Latest cycle6 1994 1994 1995 High Low High Low High Low May Dec. Jan. Feb/ Mar/ Apr. Mayp Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.8 84.9 78.0 83.8 85.5 85.5 85.3 84.9 84.2 83.7 2 Manufacturing 88.9 70.8 87.3 70.0 85.2 76.6 83.2 85.2 85.2 84.7 84.3 83.5 83.0 3 Primary processing3 92.2 68.9 89.7 66.8 89.0 77.9 88.0 90.8 90.2 89.4 89.1 88.4 87.9 4 Advanced processing4 87.5 72.0 86.3 71.4 83.5 76.2 81.3 83.0 83.2 82.8 82.4 81.5 81.0 5 Durable goods 88.8 68.5 86.9 65.0 84.0 73.7 82.5 85.4 85.3 84.9 84.5 83.6 82.9 6 Lumber and products 90.1 62.2 87.6 60.9 93.3 76.3 91.8 94.7 94.3 91.7 89.8 87.9 87.9 7 Primary metals 100.6 66.2 102.4 46.8 92.8 74.0 91.9 98.0 95.6 94.5 94.8 94.2 93.5 8 Iron and steel 105.8 66.6 110.4 38.3 95.7 72.1 94.5 100.3 96.5 94.9 96.1 94.5 92.9 9 Nonferrous 92.9 61.3 90.5 62.2 88.7 75.0 88.7 95.2 94.6 94.2 93.2 94.0 94.4 10 Industrial machinety and equipment 96.4 74.5 92.1 64.9 84.0 72.5 88.1 91.1 92.0 91.1 90.7 90.0 89.5 11 Electrical machinery 87.8 63.8 89.4 71.1 84.9 76.6 87.0 90.8 90.1 89.8 89.4 88.8 88.4 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 85.1 57.6 83.0 88.8 89.4 89.3 87.7 83.6 80.0 13 Aerospace and miscellaneous transportation equipment 77.0 66.6 81.1 66.9 88.4 79.4 65.2 62.5 62.4 63.4 63.8 63.8 63.2 14 Nondurable goods 87.9 71.8 87.0 76.9 86.7 80.4 84.1 85.2 85.1 84.6 84.2 83.5 83.2 15 Textile mill products 92.0 60.4 91.7 73.8 92.1 78.9 90.2 91.8 92.5 90.4 90.6 91.1 89.7 16 Paper and products 96.9 69.0 94.2 82.0 94.8 86.5 92.2 95.2 93.5 93.7 93.7 93.1 93.7 17 Chemicals and products 87.9 69.9 85.1 70.1 85.9 78.9 81.7 82.5 83.8 83.0 82.6 81.3 81.1 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 97.0 105.0 105.6 100.6 97.5 19 Petroleum products 96.7 81.1 89.5 68.2 88.5 83.7 92.8 93.7 93.4 93.5 94.2 95.0 93.4 20 Mining 94.4 88.4 96.6 80.6 86.5 86.0 90.3 89.8 89.7 90.3 89.7 89.6 88.7 21 Utilities 95.6 82.5 88.3 76.2 92.6 83.2 85.8 84.7 85.6 87.5 87.3 87.6 88.0 22 Electric 99.0 82.7 88.3 78.7 94.8 86.5 87.6 87.1 87.5 88.7 88.8 89.2 89.6 1. Data in this table also appear in the Board's G.17 (419) monthly statistica lrelease. 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic For the ordering address, see the 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 pro- 1994 Group por- avg. tion May June July Aug. Sept. Oct. Nov. Dec. Mar.r Apr. MayP Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 118.1 117.4 118.0 118.2 119.1 119.0 119.5 120.3 121.7 122.0 122.1 121.9 121.2 120.9 7 60.9 115.9 115.3 115.9 116.2 116.7 116.4 116.9 117.5 118.7 119.1 119.1 118.8 118.0 117.8 Final products 46.6 118.4 117.8 118.4 118.5 119.2 118.9 119.2 119.8 121.2 121.6 121.8 121.4 120.8 120.6 4 Consumer goods, total 28.5 113.2 112.8 113.5 113.3 113.8 113.0 113.0 113.9 115.5 115.7 115.7 114.8 113.9 113.6 5 Durable consumer goods 5.5 119.4 116.4 118.0 118.0 120.7 119.1 119.4 120.5 123.4 124.5 123.4 121.3 118.9 116.4 6 Automotive products 2.5 125.5 120.1 121.0 119.5 124.9 123.8 124.5 127.1 131.1 131.7 132.3 129.8 125.8 120.6 7 Autos and trucks 1.6 125.4 118.1 118.5 115.0 126.0 122.5 122.3 126.5 131.4 132.7 133.5 130.8 124.6 117.3 8 Autos, consumer .9 94.9 90.4 89.6 86.5 91.7 90.2 92.9 94.0 100.5 103.6 103.6 103.1 93.9 87.5 9 Trucks, consumer .7 180.7 168.0 170.7 166.6 189.0 181.5 175.5 185.8 187.3 184.6 187.1 180.0 180.2 171.7 10 Auto parts and allied goods .9 123.2 121.9 123.8 126.6 120.0 123.9 126.6 125.7 127.8 126.9 127.0 125.0 126.0 125.1 11 Other 3.0 114.1 113.2 115.4 116.7 117.1 115.2 115.2 115.0 116.8 118.3 115.9 114.0 113.1 112.8 1? Appliances televisions and air conditioners .7 126.0 125.6 132.8 129.7 135.1 130.2 124.9 126.9 131.5 132.1 125.8 122.3 119.4 112222..44 N Carpeting and furniture .8 105.0 103.3 103.6 108.4 106.9 104.1 107.4 105.9 108.0 110.2 107.9 106.4 106.6 105.7 14 Miscellaneous home goods 1.5 113.8 113.1 114.2 115.3 114.6 114.6 114.9 114.5 114.9 116.5 115.8 114.3 113.6 112.3 15 Nondurable consumer goods 23.0 111.8 112.0 112.5 112.2 112.2 111.7 111.5 112.4 113.7 113.6 113.9 113.3 112.7 113.0 16 Foods and tobacco 10.3 110.5 110.9 110.5 110.6 111.2 111.9 112.2 112.4 114.3 113.1 112.9 112.4 111.8 111.8 17 Clothing 2.4 95.9 97.2 96.3 96.5 95.9 95.5 96.2 96.2 96.8 96.1 94.7 94.4 93.2 93.2 18 4.5 129.7 129.5 131.4 131.1 129.8 127.5 127.2 130.5 134.0 137.0 136.6 135.9 133.7 135.1 19 Paper products 2.9 104.7 105.6 105.8 105.2 105.9 105.2 103.6 104.6 104.3 103.4 104.1 102.9 104.1 104.7 70 2.9 113.9 112.4 115.5 114.3 113.1 110.5 109.8 110.6 109.6 110.4 114.1 113.9 114.3 114.2 71 .9 106.7 107.4 106.5 105.8 105.8 107.4 103.9 109.8 107.4 107.4 109.1 110.6 110.6 108.5 22 Residential utilities 2.1 116.8 114.4 119.3 117.8 116.1 111.8 112.2 110.7 110.3 111.6 116.0 115.2 115.8 116.5 73 18.1 126.5 125.4 125.8 126.4 127.5 128.0 128.8 128.9 130.1 130.9 131.2 131.8 131.6 131.7 74 Business equipment 14.0 146.7 144.5 145.5 146.9 148.9 149.5 150.9 151.0 152.6 153.7 154.5 155.5 155.2 155.4 75 Information processing and related 5.7 176.4 171.8 173.7 177.1 179.7 181.1 183.2 184.2 188.3 188.7 189.1 192.3 195.0 196.9 76 Computer and office equipment 1.5 284.2 271.6 276.5 282.6 288.9 295.8 300.5 305.7 311.9 318.0 325.3 331.8 339.3 346.1 77 4.0 120.9 120.7 120.6 122.1 122.3 123.0 124.4 124.1 124.1 125.9 126.1 125.8 124.8 125.1 78 Transit 2.6 137.9 135.3 136.1 132.6 137.9 136.8 137.1 137.5 137.8 139.7 143.4 143.2 139.7 136.2 79 1.2 148.0 140.0 141.7 138.2 149.4 147.7 149.2 151.6 152.6 157.2 157.7 154.9 146.7 141.2 30 Other 1.7 129.4 129.4 130.5 132.6 133.5 133.3 134.3 133.1 133.1 133.5 132.9 132.8 130.3 130.1 31 Defense and space equipment 3.4 71.0 72.4 71.3 69.9 69.2 68.8 68.7 69.0 68.7 68.6 67.7 67.6 67.3 66.6 37 Oil and gas well drilling .5 90.8 94.6 94.2 93.7 89.6 93.9 88.3 86.0 86.0 86.7 89.1 85.7 89.2 91.9 33 Manufactured homes .2 137.3 135.2 137.8 133.3 134.5 138.4 142.0 143.1 153.6 153.6 147.4 148.3 147.2 34 Intermediate products, total 14.3 108.1 107.7 108.5 109.1 109.2 108.6 109.9 110.6 110.9 111.3 110.9 110.6 109.5 109.2 35 Construction supplies 5.3 106.8 106.1 106.4 107.9 108.2 108.6 109.7 109.8 111.6 112.2 111.0 110.4 109.0 108.3 36 Business supplies 9.0 109.1 108.8 110.1 110.0 109.9 108.7 110.1 111.3 110.7 110.9 111.0 110.9 110.0 109.9 37 39.1 121.5 120.5 121.2 121.4 122.8 122.9 123.4 124.6 126.3 126.5 126.7 126.7 126.2 125.8 38 Durable goods materials 20.6 131.2 129.8 130.0 130.9 132.6 133.3 134.2 136.0 138.6 139.1 139.2 139.3 138.9 138.6 39 Durable consumer parts 3.9 132.2 129.7 129.2 130.4 133.2 133.1 133.8 135.8 139.7 139.1 139.1 138.0 135.9 133.2 40 Equipment parts 7.5 143.1 140.5 142.1 143.8 145.2 146.7 149.0 150.7 152.3 153.6 155.1 156.3 157.5 158.8 41 Other 9.1 121.3 121.2 120.8 121.1 122.3 122.8 122.7 124.6 127.3 127.6 126.7 126.6 125.7 125.2 47 Basic metal materials 3.0 119.7 120.0 119.6 118.8 119.3 121.1 121.3 123.2 126.0 125.6 124.8 124.7 124.0 123.3 43 Nondurable goods materials 8.9 118.4 118.2 118.1 118.6 120.3 119.8 120.3 121.5 122.8 122.3 121.8 121.6 120.4 119.8 44 Textile materials 1.1 105.3 104.2 104.8 104.8 105.7 105.9 106.9 110.3 108.7 109.8 108.5 108.8 109.9 107.7 45 Paper materials 1.8 118.7 118.9 118.4 117.5 122.5 121.5 120.5 122.1 121.3 120.8 122.1 124.1 122.5 123.9 46 Chemical materials 4.0 123.2 123.8 122.9 123.4 124.8 124.0 124.6 125.9 127.5 128.6 128.3 127.2 125.7 124.9 47 Other 2.0 116.9 114.8 116.5 118.6 118.1 118.2 119.5 119.3 123.4 119.1 116.8 116.1 114.3 113.5 48 Energy materials 9.6 105.2 104.6 106.7 105.2 106.1 105.6 105.2 104.9 105.3 105.6 106.6 106.5 106.5 106.0 49 6.3 100.3 100.4 100.2 100.3 100.9 100.8 100.3 100.7 101.7 101.7 102.0 102.5 102.2 101.1 50 Converted fuel materials 3.3 114.9 112.8 119.9 114.9 116.3 115.1 115.1 113.4 112.3 113.4 115.6 114.3 115.1 115.9 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.2 117.6 117.1 117.7 118.1 118.7 118.6 119.1 119.8 121.1 121.4 121.4 121.3 120.9 120.8 52 Total excluding motor vehicles and parts 95.2 117.1 116.6 117.3 117.7 118.2 118.0 118.5 119.2 120.5 120.8 120.8 120.7 120.3 120.3 53 Total excluding computer and office 98.3 115.4 114.8 115.4 115.5 116.4 116.1 116.6 117.4 111188..77 111188..99 111188..99 111188..66 111177..99 111177..66 54 Consumer goods excluding autos and trucks . 26.9 112.4 112.4 113.2 113.2 113.0 112.4 112.4 113.1 114.5 114.6 114.5 113.8 113.2 113.4 55 Consumer goods excluding energy 25.6 113.1 112.8 113.2 113.2 113.8 113.3 113.3 114.2 116.2 116.3 115.9 114.9 113.8 113.5 56 Business equipment excluding autos and trucks 12.8 146.5 144.8 145.7 147.7 148.8 149.5 151.0 150.9 115522..55 153.3 154.1 115555..55 115555..99 115566..77 57 Business equipment excluding computer and office equipment 12.5 130.7 129.4 130.0 131.1 132.7 132.7 133.8 133.6 134.7 135.4 135.6 113366..22 113355..33 113355..00 58 Materials excluding energy 29.5 127.3 126.2 126.4 127.2 128.8 129.2 129.9 131.6 133.8 134.0 133.9 133.9 133.2 132.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • August 1995 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 1994 1995 GGrroouupp SIC2 pro- 1994 code por- avg. tion May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.r Mar/ Apr. Mayp Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 118.1 117.4 118.0 118.2 119.1 119.0 119.5 120.3 121.7 122.0 122.1 121.9 121.2 120.9 60 Manufacturing 85.5 119.7 119.0 119.3 119.8 120.9 120.9 121.5 122.6 124.2 124.5 124.2 124.1 123.3 123.0 61 Primary processing 26.5 115.3 115.2 114.7 115.3 116.3 116.2 116.6 118.4 120.3 119.8 119.1 118.9 118.3 117.9 62 Advanced processing 59.0 121.8 120.8 121.5 121.9 123.1 123.1 123.8 124.6 126.0 126.6 126.6 126.5 125.6 125.4 63 Durable goods 45.1 125.5 124.0 124.6 125.2 127.0 127.2 128.0 129.1 131.2 131.6 131.5 131.5 130.7 130.3 64 Lumber and products "24 2.0 106.0 106.0 106.2 106.8 105.5 107.6 106.7 106.7 110.4 110.2 107.4 105.4 103.4 103.7 65 Furniture and fixtures 25 1.4 111.4 110.1 111.8 114.0 115.5 112.4 114.8 113.0 114.7 116.0 115.6 113.7 112.8 113.3 66 Stone, clay, and glass products 32 2.1 104.9 105.5 104.4 104.3 105.8 105.8 105.4 106.9 110.1 108.7 107.4 108.7 106.5 106.0 67 Primary metals 33 3.1 114.5 114.8 113.7 112.7 113.5 116.0 115.9 119.1 123.0 120.9 119.8 120.4 119.9 119.2 68 Iron and steel 331,2 1.7 118.3 120.9 118.2 116.1 113.0 118.2 118.8 121.9 129.3 125.9 124.3 126.1 124.2 122.3 69 Raw steel .1 107.9 105.7 106.3 104.7 107.0 109.9 109.0 114.2 121.9 114.6 117.2 117.2 114.3 70 Nonferrous 333-6,9 1.4 109.3 106.9 107.6 108.0 113.6 112.7 111.8 115.2 114.8 114.2 113.8 112.8 114.0 1148 71 Fabricated metal products... 34 5.0 110.8 110.0 110.2 111.7 112.4 111.6 112.2 113.3 115.3 115.3 114.9 114.4 114.0 114.0 72 Industrial machinery and equipment 35 7.9 159.9 157.7 158.9 160.6 162.6 164.6 166.5 167.5 168.5 171.4 171.1 171.7 171.8 172.4 73 Computer and office equipment 357 1.7 284.2 271.6 276.5 282.6 288.9 295.8 300.5 305.7 311.9 318.0 325.3 331.8 339.3 346.1 74 Electrical machinery 36 7.3 160.0 156.5 159.5 161.5 164.1 165.0 166.9 168.8 172.5 172.9 174.0 175.0 175.7 176.6 75 Transportation equipment. .. 37 9.6 109.7 107.6 107.5 105.7 109.5 108.8 109.0 110.5 111.9 112.6 113.5 112.7 109.7 106.6 76 Motor vehicles and parts . 371 4.8 137.9 131.6 132.2 129.6 138.1 137.4 138.4 141.4 144.6 146.1 146.7 144.7 138.6 133.1 77 Autos and light bucks . 371 2.5 131.9 124.4 124.6 120.8 131.9 128.4 128.6 132.7 138.4 140.0 140.8 138.2 130.9 123.2 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.8 82.6 84.6 83.8 82.8 82.3 81.4 80.8 80.9 80.6 80.4 81.7 82.1 82.1 81.2 79 Instruments 38 5.4 107.4 106.4 106.8 108.5 108.7 108.0 108.2 107.7 108.9 108.4 107.7 108.5 109.4 109.9 80 Miscellaneous 39 1.3 116.2 115.4 115.8 118.6 117.1 117.0 118.4 118.6 117.6 119.1 120.3 118.5 118.0 117.4 81 Nondurable goods 40.5 113.3 113.4 113.4 113.6 114.0 113.7 114.2 115.4 116.4 116.5 116.1 115.7 115.0 114.8 82 Foods "20 9.4 112.8 112.8 112.8 113.4 113.7 114.6 113.4 113.9 114.7 115.9 115.7 115.5 114.3 114.0 83 Tobacco products 21 1.6 96.5 98.5 95.9 93.7 96.2 96.1 104.5 101.5 108.0 97.3 96.4 95.2 97.0 97.7 84 Textile mill products 22 1.8 109.0 108.9 108.7 109.4 109.0 108.3 110.6 112.0 112.2 113.3 110.9 111.5 112.3 110.7 85 Apparel products 23 2.2 96.3 97.1 97.0 97.0 96.8 96.8 96.9 96.8 97.0 96.6 95.8 94.8 93.5 93.1 86 Paper and products 26 3.6 117.4 116.7 116.6 116.6 120.2 118.7 118.9 121.3 121.7 119.8 120.3 120.6 120.1 121.1 87 Printing and publishing 27 6.8 101.1 101.6 102.4 102.1 101.5 100.9 101.4 102.0 101.6 101.3 100.8 100.4 99.6 99.7 88 Chemicals and products .... 28 9.9 124.1 124.0 124.4 124.7 124.7 123.7 123.8 126.2 128.0 130.4 129.7 129.3 127.8 127.9 89 Petroleum products 29 1.4 105.3 107.0 104.5 104.3 105.2 105.3 104.0 107.6 107.7 107.4 107.6 108.5 109.5 107.7 90 Rubber and plastic products . 30 3.5 133.5 132.4 132.8 134.5 134.5 134.7 136.7 138.3 140.0 140.2 140.5 139.1 139.4 138.3 91 Leather and products 31 .3 85.8 85.9 85.5 86.3 85.5 85.4 85.6 84.5 84.4 82.9 82.8 82.9 81.0 79.4 92 Mining 6.8 99.8 100.7 100.6 100.1 100.0 100.1 99.2 98.3 100.1 100.0 100.6 100.0 99.8 98.8 93 Metal "lO .4 159.4 156.4 162.8 159.5 156.6 160.0 158.9 154.3 156.2 158.5 160.4 155.2 153.2 152.0 94 Coal 12 1.0 112.0 111.5 113.4 108.6 111.4 110.7 110.2 110.1 117.8 117.9 118.6 117.4 114.1 106.1 95 Oil and gas extraction 13 4.7 93.0 94.3 93.8 93.9 93.5 93.7 92.2 91.2 92.2 91.2 92.3 91.7 92.6 93.0 96 Stone and earth minerals 14 .6 107.0 108.1 105.6 107.9 106.6 106.7 109.3 109.9 109.9 115.1 112.0 113.3 109.5 107.9 97 Utilities 7.7 118.1 115.8 121.1 119.0 118.8 116.5 117.2 116.5 115.2 116.5 119.2 119.1 119.7 120.4 98 Electric 49L3PT 6.1 117.8 116.2 121.4 119.0 118.4 117.1 117.9 117.5 116.5 117.2 119.0 119.3 119.9 120.8 99 Gas 492,3PT 1.6 119.2 114.1 120.0 118.9 120.4 114.2 114.4 112.3 109.8 113.7 120.1 118.1 118.5 119.0 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.7 118.6 118.2 118.6 119.2 119.8 119.9 120.5 121.5 122.9 123.2 122.9 122.8 122.4 122.3 101 Manufacturing excluding office and computing machines ... 83.8 116.5 115.9 116.2 116.6 117.6 117.5 118.1 119.1 120.6 120.8 120.5 120.3 119.4 119.0 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 2,006.2 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 2,066.5 2,063.9 2,050.9 2,043.3 103 Final 1,314.6 1,576.3 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 1,626.4 1,624.9 1,614.7 1,608.0 104 Consumer goods 866.6 982.5 977.1 983.0 979.0 987.3 981.5 977.0 988.5 999.6 1,000.2 1,001.9 997.0 988.0 981.0 105 Equipment 448.0 593.8 584.5 588.1 590.3 599.3 602.7 607.3 609.9 615.5 620.9 624.5 627.9 626.7 626.9 106 Intermediate 392.5 429.8 429.0 431.4 432.9 433.5 431.4 436.0 438.8 441.4 442.0 440.1 439.0 436.2 435.3 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 1995r IItteemm 11999922 11999933 11999944 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 1,095 1,199 1,372 1,347 1,386 1,426 1,401 1,358 1,420 1,293 1,282 1,235 1,243 7 911 987 1,068 1,049 1,063 1,066 1,046 1,025 1,105 990 931 911 905 3 Two-family or more 184 213 303 298 323 360 355 333 315 303 351 324 338 4 Started 1,200 1,288 1,457 1,440 1,463 1,511 1,451 1,536 1,545 1,366 1,319 1,238 1,255 5 One-family 1,030 1,126 1,198 1,219 1,174 1,235 1,164 1,186 1,250 1,055 1,048 987 995 6 Two-family or more 170 162 259 221 289 276 287 350 295 311 271 251 260 7 Under construction at end of period 612 680 762 757 770 773 779 787 791 792 797 769 763 8 One-family 473 543 558 585 589 590 587 587 584 578 579 553 545 9 Two-family or more 140 137 204 172 181 183 192 200 207 214 218 216 218 10 1,158 1,193 1,347 1,280 1,337 1,400 1,376 1,371 1,388 1,436 1,302 1,439 1,338 11 964 1,040 1,160 1,157 1,144 1,158 1,169 1,136 1,173 1,209 1,080 1,217 1,088 1? Two-family or more 194 153 187 123 193 242 207 235 215 227 222 222 250 13 Mobile homes shipped 210 254 304 289 295 307 314 322 347 361 335 333 318 Merchant builder activity in one-family units 14 610 666 670 630 672 691 707 642 627 643r 567 559966 558800 15 Number for sale at end of period 265 293 338 317 322 328 330 335 338 342 347 347 350 Price of units sold (thousands of dollars)2 16 121.3 126.1 130.4 124.4 133.3 129.7 132.0 129.9 135.0 127.9r 113344..44 113300..00 113322..55 17 Average 144.9 147.6 153.7 144.4 154.9 157.2 153.0 155.4 159.6 147.4r 159.3 154.3 156.7 EXISTING UNITS (one-family) 18 Number sold 3,520 3,800 3,946 3,940 3,910 3,870 3,820 3,690 3,760 3,610 3,420 3,620 3,390 Price of units sold (thousands of dollars) 19 103.6 106.5 109.6 112.4 113.0 108.9 107.5 108.7 109.1 108.1 110077..00 110077..99 110088..11 20 Average 130.8 133.1 136.4 139.7 141.2 135.8 133.0 134.7 135.6 135.3 133.4 134.5 134.2 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 435355 466,365 506,315 505,445 505,470 514,197 519,336 522,106 528,613 527314 526,728 524,375 526,605 7? 316,115 341,101 377,136 376,463 376,216 382,287 383,044 390,729 393,171 394,037 392,164 388,047 388,490 73 187,870 210,455 237,767 237,775 236,871 238,529 239,136 241,320 243,768 244,628 243,610 238,382 233,674 74 128,245 130,646 139,369 138,688 139,345 143,758 143,908 149,409 149,403 149,409 148,554 149,665 154,816 ?5 20,720 19,533 21,600 21,117 22,012 22,621 22,190 25,050 23,074 23,316 24,853 24,403 25,812 76 Commercial buildings 41,523 42,627 48,268 48,607 48,185 50,180 50,583 51,993 53,272 54,247 54,798 56,251 56,539 77 Other buildings 21,494 23,626 23,835 23,838 23,648 24,784 24,103 24,325 24,851 24,430 24,677 23,539 24,445 28 Public utilities and other 44,508 44,860 45,666 45,126 45,500 46,173 47,032 48,041 48,206 47,416 44,226 45,472 48,020 79 Public 119,238 125,262 129,175 128,982 129,255 131,910 136,292 131,377 135,443 133,277 134,564 136,328 138,115 30 2,502 2,454 2,315 2,351 2,357 2,364 2,329 2,247 2,481 2,629 2,723 2,223 2,577 31 34,899 37,355 40,185 40,305 40,057 40,797 41,685 40,011 39,256 39,193 38,994 41,174 40,735 3? Conservation and development 6,021 5,976 6,236 5,935 5,754 7,521 7,135 6,658 7,765 6,927 7,445 7,386 7,329 33 Other 75,816 79,477 80,439 80,391 81,087 81,228 85,143 82,461 85,941 84,528 85,402 85,545 87,474 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 • August 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 llleeevvveeelll,,, 1994 1995 1995 MMMaaayyy 11999944 11999955 111999999555''' MMaayy MMaayy June Sept. Dec. Mar. Jan.r Feb.r Mar. Apr. May CONSUMER PRICES2 (1982-84=100) 1 AU items 2.3 3.2 2.7 3.6 1.9 3.2 .3 .3 .2 .4 J 152.2 2 Food 1.7 3.3 2.8 5.1 3.9 .0 -.3 .3 .0 .7 .1 148.3 3 Energy items -1.4 3.3 -3.0 9.2 .4 -1.1 .3 -.1 -.5 .4 .5 106.3 4 All items less food and energy 2.8 3.1 3.1 2.6 2.0 4.1 .4 .3 .3 .4 .2 160.8 5 Commodities 1.3 1.5 3.9 .9 .3 2.6 .4 .1 .1 .2 .0 139.6 6 Services 3.5 3.8 2.7 3.6 2.6 4.8 .5 .4 .4 .4 .3 172.9 PRODUCER PRICES (1982=100) 7 Finished goods -.4 2.2 .0 1.9 2.2 2.6 .5 .2 .0 .5 .0 128.0 8 Consumer foods -.2 1.0 -5.5 1.9 9.2 -1.8 -.5 .2 -.2 -.2 -.6 127.9 9 Consumer energy -4.3 5.5 -2.6 3.2 .0 9.1 2.5 .3 -.5 2.3 -.2 80.4 10 Other consumer goods -.9 2.1 2.0 1.7 .6 2.6 .3 .1 .2 .3 .4 141.7 11 Capital equipment 2.2 1.7 3.0 2.1 -.3 2.4 .4 .2 -.1 .3 .2 136.4 Intermediate materials 12 Excluding foods and feeds .7 7.4 2.8 6.2 7.2 9.9 1.3 .7 .3 .8 .3 126.0 13 Excluding energy 1.5 7.8 3.9 6.8 8.3 9.8 1.2 .8 .4 .7 .2 135.5 Crude materials 14 Foods -2.2 -9.3 -18.0 -13.5 -1.2 -5.0 .0 1.2 -2.4 -.9 -3.0 99.5 15 Energy -9.7 1.0 21.0 -19.2 -7.6 -3.9 -.1 .0 -.9 5.3 1.6 74.1 16 Other 6.5 18.8 -.8 20.3 27.9 20.0 3.0 1.2 .5 1.2 -.3 179.8 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 1995 Q1 Q2 Q3 Q4 GROSS DOMESTIC PRODUCT 1 Total 63433 6,738.4 6,574.7 6,689.9 6,791.7 6,897.2 By source 4 2 3 Per N D so o u n n ra a d b l u l r c e a o b g n l o s e u o m g d o s p o t d io s n expenditures 4 2 1 , , , 1 4 3 2 3 9 4 9 6 2 8 5 . . . . 9 7 7 5 4 2 1 , , , 3 5 5 3 7 0 3 3 8 1 8 9 . . . . 2 0 0 2 4 2 1 , , , 6 6 5 3 2 4 9 9 8 2 1 4 . . . . 4 7 5 3 4 2 1 , , , 5 5 5 3 3 8 7 6 5 9 6 8 . . . . 0 9 2 9 4 2 1 , , , 5 6 5 3 8 2 8 8 6 4 0 1 . . . . 4 7 3 4 4 2 1 , , , 6 6 5 4 5 5 9 0 7 9 1 6 . . . . 5 9 5 1 4 2 1 , , . 7 6 6 4 3 9 1 2 4 6 7 0 . . . . 8 4 7 7 5 Services 6 Gross private domestic investment 788.3 882.0 1,032.9 966.6 1,034.4 1,055.1 1,075.6 7 Fixed investment 785.2 866.7 980.7 942.5 967.0 992.5 1.020.8 8 Nonresidential 561.4 616.1 697.6 665.4 683.3 709.1 732.8 9 Structures 171.1 173.4 182.8 172.7 181.8 184.6 192.0 10 Producers' durable equipment 390.3 442.7 514.8 492.7 501.5 524.5 540.7 11 Residential structures 223.8 250.6 283.0 277.1 283.6 283.4 288.0 12 Change in business inventories 3.0 15.4 52.2 24.1 67.4 62.6 54.8 13 Nonfarm -2.7 20.1 45.9 22.3 60.4 53.4 47.4 14 Net exports of goods and services -30.3 -65.3 -98.2 -86.7 -97.6 -109.6 -98.9 15 Exports 638.1 659.1 718.7 674.2 704.5 730.5 765.5 16 Imports 668.4 724.3 816.9 760.9 802.1 840.1 864.4 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 18 Federal 449.0 443.6 437.3 437.8 435.1 444.3 431.9 19 State and local 676.3 704.7 738.0 722.0 731.5 744.5 753.8 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 21 Goods 2,292.0 2,390.4 2,532.4 2.489.1 2,493.7 2,543.6 2,603.3 22 Durable 968.6 1.032.4 1,118.8 1.098.2 1,099.4 1,125.8 1.151.8 23 Nondurable 1,323.4 1,358.1 1,413.6 1,390.9 1.394.3 1,417.8 1.451.5 24 Services 3,227.2 3.405.5 3,576.2 3,503.8 3.555.4 3,603.6 3.641.9 25 Structures 498.1 532.0 577.6 557.7 573.4 581.9 597.3 26 Change in business inventories 3.0 15.4 52.2 24.1 67.4 62.6 54.8 27 Durable goods -13.0 8.6 34.8 20.6 38.2 44.1 36.3 28 Nondurable goods 16.0 6.7 17.4 3.5 29.2 18.5 18.5 MEMO 29 Total GDP In 1987 dollars 4,9793 5,134.5 5344.0 5,261.1 5314.1 5367.0 5,433.8 NATIONAL INCOME 30 Total 4,829.5 5,131.4 5,458.4 5308.7 5,430.7 5,494.9 5,599.4 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 3 3 3 3 3 3 5 6 2 3 4 7 S W u a E G O O p g p m o t t e h h l v e s p e e e m l r r a o r n n e y la n m d e b t r e s o t n a c r o l t o a i n w n a r t i n c r a e o i d g s b m e u g s e t o i a o v n n e d r s n f s m o a e l r a n s r t i o e c e s i n a t l e r i p n r s i u s r e a s n c . e . . 2 2 , , 9 5 6 3 3 3 5 0 2 3 8 6 4 7 8 6 7 7 . . . . . . 8 7 7 5 4 3 3 2 , , 6 3 1 5 5 3 2 7 0 1 5 8 4 0 9 7 5 3 . . . . . . 3 8 0 6 3 8 2 3 , , 6 6 7 3 3 2 0 7 4 8 2 7 2 4 6 9 1 5 . . . . . . 8 6 2 0 0 6 3 2, , 7 3 3 2 5 6 3 7 1 0 9 1 8 3 1 2 5 8 . . . . . . 5 2 7 7 3 6 3 2. , 6 7 3 3 6 2 7 4 0 2 5 5 8 3 1 2 5 7 . . . . . . 4 6 9 4 0 2 2 3 , , 6 6 7 3 3 2 8 8 2 0 4 9 3 9 9 4 6 3 . . . . . . 7 7 6 4 0 9 3 2 . , 6 7 3 3 3 7 8 5 3 0 5 4 8 0 8 9 6 7 . . . . . . 7 2 9 4 4 0 38 Proprietors' income' 418.7 441.6 473.7 471.0 471.3 467.0 485.7 39 Business and professional1 374.4 404.3 434.2 423.8 431.9 437.1 444.0 40 Farm1 44.4 37.3 39.5 47.2 39.3 29.8 41.7 41 Rental income of persons2 -5.5 24.1 27.7 15.3 34.1 32.6 29.0 42 Corporate profits' 405.1 485.8 542.7 508.2 546.4 556.0 560.3 43 Profits before tax3 395.9 462.4 524.5 483.5 523.1 538.1 553.5 44 Inventory valuation adjustment -6.4 -6.2 -19.5 -12.3 -14.1 -19.6 -32.1 45 Capital consumption adjustment 15.7 29.5 37.7 37.0 37.4 37.5 38.8 46 Net interest 420.0 399.5 409.7 394.2 399.7 415.7 429.2 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • August 1995 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1994 1995 AAccccoouunntt 11999922 11999933 Ql Q2 Q3 Q4 Qlr PERSONAL INCOME AND SAVING 1 Total personal income 5,154.3 5,375.1 5,701.7 5,555.8 5,659.9 5,734.5 5,856.6 5,963.2 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 3,404.2 3 Commodity-producing industries 757.6 773.8 818.2 801.9 811.6 821.8 837.3 848.3 578.3 588.4 617.5 609.4 612.8 618.3 629.5 638.2 682.3 701.9 748.5 728.6 742.5 753.5 769.6 778.8 967.6 1,021.4 1,109.5 1,082.0 1,101.2 1,114.3 1,140.5 1,160.7 7 Government and government enterprises 567.3 583.8 602.8 595.7 601.9 604.4 609.0 616.4 328.7 355.3 381.0 373.2 378.4 383.7 388.7 399.6 418.7 441.6 473.7 471.0 471.3 467.0 485.7 492.6 10 Business and professional 374.4 404.3 434.2 423.8 431.9 437.1 444.0 449.2 11 Farm1 44.4 37.3 39.5 47.2 39.3 29.8 41.7 43.5 12 Rental income of persons2 -5.5 24.1 27.7 15.3 34.1 32.6 29.0 25.1 161.0 181.3 194.3 185.7 191.7 196.9 202.7 205.5 14 Personal interest income 665.2 637.9 664.0 631.1 649.4 674.2 701.1 725.3 15 Transfer payments 860.2 915.4 963.4 947.4 957.6 969.0 979.7 1,004.7 16 Old age survivors, disability, and health insurance benefits 414.0 444.4 473.5 463.8 470.7 476.5 483.1 496.7 17 LESS: Personal contributions for social insurance 248.7 261.3 281.4 276.3 279.9 282.9 286.6 293.8 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 5,963.2 19 LESS: Personal tax and nontax payments 648.6 686.4 742.1 723.0 746.4 744.1 754.7 773.4 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 5,189.8 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 4,924.3 22 EQUALS: Personal saving 247.9 192.6 203.1 175.5 201.1 203.3 232.6 265.5 MEMO Per capita (1987 dollars) 19,489.7 19,878.8 20,475.8 20,235.2 20,389.7 2200,,553366..55 2200,,773399..88 2200,,883366..00 24 Personal consumption expenditures 13,110.4 13,390.8 13,715.4 13,639.8 13,650.9 13,716.6 13,853.5 13,888.5 25 Disposable personal income 14,279.0 14,341.0 14,696.0 14,535.0 14,625.0 14,697.0 14,927.0 15,061.0 26 Saving rate (percent) 5.5 4.1 4.1 3.6 4.1 4.1 4.6 5.1 GROSS SAVING 27 Gross saving 722.9 787.5 920.6 886.2 923.3 922.6 950.3 1,006.9 28 Gross private saving 980.8 1,002.5 1,053.5 1,037.3 1,041.4 1,052.7 1,082.7 1,127.5 247.9 192.6 203.1 175.5 201.1 203.3 232.6 265.5 30 Undistributed corporate profits1 94.3 120.9 135.1 127.7 142.3 139.5 130.7 131.5 31 Corporate inventory valuation adjustment -6.4 -6.2 -19.5 -12.3 -14.1 -19.6 -32.1 -38.7 Capital consumption allowances 396.8 407.8 432.2 443322..22 442255..99 443322..66 443388..00 444455..55 33 Noncorporate 261.8 261.2 283.1 301.8 272.1 277.3 281.3 285.1 34 Government surplus, or deficit (-), national income and -257.8 -215.0 -132.9 -151.1 -118.1 -130.1 -132.3 --112200..66 35 Federal -282.7 -241.4 -159.1 -176.2 -145.1 -154.0 -161.1 -150.3 36 State and local 24.8 26.3 26.2 25.2 27.0 23.9 28.8 29.7 37 Gross investment 731.7 789.8 889.7 850.2 899.3 901.5 907.9 946.5 38 Gross private domestic investment 788.3 882.0 1,032.9 966.6 1,034.4 1,055.1 1,075.6 1,110.1 39 Net foreign investment -56.6 -92.3 -143.2 -116.4 -135.1 -153.6 -167.7 -163.6 40 Statistical discrepancy 8.8 23 -30.9 -36.1 -24.0 -21.1 -42.4 -60.4 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 Ql Q2 Q3 Q4P 1 Balance on current account -67,886 -103,896 -155,672 -30,587 -32,238 -37,827 -40,848 -44,758 2 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 5 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 3,947r -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 -321 490 462 -270 -961 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 -146,214r -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 20 U.S. purchases of foreign securities, net -45,114 -119,983 -60,621 -30,349 -24,605 -14,007 -8,103 -13,906 21 U.S. direct investments abroad, net -41,004 -57,871r -58,423 -22,683 -24,987 -8,227 -11,223 -13,989 22 Change in foreign official assets in United States (inciease, +) 40,858 71,681 38,912 23,962 11,530 8,925 19,460 -1,003 23 U.S. Treasury securities 18,454 48,702 30,441 22,856 1,193 6,033 15,841 7,374 24 Other U.S. government obligations 3,949 4,062 5,988 970 50 2,355 2,003 1,580 25 Other U.S. government liabilities4 2,572 1,666 2,514 825 938 252 700 624 26 Other U.S. liabilities reported by U.S. banks3 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 28 Change in foreign private assets in United States (inciease, +) 105,646 159,017 275,702 66,200 83,600 40,384 60,794 90,924 29 U.S. bank-reported liabilities 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 32 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 -673 -59 3,537 -165 2,033 39 Foreign official assets in United States, excluding line 25 (increase, +) 38,286 70,015 36,398 23,137 10,592 8,673 18,760 -1,627 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 5,942 -3,847 -1,049 -229 -1,674 -4,149 3,726 1,048 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 • August 1995 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1994r 1995 IItteemm 11999922rr 11999933rr 11999944rr Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr.p 1 Goods and services, balance -39,480 -74,842 -106,214 -9,841 -9,735 -7,894 -10,616 -9,610 -9,792 -11,374 2 Merchandise -96,106 -132,618 -166,101 -14,926 -15,292 -13,272 -15,946 -14,426 -14,678 -16,504 3 Services 56,626 57,777 59,887 5,085 5,557 5,378 5,330 4,816 4,886 5,130 4 Goods and services, exports 618,969 644,579 701,200 59,978 61,713 63,185 61,989 62,093 64,820 63,977 5 Merchandise 440,352 456,824 502,484 43,315 44,441 46,172 44,772 45,482 47,805 46,923 6 Services 178,617 187,755 198,716 16,663 17,272 17,013 17,217 16,611 17,015 17,054 7 Goods and services, imports -658,449 -719,421 -807,414 -69,819 -71,448 -71,079 -72,605 -71,704 -74,613 -75,351 8 Merchandise -536,458 -589,442 -668,585 -58,241 -59,733 -59,444 -60,718 -59,909 -62,484 -63,427 9 Services -121,991 -129,979 -138,829 -11,578 -11,715 -11,635 -11,887 -11,795 -12,129 -11,924 MEMO 10 Balance on merchandise trade, Census basis -84,501 — 115,568 -150,629 -13,642 -14,202 -12,010 -15,047 —13,507 -13,024 -14,906 1. Data show monthly values consistent with quarterly figures in the U.S. balance of SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of payments accounts. Economic Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1994 1995 AAsssseett 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Mayp 1 Total 77,719 71,323 73,442 78,172 74,000 74,335 76,027 81,439 86,761 88,756 90,549 2 Gold stock, including Exchange Stabilization Fund1 11,057 11,056 11,053 11,053 11,052 11,051 11,050 11,050 11,053 11,055 11,054 3 Special drawing rights2'3 11,240 8,503 9,039 10,088 10,017 10,039 10,154 11,158 11,651 11,743 11,923 4 Reserve position in International Monetary Fund2 9,488 11,759 11,818 12,339 12,037 12,030 12,120 12,853 13,418 14,206 14,278 5 Foreign currencies4 45,934 40,005 41,532 44,692 40,894 41,215 42,703 46,378 50,639 51,752 53,294 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Mayp 1 Deposits 968 205 386 223 230 250 185 188 370 166 227 Held in custody 2 U.S. Treasury securities2 281,107 314,481 379,394 439,854 444,339 441,866 439,139 447,206 459,694 469,482 474,181 3 Earmarked gold3 13,303 13,118 12,327 12,039 12,037 12,033 12,033 12,033 11,964 11,897 11,800 1. Excludes deposits and U.S. Treasury securities held for international and regional 3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; organizations. not included in the gold stock of the United States. 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury securities, in each case measured at face (not market) value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A55 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1994 1995 IItteemm 11999922 11999933 Oct. Nov. Dec. Jan. Feb.' Mar. Apr.p 1 Total1 412,624 483,002 531,397 523,915 520,204 516,713 527,011 541,899 551,730 By type 2 Liabilities reported by banks in the United States 54,967 69,808 79,361 73,507 72,731 74,094 80,326 83,128 85,010 3 U.S. Treasury bills and certificates3 104,596 151,100 148,039 143,222 139,570 133,014 134,341 141,716 146,417 U.S. Treasury bonds and notes 4 Marketable 210,931 212,237 250,695 253,455 254,037 255,784 257,894 261,916 265,039 5 Nonmarketable4 4,532 5,652 6,031 6,069 6,109 6,137 6,095 6,135 6,169 6 U.S. securities other than U.S. Treasury securities5 37,598 44,205 47,271 47,662 47,757 47,684 48,355 49,004 49,095 By area 7 Europe1 189,230 207,121 222,833 217,018 214,908 212,029 213,544 218,023 216,360 8 Canada 13,700 15,285 18,497 17,528 17,235 18,041 18,655 19,268 19,248 9 Latin America and Caribbean 37,973 55,898 47,765 45,206 41,189 36,979 42,198 39,301 41,864 10 Asia 164,690 197,702 232,871 234,344 236,864 240,054 244,685 256,884 266,217 11 Africa 3,723 4,052 4,232 4,673 4,179 4,335 4,066 4,583 4,200 12 Other countries6 3,306 2,942 5,197 5,144 5,827 5,273 3,861 3,838 3,839 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 1995 IItteemm 11999911 11999922 11999933 June Sept. Dec. Mar. 1 Banks' liabilities 75,129 72,796 78,120 72,490 82,293 89,616 96,003 2 Banks' claims 73,195 62,799 60,649 56,669 59,261 54,448 74,283 3 Deposits 26,192 24,240 20,284 21,490 20,419 19,798 26,071 4 Other claims 47,003 38,559 40,365 35,179 38,842 t 34,650 48,212 5 Claims of banks' domestic customers2 3,398 4,432 4,100 4,732 5,466 10,773 11,313 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 • August 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 11999944 Oct. Nov. Dec. Jan. Feb/ Mar. Apr.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 810,259 921,796 1,015,860 1,012,336 989,094 1,015,860 1,009,899 1,019,763 1,029,520 1,041,240 2 Banks' own liabilities 606,444 623,432 721,047 709,734 686,602 721,047 722,047 725,166 723,437 719,216 3 Demand deposits 21,828 21,573 25,831 24,614 23,954 25,831 23,424 24,058 22,656 22,916 4 Time deposits2 160,385 175,078 186,392 181,406 178,348 186,392 187,975 185,706 184,258 180,655 5 Other3 93,237 110,144 113,850 133,805 124,309 113,850 123,987 125,598 120,060 122,926 6 Own foreign offices4 330,994 316,637 394,974 369,909 359,991 394,974 386,661 389,804 396,463 392,719 7 Banks' custodial liabilities5 203,815 298,364 294,813 302,602 302,492 294,813 287,852 294,597 306,083 322,024 8 U.S. Treasury bills and certificates6 127,644 176,739 162,825 174,441 169,056 162,825 156,664 160,353 170,138 175,300 9 Other negotiable and readily transferable instruments 21,974 36,289 42,177 37,661 39,834 42,177 40,442 43,378 44,921 54,063 10 Other 54,197 85,336 89,811 90,500 93,602 89,811 90,746 90,866 91,024 92,661 11 Nonmonetary international and regional organizations8... 9,350 10,936 7,474 7,824 6,207 7,474 9,112 8,221 9,193 8,640 12 Banks' own liabilities 6,951 5,639 7,044 6,047 5,441 7,044 8,646 7,572 8,569 7,477 13 Demand deposits 46 15 29 83 35 29 24 35 31 214 14 Time deposits2 3,214 2,780 3,198 3,095 2,817 3,198 3,715 3,484 3,899 3,954 15 Other3 3,691 2,844 3,817 2,869 2,589 3,817 4,907 4,053 4,639 3,309 16 Banks' custodial liabilities5 2,399 5,297 430 1,777 766 430 466 649 624 1,163 17 U.S. Treasury bills and certificates 1,908 4,275 281 1,572 501 281 280 407 314 763 18 Other negotiable and readily transferable instruments7 486 1,022 149 205 265 149 181 242 307 400 19 Other 5 0 0 0 0 0 5 0 3 0 20 Official institutions9 159,563 220,908 212,301 227,400 216,729 212,301 207,108 214,667 224,844 231,427 21 Banks' own liabilities 51,202 64,231 59,280 67,505 60,717 59,280 62,082 67,314 68,627 67,179 22 Demand deposits 1,302 1,601 1,564 2,028 1,682 1,564 1,598 1,587 1,705 1,485 23 Time deposits2 17,939 21,654 23,175 23,812 20,626 23,175 22,622 25,348 23,615 25,456 24 Other3 31,961 40,976 34,541 41,665 38,409 34,541 37,862 40,379 43,307 40,238 25 Banks' custodial liabilities5 108,361 156,677 153,021 159,895 156,012 153,021 145,026 147,353 156,217 164,248 26 U.S. Treasury bills and certificates6 104,596 151,100 139,570 148,039 143,222 139,570 133,014 134,341 141,716 146,417 27 Other negotiable and readily transferable instruments7 3,726 5,482 13,245 11,820 12,773 13,245 11,972 12,943 14,351 17,628 28 Other 39 95 206 36 17 206 40 69 150 203 29 Banks10 547,320 589,077 681,724 658,315 647,281 681,724 676,071 678,320 685,399 686,482 30 Banks' own liabilities 476,117 477,050 568,243 545,707 532,625 568,243 562,500 561,623 565,350 558,791 31 Unaffiliated foreign banks 145,123 160,413 173,269 175,798 172,634 173,269 175,839 171,819 168,887 166,072 32 Demand deposits 10,170 9,719 13,080 11,023 11,259 13,080 10,243 10,954 10,788 10,667 33 Time deposits 90,296 105,192 111,461 106,646 106,043 111,461 112,193 107,429 107,905 99,379 34 Other3 44,657 45,502 48,728 58,129 55,332 48,728 53,403 53,436 50,194 56,026 35 Own foreign offices4 330,994 316,637 394,974 369,909 359,991 394,974 386,661 389,804 3%,463 392,719 36 Banks' custodial liabilities5 71,203 112,027 113,481 112,608 114,656 113,481 113,571 116,697 120,049 127,691 37 U.S. Treasury bills and certificates6 11,087 10,712 11,218 10,783 11,792 11,218 10,992 12,328 15,723 15,522 38 Other negotiable and readily transferable instruments7 7,555 17,020 14,234 13,228 13,530 14,234 14,137 15,232 15,254 21,446 39 Other 52,561 84,295 88,029 88,597 89,334 88,029 88,442 89,137 89,072 90,723 40 Other foreigners 94,026 100,875 114,361 118,797 118,877 114,361 117,608 118,555 110,084 114,691 41 Banks' own liabilities 72,174 76,512 86,480 90,475 87,819 86,480 88,819 88,657 80,891 85,769 42 Demand deposits 10,310 10,238 11,158 11,480 10,978 11,158 11,559 11,482 10,132 10,550 43 Time deposits2 48,936 45,452 48,558 47,853 48,862 48,558 49,445 49,445 48,839 51,866 44 Other3 12,928 20,822 26,764 31,142 27,979 26,764 27,815 27,730 21,920 23,353 45 Banks' custodial liabilities5 21,852 24,363 27,881 28,322 31,058 27,881 28,789 29,898 29,193 28,922 46 U.S. Treasury bills and certificates6 10,053 10,652 11,756 14,047 13,541 11,756 12,378 13,277 12,385 12,598 47 Other negotiable and readily transferable instruments 10,207 12,765 14,549 12,408 13,266 14,549 14,152 14,961 15,009 14,589 48 Other 1,592 946 1,576 1,867 4,251 1,576 2,259 1,660 1,799 1,735 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 9,111 17,567 17,895 16,793 17,397 17,895 16,442 17,137 16,759 17,806 1. Reporting banks include all types of depository institutions, as well as some brokers 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to and dealers. official institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in "Other 7. Principally bankers acceptances, commercial paper, and negotiable time certificates negotiable and readily transferable instruments." of deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the Inter- 4. For U.S. banks, includes amounts owed to own foreign branches and foreign American Development Bank, and the Asian Development Bank. Excludes "holdings of subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank dollars" of the International Monetary Fund. regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign 9. Foreign central banks, foreign central governments, and the Bank for International banks, consists principally of amounts owed to the head office or parent foreign bank, and Settlements. to foreign branches, agencies, or wholly owned subsidiaries of die 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

Bank-Reported Data A57 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1994 1995 IItteemm 11999922 11999933 11999944 Oct. Nov. Dec. Jan. Feb. Mar. Apr.p AREA 50 Total, all foreigners 810,259 921,796 1,015,860 1,012,336 989,094 1,015,860 1,009,899 l,019,763r 1,029,520 1,041,240 51 Foreign countries 800,909 910,860 1,008,386 1,004,512 982,887 1,008386 1,000,787 1,011,542' 1,020,327 1,032,600 5? 307,670 377,193 392,761 413,440 393,156 392,761 393,587 386,590' 380,671 371,594 53 1,611 1,917 3,649 3,610 4,264 3,649 3,236 4,021 4,012 4,134 54 Belgium and Luxembourg 20,567 28,621 21,738 23,566 22,322 21,738 21,679 22,094 23,886 22,701 55 3,060 4,517 2,784 2,374 2,307 2,784 2,662 1,971 2,396 2,567 56 1,299 1,872 1,436 2,601 1,587 1,436 2,403 1,754 1,223 2,184 57 41,411 39,746 44,716 44,209 41,160 44,716 42,325 44,314 41,300 38,255 58 18,630 26,613 27,175 33,136 31,050 27,175 28,521 27,497 28,276 28,453 59 913 1,519 1,392 1,711 1,477 1,392 1,231 2,065R 2,264 2,195 60 Italy 10,041 11,759 10,884 10,893 9,777 10,884 10,269 12,021 8,686 9,572 61 7,365 16,096 16,748 18,034 17,310 16,748 15,629 15,891 15,784 12,545 6? Norway 3,314 2,966 2,338 3,400 2,807 2,338 2,309 2,147 2,066 1,374 63 Portugal 2,465 3,366 2,846 2,861 2,919 2,846 2,863 4,007 2,810 2,940 64 577 2,511 2,714 2,337 2,367 2,714 2,047 2,642 3,469 5,011 65 9,793 20,493 14,657 16,325 15,038 14,657 15,149 11,106 11,675 9,859 66 2,953 2,572 3,093 3,467 3,361 3,093 2,258 2,247 2,474 1,801 67 39,440 41,561 41,882 41,834 41,756 41,882 39,516 40,100 39,355 45,734 68 Turkey 2,666 3,227 3,341 3,143 3,032 3,341 3,621 2,701 2,513 3,649 69 111,805 133,936 163,577 171,938 162,760 163,577 173,870 162,629 159,894 152,732 70 504 570 245 220 240 245 261 258 211 222 71 Other Europe and other former U.S.S.R. 29,256 33,331 27,746 27,981 27,822 27,746 23,938 27,325 28,477 25,666 72 Canada 22,420 20,227 24,609 23,115 23,295 24,609 26,498 26,568' 27,034 28,418 73 317,228 358,040 422,768 391,971 397,141 422,768 407,905 421,069' 421,545 431,744 74 9,477 14,477 17,201 15,577 15,950 17,201 12,789 11,886 9,957 10,205 75 82,284 73,800 106,058 88,668 90,091 106,058 95,226 98,833 100,370 97,547 76 7,079 7,841 8,467 8,936 7,615 8,467 8,904 8,554 8,798 8,695 77 Brazil 5,584 5,301 9,140 6,196 6,723 9,140 9,001 10,628' 10,860 13,084 78 British West Indies 153,033 190,445 227,175 210,248 215,186 227,175 227,816 233,052' 235,429 243,286 79 Chile 3,035 3,183 3,114 3,078 3,741 3,114 2,965 3,327 3,587 3,446 80 Colombia 4,580 3,171 4,607 4,475 4,417 4,607 4,308 4,037 3,644 3,598 81 Cuba 3 33 13 7 7 13 12 5 5 6 8? 993 880 875 830 825 875 1,339 1,511 1,117 1,054 83 Guatemala 1,377 1,207 1,121 1,077 1,036 1,121 1,056 1,079 1,062 1,094 84 371 410 529 589 513 529 447 464 491 422 85 19,454 28,018 12,243 21,263 19,199 12,243 12,608 16,770' 15,750 18,251 86 Netherlands Antilles 5,205 4,195 4,539 4,153 4,845 4,539 3,838 4,495' 4,013 4,076 8877 4,177 3,582 4,549 4,077 4,598 4,549 4,832 4,281 4,361 4,810 8888 Peru 1,080 926 900 1,027 935 900 901 892 893 931 89 1,955 1,611 1,596 1,472 1,190 1,596 1,797 1,610^ 1,754 1,931 90 11,387 12,786 13,979 13,809 13,833 13,979 13,460 12,970 12,632 12,129 91 Other 6,154 6,174 6,662 6,489 6,437 6,662 6,606 6,675 6,822 7,179 92 143,540 144,575 155,357 163,316 157,153 155,357 159,465 166,082' 178,476 187,619 China 93 People's Republic of China 3,202 4,011 10,063 5,625 8,017 10,063 12,908 15,661' 12,017 12,138 94 Republic of China (Taiwan) 8,408 10,627 9,792 9,473 10,919 9,792 9,135 9,941' 10,021 9,629 95 18,499 17,178 17,181 18,217 17,552 17,181 18,460 18,166' 19,964 20,116 96 1,399 1,114 2,336 2,376 2,377 2,336 2,293 2,119' 2,354 2,194 97 1,480 1,986 1,576 1,734 1,613 1,576 1,601 1,957' 2,107 1,696 98 3,773 4,435 5,155 6,607 5,066 5,155 5,471 4,953 5,003 5,411 99 58,435 61,466 64,039 66,152 63,309 64,039 61,612 63,200' 77,846 84,761 100 3,337 4,913 5,104 4,740 5,016 5,104 4,771 4,175' 4,357 4,697 101 2,275 2,035 2,714 3,158 3,064 2,714 2,616 2,363 2,297 2,257 107 Thailand 5,582 6,137 6,466 5,682 5,946 6,466 8,216 9,906 9,564 10,419 103 Middle Eastern oil-exporting countries 21,437 15,824 15,474 17,232 17,678 15,474 16,181 14,935r 15,516 15,730 104 Other 15,713 14,849 15,457 22,320 16,596 15,457 16,201 18,706' 17,430 18,571 105 5,884 6,633 6,511 6,389 6,939 6,511 6,363 6,203 6,817 7,218 106 2,472 2,208 1,867 1,996 2,097 1,867 1,749 1,830 1,781 2,102 107 76 99 97 66 67 97 92 73 70 66 108 190 451 433 245 693 433 285 400 706 401 109 19 12 9 9 10 9 10 10 9 12 110 1,346 1,303 1,343 1,176 1,227 1,343 1,409 1,122 1,599 1,328 111 Other 1,781 2,560 2,762 2,897 2,845 2,762 2,818 2,768 2,652 3,309 11? 4,167 4,192 6,380 6,281 5,203 6,380 6,969 5,030r 5,784 6,007 113 3,043 3,308 5,141 5,114 4,094 5,141 5,395 4,351 5,024 4,912 114 Other 1,124 884 1,239 1,167 1,109 1,239 1,574 679' 760 1,095 115 Nonmonetary international and regional organizations... 9,350 10,936 7,474 7,824 6,207 7,474 9,112 8,221' 9,193 8,640 116 International15 7,434 6,851 6,467 5,844 4,358 6,467 7,746 7,068' 8,022 7,103 117 Latin American regional 1,415 3,218 551 950 1,094 551 865 582 576 666 118 Other regional17 501 867 456 1,030 755 456 501 571 595 871 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 Internationa lBank 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 Internationa lMonetary 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 f°r International Settlements, which is included in "Other Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • August 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr.p 1 Total, all foreigners 499,437 484,584 478,213 479,426 464,360 478,213 480,606 474,488r 490,108 478,719 2 Foreign countries 494,355 482,179 473,919 477,421 463,026 473,919 477,611 473,604r 486,374 475,782 3 Europe 123,377 121,550 123,689 131,985 120,045 123,689 125,891 122,440r 127,453 121,689 4 Austria 331 413 705 440 369 705 350 425 589 461 5 Belgium and Luxembourg 6,404 6,535 6,651 6,370 6,274 6,651 5,558 4,818r 7,330 8,393 6 Denmark 707 382 1,039 880 668 1,039 488 646 733 549 7 Finland 1,418 594 695 587 718 695 720 456 568 700 8 France 14,723 11,519 12,186 16,354 12,906 12,186 12,615 ll,953r 13,264 12,863 9 Germany 4,222 7,703 6,658 8,501 8,452 6,658 8,530 7,640 7,009 7,090 10 Greece 717 679 592 520 518 592 668 751 586 535 11 Italy 9,047 8,918 6,140 6,693 5,950 6,140 6,703 6,552r 6,412 6,213 12 Netherlands 2,468 3,073 3,709 3,402 3,426 3,709 3,741 4,200 4,076 3,527 13 Norway 355 396 504 903 1,004 504 1,069 988 1,442 1,295 14 Portugal 325 834 938 1,056 1,006 938 988 1,045 907 915 15 Russia 3,147 2,310 949 1,220 1,172 949 1,148 759 770 657 16 Spain 2,755 2,766 3,552 2,731 2,174 3,552 2,989 2,803 3,069 2,083 17 Sweden 4,923 4,086 4,101 3,156 3,596 4,101 3,831 4,043 3,377 3,522 18 Switzerland 4,717 6,566 7,491 7,670 6,544 7,491 9,025 8,060 7,844 7,381 19 Turkey 962 1,294 862 1,147 914 862 548 882r 690 810 20 United Kingdom 63,430 61,169 65,487 68,512 62,616 65,487 64,914 64,608r 67,509 63,297 21 Yugoslavia^. 569 536 265 266 266 265 265 265 247 247 22 Other Europe and other former U.S.S.R.3 2,157 1,777 1,165 1,577 1,472 1,165 1,741 1,546 1,031 1,151 23 Canada 13,845 18,432 17,978 16,433 17,788 17,978 18,812 18,936r 20,277 17,497 24 Latin America and Caribbean 218,078 223,649 219,343 221,055 215,948 219,343 220,387 219,293r 223,464 223,900 25 Argentina 4,958 4,422 5,776 5,588 5,718 5,776 5,832 6,307r 6,238 6,142 26 Bahamas 60,835 64,410 65,951 64,841 60,786 65,951 63,996 63,787 65,079 63,920 27 Bermuda 5,935 8,034 7,482 5,199 6,710 7,482 14,551 10,924r 8,513 11,432 28 Brazil 10,773 11,812 9,452 10,216 9,784 9,452 9,735 10,007r 10,747 10,763 29 British West Indies 101,507 98,149 94,082 99,311 95,922 94,082 89,974 91,312r 95,902 94,245 30 Chile 3,397 3,616 3,787 3,431 3,628 3,787 3,866 4,196r 4,337 4,248 31 Colombia 2,750 3,179 4,003 3,671 3,768 4,003 3,816 3,818 3,983 3,926 32 Cuba 0 0 0 12 0 0 0 0 0 2 33 Ecuador 884 680 685 628 635 685 712 664 565 560 34 Guatemala 262 286 366 337 335 366 346 349 377 360 35 Jamaica 162 195 254 255 251 254 253 278 275 262 36 Mexico 14,991 15,834 17,517 16,954 17,406 17,517 17,306 17,204r 17,164 17,161 37 Netherlands Antilles 1,379 2,411 1,055 1,195 1,818 1,055 1,205 1,437 1,182 1,383 38 Panama 4,654 2,892 2,179 2,307 2,304 2,179 2,155 2,340 2,465 2,503 39 Peru 730 653 959 857 884 959 998 1,055 1,039 1,058 40 Uruguay 936 952 485 800 652 485 420 390 344 345 41 Venezuela 2,525 2,907 1,827 1,934 1,921 1,827 1,702 1,724 1,648 1,683 42 Other 1,400 3,217 3,483 3,519 3,426 3,483 3,520 3,501r 3,606 3,907 43 Asia 131,789 111,787 106,714 101,412 103,346 106,714 105,719 106,858r 109,455 110066,,558866 China 44 People's Republic of China 906 2,299 835 822 817 835 923 869r 841 971 45 Republic of China (Taiwan) 2,046 2,628 1,381 1,464 1,479 1,381 1,245 1,213 1,471 1,451 46 Hong Kong 9,642 10,881 9,272 10,362 11,336 9,272 10,305 ll,285r 14,459 11,651 47 India 529 589 986 971 1,021 986 1,103 1,059 1,039 1,139 48 Indonesia 1,189 1,527 1,454 1,328 1,366 1,454 1,488 1,426 1,513 1,461 49 Israel 820 826 691 863 696 691 673 683r 811 683 50 Japan 79,172 59,945 59,152 50,140 53,550 59,152 55,251 57,172r 55,494 55,132 51 Korea (South) 6,179 7,569 10,002 9,048 8,933 10,002 10,929 10,841r 12,366 11,913 52 Philippines 2,145 1,408 636 639 583 636 564 548 548 494 53 Thailand 1,867 2,154 2,818 2,756 2,676 2,818 2,835 2,635r 2,778 2,740 54 Middle Eastern oil-exporting countries4 18,540 15,110 13,732 15,425 14,454 13,732 14,044 13,341 13,069 13,292 55 Other 8,754 6,851 5,755 7,594 6,435 5,755 6,359 5,786 5,066 5,659 56 Africa 4,279 3,867 3,033 3,177 3,115 3,033 2,966 2,903r 2,859 2,725 57 Egypt 186 196 225 237 229 225 227 234 205 181 58 Morocco 441 481 429 468 480 429 415 442 424 440 59 South Africa 1,041 633 665 480 454 665 657 597 645 585 60 Zaire 4 4 2 3 3 2 2 2 2 2 61 Oil-exporting countries5 1,002 1,139 872 985 909 872 854 772r 731 700 62 Other 1,605 1,414 840 1,004 1,040 840 811 856r 852 817 63 Other 2,987 2,894 3,162 3,359 2,784 3,162 3,836 3,174 2,866 3,385 64 Australia 2,243 2,071 2,219 2,158 1,687 2,219 2,198 1,912 1,758 1,804 65 Other 744 823 943 1,201 1,097 943 1,638 1,262 1,108 1,581 66 Nonmonetary international and regional organizations6... 5,082 2,405 4,294 2,005 1,334 4,294 2,995 884 3,734 2,937 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 11999922 11999933 Oct. Nov. Dec. Jan. Feb.r Mar. Apr.p 1 Total 559,495 535,393 548,949 548,949 571,943 2 Banks' claims 499,437 484,584 478,213 479,426 464,360 478,213 480,606 474,488 490,108 478,719 3 Foreign public borrowers 31,367 29,115 23,110 22,373 20,649 23,110 22,992 17,778 23,796 22,261 4 Own foreign offices2 303,991 286,382 282,393 286,539 276,040 282,393 278,954 279,180 293,289 282,496 5 Unaffiliated foreign banks 109,342 98,433 109,591 107,035 103,639 109,591 104,386 105,124 103,799 103,981 6 Deposits 61,550 47,167 58,402 52,914 50,490 58,402 53,786 53,543 52,548 54,805 7 Other 47,792 51,266 51,189 54,121 53,149 51,189 50,600 51,581 51,251 49,176 8 All other foreigners 54,737 70,654 63,119 63,479 64,032 63,119 74,274 72,406 69,224 69,981 9 Claims of banks' domestic customers3 60,058 50,809 70,736 70,736 81,835 10 Deposits 15,452 20,241 34,863 34,863 36,528 11 Negotiable and readily transferable instruments4 31,474 16,885 22,565 22,565 30,823 12 Outstanding collections and other claims 13,132 13,683 13,308 13,308 14,484 MEMO 13 Customer liability on acceptances 8,655 7,863 8,226 8,226 8,313 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 38,623 26,370 27,347 23,337 27,912 27,347 28,064R 29,230 2266,,778866 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 1995 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999911 11999922 11999933 June Sept. Dec. Mar.p 1 Total 195,302 195,119 196,552 186,711 191,770 194,716 196,496 By borrower 2 Maturity of one year or less 162,573 163,325 167,919 161,594 166,244 169,765 168,312 3 Foreign public borrowers 21,050 17,813 17,773 12,951 16,986 15,006 15,814 4 All other foreigners 141,523 145,512 150,146 148,643 149,258 154,759 152,498 5 Maturity of more than one year 32,729 31,794 28,633 25,117 25,526 24,951 28,184 6 Foreign public borrowers 15,859 13,266 10,821 8,051 7,375 7,693 7,701 7 All other foreigners 16,870 18,528 17,812 17,066 18,151 17,258 20,483 By area Maturity of one year or less 8 Europe 51,835 53,300 56,605 51,204 58,406 56,354 53,721 9 Canada 6,444 6,091 7,564 8,285 7,217 7,251 7,402 10 Latin America and Caribbean 43,597 50,376 56,755 56,758 57,034 58,906 62,241 11 Asia 51,059 45,709 41,382 38,891 36,766 40,043 38,190 12 Africa 2,549 1,784 1,820 1,798 1,519 1,364 1,223 13 All other3 7,089 6,065 3,793 4,658 5,302 5,847 5,535 Maturity of more than one year 14 Europe 3,878 5,367 4,428 3,355 3,637 3,641 4,503 15 Canada 3,595 3,287 2,553 2,451 2,607 2,373 3,603 16 Latin America and Caribbean 18,277 15,312 13,866 12,420 12,146 11,992 12,889 17 Asia 4,459 5,038 5,402 4,607 4,838 4,583 5,120 18 Africa 2,335 2,380 1,936 1,849 1,836 1,549 1,593 19 All other3 185 410 448 435 462 813 476 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 • August 1995 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1993 1994 1995 AArreeaa oorr ccoouunnttrryy 11999911 11999922 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar.11 1 Total 343.6 346.5 361.1 377.1 388.4 404.7 478.4 502.7 509.4r 499.2r 555.1 2 G-10 countries and Switzerland 137.6 132.9 142.5 150.0 153.3 161.6 178.8 174.2 188.4 176.1 194.4 3 Belgium and Luxembourg .(f 5.6 6.1 7.0 7.1 7.4 8.0 8.8 9.7 6.9 8.1 4 France 11.0 15.3 13.5 14.0 12.3 11.7 16.4 18.8 20.7 19.1 19.8 5 Germany 8.3 9.3 9.9 10.8 12.4 12.6 29.0 26.0 25.2 24.5 30.3 6 Italy 5.6 6.5 6.7 7.9 8.7 7.7 15.5 14.0 11.6 11.8 12.2 7 Netherlands 2.8 3.6 3.7 3.7 4.7 4.1 3.6 3.5 3.6 3.5 8 Sweden 1.9 2.3 3.0 2.5 2.5 2.5 2.8 2.9 2.6 2.7 3.1 9 Switzerland 3.4 4.8 5.3 4.7 5.6 5.9 6.3 6.5 6.2 6.9 6.2 10 United Kingdom 68.5 60.8 65.7 73.5 74.7 84.7 70.1 63.4 82.8 70.3 76.2 11 Canada 5.8 6.3 8.2 8.0 9.7 6.7 7.7 9.6 9.8 9.5 10.5 12 Japan 22.6 19.3 20.4 17.9 16.8 17.8 18.9 20.5 16.4 20.7 24.3 13 Other industrialized countries 22.8 24.0 25.4 27.2 26.0 24.6 41.2 41.7 41.5 45.2 43.9 14 Austria .6 1.2 1.2 1.3 .6 .4 1.0 1.0 1.0 1.1 .9 15 Denmark .9 .9 .8 1.0 1.1 1.0 1.1 1.1 .8 1.2 1.6 16 Finland .7 .7 .7 .9 .6 .4 1.0 .8 .8 1.0 1.1 17 Greece 2.6 3.0 2.7 3.1 3.2 3.2 3.8 4.6 4.3 4.5 4.9 18 Norway 1.4 1.2 1.8 1.8 2.1 1.7 1.6 1.6 1.6 2.0 2.4 19 Portugal .6 .4 .7 .9 1.0 .8 1.2 1.1 1.0 1.2 1.0 20 Spain 8.3 8.9 9.5 10.5 9.3 8.9 12.3 11.7 13.1 13.6 14.1 21 Turkey 1.4 1.3 1.4 2.1 2.1 2.1 2.4 2.1 1.8 1.6 1.4 22 Other Western Europe 1.8 1.7 2.0 1.7 2.2 2.6 3.0 2.8 1.0 2.7 2.5 23 South Africa 1.9 1.7 1.6 1.3 1.2 1.1 1.2 1.2 1.2 1.0 1.4 24 Australia 2.7 2.9 2.9 2.5 2.8 2.3 12.7 13.7 15.0 15.4 12.6 25 OPEC2 14.5 16.1 16.6 15.7 14.8 17.4 22.9 21.5 21.7 22.1 19.3 26 Ecuador .7 .6 .6 .6 .5 .5 .5 .5 .4 .5 .5 27 Venezuela 5.4 5.2 5.1 5.5 5.4 5.1 4.7 4.4 3.9 3.7 3.5 28 Indonesia 2.7 3.0 3.1 3.1 2.8 3.3 3.4 3.2 3.3 3.6 3.8 29 Middle East countries 4.2 6.2 6.6 5.4 4.9 7.4 13.2 12.4 13.1 13.4 10.7 30 African countries 1.5 1.1 1.1 1.1 1.1 1.2 1.1 1.1 1.0 .9 .7 31 Non-OPEC developing countries 63.9 72.1 74.4 76.7 77.0 82.6 93.6 94.1 94. lr 91.T 100.2 Latin America 32 Argentina 4.8 6.6 7.1 6.6 7.2 7.7 8.7 9.8 10.5 11.1 11.4 33 Brazil 9.6 10.8 11.6 12.3 11.7 12.0 12.6 11.9 9.2 8.2 9.0 34 Chile 3.6 4.4 4.6 4.6 4.7 4.7 5.1 5.1 5.4 6.1 6.3 35 Colombia 1.7 1.8 1.9 1.9 2.0 2.1 2.2 2.4 2.4 2.6 2.6 36 Mexico 15.5 16.0 16.8 16.8 17.5 17.7 18.8 18.5 19.6 18.1 17.7 37 Peru .4 .5 .4 .4 .3 .4 .5 .6 .6 .5 .6 38 Other 2.1 2.6 2.7 2.7 2.7 3.0 2.7 2.7 2.7 2.5 2.4 Asia China 39 Peoples Republic of China .3 .7 .6 1.6 .5 2.0 .8 .7 1.0 1.1 1.1 40 Republic of China (Taiwan) 4.1 5.2 5.3 5.9 6.4 7.3 7.5 7.1 6.9 9.1 10.5 41 India 3.0 3.2 3.1 3.1 2.9 3.2 3.6 3.7 3.9 4.2 3.8 42 Israel .5 .4 .5 .4 .4 .5 .4 .4 .4 .4 .6 43 Korea (South) 6.8 6.6 6.5 6.9 6.5 6.7 13.9 14.1 14.1 15.9 16.9 44 Malaysia 2.3 3.1 3.4 3.7 4.1 4.4 5.2 5.2 5.7r 4.4r 3.8 45 Philippines 3.7 3.6 3.4 2.9 2.6 3.1 3.4 3.2 2.9 3.3 3.0 46 Thailand 1.7 2.2 2.2 2.4 2.8 3.1 2.9 3.3 3.5 3.7 3.3 47 Other Asia 2.0 2.7 2.7 2.6 3.0 2.9 3.1 3.5 3.6 4.8 5.2 Africa 48 Egypt .4 .2 .2 .2 .2 .4 .4 .5 .3 .3 .4 49 Morocco .7 .6 .5 .6 .6 .7 .7 .7 .7 .6 .6 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .7 1.0 .8 .9 .8 .8 1.0 .9 .9 .8 .7 52 Eastern Europe 2.4 3.1 2.9 3.2 3.0 3.1 3.4 3.0 3.0 2.7 2.4 53 Russia4 .9 1.9 1.7 1.9 1.7 1.6 1.5 1.2 1.1 .8 .6 54 Yugoslavia5 .9 .6 .6 .6 .6 .6 .5 .5 .5 .5 .4 55 Other .7 .6 .7 .8 .7 .9 1.4 1.4 1.5 1.4 1.3 56 Offshore banking centers 54.2 58.3 60.3 58.0 67.9 71.9 78.4 76.8 74.9 68.1 83.6 57 Bahamas 11.9 6.9 9.7 7.1 12.7 11.9 15.1 13.5 13.5 9.7 12.2 58 Bermuda 2.3 6.2 4.1 4.5 5.5 8.1 8.4 6.1 5.3 7.4 8.4 59 Cayman Islands and other British West Indies 15.8 21.8 17.6 15.6 15.1 17.0 17.2 20.3 20.2 18.5 18.8 60 Netherlands Antilles 1.2 1.1 1.6 2.5 2.8 2.3 2.8 2.5 1.7 1.0 .9 61 Panama6 1.4 1.9 2.0 2.1 2.1 2.4 2.0 1.9 1.9 1.3 1.1 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 14.4 13.8 16.7 16.9 19.1 18.7 19.7 21.7 20.3 19.9 22.8 64 Singapore 7.1 6.5 8.4 9.3 10.4 11.2 13.1 10.7 11.8 10.2 19.2 65 Other' .0 .0 .0 .0 .0 .1 .0 .0 .0 .1 .0 66 Miscellaneous and unallocated8 48.0 39.7 38.8 46.2 46.3 43.4 59.9 91.1 85.5 87.0 111.1 1. The banking offices covered by these data include U.S. offices and foreign branches 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not of OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and covered include U.S. agencies and branches of foreign banks. Beginning March 1994, the United Arab Emirates); and Bahrain and Oman (not formally members of OPEC). data include large foreign subsidiaries of U.S. banks. The data also include other types of 3. Excludes Liberia. Beginning March 1994 includes Namibia. U.S. depository institutions as well as some types of brokers and dealers. To eliminate 4. As of December 1992, excludes other republics of the former Soviet Union. duplication, the data are adjusted to exclude the claims on foreign branches held by a U.S. 5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia. office or another foreign branch of the same banking institution. 6. Includes Canal Zone. These data are on a gross claims basis and do not necessarily reflect the ultimate 7. Foreign branch claims only. country risk or exposure of U.S. banks. More complete data on the country risk exposure 8. Includes New Zealand, Liberia, and international and regional organizations. of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1993 1994 Type of liability, and area or country 11999911 11999922 11999933 Sept. Dec. Mar. June Sept. Dec. 1 Total 44,708 45,511 49,996 48,954 49,996 51,988 55,478 57,197 54,644 2 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 Trade payables 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 12 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 France 2,106 1,623 2,377 2,077 2,377 2,606 1,590 2,241 1,727 15 Germany 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 Switzerland 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 21 Bahamas 537 379 1,148 1,301 1,148 1,157 1,052 1,112 926 22 Bermuda 114 114 0 114 0 120 115 15 80 23 Brazil 6 19 18 18 18 18 18 7 207 24 British West Indies 3,524 2,850 1,533 1,600 1,533 1,613 1,454 1,364 1,160 25 Mexico 7 12 17 15 17 14 13 15 0 26 Venezuela 4 6 5 5 5 5 5 5 5 27 Asia2 5,381 5,818 5,689 5,754 5,689 5,650 5,694 8,149 8,147 28 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 Africa .. 6 6 133 132 133 133 9 133 135 4 0 123 124 123 124 0 123 123 31 Oil-exporting countries 52 33 109 18 109 58 30 19 50 32 All other5 Commercial liabilities 8,701 7,398 6,835 7,048 6,835 6,550 6,921 6,867 6,855 33 Europe 248 298 239 257 239 251 254 287 231 34 Belgium and Luxembourg 1,039 700 655 642 655 554 712 742 763 35 France 1,052 729 684 571 684 577 670 552 611 36 Germany 710 535 688 600 688 628 649 674 723 37 Netherlands 575 350 375 536 375 388 473 391 335 38 Switzerland 2,297 2,505 2,047 2,319 2,047 2,151 2,311 2,351 2,450 39 United Kingdom 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 42 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 Mexico 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 4 5 9 0 M Jap id a d n l e Eastern oil-exporting countries ;; 3 1 , , 7 4 2 9 1 8 3 1 , , 6 8 1 8 2 9 4 1 , , 3 5 1 4 4 2 3 1 , , 7 9 2 6 6 8 4 1 , , 3 5 1 4 4 2 4 1 , , 6 5 1 4 7 2 4 1 , , 3 8 8 4 9 1 4 1 , , 2 6 3 8 5 8 4 1 , , 8 6 0 1 8 0 51 Africa 715 568 464 641 464 490 523 482 442 52 Oil-exporting countries4 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 • August 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.r 1 Total 45,262 45,073 47,643 46,030 47,643 48,404 47,925 49,830 55,409 2 Payable in dollars 42,564 42,281 44,318 42,342 44,318 44,978 44,324 46,284 52,270 3 Payable in foreign currencies 2,698 2,792 3,325 3,688 3,325 3,426 3,601 3,546 3,139 By type 4 Financial claims 27,882 26,509 26,995 26,902 26,995 27,814 26,576 28,214 32,336 5 Deposits 20,080 17,695 15,795 14,509 15,795 15,864 15,637 17,510 18,568 6 Payable in dollars 19,080 16,872 15,246 13,503 15,246 15,353 15,009 16,934 18,117 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 13,768 9 Payable in dollars 6,910 7,890 9,974 11,282 9,974 10,725 9,711 9,466 12,711 10 Payable in foreign currencies 892 924 1,226 1,111 1,226 1,225 1,228 1,238 1,057 11 Commercial claims 17,380 18,564 20,648 19,128 20,648 20,590 21,349 21,616 23,073 12 Trade receivables 14,468 16,007 17,647 16,150 17,647 17,697 18,530 18,836 20,208 13 Advance payments and other claims 2,912 2,557 3,001 2,978 3,001 2,893 2,819 2,780 2,865 14 Payable in dollars 16,574 17,519 19,098 17,557 19,098 18,900 19,604 19,884 21,442 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 7,641 17 Belgium and Luxembourg 13 8 134 70 134 125 83 114 86 18 France 269 764 785 708 785 753 859 825 800 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 4,398 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 18,358 25 Bahamas 827 778 1,006 980 1,006 1,157 1,193 1,006 2,264 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 14,513 29 Mexico 212 445 868 882 868 850 614 655 605 30 Venezuela 40 29 161 25 161 26 33 32 35 31 640 864 1,591 2,754 1,591 2,522 2,210 2,152 1,835 32 Japan 350 668 853 2,213 853 1,655 1,349 662 931 33 Middle Eastern oil-exporting countries 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 9,579 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 1,766 1,886 40 Germany 955 933 1,018 935 1,018 944 937 880 1,046 41 Netherlands 645 552 422 410 422 354 293 329 314 42 Switzerland 295 362 429 377 429 413 685 537 559 43 United Kingdom 2,086 2,094 2,369 2,288 2,369 2,330 2,427 2,483 2,554 44 Canada 1,121 1,286 1,358 1,362 1,358 1,451 1,466 1,501 1,543 45 Latin America and Caribbean 2,655 3,043 3,283 3,073 3,283 3,569 3,901 3,965 4,147 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 203 345 295 287 295 294 303 392 355 52 4,591 4,866 5,909 5,544 5,909 5,852 6,145 6,425 6,745 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 countries 620 693 715 458 715 667 615 615 700 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 390 364 500 437 500 468 441 495 586 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 1994 1995 Transaction, and area or country 1993 1994 J A an pr .- . Oct. Nov. Dec. Jan. Feb. Mar. Apr.p U.S. corporate securities STOCKS 1 Foreign purchases 319,664 350,558 119,772 27,811 28,696 28,094 24,999 29,443r 35,332 29,998 2 Foreign sales 298,086 348,648 122,435 29,852 27,653 29,727 25,893 29,685 37,653 29,204 3 Net purchases, or sales (-) 21,578 1,910 -2,663 -2,041 1,043 -1,633 -894 —242r —2,321 794 4 Foreign countries 21,306 1,900 -2,623 -2,073 1,020 -1,635 -930 —197r -2,291 795 5 Europe 10,658 6,717 -1,749 -1,382 226 -1,110 -516 -101 -1,304 81 6 France -103 -201 -612 -198 -25 -119 -255 -27 -250 -80 7 Germany 1,642 2,110 -716 -161 -55 -158 -157 -55 -243 -261 8 Netherlands -602 2,251 1,155 320 265 652 278 232 296 349 9 Switzerland 2,986 -30 -1,621 -655 -551 8 -389 -78 -475 -679 10 United Kingdom 4,559 840 941 -542 566 -1,265 253 -51r -309 1,048 11 Canada -3,213 -1,160 -372 -415 -109 175 129 27 -333 -195 12 Latin America and Caribbean 5,719 -2,108 2,084 -536 650 -577 991 766 -243 570 13 Middle East1 -321 -1,142 -169 -74 1 -86 -22 -133 -73 59 14 Other Asia 8,198 -1,207 -2,348 346 251 -171 -1,469 -851 -342 314 15 Japan 3,825 1,190 -1,693 258 262 -174 -860 -541 -321 29 16 Africa 63 29 -56 12 -4 -25 -36 0 -10 -10 17 Other countries 202 771 -13 -24 5 159 -7 4 14 -24 18 Nonmonetary international and regional organizations 272 10 -40 32 23 2 3366 --4455 --3300 -1 BONDS2 19 Foreign purchases 283,824 291,193 85,645 19,932 22,379 18,911 19,267 22,789r 25,390 18,199 20 Foreign sales 217,824 229,640 60,865 16,609 15,462 14,760 12,800 16,354 17,552 14,159 21 Net purchases, or sales (—) 66,000 61,553 24,780 3,323 6,917 4,151 6,467 6,435r 7,838 4,040 22 Foreign countries 65,462 60,668 24,926 3,324 6,933 3,811 6,263 6,489r 8,151 4,023 23 Europe 22,587 38,585 19,950 3,285 4,383 2,635 6,653 6,037r 4,976 2,284 2,346 242 -506 105 -106 4 157 296 -85 -874 25 Germany 887 657 1,783 449 201 451 1,516 526 -176 -83 26 Netherlands -290 3,322 2 19 346 28 -241 126 154 -37 27 Switzerland -627 1,055 71 5 488 12 -85 304 -61 -87 28 United Kingdom 19,686 33,212 18,863 1,469 3,529 1,943 5,406 4,800' 5,248 3,409 29 Canada 1,668 3,054 893 496 207 443 245 175 289 184 30 Latin America and Caribbean 15,691 5,402 1,039 -1,189 1,305 662 -655 -480 1,285 889 31 Middle East1 3,248 771 832 51 -96 -193 59 119 328 326 32 Other Asia 20,846 12,153 2,073 607 1,137 240 -28 595 1,150 356 33 Japan 11,569 5,486 581 375 497 -174 -396 132 570 275 34 Africa 1,149 49 -10 19 -2 8 8 -4 22 -36 35 Other countries 273 654 149 55 -1 16 -19 47 101 20 36 Nonmonetary international and regional organizations 538 885 -146 -1 -16 340 220044 --5544 --331133 1177 Foreign securities 37 Stocks, net purchases, or sales (—) -62,691 -46,818 -6,277 -4,427 -2,547 -2,212 -210 — 1,084r -2,841 -2,142 38 Foreign purchases 245,490 386,334 108,567 29,867 28,444 25,742 27,948 27,151r 28,991 24,477 39 Foreign sales 308,181 433,152 114,844 34,294 30,991 27,954 28,158 28,235r 31,832 26,619 40 Bonds, net purchases, or sales (—) -80,377 -5,853 -4,290 -5,200 -1,997 1,135 1,246 -2,661r -1,989 -886 41 Foreign purchases 745,952 898,550 266,460 66,202 66,907 68,887 71,948 60,951r 79,350 54,211 42 Foreign sales 826,329 904,403 270,750 71,402 68,904 67,752 70,702 63,612r 81,339 55,097 43 Net purchases, or sales (—), of stocks and bonds -143,068 -52,671 —10,567 -9,627 -4,544 -1,077 1,036 —3,745r -4,830 -3,028 44 Foreign countries —143,232 -53,191 —10,534 -9,477 -4,497 -1,832 972 -3481r -4,741 -3,184 45 Europe -100,872 4,778 -1,494 -5,507 -790 -857 3,404 -i,2ir -1,859 -1,828 -15,664 -7,525 -1,647 -857 -525 1,637 -165 863r -1,150 -1,195 47 Latin America and Caribbean -7,600 -22,133 -5,498 -1,464 -2,241 -421 -436 -2,091 429 48 Asia -15,159 -24,080 -2,260 -1,477 511 -2,180 -1,749 13r 9 -533 49 Africa -185 -475 -47 -72 -267 -96 -2 — 116r 85 -14 50 Other countries -3,752 -3,756 412 -100 -1,185 85 -80 270r 265 -43 51 Nonmonetary international and regional organizations 164 520 -33 -150 -47 755 64 -164 -89 156 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, agencies and corporations. Also includes issues of ne wdebt 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 • August 1995 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales (—) during period 1995 1994 1995 AArreeaa oorr ccoouunnttrryy 11999933 11999944 Ja A n p .— r. Oct. Nov. Dec. Jan. Feb. Mar. Apr.p 1 Total estimated 23,552 78,653 38,928 10,530 13,105 11,535 9,216 14,091r 9,211 6,410 2 Foreign countries 23,368 78,610 38,796 9,435 13,068 11,938 9,890 13,373r 9,107 6,426 3 Europe -2,373 38,544 22,449 -1,566 7,763 8,274 2,906 13,282r 3,109 3,152 4 Belgium and Luxembourg 1,218 1,098 354 32 24 434 134 107 51 62 5 Germany -9,976 5,709 2,194 254 924 725 60 -543 1,461 1,216 6 Netherlands -515 1,254 1,899 954 -2 156 2,388 -239 -7 -243 7 Sweden 1,421 794 22 -37 211 61 -35 97 30 -70 8 Switzerland -1,501 456 -260 -718 -1,512 656 166 165 -418 -173 9 United Kingdom 6,197 23,438 16,085 -1,958 7,706 6,243 299 10,436 3,099 2,251 10 Other Europe and former U.S.S.R 783 5,795 2,155 -93 412 -1 -106 3,25? -1,107 109 11 Canada 10,309 3,491 3,706 -420 -1,350 -559 3,177 1,486 434 -1,391 12 Latin America and Caribbean -4,561 -10,182 -1,752 6,710 725 978 636 -3,268 -2,332 3,212 13 Venezuela 390 -319 689 7 43 91 -211 329 387 184 14 Other Latin America and Caribbean -5,795 -20,496 -1,466 -419 -2,074 74 3,028 -3,325 -3,358 2,189 15 Netherlands Antilles 844 10,633 -975 7,122 2,756 813 -2,181 -272 639 839 16 Asia 20,582 47,087 14,941 4,435 4,944 3,640 3,567 l,730r 8,445 1,199 17 Japan 17,070 29,518 11,424 2,189 4,551 2,067 3,444 2,316 4,167 1,497 18 Africa 1,156 240 -5 135 -11 58 -9 49 -9 -36 19 Other -1,745 -570 -543 141 997 -453 -387 94 -540 290 20 Nonmonetary international and regional organizations 184 43 132 1,095 37 -403 -674 718 104 -16 21 International -330 170 64 1,074 73 -322 -708 608 458 -294 22 Latin American regional 653 75 54 6 4 -3 -6 199 -367 228 MEMO 23 Foreign countries 23,368 78,610 38,796 9,435 13,068 11,938 9,890 13,373r 9,107 6,426 24 Official institutions 1,306 41,800 11,002 2,891 2,760 582 1,747 2,111/ 4,022 3,123 25 Other foreign 22,062 36,810 27,794 6,544 10,308 11,356 8,143 11,263 5,085 3,303 Oil-exporting countries 26 Middle East2 -8,836 -38 436 445 623 -405 -360 -89 152 733 27 Africa3 -5 0 1 0 0 -1 0 0 1 0 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 June 30, 1995 Rate on June 30, 1995 Rate on June 30, 1995 Country Country Country e M ffe o c n t t i h v e e M ffe o c n t t i h v e Month effective Austria.. 4.0 Mar. 1995 Germany... 4.0 Mar. 1995 Norway 4.75 Feb. 1994 Belgium. 4.0 Mar. 1995 Italy 9.0 June 1995 Switzerland 3.0 Mar. 1995 Canada.. 6.97 June 1995 Japan 1.0 Apr. 1995 United Kingdom 12.0 Sept. 1992 Denmark 6.0 Mar. 1995 Netherlands 3.75 June 1995 France . 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 Dec. Jan. Feb. Mar. Apr. May June 1 Eurodollars 3.70 3.18 4.63 6.27 6.23 6.14 6.15 6.13 6.03 5.89 2 United Kingdom 9.56 5.88 5.45 6.30 6.50 6.68 6.61 6.64 6.64 6.63 3 Canada 6.76 5.14 5.57 6.75 7.86 8.14 8.32 8.16 7.56 7.07 4 Germany 9.42 7.17 5.25 5.29 5.04 5.00 4.% 4.58 4.49 4.43 5 Switzerland 7.67 4.79 4.03 4.07 3.95 3.77 3.62 3.33 3.29 3.09 6 Netherlands 9.25 6.73 5.09 5.35 5.09 5.03 5.03 4.60 4.41 4.21 7 France 10.14 8.30 5.72 5.82 5.76 5.70 7.77 7.60 7.29 7.04 8 Italy 13.91 10.09 8.45 8.98 9.10 9.07 10.98 10.94 10.38 10.91 9 Belgium 9.31 8.10 5.65 5.42 5.29 5.33 6.21 5.22 5.16 4.62 10 Japan 4.39 2.96 2.24 2.34 2.31 2.27 2.11 1.55 1.31 1.16 1. Rates are for three-month interbank loans, with the following exceptions: Canada, finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • August 1995 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1995 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999922 11999933 11999944 Jan. Feb. Mar. Apr. May June 1 Australia/dollar2 73.521 67.993 73.161 76.469 74.473 73.452 73.564 72.716 71.959 2 Austria/schilling 10.992 11.639 11.409 10.769 10.573 9.898 9.720 9.912 9.854 3 Belgium/franc 32.148 34.581 33.426 31.542 30.908 29.035 28.419 29.009 28.790 4 Canada/dollar 1.2085 1.2902 1.3664 1.4132 1.4005 1.4077 1.3762 1.3609 1.3775 5 China, P.R./yuan 5.5206 5.7795 8.6404 8.4608 8.4553 8.4483 8.4421 8.3370 8.3288 6 Denmark/krone 6.0372 6.4863 6.3561 6.0311 5.9302 5.6281 5.4391 5.5194 5.4604 7 Finland/markka 4.4865 5.7251 5.2340 4.7506 4.6547 4.3967 4.2884 4.3386 4.3134 8 France/franc 5.2935 5.6669 5.5459 5.2912 5.2252 4.9756 4.8503 4.9869 4.9172 9 Germany/deutsche mark 1.5618 1.6545 1.6216 1.5302 1.5022 1.4061 1.3812 1.4096 1.4012 10 Greece/drachma 190.81 229.64 242.50 238.21 236.17 228.53 225.19 228.46 226.56 11 Hong Kong/dollar 7.7402 7.7357 7.7290 7.7439 7.7314 7.7318 7.7336 7.7351 7.7356 12 India/rupee 28.156 31.291 31.394 31.374 31.380 31.587 31.407 31.418 31.404 13 Ireland/pound2 170.42 146.47 149.69 155.67 156.20 159.76 162.80 161.98 162.87 14 Italy/lira 1,232.17 1,573.41 1,611.49 1,611.53 1,620.58 1,688.99 1,710.89 1,652.78 1,639.75 15 Japan/yen 126.78 111.08 102.18 99.77 98.24 90.52 83.69 85.11 84.64 16 Malaysia/ringgit 2.5463 2.5738 2.6237 2.5556 2.5526 2.5464 2.4787 2.4684 2.4396 17 Netherlands/guilder 1.7587 1.8585 1.8190 1.7159 1.6844 1.5774 1.5474 1.5779 1.5686 18 New Zealand/dollar2 53.792 54.127 59.358 64.018 63.448 64.598 66.723 66.740 66.947 19 Norway/krone 6.2142 7.1009 7.0553 6.6968 6.5974 6.2730 6.2050 6.2980 6.2387 20 Portugal/escudo 135.07 161.08 165.93 157.86 155.36 147.92 145.89 148.40 147.63 21 Singapore/dollar 1.6294 1.6158 1.5275 1.4532 1.4541 1.4216 1.3986 1.3947 1.3953 22 South Africa/rand 2.8524 3.2729 3.5526 3.5404 3.5629 3.6013 3.6035 3.6574 3.6627 23 South Korea/won 784.66 805.75 806.93 793.08 793.19 781.81 770.61 764.43 763.88 24 Spain/peseta 102.38 127.48 133.88 132.62 130.52 128.58 124.14 123.22 121.71 25 Sri Lanka/rupee 44.013 48.211 49.170 49.870 49.895 49.627 49.371 49.558 50.210 26 Sweden/krona 5.8258 7.7956 7.7161 7.4775 7.3914 7.2787 7.3455 7.3072 7.2631 27 Switzerland/franc 1.4064 1.4781 1.3667 1.2863 1.2715 1.1709 1.1384 1.1693 1.1588 28 Taiwan/dollar 25.160 26.416 26.465 26.300 26.339 26.102 25.491 25.537 25.784 29 Thailand/baht 25.411 25.333 25.161 25.133 25.020 24.760 24.572 24.663 24.672 30 United Kingdom/pound2 176.63 150.16 153.19 157.46 157.20 160.02 160.73 158.74 159.48 MEMO 31 United States/dollar3 86.61 93.18 91.32 88.30 87.29 83.69 81.81 82.73 82.27 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 August 1994 November 1994 A68 November 1994 February 1995 A68 February 1995 May 1995 A68 May 1995 August 1995 A68 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 1994 November 1994 A72 September 30, 1994 February 1995 A72 December 31, 1994 May 1995 A72 March 31, 1995 August 1995 A72 Pro forma balance sheet and income statements for priced service operations September 30, 1991 January 1992 A70 March 31, 1992 August 1992 A80 June 30, 1992 October 1992 A70 March 31, 1995 August 1995 A76 Assets and liabilities of life insurance companies June 30, 1991 December 1991 A79 September 30, 1991 May 1992 A81 December 31, 1991 August 1992 A83 September 30, 1992 March 1993 A71 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • August 1995 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 1-5, 19951 Commercial and Industrial Loans Weighted Loan rate (percent) Loans Loans made Amount of Average size average secured under Partici- ( o t f h o l d o u o a s n l a l s a n r d s s ) ( o t f h o d u o s l a la n r d s s ) ma D tu a r y i s ty 2 W e a ff v e e e i c g r t a h i g t v e e e d 3 St e a r n ro da r4 r d c (p o e ll r b a c y t e e n ra t) l ( c p o m e m r e c m n en t i t t - ) pa ( t p io er n c e lo n a t) n s ALL BANKS 1 Overnight6 13,349,045 8,538 2 One month or less (excluding overnight) 11,047,384 1,290 7.21 22.1 68.5 2.9 3 Fixed rate 8,945,813 3,795 7.06 16.4 64.9 2.8 4 Floating rate 2,101,571 339 7.85 46.2 83.9 3.2 5 More than one month and less than one year 12,113,349 224 134 8.09 49.5 80.4 7.4 6 Fixed rate 6,155,589 282 100 7.33 37.8 78.6 9.4 7 Floating rate 5,957,760 185 169 8.87 61.6 82.2 5.3 8 Demand7 19,265,759 291 8.20 49.9 68.5 9.0 9 Fixed rate 7,498,234 881 6.85 15.6 52.0 10.5 10 Floating rate 11,767,525 204 9.07 71.6 79.0 8.0 11 Total short-term 55,775,537 427 7.64 34.1 67.9 12 Fixed rate (thousands of dollars) 35,939,048 1,049 26 6.95 16.5 61.0 4.9 13 1-99 353,972 13 165 9.56 83.1 43.2 .4 14 100-499 394,731 220 93 7.97 64.5 70.7 6.1 15 500-999 472,077 679 59 7.65 40.9 80.1 7.5 16 1,000-4,999 5,128,149 2,349 35 7.34 29.6 73.6 4.3 17 5,000-9,999 6,288,425 6,528 31 7.11 19.0 65.9 8.5 18 10,000 or more 23,301,694 19,149 20 6.76 10.6 56.6 4.0 19 Floating rate (thousands of dollars) 19,836,489 206 130 8.88 65.9 80.5 6.7 20 1-99 1,837,167 26 170 10.29 84.2 83.4 1.2 21 100-499 3,852,052 202 165 9.83 80.9 85.9 4.3 22 500-999 1,914,532 675 177 9.50 69.8 85.1 4.7 23 1,000-4,999 5,042,862 1,994 167 9.00 62.0 85.3 9.7 24 5,000-9,999 1,980,243 6,540 100 8.29 55.8 78.4 3.8 25 10,000 or more 5,209,632 18,329 64 7.57 54.6 69.7 9.2 26 Total long-term 8,834,054 279 8.92 67.6 70.6 27 Fixed rate (thousands of dollars).. 2,817,418 217 8.87 64.1 44.5 1.5 28 1-99 264,446 23 10.12 92.4 18.2 1.0 29 100-499 184,278 204 9.53 88.0 42.3 2.9 30 500-999 89,861 655 8.41 70.0 84.5 2.5 31 1,000 or more 2,278,833 4,660 8.69 58.7 46.1 1.4 32 Floating rate (thousands of dollars) 6,016,636 323 8.94 69.3 82.9 7.9 33 1-99 358,759 28 10.40 91.7 58.6 1.5 34 100-499 889,465 226 9.81 82.1 81.1 5.3 35 500-999 707,716 666 9.69 76.3 85.4 8.4 36 1,000 or more 4,060,696 3,862 8.50 63.3 85.0 9.0 Loan rate (percent) Days Effective3 Nominal8 LOANS MADE BELOW PRIME1" 37 Overnight6 13,103,641 9,239 6.71 6.50 6.3 54.4 1.0 38 One month or less (excluding overnight) 10,213,602 4,934 14 6.97 6.75 17.4 67.5 2.4 39 More than one month and less than one year 8,602,326 875 105 7.29 7.09 37.4 81.0 9.1 40 Demand7 10,502,145 2,159 6.85 6.79 25.0 53.6 11.7 41 Total short-term 42,421,714 2,333 19.9 62.7 42 Fixed rate 34,644,956 3,296 6.84 6.66 14.4 60.4 4.9 43 Floating rate 7,776,758 1,013 7.32 7.15 44.4 73.1 8.9 44 Total long-term 3,474,986 704 7.26 45 Fixed rate 1,309,563 445 7.45 7.32 47.6 58.1 2.5 46 Floating rate ... 2,165,423 1,084 7.36 7.22 48.6 84.2 11.3 Footnotes appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A69 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 1-5, 1995Continued Commercial and industrial loans—Continued Weighted Loan rate (percent) Loans Loans made Amount of Average size average secured under Partici- ( o t f h o l d o u o a s l n a la s n r d s s ) ( o t f h o d u o s l a la n r d s s ) ma D tu ay ri s t y2 W e a f v f e e e i c g r t a h i g v te e e d 3 St e a r n ro d r a 4 r d c (p o e ll r b a c y t e e n ra t) l ( c p o m e m r e c m n en t i t t - ) pa ( t p io er n c e lo n a t) n s LARGE BANKS 1 Overnight6 10,614,681 8,702 56.3 2 One month or less (excluding overnight) 8,091,668 3,673 7.18 19.2 64.0 3.5 3 Fixed rate 7,019,517 7,086 7.10 16.3 60.6 3.3 4 Floating rate 1,072,150 884 7.68 38.6 85.9 4.5 5 More than one month and less than one year 7,196,285 1,095 108 7.65 42.6 83.2 5.9 6 Fixed rate 4,335,359 3,082 91 7.24 35.4 78.6 7.6 7 Floating rate 2,860,927 554 134 8.28 53.4 90.2 3.2 8 Demand7 12,132,621 520 7.93 42.9 60.7 9 Fixed rate 5,683,039 3,991 6.71 10.4 44.5 10 Floating rate 6,449,582 294 9.00 71.6 75.0 11 Total short-term 38,035,255 1,141 7.41 28.1 64.4 12 Fixed rate (thousands of dollars) 27,645,420 5,491 22 6.93 14.9 58.5 4.0 13 1-99 21,595 31 114 8.82 73.9 56.4 .0 14 100-499 152,594 261 72 8.04 60.4 80.1 1.9 15 500-999 319,707 684 57 7.83 41.1 78.6 4.9 16 1,000-4,999 3,719,209 2,364 32 7.35 28.5 71.9 3.0 17 5,000-9,999 4,641,118 6,619 25 7.09 19.5 57.4 5.1 18 10,000 or more 18,791,197 18,750 19 6.78 10.2 55.5 3.9 19 Floating rate (thousands of dollars) 10,389,835 367 102 8.67 63.2 80.3 5.9 20 1-99 548,899 32 159 10.15 84.9 88.9 1.2 21 100-499 1,714,562 210 154 9.74 80.1 90.1 3.7 22 500-999 953,202 665 157 9.45 66.5 89.5 6.2 23 1,000-4,999 2,641,904 2,056 120 8.85 56.5 87.8 9.7 24 5,000-9,999 1,055,792 6,869 85 8.21 48.4 78.3 7.1 25 10,000 or more 3,475,475 20,128 74 7.69 60.1 66.5 4.3 26 Total long-term 5,448,626 834 8.82 62.7 80.1 27 Fixed rate (thousands of dollars).. 1,587,488 1,943 8.77 57.2 51.7 1.4 28 1-99 11,468 28 9.31 87.1 62.9 .4 29 100-499 36,722 230 8.52 76.2 75.0 .0 30 500-999 38,020 709 7.90 58.5 95.4 .0 31 1,000 or more 1,501,278 7,620 8.80 56.4 49.9 1.5 32 Floating rate (thousands of dollars) 3,861,138 675 8.83 65.0 91.7 7.9 33 1-99 92,666 36 9.85 87.1 85.4 3.3 34 100-499 439,713 241 9.62 75.6 87.1 4.8 35 500-999 426,214 672 9.45 68.3 90.2 7.8 36 1,000 or more 2,902,544 4,292 8.59 62.2 92.9 8.6 Loan rate (percent) Days Nominal8 LOANS MADE BELOW PRIME10 37 Overnight6 10,402,778 9,457 6.74 6.53 7.2 55.4 .4 38 One month or less (excluding overnight) 7,628,198 6,851 7.00 6.77 15.5 62.8 3.0 39 More than one month and less than one year 6,122,975 3,320 7.27 7.07 37.9 82.9 6.4 40 Demand' 7,553,393 3,706 6.77 6.70 23.1 45.8 7.7 41 Total short-term 31,707,344 5,201 42 Fixed rate 26,904,588 6,319 6.85 6.66 13.5 57.5 4.0 43 Floating rate 4,802,756 2,613 7.28 7.10 49.2 75.3 3.7 44 Total long-term 2,171,481 2,284 42 7.17 47.8 90.5 45 Fixed rate 682,167 1,993 7.03 6.98 44.7 80.1 2.5 46 Floating rate ... 1,489,314 2,448 7.41 7.25 49.3 95.2 13.4 Footnotes appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • August 1995 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 1-5, 1995'—Continued Commercial and industrial loans—Continued Weighted Loan rate (percent) Loans Loans made Amount of Average size average secured under Partici- ( o t f h o l d o u o a s l n a la s n r d s s ) ( o t f h o d u o s l a la n r d s s ) maturity2 W av e e ig ra h g te e d Standard coll b a y te ral co m m e m nt i t- pa ( t p io er n c e lo n a t) n s Days effective3 (percent) (percent) OTHER BANKS 1 Overnight6 2,734,364 7,958 50.9 3.3 2 One month or less (excluding overnight) 2,955,717 465 7.31 29.8 81.1 1.2 3 Fixed rate 1,926,296 1,410 6.92 16.9 80.8 .8 4 Floating rate 1,029,421 206 8.04 54.1 81.7 1.8 5 More than one month and less than one year 4,917,063 104 171 8.72 59.7 76.2 9.6 6 Fixed rate 1,820,230 89 120 7.52 43.5 78.6 13.7 7 Floating rate 3,096,834 114 201 9.42 69.3 74.8 7.2 8 Demand7 7,133,138 166 8.67 61.6 81.7 10.6 9 Fixed rate 1,815,195 256 7.26 32.1 75.7 15.9 10 Floating rate 5,317,943 148 9.15 71.7 83.8 11 Total short-term 17,740,282 183 8.14 46.9 75.3 12 Fixed rate (thousands of dollars) 8,293,628 284 39 7.03 21.8 69.4 7.8 13 1-99 332,377 12 167 9.61 83.7 42.3 .5 14 100-499 242,136 200 106 7.92 67.1 64.7 8.8 15 500-999 152,370 668 63 7.26 40.6 83.4 13.1 16 1,000-4,999 1,408,940 2,313 44 7.30 32.6 78.1 7.9 17 5,000-9,999 1,647,307 6,283 51 7.16 17.5 89.8 17.9 18 10,000 or more 4,510,497 21,016 23 6.65 12.3 60.9 4.3 19 Floating rate (thousands of dollars) 9,446,654 139 156 9.12 69.0 80.6 7.5 20 1-99 1,288,268 24 173 10.35 84.0 81.0 1.2 21 100-499 2,137,490 196 170 9.91 81.5 82.6 4.7 22 500-999 961,330 686 188 9.54 73.1 80.8 3.1 23 1,000-4,999 2,400,958 1,931 207 9.16 68.1 82.5 9.7 24 5,000-9,999 924,452 6,201 119 8.39 64.3 78.4 .0 25 10,000 or more 1,734,156 15,546 42 7.32 43.8 76.2 19.0 26 Total long-term 3,385,428 135 9.08 75.5 55.5 27 Fixed rate (thousands of dollars).. 1,229,930 101 8.99 73.1 35.2 1.7 28 1-99 252,978 23 10.16 92.7 16.2 1.0 29 100-499 147,556 199 9.78 91.0 34.1 3.6 30 500-999 51,842 620 8.78 78.4 76.5 4.4 31 1,000 or more 777,555 2,663 8.47 63.0 38.9 1.3 32 Floating rate (thousands of dollars) 2,155,498 167 9.14 76.9 67.0 7.9 33 1-99 266,093 27 10.59 93.4 49.2 .9 34 100-499 449,752 213 9.99 88.5 75.3 5.8 35 500-999 281,501 658 10.06 88.3 78.1 9.4 36 1,000 or more 1,158,152 3,087 8.26 65.9 65.2 10.0 Loan rate (percent) Days Effective Nominal LOANS MADE BELOW PRIME10 37 Overnight6 2,700,863 8,487 6.60 6.39 2.7 50.3 38 One month or less (excluding overnight) 2,585,404 2,703 17 6.90 6.68 23.2 81.4 39 More than one month and less than one year 2,479,351 310 13*1 7.34 7.15 36.2 76.5 15.8 40 Demand' 2,948,752 1,043 7.04 7.03 29.8 73.4 22.0 41 Total short-term 10,714370 48 6.97 10.7 42 Fixed rate 7,740,369 1,238 33 6.81 6.65 17.6 70.5 8.2 43 Floating rate 2,974,002 509 102 7.37 7.23 36.7 69.5 17.3 44 Total long-term 1,303,505 7.40 48.8 47.4 45 Fixed rate 627,396 241 7.90 7.68 50.7 34.1 2.4 46 Floating rate ... 676,109 487 7.26 7.14 47.0 59.7 6.6 Footnotes appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A71 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 1-5, 1995—Continued NOTES 1. The survey of terms of bank lending to business collects data on gross loan 4. The chances are about two out of three that the average rate shown would differ by extensions made during the first full business week in the mid-month of each quarter by a less than the amount of the standard error from the average rate that would be found by a sample of 340 commercial banks of all sizes. A sample of 250 banks reports loans to complete survey of lending at all banks. farmers. The sample data are blown up to estimate the lending terms at all insured 5. The rate used to price the largest dollar volume of loans. Base pricing rates include commercial banks during that week. The estimated terms of bank lending are not intended the prime rate (sometimes referred to as a bank's "basic" or "reference" rate); the federal for use in collecting the terms of loans extended over the entire quarter or residing in the funds rate; domestic money market rates other than the federal funds ratc, foreign money portfolios of those banks. Construction and land development loans include both unsecure market rates; and other base rates not included in the foregoing classifications. loans and loans secured by real estate. Thus, some of die construction and land develop- 6. Overnight loans mature on the following business day. ment loans would be reported on the statement of condition as real estate loans and the 7. Demand loans have no stated date of maturity. remainder as business loans. Mortgage loans, purchased loans, foreign loans, and loans of 8. Nominal (not compounded) annual interest rate calculated from the stated rate and less that $1,000 are excluded from the survey. As of September 30, assets of most of the other terms of the loans and weighted by loan size. large banks were at least $7.0 billion. For all insured banks, total assets averaged $275 9. Calculated by weighting the prime rate reported by each bank by the volume of million. loans reported by that bank, summing the results, and then averaging over all reporting 2. Average maturities are weighted by loan size; excludes demand loans. banks. 3. Effective (compounded) annual interest rate calculated from the stated rate and other 10. The proportion of loans made at rates below the prime may vary substantially from terms of the loans and weighted by loan size. the proportion of such loans outstanding in banks' portfolios. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • August 1995 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 19951—Continued Millions of dollars, except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l n 3 g o IB nl F y s 3 inc T I l B o u F t d a i s l n g I o B n F ly s inc T I l B o u F t d a i s l n g I o B n F ly s inc T I l B o u F t d a i s l n g I o B n F ly s 1 Total assets4 764,043 323,166 582,059 263,276 77,195 33,444 65,726 18,134 2 Claims on nonrelated parties 684,296 186,179 515,903 150,021 72,714 17,511 63,900 13,090 3 Cash and balances due from depository institutions 152,685 126,524 131,000 106,683 7,971 7,410 11,978 11,294 4 Cash items in process of collection and unposted debits 2,632 0 2,468 0 4 0 105 0 5 Currency and coin (U.S. and foreign) 21 n.a. 14 n.a. 1 n.a. 1 n.a. 6 Balances with depository institutions in United States 90,803 70,547 76,654 57,786 5,306 4,802 8,092 7,634 7 U.S. branches and agencies of other foreign banks (including IBFs) 85,985 67,969 72,445 55,316 5,028 4,735 7,965 7,594 8 Other depository institutions in United States (including IBFs) 4,818 2,578 4,209 2,470 278 67 127 40 9 Balances with banks in foreign countries and with foreign central banks 58,921 55,977 51,635 48,897 2,624 2,608 3,773 3,660 10 Foreign branches of U.S. banks 1,990 1,759 1,803 1,572 43 42 121 121 11 Other banks in foreign countries and foreign central banks . 56,930 54,218 49,832 47,325 2,581 2,566 3,652 3,539 12 Balances with Federal Reserve Banks 308 n.a. 229 n.a. 35 n.a. 7 n.a. 13 Total securities and loans 386,977 50,624 261,579 36,018 58,136 8,981 38,841 1,371 14 Total securities, book value 88,984 11,839 81,356 10,640 4,257 662 2,760 516 15 U.S. Treasury 25,453 n.a. 24,168 n.a. 654 n.a. 531 n.a. 16 Obligations of U.S. government agencies and corporations ... 22,011 n.a. 21,404 n.a. 344 n.a. 92 n.a. 17 Other bonds, notes, debentures, and corporate stock (including state and local securities) 41,520 11,839 35,783 10,640 3,260 662 2,137 516 18 Securities of foreign governmental units 13,685 5,260 12,519 4,828 608 271 428 140 19 All Other 27,835 6,579 23,264 5,812 2,651 391 1,709 376 20 Federal funds sold and securities purchased under agreements to resell 40,031 3,906 36,983 3,157 937 458 1,487 200 21 U.S. branches and agencies of other foreign banks 8,829 2,781 7,558 2,430 629 343 415 0 22 Commercial banks in United States 6,804 275 6,013 75 144 0 343 200 23 Other 24,398 850 23,412 651 165 115 729 0 24 Total loans, gross 298,143 38,797 180,318 25,385 53,915 8,321 36,089 855 25 LESS: Unearned income on loans 150 12 95 7 36 2 7 0 26 EQUALS: Loans, net 297,992 38,786 180,223 25,377 53,878 8,318 36,082 855 Total loans, gross, by category 27 Real estate loans 38,233 262 21,716 95 11,175 166 3,190 0 28 Loans to depository institutions 37,577 24,138 23,453 14,290 8,724 6,397 1,199 420 29 Commercial banks in United States (including IBFs) 17,708 8,747 10,032 4,025 6,430 4,371 949 215 30 U.S. branches and agencies of other foreign banks 15,147 8,265 8,384 3,666 6,250 4,280 326 215 31 Other commercial banks in United States 2,561 481 1,648 359 180 91 623 0 32 Other depository institutions in United States (including IBFs) 34 0 34 0 0 0 0 0 33 Banks in foreign countries 19,834 15,391 13,386 10,265 2,293 2,026 250 205 34 Foreign branches of U.S. banks 481 416 412 350 66 63 0 0 35 Other banks in foreign countries 19,353 14,975 12,974 9,915 2,227 1,963 250 205 36 Loans to other financial institutions 24,985 790 20,071 638 2,231 48 2,207 83 37 Commercial and industrial loans 179,165 11,336 100,681 8,313 30,912 1,644 27,325 333 38 U.S. addressees (domicile) 157,257 54 84,923 41 28,109 4 26,427 0 39 Non-U.S. addressees (domicile) 21,909 11,282 15,758 8,272 2,803 1,640 898 333 40 Acceptances of other banks 676 61 497 54 39 0 67 0 41 U.S. banks 300 0 266 0 17 0 7 0 42 Foreign banks 376 61 232 54 22 0 60 0 43 Loans to foreign governments and official institutions (including foreign central banks) 3,402 1,934 2,789 1,755 174 66 97 20 44 Loans for purchasing or carrying securities (secured and unsecured) 7,553 30 7,189 30 201 0 66 0 45 All other loans 5,222 210 2,626 174 446 0 1,920 0 46 Assets held in trading accounts 30,352 276 27,131 276 1,024 0 2,196 0 47 All other assets 74,251 4,848 59,209 3,887 4,646 662 9,397 225 48 Customers' liabilities on acceptances outstanding 12,034 n.a. 8,560 n.a. 2,546 n.a. 393 n.a. 49 U.S. addressees (domicile) 9,056 n.a. 5,945 n.a. 2,423 n.a. 385 n.a. 50 Non-U.S. addressees (domicile) 2,979 n.a. 2,615 n.a. 123 n.a. 8 n.a. 51 Other assets including other claims on nonrelated parties .... 62,217 4,848 50,650 3,887 2,099 662 9,004 225 52 Net due from related depository institutions5 79,747 136,987 66,156 113,255 4,481 15,933 1,826 5,044 53 Net due from head office and other related depository institutions5 79,747 n.a. 66,156 n.a. 4,481 n.a. 1,826 n.a. 54 Net due from establishing entity, head offices, and other related depository institutions5 n.a. 136,987 n.a. 113,255 n.a. 15,933 n.a. 5,044 55 Total liabilities4 764,043 323,166 582,059 263,276 77,195 33,444 65,726 18,134 56 Liabilities to nonrelated parties 649,435 301,515 534,554 248,206 56,374 32,910 40,457 13,897 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 1995'—Continued Millions of dollars, except as noted All states2 New York California Illinois IItteemm ex I T c B l o u F t d a s i l 3 n g o IB nl F y s 3 ex T c IB l o u F t d a s i l n g I o B n F ly s ex T c IB l o u t F d a s i l n g I o B n F ly s ex T c IB l o u F t d a s i l n g I o B n F ly s 57 Total deposits and credit balances 152,952 233,267 129,314 212,752 5,094 6,322 9,764 8,906 58 Individuals, partnerships, and corporations 103,396 11,899 83,622 7,553 4,398 503 8,063 20 59 U.S. addressees (domicile) 89,539 78 75,841 78 2,595 0 7,221 0 60 Non-U.S. addressees (domicile) 13,857 11,821 7,781 7,475 1,803 503 842 20 61 Commercial banks in United States (including IBFs) 28,156 64,204 25,768 59,612 360 2,378 1,537 1,978 62 U.S. branches and agencies of other foreign banks 15,119 59,148 14,240 55,017 138 2,210 355 1,704 63 • Other commercial banks in United States 13,037 5,056 11,528 4,594 221 168 1,182 274 64 Banks in foreign countries 8,839 135,894 8,468 126,875 107 2,746 87 5,313 65 Foreign branches of U.S. banks 3,251 4,815 3,200 4,294 0 292 50 124 66 Other banks in foreign countries 5,589 131,079 5,267 122,581 107 2,454 37 5,189 67 Foreign governments and official institutions (including foreign central banks) 3,531 21,221 3,172 18,664 190 695 2 1,595 68 All other deposits and credit balances 8,646 49 7,948 49 18 0 66 0 69 Certified and official checks 384 336 22 8 70 Transaction accounts and credit balances (excluding IBFs) .... 7,956 6,240 382 423 71 Individuals, partnerships, and corporations 6,072 4,680 296 410 72 U.S. addressees (domicile) 4,334 3,619 222 404 73 Non-U.S. addressees (domicile) 1,739 1,061 75 6 74 Commercial banks in United States (including IBFs) 100 92 5 0 75 U.S. branches and agencies of other foreign banks 8 6 0 0 76 Other commercial banks in United States 93 86 5 0 77 Banks in foreign countries 834 632 39 2 78 Foreign branches of U.S. banks 3 2 0 0 79 Other banks in foreign countries 831 630 39 2 80 Foreign governments and official institutions (including foreign central banks) 459 418 2 2 81 All other deposits and credit balances 107 81 18 1 82 Certified and official checks 384 336 22 8 83 Demand deposits (included in transaction accounts and credit balances) 7,456 6,037 311 410 84 Individuals, partnerships, and corporations 5,713 4,569 245 397 85 U.S. addressees (domicile) 4,197 3,556 186 391 86 Non-U.S. addressees (domicile) 1,516 1,013 58 6 87 Commercial banks in United States (including IBFs) 83 n.a. 77 n.a. 3 n.a. 0 n.a. 88 U.S. branches and agencies of other foreign banks 8 6 0 0 89 Other commercial banks in United States 75 70 3 0 90 Banks in foreign countries 798 605 38 2 91 Foreign branches of U.S. banks 3 2 0 0 92 Other banks in foreign countries 796 602 38 2 93 Foreign governments and official institutions (including foreign central banks) 434 413 2 2 94 All other deposits and credit balances 44 37 1 1 95 Certified and official checks 384 336 22 8 96 Nontransaction accounts (including MMDAs, excluding IBFs) 144,996 123,074 4,712 9,341 97 Individuals, partnerships, and corporations 97,323 78,941 4,102 7,654 98 U.S. addressees (domicile) 85,205 72,222 2,373 6,817 99 Non-U.S. addressees (domicile) 12,118 6,720 1,729 836 100 . Commercial banks in United States (including IBFs) 28,056 25,676 355 1,536 101 U.S. branches and agencies of other foreign banks 15,111 14,234 138 355 102 Other commercial banks in United States 12,945 11,442 217 1,182 103 Banks in foreign countries 8,006 7,835 68 85 104 Foreign branches of U.S. banks 3,248 3,198 0 50 105 Other banks in foreign countries 4,757 4,637 68 35 106 Foreign governments and official institutions (including foreign central banks) 3,072 2,754 187 0 107 All other deposits and credit balances 8,539 7,867 0 66 108 IBF deposit liabilities 233,267 212,752 6,322 8,906 109 Individuals, partnerships, and corporations 11,899 7,553 503 20 110 U.S. addressees (domicile) 78 78 0 0 111 Non-U.S. addressees (domicile) 11,821 7,475 503 20 112 Commercial banks in United States (including IBFs) 64,204 59,612 2,378 1,978 113 U.S. branches and agencies of other foreign banks 59,148 55,017 2,210 1,704 114 Other commercial banks in United States n.a . 5,056 n a. 4,594 n.a. 168 n a. 274 115 Banks in foreign countries 135,894 126,875 2,746 5,313 116 Foreign branches of U.S. banks 4,815 4,294 292 124 117 Other banks in foreign countries 131.079 122.581 2,454 5,189 118 Foreign governments and official institutions (including foreign central banks) 21.221 18.664 695 1,595 119 All other deposits and credit balances 49 49 0 0 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • August 1995 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 19951—Continued Millions of dollars, except as noted All states2 New York California Illinois IItteemm in I c T B lu o F t d a s i l n 3 g o IB nl F y s 3 inc T I l B o u F t d a i s l n g I o B n F ly s inc T I l B o u F t d a i s l n g I o B n F ly s inc T I l B o u F t d a i s l n g I o B n F ly s 170 Federal funds purchased and securities sold under agreements to repurchase 64,155 13,094 53,158 8,303 66,,994477 3,463 33,,662266 1,165 121 U.S. branches and agencies of other foreign banks 9,983 3,329 6,082 1,524 2,933 1,399 687 249 17? Other commercial banks in United States 9,113 241 6,609 82 1,589 159 883 0 m Other 45,059 9,524 40,467 6,697 2,426 1,905 2,056 915 124 Other borrowed money 0 0 0 0 0 0 0 0 175 Owed to nonrelated commercial banks in United States (including IBFs) 35,396 18,999 14,708 5,338 16,731 12,239 2,713 992 126 Owed to U.S. offices of nonrelated U.S. banks 8,030 1,782 4,493 594 2,481 1,066 763 II 177 Owed to U.S. branches and agencies of nonrelated 27,366 17,218 10,215 4,744 14,250 11,173 11,,995500 915 17.8 Owed to nonrelated banks in foreign countries..: 31,439 29,201 18,025 16,043 10,190 10,077 2,513 2,513 179 Owed to foreign branches of nonrelated U.S. banks 1,566 1,466 669 613 709 704 76 lb no Owed to foreign offices of nonrelated foreign banks 29,873 27,735 17,356 15,430 9,480 9,373 2,437 2,436 131 Owed to others 39,285 1,798 28,361 1,411 7,114 227 3,082 161 132 All other liabilities 92,941 5,155 78,236 4,360 3,975 582 9,854 161 133 Branch or agency liability on acceptances executed and outstanding 1122,,559900 n.a. 99,,007733 n.a. 22,,551166 n.a. 441199 n.a. 134 Trading liabilities 25,306 55 23,965 53 19 1 1,289 0 135 Other liabilities to nonrelated parties 55,044 5,101 45,199 4,307 1,440 581 8,145 161 136 Net due to related depository institutions5 114,608 21,652 47,504 15,070 20,821 534 25,269 4,237 137 Net owed to head office and other related depository institutions5 114,608 n.a. 47,504 n.a . 20,821 n.a. 25,269 n.a. 138 Net owed to establishing entity, head office, and other related depository institutions5 n.a. 21,652 n.a. 15,070 n.a. 534 n.a. 4,237 MEMO 139 Non-interest-bearing balances with commercial banks in United States 1,133 29 822 00 125 2299 4422 0 140 Holding of commercial paper included in total loans 528 494 1 0 141 Holding of own acceptances included in commercial and industrial loans 3,974 2,578 1,255 2299 142 Commercial and industrial loans with remaining maturity of one year or less 105,519 58,859 18,293 17,283 143 Predetermined interest rates 61,805 n.a. 34,182 n.a. 11,541 n.a. 11,701 n.a. 144 Floating interest rates 43,714 24,676 6,752 5,581 145 Commercial and industrial loans with remaining maturity of more than one year 73,647 41,822 12,619 10,042 146 Predetermined interest rates 18,220 10,398 3,111 3,379 147 Floating interest rates 55,426 31,424 9,508 6,663 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A75 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 1995'—Continued Millions of dollars, except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 exc T IB l o u F t d a s i l n g I o B n F ly s ex T c IB l o u F t d a s i l n g I o B n F ly s ex T c IB l o u F t d a s i l n g I o B n F ly s 111144448888 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ooooffff nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss 148,088 n.a. 126,550 n.a. 5,237 n.a. 9,582 n.a. 111144449999 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 111,917 n.a. 95,631 n.a. 2,795 n.a. 7,573 n.a. 111155550000 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 28,211 n.a. 24,419 n.a. 1,496 n.a. 1,603 n.a. 111155551111 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss 7,960 n.a. 6,500 n.a. 945 n.a. 407 n.a. All states2 New York California Illinois inc T I l B u o F t d a i s l n g I o B n F ly s inc T I l B u o F t d a i s l n g I o B n F ly s inc T I l B o u F t d a i s l n g I o B n F ly s inc T IB l o u F t d a i s l n g I o B n F ly s 111155552222 MMMMaaaarrrrkkkkeeeetttt vvvvaaaalllluuuueeee ooooffff sssseeeeccccuuuurrrriiiittttiiiieeeessss hhhheeeelllldddd 0 0 0 0 0 0 0 0 111155553333 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 64,040 n.a. 31,678 n.a. 26,626 n.a. 4,257 n.a. 111155554444 NNNNuuuummmmbbbbeeeerrrr ooooffff r r r reeeeppppoooorrrrttttssss f f f fiiiilllleeeedddd5555 539 0 255 0 123 0 47 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, item, either because the item is not an eligible IBF asset or liability or because that level "Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The of detail is not reported for IBFs. From December 1981 through September 1985, IBF form was first used for reporting data as of June 30, 1980, and was revised as of December data were included in all applicable items reported. 31, 1985. From November 1972 through May 1980, U.S. branches and agencies of foreign 4. Total assets and total liabilities include net balances, if any, due from or owed to banks had filed a monthly FR 886a report. Aggregate data from that report were available related banking institutions in the United States and in foreign countries (see note 5). On through the Federal Reserve statistical release G. 11, last issued on July 10, 1980. Data in the former monthly branch and agency report, available through the G.ll statistical this table and in the G.ll tables are not strictly comparable because of differences in release, gross balances were included in total assets and total liabilities. Therefore, total reporting panels and in definitions of balance sheet items. IBF, international banking asset and total liability figures in this table are not comparable to those in the G.l 1 tables. facility. 5. Related depository institutions includes the foreign head office and other U.S. and 2. Includes the District of Columbia. foreign branches and agencies of a bank, a bank's parent holding company, and majority- 3. Effective December 1981, the Federal Reserve Board amended Regulations D and Q owned banking subsidiaries of the bank and of its parent holding company (including to permit banking offices located in the United States to operate international banking subsidiaries owned both directly and indirectly). facilities (IBFs). Since December 31, 1985, data for IBFs have been reported in a separate 6. In some cases two or more offices of a foreign bank within the same metropolitan column. These data are either included in or excluded from the total columns as indicated area file a consolidated report. in the headings. The notation "n.a." indicates that no IBF data have been reported for that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • August 1995 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES A. Pro forma balance sheet Millions of dollars Mar. 31, 1995 Short-term assets (Note 1) Imputed reserve requirement on clearing balances 343.3 Investment in marketable securities 3,089.7 Receivables 65.0 Materials and supplies 7.1 Prepaid expenses 39.6 Items in process of collection 1,867.7 Total short-term assets 5,412.4 Long-term assets (Note 2) Premises 343.3 Furniture and equipment 157.0 Leases and leasehold improvements 22.9 Prepaid pension costs 212.6 Total long-term assets Total assets 6,1483 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 3,463.9 Deferred-availability items 1,836.8 Short-term debt 111.7 Total short-term liabilities 5,412.4 Long-term liabilities Obligations under capital leases 3.8 Long-term debt 156.0 Postretirement/postemployment benefits obligation 166.8 Total long-term liabilities Total liabilities 5,739.1 Equity 409.2 Total liabilities and equity (Note 3) 6,148.3 NOTE. Components may not sum to totals because of rounding. The priced services financial statements consist of these tables and the accompanying notes. B. Pro forma income statement Millions of dollars Item Quarter ended Mar. 31, 1995 Revenue from services provided to depository institutions (Note 4) 182.0 Operating expenses (Note 5) 168.9 Income from operations 13.1 Imputed costs (Note 6) 5.7 Interest on debt 4.1 Sales taxes 2.2 FDIC insurance 3.5 15.5 Income from operations after imputed costs -2.4 Other income and expenses (Note 7) Investment income on clearing balances 63.9 Earnings credits 54.3 9;5 Income before income taxes 7.1 Imputed income taxes (Note 8) 2.2 Income before cumulative effect of a change in accounting principle 4.9 Cumulative effect on previous years from retroactive application of accrual method of accounting for postemployment benefits (net of $6.5 million tax) (Note 9) -14.6 Net income -9.6 MEMO Targeted return on equity (Note 10) 8.1 NOTE. Components may not sum to totals because of rounding. The priced services financial statements consist of these tables and the accompanying notes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank Reported Data All NOTES TO FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES (1) SHORT-TERM ASSETS (6) IMPUTED COSTS The imputed reserve requirement on clearing balances held at Reserve Banks by deposi- Imputed costs consist of interest on float, interest on debt, sales taxes, and the FDIC tory institutions reflects a treatment comparable to that of compensating balances held at assessment. Interest on float is derived from the value of float to be recovered, either correspondent banks by respondent institutions. The reserve requirement imposed on explicitly or through per-item fees, during the period. Float costs include costs for checks, respondent balances must be held as vault cash or as nonearning balances maintained at a book-entry securities, noncash collection, ACH, and funds transfers. Reserve Bank; thus, a portion of priced services clearing balances held with the Federal Interest is imputed on the debt assumed necessary to finance priced-service assets. The Reserve is shown as required reserves on the asset side of the balance sheet. The sales taxes and FDIC assessment that the Federal Reserve would have paid had it been a remainder of clearing balances is assumed to be invested in three-month Treasury bills, private-sector firm are among the components of the PSAF (see note 3). shown as investment in marketable securities. The following list shows the daily average recovery of float by the Reserve Banks for Receivables are (1) amounts due the Reserve Banks for priced services and (2) the the first quarter of 1995 in millions of dollars: share of suspense-account and difference-account balances related to priced services. Materials and supplies are the inventory value of short-term assets. Total float 666.5 Prepaid expenses include salary advances and travel advances for priced-service Unrecovered float 3.6 personnel. Float subject to recovery 662.9 Items in process of collection is gross Federal Reserve cash items in process of Sources of float recovery collection (CIPC) stated on a basis comparable to that of a commercial bank. It reflects Income on clearing balances 64.6 adjustments for intra-System items that would otherwise be double-counted on a consoli- As-of adjustments 268.3 dated Federal Reserve balance sheet; adjustments for items associated with non-priced Direct charges 130.4 items, such as those collected for government agencies; and adjustments for items Per-item fees 199.6 associated with providing fixed availability or credit before items are received and processed. Among the costs to be recovered under the Monetary Control Act is the cost of Unrecovered float includes float generated by services to government agencies and by float, or net CIPC during the period (the difference between gross CIPC and deferred- other central bank services. Float recovered through income on clearing balances is the availability items which is the portion of gross CIPC that involves a financing cost), result of the increase in investable clearing balances; the increase is produced by a valued at the federal funds rate. deduction for float for cash items in process of collection, which reduces imputed reserve requirements. The income on clearing balances reduces the float to be recovered through (2) LONG-TERM ASSETS other means. As-of adjustments and direct charges are mid-week closing float and interterritory check float, which may be recovered from depositing institutions through adjustments to the institution's reserve or clearing balance or by valuing the float at the Consists of long-term assets used solely in priced services, the priced-services portion of federal funds rate and billing the institution directly. Float recovered through per-item fees long-term assets shared with nonpriced services, and an estimate of the assets of the Board is valued at the federal funds rate and has been added to the cost base subject to recovery of Governors used in the development of priced services. Effective Jan. 1, 1987, the in the first quarter of 1995. Reserve Banks implemented the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly, the Reserve Banks recognized a credit to expenses of $7.2 million in the first (7) OTHER INCOME AND EXPENSES quarter of 1995 and a corresponding increase in this asset account. Consists of investment income on clearing balances and the cost of earnings credits. Investment income on clearing balances represents the average coupon-equivalent yield (3) LIABILITIES AND EQUITY on three-month Treasury bills applied to the total clearing balance maintained, adjusted for the effect of reserve requirements on clearing balances. Expenses for earnings credits Under the matched-book capital structure for assets that are not "self-financing," short- granted to depository institutions on their clearing balances are derived by applying the term assets are financed with short-term debt. Long-term assets are financed with average federal funds rate to the required portion of the clearing balances, adjusted for the long-term debt and equity in a proportion equal to the ratio of long-term debt to equity for net effect of reserve requirements on clearing balances. the fifty largest bank holding companies, which are used in the model for the privatesector adjustment factor (PSAF). The PSAF consists of the taxes that would have been paid and the return on capital that would have been provided had priced services been (8) INCOME TAXES furnished by a private-sector firm. Other short-term liabilities include clearing balances maintained at Reserve Banks and deposit balances arising from float. Other long-term Imputed income taxes are calculated at the effective tax rate derived from the PSAF model liabilities consist of obligations on capital leases. (see note 3). (9) POSTEMPLOYMENT BENEFITS (4) REVENUE Effective Jan. 1, 1995, the Reserve Banks implemented SFAS 112, Employers' Account- Revenue represents charges to depository institutions for priced services and is realized ing for Postemployment Benefits. Accordingly in the first quarter of 1995 the Reserve from each institution through one of two methods: direct charges to an institution's Banks recognized a one-time cumulative charge of $21.1 million to reflect the retroactive account or charges against its accumulated earnings credits. application of this change in accounting principle. (5) OPERATING EXPENSES (10) RETURN ON EQUITY Operating expenses consist of the direct, indirect, and other general administrative Represents the after-tax rate of return on equity that the Federal Reserve would have expenses of the Reserve Banks for priced services plus the expenses for staff members of earned had it been a private business firm, as derived from the PSAF model (see note 3). the Board of Governors working directly on the development of priced services. The This amount is adjusted to reflect the recovery of automation consolidation costs of $.3 expenses for Board staff members were $.7 million in the first quarter of 1995. The credit million for the first quarter of 1995. The Reserve Banks plan to recover these amounts, to expenses under SFAS 87 (see note 2) is reflected in operating expenses. along with a finance charge, by the end of the year 2000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Index to Statistical Tables References are to pages A3-A77 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Demand deposits—Continued Agricultural loans, commercial banks, 21, 22 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 22, 23 Banks, by classes, 18—23 Turnover, 17 Domestic finance companies, 36 Depository institutions Federal Reserve Banks, 11 Reserve requirements, 9 Financial institutions, 28 Reserves and related items, 4, 5, 6, 13 Foreign banks, U.S. branches and agencies, 23, 72-75 Deposits (See also specific types) Automobiles Banks, by classes, 4, 18—23 Consumer installment credit, 39 Federal Reserve Banks, 5,11 Production, 47, 48 Interest rates, 16 Turnover, 17 Discount rates at Reserve Banks and at foreign central banks and BANKERS acceptances, 11, 12, 21-24, 26 foreign countries (See Interest rates) Bankers balances, 18-23, 72-75. (See also Foreigners) Discounts and advances by Reserve Banks (See Loans) Bonds (See also U.S. government securities) Dividends, corporate, 35 New issues, 34 Rates, 26 EMPLOYMENT, 45 Branch banks, 23 Eurodollars, 26 Business activity, nonfinancial, 45 Business expenditures on new plant and equipment, 35 FARM mortgage loans, 38 Business loans (See Commercial and industrial loans) Federal agency obligations, 5, 10, 11, 12, 31, 32 Federal credit agencies, 33 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation, and types and ownership Banks, by classes, 18 of gross debt, 30 Federal Reserve Banks, 11 Receipts and outlays, 28, 29 Central banks, discount rates, 65 Treasury financing of surplus, or deficit, 28 Certificates of deposit, 26 Treasury operating balance, 28 Commercial and industrial loans Federal Financing Bank, 33 Commercial banks, 21, 22 Federal funds, 7, 21, 22, 23, 26, 28 Weekly reporting banks, 21-23 Federal Home Loan Banks, 33 Commercial banks Federal Home Loan Mortgage Corporation, 33, 37, 38 Assets and liabilities, 18-23, 68-71 Federal Housing Administration, 33, 37, 38 Commercial and industrial loans, 18-23 Federal Land Banks, 38 Consumer loans held, by type and terms, 39 Federal National Mortgage Association, 33, 37, 38 Deposit interest rates of insured, 16 Federal Reserve Banks Loans sold outright, 22 Condition statement, 11 Real estate mortgages held, by holder and property, 38 Discount rates (See Interest rates) Terms of lending, 68-71 U.S. government securities held, 5, 11, 12, 30 Time and savings deposits, 4 Federal Reserve credit, 5, 6, 11, 12 Commercial paper, 24, 26, 36 Federal Reserve notes, 11 Condition statements (See Assets and liabilities) Federal Reserve System Construction, 45,49 Balance sheet for priced services, 76 Consumer installment credit, 39 Condition statement for priced services, 76 Consumer prices, 45 Federally sponsored credit agencies, 33 Consumption expenditures, 52, 53 Finance companies Corporations Assets and liabilities, 36 Profits and their distribution, 35 Business credit, 36 Security issues, 34, 65 Loans, 39 Cost of living (See Consumer prices) Paper, 24,26 Credit unions, 39 Financial institutions, loans to, 21, 22, 23 Currency in circulation, 5, 14 Float, 5 Customer credit, stock market, 27 Flow of funds, 40, 42, 43, 44 Foreign banks, assets and liabilities of U.S. branches and agencies, 22, 23, 72-75 DEBITS to deposit accounts, 17 Foreign currency operations, 11 Debt (See specific types of debt or securities) Foreign deposits in U.S. banks, 5, 22 Demand deposits Foreign exchange rates, 66 Banks, by classes, 18-23 Foreign trade, 54 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 Foreigners Producer prices, 45, 50 Claims on, 55, 58, 59, 60, 62 Production, 45, 47 Liabilities to, 22, 54, 55, 56, 61, 63, 64 Profits, corporate, 35 GOLD REAL estate loans Certificate account, 11 Banks, by classes, 21, 22, 38 Stock, 5, 54 Terms, yields, and activity, 37 Government National Mortgage Association, 33, 37, 38 Type of holder and property mortgaged, 38 Gross domestic product, 51 Repurchase agreements, 7 Reserve requirements, 9 HOUSING, new and existing units, 49 Reserves Commercial banks, 18 INCOME and expenses, Federal Reserve System, 76 Depository institutions, 4, 5, 6, 13 Income, personal and national, 45, 51, 52 Federal Reserve Banks, 11 Industrial production, 45, 47 US. reserve assets, 54 Installment loans, 39 Residential mortgage loans, 37 Insurance companies, 30, 38 Retail credit and retail sales, 39, 45 Interest rates Bonds, 26 SAVING Commercial banks, 68-71 Flow of funds, 40, 42, 43,44 Consumer installment credit, 39 National income accounts, 51 Deposits, 16 Savings institutions, 38, 39, 40 Federal Reserve Banks, 8 Savings deposits (See Time and savings deposits) Foreign central banks and foreign countries, 65 Securities (See also specific types) Money and capital markets, 26 Federal and federally sponsored credit agencies, 33 Mortgages, 37 Foreign transactions, 63 Prime rate, 25 New issues, 34 International capital transactions of United States, 53-65 Prices, 27 International organizations, 55, 56, 58, 61, 62 Special drawing rights, 5, 11, 53, 54 Inventories, 51 State and local governments Investment companies, issues and assets, 35 Deposits, 21, 22 Investments (See also specific types) Holdings of U.S. government securities, 30 Banks, by classes, 18-23 New security issues, 34 Commercial banks, 4, 18-23 Ownership of securities issued by, 21, 23 Federal Reserve Banks, 11, 12 Rates on securities, 26 Financial institutions, 38 Stock market, selected statistics, 27 Stocks (See also Securities) LABOR force, 45 New issues, 34 Life insurance companies (See Insurance companies) Prices, 27 Loans (See also specific types) Banks, by classes, 18—23 Student Loan Marketing Association, 33 Commercial banks, 18-23 Federal Reserve Banks, 5, 6, 8, 11, 12 TAX receipts, federal, 29 Federal Reserve System, 76 Thrift institutions, 4. (See also Credit unions and Savings Financial institutions, 38 institutions Insured or guaranteed by United States, 37, 38 Time and savings deposits, 4, 14, 16, 18-23 Trade, foreign, 54 MANUFACTURING Treasury cash, Treasury currency, 5 Capacity utilization, 46 Treasury deposits, 5, 11, 28 Production, 46,48 Treasury operating balance, 28 Margin requirements, 27 UNEMPLOYMENT, 45 Member banks (See also Depository institutions) U.S. government balances Federal funds and repurchase agreements, 7 Commercial bank holdings, 18-23 Reserve requirements, 9 Treasury deposits at Reserve Banks, 5, 11, 28 Mining production, 48 Mobile homes shipped, 49 U.S. government securities Monetary and credit aggregates, 4, 13 Bank holdings, 18-23, 30 Money and capital market rates, 26 Dealer transactions, positions, and financing, 32 Money stock measures and components, 4, 14 Federal Reserve Bank holdings, 5, 11, 12, 30 Mortgages (See Real estate loans) Foreign and international holdings and Mutual funds, 35 transactions, 11, 30, 64 Open market transactions, 10 Mutual savings banks (See Thrift institutions) Outstanding, by type and holder, 30, 31 Rates, 26 NATIONAL defense outlays, 29 U.S. international transactions, 53-66 National income, 51 Utilities, production, 48 OPEN market transactions, 10 VETERANS Administration, 37, 38 PERSONAL income, 52 Prices WEEKLY reporting banks, 18-23 Consumer and producer, 45, 50 Wholesale (producer) prices, 45, 50 Stock market, 27 Prime rate, 25 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 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 LARRY J. PROMISEL, Senior Associate Director DONALD J. WINN, Assistant to the Board 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 STEPHEN A. RHOADES, Assistant Director DIVISION OF BANKING 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 BRIAN F. MADIGAN, Associate Director HOWARD A. AMER, Assistant Director RICHARD D. PORTER, Deputy Associate Director GERALD A. EDWARDS, JR., Assistant Director JAMES D. GOETZINGER, Assistant Director VINCENT R. REINHART, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board STEPHEN M. HOFFMAN, JR., Assistant Director LAURA M. HOMER, Assistant Director DIVISION OF CONSUMER JAMES V. HOUPT, Assistant Director JACK P. JENNINGS, Assistant Director AND COMMUNITY AFFAIRS MICHAEL G. MARTINSON, Assistant Director GRIFFITH L. GARWOOD, Director RHOGER H PUGH, Assistant Director GLENN E. LONEY, Associate Director SIDNEY M. SUSSAN, Assistant Director DOLORES S. SMITH, Associate Director MOLLY S. WASSOM, Assistant Director MAUREEN P. ENGLISH, Assistant Director WILLIAM SCHNEIDER, Project Director, IRENE SHAWN MCNULTY, Assistant Director National Information Center 1. On loan from the Division of Information Resources Management Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 SUSAN M. PHILLIPS JANET L. YELLEN OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PA YMENT 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 JACK DENNIS, JR., Assistant Director DAVID L. SHANNON, Director EARL G. HAMILTON, Assistant Director JOHN R. WEIS, Associate Director JEFFREY C. MARQUARDT, Assistant Director ANTHONY V. DIGIOIA, Assistant Director JOHN H. PARRISH, Assistant Director JOSEPH H. HAYES, JR., Assistant Director FLORENCE M. YOUNG, Assistant Director FRED HOROWITZ, Assistant Director OFFICE OF THE INSPECTOR GENERAL OFFICE OF THE CONTROLLER GEORGE E. LIVINGSTON, Controller BRENT L. BOWEN, Inspector General 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

A82 Federal Reserve Bulletin • August 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

A83 CONSUMER ADVISORY COUNCIL JAMES L. WEST, Tijeras, New Mexico, Chairman KATHARINE W. MCKEE, Durham, North Carolina, 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

A84 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

A85 STAFF STUDIES: Only Summaries Printed in the 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM BULLETIN MORTGAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. Studies and papers on economic and financial subjects that are 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MARof general interest. Requests to obtain single copies of the full 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

A86 Maps of the Federal Reserve System 1 2- BOS•T ON O • NEW YORK • PHILADELPHIA CLEVELAND M A Q 4 • KANSAS l,ITY • « RICHMOND 5 dHHH•S•S•SMEi fettMMl M HHMflHMflfc 1 • H HI wMillll ALASKA HAWAII LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts Commonwealth of Puerto Rico and the U.S. Virgin by number and Reserve Bank city (shown on both Islands; the San Francisco Bank serves American pages) and by letter (shown on the facing page). Samoa, Guam, and the Commonwealth of the In the 12th District, the Seattle Branch serves Northern Mariana Islands. The Board of Governors Alaska, and the San Francisco Bank serves Hawaii. revised the branch boundaries of the System most The System serves commonwealths and terri- recently in December 1991. Digitized for FRtAoSriEeRs as follows: the New York Bank serves the http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimore MD / •Cincinnati •Charlotte Buffalo / ] KY CT F \ R I MA NJ N sc BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 7-G 8-H Wl Ml MO KY • Detroit • y Louisville !A —™ •Memphis Jacksonville |N Little) New Ofleans Rock/ MS ATLANTA CHICAGO ST. Louis 9-1 • MINNEAPOLIS 10-J 12-L IW^Y HH Omaha* MO ••1111 •MMHNMHM^'VHI Mm • JHBHB flHHH^ • • • •I KANSAS CITY 11-K Salt Lake City flflflP" El Paso •Los Angeles San Antonio DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A88 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 vacancy Harold L. Shewmaker DALLAS 75201 Cece Smith Robert D. McTeer, Jr. Roger R. Hemminghaus TToonnyy JJ.. SSaallvvaaggggiioo 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. Stall1 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