Federal Reserve Bulletin, 1995-10

VOLUME 81 • NUMBER 10 • OCTOBER 1995 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • S. David Frost • Griffith L. Garwood • Donald L. Kohn • J. Virgil Mattingly, Jr. • Michael J. Prell • Richard Spillenkothen • Edwin M. Truman The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the Graphics Center under the direction of Peter G. Thomas, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 917 GERMAN MONETARY TARGETING: status is unquestioned so that depositories can A RETROSPECTIVE VIEW appropriately focus their attention on the extension and management of credit in our Among the central banks of the major induseconomy, before the Subcommittee on Finantrial nations, only the Deutsche Bundesbank cial Institutions and Consumer Credit of the continues to use a monetary aggregate as its House Committee on Banking and Financial guidepost for monetary policy. The recent Services, August 2, 1995. [Chairman volatility of its targeted aggregate, German Greenspan presented similar testimony to the M3, has raised questions about whether the Senate Committee on Banking, Housing, and Bundesbank's approach remains a useful Urban Affairs, July 28, 1995.] means of controlling inflation, the primary goal of German monetary policy. This article gives a history of monetary targeting in Ger- 939 ANNOUNCEMENTS many and the other G-7 nations and then Hemispheric conference on banking superdiscusses a study of the stability of German vision. money demand since 1970. Demand for German M3 appears to have been largely stable Final rule regarding risk-based capital over the long run despite the unification of standards on interest rate risk. East and West Germany in 1990, suggesting Amendment to the risk-based capital guidethat the Bundesbank has been justified in conlines regarding the treatment of derivative tinuing to use M3 as its primary intermediate contracts. target in pursuit of price stability. Amendments to the capital adequacy guidelines for state member banks and bank holding 932 INDUSTRIAL PRODUCTION companies. AND CAPACITY UTILIZATION Modifications to the policy on third-party FOR AUGUST 1995 access to Fedwire. Industrial production rose 1.1 percent in Approval of a firm closing time for the Fed- August, to 123.0 percent of its 1987 average, wire book-entry securities transfer system. after a revised gain of 0.3 percent in July. Capacity utilization rose 0.6 percentage point, Proposal to adopt a policy to control access to to 84.3 percent. the Federal Reserve Banks' automated clearinghouse service by entities other than the depository institution whose Federal Reserve 935 STATEMENT TO THE CONGRESS account will be debited; proposed amend- Alan Greenspan, Chairman, Board of Gover- ments to the Federal Reserve and Treasury nors, offers his thoughts on the Savings Asso- Department rule requiring enhanced recordciation Insurance Fund (SAIF) and on deposit keeping related to certain wire transfers by insurance more generally and says that the financial institutions and deferral of the effecsolution to the problem of SAIF—after put- tive date of the rule previously announced; ting it on a sound basis—is to merge it with and extension of time to receive public comthe Bank Insurance Fund and that what is ments on proposed amendments in connection needed is a deposit insurance system whose with a review of Regulation T. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Establishment of the position of ombudsman A1 FINANCIAL AND BUSINESS STATISTICS at the Board and appointment to the position. These tables reflect data available as of Sponsorship of statistical study of household August 29, 1995. finances as part of the Survey of Consumer Finances. A3 GUIDE TO TABULAR PRESENTATION Availability of a new videotape on the sale of A4 Domestic Financial Statistics mutual funds and annuities by banks. A45 Domestic Nonfinancial Statistics A53 International Statistics Change in Board staff. A67 GUIDE TO STATISTICAL RELEASES 942 MINUTES OF THE FEDERAL OPEN AND SPECIAL TABLES MARKET COMMITTEE MEETING HELD ON JULY 5-6, 1995 A74 INDEX TO STATISTICAL TABLES At its meeting on July 5-6, 1995, the Committee reaffirmed the range of 1 to 5 percent for A76 BOARD OF GOVERNORS AND STAFF growth of M2 in 1995 and set the same range on a tentative basis for 1996. The range for A78 FEDERAL OPEN MARKET COMMITTEE growth of M3 was raised to 2 to 6 percent for AND STAFF; ADVISORY COUNCILS 1995 and that higher range was extended provisionally to 1996. The Committee retained A80 FEDERAL RESERVE BOARD the current monitoring range of 3 to 7 percent PUBLICATIONS for the growth of total domestic nonfinancial debt for 1995 and extended that range on a A82 MAPS OF THE FEDERAL RESERVE tentative basis to 1996. SYSTEM For the intermeeting period ahead, the Committee adopted a directive that called for A84 FEDERAL RESERVE BANKS, BRANCHES, some slight easing in the degree of pressure AND OFFICES on reserve positions and that included a bias toward possible further easing of reserve conditions during the period. 952 LEGAL DEVELOPMENTS Various bank holding company, bank service corporation, and bank merger orders; and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View Linda S. Kole and Ellen E. Meade, of the Board's achieving this goal. At its meeting on Decem- Division of International Finance, prepared ber 22, 1994, the Bundesbank Council (the central this article. Matthew Field provided research bank's policymaking body) set the monetary target assistance. for 1995 and described it as follows: In 1995 the Deutsche Bundesbank will conduct its Nineteen ninety-five marks the twentieth year of monetary policy in such a way as to ensure that German monetary targeting and the eighth year that inflation continues to decline and, at the same time, the Deutsche Bundesbank has set an objective for that the monetary conditions for sustained economic the monetary aggregate M3.1 Among the central growth remain in place. To this end, the Bank regards it as appropriate for the money stock M3 to expand by banks of the major industrial countries, only the 4 percent to 6 percent between the fourth quarter of Bundesbank continues to use a monetary aggregate 1994 and the fourth quarter of 1995 as its guidepost for monetary policy. In the other The Bundesbank is thus abiding by its tried and Group of Seven (G-7) countries—Canada, France, tested strategy of monetary targeting, and underlines Italy, Japan, the United Kingdom, and the United that, despite the disruptive influences of the past few States—the statistical relation between prices and years, it still regards the money stock M3 as the key reference variable for its monetary policy.2 the supply of money has weakened and become unstable over the past decade and a half, making The study reported in this article explored the money an unreliable guide for policy. As a result, question of whether M3 targeting remains a useful monetary aggregates have been relegated to a approach to achieving low inflation in Germany smaller role in monetary policy decisions in these by investigating the stability of German money countries. demand in recent years. The findings indicate that The erratic growth of German M3 in recent years at the time of unification, when residents of eastern has raised questions about the usefulness of the Germany initially acquired deutsche marks, there Bundesbank's target as well. Although the German was a change in the short-run dynamics of money central bank appears to be committed to M3, the demand as well as a shift in the level of M3 aggregate's recent volatility, particularly since the demanded. Over the longer run, however, unificapolitical and economic unification of East and West tion apparently has not altered the demand for Germany in 1990, has called into question the money in a fundamental way: The long-run, or stability of the statistical relation between German equilibrium, relationship among German real M3 money and prices. and its key determinants—real economic activity The primary goal of German monetary policy, as (GDP), interest rates, and real net financial set forth in the Bundesbank Act of 1957, is to wealth—seems to have remained largely unsafeguard the currency, which in practice has been changed over the past two and one-half decades interpreted to mean keeping price inflation at or despite unification and other major events. That below 2 percent per year. The Bundesbank believes said, the period since unification is short relative that targeting M3 is the most reliable means of to the entire period studied, and more time must pass before it can be determined conclusively 1. German M3 consists of notes and coins in circulation plus whether money demand has remained stable. German residents' holdings of sight deposits at banks in Germany, time deposits having original maturities of one month to less than four years held at banks in Germany, and savings deposits having a period of notice of three months or less. 2. Deutsche Bundesbank, Monthly Report (January 1995), p. 23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

918 Federal Reserve Bulletin • September 1995 The article begins with a brief history of mone- institution). Since the early 1970s the Federal tary targeting in the G-7 countries and then summa- Reserve has often used as its operating target a rizes in some detail the German experience with narrow range for the federal funds rate. monetary targeting. Next, recent studies of the Often, the type of variable a central bank chooses stability of German money demand in the post- as its operating target coincides with the variable unification period are reviewed briefly and the chosen as an intermediate target. For example, if a results of the current investigation are discussed. central bank is aiming at a particular level of three- Finally, some conclusions are drawn from the month or one-year interest rates as its intermediate analysis. Details of the empirical investigation and target, it would likely use a shorter-term rate (such estimation results and a description of the data used as the federal funds rate) as its operating target. are given in the appendixes. If, on the other hand, a central bank has chosen a particular monetary aggregate as its intermediate target, it would more likely adopt a closely related operating target such as the amount of reserves in THE RISE AND FALL OF MONETARY the banking system. TARGETING IN THE G-7 COUNTRIES The choice between using the level of interest rates or a monetary aggregate as an intermediate Since the end of World War II, monetary policy in target depends crucially on the relation of these the G-7 countries has been devoted to the pursuit of variables to ultimate monetary policy goals. Ecotwo broad goals—economic growth and price nomic theory suggests that if the nonfinancial side stability.3 Progress toward achieving these goals of the economy is stable, then interest rate targets has been measured with intermediate targets— are the most effective way to achieve economic objectives for financial variables such as monetary stability, whereas if the financial side of the econaggregates or interest rates.4 A good intermediate omy is more stable, targeting the stock of money target variable is one that is readily observable, can is better. The oil shocks of the 1970s destabilized be controlled by monetary authorities, and has a the real economy in all the G-7 nations, perhaps predictable link to one or more policy goals. Such increasing the attractiveness of targeting monetary ideal variables are uncommon, however; some growth. In addition, the growth of the money stock meet one or two of the criteria but not all three. For was considered a good alternative to short-term example, interest rates are readily observable, but rates as an intermediate target because it was pubmonetary authorities can influence them only indilished weekly and was thought to have a stable rectly, as private sector decisions ultimately deterlong-run relation to inflation. Eventually, however, mine their behavior. the process of financial innovation and deregu- In the absence of ideal intermediate target varilation in some G-7 countries made the supply of ables, monetary authorities have also formulated money less controllable by monetary authorities, operating targets for variables that they can control rendering it less useful as an intermediate target. more directly and that are closely related to their intermediate targets. In the United States, one such operating target has been the federal funds rate (the rate charged by a depository institution on an over- Roots in the 1960s night sale of federal funds to another depository Throughout the 1950s and most of the 1960s, the industrial world experienced rapid growth with low inflation. Under the Bretton Woods system of fixed 3. Technically, the term "G-7" to refer to the seven largest exchange rates, instituted in the mid-1940s, the industrial countries was not used before the mid-1980s. Other central banks of the major industrial countries were major industrial countries, notably Switzerland, also used annual limited in their ability to pursue independent monemonetary targets in the 1970s and 1980s. 4. For a discussion of intermediate targets and the goals of U.S. tary policies. Occasionally, they were obliged to monetary policy, see R. Glenn Hubbard, Money, the Financial intervene in the foreign exchange market to main- System, and the Economy (Reading, Mass.: Addison-Wesley, 1994), tain exchange rate parities, directly affecting their chap. 21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View 919 reserves and the supply of money.5 When exchange pressures, together with the move to flexible markets were tranquil, central banks attempted to exchange rates, led some G-7 central banks to set influence liquidity in the banking system; some objectives for the pace of monetary expansion. For regulated interest rates, some imposed controls on instance, the Federal Reserve adopted monetary the growth of particular credit aggregates such as targets in 1970 with the intention of using them to bank loans, and some did both. gradually reduce inflation. As a result, the Federal The practice of targeting rates of growth of key Open Market Committee (FOMC) began to set monetary aggregates had its roots in the late 1960s targets for Ml and M2 growth over the period when monetary authorities in several major indus- between its bimonthly meetings.7 These objectives trial countries reduced their emphasis on short-term were initially used to guide internal policy discusinterest rates and began to pay more attention to sions and were not released publicly. monetary aggregates.6 Around that time, economic The rise in inflation in the early 1970s was conditions raised awareness of the influence of the exacerbated by the outbreak of the Arab-Israeli money stock on economic activity over the short to war in autumn 1973 and the OPEC oil embargo, medium run and on prices over the longer run. The which caused the international price of oil to qua- U.S. credit crunches in 1966 and 1969 and the druple in January 1974. The negative supply shock German recession in 1966-67, for example, were associated with the rise of oil prices in 1973-74 seen as having been caused in part by monetary contributed to recessions in the G-7 nations, which contractions that, at least in retrospect, seemed were worsened by the monetary contraction that excessive. And the U.S. fiscal expansion associated accompanied it. High levels of inflation, interest with the Vietnam war, along with an increase in the rates, and unemployment prevailed in the G-7 pace of money growth in 1967 and 1968, clearly countries by the mid-1970s and led to growing precipitated a substantial rise in U.S. inflation in the public concern about monetary policy. late 1960s, which was transmitted to the other G-7 It was in this atmosphere of stagflation that countries through the fixed exchange rate system. monetary authorities took a new approach to imple- From 1970 to 1973, frequent exchange market menting monetary policy: publicly announcing tarinterventions during the terminal stages of the gets for the growth of the supply of money. Mone- Bretton Woods system led to a worldwide expan- tary authorities in most G-7 countries adopted sion in liquidity and a rise in inflation in all the G-7 explicit targets for the growth of one or more countries in 1972-73 (chart 1). money or credit aggregates in the mid-1970s, and during the second half of the 1970s these targets became a major focus of monetary policy in Can- Announcement of Targets in the 1970s ada, Germany, the United Kingdom, and the United States. By the end of the decade, all the G-7 coun- The orientation of monetary policy in the G-7 tries except Japan and Italy had official objectives countries changed significantly during the 1970s. for the rate of monetary expansion.8 The experi- The breakdown of the Bretton Woods system gave ence of the G-7 countries with announced monemonetary authorities greater latitude to pursue indetary targets or (in the case of Japan) projections is pendent policies. In the early 1970s, rising inflation summarized in table 1.9 5. Under the Bretton Woods system, the U.S. dollar was the nth 7. See Ann-Marie Meulendyke, U.S. Monetary Policy and currency, in terms of which the (n - 1) other currencies were Financial Markets (New York: Federal Reserve Bank of New York, defined. In theory, the United States was responsible for fixing the 1989), pp. 38-47, for a discussion of U.S. monetary policy in the price of gold at $35 per ounce. In practice, however, the United 1970s and early 1980s. States intervened only rarely in the market for gold or foreign 8. From 1974 to 1980, Italy did, however, set targets for total exchange, letting the central banks of other countries intervene to domestic credit expansion. fix their exchange rates against the dollar. 9. See Karen H. Johnson, "Foreign Experience with Targets for 6. For a discussion of the economic events leading up to the Money Growth," Federal Reserve Bulletin, vol. 69 (October 1983), implementation of monetary targets, as well as early experience pp. 746-54, for a comprehensive review of early experience with with targets, see Organisation for Economic Co-operation and monetary targets abroad. Also see Paul Meek, ed., Central Bank Development, Monetary Targets and Inflation Control (Paris: Views on Monetary Targeting (Federal Reserve Bank of New York, OECD, 1979). Also see Brian Griffiths and G.E. Wood, eds., 1983) and Michele U. Fratianni and Dominick Salvatore, eds., Monetary Targets (New York: St. Martin's Press, 1981), introduc- Monetary Policy in Developed Economies (New York: Greenwood tion and chap. 1. Press, 1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

920 Federal Reserve Bulletin • September 1995 1. Four-quarter change in monetary aggregates and consumer prices in the G-7 countries, 1965-95 Percent Percent M2+CDS United States — — 20 M2 NOTE. Monetary aggregates and consumer price indexes are from sources 1. French M2R before December 1977. within each country. Definitions differ from country to country. The mone- 2. Breaks in series in December 1985 and January 1991. tary aggregates shown were targeted or projected at some time during the 3. Series redefined in December 1974. past three decades. 4. Series redefined in January 1970. Experience with Targets rise in inflation that peaked near the turn of the decade. In the early years of monetary targeting—the The appointment of Paul Volcker as Chairman of second half of the 1970s—the targets often were the Federal Reserve Board in August 1979 marked exceeded; only Canada was able to meet its targets a turning point in the implementation of monetary consistently. At the same time, monetary authorities targeting. In October 1979, the Federal Reserve were trying to reduce the variability of interest announced a major change in its conduct of monerates and exchange rates, actions that were some- tary policy—adoption of an operating target for times at odds with meeting the monetary targets. nonborrowed reserves to improve its control over Nevertheless, rates of monetary growth eventually Ml. Interest rates shot up, and Ml growth declined slowed somewhat, and target ranges were reduced. from an annual rate of 8V2 percent over the first Then global oil prices more than doubled during three quarters of 1979 to 5V2 percent during the the course of 1979, contributing to a worldwide four quarters of 1981. The change in operating Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View 921 1. History of announced monetary targets or projections in the G-7 countries Initial target or Periods target was Periods target Country projection period met or undershot was exceeded Canada1 Ml, 1975:Q2to 1976:Q2 1976-82 France2 M2, December 1976 to December 1977 1980 1977-79 1982 1981 1987-90 1983-85 M3,1985:Q4 to 1986:Q4 1986 1987 1991-93 Germany Central bank money, December 1974 1979-85 1975-78 to December 1975 1986-87 M3,1987:Q4 to 1988.Q4 1989-91 1988 1994 1992-93 M2, December 1983 to December 1984 1986 1984-85 1992 1987-91 1994 1993 M2+CDs, 1977:Q3 to 1978:Q3 United Kingdom3 £M3,1976/77 (fiscal year ending March 31, 1977) 1976/77 1977/78 1978/79-1979/80 1980/81-1981/82 1982/83-1983/84 1984/85-1985/86 PSL2, Febraary 1982 to April 1983 1982/83-1983/84 Ml, February 1982 to April 1983 1982/83 1983/84 MO, February 1984 to April 1985 1984/85-87 1988-89 1990-91 1992 M4, October 1992 United States6 Ml, March 1975 to March 1976 1976:Q1-77:Q2 1977:Q3-78:Q4 1979:Q1-Q3 1979-80 1981 1982 1983-84 1985-86 M2, March 1975 to March 1976 1976:Q1-Q3 1976:Q4-77:Q3 1977:Q4-79:Q3 1979-82 1983-94 M3, March 1975 to March 1976 1976:Q1-Q3 1976:Q4-77:Q4 1978:Q1-79:Q3 1979-84 1985-94 1. The Bank of Canada abandoned monetary targeting as of November periods that the targets applied to have varied considerably, often coinciding 1982. with fiscal years. Targets were updated at six-month intervals until June 2. From 1976 through 1981, a single target rate of growth from Decem- 1979. When the Conservative government of Margaret Thatcher came to ber 1 to December 1 was announced. A range was announced for the first power in June 1979, the control of the growth of the stock of money became time in 1982, and in 1983 the target was for year-over-year growth between the centerpiece of monetary policy. The target period was initially June 1979 three-month intervals from November to January. For 1984 and 1985 the to April 1980 and was extended in October 1979 for one year. In 1980 the targeted aggregate was M2R, and in 1986 the monetary aggregates were target period of February 1980 to April 1981 (at an annual rate) was also redefined. In 1986, M3 became the targeted aggregate, and the target period adopted and was used through April 1985. From May 1985 through March was changed to Q4/Q4. In 1987, a target for M2 was reintroduced, and in 1992, targets were expressed as twelve-month growth rates in each month of 1988, the target for M3 was dropped. The target was switched from M2 a fiscal year, April through March. For October 1992, the government back to M3 for 1991. In January 1994, the Monetary Policy Council of announced a "monitoring range" for M4. Currently the government has the Bank of France deemphasized its monetary growth target by announcing monitoring ranges for M0 and M4 that are expressed as twelve-month a medium-term growth target for M3 of 5 percent per year over a four-year growth rates for each month during the current Parliament, which began in period. May 1992 and has a maximum duration of five years. 3. Until 1991 the target period was the calendar year; since then it has 6. In April 1975, the U.S. Congress requested that the Federal Reserve been Q4/Q4. prepare quarterly reports on its intentions for the monetary aggregates for the 4. The Bank of Japan announces one-quarter-ahead forecasts of the four- coming year. In May, the Federal Reserve began to publish target ranges for quarter percentage change in M2 plus certificates of deposit but has never set the growth of the key monetary aggregates during the twelve months ending a target. in March 1976 but shortly afterward started to announce a quarterly target 5. The British government first announced a target in July 1976, for M3 range for growth over the coming four quarters. Until 1979 the Federal growth for the rest of the fiscal year, but shortly thereafter it switched to Reserve announced quarterly targets for year-over-year growth; since then it targeting £M3, the portion of M3 denominated in pounds sterling. The has announced annual targets for Q4/Q4 growth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

922 Federal Reserve Bulletin • September 1995 procedure was largely successful at reducing infla- recognized and most G-7 nations had ceased to rely tion, which peaked at around 13 percent in early on monetary targets as a consistent guide for policy. 1980 and fell below 5 percent during 1982. The During the 1980s, monetary policy in some shift toward tighter monetary policy and lower countries became increasingly oriented toward rates of inflation eventually occurred in all G-7 external objectives, in particular, toward maintaincountries over the course of the 1980s and gener- ing a competitive or stable value of the nation's ally has continued in the 1990s. currency. Countries that participated in the exchange rate mechanism (ERM) of the European Monetary System progressively directed their Decreased Emphasis in the 1980s monetary policy actions toward maintaining exchange rate parities. At times, monetary policy in Financial liberalization and innovation over the the United Kingdom and Canada was also aimed at 1970s and 1980s changed the relationship between exchange rate objectives. money stocks and other economic variables in most In the second half of the 1980s and in the early G-7 countries. Structural changes in these coun- 1990s, some G-7 central banks adopted official tries' banking systems altered the role of banks in targets for the rate of inflation, making the ultimate the monetary transmission mechanism, and techno- goal of monetary policy a target variable. The Bank logical changes, particularly the advance of com- of Canada and, more recently, the Bank of England puter technology, fundamentally revolutionized have taken this approach. financial markets and increased the speed with which financial transactions could occur. In many countries, previously stable money HISTORY OF MONETARY TARGETING demand relationships broke down during the IN GERMANY 1980s.10 Financial innovation and deregulation altered the elasticity of money demand with respect The Deutsche Bundesbank has used monetary tarto income and to interest rates, making monetary geting to guide policy for twenty years.11 The aggregates less reliable as intermediate targets. For Bundesbank Council usually publicizes its target example, by late 1981 the velocity of Ml in the range for monetary growth during the subsequent United States had begun to deviate significantly year in December and reviews the target in July. In from its trend and the linkages between money, setting the target, the Council takes into account income, interest rates, and prices had become less three factors: an estimate of the growth of potential stable and predictable. Since the summer of 1982 output for Germany, a maximum tolerable rate of the monetary aggregates have been deemphasized price inflation, and an adjustment for the downin the United States, although the Federal Reserve ward trend in velocity.12 Recent targets have been continues to announce annual growth ranges. formulated assuming growth of potential output of In some countries, monetary aggregates have 2Vi percent or 23/4 percent, inflation of 2 percent, been deemphasized through a change in targeting and a decline in M3 velocity of 1 percent.13 procedure. For example, as the demand for the broad U.K. aggregate £M3 became less stable, the British government shifted to the much narrower 11. This section relies heavily on material published by the Deutsche Bundesbank in its Monthly Report (various issues, 1975— aggregate MO. Canada abandoned monetary target- 95). Also see Norbert Kloten, "The Control of Monetary Aggreing altogether in 1982. By the end of the 1980s, the gates in the Federal Republic of Germany under Changing Condiproblems with monetary targeting were widely tions," in S.F. Frowen and D. Kath, eds., Monetary Policy and Financial Innovations in Five Industrial Countries: The UK, the USA, West Germany, France, and Japan (New York: St. Martin's Press, 1992), pp. 32-58. 12. Velocity is the rate at which the stock of money turns over in 10. One study that considered the stability of money demand in an economy and defines exactly the relation between the nominal several countries was Ray C. Fair, "International Evidence on the money supply and nominal income. The velocity of German M3 Demand for Money," Review of Economics and Statistics, vol. 69 has trended down over time. (1987), pp. 473-80. Fair concluded that the demand for money had 13. The Bundesbank's figure for "acceptable" inflation— become unstable in most major countries, the only exception being typically 2 percent—is based on a goal of stable prices taking into West Germany. account potential errors in measurement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View 923 The Early Years 2. History of German monetary targeting Rates in percent In December 1974, the Bundesbank became the Target growth rate first central bank to announce a monetary target.14 1 11 H The target was 8 percent growth of the stock of central bank money between December 1974 and (Q4/Q4) [ year December 1975.15 Germany's experience with \' monetary targeting since that first target was announced is summarized in table 2. For the next three years, the target was left at 8 percent growth of the stock of central bank money, but the measure was changed to annual average growth. The target was missed in all four early years, making the link between the stock of central bank money and I P l^ 1 IS • [ ' ' I . • 11 monetary policy actions unclear. 3tf ::: 1 & 1 In 1979, the target was changed in two ways. First, the measure was changed once again, from 1.............................................._......! annual average growth of central bank money to growth from fourth quarter to fourth quarter. Sec- 1 ond, the target was specified as a range of accept- Jjgjjj B 1 5. A 8 Y N e o s 2 1 . 7 8 l l i ' l l ii able outcomes rather than a single rate. The latter «siii8lgM88«gi I change was intended to permit some scope for * NOTE. Targets through 1987 refer to the central bank money stock, policy maneuvering, understanding that the predic- thereafter to M3. Data are for West Germany through 1990 and unified tion of money growth over a short period is inher- Germany thereafter, and have been adjusted to remove the break in level associated with unification. ently imprecise. Following these changes, until 1. In the early years, the target period (and thus the period for measuring 1986, the growth of the stock of central bank actual growth) was not Q4/Q4: In 1975, the period was December 1974 to December 1975; for 1976-78, the period was the annual average growth rate money was consistently within its target range.16 over the calendar year. In 1986, the growth of central bank money was 2. Figures for actual growth before 1988 have been rounded. 3. Inflation is measured by the change in western German consumer more than 2 percentage points above the upper prices. limit of its target range. Even so, the Bundesbank 4. Actual growth rate is annual rate of growth of M3 between 1994:Q4 and July 1995; the rate of inflation is inflation in August 1995 relative to did not raise official interest rates during the year. August 1994. A number of factors likely contributed to the SOURCES. Deutsche Bundesbank, The Monetary Policy of the Bundesbank, March 1994, and Monthly Report, selected issues. Bundesbank's reluctance to raise interest rates. The deutsche mark increased in value 35 percent against the U.S. dollar over the year, making German exports less competitive in international markets and, along with a decline in world oil prices, putting considerable downward pressure on domestic 14. Bundesbank Council member Otmar Issing provided an prices. As a result, consumer prices in West Gerinteresting discussion of Germany's experience with monetary many (as measured on an annual average basis) targeting in a paper delivered at the conference on "Monetary declined. Falling prices, combined with a flat yield Policy in an Integrated World Economy," Kiel, Germany, June 1995. curve, encouraged the holding of short-term assets 15. Central bank money is defined as total currency in circula- included in the stock of central bank money, boosttion plus (1) sight deposits multiplied by a factor of 0.166, (2) time ing the growth of the aggregate. Raising interest deposits having maturity of less than four years multiplied by a factor of 0.124, and (3) savings deposits having maturity of less rates under such circumstances would have risked than four years multiplied by a factor of 0.081. (The factors further appreciation of the mark and the consequent represent the reserve ratios effective in January 1974.) negative effects on growth and prices. In 1987, the 16. Technically, the target was undershot slighdy in 1980 and 1981. However, if actual growth rates are rounded up to the nearest growth of the central bank money stock again half percentage point, as was the Bundesbank's practice, the targets substantially exceeded the upper limit of its target were met. See Deutsche Bundesbank, The Monetary Policy of the range, owing primarily to very rapid expansion of Bundesbank (Frankfurt: Deutsche Bundesbank, March 1994), p. 118. bank notes and coins. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

924 Federal Reserve Bulletin • September 1995 The Switch to M3 Unification The wayward behavior of central bank money in For 1990, the Bundesbank once again specified a 1986 and 1987 led the Bundesbank to switch its target range, to reflect the uncertainties associated focus to the monetary aggregate M3 and to adopt it with the monetary and economic union of West and as a formal target in 1988. At the time, the Bundes- East Germany and to reaffirm to the public that bank cited the rapid growth of currency and its unification had not changed the strategy or ultimate relatively heavy weight in the central bank money goal of monetary policy. The readoption of a target stock, along with the similarity between the behav- range may also have been motivated by a desire to ior of the central bank money stock and M3, as the harmonize monetary targets across European counreasons for its move to the broader aggregate.17 M3 tries in the first stage of European monetary union, growth slightly exceeded the upper limit of its which began July 1, 1990. German monetary and target range in 1988, as the lagged effects of inter- economic unification in mid-1990, in which resiest rate cuts executed in 1987 continued to boost dents of the former East Germany traded in their money demand and also because more deutsche ostmarks for deutsche marks, led to an increase in mark notes were being demanded abroad. Also, in the level of M3 on the order of 16 percent (the shift anticipation of a withholding tax on capital income is apparent in table 3 but has been adjusted for in announced in the second half of 1988 and sched- the figures shown in table 2). Still, M3 expanded uled to take effect at the beginning of 1989, many within its target range for the year. German investors had begun to liquidate their In 1990, the contribution of eastern Germany to longer-term deposits not included in the M3 aggre- total German output was roughly IV2 percent, subgate and to move into cash.18 stantially smaller than the 16 percent share of M3 For 1989, the Bundesbank announced a target held by eastern residents.20 Sluggish growth of M3 for M3 growth of "about 5 percent," the single through mid-1991 was thought to reflect portfolio figure intended to imply somewhat more flexibility shifts by eastern German residents out of the than that in earlier years because the figure was at shorter-term assets included in M3 and into longerthe upper end of the range that would have been set term assets. When M3 growth picked up toward the on the basis of the standard criteria (that is, 3 per- end of 1991, the Bundesbank cited as factors undercent to 5 percent). M3 growth slowed considerably lying its acceleration the increased use of deutsche in 1989 in response to the Bundesbank's tightening marks in the countries of eastern Europe and the of monetary conditions and also as a result of the republics of the former Soviet Union and the brisk rescinding of the withholding tax on capital income pace of credit expansion (about one-fourth to oneat midyear.19 M3 expanded 4.6 percent between the third of which was thought to represent subsidized fourth quarter of 1988 and the fourth quarter of lending in eastern Germany) (table 3). 1989, and thus the target was achieved. ERM Turmoil and the Withholding Tax Despite the broad changes in the German economy 17. The Bundesbank stated: "[I]n the past two years the central at unification, monetary targeting was largely on bank money stock has tended to exaggerate monetary growth because of the large share of currency in it (and the exceptionally track until 1992, when various "special factors" fast growth of this component). Over the long term, the central bank money stock and the money stock M3 have moved largely parallel to one another. They are therefore of comparable value as 20. That eastern Germans held 16 percent of M3 balances while guidelines for a monetary policy oriented to non-inflationary eco- producing only IV2 percent of all German output reflects the nomic growth over the medium term" (Monthly Report of the exchange rate used to convert ostmarks to deutsche marks at the Deutsche Bundesbank, February 1988, p. 9). time of unification and the greater fraction of wealth held as money 18. The withholding tax (known as the "minor investment balances (due to the underdevelopment of financial markets in the income tax") of 10 percent was withheld at the source. east). After unification, economic activity in the eastern states fell 19. The withholding tax was abolished on July 1. Because the dramatically, bottoming out in 1991, when output was only 7 pertax had applied to foreign as well as domestic investors, foreign cent of all German GDP. Output in the eastern states has recovered asset holders had fled German capital markets—an unintended steadily since and at the end of 1994 accounted for 9 percent of all consequence of the tax. German real GDP. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View 925 resulted in growth of 9.5 percent (fourth quarter 3. Change in components of German M3 over fourth quarter), exceeding the upper limit of Percent the Bundesbank's target range by 4 percentage 1 SMto t Savin** 1 Time 1 MeMO: points. One element of M3's brisk expansion in Year Currency ^'f,"^ deposits deposits ChanSe in 1992 was the continued rapid growth of currency (table 3): Continued high demand in eastern Euro- 1990.... JS 8.6 -5.4 21.2 7.5 1991 .... 16.6 29.4 11.4 23.8 21.4 pean countries and the former Soviet republics 1992.... 11.8 10.0 2.3 14.7 10.1 boosted currency growth throughout the year. 1993 .... 8.5 8.7 10.7 7.1 7.8 Other, more important special factors were the 1994 .... 7.2 6.4 13.2 -7.4 8.6 1995 .... 111 3.4 3.5 11.8 -19.3 5.1 September 1992 crisis in the ERM and the massive deutsche mark intervention associated with it,21 as NOTE. Change is measured from the fourth quarter of the preceding year to the fourth quarter of the year indicated. Data are for West Germany for well as the reintroduction of a withholding tax on 1990, unified Germany thereafter; growth rates for 1991 reflect a shift resulting from unification (and thus they do not correspond to the M3 growth interest income, effective January 1, 1993, which rates in table 2). For 1995, growth of M3 components is for July (not initially induced Germans to trade securities for seasonally adjusted) relative to July 1994, and change in bank credit is the cash.22 Another special factor in 1992 was the fall twelve-month growth rate through June. of long-term interest rates to levels below shortterm rates, which led to shifts from longer-term The growth of M3 slowed significantly in early assets excluded from German M3 to time deposits 1993 as the shifts into currency associated with the having maturity of less than four years (which are imposition of the withholding tax began to unwind included in M3). (as currency moved out of Germany), but the aggregate began to grow rapidly again in early summer, and the growth rate ended the year about 1 percentage point above the 6V2 percent upper limit of the target range. The particular special 21. During the ERM crisis in September 1992, intervention by the Bundesbank totaled more than DM 92 billion ($63 billion) as factors that influenced the behavior of M3 in 1993 authorities attempted to keep ERM currencies from rising above are less clear than those present in 1992. The their upper target limit relative to the deutsche mark. The Bundes- Bundesbank again cited the greater use of the mark bank did not sterilize this intervention immediately; in its view, the available monetary instruments (weekly repurchase operations) as a parallel currency outside Germany, pointed to were not sufficient to withdraw such a large volume of liquidity the effects of the massive intervention in foreign from the markets at one time. Thus, the sterilization took place exchange markets during another episode of ERM gradually, causing M3 to swell during the interim period. (Had the Bundesbank chosen to withdraw such a volume of liquidity rapidly, turmoil in late July, and mentioned the continued the resulting spike in interest rates would have jeopardized an inversion of the yield curve. already weak domestic economy and risked further destabilization Though M3 growth exceeded its target in 1993, of the ERM.) The Bundesbank attempted to lessen the difficulties associated with sterilizing the large inflow into M3 by immediately it was the excessive growth during the first half of shortening the maturity of repurchase contracts (from predomi- 1994 that caused intensified concern about the nantly four-week to two-week contracts) and, beginning in early ultimate viability of M3 targeting for Germany 1993, by issuing short-term paper (known as Bulis) to nonbanks. 22. In response to a ruling by the Federal Constitutional Court in (chart 2). The Bundesbank attributed M3's surge to mid-1991 that declared the prevailing treatment of interest income a number of special factors, both economic and to be unconstitutional, the withholding tax on interest income was statistical. One was the anticipation of a change in reinstated. However, the withholding tax instituted in 1993 differed in several ways from the one effective in 1989: First, the interest the law regarding the withholding tax on interest income exemption was raised by a factor of ten, to DM 6,000 per income that was to take effect on January 1, 1994, person; second, the rate of taxation was increased from 10 percent which induced a reflow of investment funds from to 30 percent (35 percent for over-the-counter transactions); third, foreign holders of German assets were effectively exempt from the Luxembourg to Germany in December 1993.23 At tax. Because the new withholding tax applied only to interest on the end of December 1993 the level of M3 was investments with banks located in Germany, residents seeking to already above the average level for the fourth avoid the tax traded securities for currency in the late months of 1992. Eventually the cash was transported to Luxembourg (and quarter (the base period for the target) by some other locations outside Germany) and reinvested, often in branches of German banks (which were not legally required to withhold tax on interest income). These actions caused a swelling of the currency component of M3 toward the end of 1992 and a subsequent 23. Effective January 1,1994, the withholding tax was extended reversal early in 1993 as the funds were reinvested outside to income accruing to investors in Germany from cumulative Germany. foreign investment funds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

926 Federal Reserve Bulletin • September 1995 2. Growth of German M3, 1994-95 From August through December 1994, DM 46 billion flowed into money market funds, helping the Bundesbank meet its monetary target last year.25 Had M3 been redefined to include these funds, growth would have been 6.3 percent, slightly above the upper limit of the target range but still a considerable slowdown from the pace in 1993 26 In December 1994, the Bundesbank reaffirmed that money market funds would not be included in the M3 aggregate but said that they would be included in the next broadest monetary aggregate, extended M3. The Bundesbank also announced its intention to monitor extended M3 and the development of money market funds. NOTE. Growth rates were computed as follows: The monthly level of M3 (seasonally adjusted) was divided by the average level during the target base period and expressed at an annual rate. The target base period for 1994 was 1993:Q4, and for 1995, 1994:Q4. Developments in 1995 DM 64 billion (or 3.6 percent), adding a "monetary The contraction of M3 through mid-1995 has once overhang" to the aggregate that was carried over again raised questions about the appropriateness of into 1994. Another special factor cited by the monetary targeting as a guide for Bundesbank pol- Bundesbank was the expiration of tax incentives icy. Despite a leveling off of funds flowing into for mortgage borrowing, which boosted M3 around money market accounts, M3 has remained weak, the turn of the year. with growth mainly in longer-term assets not A steep rise in long-term interest rates in early included in the monetary aggregate ("monetary 1994 also contributed to the rapid growth of M3 capital formation," in Bundesbank parlance). In early in the year. Uncertainty about whether these July, M3 growth returned to negative territory (with movements were likely to be temporary or perma- June posting the only positive figure so far this nent led to a buildup of liquidity and slowed the year), and the level of M3 remained well below flow of the repatriated investment funds into that in the fourth quarter of last year. In its midyear longer-term assets not included in M3. Eventually, review of the monetary target, the Bundesbank the speculative inflows into time deposits were reaffirmed the 4 percent to 6 percent target range, reversed, and by the end of the year M3 had fallen stating: "[T]he judgment that the long-term back into its target range. demand for money has remained stable, and that the current weakness of monetary growth is largely The Introduction of Money Market Funds a reaction to previous dislocations, warrants neither Another factor influencing M3 growth over 1994 was legislation effective August 1, 1994, that development because it feared that a proliferation of short-term encouraged the development of money market instruments would lead to a loss of monetary control. In Septemfunds in Germany. Although money market funds ber 1994, the Bundesbank stopped issuing Bulis (see note 21), thus had already been permitted in principle, they had reducing the variety of short-term instruments available to money market funds. been allowed to invest no more than 49 percent of 25. More than half the inflow into money market funds—some total assets in short-term paper or bank deposits, a DM 27 billion—occurred in December and was related to a change restriction that effectively prevented their develop- in the taxation of assets effective at the end of the year. The change increased the tax rate on deposits while leaving the tax rate on ment; the new legislation allowed the funds to equities (including money market funds) unchanged. invest exclusively in short-term instruments.24 26. The calculation assumes that domestic money market funds are included in the M3 aggregate. Foreign money market funds (for instance, funds offered by German banks located in Luxembourg) 24. As financial markets in other major industrial countries were have risen as well, but the M3 aggregate by definition is restricted introducing money market funds, the Bundesbank had resisted their to holdings of assets extended by banks located in Germany. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View 927 an abandonment nor a revision of this year's mone- details of model testing and empirical results are tary target. However, since the monetary target is given in appendix A. being considerably undershot at present, it seems The general approach in previous work, and the rather unlikely that the target will be met at the end approach taken in the current study, is as follows: of the year." On August 24, the Bundesbank The M3 equation is initially estimated over the reduced official interest rates, stating that "[t]he pre-unification period and statistical tests are permain reason for this interest rate cut was the persis- formed to ensure that the estimated coefficients are tently weak trend in the money stock." stable. Then the equation's estimation range is extended to include data since 1990, with one or more dummy variables included to account for STABILITY OF GERMAN MONEY DEMAND shifts due to unification. (An impulse dummy is used to detect shifts in a single quarter, whereas a The viability of M3 as an intermediate target for shift dummy is used to detect a permanent change. monetary policy rests on the predictability of the A statistically significant impulse dummy would macroeconomic consequences of a change in the not be evidence of a break in the money demand supply of M3. If a stable money demand function relation, but a statistically significant shift dummy exists in Germany, then a policy-driven change in would be.) Stability is examined by comparing the M3 should have predictable influences on GDP, pre-unification results with results for the extended interest rates, and, ultimately, prices. period. A number of recent studies have examined the In general, the results of earlier studies have stability of German money demand since the unifi- been mixed (table 4). Von Hagen and Hansen and cation of West and East in 1990. Though the stud- Kim rejected the stability of M3 demand, whereas ies have differed in some ways, including the Issing and Todter and the Bundesbank found little number of data observations since unification, the evidence that the long-run relation between money number and definition of explanatory variables, demand and its key determinants changed after and the seasonal adjustment of the data, they have German unification. Gerlach, using a money degenerally taken the same approach: specification mand relation estimated through 1990, forecast and estimation of an equation that explains the German M3 through 1992 and, based on the accudemand for German M3 in terms of income and a racy of the forecast, concluded that the demand measure of the opportunity cost of holding M3. for M3 had remained stable. The OECD concluded Some studies analyzed the demand for nominal M3, that its findings lend tentative support to stability whereas others focused on real M3 (the nominal despite a small but statistically significant estimate stock of M3 deflated by some measure of prices), •> for the shift dummy variable. The common formulation of the money demand As in some earlier studies, our equations for function, used in most previous studies and in the estimating the long-run money demand relationwork reported here, is a dynamic error-correction ship explained real M3 in terms of real GDP and representation in which the long-run, or equilib- an interest rate to proxy for the opportunity cost of rium, relationship between M3 and its determinants holding money (table 5). In contrast to most earlier is embedded in an equation that captures short-run studies, however, we included real net financial variation and dynamics.27 Stability of M3 since wealth in the equation and estimated it using data German unification is essentially a question about that had not been adjusted for seasonal variation. the stability of the long-run relationship within the We constructed a measure of real net financial dynamic error-correction representation. This sec- wealth by extrapolating biannual data on flows and tion focuses on the estimated long-run relationship; stocks of financial assets held by households. The wealth variable was not significant, perhaps indicating statistical problems with our measurement 27. See D.F. Hendry and N.R. Ericsson, "Modeling the Demand of real wealth. However, inclusion of real net for Narrow Money in the United Kingdom and the United States," European Economic Review, vol. 35 (1991), pp. 833-86, and J.M. wealth substantially reduced the estimated respon- Kremers, N.R. Ericsson, and J.J. Dolado, "The Power of Cointegra- siveness of money demand to real income, production Tests," Oxford Bulletin of Economics and Statistics, vol. 54 ing a more plausible result (most earlier studies (1992), pp. 325-48, for discussions of this approach. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

928 Federal Reserve Bulletin • September 1995 4. Studies of the stability of German money demand since unification Estimation Dependent Explanatory Author period variable variables Von Hagen1 1965:Q1-9I:Q4 Change in M3 velocity Real GDP or absorption, interest rate on No (1993) public bonds, seasonal dummies OECD2 1970:Q1-92:Q4 Change in real M3 Real GDP, opportunity cost, shift dummy Yes? (1993) for 1991:Q1 OECD3 1970:Q1-93:Q4 Change in real M3 Real GDP, 3-month interest rate, interest Yes? (1994) rate on public bonds, shift and impulse dummies for 1991 :Q1 Gerlach4 1971:Q1-90:Q4 Change in M3 Real GDP, opportunity cost, impulse Yes (1994) dummyfor 1990:Q2, shift dummy for Issing and Tbdter5 1976:Q1-93:Q2 4-quarter change in real M3 not Real GDP, opportunity cost, inflation, Yes (1995) adjusted for seasonal factors seasonal dummies, impulse dummy for 1990:Q2 Bundesbank6 1975:Q1-95:Q1 Change in M3 Nominal GDP, interest rate on bearer securi- Yes (1995) ties, nominal financial wealth, shift and impulse dummies for 1990.Q3, impulse dummies for major tax changes in 1993 and 1994 Hansen and Kim7 1974:Q1-92:Q4 Change in real M3 Real GDP, 3-month interest rate, interest No (Forthcoming) rate on public bonds NOTE. Data used in the studies were seasonally adjusted unless otherwise 5. O. Issing and K.-H. TBdter, "Geldmenge und Preise im vereinigten noted. Deutschland," in D. Duwendag, ed., Neuere Entwicklungen in der Geld- 1. Jiirgen Von Hagen, "Monetary Union, Money Demand, and Money theorie und Wahrungspolitik, Schriften des Vereins ftir Socialpolitik (1995), Supply: A Review of the German Monetary Union," European Economic pp. 97-123. Review, vaL 37 (1993), pp. 803-36. 6. Deutsche Bundesbank, "Review of the Monetary Target and Restruc- 2. Organisation for Economic Co-operation and Development, 1992-93 turing of the Minimum Reserve Requirements," Monthly Report (July 1995), Economic Survey, Germany (Paris: OECD, 1993). pp. 17-35. 3. Organisation for Economic Co-operation and Development, 1993-94 7. Gerd Hansen and Jeong-Ryeol Kim, "Stability of German Money Economic Survey, Germany (Paris: OECD, 1994). Demand: Tests of the Cointegration Relation," Weltwirtschaftliches Archiv, 4. Stefan Gerlach, "German Unification and the Demand for German forthcoming. M3," Bank for International Settlements Working Paper 21 (Basle: 1994). reported an income elasticity well in excess of tunity cost variable, which some earlier studies of unity, a finding that does not accord with economic German money demand found to be relatively high. theory). The inclusion of wealth also reduced the The use of data that were unadjusted for seasonal estimated semi-elasticity with respect to the oppor- variation allowed us to estimate the seasonal effects directly and to test whether the seasonal pattern shifted at unification. It also lengthened the postunification sample period by two observations. 5. Equations for estimating equilibrium money demand Although our approach differed somewhat from used in current study those of earlier studies, our findings are similar to For period before G erman unification: Swfil'iSSttw the earlier results regarding the effects of German Real M3 - 0.58 x real income unification on the long-run demand for real M3. That is, the equilibrium money demand function - 1.76 x opportunity cost appears to have been largely stable since unifica- + 0.41 x real net wealth mp tion despite some changes in short-run dynamics + constant and a level shift in 1990 (table 6). Our long-run §#|||ff; estimates do, however, indicate some increase in For entire period: l l l jj the sensitivity of real money demand to real income Real M3 = 0.75 x real income and some decline with respect to changes in real net wealth. The shift in the income and wealth - 1.83 x opportunity cost elasticities could be signaling a shift in the long- + 0.34 x real net wealth run relationship. However, at the time of unifica- + constant tion, residents of eastern Germany were holding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View 929 6. Estimates of the change in demand 3. Prediction errors for the stock of German real M3 for real German M3 NOTE. Vertical line marks time of unification of monetary statistics for East and West Germany. over the past two and a half decades despite the unification of East and West Germany in 1990. Thus, the Bundesbank's continued use of M3 as its primary intermediate target in pursuit of price stability—while other central banks have de-emphasized monetary aggregates as a guide to policy— NOTE. Statistical significance was computed using heteroskedasticconsistent standard errors (HCSEs). seems justified. * Significant at the 5 percent level. ** Significant at the 1 percent level. With the many changes worldwide in financial markets and economic relations over the past two most of their financial wealth in the form of M3, decades, the stability of the long-run relation of the and some additional diversification out of M3 stock of money to income and prices in Germany is assets is likely. Thus, it is probably still too early in perhaps surprising. The relative stability may be the post-unification period to ascertain conclu- due in part to the historical pattern of financial sively whether the long-run demand for German change in Germany. In contrast to that in other M3 has remained stable. G-7 countries, domestic financial liberalization To assess the accuracy of our model, we exam- was well advanced in Germany by 1970 and has ined the prediction errors for the level of real M3 progressed relatively slowly since then. Foreign (chart 3).28 Despite the apparent stability of long- exchange controls were removed in the 1950s, run money demand, prediction errors and the vari- and controls on interest rates were abolished in ability of those errors have become noticeably 1967—in line with a longstanding tradition of larger since unification. Recently, large prediction liberal banking and capital market policies. errors have tended to coincide with periods when Whereas financial change in the form of finanspecial factors, such as tax or regulatory changes, cial liberalization came early in Germany, financial were present. change in the form of the development of new financial instruments—a source of instability in money demand in many other major industrial CONCLUSIONS countries—has been relatively slow to evolve. For example, the German short-term money market is Empirical evidence from the study reported here as quite limited; instruments similar to U.S. threewell as from earlier studies indicates that the demonth Treasury bills do not exist, and the public mand for German M3 has remained largely stable has little access to interbank money markets. Several factors underlie the slower pace of finan- 28. As the dynamic error-correction representation is based on cial innovation in Germany compared with that changes in holdings of real M3, we cumulated the predicted in other G-7 countries. In several G-7 countries, changes from the initial level to obtain constructed levels. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

930 Federal Reserve Bulletin • September 1995 controls on exchange rates and interest rates in the specification in which the long-run relationship is 1970s and early 1980s prompted the creation of embedded and discuss the estimates for the shortnew financial instruments designed to circumvent run dynamics of the money demand function. these controls. In Germany, the early removal of We began our analysis with a very general specisuch controls, combined with the relatively low fication of a dynamic error-correction formulation rate of inflation, may have reduced the need for of the demand for M3 balances: financial innovation. Germany's proximity to Luxembourg, a financial center that offers a full array (1) A(L)A(ra -p) = OCQ + a(L)Ay + a (L)Ap { 2 of financial instruments and that has often served as an investment outlet for German asset holders, + <X 3 (L)A/ + 0C4)>_i may also have played a role. The relative stability of German money demand + aLi + a(w-p)_i 5 6 resulting from the slower pace of financial change over the past few decades has been a key ingredient + a (m-/?)_! + A SQL 7 S in the Bundesbank's success in using monetary targeting to achieve low inflation. Another key + A^SQ2 + (XIOS<23, ingredient has been the central bank's flexibility and credibility. Whenever the monetary target has where A(L) and a(L) are polynomials in the lag become less useful because of exchange-rate or operator, L; A denotes the difference operator; other considerations, the Bundesbank has allowed (m - p) is real M3 balances; y is real GDP; p is the M3 to miss its target temporarily and has suffered GDP deflator; i is the interest rate on public bonds little loss of credibility. Another important factor (a proxy for the opportunity cost of holding M3 has been the popular consensus against inflation, balances); (w - p) is real net financial wealth of which is probably stronger in Germany than in households; and SQ\, SQ2, and SQ3 are seasonal most other countries. dummies that take the value of 1 in the quarter The future for monetary targeting in Germany is indicated and 0 elsewhere. The lower case varinot clear. Further financial changes undoubtedly ables (other than i) are natural logarithms. will come, raising the potential for instability in the Our initial specification included four lags of relation between money and prices. As Europe the differenced variables (the variables preceded by moves toward establishing a European Central a(L)A in eq. 1). The equation was subsequently Bank, issues regarding the best intermediate targets pared down because the estimated parameters and operating procedures are being actively dis- proved to be statistically insignificant. (At each cussed at the European Monetary Institute.29 The stage of the reduction process, we also used the Bundesbank's experience with monetary targeting Schwarz information criterion to judge the undoubtedly will influence the future course of information content of each equation and checked European monetary policy. for serial correlation of the residuals.) The parameters of the dynamic money demand equation estimated over the pre-unification period are shown in table 6. APPENDIX A: We were unable to find many explanatory vari- DETAILS OF ESTIMATION AND RESULTS ables in differenced form that entered the equation This appendix discusses our general empirical describing the change in real money balances. In approach. The estimated long-run (or equilibrium) particular, we never found that the addition of the money demand relationship was presented earlier growth rate of real GDP or its four lagged values and is not repeated. Here we lay out the general improved the fit of the equations. The estimated coefficient on the contemporaneous change in the yield on public bonds was posi- 29. Issues of currency substitution and stability of European tive and significant at the 5 percent level, but it was money demand in Europe are discussed in Deutsche Bundesbank, smaller in magnitude than the coefficient on the "Demand for Money and Currency Substitution in Europe," lagged change in interest rates, which was nega- Monthly Report (January 1995), pp. 33^9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

German Monetary Targeting: A Retrospective View 931 tive, as expected. In the short run, the change in part to the inclusion of dummy variables to detect interest rates may proxy for changes in short-term shifts at unification. or own interest rates (that is, the rate paid on assets Table 6 also presents the estimation results over included in the M3 aggregate), which would tend the extended sample period. Initially, we included to boost the demand for real M3 balances. several dummy variables to capture possible effects The parameters of our relationship proved to be of changes in definitions of data and in economic sensitive to the particular interest rate used, as behavior due to unification. When estimated other authors have noted. The own rate was consis- through the fourth quarter of 1994, the results gave tently insignificant in estimation for a number of strong support for impulse dummies in the second different definitions. We constructed average own and third quarters of 1990 (coinciding with breaks rates and marginal own rates from available data in the M3 and GDP series respectively), but a on the yields on savings deposits and time deposits permanent shift dummy variable in mid-1990 was (the interest-bearing components of German M3). not statistically significant. The coefficients indi- However, the data did not allow any of these mea- cate a rise in real M3 balances of about 14 percent sures of the own rate to be constructed without in the second quarter of 1990, followed by a further some approximation, and the process of approxi- 3V percent boost in the third quarter. In addition, 4 mation may have introduced enough measurement there is some evidence that the seasonal pattern of error to make the variable insignificant in our money demand changed at unification, particularly regressions.30 in the first quarter. The estimated coefficient on Ap (differenced prices) is significantly negative, indicating that, within a quarter, the demand for M3 is not homoge- APPENDIX B: DATA neous with respect to prices: A change of 1 percentage point in the GDP deflator erodes real balances All observations used in the study were quarterly by almost 3A percentage point. To some extent, this log levels of not seasonally adjusted data. result may be related to the different periodicities Money. End-of-period levels of M3. Data for of money and prices, as M3 data are end-of-quarter West Germany only through 1990:Q1; unified figures whereas the GDP deflator is a quarterly Germany thereafter. (The targeted aggregate M3 is average.31 defined on the basis of seasonally adjusted, period We performed several diagnostic procedures to average data.) Source: Bundesbank. test for the presence of autocorrelation, autoregres- Real GDP. Data for West Germany only through sive conditional heteroskedasticity (ARCH), and 1990:Q2; unified Germany thereafter. Sources: normality of the residuals and found no evidence Bundesbank (West Germany and western states) of any problems.32 However, we did find evidence and Federal Statistical Office and the Deutsches of some conventional heteroskedasticity, owing in Institut fur Wirtschaftsforschung (eastern states). GDP Deflator. Constructed from real and nominal GDP. Data for West Germany only through 30. In his estimated equations for the pre-unification period, 1990:Q2; unified Germany thereafter. Von Hagen omitted the interest rates on savings deposits and time Interest Rate. Average yield in the secondary deposits included in M3 on the grounds that the rate on savings deposits did not vary enough during the sample period and the rate market on all public sector bonds. Source: on time deposits was not available for a long enough period of Bundesbank. time. See Jiirgen Von Hagen, "Monetary Union, Money Demand, Wealth. Constructed and interpolated from and Money Supply: A Review of the German Monetary Union," European Economic Review, vol. 37 (1993), pp. 803-36. biannual flows of net financial wealth of house- 31. We used end-of-quarter M3 data to reduce the possibility of holds. Data for West Germany only through any within-quarter feedback from money to prices. 1990:Q2; unified Germany thereafter. Source: 32. ARCH is a special type of heteroskedasticity in which the Bundesbank. • variance of the residuals exhibits an autoregressive pattern. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

932 Industrial Production and Capacity Utilization for August 1995 Released for publication September 15 by sharp gains in the output of motor vehicles and of related parts and materials; most other industries Industrial production rose 1.1 percent in August also posted production increases. The output of after a revised gain of 0.3 percent in July. Manufac- utilities increased nearly 5 percent further as the turing output, which increased 1 percent, was led heat wave continued; mining output decreased Industrial production indexes Twelve-month percent change Twelve-month percent change 10 10 Materials 5 5 + Products 0 1989 1990 1991 1992 1993 1994 1995 1989 1990 1991 1992 1993 1994 1995 Capacity and industrial production Ratio scale, 1987 production =100 Ratio scale, 1987 production =100 — Total industry Capacity 140 — Manufacturing Capacity ___— 140 120 120 _ 100 100 ^ Production Production 80 80 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing Utilization 90 Utilization 90 80 80 70 70 J I L J I L J I L J L J I L 1981 1983 1985 1987 1989 1991 1993 1995 1981 1983 1985 1987 1989 1991 1993 1995 All series are seasonally adjusted. Latest series, August. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

933 Industrial production and capacity utilization, August 1995 Industrial production, index, 1987 = 100 Percentage change Category 1995 19951 Aug. 1994 to Mayr Juner Julyr Aug. Mayr Juner Julyr Aug.P Aug. 1995 Total 121.4 121.2 121.6 123.0 -.1 1.1 3.2 Previous estimate 121.2 121.1 121.3 -.1 Major market groups Products, total2 118.2 118.4 118.5 119.9 .1 .2 .1 1.2 2.7 Consumer goods ... 114.4 114.6 114.3 116.1 .0 .2 -.3 1.5 2.0 Business equipment 154.9 156.0 157.6 159.0 .0 .7 1.0 .9 6.8 Construction supplies 107.1 107.3 106.9 107.9 -1.3 .2 -.4 .9 -.3 Materials 126.3 125.6 126.4 127.7 .1 -.6 .7 1.0 4.0 Major industry groups Manufacturing 123.2 123.1 123.1 124.3 -.1 -.1 .0 1.0 2.8 Durable 130.1 130.6 130.9 132.7 -.2 .3 .2 1.4 4.5 Nondurable 115.5 114.8 114.4 114.9 .1 -.6 -.3 .4 .8 Mining 100.5 100.4 101.1 99.7 -.2 -.2 .7 -1.4 -.3 Utilities 122.1 121.8 126.0 132.2 3.4 -.2 3.5 4.9 11.2 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1994 1995 AAvveerraaggee,, LLooww,, HHiigghh,, ccchhhaaannngggeee,,, 11996677--9944 11998822 11998888--8899 AAAuuuggg... 111999999444 Aug. Mayr June' Julyr Aug.? tttooo AAAuuuggg... 111999999555 Total 82.0 71.8 84.9 84.5 84.0 83.7 83.7 84.3 3.5 Previous estimate 83.9 83.6 83.4 Manufacturing 81.3 70.0 85.2 83.8 83.1 82.8 82.5 83.0 3.9 Advanced processing 80.7 71.4 83.5 82.1 81.4 81.4 81.0 81.6 4.4 Primary processing . 82.5 66.8 89.0 88.3 87.5 86.4 86.2 86.5 2.6 Mining 87.4 80.6 86.5 89.7 90.2 90.1 90.8 89.5 -.1 Utilities 86.7 76.2 92.6 87.8 89.2 88.9 91.9 96.3 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. 1.4 percent, more than reversing the gain in July. increases recorded in June and July; gains in the At 123.0 percent of its 1987 average, industrial output of both industrial equipment and informaproduction in August was 3.2 percent above its tion processing and related equipment were level of August 1994. Capacity utilization rose sizable. The output of construction supplies turned 0.6 percentage point, to 84.3 percent. up, rising nearly 1 percent in its first significant When analyzed by market group, the data show gain since January; nonetheless, production in this that the output of consumer goods increased market category remained well below the high 1.5 percent, boosted by the gains in motor vehicle levels at the turn of the year. assemblies and in utility output for residential use. The output of materials rose sharply last month Excluding motor vehicles and utilities, the output because of sizable increases in the production of of consumer goods rose 0.6 percent after having the energy and durable goods components. Another fallen about 1 Vk percent between January and July; weather-related jump in electricity generation the gain in August largely reflected increases in the accounted for the gain in energy materials. Among production of appliances, furniture, consumer durable goods materials, production increased sigchemical products, and food. nificantly in parts and materials for use in motor The production of business equipment advanced vehicles and high-technology equipment. The out- 0.9 percent, about the same as the monthly put of nondurable materials rose for the second Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

934 Federal Reserve Bulletin • September 1995 consecutive month but has reclaimed only a part of The factory operating rate, which had been its June plunge. In August, the output levels for declining since early this year, rose 0.5 percentage both textile and paper materials were still well point in August, to 83.0 percent. Although still below those of May, while the output of chemicals below its recent peak, the utilization rate in manuhad nearly recovered. facturing was nearly 2 percentage points above its When analyzed by industry group, the data show 1967-94 average. The rise in the operating rate in that factory output rose 1 percent in August, with August was more pronounced among advancedthe most pronounced gains in durables. As a result processing industries than among primaryof the increase, the August level of manufacturing processing industries. The level of utilization in output was only slightly below the recent peak in advanced-processing industries was 1.6 percentage January. Most major durable goods industries points below its recent peak; for primaryposted gains of about 1 percent or more in August. processing industries, the gap was 4.3 percentage The output of motor vehicles and parts increased points. 4.2 percent, the first notable gain in this industry The abnormally high temperatures in July and since early this year. Another sharp advance in August pushed electricity output well above trend the production of computers and related compo- and boosted the operating rate for utilities to nents contributed significantly to the increases in 96.3 percent in August, the highest level since May industrial machinery and equipment and in electri- 1970. The operating rate for mining fell 1.3 percal machinery. The output of nondurables rose centage points, largely because of a sharp cutback 0.4 percent, reversing the loss in July. Declines in in coal mining. • paper production and petroleum refining offset some of the gains in the other major nondurable industries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

935 Statement to the Congress Statement by Alan Greenspan, Chairman, Board of With deposit insurance, as it is currently admin- Governors of the Federal Reserve System, before istered and funded, depositors do not move their the Subcommittee on Financial Institutions and funds from depository institution to depository Consumer Credit of the Committee on Banking and institution based on the soundness of particular Financial Services, U.S. House of Representatives, insurance funds. Depositors are generally unaware, August 2, 1995 and indeed should be unconcerned, about the Bank Insurance Fund (BIF) versus SAIF. In the mind of I am pleased to be able to appear here today to offer the typical depositor, the Federal Deposit Insurance my thoughts on the status of the Savings Associa- Corporation (FDIC) provides the insurance, and tion Insurance Fund (SAIF) and on deposit insur- the details of one fund versus another receive little ance more generally. attention. The combination of deposit insurance and a cen- Competitive depository institutions cannot differtral bank providing discount window credit has entiate themselves by the quality of the deposit made the contagion of bank runs that often charac- insurance that is offered because it is the same terized the nineteenth century and the first third of insurance regardless of whether it is from BIF or the twentieth century an anachronism. The United SAIF. In either case, it is government-mandated States has not suffered a financial panic or systemic and government-sponsored deposit insurance. For bank run in the past fifty years. In large part, this identical insurance, it is rational that depository reflects the safety net, whose existence, as much as institutions seek the one available at the lowest its use, has helped to sustain confidence. cost. If a substantial difference in deposit premiums But deposit insurance is not without its costs. By exists between SAIF and BIF, the institutions payrelieving depositors of the consequences of bank ing the higher premium will pursue insurance failure, government guarantees of bank deposits offered by the other insurance fund unless there is make depositors relatively indifferent to bank fail- some other reason to remain with their current ure and thus encourage banks to have larger, riskier fund. asset portfolios than would be possible in a wholly Although today we are discussing what to do market-driven intermediation process. Without about SAIF, I want to stress that the problem we the safety net, additional risks would have to be are addressing is a general one. If there is no reflected in some combination of higher deposit substantial difference between BIF and SAIF insurcosts, greater liquid asset holding, or a larger capi- ance and if there is no substantial difference tal base, and these, in turn, would constrain risk- between the advantages granted to BIF institutions taking. In the late 1980s and early 1990s, the or SAIF institutions, then anytime one deposit in- Congress responded to problems at insured deposi- surance fund has difficulties that result in substantory institutions—and their insurance funds—with tially higher deposit premiums, members will try to legislation designed to induce these entities to be shift to the other deposit insurance fund. In the more prudent risk-takers. process, the disadvantaged fund becomes increas- Today, we are here to address an evolving com- ingly vulnerable to insolvency as its premium base petitive imbalance and other implications of two declines. This, in turn, engenders a still greater insurance funds with sharply different premiums. incentive to leave the troubled fund or requires the But it is critical to underline that even if there were payment of still higher premiums to support it. no evolving problem with SAIF, the existing Short of effective barriers to exit, once initiated the deposit insurance system, with its reliance on two downward spiral does indeed lead to fund insolfunds, would be inherently unstable. vency. Thus, having two deposit insurance funds Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

936 Federal Reserve Bulletin • September 1995 creates a mechanism that is prone to instability Using the FDIC's projections of future deposit now, and probably in the future. Today, the prob- premiums, a migration of only $40 billion to lem is at SAIF; it may, at some date in the future, $50 billion per year of SAIF deposits to BIF deposbe at BIF. its might yield higher deposit premiums for exist- The Congress can attempt to legislate barriers ing BIF members than if those members were to that try to stop institutions from shifting deposits, participate in any of a number of proffered solubut the history of efforts to legislate against such tions to the potential SAIF problem, each of which strong financial incentives is not encouraging. We would remove incentives to migrate. Such a shift of are, in effect, attempting to use government to deposits seems entirely credible if a large deposit enforce two different prices for the same item— premium difference exists between SAIF and BIF, namely, government-mandated deposit insurance. since $50 billion amounts to only 7 percent of the Such price differences only create efforts by market existing SAIF assessment base. Furthermore, even participants to arbitrage the difference. In the this relatively small migration suggests that paypresent case, with SAIF institutions expected ments of The Financing Corporation (FICO) bond to pay at least five times more per year for the interest funded by SAIF could be put in jeopardy in same deposit insurance, this arbitrage means that the very near future. If action is not taken shortly, a SAIF institutions will pursue all avenues open to future congressional appropriation for interest on them profitably to move deposits from SAIF to FICO bonds might be required, or further increases BIF. in SAIF premiums on the smaller SAIF deposit The difference between paying, say, 24 basis base might be necessary, or possibly even the impopoints and paying 4.5 basis points for deposit insur- sition of higher premiums on both SAIF and BIF ance translates into about $1.4 billion per year in deposits might be needed. additional premiums paid for SAIF deposits. For Meanwhile, SAIF institutions will be harmed SAIF institutions, this equals roughly 18 percent of directly by the continuation of a deposit premium their 1994 pretax income. Given the large potential higher than that to be assessed on BIF members, financial gains to SAIF institutions if they move and the returns on capital of SAIF members will be deposits to BIF, the current deposit insurance sys- driven lower than similarly situated competitors. tem will impose a large dead-weight loss on the As I noted, BIF institutions will be harmed by the financial system. Many of the political, policy, inflow of new deposits shifted from SAIF institufinancial, and legal institutions concerned with tions requiring BIF members to pay higher premibanking issues will be preoccupied, for the foresee- ums. The only winners created by the looming able future, with the details of this issue because deposit premium difference between SAIF and BIF SAIF institutions will continually strive to move deposits will be those depositories able to "game" deposits into BIF and BIF institutions will attempt the system and leave SAIF first. The solution to to thwart such movements. this problem is to end this game and merge SAIF Indeed, BIF institutions suffer under the current and BIF. system to the extent that SAIF members success- A prerequisite is to put SAIF on a sound basis. fully shift their deposits to BIF. One way for a This could be accomplished if, as has been recom- SAIF institution to minimize its cost under the mended, the institutions that hold SAIF deposits current system is for that institution either to pay a special one-time assessment to recapitalize acquire or to be acquired by a BIF institution. The SAIF at the legally mandated 1.25 percent ratio of SAIF institution can be funded from nondeposit insured deposits. Such a one-time charge is large: sources, while its depositors are encouraged to shift SAIF member institutions would pay as much as funds to the BIF institution. Current BIF members $6.6 billion, or 85 to 90 basis points of their deposit would almost surely find their premiums higher base. This assessment seems unlikely, however, to than otherwise because the new BIF deposits come drive healthy SAIF members into insolvency, and without the associated insurance fund reserves, weaker SAIF institutions can be allowed a longer requiring older BIF deposits to pay a higher assess- pay-in period. The merging of a recapitalized SAIF ment to maintain the required 1.25 percent reserve with a sound BIF would then consolidate the FICO ratio on both the new and the old deposits. bond obligation of SAIF into the new insurance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 937 fund and effectively obligate past BIF members to Discussions about merging BIF with a recapitalparticipate on a pro rata basis. ized SAIF insurance fund and sharing the FICO Most bankers would argue, with some justice, interest obligation among the members of both that they should not be responsible for this legacy deposit insurance funds raise the question of retainof the thrift crisis in which they played no role. ing separate bank and thrift charters. It is difficult Many may, nonetheless, conclude that two or two to overstate the importance of savings and loan and one-half basis points per year in additional associations in the financing of the residential housdeposit premiums for the FICO interest payments ing market in the first two decades after World may be a price they would willingly pay to finally War II. Their continued demonstration to other remove the incentives of SAIF members to shift to lenders of the basic credit quality of the lower BIF, with the associated increase in the premiums downpayment, long-term, conventional, amortized, of BIF members. residential mortgage instrument revolutionized Even after SAIF is recapitalized, in the years housing finance. Their success led public policyimmediately ahead some large savings and loan makers to look at thrift institutions as innovators associations, still suffering from the residue of past operating at the cutting edge of the market. But difficulties, may continue to represent a risk of beginning in the 1970s, market forces and innovarelatively large loss to their federal deposit insurer. tions began to erode the original purpose of special- If SAIF were not merged with BIF, or if that ized thrift institutions and, hence, their charter. The merger were delayed, the risk of such loss would development of mortgage-backed securities—along expose a recapitalized SAIF both to a reserve short- with the technological revolution facilitated by the fall and to a higher deposit insurance premium to computer—has lessened the special franchise of once again rebuild its reserves. An industry that thrift institutions by creating a secondary market had just paid a large one-time premium to recapital- for most residential mortgages. As a result, the ize its insurance fund would be understandably standard residential mortgage no longer requires concerned about that possibility. If such losses specialized financial institutions to originate or were to occur to a merged BIF-SAIF fund, the fund these instruments. necessity of reserve-building would be shared So far in this decade, savings and loan assoamong banks and thrift institutions pro rata— ciations and savings banks have originated 25 perimplying a larger dollar burden on the larger com- cent of residential mortgages—compared with mercial bank industry. Banks would be understand- 50 percent over the previous twenty years—and ably concerned about such exposure, especially hold, on average, only 28 percent of outstanding after accepting a pro rata share of the FICO interest residential mortgage debt, compared with twoobligation. thirds during the earlier period. Currently, only Both sets of institutions are thus sensitive to the two thrift institutions are among the top fifsmall probability of a large thrift institution's fail- teen mortgage servicers and none are among ure imposing still further costs on them. One way the top ten originators. Over the past decade, to address these concerns is for the Congress to when thrift institutions' participation in the resiarrange a catastrophe contingency funding arrange- dential mortgage market receded, the aggregate ment over, say, the next five years to bridge the supply of housing finance was unimpaired and period over which this risk exists. It has been mortgage rates apparently unaffected. Indeed, suggested, for example, that over such an interval events over the past decade suggest that market public funds be made available in any year that forces and innovations have reduced the relative losses to SAIF, or losses created by current SAIF yield on the standard residential mortgage, while at members to a merged BIF-SAIF, exceed $500 mil- the same time other market forces have made lion. If increased budget outlays are, with good deposit rates increasingly competitive. In such an reason, not acceptable to the Congress, one possi- environment, significant questions are raised about bility is that this catastrophe insurance be financed the economic viability of any institution that by through a small special insurance fee, paid to the law or regulation is required to place most of its Treasury by SAIF members to cover the potential assets in mortgage instruments and fund them in taxpayer risk exposure. the deposit market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

938 Federal Reserve Bulletin • September 1995 Two conclusions are clear. First, the nexus those provisions that penalize diversification for between thrift institutions and housing largely has those that choose to do so. been broken without any detriment to housing Let me conclude by clarifying why the Federal finance availability. Second, a public policy that Reserve is concerned about the SAIF problem and induces—let alone requires—thrift institutions to believes it is necessary to resolve it. The Federal specialize in mortgage finance threatens the contin- Reserve's primary concerns are sustainable ecoued viability of many of these entities—particularly nomic growth and financial stability. A healthy and those without wide and deep deposit franchises, competitive financial system is critical for maintight cost controls, and the ability, when necessary, taining and promoting economic growth. One key to effectively originate and sell standard mortgages component of a healthy financial system is a sound that cannot profitably be held long-term. A broader depository institution system, and an important charter for thrift institutions—such as a commer- component of a sound depository institution system cial bank charter that lets them hold a wider range is that depository institutions are not given artificial of assets—thus would seem to be good public incentives to switch between insurance funds or to policy. abandon an insurance fund to gain competitive Even if such modifications of the thrift charter advantages. Such "regulatory arbitrage" wastes are not adopted, but especially if charter changes scarce and valuable resources that could be much are made, serious consideration ought to be given more productively employed. to reevaluating tax rules that not only induce mort- Furthermore, as we know from our experience in gage specialization but penalize thrift institutions the last recession, uncertainties about the resolution that try to adopt more diversified portfolios. The of insurance fund failures, and the regulatory polispecial bad debt reserve treatment that provides tax cies needed to protect the taxpayer while these benefits—and, hence, subsidy—to mortgage lend- uncertainties are resolved, can only inhibit the willing by thrift institutions should be considered for ingness of depository institutions to lend. While removal going forward. In addition, consideration there were many reasons monetary policy encounshould be given for grandfathering the reserve tered strong headwinds during that period, surely buildup from this past tax subsidy in order to the legislative and regulatory reactions to the taxremove it as a barrier for entities that wish to payer funding of the thrift deposit insurance fund diversify. A penalty should not be charged insti- and to the depleted nature of BIF compounded our tutions that are striving to respond rationally to problems. market realities. Whatever solution is finally adopted, we should Charter changes and adjustment of tax policies not lose sight of first principles. A deposit insurwill not mean that all, or even most, thrift institu- ance system that focuses the attention of banks and tions will give up mortgage originations and port- thrift institutions on the relative status of their folio holdings. These entities have, over the years, funds, and a system that rewards those who can built up special skills that they will continue to use jump ship first, is, to say the least, counterproducin mortgage finance. Some—those with strong cost tive. What is needed is a deposit insurance system controls, greater expertise, and the ability to whose status is unquestioned, so that the deposirespond to changing market conditions—will prob- tories can appropriately focus their attention on the ably continue to be strong, profitable, and viable extension and management of credit in our econinstitutions specializing mainly in mortgage credit. omy. I might also add that a congressional decision But long-run health for the thrift industry as a to provide a more banklike thrift charter and bankwhole, I think, requires that most cannot be mort- like taxation would be consistent with market gage specialists to the same degree as in the past, trends and stronger depositories, and would not be and good public policy must, at a minimum, drop likely to reduce mortgage credit flows. • Similar testimony was presented to the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, July 28, 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

939 Announcements HEMISPHERIC CONFERENCE ON regarding interest rate risk (IRR). The revision BANKING SUPERVISION states that the Board will consider "a bank's exposure to declines in the economic value of its capital The first hemispheric conference on banking super- due to changes in interest rates" in determining the vision was held on August 23, 1995, in Buenos institution's capital needs. The final rule was effec- Aires, Argentina, under the cosponsorship of the tive September 1, 1995. Federal Reserve Board, the Central Bank of Argen- The Board also requested public comment on a tina, and the Center for Latin American Monetary proposed interagency policy statement regarding Studies. the measurement and assessment of IRR. Com- The one-day Pan-American Conference on ments were requested by October 2, 1995. Banking Supervision stems directly from the sum- The agencies sought public comment on a promit of the Americas meeting held last December in posed framework for IRR in September 1993, and Miami. Countries represented at the summit agreed the final rule and proposed policy statement have to "support the cooperative endeavors of the Asso- been designed to take account of the commenters' ciation of Latin American and Caribbean Bank concerns and recommendations. Supervisors and the Council of Securities Regulators of the Americas to provide sound supervision AMENDMENT TO THE RISK-BASED CAPITAL and regulation that support the development and GUIDELINES REGARDING THE TREATMENT OF progressive integration of markets." DERIVATIVE CONTRACTS Thus, the Pan-American Conference on Banking Supervision discussed cooperative efforts to pro- The Federal Reserve Board along with the Office vide sound, comparable supervision and regulation of the Comptroller of the Currency and the Federal of banks in the western hemisphere. Deposit Insurance Corporation is amending the Federal Reserve Governor Edward W. Kelley risk-based capital guidelines for banks and bank addressed the conference on "Fostering Strong holding companies (banking organizations) regard- Financial Markets through Prudential Superviing the treatment of derivative contracts. The final sion." President Roque B. Fernandez of the Central rule was effective October 1, 1995, and is based on Bank of Argentina concluded the conference with a revision to the Basle Accord issued by the Basle a discussion of "Harmonization of Regulatory Supervisors' Committee in April 1995. Structures in the Hemisphere." Heads of supervi- The amendments revise the set of conversion sion from more than thirty countries in the hemifactors used to estimate the potential future credit sphere participated in the discussions during the exposure of derivative contracts and permit bankconference. ing organizations to recognize the effects of bilateral netting arrangements in the calculation of those estimates. RISK-BASED CAPITAL STANDARDS REGARDING INTEREST RATE RISK: FINAL RULE AMENDMENTS TO THE CAPITAL ADEQUACY GUIDELINES FOR STATE MEMBER BANKS The Federal Reserve Board issued on August 2, AND BANK HOLDING COMPANIES 1995, a final rule revising risk-based capital standards to implement section 305 of the Federal The Federal Reserve Board on August 29, 1995, Deposit Insurance Corporation Improvement Act issued amendments to its capital adequacy guide- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

940 Federal Reserve Bulletin • September 1995 lines for state member banks and bank holding Eastern Time (ET) for transfer originations and companies (banking organizations) with regard to 3:30 p.m. ET for reversals for the Fedwire bookthe regulatory capital treatment of certain transfers entry securities transfer system. The Board has also of assets with recourse. The final rule was effective authorized the Reserve Banks to continue to close September 1, 1995. the Fedwire securities transfer service earlier than The amendments implement section 208 of the 3:15/3:30 p.m. ET on certain days when the U.S. Riegle Community Development and Regulatory government and mortgage securities markets Improvement Act of 1994 (Riegle Act). observe partial-day or full-day holiday operations. The final rule will have the effect of lowering the These changes become effective on January 2, capital requirement for small business loans and 1996. leases on personal property that have been The Federal Reserve Banks may grant periodic transferred with recourse by qualified banking extensions of the closing time in response to sigorganizations. nificant operating problems at a major bank or dealer or to prevent market disruption. The Board believes that the new schedule will benefit market participants by reducing uncertainty about the final MODIFICATIONS TO THE POLICY closing time of the system, thus enabling partici- ON THIRD-PARTY ACCESS TO FEDWIRE pants to manage resources more effectively and control costs with greater certainty. The Federal Reserve Board announced on August 10, 1995, that it had approved certain modifications to its policy on third-party access to Fedwire to clarify its applicability and to reduce PROPOSED ACTIONS the administrative burden of several provisions. These changes became effective August 10, 1995. The Federal Reserve Board requested public com- Existing arrangements for third-party access to ment on August 10, 1995, on the benefits and Fedwire should comply with the revised policy by costs of adopting a policy to control access to the March 1, 1996. In particular, to reduce the costs Federal Reserve Banks' automated clearinghouse imposed by the policy, the Board has limited sev- service by entities other than the depository institueral requirements to arrangements in which the tion whose Federal Reserve account will be debservice provider is not affiliated with the Fedwire ited. Comments are requested by November 9, participant. In addition, the Board has clarified the 1995. policy's scope. The Federal Reserve Board and the Department These policy modifications are interim modifica- of the Treasury on August 18, 1995, jointly tions pending the completion of a broader review requested comment on proposed amendments to of supervisory policies that should be applicable to their rule that requires enhanced recordkeeping outsourcing arrangements more generally. The related to certain wire transfers by financial insti- Federal Reserve Banks will not approve any new tutions, in accordance with the Bank Secrecy third-party access arrangements involving a foreign Act. Comments were requested by September 25, service provider pending further analysis of issues 1995. associated with such arrangements. The Board and the Treasury have also deferred the effective date of the recordkeeping rule from January 1, 1996, to April 1, 1996. The Federal Reserve Board announced on APPROVAL OF A FIRM CLOSING TIME August 23, 1995, an extension of time to receive FOR THE FEDWIRE BOOK-ENTRY SECURITIES public comments on proposed amendments pub- TRANSFER SYSTEM lished by the Board in connection with a review of Regulation T (Credit by Brokers and Dealers). The Federal Reserve Board approved on Comments were requested by September 29, 1995, August 10, 1995, a firm closing time of 3:15 p.m. instead of by August 28, 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 941 ESTABLISHMENT OF POSITION OF AVAILABILITY OF A NEW VIDEOTAPE OMBUDSMAN AT THE FEDERAL RESERVE ON THE SALE OF MUTUAL FUNDS AND BOARD AND APPOINTMENT TO THE POSITION ANNUITIES BY BANKS The Federal Reserve Board announced on The Federal Reserve Board announced on August 7, 1995, that it had established the position August 15, 1995, the availability of a videotape of Ombudsman to handle complaints about regula- designed to help consumers understand that mutual tory matters as required by section 309 of the funds and annuities, unlike certificates of deposit, Riegle Community Development and Regulatory are neither insured by the Federal Deposit Insur- Improvement Act of 1994. ance Corporation nor in any way guaranteed by the The Board has appointed Barbara R. Lowrey, banks that sell them. Associate Secretary of the Board, to assume the The video, which runs about eight minutes, will additional responsibilities of this position. be used by the Federal Reserve in the seminar Under the 1994 act, the Board's Ombudsman programs it is presently offering for consumers on will act as a facilitator and mediator and will ensure the topic of uninsured products. It is also intended that complaints about Board or Reserve Bank regu- for educational use by bankers and consumer latory actions are addressed in a fair and timely groups in this area. manner. Also available are compliance checklists to help financial institutions comply with the Interagency Statement on Retail Sales of Nondeposit Invest- SPONSORSHIP OF STUDY OF ment Products. The checklists were distributed at HOUSEHOLD FINANCES seminar sessions held by the Federal Reserve for bankers involved in the sale of these products. The Federal Reserve Board is currently sponsoring There is no charge for the video or the checklists. a statistical study of household finances that will To order the video, please write the Public provide policymakers with information on the eco- Affairs Department, Federal Reserve Bank of Minnomic condition of a broad array of American neapolis, P.O. Box 291, Minneapolis, MN 55480families. 9985. Orders may also be phoned (612-340-2446) The study, which is undertaken every three or faxed (612-335-2855). years as part of the Survey of Consumer Finances, To order the checklists, please write the Division is being conducted for the Board by the National of Consumer and Community Affairs, Federal Opinion Research Center (NORC) at the Univer- Reserve Board, Mail Stop 800, Washington, DC sity of Chicago through November of this year. 20551. To order by phone, call (202) 452-3306. Participants in the study are chosen at random, Additional information about the seminar prousing a scientific sampling procedure in 100 areas grams for consumers and financial institutions may throughout the United States. A representative of also be obtained from the District Federal Reserve NORC contacts each potential participant person- Banks. ally to explain the project and request time for an interview. Names and addresses of each participant are CHANGE IN BOARD STAFF confidential. Participation in the study is completely voluntary, and summary results will be The Board of Governors announced the retirement published by the Board in the Federal Reserve of James D. Goetzinger, Assistant Director, Divi- Bulletin after all data have been assessed and sion of Banking Supervision and Regulation, effecanalyzed. tive September 1, 1995. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

942 Minutes of the Federal Open Market Committee Meeting Held on July 5-6, 1995 A meeting of the Federal Open Market Committee Mr. Madigan, Associate Director, Division of was held in the offices of the Board of Governors Monetary Affairs, Board of Governors of the Federal Reserve System in Washington, Mr. Simpson, Associate Director, Division of Research and Statistics, Board of Governors D.C., on Wednesday, July 5, 1995, at 2:30 p.m. Ms. Johnson, Assistant Director, Division of and continued on Thursday, July 6, 1995, at International Finance, Board of Governors 9:00 a.m. Messrs. Clouse1 and Roberts,1 Economists, Divisions of Monetary Affairs and Research and Statistics respectively, Board of Present: Governors Mr. Greenspan, Chairman Ms. Low, Open Market Secretariat Assistant, Mr. McDonough, Vice Chairman Division of Monetary Affairs, Board of Mr. Blinder Governors Mr. Hoenig Mr. Kelley Mr. Connolly, First Vice President, Federal Reserve Mr. Lindsey Bank of Boston Mr. Melzer Ms. Minehan Messrs. Beebe, Goodfriend, Lang, Rosenblum, Mr. Moskow Sniderman, and Ms. Tschinkel, Senior Vice Ms. Phillips Presidents, Federal Reserve Banks of Ms. Yellen San Francisco, Richmond, Philadelphia, Dallas, Cleveland, and Atlanta respectively Messrs. Boehne, Jordan, McTeer, and Stern, Ms. Krieger and Mr. Miller, Vice Presidents, Alternate Members of the Federal Open Federal Reserve Banks of New York and Market Committee Minneapolis respectively By unanimous vote, the minutes of the meeting Messrs. Broaddus, Forrestal, and Parry, Presidents of the Federal Open Market Committee held on of the Federal Reserve Banks of Richmond, Atlanta, and San Francisco respectively May 23, 1995, were approved. The Manager of the System Open Market Account reported on developments in foreign Mr. Kohn, Secretary and Economist Mr. Bernard, Deputy Secretary exchange markets and on System foreign currency Mr. Coyne, Assistant Secretary transactions during the period May 23, 1995, Mr. Gillum, Assistant Secretary through July 5, 1995. By unanimous vote, the Mr. Mattingly, General Counsel Committee ratified these transactions. Mr. Prell, Economist The Manager also reported on developments in Mr. Truman, Economist domestic financial markets and on System open market transactions in government securities and Ms. Brown, Messrs. Davis, Dewald, Hunter, federal agency obligations during the period Lindsey, Mishkin, Promisel, Siegman, and Slifman, Associate Economists Mr. Fisher, Manager, System Open Market 1. Attended portion of meeting relating to the Committee's Account review of the economic outlook and policy discussion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

943 May 23, 1995, through July 5, 1995. By unanimous Nominal retail sales were about unchanged over vote, the Committee ratified these transactions. April and May. Purchases at furniture and appli- The Committee then turned to a discussion of the ance stores were up slightly on balance over the economic and financial outlook, the ranges for two months. Sales at automotive dealerships and growth of money and debt in 1995 and 1996, and apparel outlets fell in April but revived somewhat the implementation of monetary policy over the in May. Spending at building materials stores fell intermeeting period ahead. A summary of the eco- in both months. The retail sales reports, in combinomic and financial information available at the nation with data on consumer prices and unit time of the meeting and of the Committee's discus- motor-vehicle sales, suggested that inflationsion is provided below, followed by the domestic adjusted spending for consumer goods had changed policy directive that was approved by the Commit- little since the fourth quarter of last year. Housing tee and issued to the Federal Reserve Bank of New starts were unchanged on balance over April and York. May; a reduction in starts of single-family homes The information reviewed at this meeting sug- was offset by a rise in starts of multifamily units. gested that the level of economic activity was about Adverse weather in some parts of the country might unchanged in the second quarter. Consumer spend- have contributed to the sluggishness in starts. ing apparently remained sluggish, and business Home sales were higher in May: Sales of new spending on plant and equipment rose less rapidly homes turned up sharply, and sales of existing than in other recent quarters. With final sales flag- homes also advanced somewhat. ging, firms sought to hold down production and Shipments of nondefense capital goods increased employment in order to keep inventories under considerably in May after being unchanged control. Broad indexes of consumer and producer in April. Shipments of computing equipment prices had increased faster on balance thus far this remained robust on balance over April and May, year, but signs of some moderation in inflation but growth of shipments of other business equipwere evident in recent price data. Growth of labor ment slowed significantly. Sales of heavy trucks compensation costs remained subdued. rebounded strongly in May from an April decline. Nonfarm payroll employment fell substantially Recent data on new orders for nondefense capital in May after a small decline in April and reduced goods suggested that spending on business equipgains in the first quarter. Payrolls in the services ment might moderate somewhat in the months industry continued to rise in May, but the pace of ahead after an extended period of rapid expansion. hiring was well below the average rate of increase Nonresidential construction continued to trend over other recent months. In manufacturing and appreciably higher in April; particularly large gains construction, employment contracted further in were recorded in the public utility, industrial, and May, although part of the job decline in construc- institutional categories. tion might have been temporary, reflecting heavy Business inventories grew at a little slower rate rains and floods in the South. The civilian unem- in April than in the first quarter. In manufacturployment rate edged lower in May, to 5.7 percent, ing, inventory investment remained brisk in April but was somewhat above its average for the first but slowed somewhat in May; the inventory-toquarter. sales ratio for the two months was at the high Industrial production continued to weaken in end of the range for the past year. At the whole- May, and incoming data suggested a further decline sale level, the rate of increase in stocks in April in June. Manufacturing output fell in May for a equaled the first-quarter pace and the ratio of stocks fourth consecutive month, reflecting another cut- to sales reached its highest level in several years. back in the production of motor vehicles. Output of Inventory accumulation in the retail sector was non-auto manufactured goods was unchanged, with more moderate in April. More than half the rise increases in the production of nondurable con- occurred at automotive establishments. The sumer goods and non-auto business equipment off- inventory-to-sales ratio for retailers other than auto setting declines in output elsewhere. Utilization of dealers had remained stable for a number of months manufacturing capacity dropped again in May but and was near the middle of its range for recent was still at a relatively high level. years. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

944 Federal Reserve Bulletin • September 1995 The nominal deficit on U.S. trade in goods and run objectives for price stability and sustainable services widened substantially in April from its economic growth, and giving careful consideration average rate for the first quarter. The value of to economic, financial, and monetary developimports was up sharply, with increases posted in ments, somewhat greater reserve restraint or somenearly all major import categories. The value of what lesser reserve restraint would be acceptable exports rose modestly from the first-quarter level; during the intermeeting period. The reserve condiincreases in exports of aircraft and industrial sup- tions associated with this directive were expected plies were partially offset by declines in exports of to be consistent with moderate growth in the automotive products to Canada and Mexico. Avail- broader monetary aggregates over the months able data indicated that, on average, economic ahead. growth in the major foreign industrial countries had Open market operations during the intermeeting been sluggish in the first quarter and apparently period were directed toward maintaining the existhad remained so in the second quarter; growth had ing degree of pressure on reserve positions. The been particularly weak in Canada and Japan. federal funds rate generally remained near 6 per- Incoming data suggested that price inflation cent, but most short-term interest rates were down might be slowing a little after having picked up on balance in response to incoming economic data, early in the year. Consumer prices rose a bit less in particularly the employment report for May, that May; energy prices recorded another sizable were seen by market participants as increasing the increase, but food prices changed little and prices likelihood that monetary policy would be eased in of other items advanced more slowly. However, for the near future. Longer-term interest rates also the twelve months ended in May, prices of non- declined in reaction to growing indications that food, non-energy consumer items increased slightly efforts to narrow substantially the U.S. budget defimore than in the preceding twelve months. At the cit might be successful. Yields on corporate and producer level, prices of finished goods were municipal obligations fell less than Treasury rates unchanged in May, reflecting declines in the prices and risk spreads widened a little, particularly for of finished foods and finished energy goods; junk bonds. Major indexes of equity prices rose excluding food and energy, prices of finished goods over the intermeeting period, partly in response to rose in May at the same rate as in April. For the lower interest rates. year ending in May, producer prices rose moder- In foreign exchange markets over the intermeetately after being essentially unchanged in the previ- ing period, the trade-weighted value of the dollar in ous year. At earlier stages of production, producer terms of the other G-10 currencies declined considprices grew at a considerably slower rate or erably on balance. The dollar fell sharply in the declined in May, suggesting some easing of cost week after the May meeting on further news of pressures over the next few months. Average weakening in the U.S. economy but rebounded hourly compensation in the nonfarm business sec- somewhat at the end of the month when concerted tor accelerated in the first quarter of the year, owing central-bank intervention was carried out. The dolin large part to temporary developments. Over the lar remained relatively stable over the balance of year ended in March, this compensation measure the period. increased somewhat more than it had over the Growth of M2 strengthened substantially in May previous year. Average hourly earnings declined in and June. Downward adjustments in returns on May, but the change in hourly earnings over the deposits and retail money fund shares had lagged past twelve months was slightly larger than the declines in market interest rates in recent months, advance over the preceding twelve-month period. and investors evidently responded by shifting funds At its meeting on May 23, 1995, the Committee from market instruments into these M2 assets. For adopted a directive that called for maintaining the the year through June, M2 expanded at a rate in the existing degree of pressure on reserve positions and upper half of its range for 1995. M3 also accelerthat did not include a presumption about the likely ated in May and June; and for the year through direction of any adjustments to policy during the June, this aggregate grew at a rate well above the intermeeting period. Accordingly, the directive annual range set in February. The pickup in M3 stated that in the context of the Committee's long- growth importantly reflected more rapid inflows to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 945 institution-only money funds, whose yields also the view of most members, however, the risks to adjusted sluggishly to falling money market rates. the outlook were tilted to the downside. Several Total domestic nonfinancial debt had grown at a stressed that the ongoing adjustments to business rate in the upper half of its monitoring range in inventories could prove to be more pronounced and recent months. of longer duration than they anticipated, with nega- The staff forecast prepared for this meeting sug- tive repercussions on production and incomes and gested that economic activity would expand slug- in turn on consumer spending and business investgishly over the next few months as business firms ment. Other downside risks included the adverse adjusted production schedules to bring inventories implications for exports of potentially less-thaninto better alignment with sales. Subsequently, as projected expansion in a number of major foreign inventory positions were corrected, and with under- economies. Nonetheless, recent developments suglying support for final sales from the favorable gested that the period of maximum risk to the wealth and interest-cost effects of the extended domestic expansion might have passed. With presrally in the equity and debt markets, the economy sures on resources having diminished and likely to would begin to expand at a moderate pace. The ease somewhat further and with labor costs remainforecast assumed a modest step-up in the pace of ing subdued, the risk of continuing increases in consumer spending in response to some diminution inflation had fallen considerably; indeed, in the of concerns about job prospects and incomes as view of many members inflation should moderate well as improved financial conditions and house- over the projection period. hold balance sheets. Homebuilding was projected In keeping with the practice at meetings when to pick up somewhat in lagged response to the the Committee sets its long-run ranges for the recent decline in mortgage rates and the related money and debt aggregates, the members of the improvement in housing affordability. Business Committee and the Federal Reserve Bank presioutlays for new equipment were expected to slow dents not currently serving as members provided from the very rapid pace of the past few years in their individual projections of the growth in real response to the slower growth of sales and profits, and nominal GDP, the rate of unemployment, and but lower costs of capital and the ready availability the rate of inflation for the years 1995 and 1996. of financing would help to sustain appreciable The forecasts of the rate of expansion in real GDP growth in such investment. Export expansion for 1995 as a whole had a central tendency of would pick up in response to some anticipated 1Vz to 2 percent, reflecting expectations of a pickup strengthening in the economies of major U.S. trad- in growth to a moderate pace in the second half of ing partners. Considerable uncertainty continued to the year; for 1996, projections of growth in real surround the fiscal outlook, but in light of recent GDP centered on a range of 2XA to 2% percent. developments the forecast now reflected a greater With regard to the expansion of nominal GDP, the degree of fiscal restraint. In the staff's judgment, growth forecasts were concentrated in a range of the prospects for some easing of pressure on labor 4V4 to 43/ percent for 1995 and 43/4 to 5Vs percent 4 and other resources suggested that price inflation for 1996. The rate of unemployment associated likely would moderate from its recently higher with these forecasts was expected to edge higher in level. the second half of this year to a consensus range of In the Committee's discussion of current and 53/4 to 6V% percent in the fourth quarters of both prospective economic developments, members 1995 and 1996. Projections of the rate of inflation, commented that the apparent pause in the expan- as measured by the consumer price index, pointed sion was likely to prove temporary, and their fore- to a small decline over the projection horizon; the casts generally pointed to an upturn in overall projections converged on rates of 3Vs to 33/s pereconomic activity to a pace in the neighborhood of cent for 1995 and 27/s to 3VA percent for 1996. the economy's potential by the latter part of this In the course of the discussion, members indiyear or early 1996. Many emphasized that the cated that much of the economic information that prospects for a strengthening economy were had become available since the May meeting had enhanced by the drop in intermediate- and long- suggested a greater softening in the economy than term interest rates and the rise in equity prices. In they had anticipated and had raised concerns about Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

946 Federal Reserve Bulletin • September 1995 the timing and strength of the upturn over coming values of financial assets should help to sustain quarters. However, the most recent data and some moderate growth. Moreover, if the strengthening in of the anecdotal reports from around the country housing activity materialized as projected, sales of had a better tone. Among the positive factors in the consumer durables would be favorably affected. economic outlook, members gave particular empha- While consumer confidence had declined earlier, sis to the favorable financial climate, including the recent surveys indicated that confidence had stabistimulative effects of lower interest rates on lized or even edged up more recently and was in interest-sensitive sectors of the economy, the ready any event at relatively high levels in most parts of availability of financing from market sources and the country. banking institutions, and the impact of rising equity Business fixed investment appeared to have and bond prices on balance sheets. Business and moderated since earlier in the year, though expendiconsumer sentiment also remained generally favor- tures for both producer durable equipment and able, though anecdotal reports suggested a height- nonresidential structures were still registering ened degree of caution among business contacts in strong gains. Further moderation was anticipated many parts of the nation. Members observed that over the course of coming quarters in association the expansion did not appear to have produced with slower growth in business sales and decreased overall imbalances in the economy aside from an pressures on producer resources. While some conapparent overhang of inventories in some indus- cern was expressed about the vulnerability of capitries. The ongoing adjustments needed to bring tal spending to a downturn in the growth of sales, these inventories down to desired levels were seen the members generally expected this sector of the as the most serious threat to the expansion. Some economy to remain a positive factor in the expanmembers commented that the inventory correction sion. The ready availability of financing on favorin the second quarter appeared on the basis of the able terms and the ongoing need to modernize available evidence to be less than was expected equipment and other producer resources for comearlier and that the period of inventory adjustment petitive reasons, notably to take advantage of conmight therefore be more extended in time than they tinuing improvements in computer and other techhad anticipated. While such a development might nologies, should foster continued overall growth in not in itself be sufficient to tilt the economy into business investment. Members also noted that the recession, in the possible context of relatively slug- strength in business profits, though likely to modergish growth in final demands, the economy would ate cyclically at some point, remained a favorable be vulnerable to adverse domestic or external factor undergirding business capital spending. shocks. On balance, while the timing remained Housing activity had stagnated in recent months, uncertain, a resumption of growth at a moderate but this sector of the economy also was expected to rate was viewed as a likely prospect, given the provide some stimulus to the expansion as homeunderlying strength of the economy. buyers responded to reduced mortgage rates. In their review of prospective developments in Although the latest available data indicated that key sectors of the economy, members noted that housing starts were still relatively depressed, home consumer expenditures had fallen short of earlier sales and mortgage loan applications for home expectations, but signs of some firming were vis- purchases had strengthened recently. With some ible, notably the indications of an improvement in exceptions, building industry contacts in local areas sales of motor vehicles since early spring. While a tended to confirm broader indications that improvecontinued sluggish performance of the consumer ment in housing activity was occurring. Members sector could not be ruled out, the members gener- also noted that rising occupancy levels and rents ally expected a resumption of moderate growth in should support fairly robust construction of multiconsumer spending. The upturn undoubtedly would family housing in many areas. be limited to some extent by the apparent exhaus- With regard to the outlook for fiscal policy, tion of much of the earlier pent-up demands and members gave considerable emphasis to recent perhaps by concerns about job prospects and developments in the Congress that suggested incomes, but the effects of reduced interest rates on there could be greater deficit reduction over the borrowers and the wealth effects from gains in years ahead than had been built into many fore- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 947 casts. The direct effects of deficit cutbacks would increased sharply in earlier months and these tend to hold down the growth in final demand and increases would continue to put upward pressure act as a restraining influence on overall economic on the prices of finished goods, but there recently activity over the projection horizon. But those cut- had been signs of some abatement of inflation at backs also would have favorable effects on finan- the earlier stages of production. Similarly, earlier cial markets, thereby stimulating to an extent off- declines in the foreign exchange value of the dollar setting increases in spending. Over the longer run, were placing upward pressure on the prices of deficit reduction should enhance the performance many imported products, but the recent stability of and growth of the economy, though monetary the dollar promised a diminution of such pressure policymakers would need to carefully monitor over time. On balance, most of the members possible transition effects. believed that the underlying trend of inflation was A considerable downside risk in the view of now tilted toward gradual deceleration in the conmany members was the outlook for exports. Eco- text of marginally higher rates of unemployed labor nomic activity in the major foreign industrial and other resources, but they acknowledged that nations had been more sluggish than anticipated the risks to such an outcome remained substantial. during the first half of the year, and this raised In keeping with the requirements of the Full questions about the strength of the expansion in Employment and Balanced Growth Act of 1978 those countries and the related prospects for faster (the Humphrey-Hawkins Act), the Committee at growth in U.S. exports. Most of the major econo- this meeting reviewed the ranges for growth in the mies in Latin America also were projected to monetary and debt aggregates that it had estabstrengthen, and indeed such expectations were lished in February for 1995, and it decided on reflected in financial markets, but substantial prob- tentative ranges for growth in those aggregates in lems remained that could undermine the favorable 1996. The current ranges set in February for the outlook. On the positive side, members observed period from the fourth quarter of 1994 to the fourth that U.S. exports were now quite competitive in quarter of 1995 included expansion of 1 to 5 perworld markets, as evidenced by continuing gains in cent for M2 and 0 to 4 percent for M3. A monitorexports to numerous countries, and such a percep- ing range for growth of total domestic nonfinancial tion was reinforced by anecdotal reports of increas- debt had been set at 3 to 7 percent for 1995. ing foreign sales of a variety of products by firms In the Committee's discussion, the members took around the country. On balance, some growth in account of the accelerated rates of M2 and M3 exports remained a reasonable prospect but it might growth since early spring that, for the year to date, fall below current expectations. had lifted the expansion of M2 to the upper half of The members generally agreed that the inflation the Committee's range and the expansion of M3 risks in the economy had diminished, though some further above its range. According to a staff projecstill saw the potential for little or no progress in tion, the growth of both aggregates was likely to unwinding the recent uptick in inflation. Many moderate over the balance of the year, assuming an referred to indications of easing pressures on unchanged monetary policy, as rates paid on variresources in recent months, and they generally felt ous components of the aggregates were adjusted that such pressures would be contained over the more fully to the reductions in market interest rates projection horizon if economic growth were to that had occurred since early in the year. Even so, materialize in line with their forecasts. Develop- the projected growth of the broad aggregates would ments seen as consistent with such an expectation remain well above that experienced over the last included persisting anecdotal reports of highly several years. These developments implied veloccompetitive markets that made it very difficult ity behavior for these aggregates that was more in for business firms to pass on cost increases or to line with historical patterns after several years of raise profit margins. Moreover, despite continuing pronounced and atypical velocity increases. The reports of labor scarcities in some areas and indus- members noted that financial innovations, technical tries, increases in nominal labor costs generally changes, and deregulation had obscured historical had remained subdued across the nation. Prices distinctions among various financial instruments of many raw materials and semifinished goods had and had affected the extent to which holders might Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

948 Federal Reserve Bulletin • September 1995 shift funds into or out of components of the mone- 0 to 4 percent range was quite low in relation to the tary aggregates in response to changing interest range for M2, judging by the average historical rate patterns. As a result, substantial uncertainty growth of this aggregate relative to that of M2. The remained about projections of money growth and range had been adopted in the light of unusual the future relationships of money and debt to the developments that had depressed M3 growth over basic objectives of monetary policy. Against this much of the 1990s. Those developments, which background, members expressed somewhat differ- also had served to curb M2 growth though to a ing views regarding appropriate ranges for the lesser extent, involved a reduced role of banking growth of M2 and M3 in 1995 and 1996. institutions in the intermediation of flows of funds With regard to M2, a majority of the members between savers and borrowers. That reduced role favored or could accept a proposal to maintain the had been induced to a large degree by balance existing 1 to 5 percent range for both years. These sheet adjustments undertaken in response to members noted that M2 growth was projected to extraordinary strains experienced by banks and remain within the current range, though in the thrifts. Against the background of favorable ecoupper half in 1995 and at the top in 1996. While nomic developments, the financial health of deposirecognizing that expansion at a rate above that tory institutions had improved markedly over the range could not be ruled out, especially for 1996, past few years, and the increased ability and willthey suggested that an increase in the range, at a ingness of these institutions to serve as financial time when substantial uncertainties continued to intermediaries appeared to be working toward surround the relationship of M2 to broad measures strengthening the growth of M3 and lowering of economic performance, would imply a degree of its velocity. In the circumstances, the members confidence regarding the relationship that the Com- believed that the contemplated increase in the M3 mittee did not possess at this point. Moreover, if range was essentially a technical response to develthe more normal behavior of velocity over the past opments that were tending to restore both tradiseveral quarters were to continue, a 1 to 5 percent tional financing patterns and the historical pattern range for growth of M2 likely would prove consis- of somewhat faster growth in M3 than in M2. In tent with the Committee's ultimate objectives of this respect, the increase in the M3 range did not sustained economic expansion and reasonable price have any implications for the underlying thrust of stability. There was concern that an increase in the monetary policy, though the higher range could M2 range could foster a misreading of the Commit- prove to be more consistent over time with sustaintee's intentions, especially if some easing in policy able and noninflationary economic growth. As in were to be approved during this meeting, explana- the case of the current M2 range, that conclusion tions of the technical reasons notwithstanding. assumed the eventual restoration of historic relationships between M3 and measures of overall Members preferring a somewhat higher M2 economic performance. range emphasized that expectations for growth of this aggregate in 1995 and 1996 were around the The Committee was unanimous in its view that upper end of the current range. In their view, under the current monitoring range for the growth of total the Federal Reserve Act, the Committee's target domestic nonfinancial debt should be retained for ranges—and normally their midpoints—should be 1995 and extended to 1996. This view took into consistent with the Committee's expectations for account staff projections indicating that the debt growth in nominal GDP and money. From this aggregate was likely to grow at rates well within its perspective, a higher M2 range was clearly defen- 3 to 7 percent range—indeed, not far from the sible and the reasons for it easily communicated. midpoint—in both years. Indeed, a failure to adjust the range upward could At the conclusion of this discussion, the Commitbe interpreted by observers as indicating an intent tee voted to reaffirm the range of 1 to 5 percent for to tighten policy should M2 growth remain high in growth of M2 in 1995 and to set the same range on relation to its current range. a tentative basis for 1996: With regard to M3, all the members indicated that they preferred or could accept an increase in its Votes for this action: Messrs. Greenspan, range to 2 to 6 percent for both years. The current McDonough, Hoenig, Kelley, Lindsey, Melzer, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 949 Ms. Minehan, Mr. Moskow, and Ms. Phillips. Votes total domestic nonfinancial debt. The Committee raised against this action: Mr. Blinder and Ms. Yellen. the 1995 range for M3 to 2 to 6 percent as a technical adjustment to take account of changing intermediation Mr. Blinder and Ms. Yellen dissented on a tech- patterns. For 1996, the Committee established on a tentanical judgment, not a policy difference. They noted tive basis the same ranges as in 1995 for growth of the that if growth in the demand for M2 were close to monetary aggregates and debt, measured from the fourth quarter of 1995 to the fourth quarter of 1996. The historic norms in 1995 or 1996, as indeed it had behavior of the monetary aggregates will continue to be been for some time, then the Committee members' evaluated in the light of progress toward price level projections for nominal GDP would likely imply stability, movements in their velocities, and develop- M2 growth near the top of, or even above, the ments in the economy and financial markets. current range. While the relationship between the In the course of the Committee's discussion of growth of M2 and that of nominal GDP remained its monetary growth ranges, members commented subject to a great deal of uncertainty, they were on the failure of the monetary aggregates to propersuaded that the range—in fact, the midpoint of vide a reliable nominal anchor for the conduct of the range—should normally be consistent with monetary policy in recent years. Moreover, the members' forecasts of nominal GDP growth. This restoration of historic relationships, or the emerwould be truer to the spirit of the aggregates targetgence of new but stable relationships, between ing provision in the Federal Reserve Act. From this money growth and measures of progress toward perspective, they viewed a higher M2 range for broad economic objectives could not be predicted 1995 and 1996 as clearly preferable in communiwith any degree of confidence. Some members cating the Committee's objectives for the economy expressed the view that in these circumstances the and its expectations for money growth. Committee needed to continue to look at potential The Committee then voted to raise the range for alternative approaches to guide the formulation of growth of M3 to 2 to 6 percent for 1995 and to policy and to communicate its intentions to the extend that higher range provisionally to 1996: public, especially with respect to the Committee's objective of promoting price stability over time. Votes for this action: Messrs. Greenspan, In the Committee's discussion of policy for the McDonough, Blinder, Hoenig, Kelley, Lindsey, Melzer, Ms. Minehan, Mr. Moskow, and Mses. intermeeting period ahead, nearly all the members Phillips and Yellen. Votes against this action: None. indicated that they favored or could support a proposal to ease slightly the current degree of pressure The Committee voted to retain the 3 to 7 percent on reserve positions. Preferences for an unchanged monitoring range for growth of total domestic nonpolicy stance and for somewhat greater easing also financial debt for 1995 and to extend that range on were expressed. In support of at least slight easing, a tentative basis to 1996: members commented that they viewed current monetary policy as somewhat restrictive, judged in Votes for this action: Messrs. Greenspan, part by the level of the inflation-adjusted federal McDonough, Blinder, Hoenig, Kelley, Lindsey, funds rate. This degree of monetary restraint had Melzer, Ms. Minehan, Mr. Moskow, and Mses. Phillips and Yellen. Votes against this action: None. been appropriate early in the year when the economy was operating at or possibly beyond its long- These votes constituted approval of the follow- run potential and inflation pressures appeared to be ing paragraph for the directive that would be issued mounting. Some modest easing was desirable now at the end of the meeting: that the growth of the economy had slowed considerably more than anticipated and potential infla- The Federal Open Market Committee seeks monetary tionary pressures seemed to be in the process of and financial conditions that will foster price stability receding. Although inflation was higher than in and promote sustainable growth in output. In furtherance of these objectives, the Committee reaffirmed at this 1994 and the economy was still operating at an meeting the range it had established on January 31- elevated level, looking forward many members saw February 1 for growth of M2 of 1 to 5 percent, measured prospects for declining inflation and the possibility from the fourth quarter of 1994 to the fourth quarter of of shortfalls in economic growth. The members 1995. The Committee also retained the monitoring range agreed that under present economic conditions a of 3 to 7 percent for the year that it had set for growth of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

950 Federal Reserve Bulletin • September 1995 slight easing of the stance of policy would incur wait for further evidence on the performance of the little risk of stimulating increased inflation and economy, all but one of these members indicated would be entirely consistent with their commitment that, given the current uncertainties surrounding to continued progress toward price stability over the economic outlook and the small amount of time. Several members also observed that any easing that was proposed, they would not dissent move toward less restraint should be cautious at from the majority position. this point because easing would represent a change With regard to possible adjustments to policy in the direction of policy and its repercussions on during the intermeeting period, most of the memfinancial markets, including the foreign exchange bers who favored some easing also preferred an markets, could be relatively pronounced. asymmetric directive, including a marked prefer- A few members preferred somewhat greater eas- ence on the part of those who supported greater ing. They stressed that such a move was warranted easing than the majority. An asymmetric directive by the recent pause in the expansion and the appar- was consistent with the view shared by most mement vulnerability of the economy to a variety of bers that the risks to the expansion were biased to downside risks. Indeed, a move from what they the downside, but no member expressed a strong saw as a restrictive monetary policy toward.a more presumption about the likely need to ease policy neutral policy stance was somewhat overdue in during the weeks ahead. The Committee would, of their view. While they could support a slight adjust- course, monitor and respond as needed to the ment to policy at this point, these members were incoming economic information. persuaded that the stance of monetary policy At the conclusion of the Committee's discussion, probably would need to be eased by more than a all but one of the members indicated that they slight amount over time to accommodate the favored or could support a directive that called for intermediate- and long-term needs of an expanding some slight easing in the degree of pressure on economy. Moreover, the risks of increasing infla- reserve positions and that included a bias toward tionary pressures appeared to be relatively remote possible further easing of reserve conditions during in the context of the current and anticipated perfor- the intermeeting period. Accordingly, in the conmance of the overall economy. The declines in text of the Committee's long-run objectives for intermediate- and long-term interest rates were price stability and sustainable economic growth, helping to support the expansion, but those declines and giving careful consideration to economic, rested in part on market expectations of significant financial, and monetary developments, the monetary policy easing; failure to ratify such Committee decided that slightly greater monetary expectations could well result in at least a partial restraint might be acceptable or slightly lesser reversal of those desirably lower rates. monetary restraint would be acceptable during the Members who leaned toward an unchanged pol- intermeeting period. According to a staff analysis, icy remained concerned about the persistence of the reserve conditions contemplated at this meeting inflationary pressures and whether a somewhat would be consistent with moderate growth in M2 easier policy stance would be consistent with the and M3 over coming months. objective of capping inflation and setting the stage At the conclusion of the meeting, the Federal for further progress toward price stability. The Reserve Bank of New York was authorized and available evidence on the economy's current per- directed, until instructed otherwise by the Commitformance remained mixed, and most forecasts tee, to execute transactions in the System account pointed to moderate strengthening ahead; in the in accordance with the following domestic policy circumstances an easing move did not appear to be directive: needed at this time. One member emphasized that, while the risks of greater inflation seemed small, The information reviewed at this meeting suggests the costs of a policy error in the direction of too that the level of economic activity was about unchanged much easing would be high in terms of its effects in the second quarter. Nonfarm payroll employment fell in April and May after posting reduced gains in the first on the credibility of the System's anti-inflationary quarter, and the civilian unemployment rate, at 5.7 perpolicy and the need to rein in inflationary growth cent in May, was up somewhat from its first-quarter next year. Although their preference would be to average. Industrial production continued to decline in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 951 May, reflecting another cutback in the production of measured from the fourth quarter of 1995 to the fourth motor vehicles, and capacity utilization was down some- quarter of 1996. The behavior of the monetary aggrewhat further. Total retail sales have been sluggish on gates will continue to be evaluated in the light of average in recent months. Housing starts were about progress toward price level stability, movements in their unchanged over April and May, but sales of new homes velocities, and developments in the economy and finanturned up sharply in May. Orders for nondefense capital cial markets. goods have moderated somewhat in recent months but In the implementation of policy for the immediate still point to considerable further expansion of spending future, the Committee seeks to decrease slightly the on business equipment; nonresidential construction has existing degree of pressure on reserve positions. In the continued to trend appreciably higher. The nominal defi- context of the Committee's long-run objectives for price cit on U.S. trade in goods and services widened in April stability and sustainable economic growth, and giving from its average rate in the first quarter. Broad indexes careful consideration to economic, financial, and moneof consumer and producer prices have increased faster tary developments, slightly greater reserve restraint on average thus far this year, though there were signs of might or slightly lesser reserve restraint would be acceptsome moderation in the most recent data; advances in able in the intermeeting period. The contemplated labor compensation costs have remained subdued. reserve conditions are expected to be consistent with Most interest rates have declined somewhat further moderate growth in M2 and M3 over coming months. since the Committee meeting on May 23. In foreign exchange markets, the trade-weighted value of the dollar Votes for this action: Messrs. Greenspan, in terms of the other G-10 currencies declined consider- McDonough, Blinder, Kelley, Lindsey, Melzer, ably over the intermeeting period. Ms. Minehan, Mr. Moskow, and Mses. Phillips and M2 and M3 strengthened substantially in May and Yellen. Vote against this action: Mr. Hoenig. June. For the year through June, M2 expanded at a rate in the upper half of its range for 1995 and M3 grew at a Mr. Hoenig dissented because he believed the rate well above its range. Total domestic nonfinancial stance of monetary policy should remain debt has grown at a rate in the upper half of its monitoring range in recent months. unchanged at this time. With the pace of economic The Federal Open Market Committee seeks monetary activity likely to return to trend growth later this and financial conditions that will foster price stability year and inflation expected to be higher this year and promote sustainable growth in output. In furtherance and next than in 1994, he felt an unchanged policy of these objectives, the Committee reaffirmed at this in the near term would enhance the prospects of meeting the range it had established on January 31- February 1 for growth of M2 of 1 to 5 percent, mea- achieving the Committee's long-run objectives of sured from the fourth quarter of 1994 to the fourth sustainable economic growth and price stability. quarter of 1995. The Committee also retained the moni- It was agreed that the next meeting of the Comtoring range of 3 to 7 percent for the year that it had set mittee would be held on Tuesday, August 22, 1995. for growth of total domestic nonfinancial debt. The The meeting adjourned at 12:20 p.m. Committee raised the 1995 range for M3 to 2 to 6 percent as a technical adjustment to take account of changing intermediation patterns. For 1996, the Committee Donald L. Kohn established on a tentative basis the same ranges as in 1995 for growth of the monetary aggregates and debt, Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

952 Legal Developments JOINT FINAL RULE—AMENDMENTS TO RISK-BASED APPENDIX A TO PART 3—RISK-BASED CAPITAL CAPITAL STANDARDS: DERIVATIVE TRANSACTIONS GUIDELINES The Office of the Comptroller of the Currency Section 1.—Purpose, Applicability of Guidelines, ("OCC"), Department of the Treasury; Board of Gov- and Definitions. ernors of the Federal Reserve System ("Board"); and Federal Deposit Insurance Corporation ("FDIC") (collectively, "the banking agencies") are amending (c) ^ ^ ^ their respective risk-based capital standards for banks (10) Derivative contract means generally a financial and bank holding companies (banking organizations, contract whose value is derived from the values of one institutions). This final rule implements a recent revi- or more underlying assets, reference rates or indexes sion to the Basle Accord revising and expanding the of asset values. Derivative contracts include interest set of conversion factors used to calculate the poten- rate, foreign exchange rate, equity, precious metals tial future exposure of derivative contracts and recog- and commodity contracts, or any other instrument that nizing the effects of netting arrangements in the calcu- poses similar credit risks. lation of potential future exposure for derivative contracts subject to qualifying bilateral netting arrangements. The effect of this final rule is threefold. 3. In Appendix A, to part 3, section 3 is amended: First, long-dated interest rate and exchange rate contracts are subject to higher conversion factors and new a. By revising (a)(l)(viii); conversion factors are set forth that specifically apply b. In paragraph (a)(3)(ii) by removing the words "interto derivative contracts related to equities, precious est rate and exchange rate contracts," and adding in their metals, and other commodities. Second, institutions place the words "derivative contracts,"; and are permitted to recognize a reduction in potential c. In paragraph (b) by revising the introductory text and future credit exposure for transactions subject to qual- paragraph (b)(5). ifying bilateral netting arrangements. Third, derivative contracts related to equities, precious metals and The revisions read as follows: other commodities may be recognized in bilateral netting arrangements for risk-based capital purposes. Effective October 1, 1995, 12 C.F.R. Parts 3, 208, 225, Section 3.—Risk Categories/Weights for and 325 are amended as follows: On-Balance Sheet Assets and Off-Balance Sheet Items. jfc # j|e % Part 3—Minimum Capital Ratios; Issuance of Directives (<l) ( j ^ ) ^ * ^ * * (viii) That portion of assets and off-balance sheet 1. The authority citation for Part 3 continues to read as transactions93 collateralized by cash or securities follows: issued or directly and unconditionally guaranteed by the United States Government or its agencies, or Authority: 12 U.S.C. 93a, 161, 1818, 1828(n), 1828 note, 183 In note, 1835, 3907, and 3909. 2. In Appendix A, to part 3, section 1 is revised by redesignating paragraphs (c)(10) through (c)(30) as paragraphs (c)(ll) through (c)(31) and adding new para- 9a. See footnote 22 in section 3(b)(5)(iii) of this Appendix A graph (c)(10) to read as follows: (collateral held against derivative contracts). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 953 the central government of an OECD country, pro- (B) Potential future credit exposure. The potenvided that:9b tial future credit exposure for a single derivative contract, including a derivative contract with negative mark-to-market value, is calculated by (b) Off-Balance Sheet Activities. The risk weight as- multiplying the notional principal19 of the derivasigned to an off-balance sheet item is determined by a tive contract by one of the credit conversion two-step process. First, the face amount of the off- factors in Table A—Conversion Factor Matrix of balance sheet item is multiplied by the appropriate credit this Appendix A, for the appropriate category.20 conversion factor specified in this section. This calcula- The potential future credit exposure for gold tion translates the face amount of an off-balance sheet contracts shall be calculated using the foreign item into an on-balance sheet credit equivalent amount. exchange rate conversion factors. For any deriva- Second, the resulting credit equivalent amount is then tive contract that does not fall within one of the assigned to the proper risk category using the criteria specified categories in Table A—Conversion regarding obligors, guarantors, and collateral listed in Factor Matrix of this Appendix A, the potential section 3(a) of this Appendix A. Collateral and guaran- future credit exposure shall be calculated using tees are applied to the face amount of an off-balance the other commodity conversion factors. Subject sheet item; however, with respect to derivative contracts to examiner review, banks should use the effecunder section 3(b)(5) of this Appendix A, collateral and tive rather than the apparent or stated notional guarantees are applied to the credit equivalent amounts amount in calculating the potential future credit of such derivative contracts. The following are the credit exposure. The potential future credit exposure conversion factors and the off-balance sheet items to for multiple derivatives contracts executed with a which they apply. single counterparty and subject to a qualifying bilateral netting contract is determined as provided by section 3(b)(5)(ii)(A) of this Appen- (5) Derivative contracts, (i) Calculation of credit dix A. equivalent amounts. The credit equivalent amount of a derivative contract equals the sum of the cur- Table A—Conversion Factor Matrix1 rent credit exposure and the potential future credit Percent exposure of the derivative contract. The calculation Foreign of credit equivalent amounts must be measured in Remaining maturity2 In r t a er te e st e r x a c t h e a a n n g d e Equity2 P m re e c t i a o l u s s com O m th o e d r i ty U.S. dollars, regardless of the currency or curren- gold cies specified in the derivative contract. One year or less .... 0.0 1.0 6.0 7.0 10.0 (A) Current credit exposure. The current credit Over one to five years 0.5 5.0 8.0 7.0 12.0 exposure for a single derivative contract is deter- Over five years .... 1.5 7.5 10.0 8.0 15.0 mined by the mark-to-market value of the deriva- 1. For derivative contracts with multiple exchanges of principal, the contive contract. If the mark-to-market value is posi- version factors are multiplied by the number of remaining payments in the tive, then the current credit exposure equals that derivative contact. 2. For derivative contracts that automatically reset to zero value following mark-to-market value. If the mark-to-market is a payment, the remaining maturity equals the time until the next payment. zero or negative, then the current credit exposure However, interest rate contracts with remaining maturities of greater than one is zero. The current credit exposure for multiple year shall be subject to a minimum conversion factor of 0.5 percent. derivative contracts executed with a single counterparty and subject to a qualifying bilateral netting contract is determined as provided by section 3(b)(5)(ii)(A) of this Appendix A. 19. For purposes of calculating either the potential future credit exposure under section 3(b)(5)(i)(B) of this Appendix A or the 9b. Assets and off-balance sheet transactions collateralized by gross potential future credit exposure under section 3(b)(5) securities issued or guaranteed by the United States Government or (ii)(A)(2) of this Appendix A for foreign exchange contracts and its agencies, or the central government of an OECD country in- other similar contracts in which the notional principal is equivalent clude, but are not limited to, securities lending transactions, repur- to the cash flows, total notional principal is the net receipts to each chase agreements, collateralized letters of credit, such as reinsur- party falling due on each value date in each currency. ance letters of credit, and other similar financial guarantees. Swaps, 20. No potential future credit exposure is calculated for single forwards, futures, and options transactions are also eligible, if they currency interest rate swaps in which payments are made based meet the collateral requirements. However, the OCC may at its upon two floating indices, so-called floating/floating or basis swaps; discretion require that certain collateralized transactions be risk the credit equivalent amount is measured solely on the basis of the weighted at 20 percent if they involve more than a minimal risk. current credit exposure. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

954 Federal Reserve Bulletin • September 1995 (ii) Derivative contracts subject to a qualifying ual derivative contracts covered by the qualifybilateral netting contract. ing bilateral netting contract. In effect, the (A) Netting calculation. The credit equivalent qualifying bilateral netting contract must proamount for multiple derivative contracts exe- vide that the bank would have a single claim cuted with a single counterparty and subject to a or obligation either to receive or to pay only qualifying bilateral netting contract as provided the net amount of the sum of the positive and by section (3)(b)(5)(ii)(B) of this Appendix A is negative mark-to-market values on the individcalculated by adding the net current credit expo- ual derivative contracts covered by the qualifysure and the adjusted sum of the potential future ing bilateral netting contract. The single legal credit exposure for all derivative contracts sub- obligation for the net amount is operative in ject to the qualifying bilateral netting contract. the event that a counterparty, or a counterparty (1) Net current credit exposure. The net cur- to whom the qualifying bilateral netting conrent credit exposure is the net sum of all posi- tract has been assigned, fails to perform due to tive and negative mark-to-market values of the any of the following events: default, insolindividual derivative contracts subject to a vency, bankruptcy, or other similar circumqualifying bilateral netting contract. If the net stances. sum of the mark-to-market value is positive, (4) The bank obtains a written and reasoned then the net current credit exposure equals that legal opinion(s) that represents, with a high net sum of the mark-to-market value. If the net degree of certainty, that in the event of a legal sum of the mark-to-market value is zero or challenge, including one resulting from denegative, then the net current credit exposure fault, insolvency, bankruptcy, or similar ciris zero. cumstances, the relevant court and administra- (2) Adjusted sum of the potential future credit tive authorities would find the bank's exposure exposure. The adjusted sum of the potential to be the net amount under: future credit exposure is calculated as: (/) The law of the jurisdiction in which the counterparty is chartered or the equivalent location in the case of noncorporate entities, A = 0.4 X A + (0.6 X NGR X A ) mt gross gmss and if a branch of the counterparty is involved, then also under the law of the juris- A net is the adjusted sum of the potential future credit diction in which the branch is located; exposure, A gross is the gross potential future credit expo- {ii) The law of the jurisdiction that governs sure, and NGR is the net to gross ratio. A gross is the sum the individual derivative contracts covered of the potential future credit exposure (as determined by the bilateral netting contract; and under section 3(b)(5)(i)(B) of this Appendix A) for each (Hi) The law of the jurisdiction that governs individual derivative contract subject to the qualifying the qualifying bilateral netting contract. bilateral netting contract. The NGR is the ratio of the net (5) The bank establishes and maintains procecurrent credit exposure to the gross current credit expo- dures to monitor possible changes in relevant sure. In calculating the NGR, the gross current credit law and to ensure that the qualifying bilateral exposure equals the sum of the positive current credit netting contract continues to satisfy the reexposures (as determined under section 3(b)(5)(i)(A) of quirement of this section. this Appendix A) of all individual derivative contracts (6) The bank maintains in its files documentasubject to the qualifying bilateral netting contract. tion adequate to support the netting of a deriv- (B) Qualifying bilateral netting contract. In de- ative contract.21 termining the current credit exposure for multiple derivative contracts executed with a single counterparty, a bank may net derivative contracts subject to a qualifying bilateral netting contract by offsetting positive and negative mark-to- 21. By netting individual derivative contracts for the purpose of market values, provided that: calculating its credit equivalent amount, a bank represents that documentation adequate to support the netting of a set of derivative (/) The qualifying bilateral netting contract is contract is in the bank's files and available for inspection by the in writing. OCC. Upon determination by the OCC that a bank's files are (2) The qualifying bilateral netting contract is inadequate or that a qualifying bilateral netting contract may not be legally enforceable in any one of the bodies of law described in not subject to a walkaway clause. section 3(b)(5)(ii)(B)(i)(0 through (iii) of this Appendix A, the (5) The qualifying bilateral netting contract underlying derivative contracts may not be netted for the purposes creates a single legal obligation for all individ- of this section. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 955 (iii) Risk weighting. Once the bank determines the Conversion Factor Matrix1 credit equivalent amount for a derivative contract or Percent a set of derivative contracts subject to a qualifying Foreign bilateral netting contract, the bank assigns that Remaining maturity2 In r t a er te e st e r x a c t h e a a n n g d e Equity2 P m re e c t i a o l u s s com O m th o e d r i ty amount to the risk weight category appropriate to gold the counterparty, or, if relevant, the nature of any One year or less .... 0.0 1.0 6.0 7.0 10.0 collateral or guarantee.22 However, the maximum Over one to five weight that will be applied to the credit equivalent years 0.5 5.0 8.0 7.0 12.0 Over five years .... 1.5 7.5 10.0 8.0 15.0 amount of such derivative contract(s) is 50 percent. 1. For derivative contracts with multiple exchanges of principal, the con- (iv) Exceptions. The following derivative contracts version factors are multiplied by the number of remaining payments in the are not subject to the above calculation, and there- derivative contact. 2. For derivative contracts that automatically reset to zero value following fore, are not part of the denominator of a national a payment, the remaining maturity equals the time until the next payment. bank's risk-based capital ratio: However, interest rate contracts with remaining maturities of greater than one (A) An exchange rate contract with an original year shall be subject to a minimum conversion factor of 0.5 percent. maturity of 14 calendar days or less;23 and 2. The following derivative contracts will be excluded: (B) A derivative contract that is traded on an exchange requiring the daily payment of any a. Exchange rate contract with an original maturity of 14 variations in the market value of the contract. calendar days or less; and b. Derivative contract traded on exchanges and subject to daily margin requirements. 4. Table 3, at the end of Appendix A, is revised to read as follows: Part 208—Membership of State Banking Institutions in the Federal Reserve System (Regulation H) Table 3—Treatment of Derivative Contracts 1. The authority citation for Part 208 continues to read as follows: 1. The current exposure method is used to calculate the credit equivalent amounts of derivative contracts. These Authority: 12 U.S.C. 36, 248(a), 248(c), 321-338a, 371d, amounts are assigned a risk weight appropriate to the 461, 481-486, 601, 611, 1814, 1823(j), 1828(o), 1831o, obligor or any collateral or guarantee. However, the 1831p-l, 3105, 3310, 3331-3351, and 3906-3909; maximum risk weight is limited to 50 percent. Multiple 15 U.S.C. 78b, 781(b), 781(g), 781(i), 78o-4(c)(5), 78q, derivative contracts with a single counterparty may be 78q-l and 78w; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, netted if those contracts are subject to a qualifying 4104b. bilateral netting contract. 2. In part 208, Appendix A is amended by revising the last paragraph of section III.C.3. and footnote 40 in the introductory text of section III.D. to read as follows: APPENDIX A TO PART 208—CAPITAL ADEQUACY GUIDEUNES FOR STATE MEMBER BANKS: RISK-BASED MEASURE 22. Derivative contracts are an exception to the general rule of JJJ * * * applying collateral and guarantees to the face value of off-balance c * * * sheet items. The sufficiency of collateral and guarantees is deter- ^ * * * mined on the basis of the credit equivalent amount of derivative contracts. However, collateral and guarantees held against a quali- Credit equivalent amounts of derivative confying bilateral netting contract is not recognized for capital purtracts involving standard risk obligors (that is, poses unless it is legally available for all contracts included in the obligors whose loans or debt securities would be qualifying bilateral netting contract. 23. Notwithstanding section 3(b)(5)(B) of this Appendix A, gold assigned to the 100 percent risk category) are contracts do not qualify for this exception. included in the 50 percent category, unless they Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

956 Federal Reserve Bulletin • September 1995 are backed by collateral or guarantees that allow Gold contracts are accorded the same treatment as them to be placed in a lower risk category. exchange rate contracts except that gold contracts with an original maturity of fourteen or fewer calendar days are included in the risk-based ratio calcula- £) * * * 40 * * % tion. Over-the-counter options purchased are included and treated in the same way as other derivative contracts. 3. In Part 208, Appendix A is amended by revising the 2. Calculation of credit equivalent amounts. section III.E. heading and section III.E. to read as fol- a. The credit equivalent amount of a derivative conlows: tract that is not subject to a qualifying bilateral netting jjj * * * contract in accordance with section III.E.3. of this Appendix A is equal to the sum of: (i) the current exposure (sometimes referred to as E. Derivative Contracts (Interest Rate, Exchange Rate, the replacement cost) of the contract; and Commodity-(including precious metals) and Equity - (ii) an estimate of the potential future credit expo- Linked Contracts) sure of the contract. b. The current exposure is determined by the mark-to- 1. Scope. Credit equivalent amounts are computed for market value of the contract. If the mark-to-market each of the following off-balance-sheet derivative con- value is positive, then the current exposure is equal to tracts: that mark-to-market value. If the mark-to-market a. Interest Rate Contracts. These include single cur- value is zero or negative, then the current exposure is rency interest rate swaps, basis swaps, forward rate zero. Mark-to-market values are measured in dollars, agreements, interest rate options purchased (including regardless of the currency or currencies specified in caps, collars, and floors purchased), and any other the contract, and should reflect changes in underlying instrument linked to interest rates that gives rise to rates, prices, and indices, as well as counterparty similar credit risks (including when-issued securities credit quality. and forward forward deposits accepted). c. The potential future credit exposure of a contract, b. Exchange Rate Contracts. These include cross- including a contract with a negative mark-to-market currency interest rate swaps, forward foreign ex- value, is estimated by multiplying the notional princichange contracts, currency options purchased, and any pal amount of the contract by a credit conversion other instrument linked to exchange rates that gives factor. Banks should use, subject to examiner review, rise to similar credit risks. the effective rather than the apparent or stated notional c. Equity Derivative Contracts. These include equity- amount in this calculation. The credit conversion faclinked swaps, equity-linked options purchased, for- tors are: ward equity-linked contracts, and any other instrument linked to equities that gives rise to similar credit Conversion Factors risks. Percent d. Commodity (including precious metal) Derivative Commodity, Precious Exchange Contracts. These include commodity-linked swaps, Remaining Interest excluding metals, rate and Equity maturity rate precious except commodity-linked options purchased, forward gold metals gold commodity-linked contracts, and any other instrument linked to commodities that gives rise to similar credit One year or less .... 0.0 1.0 6.0 10.0 7.0 Over one to five risks. years 0.5 5.0 8.0 12.0 7.0 e. Exceptions. Exchange rate contracts with an origi- Over five years .... 1.5 7.5 10.0 15.0 8.0 nal maturity of fourteen or fewer calendar days and derivative contracts traded on exchanges that require d. For a contract that is structured such that on specidaily receipt and payment of cash variation margin fied dates any outstanding exposure is settled and the may be excluded from the risk-based ratio calculation. terms are reset so that the market value of the contract is zero, the remaining maturity is equal to the time 40. The sufficiency of collateral and guarantees for off-balance- until the next reset date. For an interest rate contract sheet items is determined by the market value of the collateral or with a remaining maturity of more than one year that the amount of the guarantee in relation to the face amount of the meets these criteria, the minimum conversion factor is item, except for derivative contracts, for which this determination 0.5 percent. is generally made in relation to the credit equivalent amount. e. For a contract with multiple exchanges of principal, Collateral and guarantees are subject to the same provisions noted under section III.B. of this Appendix A. the conversion factor is multiplied by the number of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 957 remaining payments in the contract. A derivative con- contracts are kept under review in the light of tract not included in the definitions of interest rate, possible changes in relevant law. exchange rate, equity, or commodity contracts as set iv. The bank maintains in its files documentation forth in section III.E.l. of this Appendix A, is subject adequate to support the netting of derivative conto the same conversion factors as a commodity, ex- tracts, including a copy of the bilateral netting cluding precious metals. contract and necessary legal opinions. f. No potential future exposure is calculated for a b. A contract containing a walkaway clause is not single currency interest rate swap in which payments eligible for netting for purposes of calculating the are made based upon two floating rate indices (a so credit equivalent amount.49 called floating/floating or basis swap); the credit expo- c. A bank netting individual contracts for the purpose sure on such a contract is evaluated solely on the basis of calculating credit equivalent amounts of derivative of the mark-to-market value. contracts, represents that it has met the requirements g. The Board notes that the conversion factors set of this Appendix A and all the appropriate documents forth above, which are based on observed volatilities are in the bank's files and available for inspection by of the particular types of instruments, are subject to the Federal Reserve. The Federal Reserve may deterreview and modification in light of changing volatili- mine that a bank's files are inadequate or that a netting ties or market conditions. contract, or any of its underlying individual contracts, 3. Netting, a. For purposes of this Appendix A, netting may not be legally enforceable under any one of the refers to the offsetting of positive and negative bodies of law described in section III.E.3.a.ii. of this mark-to-market values when determining a current Appendix A. If such a determination is made, the exposure to be used in the calculation of a credit netting contract may be disqualified from recognition equivalent amount. Any legally enforceable form of for risk-based capital purposes or underlying individbilateral netting (that is, netting with a single counter- ual contracts may be treated as though they are not subject to the netting contract. party) of derivative contracts is recognized for purposes of calculating the credit equivalent amount pro- d. The credit equivalent amount of contracts that are vided that: subject to a qualifying bilateral netting contract is i. The netting is accomplished under a written net- calculated by adding (i) the current exposure of the ting contract that creates a single legal obligation, netting contract (net current exposure) and (ii) the covering all included individual contracts, with the sum of the estimates of potential future credit expoeffect that the bank would have a claim to receive, sures on all individual contracts subject to the netting or obligation to pay, only the net amount of the sum contract (gross potential future exposure) adjusted to of the positive and negative mark-to-market values reflect the effects of the netting contract.50 on included individual contracts in the event that a e. The net current exposure is the sum of all positive counterparty, or a counterparty to whom the con- and negative mark-to-market values of the individual tract has been validly assigned, fails to perform due contracts included in the netting contract. If the net to any of the following events: default^ insolvency, sum of the mark-to-market values is positive, then the liquidation, or similar circumstances. net current exposure is equal to that sum. If the net ii. The bank obtains a written and reasoned legal sum of the mark-to-market values is zero or negative, opinion(s) representing that in the event of a legal then the net current exposure is zero. The Federal challenge—including one resulting from default, Reserve may determine that a netting contract qualiinsolvency, liquidation, or similar circumstances— fies for risk-based capital netting treatment even the relevant court and administrative authorities though certain individual contracts included under the would find the bank's exposure to be the net amount netting contract may not qualify. In such instances, the under: nonqualifying contracts should be treated as individ- (7) The law of the jurisdiction in which the counterparty is chartered or the equivalent location in the case of noncorporate entities, and if a branch of the counterparty is involved, 49. A walkaway clause is a provision in a netting contract that permits a non-defaulting counterparty to make lower payments then also under the law of the jurisdiction in than it would make otherwise under the contract, or no payment at which the branch is located; all, to a defaulter or to the estate of a defaulter, even if the defaulter (2) The law that governs the individual con- or the estate of the defaulter is a net creditor under the contract. tracts covered by the netting contract; and 50. For purposes of calculating potential future credit exposure to a netting counterparty for foreign exchange contracts and other (3) The law that governs the netting contract. similar contracts in which notional principal is equivalent to cash iii. The bank establishes and maintains procedures flows, total notional principal is defined as the net receipts falling to ensure that the legal characteristics of netting due on each value date in each currency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

958 Federal Reserve Bulletin • September 1995 ual contracts that are not subject to the netting con- margin—a bank may elect to either include or exclude tract. all mark-to-market values of such contracts when f. Gross potential future exposure, or A is calcu- determining net current exposure, provided the gross lated by summing the estimates of potential future method chosen is applied consistently. exposure (determined in accordance with section 4. Risk Weights. Once the credit equivalent amount for a III.E.2 of this Appendix A) for each individual con- derivative contract, or a group of derivative contracts tract subject to the qualifying bilateral netting con- subject to a qualifying bilateral netting contract, has tract. been determined, that amount is assigned to the risk g. The effects of the bilateral netting contract on the category appropriate to the counterparty, or, if relevant, gross potential future exposure are recognized through the guarantor or the nature of any collateral.51 However, the application of a formula that results in an adjusted the maximum risk weight applicable to the credit equivadd-on amount A . The formula, which employs the alent amount of such contracts is 50 percent. net ratio of net current exposure to gross current exposure 5. Avoidance of double counting, a. In certain cases, (NGR) is expressed as: credit exposures arising from the derivative contracts covered by section III.E. of this Appendix A may Anet = (0.4 X A ) + 0.6 (NGR X A ) already be reflected, in part, on the balance sheet. To gwss gross avoid double counting such exposures in the assessh. The NGR may be calculated in accordance with ment of capital adequacy and, perhaps, assigning inapeither the counterparty-by-counterparty approach or propriate risk weights, counterparty credit exposures the aggregate approach. arising from the derivative instruments covered by i. Under the counterparty-by-counterparty ap- these guidelines may need to be excluded from balproach, the NGR is the ratio of the net current ance sheet assets in calculating a bank's risk-based exposure for a netting contract to the gross current capital ratios. exposure of the netting contract. The gross current b. Examples of the calculation of credit equivalent exposure is the sum of the current exposures of all amounts for contracts covered under this section III.E. individual contracts subject to the netting contract are contained in Attachment V of this Appendix A. calculated in accordance with section III.E.2. of this Appendix A. Net negative mark-to-market values for individual netting contracts with the same coun- 4. In Appendix A to Part 208, Attachments IV and V are terparty may not be used to offset net positive revised to read as follows: mark-to-market values for other netting contracts with that counterparty. ii. Under the aggregate approach, the NGR is the Attachment IV—Credit Conversion Factors for ratio of the sum of all of the net current exposures Off-Balance-Sheet Items for State Member Banks for qualifying bilateral netting contracts to the sum of all of the gross current exposures for those 100 Percent Conversion Factor netting contracts (each gross current exposure is calculated in the same manner as in section 1. Direct credit substitutes. (These include general guar- III.E.3.h.i. of this Appendix A). Net negative markantees of indebtedness and all guarantee-type instruto-market values for individual counterparties may ments, including standby letters of credit backing the not be used to offset net positive mark-to-market financial obligations of other parties.) values for other counterparties. 2. Risk participations in bankers acceptances and direct iii. A bank must consistently use either the credit substitutes, such as standby letters of credit. counterparty-by-counterparty approach or the ag- 3. Sale and repurchase agreements and assets sold with gregate approach to calculate the NGR. Regardless recourse that are not included on the balance sheet. of the approach used, the NGR should be applied 4. Forward agreements to purchase assets, including individually to each qualifying bilateral netting confinancing facilities, on which drawdown is certain. tract to determine the adjusted add-on for that net- 5. Securities lent for which the bank is at risk. ting contract. i. In the event a netting contract covers contracts that are normally excluded from the risk-based ratio calculation—for example, exchange rate contracts 51. For derivative contracts, sufficiency of collateral or guarantees is generally determined by the market value of the collateral or with an original maturity of fourteen or fewer calenthe amount of the guarantee in relation to the credit equivalent dar days or instruments traded on exchanges that amount. Collateral and guarantees are subject to the same provirequire daily payment and receipt of cash variation sions noted under section III.B. of this Appendix A. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 959 50 Percent Conversion Factor contract included under the netting contract adjusted by the application of the following formula: 1. Transaction-related contingencies. (These include bidbonds, performance bonds, warranties, and standby let- A ne , = (0.4 X A gmss ) + 0.6 (NGR X A gro J ters of credit backing the nonfinancial performance of other parties.) NGR is the ratio of net current exposure to gross current 2. Unused portions of commitments with an original exposure. maturity exceeding one year, including underwriting 2. No potential future exposure is calculated for single commitments and commercial credit lines. currency interest rate swaps in which payments are made 3. Revolving underwriting facilities (RUFs), note issu- based upon two floating indices, that is, so called ance facilities (NIFs), and similar arrangements. floating/floating or basis swaps. The credit exposure on these contracts is evaluated solely on the basis of their 20 Percent Conversion Factor mark-to-market value. Exchange rate contracts with an original maturity of fourteen days or fewer are excluded. Short-term, self-liquidating trade-related contingencies, Instruments traded on exchanges that require daily reincluding commercial letters of credit. ceipt and payment of cash variation margin are also excluded. (See upper portion of Attachment V.) Zero Percent Conversion Factor a. If contracts (1) through (5) above are subject to a qualifying bilateral netting contract, then the following Unused portions of commitments with an original matu- applies: (see lower portion Attachment V.) rity of one year or less, or which are unconditionally b. To recognize the effects of bilateral netting on potencancellable at any time, provided a separate credit deci- tial future exposure the following formula applies: sion is made before each drawing. A = (0.4 X A ) + 0.6 (NGR X A ) net gross gross Credit Conversion for Derivative Contracts c. In the above example where the net current exposure is zero, the credit equivalent amount would be calculated 1. The credit equivalent amount of a derivative contract as follows: is the sum of the current credit exposure of the contract and an estimate of potential future increases in credit NGR = 0 = (0/300,000) exposure. The current exposure is the positive mark-tomarket value of the contract (or zero if the mark-to- A net = (0.4 X $2,900,000) + 0.6 (0 X $2,900,000) market value is zero or negative). For derivative con- A = $1,160,000 net tracts that are subject to a qualifying bilateral netting contract, the current exposure is, generally, the net sum The credit equivalent amount is $1,160,000 + 0 = of the positive and negative mark-to-market values of $1,160,000. the contracts included in the netting contract (or zero if d. If the net current exposure was a positive number, for the net sum of the mark-to-market values is zero or example $200,000, the credit equivalent amount would negative). The potential future exposure is calculated by be calculated as follows: multiplying the effective notional amount of a contract by one of the following credit conversion factors, as NGR = .67 = ($200,000/$300,000) appropriate: A = (0.4 X $2,900,000) + 0.6 (.67 X $2,900,000) net A = $2,325,800. net Conversion Factors The credit equivalent amount would be $2,325,800 + Percent $200,000 = $2,525,800. Commodity, Precious Exchange Remaining Interest excluding metals, rate and Equity maturity rate precious except gold metals gold One year or less .... 0.0 1.0 6.0 10.0 7.0 Part 225—Bank Holding Companies and Change Over one to five years 0.5 5.0 8.0 12.0 7.0 in Bank Control (Regulation Y) Over five years .... 1.5 7.5 10.0 15.0 8.0 1. The authority citation for Part 225 continues to read as For contracts subject to a qualifying bilateral netting follows: contract, the potential future exposure is, generally, the sum of the individual potential future exposures for each Authority: 12 U.S.C. 18170X13), 1818, 1828(o), 1831i, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

960 Federal Reserve Bulletin • September 1995 Attachment V—Calculating Credit Equivalent Amounts for Derivative Contracts Notional Potential Current Conversion Mark-to- Credit equivalent Type of contract principal exposure exposure factor market amount amount (dollars) (dollars) (1) 120-day forward foreign exchange 5,000,000 .01 50,000 100,000 100,000 150,000 (2) 4-year forward foreign exchange 6,000,000 .05 300,000 -120,000 0 300,000 (3) 3-year singlecurrency fixed and floating interest rate swap 10,000,000 .005 50,000 200,000 200,000 250,000 (4) 6-month oil swap 10,000,000 .10 1,000,000 -250,000 0 1,000,000 (5) 7-year crosscurrency floating and floating interest rate swap 20,000,000 .075 1,500,000 -1,500,000 0 1,500,000 Total 2,900,000 + 300,000 3,200,000 Potential Credit Net current Contract future equivalent exposure exposure amount (1) 50,000 (2) 300,000 (3) 50,000 (4) 1,000,000 (5) 1,500,000 Total 2,900,000 + 2,900,000 NOTE: The total of the mark-to-market values from the first table is —$1,370,000. Since this is a negative amount, the net current exposure is zero 1831p-l, 1843(c)(8), 1844(b), 1972(1), 3106, 3108, * * * * * 3310, 3331-3351, 3907, and 3909. 3. In Part 225, Appendix A is amended by revising the section III.E. heading and section III.E. to read as fol- 2. In Part 225, Appendix A is amended by revising the lows: last paragraph of section III.C.3. and footnote 43 in the introductory text of section III./), to read as follows: JJJ * * * E. Derivative Contracts (Interest Rate, Exchange Rate, APPENDIX A TO PART 225—CAPITAL ADEQUACY Commodity-(including precious metals) and Equity- GUIDELINES FOR BANK HOLDING COMPANIES: Linked Contracts) RISK-BASED MEASURE 1. Scope. Credit equivalent amounts are computed for each of the following off-balance-sheet derivative con- JJJ * * * tracts: Q * * * a. Interest Rate Contracts. These include single cur- 2 * * * rency interest rate swaps, basis swaps, forward rate Credit equivalent amounts of derivative con- agreements, interest rate options purchased (including tracts involving standard risk obligors (that is, caps, collars, and floors purchased), and any other obligors whose loans or debt securities would be instrument linked to interest rates that gives rise to assigned to the 100 percent risk category) are similar credit risks (including when-issued securities included in the 50 percent category, unless they and forward forward deposits accepted). are backed by collateral or guarantees that allow b. Exchange Rate Contracts. These include crossthem to be placed in a lower risk category. currency interest rate swaps, forward foreign exchange contracts, currency options purchased, and any other instrument linked to exchange rates that gives D. * * * 43 * * * rise to similar credit risks. c. Equity Derivative Contracts. These include equitylinked swaps, equity-linked options purchased, for- 43. The sufficiency of collateral and guarantees for off-balance- ward equity-linked contracts, and any other instrusheet items is determined by the market value of the collateral or the amount of the guarantee in relation to the face amount of the item, except for derivative contracts, for which this determination Collateral and guarantees are subject to the same provisions noted is generally made in relation to the credit equivalent amount. under section III.fi. of this Appendix A. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 961 ment linked to equities that gives rise to similar credit Conversion Factors risks. Percent d. Commodity (including precious metal) Derivative Exchange Commodity, Precious Remaining Interest excluding metals, Contracts. These include commodity-linked swaps, maturity rate rate and Equity precious except commodity-linked options purchased, forward gold metals gold commodity-linked contracts, and any other instrument One year or less .. 0.0 1.0 6.0 10.0 7.0 linked to commodities that gives rise to similar credit Over one to five years 0.5 5.0 8.0 12.0 7.0 risks. Over five years ... 1.5 7.5 10.0 15.0 8.0 e. Exceptions. Exchange rate contracts with an original maturity of fourteen or fewer calendar days and e. For a contract with multiple exchanges of principal, derivative contracts traded on exchanges that require the conversion factor is multiplied by the number of daily receipt and payment of cash variation margin remaining payments in the contract. A derivative conmay be excluded from the risk-based ratio calculation. tract not included in the definitions of interest rate, Gold contracts are accorded the same treatment as exchange rate, equity, or commodity contracts as set exchange rate contracts except that gold contracts forth in section III.E.1. of this Appendix A is subject with an original maturity of fourteen or fewer calen- to the same conversion factors as a commodity, exdar days are included in the risk-based ratio calcula- cluding precious metals. tion. Over-the-counter options purchased are included f. No potential future exposure is calculated for a and treated in the same way as other derivative single currency interest rate swap in which payments contracts. are made based upon two floating rate indices (a so 2. Calculation of credit equivalent amounts, a. The credit called floating/floating or basis swap); the credit expoequivalent amount of a derivative contract that is not sure on such a contract is evaluated solely on the basis subject to a qualifying bilateral netting contract in of the mark-to-market value. accordance with section III.£.3. of this Appendix A is g. The Board notes that the conversion factors set equal to the sum of: forth above, which are based on observed volatilities (i) the current exposure (sometimes referred to as the of the particular types of instruments, are subject to replacement cost) of the contract; and review and modification in light of changing volatili- (ii) an estimate of the potential future credit exposure ties or market conditions. of the contract. 3. Netting, a. For purposes of this Appendix A, netting b. The current exposure is determined by the mark-to- refers to the offsetting of positive and negative markmarket value of the contract. If the mark-to-market to-market values when determining a current exposure value is positive, then the current exposure is equal to to be used in the calculation of a credit equivalent that mark-to-market value. If the mark-to-market amount. Any legally enforceable form of bilateral value is zero or negative, then the current exposure is netting (that is, netting with a single counterparty) of zero. Mark-to-market values are measured in dollars, derivative contracts is recognized for purposes of calregardless of the currency or currencies specified in culating the credit equivalent amount provided that: the contract and should reflect changes in underlying i. The netting is accomplished under a written netrates, prices, and indices, as well as counterparty ting contract that creates a single legal obligation, credit quality. covering all included individual contracts, with the c. The potential future credit exposure of a contract, effect that the banking organization would have a including a contract with a negative mark-to-market claim to receive, or obligation to pay, only the net value, is estimated by multiplying the notional princi- amount of the sum of the positive and negative pal amount of the contract by a credit conversion mark-to-market values on included individual confactor. Banking organizations should use, subject to tracts in the event that a counterparty, or a counterexaminer review, the effective rather than the apparent party to whom the contract has been validly asor stated notional amount in this calculation. The signed, fails to perform due to any of the following credit conversion factors are: events: default, insolvency, liquidation, or similar d. For a contract that is structured such that on speci- circumstances. fied dates any outstanding exposure is settled and the ii. The banking organization obtains a written and terms are reset so that the market value of the contract reasoned legal opinion(s) representing that in the is zero, the remaining maturity is equal to the time event of a legal challenge—including one resulting until the next reset date. For an interest rate contract from default, insolvency, liquidation, or similar with a remaining maturity of more than one year that circumstances—the relevant court and administrameets these criteria, the minimum conversion factor is tive authorities would find the banking organiza- 0.5 percent. tion's exposure to be the net amount under: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

962 Federal Reserve Bulletin • September 1995 1. The law of the jurisdiction in which the coun- e. The net current exposure is the sum of all positive terparty is chartered or the equivalent location in and negative mark-to-market values of the individual the case of noncorporate entities, and if a branch contracts included in the netting contract. If the net of the counterparty is involved, then also under sum of the mark-to-market values is positive, then the the law of the jurisdiction in which the branch is net current exposure is equal to that sum. If the net located; sum of the mark-to-market values is zero or negative, 2. The law that governs the individual contracts then the net current exposure is zero. The Federal covered by the netting contract; and Reserve may determine that a netting contract quali- 3. The law that governs the netting contract. fies for risk-based capital netting treatment even iii. The banking organization establishes and main- though certain individual contracts included under the tains procedures to ensure that the legal characteris- netting contract may not qualify. In such instances, the tics of netting contracts are kept under review in the nonqualifying contracts should be treated as individlight of possible changes in relevant law. ual contracts that are not subject to the netting coniv. The banking organization maintains in its files tract. documentation adequate to support the netting of f. Gross potential future exposure, or A is calcugross derivative contracts, including a copy of the bilat- lated by summing the estimates of potential future eral netting contract and necessary legal opinions. exposure (determined in accordance with section b. A contract containing a walkaway clause is not III.£.2 of this Appendix A) for each individual coneligible for netting for purposes of calculating the tract subject to the qualifying bilateral netting concredit equivalent amount.53 tract. c. A banking organization netting individual contracts g. The effects of the bilateral netting contract on the for the purpose of calculating credit equivalent gross potential future exposure are recognized through amounts of derivative contracts represents that it has the application of a formula that results in an adjusted met the requirements of this Appendix A and all the add-on amount A . The formula, which employs the net appropriate documents are in the banking organiza- ratio of net current exposure to gross current exposure tion's files and available for inspection by the Federal (NGR), is expressed as: Reserve. The Federal Reserve may determine that a banking organization's files are inadequate or that a A = (0.4 X A ) + 0.6 (NGR X A ) netting contract, or any of its underlying individual nel gross gross contracts, may not be legally enforceable under any one of the bodies of law described in section h. The NGR may be calculated in accordance with IILE.3.a.ii. of this Appendix A. If such a determina- either the counterparty-by-counterparty approach or tion is made, the netting contract may be disqualified the aggregate approach. from recognition for risk-based capital purposes or i. Under the counterparty-by-counterparty apunderlying individual contracts may be treated as proach, the NGR is the ratio of the net current though they are not subject to the netting contract. exposure for a netting contract to the gross current d. The credit equivalent amount of contracts that are exposure of the netting contract. The gross current subject to a qualifying bilateral netting contract is exposure is the sum of the current exposures of all calculated by adding: individual contracts subject to the netting contract (i) the current exposure of the netting contract (net calculated in accordance with section HI.£.2. of this current exposure) and Appendix A. Net negative mark-to-market values (ii) the sum of the estimates of potential future credit for individual netting contracts with the same counexposures on all individual contracts subject to the terparty may not be used to offset net positive netting contract (gross potential future exposure) ad- mark-to-market values for other netting contracts justed to reflect the effects of the netting contract.54 with the same counterparty. ii. Under the aggregate approach, the NGR is the ratio of the sum of all of the net current exposures 53. A walkaway clause is a provision in a netting contract that for qualifying bilateral netting contracts to the sum permits a non-defaulting counterparty to make lower payments of all of the gross current exposures for those than it would make otherwise under the contract, or no payment at netting contracts (each gross current exposure is all, to a defaulter or to the estate of a defaulter, even if the defaulter or the estate of the defaulter is a net creditor under the contract. calculated in the same manner as in section 54. For purposes of calculating potential future credit exposure to III.£.3.h.i. of this Appendix A). Net negative marka netting counterparty for foreign exchange contracts and other to-market values for individual counterparties may similar contracts in which notional principal is equivalent to cash not be used to offset net positive current exposures flows, total notional principal is defined as the net receipts falling due on each value date in each currency. for other counterparties. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 963 iii. A banking organization must use consistently Attachment IV—Credit Conversion Factors for either the counterparty-by-counterparty approach or Off-Balance-Sheet Items for Bank Holding the aggregate approach to calculate the NGR. Re- Companies gardless of the approach used, the NGR should be applied individually to each qualifying bilateral net- 100 Percent Conversion Factor ting contract to determine the adjusted add-on for that netting contract, 1. Direct credit substitutes. (These include general guari. In the event a netting contract covers contracts that antees of indebtedness and all guarantee-type instruare normally excluded from the risk-based ratio ments, including standby letters of credit backing the calculation—for example, exchange rate contracts financial obligations of other parties.) with an original maturity of fourteen or fewer calen- 2. Risk participations in bankers acceptances and direct dar days or instruments traded on exchanges that credit substitutes, such as standby letters of credit. require daily payment and receipt of cash variation 3. Sale and repurchase agreements and assets sold with margin—an institution may elect to either include or recourse that are not included on the balance sheet. exclude all mark-to-market values of such contracts 4. Forward agreements to purchase assets, including when determining net current exposure, provided the financing facilities, on which drawdown is certain. method chosen is applied consistently. 5. Securities lent for which the banking organization is at 4. Risk Weights. Once the credit equivalent amount for a risk. derivative contract, or a group of derivative contracts subject to a qualifying bilateral netting contract, has 50 Percent Conversion Factor been determined, that amount is assigned to the risk category appropriate to the counterparty, or, if relevant, 1. Transaction-related contingencies. (These include bidthe guarantor or the nature of any collateral.55 However, bonds, performance bonds, warranties, and standby letthe maximum risk weight applicable to the credit equiv- ters of credit backing the nonfinancial performance of alent amount of such contracts is 50 percent. other parties.) 5. Avoidance of double counting, a. In certain cases, 2. Unused portions of commitments with an original credit exposures arising from the derivative contracts maturity exceeding one year, including underwriting covered by section III.£. of this Appendix A may commitments and commercial credit lines. already be reflected, in part, on the balance sheet. To 3. Revolving underwriting facilities (RUFs), note issuavoid double counting such exposures in the assess- ance facilities (NIFs), and similar arrangements. ment of capital adequacy and, perhaps, assigning inappropriate risk weights, counterparty credit exposures 20 Percent Conversion Factor arising from the derivative instruments covered by these guidelines may need to be excluded from bal- Short-term, self-liquidating trade-related contingencies, ance sheet assets in calculating a banking organiza- including commercial letters of credit. tion's risk-based capital ratios. b. Examples of the calculation of credit equivalent Zero Percent Conversion Factor amounts for contracts covered under this section IIL£. are contained in Attachment V of this Appendix A. Unused portions of commitments with an original maturity of one year or less, or which are unconditionally cancellable at any time, provided a separate credit deci- 4. In Appendix A to Part 225, Attachments IV and V are sion is made before each drawing. revised to read as follows: Credit Conversion for Derivative Contracts 1. The credit equivalent amount of a derivative contract is the sum of the current credit exposure of the contract and an estimate of potential future increases in credit exposure. The current exposure is the positive mark-tomarket value of the contract (or zero if the mark-tomarket value is zero or negative). For derivative con- 55. For derivative contracts, sufficiency of collateral or guaran- tracts that are subject to a qualifying bilateral netting tees is generally determined by the market value of the collateral or contract, the current exposure is, generally, the net sum the amount of the guarantee in relation to the credit equivalent of the positive and negative mark-to-market values of amount. Collateral and guarantees are subject to the same provisions noted under section III.B. of this Appendix A. the contracts included in the netting contract (or zero if Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

964 Federal Reserve Bulletin • September 1995 the net sum of the mark-to-market values is zero or d. If the net current exposure was a positive number, negative). The potential future exposure is calculated by for example $200,000, the credit equivalent would be multiplying the effective notional amount of a contract calculated as follows: by one of the following credit conversion factors, as appropriate: NGR = .67 = ($200,000/$300,000) A = (0.4 X $2,900,000) + 0.6 (.67 X $2,900,000) NET Conversion Factors A = $2,325,800 Percent NEL Exchange Commodity, Precious The credit equivalent amount would be $2,325,800 + Remaining Interest excluding metals, maturity rate rate and Equity precious except $200,000 = $2,525,800. gold metals gold One year or less .. 0.0 1.0 6.0 10.0 7.0 Over one to five years 0.5 5.0 8.0 12.0 7.0 Part 325—Capital Maintenance Over five years ... 1.5 7.5 10.0 15.0 8.0 1. The authority citation for Part 325 continues to read as For contracts subject to a qualifying bilateral netting follows: contract, the potential future exposure is, generally, the sum of the individual potential future exposures for each Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), contract included under the netting contract adjusted by 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), the application of the following formula: 1828(d), 1828(1), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; Pub. L. 102-233, 105 Stat. 1761, 1789, A = (0.4 X A ) + 0.6 (NGR X A ) NET XROU GMSS 1790 (12 U.S.C. 183In note) Pub. L. 102-242, 105 Stat. 2236, 2355, 2386 (12 U.S.C. 1828 note). NGR is the ratio of net current exposure to gross current exposure. 2. In Appendix A to Part 325, section II is amended by: 2. No potential future exposure is calculated for single a. Revising the last sentence in section II.C. Catecurrency interest rate swaps in which payments are made gory 3; based upon two floating indices, that is, so called b. Redesignating footnotes 35 through 38 as footfloating/floating or basis swaps. The credit exposure on notes 36 through 39; these contracts is evaluated solely on the basis of their c. Adding new footnote 35 at the end of the introducmark-to-market value. Exchange rate contracts with an tory text of section II.D.; and original maturity of fourteen or fewer days are excluded. d. Revising section II.E. to read as follows: Instruments traded on exchanges that require daily receipt and payment of cash variation margin are also excluded. (See upper portion of Attachment V.) APPENDIX A TO PART 325—STATEMENT OF POUCY a. If contracts (1) through (5) above are subject to a ON RISK-BASED CAPITAL qualifying bilateral netting contract, then the following applies: (see lower portion of Attachment V.) b. To recognize the effects of bilateral netting on JJ * * * potential future exposure the following formula ap- Q * * * plies: Category 3 *** In addition, the credit equivalent amount of derivative contracts that do not qualify for A = (0.4 X A ) + 0.6 (NGR X A ) NET GROSS GROSS a lower risk weight are assigned to the 50 percent risk category. c. In the above example, where the net current exposure is zero, the credit equivalent amount would be calculated as follows: J) * * * 35 * * * NGR = 0 = (0/300,000) A = (0.4 X $2,900,000) + .6 (0 X $2,900,000) NET 35. The sufficiency of collateral and guarantees for off-balance- A = $1,160,000 NET sheet items is determined by the market value of the collateral or the amount of the guarantee in relation to the face amount of the The credit equivalent amount is $1,160,000 + 0 = item, except for derivative contracts, for which this determination $1,160,000. is generally made in relation to the credit equivalent amount. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 965 Attachment V—Calculating Credit Equivalent Amounts for Derivative Contracts Notional Potential Current Conversion Mark-to- Credit equivalent Type of contract principal exposure exposure amount factor (dollars) market (dollars) amount (1) 120-day forward foreign exchange 5,000,000 .01 50,000 100,000 100,000 150,000 (2) 4-year forward foreign exchange 6,000,000 .05 300,000 -120,000 0 300,000 (3) 3-year singlecurrency fixed and floating interest rate swap 10,000,000 .005 50,000 200,000 200,000 250,000 (4) 6-month oil swap 10,000,000 .10 1,000,000 -250,000 0 1,000,000 (5) 7-year crosscurrency floating and floating interest rate swap 20,000,000 .075 1,500,000 -1,500,000 0 1,500,000 Total 2,900,000 + 300,000 3,200,000 Potential Credit Net current Contract future equivalent exposure exposure amount (1) 50,000 (2) 300,000 (3) 50,000 (4) 1,000,000 (5) 1,500,000 Total 2,900,000 + 0 2,900,000 NOTE: The total of the mark-to-market values from the first table is —$1,370,000. Since this is a negative amount, the net current exposure is zero. E. Derivative Contracts (Interest Rate, Exchange Rate, (iv) Any other instrument linked to commodities or Commodity (including precious metal) and Equity Deriv- equities that gives rise to similar credit risks. ative Contracts) 2. Exchange rate contracts with an original maturity of 1. Credit equivalent amounts are computed for each of 14 calendar days or less and derivative contracts traded the following off-balance-sheet derivative contracts: on exchanges that require daily receipt and payment of (a) Interest Rate Contracts cash variation margin may be excluded from the risk- (i) Single currency interest rate swaps. based ratio calculation. Gold contracts are accorded the (ii) Basis swaps. same treatment as exchange rate contracts except gold (iii) Forward rate agreements. contracts with an original maturity of 14 calendar days (iv) Interest rate options purchased (including caps, or less are included in the risk-based calculation. Overcollars, and floors purchased). the-counter options purchased are included and treated (v) Any other instrument linked to interest rates that in the same way as other derivative contracts. gives rise to similar credit risks (including when- 3. Credit Equivalent Amounts for Derivative Contracts. issued securities and forward deposits accepted). (a) The credit equivalent amount of a derivative con- (b) Exchange Rate Contracts tract that is not subject to a qualifying bilateral netting (i) Cross-currency interest rate swaps. contract in accordance with section II.£.5. of this (ii) Forward foreign exchange contracts. Appendix A is equal to the sum of: (iii) Currency options purchased. (i) The current exposure (which is equal to the (iv) Any other instrument linked to exchange rates mark-to-market value,40 if positive, and is somethat gives rise to similar credit risks. times referred to as the replacement cost) of the (c) Commodity (including precious metal) or Equity contract; and Derivative Contracts (ii) An estimate of the potential future credit expo- (i) Commodity- or equity-linked swaps. sure. (ii) Commodity- or equity-linked options pur- (b) The current exposure is determined by the markchased. to-market value of the contract. If the mark-to-market (iii) Forward commodity- or equity-linked con- value is positive, then the current exposure is equal to tracts. 40. Mark-to-market values are measured in dollars, regardless of the currency or currencies specified in the contract and should Collateral and guarantees are subject to the same provisions noted reflect changes in both underlying rates, prices and indices, and under section II.fi. of this Appendix A. counterparty credit quality. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

966 Federal Reserve Bulletin • September 1995 that mark-to-market value. If the mark-to-market avoid double counting such exposures in the assessvalue is zero or negative, then the current exposure is ment of capital adequacy and, perhaps, assigning inapzero. propriate risk weights, counterparty credit exposures (c) The potential future credit exposure of a contract, arising from the types of instruments covered by these including a contract with a negative mark-to-market guidelines may need to be excluded from balance value, is estimated by multiplying the notional princi- sheet assets in calculating a bank's risk-based capital pal amount of the contract by a credit conversion ratio. factor. Banks should, subject to examiner review, use (c) The FDIC notes that the conversion factors set the effective rather than the apparent or stated notional forth in section II.£.3. of Appendix A, which are amount in this calculation. The credit conversion fac- based on observed volatilities of the particular types tors are: of instruments, are subject to review and modification in light of changing volatilities or market conditions. Conversion Factor Matrix (d) Examples of the calculation of credit equivalent Percent amounts for these types of contracts are contained in Exchange Precious Table IV of this Appendix A. Remaining Interest metals, Other maturity rate rate and Equity except commodities 5. Netting, (a) For purposes of this Appendix A, netgold gold ting refers to the offsetting of positive and negative One year or less ... 0.0 1.0 6.0 7.0 10.0 mark-to-market values when determining a current More than one exposure to be used in the calculation of a credit year to five years 0.5 5.0 8.0 7.0 12.0 equivalent amount. Any legally enforceable form of More than five bilateral netting (that is, netting with a single counteryears 1.5 7.5 10.0 8.0 15.0 party) of derivative contracts is recognized for pur- (d) For contracts that are structured to settle outstand- poses of calculating the credit equivalent amount proing exposure on specified dates and where the terms vided that: are reset such that the market value of the contract is (i) The netting is accomplished under a written zero on these specified dates, the remaining maturity netting contract that creates a single legal obligais equal to the time until the next reset date. For tion, covering all included individual contracts, with interest rate contracts with remaining maturities of the effect that the bank would have a claim or more than one year and that meet these criteria, the obligation to receive or pay, respectively, only the conversion factor is subject to a minimum value of 0.5 net amount of the sum of the positive and negative percent. mark-to-market values on included individual con- (e) For contracts with multiple exchanges of principal, tracts in the event that a counterparty, or a counterthe conversion factors are to be multiplied by the party to whom the contract has been validly asnumber of remaining payments in the contract. Deriv- signed, fails to perform due to default, bankruptcy, ative contracts not explicitly covered by any of the liquidation, or similar circumstances; columns of the conversion factor matrix are to be (ii) The bank obtains a written and reasoned legal treated as "other commodities." opinion(s) representing that in the event of a legal (f) No potential future exposure is calculated for sin- challenge, including one resulting from default, ingle currency interest rate swaps in which payments solvency, bankruptcy or similar circumstances, the are made based upon two floating rate indices (so relevant court and administrative authorities would called floating/floating or basis swaps); the credit ex- find the bank's exposure to be such a net amount posure on these contracts is evaluated solely on the under: basis of their mark-to-market values. (7) The law of the jurisdiction in which the 4. Risk Weights and Avoidance of Double Counting. counterparty is chartered or the equivalent loca- (a) Once the credit equivalent amount for a derivative tion in the case of noncorporate entities and, if a contract, or a group of derivative contracts subject to a branch of the counterparty is involved, then also qualifying bilateral netting agreement, has been deter- under the law of the jurisdiction in which the mined, that amount is assigned to the risk category branch is located; appropriate to the counterparty, or, if relevant, the (2) The law that governs the individual contracts guarantor or the nature of any collateral. However, the covered by the netting contract; and maximum weight that will be applied to the credit (3) The law that governs the netting contract. equivalent amount of such contracts is 50 percent. (iii) The bank establishes and maintains procedures (b) In certain cases, credit exposures arising from the to ensure that the legal characteristics of netting derivative contracts covered by these guidelines may contracts are kept under review in the light of already be reflected, in part, on the balance sheet. To possible changes in relevant law; and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 967 (iv) The bank maintains in its file documentation The effect of this formula is that A is the weighted net adequate to support the netting of derivative con- average of A , and A adjusted by the NGR. gross gross tracts, including a copy of the bilateral netting (g) The NGR may be calculated in either one of two contract and necessary legal opinions. ways—referred to as the counterparty-by-counterparty (b) A contract containing a walkaway clause is not approach and the aggregate approach. eligible for netting for purposes of calculating the (i) Under the counterparty-by-counterparty apcredit equivalent amount.41 proach, the NGR is the ratio of the net current (c) By netting individual contracts for the purpose of exposure of the netting contract to the gross current calculating its credit equivalent amount, a bank repre- exposure of the netting contract. The gross current sents that it has met the requirements of this Appendix exposure is the sum of the current exposures of all A and all the appropriate documents are in the bank's individual contracts subject to the netting contract files and available for inspection by the FDIC. Upon calculated in accordance with section His. of this determination by the FDIC that a bank's files are Appendix A. inadequate or that a netting contract may not be le- (ii) Under the aggregate approach, the NGR is the gally enforceable under any one of the bodies of law ratio of the sum of all of the net current exposures described in paragraphs (ii)(i) through (3) of section for qualifying bilateral netting contracts to the sum IIis.5.(a) of this Appendix A, underlying individual of all of the gross current exposures for those contracts may be treated as though they were not netting contracts (each gross current exposure is subject to the netting contract. calculated in the same manner as in section (d) The credit equivalent amount of derivative con- II.£.5.(g)(i) of this Appendix A). Net negative tracts that are subject to a qualifying bilateral netting mark-to-market values to individual counterparties contract is calculated by adding: cannot be used to offset net positive current expo- (i) the net current exposure of the netting contract; sures to other counterparties. and (iii) A bank must use consistently either the (ii) the sum of the estimates of potential future counterparty-by-counterparty approach or the agexposure for all individual contracts subject to the gregate approach to calculate the NGR. Regardless netting contract, adjusted to take into account the of the approach used, the NGR should be applied effects of the netting contract.42 individually to each qualifying bilateral netting con- (e) The net current exposure is the sum of all positive tract to determine the adjusted add-on for that netand negative mark-to-market values of the individual ting contract. contracts subject to the netting contract. If the net sum 3. In Appendix A to Part 325, Table III is amended by: of the mark-to-market values is positive, then the net a. In the last sentence, removing "II.E.3." and adding current exposure is equal to that sum. If the net sum of in its place "II.Zs.5."; and the mark-to-market values is zero or negative, then the b. Revising the chart and its heading to read as folnet current exposure is zero. lows: (f) The effects of the bilateral netting contract on the gross potential future exposure are recognized through application of a formula, resulting in an adjusted Table III. * * * add-on amount A . The formula, which employs the net ratio of net current exposure to gross current exposure (NGR) is expressed as: Credit Conversion for Derivative Contracts A = (0.4 X A ) + 0.6 (NGR X A ) net gross gwss Conversion Factor Matrix Percent Precious Exchange Remaining Interest metals, Other 41. For purposes of this section, a walkaway clause means a maturity rate rate and Equity except commodities gold provision in a netting contract that permits a non-defaulting coun- gold terparty to make lower payments than it would make otherwise under the contract, or no payment at all, to a defaulter or to the One year or less .... 0.0 1.0 6.0 7.0 10.0 estate of a defaulter, even if a defaulter or the estate of a defaulter is More than one year to five a net creditor under the contract. 0.5 5.0 8.0 7.0 12.0 42. For purposes of calculating potential future credit exposure More than five for foreign exchange contracts and other similar contracts in which 1.5 7.5 10.0 8.0 15.0 notional principal is equivalent to cash flows, total notional principal is defined as the net receipts to each party falling due on each value date in each currency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

968 Federal Reserve Bulletin • September 1995 4. Appendix A to Part 325, Table IV, is revised to read as FINAL RULE—AMENDMENTS TO REGULATIONS H follows: (see Table IV below) AND Y (2) To recognize the effects of netting on potential The Board of Governors is amending 12 C.F.R. Parts future exposure, the following formula applies: 208 and 225, its Regulations H and Y (Capital and Capital Adequacy Guidelines), its risk-based and lever- A , = (0.4 X A ) + 0.6 (NGR X A ) ne gross gwss age capital adequacy guidelines for state member banks and bank holding companies (collectively, banking orga- (3) In the above example: nizations) to implement section 208 of the Riegle Community Development and Regulatory Improvement Act NGR = 0 = (0/300,000) of 1994 (Riegle Act). Section 208 states that a qualifying A = (0.4 X 2,900,000) + 0.6 (0 X 2,900,000) insured depository institution that transfers small businet ness loans and leases on personal property with recourse A = 1,160,000 net shall include only the amount of retained recourse in its risk-weighted assets when calculating its capital ratios, Credit Equivalent Amount: 1,160,000 + 0 = 1,160,000 provided that certain conditions are met. This rule will (4) If the net current exposure was a positive amount, have the effect of lowering the capital requirements for for example, $200,000, the credit equivalent amount small business loans and leases on personal property that would be calculated as follows: have been transferred with recourse by qualifying banking organizations. NGR = .67 = (200,000/300,000) Effective September 1, 1995, 12 C.F.R. Parts 208 and A = (0.4 X 2,900,000) + 0.6 (.67 X 2,900,000) 225 are amended as follows: nel A = 2,325,800 Part 208—Membership of State Banking net Institutions in the Federal Reserve System Credit Equivalent Amount: 2,325,800 + 200,000 = (Regulation H) 2,525,800 1. The authority citation for Part 208 continues to read as follows: Table IV—Calculation of Credit Equivalent Amounts for Derivative Contracts e P x o p te o n su ti r a e l + e C xp u o rr s e u n r t e = Credi a t m e o q u u n iv t alent Notional Potential Mark-to- Current Credit Type of contract Conversion principal exposure market exposure equivalent (remaining maturity) (dollars) factor (dollars) value (dollars) amount (1) 120-day forward foreign exchange 5,000,000 .01 50,000 100,000 100,000 150,000 (2) 4-year forward foreign exchange 6,000,000 .05 300,000 -120,000 0 300,000 (3) 3-year singlecurrency fixed/floating interest rate swap 10,000,000 .005 50,000 200,000 200,000 250,000 (4) 6-month oil swap 10,000,000 .10 1,000,000 -250,000 0 1,000,000 (5) 7-year crosscurrency floating/floating interest rate swap 20,000,000 .075 1,500,000 -1,500,000 1,500,000 TOTAL 2,900,000 300,000 3,200,000 (1) If contracts (1) through (5) above are subject to a qualifying bilateral netting contract, then the following applies: Potential future Net current Credit equivalent exposure exposure* amount (from above) (1) 50,000 (2) 300,000 (3) 50,000 (4) 1,000,000 (5) 1,500,000 Total 2,900,000 + 0 = 2,900,000 ' The total of the mark-to-market values from above is —1,370,000. Since this is a negative amount, the net current exposure is zero. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 969 Authority: 12 U.S.C. 36, 248(a), 248(c), 321-338a, 37Id, d. The risk-based capital ratios of the bank shall be 461, 481-486, 601, 611, 1814, 1823(j), 1828(o), 1831o, calculated without regard to the preferential capital 1831p-l, 3105, 3310, 3331-3351, and 3906-3909; treatment for transfers of small business obligations 15 U.S.C. 78b, 781(b), 781(g), 781(i), 78o-4(c)(5), 78q, with recourse specified in section III.B.5.a. of this 78q-l and 78w; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, Appendix A for purposes of: 4104b. (i) Determining whether a bank is adequately capitalized, undercapitalized, significantly undercapital- 2. In Part 208, Appendix A, section III.B. is amended by ized, or critically undercapitalized under prompt adding a new paragraph 5. to read as follows: corrective action (12 C.F.R. 208.33(b)); and (ii) Reclassifying a well capitalized bank to ade- APPENDIX A TO PART 208—CAPITAL ADEQUACY quately capitalized and requiring an adequately cap- GUIDEUNES FOR STATE MEMBER BANKS: italized bank to comply with certain mandatory or RISK-BASED MEASURE discretionary supervisory actions as if the bank were in the next lower prompt corrective action capital category (12 C.F.R. 208.33(c)). JJJ * * * g * * * 5. Small Business Loans and Leases on Personal Prop- 3. In Part 208, Appendix B, section II. is amended by erty Transferred with Recourse. redesignating paragraph c. as paragraph g. and adding a. Notwithstanding other provisions of this Appen- new paragraphs c., d., e., and f. to read as follows: dix A, a qualifying bank that has transferred small business loans and leases on personal property (small business obligations) with recourse shall include in APPENDIX B TO PART 208—CAPITAL ADEQUACY weighted-risk assets only the amount of retained re- GUIDEUNES FOR STATE MEMBER BANKS: TIER 1 course, provided two conditions are met. First, the LEVERAGE MEASURE transaction must be treated as a sale under GAAP and, second, the bank must establish pursuant to GAAP a non-capital reserve sufficient to meet the bank's rea- JJ * * * sonably estimated liability under the recourse arrange- c. Notwithstanding other provisions of this Appenment. Only loans and leases to businesses that meet dix B, a qualifying bank that has transferred small the criteria for a small business concern established by business loans and leases on personal property (small the Small Business Administration under section 3(a) business obligations) with recourse shall, for purposes of the Small Business Act are eligible for this capital of calculating its tier 1 leverage ratio, exclude from its treatment. average total consolidated assets the outstanding prinb. For purposes of this Appendix A, a bank is qualify- cipal amount of the small business loans and leases ing if it meets the criteria set forth in the Board's transferred with recourse, provided two conditions are prompt corrective action regulation (12 C.F.R. 208.30) met. First, the transaction must be treated as a sale for well capitalized or, by order of the Board, ade- under generally accepted accounting principles quately capitalized. For purposes of determining (GAAP) and, second, the bank must establish pursuwhether a bank meets the criteria, its capital ratios ant to GAAP a non-capital reserve sufficient to meet must be calculated without regard to the preferential the bank's reasonably estimated liability under the capital treatment for transfers of small business obli- recourse arrangement. Only loans and leases to busigations with recourse specified in section III.B.5.a. of nesses that meet the criteria for a small business this Appendix A. The total outstanding amount of concern established by the Small Business Adminisrecourse retained by a qualifying bank on transfers of tration under section 3(a) of the Small Business Act small business obligations receiving the preferential are eligible for this capital treatment. capital treatment cannot exceed 15 percent of the d. For purposes of this Appendix B, a bank is qualifybank's total risk-based capital. By order, the Board ing if it meets the criteria set forth in the Board's may approve a higher limit. prompt corrective action regulation (12 C.F.R. 208.30) c. If a bank ceases to be qualifying or exceeds the 15 for well capitalized or, by order of the Board, adepercent capital limitation, the preferential capital treat- quately capitalized. For purposes of determining ment will continue to apply to any transfers of small whether a bank meets these criteria, its capital ratios business obligations with recourse that were consum- must be calculated without regard to the preferential mated during the time that the bank was qualifying capital treatment for transfers of small business obliand did not exceed the capital limit. gations with recourse specified in section II.c. of this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

970 Federal Reserve Bulletin • September 1995 Appendix B. The total outstanding amount of recourse transferred small business loans and leases on perretained by a qualifying bank on transfers of small sonal property (small business obligations) with business obligations receiving the preferential capital recourse shall include in weighted-risk assets only treatment cannot exceed 15 percent of the bank's total the amount of retained recourse, provided two conrisk-based capital. By order, the Board may approve a ditions are met. First, the transaction must be higher limit. treated as a sale under GAAP and, second, the e. If a bank ceases to be qualifying or exceeds the 15 banking organization must establish pursuant to percent capital limitation, the preferential capital treat- GAAP a non-capital reserve sufficient to meet the ment will continue to apply to any transfers of small organization's reasonably estimated liability under business obligations with recourse that were consum- the recourse arrangement. Only loans and leases to mated during the time that the bank was qualifying businesses that meet the criteria for a small busiand did not exceed the capital limit. ness concern established by the Small Business f. The leverage capital ratio of the bank shall be Administration under section 3(a) of the Small calculated without regard to the preferential capital Business Act are eligible for this capital treatment. treatment for transfers of small business obligations b. For purposes of this Appendix A, a banking with recourse specified in section II of this Appen- organization is qualifying if it meets the criteria for dix B for purposes of: well capitalized or, by order of the Board, ade- (i) Determining whether a bank is adequately capi- quately capitalized, as those criteria are set forth in talized, undercapitalized, significantly undercapital- the Board's prompt corrective action regulation for ized, or critically undercapitalized under prompt state member banks (12 C.F.R. 208.30). For purcorrective action (12 C.F.R. 208.33(b)); and poses of determining whether an organization meets (ii) Reclassifying a well capitalized bank to ade- these criteria, its capital ratios must be calculated quately capitalized and requiring an adequately cap- without regard to the capital treatment for transfers italized bank to comply with certain mandatory or of small business obligations with recourse specidiscretionary supervisory actions as if the bank fied in section III.B.5.a. of this Appendix A. The were in the next lower prompt corrective action total outstanding amount of recourse retained by a capital category (12 C.F.R. 208.33(c)). qualifying banking organization on transfers of small business obligations receiving the preferential capital treatment cannot exceed 15 percent of the organization's total risk-based capital. By order, the Part 225—Bank Holding Companies and Change Board may approve a higher limit. in Bank Control (Regulation Y) c. If a bank holding company ceases to be qualifying or exceeds the 15 percent capital limitation, the 1. The authority citation for Part 225 continues to read as preferential capital treatment will continue to apply follows: to any transfers of small business obligations with recourse that were consummated during the time Authority: 12U.S.C. 18170(13), 1818, 1828o, 1831i, that the organization was qualifying and did not 183lp-1, 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, exceed the capital limit. 3331-3351,3907, and 3909. 2. In Part 225, Appendix A, section III.B. is amended by ORDERS ISSUED UNDER BANK HOLDING COMPANY adding a new paragraph 5. to read as follows: ACT Orders Issued Under Section 3 of the Bank APPENDIX A TO PART 225—CAPITAL ADEQUACY Holding Company Act GUIDELINES FOR BANK HOLDING COMPANIES: RISK-BASED MEASURE Fulton Financial Corporation Lancaster, Pennsylvania JJJ * * * Order Approving the Merger of Bank Holding g * * * Companies 5. Small Business Loans and Leases on Personal Property Transferred with Recourse. Fulton Financial Corporation, Lancaster, Pennsylvania a. Notwithstanding other provisions of this Appen- ("Fulton"), a bank holding company within the meaning dix A, a qualifying banking organization that has of the Bank Holding Company Act ("BHC Act"), has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 971 applied under section 3 of the BHC Act (12 U.S.C. home state would permit the acquisition by a Delaware § 1842) to merge with Delaware National Bankshares bank holding company of banks and bank holding com- Corporation ("Delaware National"), and thereby indi- panies located in that state on a reciprocal basis, and that rectly acquire Delaware National Bank, both of George- certain other conditions are satisfied.4 Pennsylvania law town, Delaware. also permits the acquisition of Pennsylvania banks and Notice of this proposal, affording interested persons an bank holding companies by out-of-state organizations, opportunity to submit comments, has been published (60 if, among other things, there is reciprocity between Penn- Federal Register 27,105 (1995)). The time for filing sylvania and the home state of the acquiring company.5 comments has expired, and the Board has considered the The Board also notes that the Delaware Bank Commisproposal and all comments received in light of the fac- sioner has approved this transaction and has determined tors set forth in section 3 of the BHC Act. that the proposal would comply with Delaware's inter- Fulton, with total consolidated assets of approxi- state banking statute. In light of the foregoing, and based mately $3 billion, operates banks in Pennsylvania and on all the facts of record, the Board has concluded that Maryland.1 Fulton is the 11th largest commercial bank- approval of this proposal is not prohibited by the Douing organization in Pennsylvania, controlling approxi- glas Amendment. mately $2 billion in deposits, representing approximately 1.5 percent of the total deposits in commercial Convenience and Needs Considerations banks in the state. Delaware National, with total consolidated assets of $96 million, is the seventh largest com- In acting on an application under the BHC Act to acquire mercial banking organization in Delaware, controlling a depository institution, the Board must consider the $77 million in deposits, representing approximately convenience and needs of the communities to be served, 1 percent of the total deposits in commercial banks in the and take into account the records of the relevant deposistate. Fulton and Delaware National do not compete in tory institutions under the Community Reinvestment Act any banking market. Based on all the facts of record, the (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires Board has concluded that consummation of this proposal the federal financial supervisory agencies to encourage would not result in any significantly adverse effect on financial institutions to help meet the credit needs of the competition or the concentration of banking resources in local communities in which they operate, consistent with any relevant banking market. their safe and sound operation. To accomplish this end, the CRA requires the appropriate federal supervisory Douglas Amendment Analysis authority to "assess the institution's record of meeting the credit needs of its entire community, including low- Section 3(d) of the BHC Act ("Douglas Amendment") and moderate-income neighborhoods, consistent with prohibits the Board from approving an application by a the safe and sound operation of such institution," and to bank holding company to acquire any interest in a bank take that record into account in its evaluation of applicalocated outside the applicant's home state2 unless the tions.6 acquisition "is specifically authorized by the statute laws The Board has received comments from an individual of the State in which such bank is located, by language ("Protestant") alleging that Fulton's subsidiary bank, to that effect and not merely by implication."3 For pur- Lafayette Bank, Easton, Pennsylvania ("Lafayette"), has poses of the Douglas Amendment, the home state of a record of inadequate mortgage lending in low- and Fulton is Pennsylvania and the home state of Delaware moderate-income communities and that this record indi- National is Delaware. cates violations of federal fair lending laws. Protestant The statute laws of Delaware permit an out-of-state also suggests that Lafayette's lending activities discrimibank holding company, such as Fulton, to acquire con- nate against Hispanic credit applicants and businesses trol of a Delaware bank or bank holding company, provided that the out-of-state bank holding company's 1. Asset data are as of March 31, 1995, and state deposit data are 4. See Del. Code Ann. tit. 5, §§ 842, 843 (1993). Delaware law as of June 30, 1994. also requires that the majority of the deposits controlled by the 2. Under the Douglas Amendment, a bank holding company's out-of-state bank holding company be located in states with laws home state is the state in which the operations of its banking that permit a bank holding company located in Delaware to acquire subsidiaries were principally conducted on July 1, 1966, or the date a banking organization located in the other state on substantially on which it became a bank holding company, whichever is later. the same terms and conditions applicable to an in-state bank 12 U.S.C. § 1842(d). The operations of a bank holding company holding company, and that the acquiring company file an applicaare considered to be principally conducted in that state in which the tion with the Delaware Bank Commissioner. total deposits of all its banking subsidiaries are largest. 5. See Pa. Stat. Ann. tit. 7, § 116 (Purdon 1995). 3. 12 U.S.C. § 1842(d). 6. 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

972 Federal Reserve Bulletin • September 1995 with predominantly Hispanic customers, in violation of ette's lending to residents of low- and moderate-income federal fair lending laws.7 neighborhoods declined in 1993 and 1994. Lafayette In considering the convenience and needs factor under also received relatively few loan applications from the BHC Act, the Board has carefully reviewed the Hispanics. entire CRA performance record of Fulton, Delaware The Board notes that the most recent CRA examina- National, and their subsidiaries; all comments received tion of Lafayette determined that the bank's delineation on this proposal and Fulton's responses to those com- of its local community was reasonable and did not ments; and all other relevant facts of record, in light of exclude low- and moderate-income communities. Furthe CRA, the Board's regulations, and the Statement of thermore, examiners found that Lafayette generally sothe Federal Financial Supervisory Agencies Regarding licits and appears willing to accept and consider applicathe Community Reinvestment Act ("Agency CRA State- tions from all segments of its local community, including ment").8 low- and moderate-income neighborhoods, and that there was no evidence of any practice intended to discourage Record of CRA Performance credit applications. The 1994 Exam concluded that Lafayette was in compliance with the provisions of A. Evaluation of CRA Performance federal fair lending laws and regulations, including the Equal Credit Opportunity Act and the Fair Housing Act. The Agency CRA Statement provides that a CRA exam- The record also indicates that Lafayette has taken steps ination is an important and often controlling factor in the to ensure that all loan applicants are treated equally in consideration of an institution's CRA record and that the lending process, and that Lafayette provides training reports of these examinations will be given great weight on fair lending and other CRA-related issues to the in the applications process.9 In this case, the Board notes bank's officers and other personnel who may have conthat all seven of Fulton's subsidiary banks received tact with the public. "outstanding" or "satisfactory" ratings in the most re- Lafayette has also taken a number of steps to meet cent examinations of their CRA performance by their housing-related and other credit needs within its commuprimary federal supervisors. In particular, Lafayette re- nity. In 1993, for example, Lafayette initiated its First ceived a "satisfactory" rating from its primary federal Time Home Buyers Program, which helps make home supervisor, the FDIC, at its most recent CRA perfor- ownership affordable by, among other things, requiring a mance examination as of February 23, 1994 ("1994 down payment as low as 5 percent. In 1994, Lafayette Exam"). Delaware National Bank also received a "satis- originated loans totalling $1,651,000 through the profactory" rating from its primary federal supervisor, the gram. Lafayette has advertised the program in local Office of the Comptroller of the Currency, at its most newspapers and on billboards, including a number of recent CRA performance examination as of June 1, billboards located in low- and moderate-income neigh- 1993. borhoods. In addition, in 1995, Lafayette initiated its 100% Financing Mortgage Program. This program pro- B. HMDA Data and Lending Record vides for no points, less restrictive income requirements, and loan-to-value ratios as high as 100 percent, and The Board has carefully reviewed the data filed by focuses on low- and moderate-income areas. Lafayette Lafayette under the Home Mortgage Disclosure Act also is one of several financial institutions that partici- (12 U.S.C. § 2801 et seq.) ("HMDA") for 1992, 1993, pates in the Home Ownership Outreach Program and 1994, in light of Protestant's allegations. These data ("HOOP"), under which conventional bank mortgage generally indicate that there are disparities in the origina- loans are combined with secondary financing from tion and denial rates for loan applicants who are resi- HOOP. dents of low- and moderate-income neighborhoods com- Lafayette also assists in meeting the affordable houspared with loan applicants who are residents of ing and other needs of low- and moderate-income resimiddle- and high-income neighborhoods, and that Lafay- dents throughout its delineated community by participating in community development programs. Lafayette, for example, has invested $100,000 in a privately held multi-bank community development corporation en- 7. Protestant also believes that he was treated unfairly on the gaged in creating affordable housing and improving embasis of his religion in his business dealings with Lafayette. Protestant's allegations of illegal discrimination and violations of federal ployment opportunities for low- and moderate-income fair lending and other laws have been referred to Lafayette's individuals who live in economically distressed areas. primary federal supervisor, the Federal Deposit Insurance Corpora- Lafayette also has provided more than $5 million in tion ("FDIC"). financing for a low- and moderate-income housing 8. 54 Federal Register 13,742 (1989). project through loans and an equity participation. The 9. Id. at 13,745. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 973 bank participates in a significant number of economic sored credit-related educational programs in 1995. The and community development corporations, and has made "Dollars for Your Business Workshops" were designed substantial loans to municipalities and community for low- and moderate-income individuals who wish to projects, such as day care and senior citizen centers and start their own businesses or expand existing businesses. senior citizen housing units. The seminars focused on making participants aware of Although a relatively small proportion of Lafayette's various financing programs available in the community loan portfolio consists of commercial loans, Lafayette and discussed credit-related and other issues important provides funding to meet the credit needs of small busi- to small businesses. nesses in its community, such as through its participation The 1994 Exam also noted that Lafayette's CRA in the Lehigh Valley Small Business Loan Pool policy is formulated by its board of directors and is ("Pool").10 The Pool uses the resources of several banks reviewed annually. Lafayette's directors are involved in to provide funding for small businesses through various creating and monitoring Lafayette's CRA policies and programs, including one for minority-owned businesses. programs, and three of Lafayette's directors are mem- As of December 31, 1994, Lafayette's total participation bers of its CRA committee. in loans generated through the Pool was approximately $150,000, and included participations in 14 loans of D. Conclusion On Convenience and Needs Factor $100,000 or less. Lafayette also assists in funding the cost of publishing the Pool's marketing brochure in The Board has carefully considered all the facts of Spanish. In addition, in 1994, Lafayette made several record in this case, including the comments received, in SBA loans for a total of more than $500,000. reviewing the convenience and needs factor under the BHC Act. Based on a review of the entire record, includ- C. Other Elements of CRA Performance ing the programs and record of performance discussed above, information provided by Fulton, and relevant The 1994 Exam found that Lafayette's marketing pro- reports of examination, the Board has concluded that gram was designed to reach all segments of its delin- convenience and needs considerations, including the eated community, including low- and moderate-income CRA performance records of Fulton, Delaware National, neighborhoods. Lafayette uses a variety of media to and their subsidiary depository institutions, are consismarket its products and services, including newspapers, tent with approval of this application. direct mailings and billboards. These activities include marketing efforts directed specifically to Hispanic resi- Other Considerations dents. For example, Lafayette advertises its services in El Hispano, a newspaper distributed primarily within the The Board also has reviewed the financial and manage- Hispanic community. Lafayette also makes available at rial resources and future prospects of Fulton, Delaware its branches brochures in Spanish describing Lafayette's National, and their respective subsidiaries,12 and other services and products. In addition, Lafayette recently hired a Spanish-speaking mortgage loan originator. Lafayette also uses various methods to ascertain com- authorities, business and professional associations, and outreach munity credit needs, including participation in various programs. community groups.11 In addition, Lafayette has spon- 12. Protestant contends that Fulton and Lafayette lack sufficient supervisory and managerial resources and policies to merit approval of this proposal, particularly in the areas of commercial lending and the integration of newly-acquired banks into the orga- 10. Protestant maintains that Lafayette is reluctant to lend to nization. Protestant supports these allegations with information certain types of businesses, and that this practice constitutes the from a civil action he has filed in a Pennsylvania state court against illegal practice of "redlining." The record in this case indicates that Fulton and Lafayette, and on the basis of related matters such as Lafayette is not an active commercial lender. In particular, the 1994 Fulton's alleged failure to institute new policies and replace person- Exam noted that Lafayette makes mostly consumer and residential nel in response to Protestant's civil action and the underlying real estate loans, with commercial lending comprising only events. In this case, a jury concluded that Protestant was entitled to 7 percent of the bank's total loan portfolio. The 1994 Exam also substantial money damages as the result of actions taken by Lafayfound that Lafayette makes loans throughout its community and did ette in foreclosing on a loan to him. Lafayette has filed motions to not find any evidence of discriminatory lending practices. Neither set aside the jury's verdict, and a ruling on these motions is the CRA nor federal fair lending laws require financial institutions pending. to offer or promote a particular loan product or to lend to any The Board has carefully reviewed Protestant's allegations in light particular type of business. On the basis of all the facts of record, of all the facts of record, including reports of examination from including the findings of the 1994 Exam, the Board has concluded Lafayette's primary federal supervisor, the FDIC, which assess the that Protestant's comments do not warrant denial of this applica- managerial resources and policies of the bank, and the most recent tion. report of inspection of Fulton. The Board also notes that Protes- 11. The 1994 Exam noted that several directors and officers of tant's allegations relate, in large part, to events that occurred in the Lafayette participate in local chambers of commerce, development context of an individual loan transaction with Lafayette, and that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

974 Federal Reserve Bulletin • September 1995 supervisory factors the Board must consider under sec- the Board's decision. For these reasons, and based on all tion 3 of the BHC Act, and, based on all the facts of the facts of record, the Board has determined that a record, has concluded that these factors are consistent public meeting or hearing is not necessary to clarify the with approval of this proposal. factual record in this application, or otherwise warranted in this case. Accordingly, Protestant's request for a pub- Request for Hearing lic hearing or meeting on this application is hereby denied.14 Protestant has requested that the Board hold a public meeting or hearing on this application, because he be- Conclusion lieves that testimony is needed to present certain facts as part of the record. Section 3(b) of the BHC Act does not Based on the foregoing and all the other facts of record, require the Board to hold a public hearing or meeting on the Board has determined that the application should be, an application unless the appropriate supervisory author- and hereby is, approved. The Board's approval is exity for the bank to be acquired makes a timely written pressly conditioned on Fulton's compliance with all the recommendation of denial. No supervisory agency has commitments made in connection with this application. recommended denial of this proposal. For purposes of this action, these commitments and the Generally, under its rules, the Board may, in its discre- conditions stated in this order shall be deemed to be tion, hold a public hearing or meeting on an application conditions imposed in writing by the Board in connecto clarify factual issues and to provide an opportunity for tion with its findings and decision, and, as such, may be testimony, if appropriate. 12 C.F.R. 262.3(e) and enforced in proceedings under applicable law. 262.25(d). In the Board's view, all interested parties This transaction shall not be consummated before the have had ample opportunity to submit their views, and fifteenth calendar day following the effective date of this substantial written submissions have been received. Prot- order, or later than three months after the effective date estant's request fails to demonstrate why his substantial of this order, unless such period is extended for good written submissions do not adequately present his allega- cause by the Board or by the Federal Reserve Bank of tions or why a public hearing or meeting is otherwise Philadelphia, acting pursuant to delegated authority. warranted.13 Moreover, after a careful review of all the By order of the Board of Governors, effective facts of record, the Board has concluded that Protestant's August 14, 1995. request disputes the weight that should be accorded to, and the conclusions that may be drawn from, the existing Voting for this action: Chairman Greenspan, Vice Chairman facts of record, or disputes facts that are not material to Blinder, and Governors Kelley and Lindsey. Absent and not voting: Governors Phillips and Yellen. WILLIAM W. WILES the civil courts are empowered to provide Protestant with an appropriate remedy under applicable law. Moreover, Fuhon has Secretary of the Board stated that Lafayette is in the process of revising its formal loan policies. The Board expects the bank to initiate these revisions Orders Issued Under Section 4 of the Bank promptly and to consult with the FDIC regarding their promulga- Holding Company Act tion and implementation. Based on all the facts of record, the Board has concluded that Protestant's allegations on these matters do not warrant denial of this application. Norwest Corporation 13. Protestant maintains generally that a hearing would elicit Minneapolis, Minnesota material information and clarify factual issues relating to this application. He supports his request for a hearing primarily by Order Approving a Notice to Engage in the Activity of contending that his experience with Lafayette is indicative of inadequate managerial resources at Lafayette and Fulton. Protestant Transmitting Money to a Foreign Country also has identified two other individuals who, according to Protestant, wish to be heard in this matter and would present adverse Norwest Corporation, Minneapolis, Minnesota ("Norinformation relating to those entities. Protestant also indicates that west"), a bank holding company within the meaning of other community residents would like to testify at a public meeting or hearing. Protestant's request does not identify the evidence he the Bank Holding Company Act ("BHC Act"), has would present to clarify the factual issues in this application or given notice under section 4(c)(8) of the BHC Act explain why written presentations are insufficient. Moreover, Protestant has not specified the nature of the information that would be presented by the other individuals referred to or specifically identified by Protestant. The Board notes that its rules specify that a 14. Protestant also has requested that certain information be hearing request should include a statement of why a written presen- obtained from Fulton. The Board has reviewed this request, and, tation would not suffice in lieu of a hearing, identifying specifically for the reasons stated above and in light of all the facts of record, any questions of fact that are in dispute and summarizing the has concluded that the record before the Board is sufficient to act on evidence that would be presented at a hearing. this application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 975 (12 U.S.C. § 1843(c)(8)) and section 225.23 of the sion of funds using a telephone in the office of an outside Board's Regulation Y (12 C.F.R. 225.23) to acquire Or- representative of Companies. The outside representative landi Valuta, Los Angeles, California, and Orlandi collects the money from the customer, issues a receipt Valuta Nacional, Boulder City, Nevada (collectively and deposits the funds into a designated bank account, "Companies"), through its subsidiary, Norwest Finan- which is swept daily by Companies.5 Companies transcial Services, Inc., Des Moines, Iowa, and thereby en- mit the money-transfer information to their office in gage in the activity of transmitting money for customers Mexico City, where they purchase pesos from an unaffilto a foreign country. iated Mexican exchange company and deposit them in Notice of the proposal, affording interested persons an an account at an unaffiliated Mexican bank. The funds in opportunity to submit comments, has been published (60 this account are transferred to the branch of the Mexican Federal Register 39,395 (1995)). The time for filing bank nearest to the recipient, who is notified of the comments has expired, and the Board has considered the transaction. When the recipient comes to the disbursenotice and all comments received in light of the factors ment site, a check is issued from the branch account, and set forth in section 4(c)(8) of the BHC Act. the funds are immediately available to the recipient. Norwest, with total consolidated assets of approxi- Section 4(c)(8) of the BHC Act requires the Board to mately $61.8 billion, controls bank subsidiaries in 15 consider whether (1) the proposed activity is closely states.1 Norwest also engages directly and through sub- related to banking; and (2) the performance of the prosidiaries in a broad range of permissible nonbanking posed activity is a proper incident to banking—that is activities. Companies are corporations that engage in the whether the proposed activity "can reasonably be exbusiness of money transmission to Mexico, and they pected to produce benefits, such as greater convenience, operate through a network of approximately 1,200 out- increased competition, or gains in efficiency, that outside representatives in California, Florida, Illinois, and weigh possible adverse effects, such as undue concentra- Texas.2 tion of resources, decreased or unfair competition, con- Norwest proposes to engage, through Companies, in flicts of interests, or unsound banking practices." the activity of transmitting money to Mexico at the order The Board has determined that the activity of transmitof customers in California, Florida, Illinois, and Texas.3 ting money to foreign countries is closely related to Norwest has applications pending with state banking banking for purposes of section 4(c)(8) of the BHC Act.6 regulators for Companies to continue to conduct this The Board also believes that consummation of the proactivity in the states in which they currently operate, and posal can reasonably be expected to result in public Companies would be subject to examination by the state benefits, including gains in efficiencies in the operation banking regulators.4 Companies would not be FDIC- of Companies and Norwest, as well as greater competiinsured institutions, and their offices would not consti- tion by expanding the services of Companies into more tute "branches" under state or federal law. Companies communities. In addition, consummation of this prowould not engage in any other nonbanking activity, and posal is not likely to result in any significant adverse in particular, Companies would not engage in commer- effects, such as undue concentration of resources, decial lending activities. creased or unfair competition, conflicts of interests, or Companies receive funds from customers in the unsound banking practices. Accordingly, the Board has United States for transmission to Mexico. A customer determined that the balance of public interest factors it makes a direct request to Companies for the transmis- must consider under section 4(c)(8) of the BHC Act is favorable and consistent with approval. Based on the foregoing and all the facts of record, the 1. Asset data are as of March 31, 1995. Board has determined to, and hereby does, approve the 2. Outside representatives of Companies are located in retail notice. The Board's decision is specifically conditioned establishments such as small markets and grocery stores, travel on Norwest's complying with all the commitments made agencies, pharmacies, and insurance agencies. These establishin connection with this notice, and obtaining the necesments, however, do not constitute offices of Companies. 3. Under California law, Companies are authorized to receive sary approvals from state regulators.7 The Board's determoney for transmission only to foreign countries. Cal. Fin. Code § 1800.5(a)(1) (West Supp. 1994). Under the laws of Illinois and Texas, Companies are licensed to transmit money within or outside the United States. See 111. Rev. Stat. ch. 205 para. 1 et seq. (1995); 5. Funds are held in trust for the benefit of the remitting cus- Tex. Rev. Civ. Stat. Ann. art. 489d. (West 1973). Companies have tomer, and the customer continues to own the funds until the applied in Florida to transmit money within or outside the United designated recipient receives the funds. States. See Fla. Stat. Ann. § 560 et seq. (West Supp. 1995). 6. See Philippine Commercial International Bank, 11 Federal 4. See Cal. Fin. Code § 1800 (West Supp. 1994); 111. Rev. Stat, Reserve Bulletin 270 (1991); Bergen Bank A/S, 76 Federal Reserve ch. 205 para. 657 1 et seq. (1995); Tex. Rev. Civ. Stat. Ann. art. Bulletin 457 (1990). 489d. (West 1973); Fla. Stat. Ann. § 560 et seq. (West Supp. 7. Norwest also has proposed to engage in money transmission 1995). activities to foreign countries from offices throughout the United Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

976 Federal Reserve Bulletin • September 1995 mination also is subject to all the terms and conditions Notice of the proposal, affording interested persons an set forth in Regulation Y, including those in sec- opportunity to submit comments, has been given in tions 225.7 and 225.23(b) of Regulation Y, and to the accordance with the Bank Merger Act and the Board's Board's authority to require such modification or termi- Rules of Procedure (12 C.F.R. 262.3(b)). As required by nation of the activities of a bank holding company or any the Bank Merger Act, reports on the competitive effects of its subsidiaries as the Board finds necessary to ensure of the merger were requested from the United States compliance with, and to prevent evasion of, the provi- Attorney General, the Office of the Comptroller of the sions of the BHC Act and the Board's regulations and Currency ("OCC"), and the Federal Deposit Insurance orders issued thereunder. For purposes of this action, Corporation. The time for filing comments has expired, these commitments and conditions are considered condi- and the Board has considered the proposal and all comtions imposed in writing by the Board and, as such, may ments received in light of the factors set forth in the be enforced in proceedings under applicable law. Bank Merger Act. This transaction shall not be consummated later than Fifth Third is the fourth largest commercial bank in three months after the effective date of this order, unless Ohio, controlling deposits of $7.7 billion, representing such period is extended for good cause by the Board or approximately 7.9 percent of total deposits in commerby the Federal Reserve Bank of Minneapolis, acting cial banks in the state.2 Based on all the facts of record, pursuant to delegated authority. the Board concludes that consummation of the proposed By order of the Board of Governors, effective transaction would not have a significantly adverse effect August 28, 1995. on competition or the concentration of banking resources in any relevant banking market. The Board also con- Voting for this action: Governors Kelley, Lindsey, Phillips and cludes that the financial and managerial resources and Yellen. Absent and not voting: Chairman Greenspan and Vice future prospects of Fifth Third, and the other factors Chairman Blinder. required to be considered under the Federal Reserve Act, are consistent with approval.3 Considerations relating to JENNIFER J. JOHNSON the convenience and needs of the communities to be Deputy Secretary of the Board served also are consistent with approval.4 ORDERS ISSUED UNDER BANK MERGER ACT 2. Deposit data are as of March 31, 1995. 3. The Board received comments from an individual ("Protes- The Fifth Third Bank tant") alleging that a demand deposit account of Protestant's com- Cincinnati, Ohio pany became overdrawn because the Columbus, Ohio, bank subsidiary of Fifth Third Bancorp, changed the encoding for the account Order Approving the Merger of Banks and without proper notice after acquiring the account as part of a branch Establishment of Bank Branches acquisition from a third-party financial institution. Protestant also asserts that the service fees for this account are too high. Fifth Third has provided account information indicating that Protestant The Fifth Third Bank, Cincinnati, Ohio ("Fifth Third"), was notified of the account conversion and that deposits made by a state member bank, has applied under section 18(c) of Protestant were properly accounted for in the account. Moreover, the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)) no similar complaints have been discovered involving other ac- (the "Bank Merger Act") to acquire certain assets and counts transferred as a result of the conversion. Based on all the facts of record, including Fifth Third's reports of examination, the assume certain liabilities of 12 branches of PNC Bank, Board does not believe that these complaints warrant denial of this Ohio, N.A., Cincinnati, Ohio ("PNC"). Fifth Third also proposal. has applied under section 9 of the Federal Reserve Act 4. Protestant generally contends that Fifth Third and PNC ille- (12 U.S.C. § 321) to establish branches at the current gally discriminate in lending related to commercial properties locations of eight of the PNC branches.1 located in certain areas (commercial "redlining"). In particular, Protestant states that Fifth Third, PNC, and other institutions in the Dayton, Ohio, banking market have failed to process loans sponsored by the Small Business Administration ("SBA"). Protestant States. Norwest has committed to consult with the Federal Reserve supports his allegations by citing PNC's denial of his application System before commencing money transmission activities in any for such a loan. Fifth Third and PNC dispute Protestant's claims, state not specified in this order to ensure that the activity would noting that Protestant's loan was denied because Protestant failed satisfy the criteria set forth in this order and to give the Federal to provide requested additional information. Both Fifth Third and Reserve System an opportunity to consider whether a separate PNC received "outstanding" ratings from their federal supervisors application should be submitted for Board review. at their most recent examinations for performance under the Community Reinvestment Act (Fifth Third—Federal Reserve Bank of 1. The locations of the branches that Fifth Third proposes to Cleveland as of December 30, 1994; PNC—OCC as of June 2, acquire are listed in the Appendix. Four of the branches would be 1994) ("CRA Examination"). Examiners found no evidence of merged into existing branches of Fifth Third, and the remaining practices intended to discourage loan applications at either institution, and also found both banks to be in compliance with federal eight branches would remain open. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 977 Based on the foregoing and all the facts of record, the 112 West Second Street, Dayton, Ohio* Board has determined that the proposal should be, and 2307 Far Hills Avenue, Oakwood, Ohio* hereby is, approved. The Board's approval is specifically 1995 Shiloh Springs Road, Dayton, Ohio* conditioned on compliance by Fifth Third with all commitments made in connection with this proposal. The * Branch offices of PNC to be merged into Fifth Third commitments and conditions relied on by the Board are upon consummation of the proposed transaction. deemed conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. ORDERS ISSUED UNDER FEDERAL RESERVE ACT This transaction may not be consummated before the fifteenth calendar day after the effective date of this Republic Bank order, or later than three months after the effective date Philadelphia, Pennsylvania of this order, unless such period is extended by the Board or by the Federal Reserve Bank of Cleveland, Order Approving Establishment of a Branch acting pursuant to delegated authority. By order of the Board of Governors, effective Republic Bank, Philadelphia, Pennsylvania ("Bank"), a August 23, 1995. state member bank, has given notice of its intention to establish a branch under section 9 of the Federal Reserve Voting for this action: Chairman Greenspan, Vice Chairman Act ("Act") (12 U.S.C. § 321 et seq.) at 233 Lancaster Blinder, and Governors Kelley, Lindsey, Phillips and Yellen. Avenue, Ardmore, Pennsylvania. Notice of the proposal, affording interested persons an JENNIFER J. JOHNSON opportunity to submit comments, has been published in Deputy Secretary of the Board accordance with the Board's Rules of Procedure (12 C.F.R. 262.3(b)). The time for filing comments has Appendix expired, and the Board has considered the application and all comments received in light of the factors speci- Branch offices of PNC to be acquired by Fifth Third: fied in the Act. Bank is the 110th largest banking organization in 5790 Springboro Pike, Dayton, Ohio Pennsylvania with deposits at March 31, 1995, of One Country Lane, Brookville, Ohio $104 million, representing less than 1 percent of deposits 430 Wolf Creek Pike, Brookville, Ohio in commercial banks in the state. The proposed branch 310 West National Road, Englewood, Ohio would be Bank's first. 5790 Denlinger Road, Dayton, Ohio 4490 Indian Ripple Road, Dayton, Ohio Community Reinvestment Act Performance Record 5529 Far Hills Avenue, Dayton, Ohio 1 East Main Street, Trotwood, Ohio In acting on branch applications, the Board is required to 1015 South Main Street, Centerville, Ohio* take into account the bank's record under the Community Reinvestment Act ("CRA").1 The CRA requires the federal financial supervisory agencies to encourage fifair lending laws. In addition, both institutions have a variety of nancial institutions to help meet the credit needs of the programs designed to assist commercial borrowers in low- and moderate-income areas, including participation in SBA lending local communities in which they operate, consistent with programs. For example, Fifth Third has a "Consumer and Small their safe and sound operation. To this end, the CRA Business Banking Center Manager Call Program" and offers requires the appropriate federal supervisory authority to government-sponsored loan programs to assist small businesses "assess the institution's record of meeting the credit and businesses owned by women and minorities. The bank's comneeds of its entire community, including low- and mercial group also conducts a second review of loan denials for businesses with less than $1 million in annual sales. Fifth Third's moderate-income neighborhoods, consistent with the CRA Examination indicates that Fifth Third made 46 SBA loans, safe and sound operation of such institution," and to take totalling approximately $9.7 million. In addition to offering that record into account in its evaluation of branch government-guaranteed small business loans, PNC introduced a applications.2 Small Business Line of Credit product in 1994 that focuses on businesses with less than $2 million in annual sales. PNC's CRA The Board has received comments from Kensington Examination indicates that PNC made 17 SBA loans, totalling Joint Action Council ("Protestant") opposing the proapproximately $3.95 million. The Board also notes that Protestant's allegations relating to his loan denial have been referred to PNC's primary federal supervisor, the OCC. Based on all the facts of record, the Board concludes that these allegations do not warrant 1. 12 U.S.C. § 2901 etseq. denial of this proposal. 2. 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

978 Federal Reserve Bulletin • September 1995 posed branch. In particular, Protestant alleges that 1993 institution's lending in its community, and Bank has data filed under the Home Mortgage Disclosure Act taken a number of steps to help meet the credit needs of ("HMDA")3 indicate a bias in Bank's lending record in its community. favor of upper-income communities. The Board has Bank assists in meeting housing-related credit needs carefully reviewed the entire record of Bank's CRA through a variety of programs. For example, Bank enperformance, the comments received on this application, tered into an origination agreement with an independent and all other relevant facts of record, in light of the mortgage company in August 1994, to offer alternative CRA, the Board's regulations, and the Statement of the financing through a wider range of mortgage products to Federal Financial Agencies Regarding the Community Bank's customers and, in particular, low- to moderate- Reinvestment Act ("Agency CRA Statement").4 income individuals. Bank has originated loans totalling $341,000 under the agreement. The Examination noted that as of July 15, 1994, Bank had over $1 million A. CRA Performance Examinations outstanding in loans to support affordable housing, mainly to purchase and renovate low- to moderate- The Agency CRA Statement provides that a CRA examincome housing in Philadelphia. In 1995, Bank has made ination is an important and often controlling factor in the 15 loans totalling $358,000 to finance properties in lowconsideration of an institution's CRA record, and that income neighborhoods to be leased by tenants whose reports of these examinations will be given great weight rent is subsidized by the federal government under secin the applications process.5 Bank is primarily a wholetion 8 of the Housing and Community Development Act sale bank and its lending activities focus on small-and of 1974. medium-sized businesses. The Board notes that Bank Bank also participates in the Federal Home Loan received a "satisfactory" rating from the Federal Re- Bank of Pittsburgh's Affordable Housing Program under serve Bank of Philadelphia ("Reserve Bank") in its section 721 of the Financial Institutions Reform, Recovmost recent examination for CRA performance, as of ery, and Enforcement Act of 1989. Bank submitted December 19, 1994 (the "Examination"). applications for grants of $100,000 on behalf of a community development association and $70,000 on behalf B. HMDA Data and Lending Practices of a housing association, which were approved in 1994. The first grant will be used in connection with a The Board has reviewed Bank's 1993 and 1994 HMDA $2.8 million project to acquire and rehabilitate 25 vacant data in light of Protestant's allegation that Bank favors single-family homes in a low- to moderate-income cenupper-income areas in mortgage lending. As noted sus tract in Philadelphia, and the second grant will be above, Bank is primarily a wholesale bank and HMDA used in connection with a $1.4 million project to condata show that it has a small number of loan applications struct, acquire and rehabilitate 14 similarly located and originations. Nevertheless, Bank's HMDA data indi- single-family units. Bank is requesting a $200,000 grant cate that loan applications and originations increased in connection with a project to provide 40 housing units substantially from 1993 to 1994. In addition, Bank ex- for first-time homebuyers and single heads of household. ceeds the average for banks in its market6 both in its Bank has 22 Small Business Administration ("SBA") percentage of applications and originations in low- and loans totalling approximately $800,000, and plans to moderate-income neighborhoods, and in its approval purchase approximately $250,000 of additional loans in rates for loans in these low- to moderate-income neigh- the third quarter of 1995. Bank also has a $25,000 loan borhoods. commitment to the Philadelphia Small Business Micro While the CRA does not require a bank to extend any Loan Fund. particular type of credit, an institution such as Bank is Bank actively engages in community development not relieved from having its performance record assessed lending. For example, Bank has committed $1,175,000 under the CRA.7 The Board has previously noted that for construction and working capital loans for a residen- HMDA data alone provide an incomplete measure of an tial care facility for severely retarded and disabled children. In addition, Bank has a $650,000 revolving credit facility for a nursing home for low-income, predominantly minority, patients. Bank also has participated with 3. 12 U.S.C. § 2801 etseq. the Philadelphia Community Development Corporation 4. 54 Federal Register 13,742 (1989). 5. Id. at 13,745. in a $187,000 small business credit facility. 6. Based on data for banks in Philadelphia, Montgomery, Dela- The Examination found that Bank's loan policies ware, Bucks, and Chester counties, the five Pennsylvania counties show its commitment to evaluating and offering credit in the eight-county Philadelphia Metropolitan Statistical Area. without regard to any prohibited basis, that Bank is in 7. See Continental Bank Corporation, 75 Federal Reserve Bulletin 304 (1989). compliance with the substantive provisions of the anti- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 979 discrimination laws and regulations, and that there was International Banking Act ("IBA"), has applied under no evidence of prohibited discriminatory practices. section 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a representative office in Chicago, Illinois. The C. Conclusion Regarding CRA Performance Foreign Bank Supervision Enhancement Act of 1991, which amended the IBA, provides that a foreign bank The Board has carefully considered the entire record, must obtain the approval of the Board to establish a including Protestant's comments, Bank's responses, and representative office in the United States. Bank's CRA performance examination reports. In light Notice of the application, affording interested persons of all the facts of record, the Board concludes that CRA an opportunity to comment, has been published in a considerations are consistent with approval of this pro- newspaper of general circulation in Chicago (The Chiposal, and that Protestant's comments do not warrant cago Tribune, May 20, 1994). The time for filing comdenial. ments has expired, and the Board has considered the application and all comments received. Other Considerations Bank, with total consolidated assets of approximately $58.7 billion, is the largest bank in Austria.1 The Board has also concluded that the factors it is Anteilsverwaltung-Zentralsparkasse, a holding company required to consider under section 9 of the Act, including ultimately owned by the City of Vienna, is Bank's Bank's financial condition, the general character of its largest shareholder, with 51.8 percent of its voting management, and the proposed exercise of corporate shares. The Republic of Austria owns 22.6 percent of the powers, are consistent with approval of this application. voting shares. No other single shareholder holds Based on the foregoing and all other facts of record, 10 percent or more of the outstanding voting shares of the Board has determined that the application should be, Bank. and hereby is, approved. The Board's approval is specif- Bank operates 358 domestic branches and more than ically conditioned on Bank's compliance with all com- 20 international offices, including five branches and nine mitments made in connection with the application. The banking and financial subsidiaries in Europe, Asia, and commitments and conditions relied on by the Board are the United States. In the United States, Bank operates a deemed to be conditions imposed in writing by the branch in New York, New York, and seven nonbank Board in connection with its findings and decision, and, subsidiaries that are authorized to engage in leasing, as such, may be enforced in proceedings under applica- securities brokerage, investment advisory activities, and ble law. Approval is subject to completion of the facili- the issuance of commercial paper. ties and their being in operation within one year of the The proposed representative office in Chicago, Illidate of this order and to approval by the appropriate state nois, will serve as a loan production office of the New authorities. York branch. The representative office will also act as a By order of the Board of Governors, effective liaison between the New York branch and existing cus- August 16, 1995. tomers in the Midwest. The proposed representative office will not accept any deposits, make any loans, Voting for this action: Chairman Greenspan, Vice Chairman make any business decisions for the account of Bank, or Blinder, and Governors Kelley, Lindsey, and Phillips. Absent and otherwise transact any banking business. not voting: Governor Yellen. In acting on an application to establish a representative office, the IBA and Regulation K provide that the JENNIFER J. JOHNSON Board shall take into account whether the foreign bank Deputy Secretary of the Board engages directly in the business of banking outside of the United States and has furnished to the Board the information it needs to assess the application adequately. ORDERS ISSUED UNDER INTERNATIONAL BANKING The Board also shall take into account whether the ACT foreign bank and any foreign bank parent is subject to comprehensive supervision or regulation on a consoli- Bank Austria Aktiengesellschaft dated basis by its home country supervisor (12 U.S.C. Vienna, Austria § 3105(d)(2); 12C.F.R. 211.24). The Board may also take into account additional standards as set forth in the Order Approving Establishment of a Representative IBA and Regulation K (12 U.S.C. § 3105(d)(3)-(4); Office 12 C.F.R. 211.24(c)). Bank Austria Aktiengesellschaft, Vienna, Austria ("Bank"), a foreign bank within the meaning of the 1. All data are as of December 31, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

980 Federal Reserve Bulletin • September 1995 The Board has previously stated that the standards that capital calculations, liquidity, foreign exchange posiapply to the establishment of a branch or agency need tions, large credit exposures, and investments in subsidnot in every case apply to the establishment of a repre- iaries exceeding a certain threshold. Certain of these sentative office, because representative offices do not reports include information relating to Bank's foreign engage in a banking business and cannot take deposits or branches. make loans.2 In evaluating an application to establish a The Ministry also receives reports submitted by exterrepresentative office under the IBA and Regulation K, nal auditors. If the external auditor finds that Bank's the Board will take into account the standards that apply financial condition has deteriorated and it may not be to the establishment of branches and agencies, subject to able to meet its obligations, or if the external auditor the following considerations. With respect to supervi- finds evidence that the credit institution is violating laws sion by home country authorities, a foreign bank that or regulations of the Ministry, the external auditor is proposes to establish a representative office must be required to report this information immediately to the subject to a significant degree of supervision by its home Ministry and the Central Bank. The external auditor also country supervisor.3 A foreign bank's financial and man- is to inform the Ministry if the management of Bank agerial resources will be reviewed to determine whether fails to provide information that the external auditor its financial condition and performance demonstrate that requires. it is capable of complying with applicable laws and has Bank monitors its worldwide activities and operations an operating record that would be consistent with the through periodic internal audits of its foreign and domesestablishment of a representative office in the United tic offices and subsidiaries. Subsidiaries are required to States. Finally, all foreign banks, whether operating supply all information necessary for Bank to monitor the through branches, agencies or representative offices, will group's consolidated financial position. Bank's internal be required to provide adequate assurances of access to auditors are required to verify the information supplied information on the operations of the bank'and its affili- to the Bank and to the Ministry and the Central Bank in ates necessary to determine compliance with U.S. laws. this regard. In this case, with respect to the issue of supervision by Based on all the facts of record, which include the home country authorities, the Board has considered the information described above, the Board concludes that following information. Bank is subject to the supervi- factors relating to the supervision of Bank by its home sory authority of the Austrian Federal Ministry of Fi- country supervisors are consistent with approval of the nance (the "Ministry") and the Austrian National Bank proposed representative office. (the "Central Bank"). Bank is monitored through the The Board also notes that Bank engages directly in the review of required financial reports and external audit business of banking outside the United States through its reports that provide information on Bank's financial banking operations in Austria and elsewhere. Bank has condition and compliance with law and regulation, as provided the Board with the information necessary to well as the appointment of a state commissioner to serve assess the application adequately. at Bank.4 The Board has also taken into account the additional The Ministry receives detailed monthly balance sheets standards set forth in section 7 of the IBA and Regulaand quarterly profit and loss statements from Bank. tion K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. These reports are initially filed with the Central Bank, 211.24(c)(2)). In this regard, the Ministry has authorized which undertakes a preliminary examination of this in- Bank to establish the proposed representative office. formation. The Central Bank also independently moni- With respect to the financial and managerial resources tors foreign exchange activities through the review of of Bank, taking into consideration Bank's record of daily and monthly reports submitted by Bank. In addi- operations in its home country, its overall financial retion, information is collected monthly with respect to sources, and its standing with its home country superviasset quality, off-balance sheet transactions, risk-based sors, the Board has also determined that financial and managerial factors are consistent with approval of the proposed representative office. Bank appears to have the 2. See 58 Federal Register 6348, 6351 (1993). experience and capacity to support the proposed repre- 3. See Citizens National Bank, 79 Federal Reserve Bulletin 805 sentative office and has also established controls and (1993). procedures for the proposed representative office to en- 4. The Ministry appoints a state commissioner to serve at banks sure compliance with U.S. law. whose balance sheet assets exceed ATS 5 billion (approximately $450 million), including Bank. The state commissioner has the Finally, with respect to access to information about authority, inter alia, to participate in all general meetings of share- Bank's operations, the Board has reviewed the relevant holders and all meetings of the supervisory board. If the state provisions of law in Austria and has communicated with commissioner judges decisions taken by these bodies to be in appropriate governmental authorities regarding access to violation of law, he may enter an objection which would provide the Ministry the opportunity to take appropriate action. information. Bank and its ultimate parent have each Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 981 committed to make available to the Board such informa- nation of any of Bank's direct or indirect activities in the tion on the operations of Bank and its affiliates that the United States. Approval of this application is also specif- Board deems necessary to determine and enforce compli- ically conditioned on compliance by Bank and its ultiance with the IBA, the Bank Holding Company Act of mate parent with the commitments made in connection 1956, as amended, and other applicable Federal law. To with this application, and with the conditions in this the extent that the provision of such information may be order.5 The commitments and conditions referred to prohibited by law, Bank and its ultimate parent have above are conditions imposed in writing by the Board in committed to cooperate with the Board in obtaining any connection with its decision, and may be enforced in consents or waivers that might be required from third proceedings under 12 U.S.C. § 1818 against Bank, its parties in connection with the disclosure of certain infor- offices, and its affiliates. mation. In addition, subject to certain conditions, the By order of the Board of Governors, effective Ministry may share information on Bank's operations August 16, 1995. with other supervisors, including the Board. In light of these commitments and other facts of record, and subject Voting for this action: Chairman Greenspan, Vice Chairman to the condition described below, the Board concludes Blinder, and Governors Kelley, Lindsey, and Phillips. Absent and not voting: Governor Yellen. that Bank has provided adequate assurances of access to any necessary information the Board may request. JENNIFER J. JOHNSON On the basis of all the facts of record, and subject to Deputy Secretary of the Board the commitments made by Bank and its ultimate parent, as well as the terms and conditions set forth in this order, the Board has determined that Bank's application to 5. The Board's authority to approve the establishment of the establish a representative office should be, and hereby is, proposed representative office parallels the continuing authority of approved. Should any restrictions on access to informa- the Illinois Commissioner of Banks and Trust Companies to license tion on the operations or activities of Bank and any of its offices of a foreign bank. The Board's approval of this application does not supplant the authority of the State of Illinois and its agent, affiliates subsequently interfere with the Board's ability the Illinois Commissioner of Banks and Trust Companies, to lito determine the compliance by Bank or its affiliates with cense the proposed representative office of Bank in accordance with applicable federal statutes, the Board may require termi- any terms or conditions that the State of Illinois may impose. [Legal Developments continued on next page.] Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

982 Federal Reserve Bulletin • September 1995 INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (APRIL 1,1995-JUNE 30,1995) Bulletin Merged or Acquired Date of Volume Applicant Bank or Activity Approval and Page Banco Bandeirantes, S.A., To establish a representative office in May 15, 1995 81, 742 Sao Paulo, Brazil Miami, Florida Banco Exterior de Espna, To establish a state-licensed branch in April 5, 1995 81, 616 Madrid, Spain New York, New York Banco Frances del Rio de la Plata S.A., To establish a representative office in April 24, 1995 81, 618 Buenos Aires, Argentina New York, New York Bay Bancorporation, Bay Bank, June 14, 1995 81, 791 Green Bay Wisconsin Green Bay, Wisconsin BayBanks, Inc., Plaistow Cooperative Bank, May 30, 1995 81, 723 Boston, Massachusetts Plaistow, New Hampshire NFS Financial Corp., Nashua, New Hampshire NFS Savings Bank, Nashua, New Hampshire Corporation Bancaria de Espna, Banco Exterior de Espna, April 5, 1995 81, 598 Madrid, Spain Madrid, Spain CS Holding, BEA Associates, June 30, 1995 81, 803 Zurich, Switzerland New York, New York Credit Suisse, Zurich, Switzerland Donghwa Bank, To convert its New York representative May 8, 1995 81, 744 Seoul, Korea office to a state-licensed branch The Farmers Bank of China, To establish a state-licensed limited April 24, 1995 81, 620 Taipei, Taiwan branch in Los Angeles, California Farmington Finance Corporation, Farmington State Bank, June 14, 1995 81, 791 Tortola, British Virgil Islands Farmington, Washington Farmington Bancorp, Seattle, Washington Fifth Third Bancorp, Falls Financial Inc., April 19, 1995 81, 603 Cincinnati, Ohio Cuyahoga Falls, Ohio Fifth Third Bank of Falls Savings Bank, F.S.B., Northeastern Ohio, Cuyahoga Falls, Ohio Cleveland, Ohio First Commerce Corporation, Lakeside Bancshares, June 19, 1995 81, 793 New Orleans, Louisiana Lake Charles, Louisiana Lakeside National Bank of Lake Charles, Lake Charles, Louisiana The First National Company, Buena Vista Abstracting, June 30, 1995 81, 805 Storm Lake, Iowa Storm Lake, Iowa First Place Financial Corporation, Western Bank, May 8, 1995 81, 716 Farmington, New Mexico Gallup, New Mexico First Union Corporation, First Union Capital Markets May 30, 1995 81, 726 Charlotte, North Carolina Corporation, Charlotte, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 983 Index of Orders—Continued Bulletin Merged or Acquired Date of Volume Applicant Bank or Activity Approval and Page Hemisphere Financial, Ltd., Mercantile Bank, N.A., June 19, 1995 81, 795 Road Town, British Virgil Islands Brownsville, Texas Mercantile Financial Enterprises, Inc., Wilmington, Delaware HSBC Holdings pic, James Capel Incorporated, May 25, 1995 81, 728 London, England New York, New York HSBC Holdings BV, Amsterdam, The Netherlands Huntington Bancshares Incorporated, Security National Corporation, April 12, 1995 81, 599 Columbus, Ohio Maitland, Florida Huntington Bancshares Florida, Inc., Security National Bank, Columbus, Ohio Maitland, Florida The Industrial Bank of Japan, Limited, Aubrey G. Lanston & Co., Inc., May 18, 1995 81, 731 Tokyo, Japan New York, New York Lone Star National Bancshares-Texas, Lone Star National Bank, May 15, 1995 81, 717 Inc., Pharr, Texas Pharr, Texas Lone Star National Bancshares- Nevada, Inc., Reno, Nevada Marine Midland Bank, To establish a branch office at 4191 May 25, 1995 81, 739 Buffalo, New York North Buffalo Street, Orchard Park, New York Marshall & Ilsley Corporation, Citizens Bancorp of Delavan, Inc., June 12, 1995 81, 795 Milwaukee, Wisconsin Delavan, Wisconsin Citizens Bank of Delavan, Delavan, Wisconsin Sharon State Bank, Sharon, Wisconsin Mellon Bank Corporation, Mellon Financial Markets, Inc., April 17, 1995 81, 605 Pittsburgh, Pennsylvania Pittsburgh, Pennsylvania Mercantile Bancorporation, Inc., Central Mortgage Bancshares, Inc., April 6, 1995 81, 608 St. Louis, Missouri Warrensburg, Missouri Ameribanc, Inc., St. Louis, Missouri National City Corporation, Raffensperger, Hughes & Company, June 26, 1995 81, 807 Cleveland, Ohio Inc., Indianapolis, Indiana National City Corporation, United Bancorp of Kentucky, Inc., June 6, 1995 81, 809 Cleveland, Ohio Lexington, Kentucky American Fidelity Bank, FSB, Lexington, Kentucky Computer Bank Services Inc., Lexington, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

984 Federal Reserve Bulletin • September 1995 Index of Orders—Continued Bulletin Merged or Acquired Date of Volume Applicant Bank or Activity Approval and Page Northern Trust Corporation, Tanglewood Bancshares, Inc., June 19, 1995 81, 797 Chicago, Illinois Houston, Texas Tanglewood Bank, National Association, Houston, Texas North Fork Bancorporation, Inc., Suffolk Bancorp, May 8, 1995 81, 734 Mattituck, New York Riverhead, New York The Suffolk County National Bank, Riverhead, New York Island Computer Corporation of New York, Inc., Bohemia, New York Norwest Corporation, Norwest Mortgage Corporation, May 8, 1995 81, 732 Minneapolis, Minnesota Des Moines, Iowa Ogden Bancshares, Inc., City State Bank, May 18, 1995 81, 719 Ogden, Iowa Ogden, Iowa Premier Bank, NationsBank of Virginia, N.A., April 24, 1995 81, 613 Wytheville, Virginia Richmond, Virginia Taiwan Business Bank, To convert its representative office in May 8, 1995 81, 746 Taipei, Taiwan Los Angeles, California, to a state-licensed branch Union Planters Corporation, First State Bancorporation, Inc., June 12, 1995 81, 800 Memphis, Tennessee Tiptonville, Tennessee First Exchange Bank, Tiptonville, Tennessee Westamerica Bancorporation, San CapitolBank Sacramento, April 17, 1995 81, 601 Rafael, California Sacramento, California APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Effective Applicant(s) Bank(s) Date First Commercial Corporation, FDH Bancshares, Inc., August 25, 1995 Little Rock, Arkansas Little Rock, Arkansas First Commercial Corporation, West-Ark Bancshares, Inc., August 16, 1995 Little Rock, Arkansas Clarksville, Arkansas Old National Bancorp, Shawnee Bancorp, Inc., August 31, 1995 Evansville, Indiana Harrisburg, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 985 Section 3—Continued Effective Applicant(s) Bank(s) Date SouthTrust Corporation, First Commercial Financial Corporation, August 16, 1995 Birmingham, Alabama Bradenton, Florida SouthTrust of Florida, Inc., Jacksonville, Florida United Bancshares, Inc., Commercial Interim Bank, August 29, 1995 Charleston, West Virginia Arlington, Virginia First Commercial Bank, Arlington, Virginia Section 4 Effective Applicant(s) Bank(s) Date Dacotah Banks, Inc., To engage de novo in making, acquiring or August 17, 1995 Aberdeen, South Dakota servicing loans or other extensions of credit. First National of Nebraska, Inc., First Technology Solutions, Inc., August 9, 1995 Omaha, Nebraska Omaha, Nebraska Northern Trust Corporation, RCB International, Inc., August 18, 1995 Chicago, Illinois Stamford, Connecticut SunTrust Banks, Inc., Personal Express Loans, Inc., August 25, 1995 Atlanta, Georgia Atlanta, Georgia Wachovia Corporation, Wachovia Capital Markets, Inc., August 4, 1995 Winston-Salem, North Carolina Atlanta, Georgia APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant(s) Bank(s) Bank Date Andover Bancorp, Inc., Andover Bank NH, Boston August 18, 1995 Andover, Massachusetts Salem, New Hampshire Andover Bancorp of New Hampshire, Inc., Concord, New Hampshire Barlow Banking Corporation, Iowa Falls State Bank, Chicago August 8, 1995 Iowa Falls, Iowa Iowa Falls, Iowa Central Corporation, First United Bank of Farmerville, Dallas August 14, 1995 Monroe, Louisiana Farmerville, Louisiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

986 Federal Reserve Bulletin • September 1995 Section 3—Continued Reserve EflFective Applicant(s) BBaannkk((ss)) Bank Date Chatuge Bank Shares, Inc., Bank of Hiawassee, Atlanta August 11, 1995 Hiawassee, Georgia Hiawassee, Georgia Community First Bankshares, Inc., Farmers & Merchants Bank of Beach, Minneapolis August 22, 1995 Fargo, North Dakota Beach, North Dakota Deposit Guaranty Arkansas First Merchants Financial Corporation, Atlanta August 10, 1995 Corporation, Fort Smith, Arkansas Fort Smith, Arkansas Deposit Guaranty Corporation, First Merchants Financial Corporation, Atlanta August 10, 1995 Jackson, Mississippi Fort Smith, Arkansas Deposit Guaranty Arkansas Corporation, Fort Smith, Arkansas FirstBancorp, Inc., Gulf Coast National Bank of Naples, Atlanta August 2, 1995 Marathon, Florida Naples, Florida FirstBank Holding Company of FirstBank of Colorado Springs, Kansas City August 21, 1995 Colorado, Colorado Springs, Colorado Lakewood, Colorado FirstBank Holding Company of Colorado Employee Stock Ownership Plan, Lakewood, Colorado First National Corporation of Bank of Love County, Kansas City August 10, 1995 Ardmore, Inc., Marietta, Oklahoma Ardmore, Oklahoma Great Southern Bancorp, Great Southern Bank, Atlanta August 4, 1995 West Palm Beach, Florida West Palm Beach, Florida Harris Taubman Financial CTC Bancorp, Inc., Kansas City August 23, 1995 Corporation, Fayette, Missouri Fayette, Missouri Ida Grove Bancshares, Inc., American Bancshares, Inc., Chicago August 23, 1995 Ida Grove, Iowa Holstein, Iowa New England Community The Equity Bank, Boston August 18, 1995 Bancorp, Inc., Wethersfield, Connecticut Windsor, Connecticut Shorebank Corporation, Bank of Southwest Washington, Chicago August 18, 1995 Chicago, Illinois Vancouver, Washington South Banking Company, Pineland Bank, Atlanta August 14, 1995 Alma, Georgia Metter, Georgia Towne Bancorp, Inc., Towne Bank, Cleveland August 14, 1995 Perrysburg, Ohio Perrysburg, Ohio United Community Banks, Inc., White County Bancshares, Inc., Atlanta August 9, 1995 Blairsville, Georgia Cleveland, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 987 Section 4 . . Nonbankine Reserve Effective Applicant(s) . . . , ~ Activity/Company Bank Date BancTenn Corporation, Tennessee General Corporation, Atlanta July 28, 1995 Kingsport, Tennessee Johnson City, Tennessee The Colonial BancGroup, Inc., Mt. Vernon Financial Corporation, Atlanta August 16, 1995 Montgomery, Alabama Dunwoody, Georgia Community Trust Financial Community Loan Company, Atlanta August 18, 1995 Services Corporation, Hiram, Georgia Hiram, Georgia First Banks, Inc., La Cumbre Savings Bank, F.S.B., St. Louis August 7, 1995 Clayton, Missouri Santa Barbara, California First Hawaiian, Inc., Pioneer Federal Savings Bank, San Francisco August 2, 1995 Honolulu, Hawaii Honolulu, Hawaii First Hawaiian Creditcorp, Honolulu, Hawaii Ida Grove Bancshares, Inc., To engage in making and servicing Chicago August 23, 1995 Ida Grove, Iowa loans National City Bancshares, Inc., United Federal Savings Bank, St. Louis August 18, 1995 Evansville, Indiana Vincennes, Indiana Peoples Holding Company, TPB Leasing, Atlanta August 11, 1995 Winder, Georgia Winder, Georgia West Bend Bancorp, Security Insurance Agency, Chicago August 11, 1995 West Bend, Iowa West Bend, Iowa 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. . .. ^ . OWN Reserve Effective Apphcant(s) Bank(s) „ , _ Bank Date First State Bank of Taos, First Bank of Grants, Kansas City July 28, 1995 Taos, New Mexico Grants, New Mexico Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

988 Federal Reserve Bulletin • September 1995 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the to freeze certain assets of a company pending administra- Federal Reserve Banks in which the Board of Governors is tive adjudication of civil money penalty. On March 1, not named a party. 1995, the court issued a stipulated order requiring the company to deposit $1 million into the registry of the Jones v. Board of Governors, No. 95-1359 (D.C. Cir., filed court. July 17, 1995). Petition for review of a Board order dated June 19, 1995, approving the application by First Com- In re Subpoena Duces Tecum, No. 95-5034 (D.C. Cir., filed merce Corporation, New Orleans, Louisiana, to acquire January 26, 1995). Appeal of partial denial of plaintiff's Lakeside Bancshares, Lake Charles, Louisiana. On Sepmotion to compel production of examination and other tember 1, 1995, the Board filed a motion to dismiss. supervisory material in connection with a shareholder derivative action against a bank holding company. Oral Board of Governors v. Scott, Misc. No. 95-127 (LFO/PJA) argument is scheduled for November 7, 1995. (D. D.C., filed April 14, 1995). Application to enforce investigatory subpoenas for documents and testimony. On August 3, 1995, the magistrate judge issued an order Kuntz v. Board of Governors, No. 95-3044 (6th Cir., filed granting in part and denying in part the Board's applica- January 12, 1995). Petition for review of a Board order tion. dated December 19, 1994, approving an application by KeyCorp, Cleveland, Ohio, to acquire BANKVERMONT Corp., Burlington, Vermont. On February 10, 1995, the Money Station, Inc. v. Board of Governors, No. 95-1182 Board filed its motion to dismiss. (D.C. Cir., filed March 30, 1995). Petition for review of a Board order dated March 1, 1995, approving notices by Bank One Corporation, Columbus, Ohio; CoreStates Fi- In re Subpoena Duces Tecum, Misc. No. 95-06 (D. D.C., nancial Corp., Philadelphia, Pennsylvania; PNC Bank filed January 6, 1995). Action to enforce subpoena seek- Corp., Pittsburgh, Pennsylvania; and KeyCorp, Cleve- ing pre-decisional supervisory documents sought in conland, Ohio, to acquire certain data processing assets of nection with an action by Bank of New England Corpora- National City Corporation, Cleveland, Ohio, through a tion's trustee in bankruptcy against the Federal Deposit joint venture subsidiary. On May 1, 1995, Money Station Insurance Corporation. The Board filed its opposition on filed a separate petition for review of the Board's March January 20, 1995. 31, 1995 denial of Money Station's request for reconsideration of the Board's March 1 order (D.C. Cir., No. 95-1243). The cases were consolidated on June 2, 1995. Beckman v. Greenspan, No. 95-35473 (9th Cir., file May 4, 1995). Appeal of dismissal of action against Board and others seeking damages for alleged violations of constitu- Jones v. Board of Governors, No. 95-1142 (D.C. Cir., filed tional and common law rights. The appellants' brief was March 3, 1995). Petition for review of a Board order filed on June 23,1995; the Board's brief was filed on July dated February 2, 1995, approving the applications by 12, 1995. First Commerce Corporation, New Orleans, Louisiana, to merge with City Bancorp, Inc., New Iberia, Louisiana, and First Bankshares, Inc., Slidell, Louisiana. Petitioner Board of Governors v. Ghaith R. Pharaon, No. 91-CIVfiled a motion for injunctive relief and for a stay of the 6250 (S.D. New York, filed September 17, 1991). Action Board's order on April 3, 1995. On August 17, 1995, the to freeze assets of individual pending administrative adjucourt denied the motion. dication of civil money penalty assessment by the Board. On September 17, 1991, the court issued an order tempo- Board of Governors v. Interamericas Investments, Ltd., No. rarily restraining the transfer or disposition of the individ- H-95-565 (S.D. Texas, filed February 24, 1995). Action ual's assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Financial Markets A24 Commercial paper and bankers dollar DOMESTIC FINANCIAL STATISTICS acceptances outstanding A25 Prime rate charged by banks on short-term Money Stock and Bank Credit business loans A26 Interest rates—money and capital markets A4 Reserves, money stock, liquid assets, and debt A27 Stock market—Selected statistics measures A5 Reserves of depository institutions, Reserve Bank Federal Finance credit A6 Reserves and borrowings—Depository A28 Federal fiscal and financing operations institutions A29 U.S. budget receipts and outlays A7 Selected borrowings in immediately available A30 Federal debt subject to statutory limitation funds—Large member banks A30 Gross public debt of U.S. Treasury— Types and ownership Policy Instruments A31 U.S. government securities dealers—Transactions A8 Federal Reserve Bank interest rates A32 U.S. government securities dealers— A9 Reserve requirements of depository institutions Positions and financing A10 Federal Reserve open market transactions A3 3 Federal and federally sponsored credit agencies—Debt outstanding Federal Reserve Banks All Condition and Federal Reserve note statements Securities Markets and Corporate Finance A12 Maturity distribution of loan and security A34 New security issues—Tax-exempt state and local holdings governments and corporations Monetary and Credit Aggregates A35 Open-end investment companies—Net sales and assets A13 Aggregate reserves of depository institutions A35 Corporate profits and their distribution and monetary base A35 Nonfarm business expenditures on new A14 Money stock, liquid assets, and debt measures plant and equipment A16 Deposit interest rates and amounts outstanding— A36 Domestic finance companies—Assets and commercial and BIF-insured banks liabilities, and consumer, real estate, and business A17 Bank debits and deposit turnover credit Commercial Banking Institutions Real Estate A18 Assets and liabilities, Wednesday figures A37 Mortgage markets A3 8 Mortgage debt outstanding Weekly Reporting Commercial Banks— Assets and liabilities Consumer Installment Credit A21 Large reporting banks A39 Total outstanding A23 Branches and agencies of foreign banks A39 Terms Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • September 1995 DOMESTIC FINANCIAL STATISTICS- A58 Banks' own claims on foreigners CONTINUED A59 Banks' own and domestic customers' claims on foreigners Flow of Funds A59 Banks' own claims on unaffiliated foreigners A60 Claims on foreign countries— A40 Funds raised in U.S. credit markets Combined domestic offices and foreign branches A42 Summary of financial transactions A43 Summary of credit market debt outstanding A44 Summary of financial assets and liabilities Reported by Nonbanking Business Enterprises in the United States DOMESTIC NONFINANCIAL STATISTICS A61 Liabilities to unaffiliated foreigners A62 Claims on unaffiliated foreigners Selected Measures A45 Nonfinancial business activity— Securities Holdings and Transactions Selected measures A63 Foreign transactions in securities A45 Labor force, employment, and unemployment A64 Marketable U.S. Treasury bonds and A46 Output, capacity, and capacity utilization notes—Foreign transactions A47 Industrial production—Indexes and gross value A49 Housing and construction A50 Consumer and producer prices Interest and Exchange Rates A51 Gross domestic product and income A52 Personal income and saving A65 Discount rates of foreign central banks A65 Foreign short-term interest rates A66 Foreign exchange rates INTERNATIONAL STATISTICS Summary Statistics A67 GUIDE TO STATISTICAL RELEASES AND A53 U.S. international transactions—Summary SPECIAL TABLES A54 U.S. foreign trade A54 U.S. reserve assets Special Tables A54 Foreign official assets held at Federal Reserve Banks A68 Assets and liabilities of U.S. branches and agencies A55 Selected U.S. liabilities to foreign official of foreign banks, March 31, 1995 institutions A72 Pro forma balance sheet and income statements for priced service operations, June 30, 1995 Reported by Banks in the United States A55 Liabilities to and claims on foreigners A56 Liabilities to foreigners hi A INDEX TO STATISTICAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A4 Domestic Nonfinancial Statistics • October 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 Q3 Q4 Ql Q2 Mar. Apr. Mayr June July Reserves of depository institutions2 1 Total -1.9 -3.3 -3.7 -8.0 -7.5 -12.2 -4.1 -8.5 6.4 2 Required -1.9 -3.0 -4.0 -7.0 -4.5 -11.5 -6.8 -10.4 3.8 3 Nonborrowed -3.5 -2.1 -2.4 -8.6 -7.7 -13.0 -4.9 -11.1' 4.3 4 Monetary base3 7.5 6.9 6.4 6.2 8.6 7.8 7.2 -2.7 -.4 Concepts of money, liquid assets, and debt4 5 Ml 2.4 -1.2 .0 -.9 .6 1.9 -7.0 .8 1.3 6 M2 1.0 -.3 1.7r 4.3r 2.5 4.2r 5.3 11.7' 6.1 7 M3 2.2 1.7 4.3r 7.0' 6.4' 6.2r 8.0 12.7' 8.9 8 L 2.3 3.4 7.9 9.2 10.2r 9.5r 5.8 12.1 n.a. 9 Debt 4.2 5.2 5.6r 5.6 5.5 4.6r 5.9 6.4 n.a. Nontransaction components 10 In M25 .3 ,lr 2.4 6.7r 3.3r 5.3r 11.1 16.6' 8.3 11 In M3 only6 9.0r 12.4r 18.5r 20.1' 26. r 15.8r 21.0 17.3' 22.4 Time and savings deposits Commercial banks 12 Savings, including MMDAs -4.6 -8.5 -13.2 -7.3 -17.8 -12.1 2.0 18.2' 4.3 13 Small time7 9.5r 16.0 24.3r 23.4 31.1 23.0 17.7 13.4' 9.2 14 Large time8'9 13.6r 17.7' 12.7r 16.3r 21.4r 23' 25.2 13.3' 29.0 Thrift institutions 15 Savings, including MMDAs -11.5 -17.6 -20.5 - 14.6r — 19.1r - 16.8r -7.5 -3.6' -7.6 16 Small time7 1.0r 10.4 20.7 25.6r 33.3 29.3r 20.0 2.0' -.3 17 Large time 8.3 14.1 23.3 14.6r 35.2 18.8 -13.5 6.8 30.5 Money market mutual funds 18 General purpose and broker-dealer 5.7 7.5 7.9 17.9 -1.8 15.7 28.2 61.0 44.0 19 Institution-only -4.5 7.3 10.0 27.1 57.2 24.8 11.8 66.5 39.7 Debt components4 20 Federal 3.9 5.9 5.2 5.3 7.4 .7 5.9 8.4 n.a. 21 Nonfederal 4.3 5.0 5.7 5.7 4.8 6.0r 5.8 5.7 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 May July June 14 June 21 June 28 July 5 July 12 July 19 July 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 413,473r 411,631 411,523 417,507 411,023' 420,511 413,324 411,274 U.S. government securities 2 3 B H o el u d g h u t n o de u r t r r i e g p h u t— rch S a y s s e t e a m g re a e c m co e u n n t t s 36 2 8 , , 7 9 7 6 3 2 372 2, , 6 8 7 1 2 5 371 1 , , 2 5 7 3 2 1 373,605 0 37 6 2 , , 7 0 4 5 3 6 372, 4 8 4 4 9 1 37 9 2 , , 0 6 4 3 5 9 372 1 , , 8 1 2 9 8 9 372,3890 Federal agency obligations 4 5 B H o e u ld g h u t n o d u er t ri r g e h p t u rchase agreements 3,3 5 6 9 7 10 3,1 1 4 8 0 00 3,0 1 7 2 9 01 3,1370 0 3, 5 10 9 4 60 3,1010 0 3, 2 0 5 9 1 6 0 3, 4 08 0 1 60 3,0810 0 6 Acceptances 7 Lo A an d s j u to st m de e p n o t s c it r o e r d y i t institutions 69 85 1 260 9 235 4 133 8 Seasonal credit 1400 1609 2310 1302 1708 2120 2160 2160 2320 9 Extended credit 10 Float 364 359' 568 751 299 127' 241 762 893 11 Other Federal Reserve assets 34,934 34,068 34,742 33,896 34,271 34,283 34,789 34,829 34,546 12 Gold stock 11,055 11,054 11,053 11,054 11,054 11,054 11,054 11,053 11,053 13 Special drawing rights certificate account 8,018 8,018 10,357 8,018 8,018 8,018 9,089 10,518 10,518 14 Treasury currency outstanding 23,335 23,397 23,457 23,387r 23,401r 23,415' 23,429 23,443 23,457 ABSORBING RESERVE FUNDS 15 Currency in circulation 408,336 409,113 410,854 409,721 408,396' 407,788 411,221 412,852 410,953 16 Treasury cash holdings 340 316 318 316 313 313 318 315 335 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,791 7,530 6,984 5,286 11,241 6,977 13,727 5.767 5,568 18 Foreign 184 209 196 180 218 226 185 202 193 19 Service-related balances and adjustments .. 4,226 4,36 lr 4,347 4,255 4,421 4,462' 4,498 4,257 4,217 20 Other 312 284 289 290 295 281 262 285 328 21 Other Federal Reserve liabilities and capital ., 12,926 12,971 12,949 13,010 13,073 12,905 13,327 13,112 12,790 22 Reserve balances with Federal Reserve Banks' 21,431 21,158' 20,560 20,925 22,023 20,559' 20,545 21,549 21,918 End-of-month figures Wednesday figures May July June 14 June 21 June 28 July 5 July 12 July 19 July 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 412,804 427,844' 410,861 426,352 413,201' 418,284 411,508 412,374 U.S. government securities2 2 Bought outright—System account 370,047 372,641 375,524 372,805 371,937 372,540 370,538 373,005 373,179 3 Held under repurchase agreements 3,531 16,324 0 0 15,914 3,146 6,429 0 0 Federal agency obligations 4 Bought outright 3,358 3,096 3,063 3,104 3,104 3,096 3,096 3,081 3,081 5 6 Ac H ce e p ld t an u c n e d s e r repurchase agreements 700 0 461 0 0 0 0 0 87 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 9 2 3 2 7 2 1,622 6 838 9 8 E Se x a te so n n d a e l d c c r r e e d d i i t t 1600 214 0 245 0 15 0 0 19 0 6 226 0 212 0 224 0 234 0 10 Float 994 292' 64 811 398 -247' 843 265 527 11 Other Federal Reserve assets 34,005 34,813' 34,666 33,989 34,710 34,439 35,544 34,927 34,515 12 Gold stock 11,054 11,054 11,053 11,054 11,054 11,054 11,053 11,053 11,053 13 Special drawing rights certificate account 8,018 8,018 10,518 8,018 8,018 8,018 10,518 10,518 10,518 14 Treasury currency outstanding 23,359' 23,429' 23,485 23,387' 23,401' 23,415' 23,429 23,443 23,457 ABSORBING RESERVE FUNDS 15 Currency in circulation 411,104 410,414 409,425 409,970 408,713 409,587 413,394 412,936 410,961 16 Treasury cash holdings 322 319 306 313 312 319 311 339 314 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,646 20,977 11,206 5,000 13,636 7,721 7,059 6,164 6,002 18 Foreign 227 168 190 164 306 260 192 173 160 19 Service-related balances and adjustments .. 4,336 4,498' 4,427 4,255 4,421 4,462' 4,498 4,257 4,217 20 Other 215 242 304 292 280 282 282 300 296 21 Other Federal Reserve liabilities and capital , 12,181 13,519 12,671 12,788 12,919 12,696 12,967 12,626 12,517 22 Reserve balances with Federal Reserve Banks' 22,204 20,209' 20,093 20,540 28,240 20,361' 24,582 19,727 22,936 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 3. Excludes required clearing balances and adjustments to compensate for float. 2. Includes securities loaned—fully guaranteed by US. government securities pledged with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • October 1995 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1992 1993 1994 1995 Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June July 1 Reserve balances with Reserve Banks2 25,368 29,374 24,658 22,291 21,758 22,649 24,217 21,476 21,058 20,841 2 Total vault cash3 34,541 36,818 40,365 42,291 39,795 38,518 38,099 39,038 39,839 40,522 3 Applied vault cash4 31,172 33,484 36,682 38,230 35,941 34,934 34,657 35,281 35,986 36,551 4 Surplus vault cash5 3,370 3,334 3,683 4,061 3,855 3,584 3,442 3,757 3,853 3,971 5 Total reserves6 56,540 62,858 61,340 60,521 57,699 57,583 58,874 56,757 57,044r 57,391 6 Required reserves 55,385 61,795 60,172 59,182 56,752 56,789 58,120 55,877 56,079 56,300 7 Excess reserve balances at Reserve Banks7 1,155 1,063 1,168 1,339 946 794 753 880 964r 1,091 8 Total borrowings at Reserve Banks8 124 82 209 136 59 69 111 150 272 371 9 Seasonal borrowings 18 31 100 46 33 51 82 137 172 231 10 Extended credit9 1 0 0 4 0 0 0 0 0 0 Biweekly averages of daily figures for two week periods ending on dates indicated 1995 Mar. 29 Apr. 12 Apr. 26 May 10 May 24 June 7 June 21 July 5r July 19 Aug. 2 1 Reserve balances with Reserve Banks 22,869 23,412 25,542 21,994 21,406 20,875 21,478 20,546 21,733 19,922 2 Total vault cash3 37,773 38,433 37,481 39,261 38,711 39,373 40,146 39,724 40,411 40,983 3 Applied vault cash4 34,278 34,941 34,158 35,550 34,955 35,549 36,240 35,930 36,491 36,879 4 Surplus vault cash5 3,496 3,492 3,323 3,712 3,756 3,824 3,906 3,794 3,920 4,104 5 Total reserves6 57,147 58,353 59,700 57,543 56,361 56,424 57,718 56,476 58,224 56,801 6 Required reserves 56,077 57,939 58,737 56,508 55,552 55,627 56,703 55,462 57,334 55,444 7 Excess reserve balances at Reserve Banks7 1,070 414 963 1,035 810 798 1,015 1,014 890 1,357 8 Total borrowings at Reserve Banks8 79 76 130 148 144 165 286 336 293 478 9 Seasonal borrowings 59 61 90 124 140 150 155 214 224 245 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For cash applied during the maintenance period by "nonbound" institutions (that is, those ordering address, see inside front cover. Data are not break-adjusted or seasonally whose vault cash exceeds their required reserves) to satisfy current reserve requirements. adjusted. 5. Total vault cash (line 2) less applied vault cash (line 3). 2. Excludes required clearing balances and adjustments to compensate for float and 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash includes other off-balance-sheet "as-of" adjustments. (line 3). 3. Total "lagged" vault cash held by depository institutions subject to reserve 7. Total reserves (line 5) less required reserves (line 6). requirements. Dates refer to the maintenance periods during which the vault cash may be 8. Also includes adjustment credit. used to satisfy reserve requirements. The maintenance period for weekly reporters ends 9. Consists of borrowing at the discount window under the terms and conditions sixteen days after the lagged computation period during which the vault cash is held. established for the extended credit program to help depository institutions deal with Before Nov. 25, 1992, the maintenance period ended thirty days after the lagged sustained liquidity pressures. Because there is not the same need to repay such borrowing computation period. promptly as with traditional short-term adjustment credit, the money market impact of 4. All vault cash held during the lagged computation period by "bound" institutions extended credit is similar to that of nonborrowed reserves. (that is, those whose required reserves exceed their vault cash) plus the amount of vault Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A7 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of daily figures 1995, week ending Monday SSoouurrccee aanndd mmaattuurriittyy June 5 June 12 June 19 June 26 July 3 July 10 July 17 July 24 July 31 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 80,972 81,756 78,511 73,118 79,073 84,770 79,652 75,355 77,305 2 For all other maturities 17,062 17,723 17,936 18,342 17,570 16,851 17,247 17,234 17,803 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 22,878 23,479 20,391 24,232 22,697 25,033 25,851 28,063 22,029 4 For all other maturities 28,276 27,768 27,115 26,675 26,295 25,048 25,316 26,262 26,409 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 21,082 21,848 20,890 21,803 18,792 18,939 18,296 18,899 17,082 6 For all other maturities 39,921 39,524 39,292 36,274 36,651 32,647 32,368 35,057 36,905 All other customers 7 For one day or under continuing contract 39,016 38,330 38,658 38,866 39,780 39,118 38,320 38,280 37,768 8 For all other maturities 18,351 19,198 19,419 18,928 18,473 18,024 17,700 18,187 18,559 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 62,407 59,245 61,144 59,182 61,011 61,895 56,693 55,460 56,819 10 To all other specified customers2 32,232 33,345 31,458 30,147 30,224 29,303 29,190 29,478 29,713 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 US. government agencies, ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • October 1995 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 9/ O 1/ n 9 5 Effective date Previous rate 9/ O 1/ n 9 5 Effective date Previous rate 9/ O 1/ n 9 5 Effective date Previous rate Boston 5.25 2/1/95 4.75 5.75 8/31/95 5.75 6.25 8/31/95 6.25 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 5.75 8/31/95 5.75 6.25 8/31/95 6.25 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 e l v l e F l) . — R. Ba o n f k Effectiv l A e l v l e F l) . — R. Ba o n f k Effective date l A e l v l el F ) . — R. Ba o n 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 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^.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 3.5^1 4 16 11 11 1986—Mar. 7 7-7.5 7 18 4 4 July 28 10-11 10 10 7 7 Nov. 15 4-175 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 Sept. 1, 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 1941-1970; and the Annual Statistical Digest, seasonal credit takes into account rates charged by market sources of funds and ordinarily 1970-1979. is reestablished on the first business day of each two-week reserve maintenance period; In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustmenthowever, it is never less than the discount rate applicable to adjustment credit. credit borrowings by institutions with deposits of $500 million or more that had borrowed 3. May be made available to depository institutions when similar assistance is not in successive weeks or in more than four weeks in a calendar quarter. A 3 percent reasonably available from other sources, including special industry lenders. Such credit surcharge was in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 may be provided when exceptional circumstances (including sustained deposit drains, percent was reimposed on Nov. 17, 1980; the surcharge was subsequently raised to 3 impaired access to money market funds, or sudden deterioration in loan repayment percent on Dec. 5,1980, and to 4 percent on May 5,1981. The surcharge was reduced to 3 performance) or practices involve only a particular institution, or to meet the needs of percent effective Sept. 22, 1981, and to 2 percent effective Oct. 12, 1981. As of Oct. 1, institutions experiencing difficulties adjusting to changing market conditions over a longer 1981, the formula for applying the surcharge was changed from a calendar quarter to a period (particularly at times of deposit disintermediation). The discount rate applicable to moving thirteen-week period. The surcharge was eliminated on Nov. 17, 1981. adjustment credit ordinarily is charged on extended-credit loans outstanding less than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit2 Net transaction accounts 1 $0 million-$54.0 million. . 12/20/94 2 More than $54.0 million4 . 12/20/94 3 Nonpersonal time deposits5 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 1980, depository institutions include commercial banks, mutual savings banks, tions, determined as of June 30 of each year. Effective Dec. 20, 1994, the amount was savings and loan associations, credit unions, agencies and branches of foreign banks, increased from $51.9 million to $54.0 million. and Edge Act corporations. 4. The reserve requirement was reduced from 12 percent to 10 percent on 2. The Garn-St Germain Depository Institutions Act of 1982 requires that $2 million Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that of reservable liabilities of each depository institution be subject to a zero percent reserve report quarterly. requirement. The Board is to adjust the amount of reservable liabilities subject to this zero 5. For institutions that report weekly, the reserve requirement on nonpersonal time percent reserve requirement each year for the succeeding calendar year by 80 percent of deposits with an original maturity of less than 11/2 years was reduced from 3 percent to the percentage increase in the total reservable liabilities of all depository institutions, ll/i percent for the maintenance period that began Dec. 13, 1990, and to zero for the measured on an annual basis as of June 30. No corresponding adjustment is to be made in maintenance period that began Dec. 27, 1990. The reserve requirement on nonpersonal the event of a decrease. On Dec. 20, 1994, the exemption was raised from $4.0 million to time deposits with an original maturity of 1 Vi years or more has been zero since Oct. 6, $4.2 million. The exemption applies only to accounts that would be subject to a 3 percent 1983. reserve requirement. For institutions that report quarterly, the reserve requirement on nonpersonal time 3. Includes all deposits against which the account holder is permitted to make with- deposits with an original maturity of less than 1 l/l years was reduced from 3 percent to drawals by negotiable or transferable instruments, payment orders of withdrawal, and zero on Jan. 17, 1991. telephone and preauthorized transfers for the purpose of making payments to third persons 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to or others, other than money market deposit accounts (MMDAs) and similar accounts that zero in the same manner and on the same dates as was the reserve requirement on permit no more than six preauthorized, automatic, or other transfers per month, of which nonpersonal time deposits with an original maturity of less than 1 '/> years (see note 5). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • October 1995 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1994 1995 TTyypp aa ee nn dd oo ff mm ttrr aa aa ttuu nn rr ss ii aa tt cc yy tt iioonn 11999922 11999933 11999944 Dec. Jan. Feb. Mar. Apr. May June U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 14,714 17,717 17,484 444 0 0 0 0 0 4,470 2 Gross sales 1,628 0 0 0 0 0 0 0 0 0 3 Exchanges 308,699 332,229 376,277 36,726 30,150 31,530 36,449 30,983 31,663 42,983 4 Redemptions 1,600 0 0 0 0 0 0 0 0 0 Others within one year 5 Gross purchases 1,096 1,223 1,238 125 0 0 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 -2,430 2,835 5,872 0 0 0 0 8 Exchanges -30,543 -36,582 -21,444 1,680 -3,167 -4,881 0 0 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 2,208 0 0 0 2,549 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -34,478 -27,140 -6,004 2,430 -2,145 -5,115 0 0 0 0 13 Exchanges 25,811 0 17,801 -1,680 3,167 3,031 0 0 0 0 Five to ten years 14 Gross purchases 2,818 4,168 3,818 660 0 0 0 839 0 0 IS Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -1,915 0 -3,145 0 -690 -757 0 0 0 0 17 Exchanges 3,532 0 2,903 0 0 1,150 0 0 0 0 More than ten years 18 Gross purchases 2,333 3,457 3,606 1,252 0 0 0 1,138 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -269 0 -918 0 0 0 0 0 0 0 21 Exchanges 1,200 0 775 0 0 700 0 0 0 0 All maturities 22 Gross purchases 34,079 36,915 35,314 4,689 0 0 0 4,526 0 4,470 23 Gross sales 1,628 0 0 0 0 0 0 0 0 0 24 Redemptions 1,600 767 2,337 0 621 0 0 370 0 0 Matched transactions 25 Gross purchase 1,480,140 1,475,941 1,700,836 166,648 163,615 178,877 168,800 148,306 155,027 170,083 26 Gross sales 1,482,467 1,475,085 1,701,309 166,007 164,526 176,232 170,724 147,616 153,534 171,959 Repurchase agreements 27 Gross purchases 378,374 475,447 309,276 29,406 32,201 1,300 22,070 36,314 35,158 40,989 28 Gross sales 386,257 470,723 311,898 26,351 39,756 3,310 16,477 39,157 34,377 28,196 29 Net change in U.S. Treasury securities 20,642 41,729 29,882 8,385 -9,087 634 3,669 2,004 2,274 15,387 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 37 91 55 83 20 30 262 Repurchase agreements 33 Gross purchases 14,565 35,063 52,696 5,090 5,243 25 4,926 4,415 6,155 1,941 34 Gross sales 14,486 34,669 52,696 5,720 4,948 1,345 3,821 5,020 5,955 2,180 35 Net change in federal agency obligations -554 -380 -1,002 -667 204 -1,375 1,022 -625 170 -501 36 Total net change in System Open Market Account... 20,089 41348 28,880 7,718 —8,883 -741 4,691 1,379 2,444 14,886 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 Statements' Millions of dollars Wednesday End of month Account 1995 1995 June 28 July 5 July 12 July 19 July 26 May 31 June 30 July 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,054 11,053 11,053 11,053 11,053 11,054 11,054 11,053 2 Special drawing rights certificate account 8,018 10,518 10,518 10,518 10,518 8,018 8,018 10,518 3 Coin 368 334 336 351 360 380 358 372 Loans 4 To depository institutions 228 1,834 229 1,072 251 169 217 248 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Federal agency obligations 7 Bought outright 3,096 3,096 3,081 3,081 3,063 3,358 3,096 33,,006633 8 Held under repurchase agreements 0 0 0 0 0 700 461 0 9 Total U.S. Treasury securities 375,686 376,967 373,005 373,179 368,520 373,578 388,965 375,524 10 Bought outright2 372,540 370,538 373,005 373,179 368,520 370,047 372,641 375,524 11 Bills 181,863 179,861 182,329 182,803 178,144 179,371 181,965 185,148 12 Notes 146,998 146,998 146,998 146,698 146,698 146,998 146,998 146,698 13 Bonds 43,679 43,679 43,679 43,679 43,679 43,679 43,679 43,679 14 Held under repurchase agreements 3,146 6,429 0 0 0 3,531 16,324 0 15 Total loans and securities 379,010 381,897 376,316 377,332 371,835 377,805 392,739 378,835 16 Items in process of collection 5,106 4,385 5,597 5,590 5,610 8,361 4,067 1,867 17 Bank premises 1,097 1,090 1,093 1,097 1,096 1,090 1,090 1,096 Other assets 18 Denominated in foreign currencies 23,683 23,970 23,815 23,830 23,846 24,122 23,961 2233,,550088 19 All other4 9,620 10,128 9,721 9,608 9,889 8,702 9,936 9,875 20 Total assets 437,955 443,376 438,447 439,379 434,207 439,533 451,223 437,124 LIABILITIES 21 Federal Reserve notes 386,858 390,609 390,167 388,168 387,296 388,447 387,661 386,617 22 Total deposits 33,766 36,499 30,532 33,701 30,033 31,718 46,320 36,171 23 Depository institutions 25,503 28,966 23,896 27,243 23,106 26,630 24,946 24,471 24 US. Treasury—General account 7,721 7,059 6,164 6,002 6,433 4,646 20,977 11,206 25 Foreign—Official accounts 260 192 173 160 215 227 168 190 26 Other 282 282 300 296 278 215 242 304 27 Deferred credit items 4,635 3,300 5,122 4,992 4,398 7,187 3,723 1,665 28 Other liabilities and accrued dividends 4,610 4,619 4,499 4,374 4,313 4,481 5,018 4,582 29 Total liabilities 429,869 435,028 430,320 431,236 426,040 431,832 442,723 429,035 CAPITAL ACCOUNTS 30 Capital paid in 3,814 3,820 3,842 3,852 3,860 3,807 3,815 3,861 31 Surplus 3,683 3,683 3,683 3,683 3,683 3,670 3,683 3,683 32 Other capital accounts 589 845 602 608 624 222 1,002 544 33 Total liabilities and capital accounts 437,955 443,376 438,447 439,379 434,207 439,533 451,223 437,124 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 447,726 459,901 464,871 470,039 474,534 446,653 456,421 448866,,336688 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 466,470 466,732 467,620 468,518 469,279 465,987 466,985 469,711 36 LESS: Held by Federal Reserve Banks 79,612 76,123 77,453 80,350 81,983 77,541 79,324 83,094 37 Federal Reserve notes, net 386,858 390,609 390,167 388,168 387,296 388,447 387,661 386,617 Collateral held against notes, net 38 Gold certificate account 11,054 11,053 11,053 11,053 11,053 11,054 11,054 11,053 39 Special drawing rights certificate account 8,018 10,518 10,518 10,518 10,518 8,018 8,018 10,518 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 367,787 369,038 368,596 366,597 365,725 369,374 368,590 365,046 42 Total collateral 386,858 390,609 390,167 388,168 387,296 388,447 387,661 386,617 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 • October 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 June 28 July5 July 12 July 19 July 26 May 31 June 30 July 31 1 Total loans 228 1,834 229 1,072 252 163 239 248 2 Within fifteen days' 205 1,670 56 1,047 218 134 163 116 3 Sixteen days to ninety days 23 164 174 26 34 29 75 132 4 Total US. Treasury securities 375,686 376,967 373,005 373,179 368,520 373,578 372,641 375,524 5 Within fifteen days' 21,088 17,264 17,428 18,105 18,073 22,173 6,277 16,480 6 Sixteen days to ninety days 89,811 89,985 85,486 85,018 84,637 89,258 95,686 87,822 7 Ninety-one days to one year 114,790 120,505 120,879 121,440 117,195 112,151 121,467 123,511 8 One year to five years 86,530 85,746 85,746 85,150 85,150 86,530 85,746 84,245 9 Five years to ten years 28,511 28,511 28,511 28,511 28,511 28,511 28,511 28,511 10 More than ten years 34,955 34,955 34,955 34,955 34,955 34,955 34,955 34,955 11 Total federal agency obligations 3,096 3,096 3,081 3,081 3,063 4,057 3,096 3,063 12 Within fifteen days' 210 15 18 118 135 1,134 210 135 13 Sixteen days to ninety days 516 701 683 618 583 408 516 666 14 Ninety-one days to one year 749 759 791 791 806 790 749 723 15 One year to five years 1,179 1,179 1,147 1,112 1,098 1,284 1,179 1,098 16 Five years to ten years 417 417 417 417 417 417 417 417 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 11999911 11999922 11999933 11999944 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. Dec. Jan. Feb. Mar. Apr. May June July Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS22 11 TToottaall rreesseerrvveess33 45.54 54.35 60.50 59.34 59.34 59.12 58.92 58.55 57.96 57.76 57.35 57.66 22 NNoonnbboorrrroowweedd rreesseerrvveess44 45.34 54.23 60.42 59.13 59.13 58.99 58.86 58.48 57.85 57.61 57.08 57.29 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt 45.34 54.23 60.42 59.13 59.13 58.99 58.86 58.48 57.85 57.61 57.08 57.29 44 RReeqquuiirreedd rreesseerrvveess 44.56 53.20 59.44 58.17 58.17 57.79 57.97 57.76 57.20 56.88 56.39 56.57 55 MMoonneettaarryy bbaassee66 317.43 351.12 386.60 418.22 418.22 421.05 422.31 425.35 428.13 430.69 429.72R 429.59 Not seasonally adjusted 6 Total reserves 46.98 56.06 62.37 61.13 61.13 60.52 57.72 57.62 58.93 56.82 57.13 57.49 7 Nonborrowed reserves 46.78 55.93 62.29 60.92 60.92 60.38 57.66 57.55 58.82 56.68 56.85r 57.12 8 Nonborrowed reserves plus extended credit 46.78 55.93 62.29 60.92 60.92 60.39 57.66 57.55 58.82 56.68 56.85' 57.12 9 Required reserves8 46.00 54.90 61.31 59.96 59.96 59.18 56.78 56.83 58.18 55.95 56.16 56.40 10 Monetary base9 321.07 354.55 390.59 422.51 422.51 421.84 419.25 423.27 428.74 429.29 430.23 431.23 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 55.53 56.54 62.86 61.34 61.34 60.52 57.70 57.58 58.87 56.76 57.04' 57.39 12 Nonborrowed reserves 55.34 56.42 62.78 61.13 61.13 60.39 57.64 57.51 58.76 56.61 56.77 57.02 13 Nonborrowed reserves plus extended credit 55.34 56.42 62.78 61.13 61.13 60.39 57.64 57.51 58.76 56.61 56.77 57.02 14 Required reserves 54.55 55.39 61.80 60.17 60.17 59.18 56.75 56.79 58.12 55.88 56.08 56.30 15 Monetary base12 333.61 360.90 397.62 427.25 427.25 426.31 423.57 427.56 432.79 433.47 434.54 435.49 16 Excess reserves13 .98 1.16 1.06 1.17 1.17 1.34 .95 .79 .75 .88 .96' 1.09 17 Borrowings from the Federal Reserve .19 .12 .08 .21 .21 .14 .06 .07 .11 .15 .27 .37 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) 8. To adjust required reserves for discontinuities that are due to regulatory changes in weekly statistical release. Historical data starting in 1959 and estimates of the impact on reserve requirements, a multiplicative procedure is used to estimate what required required reserves of changes in reserve requirements are available from the Money and reserves would have been in past periods had current reserve requirements been in effect. Reserves Projections Section, Division of Monetary Affairs, Board of Governors of the Break-adjusted required reserves include required reserves against transactions deposits Federal Reserve System, Washington, DC 20551. and nonpersonal time and savings deposits (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regula- 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), tory changes in reserve requirements. (See also table 1.10) plus (2) the (unadjusted) currency component of the money stock, plus (3) (for all 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault adjusted required reserves (line 4) plus excess reserves (line 16). Cash" and for all those weekly reporters whose vault cash exceeds their required 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally ad- reserves) the break-adjusted difference between current vault cash and the amount applied justed, break-adjusted total reserves (line 1) less total borrowings of depository institu- to satisfy current reserve requirements. tions from the Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with 5. Extended credit consists of borrowing at the discount window under no adjustments to eliminate the effects of discontinuities associated with regulatory the terms and conditions established for the extended credit program to help depository changes in reserve requirements. institutions deal with sustained liquidity pressures. Because there is not the same need to 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy repay such borrowing promptly as with traditional short-term adjustment credit, the reserve requirements. money market impact of extended credit is similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally total reserves (line 11), plus (2) required clearing balances and adjustments to compensate adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency for float at Federal Reserve Banks, plus (3) the currency component of the money stock, component of the money stock, plus (3) (for all quarterly reporters on the "Report of plus (4) (for all quarterly reporters on the "Report of Transaction Accounts, Other Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted their required reserves) the difference between current vault cash and the amount applied difference between current vault cash and the amount applied to satisfy current reserve to satisfy current reserve requirements. Since the introduction of contemporaneous reserve requirements. requirements in February 1984, currency and vault cash figures have been measured over 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus the computation periods ending on Mondays. excess reserves (line 16). 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • October 1995 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES' Billions of dollars, averages of daily figures 1995' Item 1991 1992 1993 1994 Dec. Dec. Dec. Dec. Apr. May June July Seasonally adjusted Measures2 1 Ml 897.3 1,024.4 1,128.6 1,148.0 1,149.7 1,143.0 1,143.8 1,145.0 2 M2 3,457.9 3,515.3 3,583.6 3,616.2' 3,643.8 3,660.0 3,695.7 3,714.6 3 M3 4,176.0 4,182.9 4,242.3' 4,303.4' 4,381.1 4,410.2 4,456.7 4,489.8 4 L 4,990.9 5,061.1 5,150.1' 5,293.2' 5,452.0 5,478.4 5,533.6 n.a. 5 Debt 11,178.2 11,716.7 12,344.2' 12,957.6' 13,202.6 13,267.0 13,337.9 n.a. Ml components 6 Currency3 267.4 292.8 322.1 354.5 365.7 368.1 367.4 367.1 7 Travelers checks4 7.7 8.1 7.9 8.4 9.2 9.2 9.0 8.9 8 Demand deposits5 289.5 338.9 383.9 382.2 381.2 380.6 386.8 389.5 9 Other checkable deposits6 332.7 384.6 414.7 402.9 393.6 385.0 380.6 379.5 Nontransaction components 10 In M27 2,560.6 2,490.9 2,455.0 2,468.2' 2,494.0 2,517.0 2,551.9 2,569.6 11 In M38 only 718.1 667.6 658.7' 687.2' 737.3 750.2 761.0 775.2 Commercial banks 12 Savings deposits, including MMDAs 665.6 754.7 785.8 752.3 716.0 717.2 728.1 730.7 13 Small time deposits9 602.5 508.1 468.6 502.6' 548.1 556.2 562.4 566.7 14 Large time deposits10' 11 333.3 286.7 271.2 296.6' 309.1 315.6 319.1 326.8 Thrift institutions 15 Savings deposits, including MMDAs 375.6 428.9 429.8 391.9 366.4 364.1 363.0 360.7 16 Small time deposits9 464.1 361.1 316.5 317.7 348.7 354.5 355.1 355.0 17 Large time deposits10 83.3 67.1 61.6 64.9 71.2 70.4 70.8 72.6 Money market mutual funds 18 General purpose and broker-dealer 374.2 356.9 360.1 389.0 396.0 405.3 425.9 441.5 19 Institution-only 180.0 200.2 198.1 180.8 192.9 194.8 205.6 212.4 Debt components 20 Federal debt 2,763.3 3,067.9 3,328.0 3,497.4 3,559.5 3,577.0 3,602.0 21 Nonfederal debt 8,414.8 8,648.8 9,016.3' 9,460.2' 9,643.1 9,690.0 9,735.9 n.a. Not seasonally adjusted Measures2 22 Ml 916.0 1,046.0 1,153.7 1,173.7 1,158.7 1,132.1 1,139.2 1,144.0 23 M2 3,472.7 3,533.6 3,606.1 3,639.7' 3,660.1 3,647.6 3,691.2 3,714.0 24 M3 4,189.4 4,201.4 4,266.1' 4,329.4' 4,392.8 4,399.9 4,450.3 4,483.1 25 L 5,015.5 5,090.8 5,184.7' 5,330.9' 5,462.1 5,457.1 5,521.6 n.a. 26 Debt 11,175.5 11,719.5 12,336.4' 12,949.3' 13,135.7 13,179.5 13,280.6 n.a. Ml components 21 Currency3 269.9 295.0 324.8 357.6 365.5 367.9 368.1 369.0 28 Travelers checks4 7.4 7.8 7.6 8.1 8.8 8.9 9.2 9.5 29 Demand deposits5 302.4 354.4 401.8 400.3 382.0 372.9 382.6 388.7 30 Other checkable deposits6 336.3 388.9 419.4 407.6 402.4 382.4 379.2 376.8 Nontransaction components 31 In M27 2,556.6 2,487.7 2,452.5' 2,466.1' 2,501.4 2,515.5 2,552.0 2,570.0 32 In M38 716.7 667.7 660.0' 689.7' 732.7 752.3 759.1 769.1 Commercial banks 33 Savings deposits, including MMDAs 664.0 752.9 784.3 751.1 717.8 717.8 730.2 732.6 34 Small time deposits9 601.9 507.8 468.2 502.2' 547.5 555.1 562.0 567.5 35 Large time deposits10' " 332.6 286.2 270.8 296.3' 306.9 318.1 320.6 325.4 Thrift institutions 36 Savings deposits, including MMDAs 374.8 427.9 429.0 391.2 367.3 364.4 364.1 361.6 37 Small time deposits9 463.7 360.9 316.2 317.4 348.3 353.8 354.8 355.4 38 Large time deposits10 83.1 67.0 61.5 64.8 70.7 70.9 71.1 72.3 Money market mutual funds 39 General purpose and broker-dealer 372.2 355.1 358.3 387.1 404.8 407.8 423.6 438.4 40 Institution-only 180.8 201.7 200.0 183.1 191.3 193.8 199.2 206.6 Repurchase agreements and Eurodollars 41 Overnight and continuing 79.9 83.2 96.5 117.1' 115.7 116.5 117.3 114.5 42 Term 132.7 127.8 143.9' 157.9' 176.3 182.3 181.5 178.2 Debt components 43 Federal debt 2,765.0 3,069.8 3,329.5 3,499.0 3,544.1 3,552.6 3,579.3 44 Nonfederal debt 8,410.5 8,649.7 9,006.9' 9,450.3' 9,591.6 9,626.9 9,701.3 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 U. 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 • October 1995 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks' 1994 1995 IItteemm 1992 1993 Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May Juner July Interest rates (annual effective yields)2 INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts 2.33 1.86 1.92 1.96 1.98 2.01 2.00 1.95 1.96 1.94 1.90 2 Savings deposits3 2.88 2.46 2.81 2.91 2.98 3.09 3.14 3.17 3.20 3.19 3.15 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 2.90 2.65 3.65 3.81 3.96 4.19 4.24 4.28 4.25 4.19 4.17 4 92 to 182 days 3.16 2.91 4.22 4.44 4.67 4.83 4.97 4.94 4.93 4.81 4.77 5 183 days to 1 year 3.37 3.13 4.85 5.12 5.39 5.57 5.60 5.60 5.49 5.27 5.18 6 More than 1 year to 2lA years 3.88 3.55 5.42 5.74 6.00 6.12 6.12 6.05 5.83 5.53 5.38 7 More than 2 VS years 4.77 4.29 6.09 6.30 6.47 6.52 6.45 6.37 6.11 5.79 5.62 BIF-INSURED SAVINGS BANKS4 8 Negotiable order of withdrawal accounts 2.45 1.87 1.91 1.95 1.99 2.04 1.99 1.99 2.00 1.98 1.96 9 Savings deposits3 3.20 2.63 2.83 2.88 2.91 2.95 2.94 2.93 2.95 2.97 2.97 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 3.13 2.70 3.51 3.80 3.98 4.17 4.21 4.18 4.24 4.24 4.29 11 92 to 182 days 3.44 3.02 4.42 4.89 5.13 5.33 5.37 5.38 5.31 5.22 5.16 12 183 days to 1 year 3.61 3.31 5.18 5.52 5.75 5.94 5.94 5.87 5.83 5.61 5.47 13 More than 1 year to 2l/2 years 4.02 3.66 5.70 6.09 6.29 6.37 6.32 6.25 6.08 5.78 5.62 14 More than 2 Yl years 5.00 4.62 6.18 6.43 6.68 6.75 6.68 6.59 6.32 5.98 5.82 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts 286,541 305,223 294,282 303,724 291,355 290,188 292,811 286,987 274,281 274,573 272,355 16 Savings deposits3 738,253 766,413 746,605 734,519 723,295 714,955 713,440 698,963 714,989 718,393 723,120 17 Personal 578,757 597,838 584,628 578,459 569,619 564,877 564,086 550,674 560,563 563,795 567,519 18 Nonpersonal 159,496 168,575 161,977 156,060 153,676 150,078 149,354 148,289 154,426 154,599 155,601 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 38,474 29,455 31,077 32,375 32,154 31,777 31,623 31,530 31,472 32,140 33,030 20 92 to 182 days 127,831 110,069 94,692 95,901 96,895 98,248 95,583 94,368 93,188 91,999 91,618 21 183 days to 1 year 163,098 146,565 159,645 161,831 163,939 169,103 176,657 179,625 184,560 187,185 187,334 22 More than 1 year to 2 {/i years 152,977 141,223 158,382 162,486 168,515 176,877 183,275 189,652 194,963 198,541 202,072 23 More than 2'/5 years 169,708 181,528 189,741 190,897 190,215 191,383 194,722 194,426 192,542 195,024 195,069 24 IRA and Keogh plan deposits 147,350 143,985 143,075 143,428 143,900 145,040 145,959 146,679 146,842 148,894 149,374 BIF-INSURED SAVINGS BANKS4 25 Negotiable order of withdrawal accounts 10,871 11,151 11,002 11,317 11,127 10,950 11,218 11,005 11,019 11,354 11,260 26 Savings deposits3 81,786 80,115 72,622 70,642 71,639 69,982 68,595 67,453 67,322 67,185 66,639 27 Personal 78,695 77,035 69,412 67,673 68,760 67,144 65,692 64,204 64,484 63,966 63,463 28 Nonpersonal 3,091 3,079 3,211 2,969 2,878 2,837 2,902 3,248 2,838 3,219 3,176 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 3,867 2,793 2,209 2,166 2,041 2,086 1,943 1,780 1,885 1,567 1,795 30 92 to 182 days 17,345 12,946 11,913 11,793 12,084 11,953 11,707 11,245 11,449 11,025 11,107 31 183 days to 1 year 21,780 17,426 18,509 18,753 19,336 19,979 20,277 21,051 20,956 21,702 22,165 32 More than 1 year to 2'/i years 18,442 16,546 17,999 17,842 20,460 21,870 22,648 23,445 24,014 24,658 25,115 33 More than 2 Vi years 18,845 20,464 21,687 21,600 21,888 22,275 22,446 22,671 22,819 22,935 22,876 34 IRA and Keogh plan accounts 21,713 19,356 19,532 19,325 19,802 20,099 20,221 20,388 20,236 20,499 20,549 1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508) 2. As of October 31, 1994, interest rate data for NOW accounts and savings deposits Special Supplementary Table monthly statistical release. For ordering address, see inside reflect a series break caused by a change in the survey used to collect these data. front cover. Estimates are based on data collected by the Federal Reserve System from a 3. Includes personal and nonpersonal money market deposits. stratified random sample of about 425 commercial banks and 75 savings banks on the last 4. Includes both mutual and federal savings banks. day of each month. Data are not seasonally adjusted and include IRA and Keogh deposits and foreign currency-denominated deposits. Data exclude retail repurchase agreements and deposits held in U.S. branches and agencies of foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A17 1.23 BANK DEBITS AND DEPOSIT TURNOVER1 Debits are in billions of dollars; turnover is ratio of debits to deposits; monthly data are at annual rates 1994 1995r BBaannkk ggrroouupp,, oorr ttyyppee ooff ddeeppoossiitt 1199992222 1199993322rr 1199994422rr Dec.' Jan. Feb. Mar. Apr. May Seasonally adjusted Demand deposits 1 All insured banks 313,128.1 334,784.1 369,029.1 373,175.2 369,875.1 384,139.7 393,325.8 362,532.4 418,151.4 2 Major New York City banks 165,447.7 171,224.3 191,168.8 187,961.2 183,454.5 195,129.3 197,666.4 185,751.6 217,465.1 3 Other banks 147,680.4 163,559.7 177,860.3 185,214.0 186,420.6 189,010.4 195,659.4 176,780.8 200,686.3 4 Other checkable deposits4 3,780.3 3,481.5 3,798.6 4,137.4 4,017.2 3,918.2 4,044.4 3,666.0 4,167.3 5 Savings deposits (including MMDAs)5 3,309.1 3,497.4 3,766.3 4,068.5 3,922.7 3,989.8 3,889.3 3,565.7 4,021.9 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 825.9 785.9 817.4 826.2 821.3 857.0 880.4 807.4 934.4 7 Major New York City banks 4,795.3 4,198.1 4,481.5 4,490.8 4,338.3 4,662.0 4,754.1 4,551.2 5,168.0 8 Other banks 428.7 424.6 435.1 451.9 456.8 465.1 482.9 433.1 495.0 9 Other checkable deposits4 14.4 11.9 12.6 14.0 13.6 13.4 13.9 12.6 14.7 10 Savings deposits (including MMDAs)5 4.7 4.6 4.9 5.5 5.4 5.5 5.4 5.0 5.6 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 313,344.9 334,899.2 369,121.8 386,421.5 368,837.1 355,792.7 412,197.5 357,566.4 407,775.8 12 Major New York City banks 165,595.0 171,283.5 191,226.1 194,120.1 181,602.7 181,697.8 209,255.5 180,169.1 207,259.8 13 Other banks 147,749.9 163,615.7 177,895.7 192,301.4 187,234.4 174,094.9 202,942.0 177,397.3 200,516.0 14 Other checkable deposits4 3,783.6 3,481.7 3,795.6 4,301.1 4,361.7 3,609.9 4,083.5 3,874.0 4,003.7 15 Savings deposits (including MMDAs)5 3,310.0 3,498.3 3,764.4 4,282.0 4,100.6 3,611.3 3,989.3 3,727.1 3,981.8 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 826.1 786.1 818.2 820.4 802.0 812.2 946.4 796.2 927.7 17 Major New York City banks 4,803.5 4,197.9 4,490.3 4,343.4 4,128.1 4,334.9 5,145.1 4,459.5 5,095.1 18 Other banks 428.8 424.8 435.3 451.1 450.2 439.5 513.9 434.1 502.7 19 Other checkable deposits4 14.4 11.9 12.6 14.3 14.5 12.3 14.0 13.0 14.3 20 Savings deposits (including MMDAs)5 4.7 4.6 4.9 5.8 5.6 5.0 5.6 5.2 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 • October 1995 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Billions of dollars Monthly averages Wednesday figures Account 1994 1995r 1995 July Jan. Feb. Mar. Apr. May June July July 5 July 12 July 19 July 26 ALL COMMERCIAL Seasonally adjusted BANKING INSTITUTIONS Assets 1 Bank credit 3,256.2 3,348.7 3,362.1 3,387.0 3,452.8 3,478.9 3,493.4 3,503.1 3,492.4 3,502.9 3,505.3 3,506.8 2 Securities in bank credit 975.6 945.6 937.4 942.2 984.5 981.3 980.9 968.7 972.1 971.8 969.6 966.4 3 U.S. government securities 751.5 721.8 717.1 705.1 704.0 706.7 705.9 698.3 700.0 699.1 697.0 698.0 4 Other securities 224.1 223.8 220.2 237.0 280.5 274.6 274.9 270.4 272.1 272.7 272.6 268.4 5 Loans and leases in bank credit2 .. . 2,280.5 2,403.2 2,424.8 2,444.9 2,468.3 2,497.6 2,512.6 2,534.3 2,520.3 2,531.0 2,535.7 2,540.4 6 Commercial and industrial 618.8 657.2 668.9 672.0 678.4 686.4 688.9 692.9 692.5 692.2 692.1 692.2 7 Real estate 965.6 1,015.1 1,022.7 1,028.3 1,035.6 1,039.9 1,047.1 1,056.7 1,052.7 1,056.4 1,057.9 1,057.7 8 Revolving home equity 74.0 76.7 77.0 77.3 78.0 78.7 79.3 79.7 79.8 79.9 79.9 79.8 9 Other 891.6 938.4 945.7 951.1 957.6 961.1 967.8 977.0 972.8 976.5 978.0 977.9 10 Consumer 423.1 457.4 459.6 465.2 471.2 473.0 478.2 481.5 479.3 480.5 482.0 482.5 11 Security3 77.2 68.6 67.8 69.7 72.9 84.2 85.0 83.1 79.6 84.7 83.8 85.0 12 Other 195.8 204.8 205.8 209.6 210.2 214.0 213.4 220.2 216.2 217.3 219.9 223.1 13 Interbank loans4 159.8 179.0 177.8 180.2 178.5 183.7 187.5 194.8 194.2 191.9 193.3 195.5 14 Cash assets5 211.6 219.4 216.0 206.9 207.8 210.2 210.6 213.1 220.6 210.1 206.7 218.2 15 Other assets6 226.1 236.7 242.2 241.3 213.4 213.8 213.7 222.2 219.9 222.0 223.2 223.6 16 Total assets7 3,796.5r 3,927.1 3,941.6 3,959.1 3,995.4 4,029.5 4,047.9 4,075.6 4,069.4 4,0693 4,071.0 4,086.7 Liabilities 17 Deposits 2,514.7 2,544.1 2,547.2 2,548.2 2,555.8 2,570.1 2,589.7 2,613.4 2,604.7 2,609.6 2,600.5 2,632.3 18 Transaction 811.2' 808.3 804.6 795.3 791.1 788.2 785.0 797.0 804.9 794.9 785.4 809.9 19 Nontransaction 1,703.5' 1,735.7 1,742.6 1,752.9 1,764.7 1,781.9 1,804.7 1,816.4 1,799.8 1,814.7 1,815.1 1,822.4 20 Large time 338.7 367.0 374.2 380.5 386.0 389.8 392.5 398.0 384.8 395.7 399.1 403.4 21 Other 1,364.8' 1,368.8 1,368.5 1,372.4 1,378.7 1,392.0 1,412.2 1,418.4 1,415.0 1,419.0 1,416.1 1,419.0 22 Borrowings 577.9' 641.5 643.5 648.5 672.4 678.0 664.8 682.0 677.7 678.9 682.4 679.1 23 From banks in the U.S 160.0 181.1 178.5 182.0 181.2 183.2 184.8 197.9 195.6 194.5 198.7 196.9 24 From nonbanks in the U.S 417.9' 460.4 465.1 466.5 491.2 494.8 480.1 484.1 482.2 484.4 483.8 482.2 25 Net due to related foreign offices 197.3 244.7 252.6 241.2 234.6 239.4 245.1 236.8 243.1 235.6 246.5 229.0 26 Other liabilities8 182.5' 174.7 178.8 196.0 208.3 205.9 205.4 196.1 198.4 199.0 196.7 194.3 27 Total liabilities 3,472.4r 3,604.9 3,622.2 3,633.8 3,671.1 3,693.4 3,705.0 3,7283 3,724.0 3,723.1 3,726.1 3,734.7 28 Residual (assets less liabilities)9 324.0' 322.1 319.4 325.3 324.3 336.1 342.9 347.3 345.4 346.2 344.9 352.0 Not seasonally adjusted Assets 29 Bank credit 3,244.1 3,344.8 3,358.0 3,387.5 3.454.0 3,470.8 3,490.2 3,490.5 3,491.1 3,486.7 3,490.6 3,487.0 30 Securities in bank credit 970.8 939.6 936.1 949.9 991.2 983.0 981.5 964.2 968.7 965.2 963.0 962.3 31 U.S. government securities 747.3' 715.6 712.8 710.1 708.3 705.9 705.5 694.5 696.6 694.4 692.6 693.5 32 Other securities 223.5 224.0 223.3 239.8 282.8 277.1 276.0 269.7 272.1 270.8 270.4 268.9 33 Loans and leases in bank credit2 .. . 2,273.3 2,405.2 2,421.9 2,437.6 2,462.8 2,487.8 2,508.7 2,526.2 2,522.4 2,521.4 2,527.5 2,524.7 34 Commercial and industrial 618.1 653.9 667.5 675.2 682.8 689.5 690.8 692.2 696.4 690.9 691.5 689.4 35 Real estate 965.1 1,013.4 1,018.8 1,023.5 1,031.4 1,038.2 1,046.9 1,056.1 1,053.2 1,056.5 1,057.1 1,056.1 36 Revolving home equity 74.0 76.6 76.7 76.6 77.4 78.6 79.3 79.7 79.9 79.8 79.9 79.9 37 Other 891.1 936.8 942.2 946.9 954.0 959.6 967.6 976.3 973.3 976.7 977.2 976.3 38 Consumer 421.0 462.1 460.9 461.7 468.0 471.5 475.6 479.2 476.0 477.4 479.6 481.0 39 Security3 72.7 70.8 71.0 70.9 73.7 78.7 81.2 78.2 75.5 78.8 78.9 78.4 40 Other 196.4 205.0 203.7 206.3 206.9 209.9 214.1 220.6 221.4 217.8 220.5 219.8 41 Interbank loans4 156.7 185.9 179.9 178.4 178.0 178.3 184.6 190.8 200.5 187.0 186.7 184.8 42 Cash assets5 208.5 224.8 212.6 201.3 204.1 207.7 208.7 210.0 239.2 204.3 200.7 201.7 43 Other assets6 225.5 236.6 239.9 236.7 209.8 213.1 212.3 221.7 224.0 220.4 220.5 220.6 44 Total assets7 3,7783r 3,935.6 3,933.8 3,9473 3,989.2 4,012.8 4,038.6 4,055.9 4,097.8 4,0413 4,0413 4,037.1 Liabilities 45 Deposits 2,505.8' 2,548.0 2,537.9 2,538.4 2,558.7 2,561.1 2,586.9 2,604.2 2,645.7 2,599.1 2,582.1 2,587.9 46 Transaction 802.0' 818.6 795.7 783.1 795.9 777.0 779.4 787.7 845.0 782.5 767.5 767.9 47 Nontransaction 1,729.3 1,742.2 1,755.3 1,762.8 1,784.0 1,807.5 1,816.5 1,800.7 1,816.6 1,814.6 1,820.0 48 Large time 338.3 363.7 374.4 381.7 384.6 394.1 395.0 397.4 382.0 395.0 398.4 404.0 49 Other 1,365.6' 1,365.6 1,367.8 1,373.6 1,378.2 1,390.0 1,412.5 1,419.2 1,418.7 1,421.6 1,416.2 1,416.0 50 Borrowings 581.0r 634.4 639.6 637.7 654.8 664.3 671.3 680.7 681.6 673.5 681.5 674.4 51 From banks in the U.S 156.8 185.9 179.7 178.3 177.7 178.0 184.5 194.1 201.0 191.0 190.7 188.7 52 From nonbanks in the U.S 424.3' 448.5 459.9 459.4 477.1 486.3 486.8 486.5 480.6 482.5 490.8 485.7 53 Net due to related foreign offices 194.3 251.3 249.7 245.1 237.1 245.4 239.2 234.3 234.4 230.8 239.9 238.9 54 Other liabilities8 180.2' 177.5 179.5 195.1 203.5 204.2 200.9 193.5 195.0 194.8 193.3 192.3 55 Total liabilities 3,461.4r 3,611.2 3,606.7 3,6163 3,654.2 3,674.9 3,6983 3,712.6 3,756.7 3,698.2 3,696.9 3,693.5 56 Residual (assets less liabilities)9 116.9 324.5 327.1 330.9 335.0 338.0 340.4 343.3 341.1 343.1 344.6 343.6 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions A19 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1—Continued Billions of dollars Monthly averages Wednesday figures Account 1994 1995r 1995 July Jan. Feb. Mar. Apr. May June July July 5 July 12 July 19 July 26 DOMESTICALLY CHARTERED Seasonally adjusted COMMERCIAL BANKS Assets 57 Bank credit 2,906.4r 2,997.6 3,001.3 3,020.7 3,053.8 3,075.8 3,090.0 3,100.1 3,093.9 33,,110000..66 33,,110011..55 33,,110011..99 58 Securities in bank credit 892.9 864.3 848.8 852.7 862.2 859.1 856.2 847.2 850.7 847.6 848.5 846.2 59 U.S. government securities 692.2 668.5 657.1 646.8 643.8 644.7 643.5 638.3 638.7 637.7 638.2 639.0 60 200.8r 195.9 191.6 205.9 218.4 214.4 212.7 208.9 212.0 210.0 210.3 207.2 61 Loans and leases in bank credit2 2,013.4 2,133.3 2,152.6 2,168.1 2,191.6 2,216.7 2,233.8 2,252.9 2,243.2 2,252.9 2,253.0 2,255.7 6? Commercial and industrial 461.3 492.3 499.4 502.7 510.8 516.7 519.0 523.4 523.2 522.8 523.0 522.9 63 922.7 974.5 982.6 988.8 997.4 1,002.3 1,009.9 1,020.3 1,016.1 1,019.9 1,021.3 1,021.5 64 Revolving home equity 74.0 76.7 77.0 77.2 77.9 78.7 79.3 79.7 79.8 79.9 79.9 79.8 65 Other 848.7 897.9 905.6 911.6 919.4 923.6 930.6 940.6 936.3 940.0 941.5 941.7 66 Consumer 423.1 457.4 459.6 465.2 471.2 473.0 478.2 481.5 479.3 480.5 482.0 482.5 67 Security3 47.6 45.5 46.5 45.9 45.4 54.0 55.5 52.2 50.3 54.7 52.7 51.5 68 Other 158.7 163.5 164.4 165.5 166.8 170.6 171.1 175.5 174.2 175.1 174.0 177.2 69 Interbank loans4 133.7 155.0 155.1 156.4 157.2 160.2 164.8 172.7 174.8 168.8 171.3 173.1 70 185.5 192.2 190.2 180.9 181.2 181.5 183.4 186.3 193.9 183.4 180.1 190.9 71 Other assets6 169.9 171.6 173.1 167.6 164.9 163.7 164.8 168.0 166.0 168.2 168.5 168.6 72 Total assets7 3,3385 3,459.5 3,4633 3,4693 3,500.2 3,524.2 3,545.8 3,569.6 3,571.0 3,563.5 3,564.0 3,577.0 Liabilities 73 2,371.5r 2,390.4 2,395.9 2,394.1 2,396.7 2,407.4 2,422.7 2,444.7 2,446.8 2,441.5 2,432.8 22,,445599..11 74 Transaction 801.lr 798.3 794.4 784.6 780.7 778.1 774.8 786.6 794.3 785.0 774.7 799.3 75 Nontransaction l,570.4r 1,592.1 1,601.5 1,609.6 1,616.0 1,629.3 1,647.8 1,658.1 1,652.4 1,656.5 1,658.2 1,659.8 76 Large time 209.4 226.9 236.0 240.6 241.7 244.0 244.1 244.9 243.0 244.6 246.3 245.1 77 Other l,361.0f 1,365.2 1,365.5 1,369.0 1,374.3 1,385.3 1,403.7 1,413.1 1,409.5 1,411.9 1,411.9 1,414.8 78 Borrowings 469.4r 541.5 540.2 537.7 561.0 565.9 559.1 570.9 565.7 569.5 574.1 564.5 79 From banks in the U.S 141.0 164.7 161.5 164.4 162.4 163.0 167.8 180.5 176.4 176.5 182.8 180.1 80 From nonbanks in the U.S 328.4r 376.8 378.7 373.3 398.6 402.9 391.3 390.4 389.3 393.0 391.3 384.4 81 Net due to related foreign offices .... 45.1 91.2 87.8 84.8 81.8 83.5 90.2 82.1 84.1 79.5 86.7 82.6 82 Other liabilities8 135.7r 119.9 121.2 131.6 143.3 139.5 139.1 131.3 132.6 132.7 132.2 131.0 83 Total liabilities 3,021.7r 3,143.0 3,145.1 3,1483 3,182.8 3,1963 3,211.1 3,229.0 3,229.1 3,223.2 3,225.8 3,237.1 84 Residual (assets less liabilities)9 316./ 316.5 318.2 321.0 317.4 327.9 334.7 340.6 341.8 340.4 338.2 339.9 Not seasonally adjusted Assets 85 Bank credit 2,897.4 2,988.6 2,996.7 3,020.0 3,058.1 3,074.3 3,090.9 3,090.4 3,094.1 3,088.9 3,089.0 3,085.7 86 Securities in bank credit .... 889.1 856.9 847.9 859.5 870.1 861.5 859.3 843.6 848.9 843.5 842.8 841.6 87 U.S. government securities . 688.9 661.0 654.0 651.2 649.1 645.5 644.4 635.3 636.7 635.0 634.2 634.3 88 Other securities 200.2 195.9 193.9 208.3 220.9 216.0 214.9 208.3 212.2 208.5 208.7 207.3 89 Loans and leases in bank credit2. 2,008.3 22,,113311..77 2,148.8 2,160.6 2,188.0 2,212.7 2,231.6 2,246.8 2,245.2 2,245.4 2,246.1 2,244.1 90 Commercial and industrial . 460.3r 448888..88 498.9 505.4 515.1 520.6 520.9 522.2 525.4 521.4 521.5 520.1 91 Real estate 922.3 973.0 978.6 983.9 993.5 1,000.7 1,009.7 1,019.8 1,016.7 1,020.1 1,020.5 1,020.0 92 Revolving home equity .. 74.0 76.6 76.6 76.5 77.4 78.6 79.3 79.7 79.8 79.8 79.9 79.8 93 Other 848.3 896.4 902.0 907.3 916.1 922.2 930.4 940.0 936.9 940.3 940.6 940.2 94 Consumer 421.0 462.1 460.9 461.7 468.0 471.5 475.6 479.2 476.0 477.4 479.6 481.0 95 Security3 45.8 44.9 47.8 46.6 46.8 51.9 54.3 50.1 48.9 51.6 50.6 48.7 96 Other 159.0 162.9 162.6 163.0 164.6 168.0 171.2 175.6 178.2 174.8 174.0 174.4 97 Interbank loans4 130.3 160.4 158.1 155.8 157.0 155.3 163.2 168.4 180.9 163.9 165.6 161.0 98 Cash assets5 182.4 198.0 187.8 175.9 178.3 180.3 181.0 183.0 211.8 177.7 174.0 174.3 99 Other assets6 170.2 171.0 170.9 164.6 162.6 163.0 164.1 168.3 171.1 167.6 166.7 166.5 100 Total assets7 3323.8 3,461.6 3,456.9 3,459.8 3,4993 3,515.9 3,542.0 3,553.2 3,600.9 3,541.1 3,5383 3,530.6 Liabilities 101 Deposits 2,362.7r 2,394.7 2,385.9 2382.5 2,400.9 2,396.4 2,416.8 2,435.8 2,488.2 2,432.3 2,414.2 2,414.0 102 Transaction 791.9" 808.5 785.5 772.8 786.0 767.4 769.4 777.3 834.0 772.6 756.7 757.4 103 Nontransaction 1,570.9" 1,586.3 1,600.4 1,609.6 1,614.9 1,629.0 1,647.4 1,658.4 1,654.3 1,659.7 1,657.5 1,656.6 104 Large time 209.4 224.7 236.2 239.4 241.0 245.6 243.7 245.0 240.9 244.9 246.1 246.0 105 Other l,361.5r 1,361.6 1,364.2 1,370.2 1,373.9 1,383.4 1,403.7 1,413.4 1,413.4 1,414.8 1,411.4 1,410.6 106 Borrowings 470.1r 535.2 538.8 528.7 543.5 556.5 563.8 567.1 564.8 561.5 569.4 561.3 107 From banks in the U.S 137.5 168.8 163.2 160.7 160.0 159.7 167.4 176.5 179.6 172.5 175.0 173.0 108 From nonbanks in the U.S.... 332.6' 366.4 375.6 367.9 383.5 396.7 396.4 390.6 385.2 389.0 394.4 388.3 109 Net due to related foreign offices 44.7 89.9 88.5 89.7 84.1 91.8 89.6 81.7 79.2 77.3 85.1 87.2 110 Other liabilities8 134.6r 121.7 120.9 132.0 140.2 137.5 135.4 130.3 131.4 130.8 130.9 130.3 111 Total liabilities 3,012Jr 3,141.6 3,134.1 3,132.8 3,168.7 3,1811 3,205.7 3,214.8 3,263.6 3,201.8 3,199.5 3,192£ 112 Residual (assets less liabilities)9. 311.6r 320.0 322.8 326.9 330.6 333.7 336.4 338.3 337.2 339.3 338.8 337.8 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • October 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 May 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19 July 26 ASSETS 1 Cash and balances due from depository institutions 132,771 111,792 113,901 116,232 109,037' 133,163 109,824 107,716 109,147 7 U.S. Treasury and government securities 303,389 305,870 303,419 300,719 295,435 295,224 292,889 292,969 293,094 Trading account 24,832 27,474 26,576 22,574 20,888 17,937 17,817 17,755 17,243 4 Investment account 278,557 278,396 276,842 278,145 274,547 277,287 275,073 275,214 275,851 5 Mortgage-backed securities' 97,283r 97,496' 96,807' 97,477' 96,687' 98,310 98,116 97,066 97,984 All others, by maturity 6 One year or less 46,704 47,353' 46,778' 46,475 44,623 45,268 44,089 44,615 44,866 7 One year through five years 72,655' 72,368' 71,842' 73,044' 72,433' 72,762 72,574 73,045 72,636 8 More than five years 61,915 61,179 61,416' 61,149 60,804 60,948 60,294 60,488 60,365 9 Other securities 130,293 130,484 132,364 130,966 127,795 127,747 123,951 124,374 122,803 in Trading account 1,392 1,418 1,477 1,487 1,660 2,192 1,448 1,329 1,466 ii Investment account 63,012 62,875 63,655 63,014 62,539 62,421 62,486 61,691 61,741 17. State and local government, by maturity 21,055 20,842 20,843 20,839 20,600 19,825 19,863 19,788 19,842 n One year or less 5,607 5,603 5,590 5,601 5,573 4,972 5,037 5,061 5,122 14 More than one year 15,449 15,239 15,253 15,239 15,026 14,854 14,825 14,728 14,719 IS Other bonds, corporate stocks, and securities 41,956 42,033 42,812 42,175 41,939 42,595 42,623 41,903 41,899 16 Other trading account assets 65,889 66,191 67,232 66,465 63,596 63,135 60,017 61,353 59,596 17 Federal funds sold" 110,584 111,104 113,505 104,656 103,240 116,347 102,357 106,370 100,381 18 To commercial banks in the United States 67,921 67,716 70,843 68,225 65,807 83,128 64,684 69,256 66,377 19 To nonbank brokers and dealers in securities 32,484 37,069 36,353 29,581 30,755 27,282 31,483 30,816 28,095 70 To others3 10,179 6,319 6,309 6,850 6,677 5,937 6,190 6,299 5,909 71 Other loans and leases, gross 1,224,565 1,223,268 1,223,610 1,226,473 1,228,699 1,242,896 1,236,559 1,236,265 1,236,810 77 Commercial and industrial 344,509' 342,802' 342,380' 343,478' 342,501' 346,328 342,909 343,215 341,875 Bankers acceptances and commercial paper 1,786 1,691 1,830 1,606 1,580 1,527 1,565 1,560 1,504 74 All other 342,723' 341,111' 340,550' 341,872' 340,921' 344,802 341,344 341,655 340,371 75 U.S. addressees 340,034' 338,493' 337,893' 339,312' 338,377' 342,224 338,715 338,955 337,692 76 Non-U.S. addressees 2,689 2,618 2,657 2,560 2,544 2,578 2,629 2,700 2,679 77 Real estate loans 481,264 483,872 483,940 484,972 485,778 489,384 491,531 491,594 491,116 78 Revolving, home equity 48,555 48,503 48,606 48,667 48,809 49,005 48,993 49,026 49,072 79 All other 432,709 435,369 435,334 436,305 436,969 440,379 442,538 442,568 442,044 30 To individuals for personal expenditures 244,520 244,797 245,595 243,567 245,313 245,272 242,300 243,718 244,886 31 To depository and financial institutions 57,808 59,404' 59,491' 59,749 61,089 62,754 66,204 63,738 63,784 37 Commercial banks in the United States 37,083 37,638 38,141 38,663 39,219 39,633 42,515 41,685 41,690 33 Banks in foreign countries 3,144 3,635 3,374 3,067 3,203 3,806 4,265 2,721 2,787 34 Nonbank depository and other financial institutions 17,580 18,130' 17,976' 18,019 18,668 19,315 19,425 19,332 19,307 35 For purchasing and carrying securities 17,550 14,663 14,899 17,440 15,483 15,804 14,414 14,166 15,009 36 To finance agricultural production 6,500 6,475 6,491 6,555 6,559 6,622 6,689 6,665 6,669 37 To states and political subdivisions 11,139 11,089 11,073 11,177 11,164 11,115 11,063 11,073 11,149 38 To foreign governments and official institutions 1,040 928 908 989 863 897 895 923 1,069 39 All other loans4 26,017 24,956' 24,463' 24,106 25,288 29,642 25,083 25,760 25,734 40 Lease-financing receivables 34,217' 34,284' 34,369' 34,440' 34,663' 35,079 35,471 35,412 35,517 41 LESS: Unearned income 1,646 1,676 1,688 1,689 1,675 1,686 1,678 1,673 1,642 47 Loan and lease reserve5 34,490 34,613 34,621 34,573 34,400 34,267 34,209 34,211 34,149 43 Other loans and leases, net 1,188,429 1,186,979 1,187,301 1,190,211 1,192,624 1,206,942 1,200,672 1,200,381 1,201,018 44 All other assets 135,001 134,984 138,533 132,627 133,717 138,842 137,713 136,670 136,199 45 Total assets6 2,000,466 1,981,213 1,989,023 1,975,411 l,961,848r 2,018,265 1,967,407 1,968,480 1,962,643 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • October 1995 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1995 AAccccoouunntt May 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19 July 26 LIABILITIES 46 Deposits 1,184,022 1,173,811 1,181,821 1,157,823 1,153,778' 1,218,820 1,176,019 1,164,345 1,164,580 47 Demand deposits7 314,893r 293,304' 302,955' 288,056' 290,145' 338,543 296,731 288,197 291,953 48 Individuals, partnerships, and corporations 264,636r 247,977' 256,109' 241,950' 246,559' 286,146 252,366 244,872 246,443 49 Other holders 50,257 45,327 46,847 46,105 43,586' 52,397 44,365 43,325 45,509 50 States and political subdivisions 8,473 7,653 8,218 8,747 8,527 8,606 8,014 8,509 8,549 51 U.S. government 1,919 2,152 3,474 2,863 1,583 1,838 1,606 1,667 1,635 52 Depository institutions in the United States 22,489 18,885 17,642 17,881 17,358 22,697 19,019 18,276 19,014 53 Banks in foreign countries 5,880 5,617 5,298 4,759 5,781 6,432 5,674 5,049 5,243 54 Foreign governments and official institutions 866 763 617 597 619 712 744 632 603 55 Certified and officers' checks 10,629 10,257 11,598 11,259 9,719 12,112 9,308 9,192 10,465 56 Transaction balances other than demand deposits 114,653 114,670 113,653 110,595 109,226 115,852 111,315 110,464 108,783 57 Nontransaction balances 754,477r 765,837' 765,212' 759,172' 754,407' 764,425 767,972 765,685 763,845 58 Individuals, partnerships, and corporations 730,474' 741,641' 741,394' 735,933' 732,019' 742,899 745,748 743,322 741,092 59 Other holders 24,002 24,195' 23,818' 23,239' 22,388' 21,526 22,224 22,362 22,753 60 States and political subdivisions 20,251 20,350' 20,037' 19,442' 18,664' 18,120 18,322 18,373 18,458 61 U.S. government 2,001 2,050 2,015 2,019 2,016 2,009 2,445 2,422 2,446 62 Depository institutions in the United States 1,439 1,484 1,461 1,457 1,391 1,097 1,158 1,271 1,552 63 Foreign governments, official institutions, and banks .. 312 312 306 321 317 300 300 297 298 64 Liabilities for borrowed money5 411,465' 405,442' 405,068' 421,076' 414,347' 413,549 408,181 413,749 406,602 65 Borrowings from Federal Reserve Banks 0 0 0 0 0 1,574 0 0 0 66 Treasury tax and loan notes 14,539 70 4,917 28,714 26,166 17,135 16,138 17,137 21,059 67 Other liabilities for borrowed money6 396,926' 405,372' 400,151' 392,362' 388,181' 394,840 392,042 396,613 385,543 68 Other liabilities (including subordinated notes and debentures) .. . 220,481' 217,323' 217,152' 211,747' 208,814' 199,709 196,378 203,549 204,747 69 Total liabilities 1,815,968 1,796,576 1,804,041 1,790,645 1,776,939' 1,832,078 1,780,577 1,781,644 1,775,928 70 Residual (total assets less total liabilities)7 184,498 184,637 184,982 184,766 184,909 186,188 186,830 186,837 186,714 MEMO 71 Total loans and leases, gross, adjusted, plus securities 1,663,826 1,665,372 1,663,913 1,655,926 1,650,143 1,659,453 1,648,558 1,649,037 1,645,021 72 Time deposits in amounts of $100,000 or more 108,075 109,455' 108,472 106,882 103,504 105,373 109,100 109,740 109,146 73 Loans sold outright to affiliates9 1,673' 1,625' 1,625' 1,624' 1,623' 1,573 1,573 1,570 1,568 74 Commercial and industrial 292 292 292 292 292 291 291 291 291 75 Other 1,381' 1,333' 1,333' 1,332' 1,331' 1,282 1,282 1,279 1,277 76 Foreign branch credit extended to U.S. residents10 25,362' 25,191' 25,143' 25,375' 25,030' 25,194 25,227 25,095 25,110 77 Net owed to related institutions abroad 87,925' 86,101' 83,943' 86,531' 86,487 74,479 72,148 80,208 81,870 1. Includes certificates of participation, issued or guaranteed by agencies of the U.S. 8. Excludes loans to and federal funds transactions with commercial banks in the government, in pools of residential mortgages. United States. 2. Includes securities purchased under agreements to resell. 9. Affiliates include a bank's own foreign branches, nonconsolidated nonbank affiliates 3. Includes allocated transfer risk reserve. of the bank, the bank's holding company (if not a bank), and nonconsolidated nonbank 4. Includes negotiable order of withdrawal (NOWs) and automatic transfer service subsidiaries of the holding company. (ATS) accounts, and telephone and preauthorized transfers of savings deposits. 10. Credit extended by foreign branches of domestically chartered weekly reporting 5. Includes borrowings only from other than directly related institutions. banks to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but 6. Includes federal funds purchased and securities sold under agreements to repur- includes an unknown amount of credit extended to other than nonfinancial businesses. chase. 7. This balancing item is not intended as a measure of equity capital for use in capital-adequacy analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Commercial Banks A23 1.28 LARGE WEEKLY REPORTING U.S. BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1995 AAccccoouunntt May 31r June 7r June 14r June 21r June 28r July 5 July 12 July 19 July 26 ASSETS 1 Cash and balances due from depository institutions 17,009 17,781 17,278 17,009 17,076 17,211 16,788 16,835 1177,,330099 2 U.S. Treasury and government agency securities 42,461 41,627 40,097 40,377 39,489 41,945 4411,,880011 4411,,006633 4411,,664477 3 Other securities 20,560 20,656 19,528 19,849 20,169 27,926 29,221 28,869 29,304 4 Federal funds sold1 29,314 25,125 24,596 27,811 30,476 26,192 29,213 29,400 32,362 5 To commercial banks in the United States 7,266 5,529 4,155 6,559 8,156 5,317 7,079 6,024 7,509 6 To others2 22,048 19,595 20,442 21,252 22,319 20,875 22,134 23,376 24,853 7 Other loans and leases, gross 172,421 172,120 173,053 175,468 174,534 176,595 175,125 175,764 174,426 8 Commercial and industrial 110,709 110,523 110,688 111,938 112,694 113,559 113,181 112,142 111,840 9 Bankers acceptances and commercial paper . 2,889 3,097 3,134 3,132 3,513 3,742 3,864 3,972 3,816 in All other 107,820 107,426 107,554 108,806 109,181 109,817 109,317 108,171 108,023 n U.S. addressees 102,926 102,634 102,741 104,007 104,236 104,833 104,401 103,491 103,207 17 Non-U.S. addressees 4,894 4,792 4,814 4,799 4,946 4,984 4,915 4,680 4,816 13 Loans secured by real estate 23,593 23,626 23,541 23,488 23,496 23,342 23,401 23,453 23,216 14 Loans to depository and financial institutions 27,389 27,766 28,286 28,799 28,647 29,307 28,676 28,606 27,823 IS Commercial banks in the United States 4,561 4,652 4,811 4,825 4,860 4,759 4,832 4,831 4,691 16 Banks in foreign countries 2,312 2,259 2,106 2,137 2,134 2,286 2,384 2,361 2,007 17 Nonbank financial institutions 20,516 20,855 21,369 21,837 21,653 22,261 21,459 21,414 21,124 18 For purchasing and carrying securities 6,150 5,462 5,719 6,732 4,969 5,998 5,315 5,367 5,565 19 To foreign governments and official institutions 386 426 567 350 361 342 447788 669999 669999 ?n All other 4,194 4,317 4,253 4,161 4,366 4,048 4,073 5,496 5,283 21 Other assets (claims on nonrelated parties) 49,319 48,529 52,559 46,996 45,437 37,358 37,500 38,182 38,450 22 Total assets3 362,201 354,616 357,088 354,401 351,678 350,417 354,467 355,635 361,591 LIABILITIES 23 Deposits or credit balances owed to other than directly related institutions 106,991 110,487 109,415 107,048 104,134 97,548 104,176 105,170 109,505 24 Demand deposits 4,231 3,877 3,780 3,514 4,084 4,339 3,709 4,265 4,098 25 Individuals, partnerships, and corporations .... 3,344 3,040 3,033 2,845 3,259 3,376 3,037 3,176 3,008 76 Other 887 837 747 669 825 963 672 1,089 1,091 27 Nontransaction accounts 102,761 106,610 105,636 103,533 100,050 93,210 100,467 100,905 105,407 28 Individuals, partnerships, and corporations .... 69,275 71,032 69,203 68,448 65,266 59,421 64,515 65,771 69,841 29 Other 33,486 35,578 36,433 35,086 34,784 33,789 35,952 35,134 35,566 30 Borrowings from other than directly related institutions 84,311 80,286 81,914 82,913 81,123 86,920 83,910 8855,,003300 8844,,994400 31 Federal funds purchased5 47,837 44,395 45,081 44,669 42,936 48,536 44,717 43,692 41,960 37 From commercial banks in the United States .. 11,899 8,040 10,165 8,463 8,175 11,215 8,729 6,901 6,207 33 From others 35,938 36,355 34,916 36,205 34,761 37,322 35,988 36,791 35,752 34 Other liabilities for borrowed money 36,474 35,891 36,832 38,245 38,187 38,384 39,193 41,338 42,980 35 To commercial banks in the United States 5,027 4,415 5,271 5,706 5,841 6,643 6,178 5,640 6,523 36 31,446 31,476 31,562 32,539 32,346 31,741 33,016 35,698 36,457 37 Other liabilities to nonrelated parties 50,735 50,288 51,574 47,245 47,035 46,815 47,414 46,356 46,792 38 Total liabilities6 362,201 354,616 357,088 354,401 351,678 350,417 354,467 355,635 361,591 MEMO 39 Total loans (gross) and securities, adjusted 252,929 249,347 248,308 252,121 251,651 262,582 263,449 264,241 265,538 40 Net owed to related institutions abroad 89,046 84,776 84,207 90,305 94,889 95,943 94,147 93,557 92,262 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 US. 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 • October 1995 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1995 IItteemm 1990 1991 1992 1993 1994 Jan. Feb. Mar. Apr. May June Commercial paper (seasonally adjusted unless noted otherwise) 1111 AAAAllllllll iiiissssssssuuuueeeerrrrssss 562,656 528,832 545,619 555,075 595,382 612,554 619,150 633,324 651,128 650,580 648,819 FFFFiiiinnnnaaaannnncccciiiiaaaallll ccccoooommmmppppaaaannnniiiieeeessss'''' 2222 DDDDeeeeaaaalllleeeerrrr----ppppllllaaaacccceeeedddd ppppaaaappppeeeerrrr2222,,,, ttttoooottttaaaallll 214,706 212,999 226,456 218,947 223,038 231,318 232,231 243,949 252,846 258,006 251,555 3333 DDDDiiiirrrreeeeccccttttllllyyyy ppppllllaaaacccceeeedddd ppppaaaappppeeeerrrr3333,,,, ttttoooottttaaaallll 200,036 182,463 171,605 180,389 207,701 215,423 218,570 218,269 219,281 216,879 218,005 4444 NNNNoooonnnnffffiiiinnnnaaaannnncccciiiiaaaallll ccccoooommmmppppaaaannnniiiieeeessss4444 147,914 133,370 147,558 155,739 164,643 165,813r 168,349r 171,106r 179,001r 175,695r 179,259 Bankers dollar acceptances (not seasonally adjusted)5 5555 TTTToooottttaaaallll 54,771 43,770 38,194 32,348 29,835 BBBByyyy hhhhoooollllddddeeeerrrr 6666 AAAAcccccccceeeeppppttttiiiinnnngggg bbbbaaaannnnkkkkssss 9,017 11,017 10,555 12,421 11,783 7777 OOOOwwwwnnnn bbbbiiiillllllllssss 7,930 9,347 9,097 10,707 10,462 8888 BBBBiiiillllllllssss bbbboooouuuugggghhhhtttt ffffrrrroooommmm ooootttthhhheeeerrrr bbbbaaaannnnkkkkssss 1,087 1,670 1,458 1,714 1,321 FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee BBBBaaaannnnkkkkssss6666 9999 FFFFoooorrrreeeeiiiiggggnnnn ccccoooorrrrrrrreeeessssppppoooonnnnddddeeeennnnttttssss 918 1,739 1,276 725 410 n.a. n.a. n.a. n.a. n.a. n.a. 11110000 OOOOtttthhhheeeerrrrssss 44,836 31,014 26,364 19,202 17,642 BBBByyyy bbbbaaaassssiiiissss 11111111 IIIImmmmppppoooorrrrttttssss iiiinnnnttttoooo UUUUnnnniiiitttteeeedddd SSSSttttaaaatttteeeessss 13,095 12,843 12,209 10,217 10,062 11112222 EEEExxxxppppoooorrrrttttssss ffffrrrroooommmm UUUUnnnniiiitttteeeedddd SSSSttttaaaatttteeeessss 12,703 10,351 8,096 7,293 6,355 11113333 AAAAllllllllooootttthhhheeeerrrr 28,973 20,577 17,890 14,838 13,417 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, 5. 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. 6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances 3. As reported by financial companies that place their paper directly with investors. for its own account. 4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A25 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Date of change Rate Period Av r e a r te a ge Period Av r e a r te a ge Period Av r e a r te a ge 1992—Jan. 1 6.50 1992 6.25 1993—Jan 6.00 1994—Sept 7.75 JJuullyy 22 6.00 1993 . 6.00 Feb 6.00 Ocl 7.75 1994 . 7.15 Mar. 6.00 Nov 8.15 1994—Mar. 24 6.25 Apr. 6.00 Dec 8.50 Apr. 19 6.75 1992—Jan 6.50 May 6.00 May 17 7.25 Feb 6.50 June 6.00 1995—Jan 8.50 Aug. 16 7.75 Mar 6.50 July 6.00 Feb 9.00 Nov. 15 8.50 Apr. 6.50 Aug 6.00 Mar. 9.00 May 6.50 Sept 6.00 Apr. 9.00 1995—Feb. 1 9.00 June 6.50 Oct 6.00 May 9.00 JJuullyy 77 8.75 July 6.02 Nov 6.00 June 9.00 Aug 6.00 Dec 6.00 July 8.80 Sept 6.00 Aug 8.75 Oct 6.00 1994—Jan 6.00 Nov 6.00 Feb 6.00 Dec 6.00 Mar. 6.06 Apr. 6.45 May 6.99 June 7.25 July 7.25 Aug 7.51 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 Financial Statistics • October 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 Apr. May June July June 30 July 7 July 14 July 21 July 28 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 3.52 3.02 4.21 6.05 6.01 6.00 5.85 5.95 6.21 5.81 5.72 5.75 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 paper3,5,6 3 1-month 3.71 3.17 4.43 6.06 6.05 6.05 5.87 6.09 6.01 5.82 5.82 5.84 4 3-month 3.75 3.22 4.66 6.12 6.06 5.94 5.79 5.94 5.86 5.73 5.77 5.80 5 6-month 3.80 3.30 4.93 6.19 6.07 5.79 5.68 5.76 5.71 5.59 5.66 5.73 Finance paper, directly placed3,5,7 6 1-month 3.62 3.12 4.33 5.96 5.94 5.92 5.74 5.93 5.87 5.70 5.71 5.72 7 3-month 3.65 3.16 4.53 6.01 5.91 5.73 5.60 5.68 5.65 5.56 5.56 5.63 8 6-month 3.63 3.15 4.56 6.01 5.81 5.47 5.39 5.44 5.42 5.31 5.33 5.50 Bankers acceptances3,5,8 9 3-month 3.62 3.13 4.56 6.00 5.91 5.80 5.66 5.79 5.70 5.62 5.66 5.66 10 6-month 3.67 3.21 4.83 6.06 5.90 5.65 5.56 5.64 5.57 5.48 5.57 5.60 Certificates of deposit, secondary market3,9 11 1-month 3.64 3.11 4.38 6.01 5.98 5.97 5.80 6.00 5.93 5.76 5.76 5.77 12 3-month 3.68 3.17 4.63 6.11 6.02 5.90 5.77 5.91 5.85 5.73 5.75 5.77 13 6-month 3.76 3.28 4.96 6.27 6.07 5.80 5.73 5.80 5.79 5.63 5.72 5.77 14 Eurodollar deposits, 3-month3,10 3.70 3.18 4.63 6.13 6.03 5.89 5.79 5.87 5.88 5.74 5.77 5.79 U.S. Treasury bills Secondary market3,5 15 3-month 3.43 3.00 4.25 5.65 5.67 5.47 5.42 5.43 5.43 5.39 5.43 5.44 16 6-month 3.54 3.12 4.64 5.77 5.67 5.42 5.37 5.37 5.34 5.32 5.42 5.40 17 1-year 3.71 3.29 5.02 5.88 5.65 5.33 5.28 5.33 5.23 5.17 5.31 5.39 Auction average3,5,11 18 3-month 3.45 3.02 4.29 5.67 5.70 5.50 5.47 5.35 5.53 5.40 5.46 5.47 19 6-month 3.57 3.14 4.66 5.80 5.73 5.46 5.41 5.34 5.46 5.30 5.40 5.46 20 1-year 3.75 3.33 5.02r 6.02 5.90 5.38 5.38 5.22 n.a. n.a. n.a. 5.38 U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 3.89 3.43 5.32 6.27 6.00 5.64 5.59 5.65 5.53 5.47 5.64 5.72 22 2-year 4.77 4.05 5.94 6.57 6.17 5.72 5.78 5.75 5.67 5.61 5.86 5.94 23 3-year 5.30 4.44 6.27 6.68 6.27 5.80 5.89 5.83 5.74 5.70 5.97 6.07 24 5-year 6.19 5.14 6.69 6.86 6.41 5.93 6.01 5.95 5.85 5.81 6.11 6.21 25 7-year 6.63 5.54 6.91 6.95 6.50 6.05 6.20 6.07 6.05 6.00 6.30 6.39 26 10-year 7.01 5.87 7.09 7.06 6.63 6.17 6.28 6.17 6.12 6.09 6.37 6.46 27 20-year n.a. 6.29 7.49 7.45 7.01 6.59 6.74 6.60 6.59 6.56 6.84 6.90 28 30-year 7.67 6.59 7.37 7.36 6.95 6.57 6.72 6.58 6.57 6.56 6.82 6.88 Composite 29 More than 10 years (long-term) 7.52 6.45 7.41 7.41 6.99 6.59 6.71 6.59 6.57 6.54 6.81 6.87 STATE AND LOCAL NOTES AND BONDS Moody's series13 30 6.09 5.38 5.77 5.74 5.68 5.62 5.68 5.65 5.63 5.64 5.72 5.72 31 BBaaaa 6.48 5.83 6.17 6.01 5.98 5.89 5.91 5.93 5.91 5.92 5.92 5.89 32 BBoonndd BBuuyyeerr sseerriieess1144 6.44 5.60 6.18 6.02 5.95 5.84 5.92 5.97 5.91 5.81 5.99 5.97 CORPORATE BONDS 33 Seasoned issues, all industries15 8.55 7.54 8.26 8.25 7.86 7.54 7.66 7.54 7.54 7.51 7.74 7.81 Rating group 34 8.14 7.22 77..9977 88..0033 77..6655 7.30 7.41 7.31 7.29 7.26 7.48 7.56 35 Aa 8.46 7.40 8.15 8.12 7.74 7.43 7.54 7.43 7.41 7.39 7.63 7.69 36 A 8.62 7.58 8.28 8.23 7.86 7.53 7.65 7.54 7.53 7.51 7.72 7.80 37 BBaaaa 8.98 7.93 8.63 8.60 8.20 7.90 8.04 7.91 7.90 7.88 8.13 8.19 38 AA--rraatteedd,, rreecceennttllyy ooffffeerreedd uuttiilliittyy bboonnddss1166 8.52 7.46 8.29 8.31 7.89 7.60 7.72 7.64 7.53 7.60 7.94 7.88 MEMO Dividend-price ratio17 39 Common stocks 2.99 2.78 2.82 2.68 2.60 2.55 2.50 2.53 2.52 2.46 2.52 2.48 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 A27 1.36 STOCK MARKET Selected Statistics 1994 1995 IInnddiiccaattoorr 11999922 11999933 11999944 Nov. Dec. Jan. Feb. Mar. Apr. May June July Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 229.00 249.71 254.16 252.48 248.65 253.56 261.86 266.81 274.38 281.81 289.52 298.18 2 Industrial 284.26 300.10 315.32 319.33 313.92 319.93 328.98 337.96 347.69 357.01 366.75 379.13 3 Transportation 201.02 242.68 247.17 227.44 218.93 230.25 237.29 252.37 254.36 254.70 256.80 279.15 4 Utility 99.48 114.55 104.96 100.07 100.01 100.58 103.87 102.08 104.70 106.02 108.12 109.59 5 Finance 179.29 216.55 209.75 198.38 195.25 201.05 211.76 213.29 219.38 228.45 236.26 240.49 6 Standard & Poor's Corporation (1941-43 = 10)' 415.75 451.63 460.42 461.01 455.19 465.25 481.92 493.20 507.91 523.83 539.35 557.37 7 American Stock Exchange (Aug. 31, 1973 = 50)2 391.28 438.77 449.49 445.16 427.39 436.09 446.37 456.06 471.54 487.03 492.60 513.25 Volume of trading (thousands of shares) 8 New York Stock Exchange 202,558 263,374 290,652 297,001 302,049 326,652 333,020 338,733 331,184 341,905 345,547 363,780 9 American Stock Exchange 14,171 18,188 17,951 18,465 18,745 18,829 18,424 17,905 19,404 19,266 24,622 23,283 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 43,990 60,310 61,160 61,000 61,160 64,380 59,800 60,270 62,520 64,070 66,340 67,600 Free credit balances at brokers4 11 Margin accounts5 8,970 12,360 14,095 13,635 14,095 13,225 12,380 12,745 12,440 13,403 13,710 13,830 12 Cash accounts 22,510 27,715 28,870 25,625 28,870 26,440 25,860 26,680 26,670 27,464 29,860 28,600 Margin requirements (percent of market value and effective date) 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 DomesticN onfinancial Statistics • October 1995 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1995 11999922 11999933 11999944 Feb. Mar. Apr. May June July <7.5. budget1 1 Receipts, total 1,090,453 1,153,226 1,257,187 82,544 92,532 165,392 90,405 147,868 92,749 2 On-budget 788,027 841,292 922,161 54,405 61,970 126,170 61,027 115,998 65,788 3 Off-budget 302,426 311,934 335,026 28,139 30,562 39,222 29,378 31,870 26,961 4 Outlays, total 1,380,856 1,408,532 1,461,067 120,899 143,074 115,673 129,958 135,054 106,328 5 On-budget 1,128,518 1,141,945 1,460,557 94,421 117,123 90,628 103,184 120,236 80,931 6 Off-budget 252,339 266,587 279,372 26,478 25,951 25,045 26,773 14,818 25,397 7 Surplus or deficit (-), total -290,403 -255,306 -203,370 -38,355 -50,543 49,720 -39,553 12,814 -13,579 8 On-budget -340,490 -300,653 -259,024 -40,016 -55,153 35,542 -42,157 -4,237 -15,143 9 Off-budget 50,087 45,347 55,654 1,661 4,610 14,178 2,604 17,051 1,564 Source of financing (total) 10 Borrowing from the public 310,918 248,594 184,998 38,964r 13,645 -27,638 44,740 8,491 10,627 11 Operating cash (decrease, or increase (-)) -17,305 6,283 16,564 14,000 17,747 -19,972 11,841 -34,312 11,635 12 Other2 -3,210 429 1,808 -14,980 18,535 -2,110 22,578 12,250 15,523 MEMO 13 Treasury operating balance (level, end of period) 58,789 52,506 35,942 35,844 18,097 38,069 26,228 60,540 48,905 14 Federal Reserve Banks 24,586 17,289 6,848 6,890 4,543 8,241 4,646 20,977 11,206 15 Tax and loan accounts 34,203 35,217 29,094 28,954 13,554 29,828 21,582 39,563 37,700 1. Since 1990, olf-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 1995 11999933 11999944 H2 HI H2 HI May June July RECEIPTS 1 All sources 1,153,226 1,257,453 582,038 652,234 625,557 710,542 90,405 147,868 92,749 7 Individual income taxes, net 509,680 543,055 262,073 275,052 273,474 307,498 29,729 61,457 42,819 3 Withheld 430,211 459,699 228,423 225,387 240,062 251,398 43,414 40,901 41,532 4 Presidential Election Campaign Fund 28 70 2 63 10 58 12 88 6 154,989 160,364 41,768 117,937 42,031 132,006 8,691 2233,,005533 3,094 6 Refunds 75,546 77,077 8,115 68,325 9,207 75,958 22,388 2,505 1,812 Corporation income taxes 7 131,548 154,205 68,266 80,536 78,392 92,132 3,572 3366,,664455 44,,447766 8 Refunds 14,027 13,820 6,514 6,933 7,331 10,399 1,379 768 1,079 9 Social insurance taxes and contributions, net ... 428,300 461,475 206,176 248,301 220,141 261,837 48,183 41,341 36,498 to Employment taxes and contributions2 ... 396,939 428,810 192,749 228,714 206,613 228,663 37,226 40,605 34,514 11 Self-employment taxes and contributions . 20,604 24,433 4,335 20,762 4,135 23,429 1,898 4,032 186 1? Unemployment insurance 26,556 28,004 11,010 17,301 11,177 18,001 10,601 320 1,636 13 Other net receipts4 4,805 4,661 2,417 2,284 2,349 2,267 355 416 349 14 48,057 55,225 25,994 26,444 30,062 27,452 4,770 4,897 5,074 15 Customs deposits 18,802 20,099 10,215 9,500 11,042 8,847 1,471 1,583 1,603 16 Estate and gift taxes 12,577 15,225 6,617 8,197 7,071 7,424 1,339 1,040 1,037 17 Miscellaneous receipts 18,273 22,041 9,227 11,170 13,305 15,749 2,719 1,674 2,320 OUTLAYS 18 All types 1,408,532 1,460,722 727,685 710,620 752,318r 760,824r 129,958r 135,054r 106,328 19 291,086 281,451 146,672 133,844 141,780' 135,931' 22,797' 26,905' 18,069 70 International affairs 16,826 17,249 10,186 5,800 12,055' 4,727 1,282 818 517 7,1 General science, space, and technology 17,030 17,602 8,880 8,502 8,978' 8,611 1,596 1,521 1,355 7? Energy 4,319 5,398 1,663 2,237 3,102' 2,358 244 601 547 73 Natural resources and environment 20,239 20,902 11,221 10,111 12,884r 10,273 1,820 1,698 1,811 24 Agriculture 20,443 15,131 7,516 7,451 7,697 4,039 236 -328 -482 75 Commerce and housing credit -22,725 -4,851 -1,490 -4,962 -4,094 -13,936 -1,988 -3,041 -733 76 Transportation 35,004 36,835 19,570 16,739 20,485' 18,192 3,154 3,432 3,324 27 Community and regional development 9,051 11,877 4,288 4,571 6,552' 4,858 860 1,035 1,191 28 Education, training, employment, and social services 50,012 44,730 26,753 19,262 25,888' 25,738 44,,220055 44,,448800 22,,886699 79 Health 99,415 106,495 52,958 53,195 54,123 58,759 9,952 10,543 8,777 30 Social security and Medicare 435,137 464,313r 223,735 232,777 236,818' 251,975 42,387 47,721 40,015 31 Income security 207,257 213,972 102,380 109,080 101,743 117,639 20,633 16,426 15,310 37, Veterans benefits and services 35,720 37,637 19,852 16,686 19,756' 19,267 3,204 4,552 1,591 33 Administration of justice 14,955 15,283 7,400 7,718 7,798' 8,062 1,129 1,419 1,664 34 13,009 11,348 6,531 5,084 7,382r 5,797 1,109 1,781 421 35 Net interest6 198,811 202,957 99,914 99,844 109,435 116,170 20,295 18,617 20,245 36 Undistributed offsetting receipts -37,386 -37,772 -20,344 -17,308 -20,066' -17,632 -2,956 -3,127 -10,163 1. Functional details do not sum to total outlays for calendar year data because 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. revisions to monthly totals have not been distributed among functions. Fiscal year total for 6. Includes interest received by trust funds. outlays does not correspond to calendar year data because revisions from the Budget have 7. Rents and royalties for the outer continental shelf, U.S. government contributions for not been fully distributed across months. employee retirement, and certain asset sales. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCES. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts 3. Old-age, disability, and hospital insurance. and Outlays of the U.S. Government; and U.S. Office of Management and Budget, Budget 4. Federal employee retirement contributions and civil service retirement and of the U.S. Government, Fiscal Year 1996. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 DomesticN onfinancial Statistics • October 1995 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1993 1994 1995 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 4,373 4,436 4,562 4,602 4,673 4,721 4,827 4,891r 4,978r 2 Public debt securities 4,352 4,412 4,536 4,576 4,646 4,693 4,800 4,864 4,951 3 Held by public 3,252 3,295 3,382 3,434 3,443 3,480 3,543 3,610 n.a. 4 Held by agencies 1,100 1,117 1,154 1,142 1,203 1,213 1,257 1,255 n.a. 5 Agency securities 21 25 27 26 28 29 27 27 27 6 Held by public 21 25 27 26 27 29 27 26 n.a. 7 Held by agencies 0 0 0 0 0 0 0 0 n.a. 8 Debt subject to statutory limit 4,256 4316 4,446 4,491 4,559 4,605 4,711 4,775 4,861 9 Public debt securities 4,256 4,315 4,445 4,491 4,559 4,605 4,711 4,774 4,861 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,370 4,900 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 Q3 04 Q1 Q2 1 Total gross public debt 3301.7 4,177.0 4,535.7 4,800.2 4,692.8 4,800.2 4,864.1 4,951.4 By type ? 3,798.9 4,173.9 4,532.3 4,769.2 4,689.5 4,769.2 4,860.5 4,947.8 3 2,471.6 2,754.1 2,989.5 3,126.0 3,091.6 3,126.0 3,227.3 3,252.6 4 Bills 590.4 657.7 714.6 733.8 697.3 733.8 756.5 748.3 5 1,430.8 1,608.9 1,764.0 1,867.0 1,867.5 1,867.0 1,938.2 1,974.7 6 435.5 472.5 495.9 510.3 511.8 510.3 517.7 514.7 7 1.327.2 1,419.8 1,542.9 1,643.1 1,597.9 1,643.1 1,633.2 1,695.2 8 State and local government series 159.7 153.5 149.5 132.6 137.4 132.6 122.9 121.2 9 41.9 37.4 43.5 42.5 42.0 42.5 41.8 41.4 10 Government 41.9 37.4 43.5 42.5 42.0 42.5 41.8 41.4 11 Public .0 .0 .0 .0 .0 .0 .0 .0 V Savings bonds and notes 135.9 155.0 169.4 177.8 176.4 177.8 178.8 180.1 13 Government account series 959.2 1,043.5 1,150.0 1,259.8 1,211.7 1,259.8 1,259.2 1,322.0 14 Non-interest-bearing 2.8 3.1 3.4 31.0 3.2 31.0 3.6 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 1,213.1 1,257.1 1,254.7 16 Federal Reserve Banks 281.8 302.5 334.2 374.1 355.2 374.1 369.3 17 Private investors 2,563.2 2,839.9 3,047.7 3,168.0 3,127.8 3,168.0 3,239.1 18 Commercial banks 233.4 294.0 316.0 296.4 313.9 296.4 285.0 19 Money market funds 80.0 79.4 80.5 67.6 60.1 67.6 67.8 20 Insurance companies 168.7 197.5 216.0 256.8 253.4 256.8 260.0 21 Other companies 150.8 192.5 213.0 230.2 229.3 230.2 230.3 n a. 22 State and local treasuries 520.3 534.8 564.0 488.3 504.6 488.3 480.0 Individuals 23 Savings bonds 138.1 157.3 171.9 180.5 178.6 180.5 181.4 24 Other securities 125.8 131.9 137.9 152.5 148.6 152.5 161.4 25 Foreign and international5 491.8 549.7 623.3 688.1 655.0 688.1 728.1 26 Other miscellaneous investors6 651.3 702.4 725.0 807.6 784.3 807.6 845.1 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 item Apr. May June May 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19 July 26 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 49,515 52,894 47,751 56,666 55,756 47,982 45,813 45,809 36,862 41,899 44,888 46,406 Coupon securities, by maturity 2 Five years or less 86,779 102,560 98,618 93,934 110,345 103,903 84,282 106,808 71,454 87,044 87,189 99,307 3 More than five years 38,590 59,066 55,441 58,883 72,572 61,528 44,886 50,487 36,172 48,433 50,443 51,351 4 Federal agency 22,120 21,890 22,595 22,584 22,244 21,415 22,591 24,449 21,799 22,039 22,224 20,369 5 Mortgage-backed 26,963 29,333 31,425 19,788 46,142 44,273 24,387 18,041 13,564 41,109 35,964 24,323 By type of counterparty With interdealer broker 6 U.S. Treasury 102,048 125,478 120,661 121,191 142,306 128,968 104,834 122,119 81,699 105,128 109,018 115,556 7 Federal agency 778 868 638 872 758 731 427 724 418 876 692 674 8 Mortgage-backed 8,353 10,050 10,912 6,960 14,907 15,660 9,470 6,315 4,148 13,394 12,415 10,238 With other 9 U.S. Treasury 72,836 89,043 81,150 88,292 96,366 84,445 70,147 80,985 62,788 72,248 73,502 81,508 10 Federal agency 21,342 21,022 21,957 21,712 21,486 20,684 22,164 23,725 21,382 21,163 21,532 19,695 11 Mortgage-backed 18,610 19,282 20,513 12,828 31,234 28,613 14,917 11,726 9,416 27,715 23,549 14,085 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 910 1,371 916 867 1,664 1,045 721 358 607 327 531 599 Coupon securities, by maturity 13 Five years or less 2,152 2,877 2,799 2,901 3,862 2,865 2,638 2,044 2,270 1,523 1,836 1,830 14 More than five years 11,781 17,425 17,667 17,358 24,310 20,562 15,249 13,055 11,397 11,799 14,087 15,895 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 n.a. Coupon securities, by maturity 18 Five years or less 2,585 2,695 2,653 2,765 3,694 2,534 1,298 2,888 3,144 3,906 2,120 2,379 19 More than five years 3,425 5,230 4,319 4,777 6,272 3,884 3,460 3,851 3,841 5,051 4,749 4,087 20 Federal agency 0 0 0 0 0 0 n.a. n.a. 0 0 n.a. 0 21 Mortgage-backed 726 1,199 1,201 1,014 2,227 1,058 540 903 1,392 1,509 1,113 833 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 live 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 deliveiy 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 • October 1995 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1995 1995, week ending IItteemm Apr. May June May 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 7,472 4,533 634 6,156 586 -3,351 -3,877 6,737 9,180 5,490 4,928 Coupon securities, by maturity 2 Five years or less -1,887 1,996 4,291 3,774 7,342 3,172 1,073 5,057 6,110 3,232 2,371 3 More than five years -30,458 -20,487 -14,742 -17,437 -13,788 -12,788 -16,055 -15,677 -17,046 -16,396 -16,838 4 Federal agency 22,961 22,564 23,438 21,034 26,935 26,399 22,082 19,137 20,627 20,778 21,688 5 Mortgage-backed 30,809 34,798 31,381 34,338 32,723 31,277 30,370 31,122 31,493 32,912 33,338 NET FUTURES POSITIONS4 By type of deliverable security 6 U.S. Treasury bills -10,906 -11,208 -7,706 -10,966 -10,222 -8,585 -6,777 -5,869 -5,504 -4,996 -6,164 Coupon securities, by maturity 7 Five years or less 2,296 1,128 2,020 -868 1,289 1,893 2,475 2,638 1,274 2,004 1,910 8 More than five years 2,427 -4,195 -7,797 -5,185 -7,772 -8,364 -9,305 -6,975 -3,505 -2,857 -1,619 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 NET OPTIONS POSITIONS By type of deliverable security 11 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 12 Five years or less 60 22 555 -880 -249 256 905 1,238 796 487 -634 13 More than five years -76 -1,623 -2,537 -2,513 -3,570 -2,996 -1,220 -2,470 -2,161 -3,569 -3,734 14 Federal agency 0 0 0 0 0 0 n.a. n.a. n.a. n.a. 0 15 Mortgage-backed 1,800 2,470 2,816 2,980 2,915 3,098 2,923 2,582 1,928 681 2,235 Financing5 Reverse repurchase agreements 16 Overnight and continuing 227,539 224,729 237,727 232,616 249,171 242,805 238,006 223,742 227,864 224,162 222,451 17 Term 370,576 369,097 396,685 334,105 378,821 399,352 399,890 419,243 359,705 411,002 427,172 Securities borrowed 18 Overnight and continuing 170,977 163,757 158,449 158,722 163,119 158,069 155,799 156,683 158,895 156,513 158,474 19 Term 59,415 55,704 55,058 49,225 51,928 54,099 57,640 57,569 51,547 53,613 60,405 Securities received as pledge 20 Overnight and continuing 3,526 2,552 3,127 2,564 3,101 3,085 3,117 3,209 3,112 3,033 2,727 21 Term 64 103 102 70 145 118 51 96 97 40 47 Repurchase agreements 22 Overnight and continuing 469,832 465,539 490,204 465,191 522,828 510,791 482,517 448,254 477,694 480,852 479,780 23 Term 330,717 323,351 341,771 284,665 308,397 334,407 360,675 374,439 303,858 348,504 365,608 Securities loaned 24 Overnight and continuing 4,946 4,879 4,971 5,534 5,283 5,181 5,108 4,372 4,758 6,131 6,787 25 Term 2,146 1,842 2,003 1,863 2,002 1,949 1,862 2,119 2,286 2,075 2,021 Securities pledged 26 Overnight and continuing 29,139 28,703 33,240 29,627 28,227 27,922 32,184 44,456 33,831 29,759 29,037 27 Term 3,184 3,742 4,251 4,046 4,488 4,428 4,168 4,267 3,029 4,031 4,095 Collateralized bans 28 Overnight and continuing 16,973 13,004 13,613 11,193 12,525 13,693 12,563 15,031 15,852 19,425 18,123 29 Term n.a. n.a. 4,177 n.a. n.a. n.a. n.a. n.a. 4,177 n.a. n.a. MEMO: Matched book6 Securities in 30 Overnight and continuing 219,256 212,193 219,216 207,514 227,691 224,931 219,818 206,193 213,018 207,611 207,471 31 Term 344,373 346,228 367,824 317,481 349,979 366,417 374,843 388,933 336,764 387,443 406,847 Securities out 32 Overnight and continuing 289,764 273,963 286,362 266,681 308,103 300,036 277,733 260,786 282,124 288,791 303,491 33 Term 275,791 272,206 287,643 232,349 258,318 276,963 302,308 321,643 257,329 297,736 313,096 1. Data for positions and financing are obtained from reports submitted to the Federal 4. Futures positions reflect standardized agreements arranged on an exchange. All Reserve Bank of New York by the U.S. government securities dealers on its published list futures positions are included regardless of time to delivery. of primary dealers. Weekly figures are close-of-business Wednesday data. Positions for 5. Overnight financing refers to agreements made on one business day that mature on calendar days of the report week are assumed to be constant. Monthly averages are based the next business day; continuing contracts are agreements that remain in effect for more on the number of calendar days in the month. than one business day but have no specific maturity and can be terminated without 2. Securities positions are reported at market value. advance notice by either party; term agreements have a fixed maturity of more than one 3. Net outright positions include immediate and forward positions. Net immediate business day. Financing data are reported in terms of actual funds paid or received, positions include securities purchased or sold (other than mortgage-backed agency securi- including accrued interest. ties) that have been delivered or are scheduled to be delivered in five business days or less 6. Matched-book data reflect financial intermediation activity in which the borrowing and "when-issued" securities that settle on the issue date of offering. Net immediate and lending transactions are matched. Matched-book data are included in the financing positions for mortgage-backed agency securities include securities purchased or sold that breakdowns given above. The reverse repurchase and repurchase numbers are not always have been delivered or are scheduled to be delivered in thirty business days or less. equal because of the "matching" of securities of different values or different types of Forward positions reflect agreements made in the over-the-counter market that specify collateralization. delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt NOTE, "n.a." indicates that data are not published because of insufficient activity. securities are included when the time to delivery is more than five business days. Forward Major changes in the report form filed by primary dealers induced a break in the dealer contracts for mortgage-backed agency securities are included when the time to delivery is data series as of the week ending July 6, 1994. more than thirty business days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1994 1995 AAggeennccyy 11999911 11999922 11999933 Dec. Jan. Feb. Mar. Apr. May 1 Federal and federally sponsored agencies 442,772 483,970 570,711 741,992 737,442R 746,071R 754,658R 759,681 771,524 2 Federal agencies 41,035 41,829 45,193 39,186 39,196 39,054 38,759 38,777 38,720 3 Defense Department1 7 7 6 6 6 6 6 6 6 4 Export-Import Bank2'3 9,809 7,208 5,315 3,455 3,455 3,455 3,156 3,156 3,156 5 Federal Housing Administration4 397 374 255 116 59 60 65 70 78 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 Postal Service6 8,421 10,660 9,732 8,073 8,073 7,873 7,873 7,873 7,615 8 Tennessee Valley Authority 22,401 23,580 29,885 27,536 27,603 27,660 27,659 27,672 27,865 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 401,737 442,141 523,452r 702,806 698,246r 707,017r 715,899r 720,904 732,804 11 Federal Home Loan Banks 107,543 114,733 139,512r 208,881 207,826r 205,629r 210,185r 21 l,944r 218,131 12 Federal Home Loan Mortgage Corporation 30,262 29,631 49,993 93,279 95,060 101,417 101,673 106,432 107,686 13 Federal National Mortgage Association 133,937 166,300 201,112 257,230 250,467 255,719 258,653 258,176 263,023 14 Farm Credit Banks8 52,199 51,910 53,123 53,175 55,558 53,846 53,947 53,629 54,054 15 Student Loan Marketing Association9 38,319 39,650 39,784 50,335 49,425 50,506 51,554 50,758 49,993 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt 185,576 154,994 128,187 103,817 101,157 100,388 98,266 95,374 92,739 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 9,803 7,202 5,309 3,449 3,449 3,449 3,150 3,150 3,150 21 Postal Service6 8,201 10,440 9,732 8,073 8,073 7,873 7,873 7,873 7,615 22 Student Loan Marketing Association 4,820 4,790 4,760 n.a. n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority 10,725 6,975 6,325 3,200 3,200 3,200 3,200 3,200 3,200 24 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Other lending14 25 Farmers Home Administration 48,534 42,979 38,619 33,719 33,669 33,574 32,759 31,769 30,759 26 Rural Electrification Administration 18,562 18,172 17,578 17,392 17,309 17,360 17,293 17,299 17,313 27 Other 84,931 64,436 45,864 37,984 35,457 34,932 33,991 32,083 30,702 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 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 • October 1995 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1994 1995 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999922 11999933 11999944 Dec. Jan. Feb. Mar. Apr. May June July 1 All issues, new and refunding' 226,818 279,945 153,950 9,541 7,717 7,366 11,844 8,552 11,804 17,956 9,777 By type of issue 2 General obligation 78,611 90,599 54,404 2,272 3,770 3,714 5,459 3,536 4,332 5,755 3,529 3 Revenue 136,580 189,346 99,546 7,269 3,947 3,652 6,385 5,016 7,472 12,201 6,248 By type of issuer 4 State 24,874 27,999 19,186 151 738 1,032 2,315 994 1,315 1,329 645 5 Special district or statutory authority2 138,327 178,714 95,896 7,352 4,835 4,889 6,572 5,814 8,039 11,382 7,399 6 Municipality, county, or township 63,617 73,232 38,868 2,038 2,144 1,445 2,957 1,744 2,450 5,245 1,733 7 Issues for new capital 101,865 91,434 105,972 8,444 5,737 5,670 10,538 6,497 8,406 13,796 8,384 By use of proceeds 8 Education 18,852 16,831 21,267 1,701 1,411 1,464 1,666 1,863 2,594 2,494 1,924 9 Transportation 14,357 9,167 10,836 307 625 671 454 615 606 3,127 1,926 10 Utilities and conservation 12,164 12,014 10,192 1,292 538 249 633 345 1,282 1,235 485 11 Social welfare 16,744 13,837 20,289 2,208 1,182 869 2,556 1,547 1,738 2,062 1,333 12 Industrial aid 6,188 6,862 8,161 1,046 384 215 1,011 391 416 411 500 13 Other purposes 33,560 32,723 35,227 1,890 1,597 2,202 4,218 1,736 1,770 4,467 2,216 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,, oorr iissssuueerr 11999922 11999933 11999944 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues' 559,827 754,969 n.a. 38,258 23,267 37,214r 42,079 39,590 30,617r 50,942r 55,435 2 Bonds2 471,502 641,498 n.a. 33,286 20,493 34,312 37,248 36,670 27,088 44,944 48,338 By type of offering 3 Public, domestic 378,058 486,879 365,050 27,278 17,809 24,353 29,350 32,703 24,615 38,671 43,791 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 6,008 2,684 9,959 7,898 3,967 2,473r 6,273 4,547 By industry group 6 Manufacturing 82,058 88,002 31,981 2,491 1,508 1,497 4,405 2,126 2,214r l,465r 5,306 7 Commercial and miscellaneous 43,111 60,293 27,900 1,578 2,469 2,334 3,038 1,941 l,666r 5,443r 4,182 8 Transportation 9,979 10,756 4,573 239 269 0 100 403 800r 945' 627 9 Public utility 48,055 56,272 11,713 744 273 659 215 839 210r 2,246' 2,044 10 Communication 15,394 31,950 11,986 333 419 813 1,122 399 235r 1,507' 1,745 11 Real estate and financial 272,904 394,226 333,135 27,902 15,556 29,009 28,368 30,962 15,445r 25,600' 24,367 12 Stocks2 88,325 113,472 n.a. 4,972 2,774 2,902 4,831 2,920 3,529 5,998 7,097 By type of offering 13 Public preferred 21,339 18,897 12,504 279 178 430 296 205 381 1,407 726 14 Common 57,118 82,657 47,884 4,693 2,595 2,472 4,535 2,715 3,148 4,591 6,371 15 Private placement3 9,867 11,917 t n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 1 16 Manufacturing 22,723 22,271 1,963 1,203 1,086 1,582 1,010 612 2,258 2,243 1 1 7 8 T C r o a m ns m p e o r r c ta ia t l i o a n n d miscellaneous 20 2 , , 2 5 3 9 1 5 25 2 , , 7 2 6 3 1 7 n. 1 a. 1,7 7 8 6 9 857 0 39 1 0 9 1,41 1 3 5 90 6 7 0 1,8 4 4 8 1 1,0 1 5 0 0 1 2,413 0 2 1 0 9 C Pu o b m l m ic u u n t i i c li a t t y i on 2 6 , , 3 5 6 3 6 2 3 7 , , 4 0 3 5 9 0 I 333 0 1 2 6 1 5 4 1 9 3 6 4 258 0 1 2 3 0 7 14 0 1 1 7 8 4 5 18 0 3 21 Real estate and financial 33,879 52,021 791 527 776 1,564 786 887 2,232 2,258 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 Nov. Dec. Jan. Feb. Mar. Apr. Mayr June I Sales of own shares2 851,885 841,286 56,849 73,183 75,099 59,121 69,898 68,294 70,798 75,196 2 Redemptions of own shares 567,881 699,823 55,757 70,747 63,737 50,738 60,970 59,957 57,033 62,384 3 Net sales3 284,004 141,463 1,092 2,436 11,362 8,383 8,928 8,337 13,765 12,812 4 Assets4 1,510,209 1,550,490 1,549,186 1,550,490 1,563,187 1,619,705 1,657,370 1,710,280 1,769,287 1,807,570 5 Cash5 100,209 121,296 125,843 121,296 124,351 126,307 121,424 124,092 128,375 122,918 6 Other 1,409,838 1,429,195 1,423,344 1,429,195 1,438,836 1,493,399 1,535,946 1,586,187 1,640,913 1,684,652 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 Q3 Q4 Ql Q2 Q3 04 Ql Q2 1 Profits with inventory valuation and capital consumption adjustment 405.1 485.8 542.7 493.5 533.9 508.2 546.4 556.0 560.3 569.7 n.a. 2 Profits before taxes 395.9 462.4 524.5 458.7 501.7 483.5 523.1 538.1 553.5 570.6 n.a. 3 Profits-tax liability 139.7 173.2 202.5 169.9 191.5 184.1 201.7 208.6 215.6 220.0 n.a. 4 Profits after taxes 256.2 289.2 322.0 288.9 310.2 299.4 321.4 329.5 337.9 350.7 n.a. 5 Dividends 171.1 191.7 205.2 193.2 194.6 196.3 202.5 207.9 213.9 217.1 219.9 6 Undistributed profits 85.1 97.5 116.9 95.6 115.6 103.0 118.9 121.6 124.0 133.5 n.a. 7 Inventory valuation -6.4 -6.2 -19.5 3.0 -6.5 -12.3 -14.1 -19.6 -32.1 -39.0 -27.8 8 Capital consumption adjustment 15.7 29.5 37.7 31.7 38.8 37.0 37.4 37.5 38.8 38.1 36.1 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.50 NONFARM BUSINESS EXPENDITURES New Plant and Equipment Billions of dollars; quarterly data at seasonally adjusted annual rates 1993 1994 IInndduussttrryy 11999922 11999933 1199994411 Ql Q2 Q3 Q4 Ql 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 7788..1199 80.33 82.74 83.64 86.03 91.71 98.97 94.44 3 Nondurable goods industries 100.69 98.02 99.77 95.80 97.22 99.74 98.51 99.02 102.28 98.39 99.39 Nonmanufacturing 4 Mining 8.88 10.08 11.24 8.98 9.10 11.09 10.92 11.43 10.70 11.57 11.27 Transportation 5 Railroad 6.67 6.14 6.72 6.16 5.94 5.89 6.55 7.46 5.36 6.65 7.40 6 Air 8.93 6.42 3.95 7.26 6.63 6.70 5.06 4.23 4.53 3.86 3.16 7 Other 7.04 9.22 10.53 8.96 8.92 8.74 10.23 10.77 9.70 10.22 11.42 Public utilities 8 Electric 48.22 52.55 52.25 49.98 50.61 52.96 55.60 48.68 53.55 54.15 52.60 9 Gas and other 23.99 23.43 24.20 23.79 23.83 22.98 23.27 24.51 22.96 24.35 24.97 10 Commercial and 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 • October 1995 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities' Billions of dollars, end of period; not seasonally adjusted 1993 1994 1995 AAccccoouunntt 11999922 11999933 11999944 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ASSETS 1 Accounts receivable, gross2 491.8 482.8 551.0 482.8 494.5 511.3 524.1 551.0 568.5 586.9 2 Consumer 118.3 116.5 134.8 116.5 120.1 124.3 130.3 134.8 135.8 141.7 3 Business 301.3 294.6 337.6 294.6 302.3 313.2 317.2 337.6 351.9 361.8 4 Real estate 72.2 71.7 78.5 71.7 72.1 73.8 76.6 78.5 80.8 83.4 5 LESS; Reserves for unearned income 53.2 50.7 55.0 50.7 51.2 51.9 51.1 55.0 58.9 62.2 6 Reserves for losses 16.2 11.2 12.4 11.2 11.6 12.1 12.1 12.4 12.9 13.7 7 Accounts receivable, net 422.4 420.9 483.5 420.9 431.7 447.3 460.9 483.5 496.7 511.1 8 All other 142.5 170.9 183.4 170.9 171.2 174.6 177.2 183.4 194.6 198.0 9 Total assets 564.9 591.8 666.9 591.8 602.9 621.9 638.1 666.9 691.4 709.1 LIABILITIES AND CAPITAL 10 Bank loans 37.6 25.3 21.2 25.3 24.2 23.3 21.6 21.2 21.0 21.5 11 Commercial paper 156.4 159.2 184.6 159.2 165.9 171.2 171.0 184.6 181.3 181.3 Debt 12 Owed to parent 39.5 42.7 51.0 42.7 41.1 44.7 50.0 51.0 52.5 57.5 13 Not elsewhere classified 196.3 206.0 235.0 206.0 211.7 219.6 228.2 235.0 254.4 264.4 14 All other liabilities 68.0 87.1 99.5 87.1 90.5 89.9 95.0 99.5 102.5 102.1 15 Capital, surplus, and undivided profits 67.1 71.4 75.7 71.4 69.5 73.2 72.3 75.7 79.7 82.5 16 Total liabilities and capital 564.9 591.8 666.9 591.8 602.9 621.9 638.1 666.9 691.4 709.1 1. Includes finance company subsidiaries of bank holding companies but not of 2. Before deduction for unearned income and losses, retailers and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown, as they are not on the books. 1.52 DOMESTIC FINANCE COMPANIES Consumer, Real Estate, and Business Credit1 Millions of dollars, amounts outstanding, end of period 1995 Jan. Feb. Mar. Apr.r May June Seasonally adjusted 1 Total 539,996 545,533 614,784 624,038 630,388 637,911 644,041 653,802 659,587 2 Consumer 157,579 160,349 176,198 178,430 178,623 180,029 181,775 186,513 188,147 i Real estate2 72,473 71,965 78,770 79,210 80,326 81,210 81,877 82,843 84,198 4 Business 309,944 313,219 359,816 366,398 371,439 376,672 380,389 384,446 387,242 Not seasonally adjusted 5 Total 544,691 550,751 620,975 624,281 629,486 640,378 646,621 653,433 660,782 6 Consumer 159,558 162,770 178,999 179,979 178,601 180,653 181,598 184,546 186,788 7 Motor vehicles 57,259 56,057 61,609 62,321 61,067 61,256 62,435 63,689 65,162 8 Other consumer3 61,020 60,396 73,221 75,147 73,691 74,534 75,369 75,943 76,581 9 Securitized motor vehicles4 29,734 36,024 31,897 30,262 31,304 32,155 31,261 32,047 32,065 10 Securitized other consumer4 11,545 10,293 12,272 12,249 12,539 12,708 12,533 12,867 12,980 11 Real estate2 72,243 71,727 78,479 79,592 80,754 80,762 82,104 82,735 83,351 12 Business 312,890 316,254 363,497 364,710 370,131 378,963 382,919 386,152 390,643 13 Motor vehicles 89,011 95,173 118,197 118,979 121,818 125,805 128,572 128,312 127,487 14 Retail5 20,541 18,091 21,514 21,809 21,577 21,652 22,370 21,228 22,142 15 Wholesale6 29,890 31,148 35,037 34,493 36,759 38,868 39,574 39,512 36,989 16 Leasing 38,580 45,934 61,646 62,677 63,482 65,285 66,628 67,572 68,356 1/ Equipment 151,424 145,452 157,953 158,820 159,333 161,306 162,623 165,219 169,995 18 Retail 33,521 35,513 39,680 40,387 40,329 42,024 40,880 41,264 42,008 19 Wholesale6 8,680 8,001 9,678 9,372 9,462 8,913 9,661 10,643 11,725 20 Leasing 109,223 101,938 108,595 109,061 109,542 110,369 112,082 113,312 116,262 21 Other business7 60,856 53,997 61,495 61,304 63,339 64,815 64,426 64,099 64,365 22 Securitized business assets4 11,599 21,632 25,852 25,607 25,641 27,037 27,298 28,522 28,796 2i Retail 1,120 2,869 4,494 4,251 4,035 4,404 4,937 5,224 4,989 24 Wholesale 5,756 10,584 14,826 14,945 15,465 16,653 16,561 17,676 18,310 25 Leasing 4,723 8,179 6,532 6,411 6,141 5,980 5,800 5,622 5,497 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 A37 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1995 IItteemm 11999922 11999933 11999944 Jan. Feb. Mar. Apr. May June July Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 158.1 163.1 170.4 176.5 175.6 173.3 174.7 178.1 181.7 169.4 2 Amount of loan (thousands of dollars) 118.1 123.0 130.8 134.2 135.6 132.6 134.6 136.3 137.7 130.4 3 Loan-to-price ratio (percent) 76.6 78.0 78.8 78.0 79.3 78.2 79.2 78.7 78.2 78.9 4 Maturity (years) 25.6 26.1 27.5 28.0 28.3 28.6 28.1 28.4 27.2 26.6 5 Fees and charges (percent of loan amount)2 1.60 1.30 1.29 1.31 1.32 1.18 1.14 1.30 1.18 1.18 Yield (percent per year) 6 Contract rate' 7.98 7.03 7.26 7.96 8.07 8.02 7.96 7.79 7.54 7.58 7 Effective rate1,3 8.25 7.24 7.47 8.18 8.28 8.21 8.15 7.99 7.73 7.78 8 Contract rate (HUD series)4 8.43 7.37 8.58 9.11 8.79 8.60 8.44 7.84 7.80 7.98 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.46 7.46 8.68 9.10 9.05 8.60 8.56 8.03 8.00 8.09 10 GNMA securities6 7.71 6.65 7.96 8.69 8.38 8.08 7.96 7.53 7.24 7.27 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 158,119 190,861 222,057 222,774 223,137 223,956 226,197 228,078 232,534 235,882 12 FHA/VA insured 22,593 23,857 28,377 28,368 28,420 28,672 28,664 28,576 28,886 28,761 13 Conventional 135,526 167,004 194,499 195,170 195,439 195,998 198,161 200,004 204,022 207,391 14 Mortgage transactions purchased (during period) 75,905 92,037 62,389 2,154 1,802 2,390 3,709 3,787 6,575 5,657 Mortgage commitments (during period) 15 Issued7 74,970 92,537 54,038 1,720 1,683 3,372 3,277 6,085 5,605 4,512 16 To sell8 10,493 5,097 1,820 57 82 64 22 28 9 26 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 33,665 55,012 72,693 73,553 75,184 77,313 79,147 81,008 85,532 88,874 18 FHA/VA insured 352 321 276 272 270 266 262 257 253 250 19 Conventional 33,313 54,691 72,416 73,281 74,914 77,047 78,885 80,751 85,278 88,624 Mortgage transactions (during period) 20 Purchases 191,125 229,242 124,697 3,254 5,537 4,609 4,530 10,982 7,001 7,316 21 Sales 179,208 208,723 117,110 2,862 4,806 3,546 3,805 10,479 5,326 6,074 22 Mortgage commitments contracted (during period)5 261,637 274,599 136,067 6,541 7,741 12,704 13,437 4,549 6,198 8,106 1. Weighted averages based on sample surveys of mortgages originated by major 6. Average net yields to investors on fully modified pass-through securities backed by institutional lender groups for purchase of newly built homes; compiled by the Federal mortgages and guaranteed by the Government National Mortgage Association (GNMA), Housing Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or Federal Housing Administration or guaranteed by the Department of Veterans Affairs. the seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mortgages; from 9. Includes conventional and government-underwritten loans. The Federal Home Loan U.S. Department of Housing and Urban Development (HUD). Based on transactions on Mortgage Corporation's mortgage commitments and mortgage transactions include activthe first day of the subsequent month. ity under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages exclude swap activity. insured by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics • October 1995 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1994 1995 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999911 11999922 11999933 Q1 Q2 Q3 Q4 Q1 1 All holders 3,926,154 4,056,233 4,229,592 4,258,823 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 3,149,634 3,185,330 3,236,909 3,293,166 3,345,755 3,379,380 3 Multifamily residences 306,551 295,417 291,985 292,533 294,709 297,315 296,633 297,691 4 Commercial 759,154 716,687 706,780 699,690 701,541 701,617 700,997 707,217 5 79,122 80,738 81,194 81,269 81,832 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 banks2 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 337,095 328,826 324,409 324,106 326,800 328,931 331,100 336,767 U Farm 18,447 19,882 20,862 21,254 21,918 22,408 22,567 22,935 12 Savings institutions3 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 15 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 20 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 266,146 286,263 328,598 329,160 329,725 329,304 323,491 319,770 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 26 Farmers Home Administration4 41,713 41,695 41,386 41,209 41,370 41,587 41,781 41,857 27 One- to four-family 18,4% 16,912 15,303 14,870 14,459 14,084 13,826 13,507 28 Multifamily 10,141 10,575 10,940 11,037 11,147 11,243 11,319 11,418 29 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 32 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 42 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 48,476 49,127 48,007 46,863 45,876 45,256 51 One- to four-family 24,125 31,032 45,929 46,571 45,427 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 1,553,818 1,611,449 1,652,999 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 55 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 359,163 407,514 446,029 466,949 479,555 482,987 486,480 488,723 58 One- to four-family 351,906 401,525 441,494 462,779 475,733 479,539 483,354 485,643 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 63 Farmers Home Administration4 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 562,616 575,237 579,341 571,739 568,970 576,450 583,370 593,715 74 One- to four-family 370,157 382,572 387,345 378,977 375,152 379,959 387,055 393,848 75 Multifamily 83,937 85,871 86,586 87,829 89,216 90,681 91,013 91,991 76 Commercial 93,541 91,524 91,401 91,020 91,393 93,130 92,929 95,406 77 14,981 15,270 14,009 13,912 13,209 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 69 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 1995 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999922 11999933 11999944 Jan. Feb. Mar. Apr. Mayr June Seasonally adjusted 1 Total 730,847 790,351 902,853 914,260 918,968 933,717 945,239r 958,313 967,935 2 Automobile 257,436 280,566 317,237 319,408 321,175 323,502 325,232r 329,124 332,103 3 Revolving 258,081 286,588 334,511 340,450 345,630 352,741 359,641 367,103 373,143 4 Other2 215,331 223,197 251,106 254,402 252,164 257,474 260,366r 262,085 262,690 Not seasonally adjusted 5 Total 748,057 809,440 925,000 922,788 917,652 927,260 936,904r 949,822 961,570 By major holder 6 Commercial banks 330,088 367,566 427,851 425,941 423.144 425,208 431,444 434,863 437,498 7 Finance companies 118,279 116,453 134,830 137,468 134,758 135,790 137,804' 139,632 141,743 8 Credit unions 91,694 101,634 119,594 120,029 120,603 121,946 123,233 125,052 126,267 9 Savings institutions 37,049 37,855 38,468 38,153 37,835 37,519 37,499 37,500 37,501 10 Nonfinancial business3 49,561 55,296 60,957 57,819 55,828 55,351 55,116 55,914 56,315 11 Pools of securitized assets4 121,386 130,636 143,300 143,378 145,484 151,446 151,808r 156,861 162,246 By major type of credit 12 Automobile 258,226 281,458 318,213 317,869 319,042 321,592 322,956r 327,672 332,133 13 Commercial banks 109,623 122,000 141,851 141,546 141,801 141,857 142,014 142,865 144,761 14 Finance companies 57,259 56,057 61,609 62,321 61,067 61,256 62,435r 63,689 65,162 15 Pools of securitized assets4 33,888 39,481 34,918 33,265 34,312 35,172 34,129 34,984 34,840 16 Revolving 271,850 301,837 352,266 347,641 345,354 348,411 354,998 362,269 368,385 17 Commercial banks 132,966 149,920 180,183 176,959 175,574 175,800 180,609 183,006 182,950 18 Nonfinancial business3 44,466 50,125 55,341 52,299 50,405 49,959 49,773 50,595 51,006 19 Pools of securitized assets4 74,921 79,878 94,376 95,826 96,613 101,571 103,174 106,797 112,195 20 Other 217,981 226,145 254,521 257,278 253,256 257,257 258,950r 259,881 261,052 21 Commercial banks 87,499 95,646 105,817 107,436 105,769 107,551 108,821 108,992 109,787 22 Finance companies 61,020 60,396 73,221 75,147 73,691 74,534 75,369r 75,943 76,581 23 Nonfinancial business3 5,095 5,171 5,616 5,520 5,423 5,392 5,343 5,319 5,309 24 Pools of securitized assets4 12,577 11,277 14,006 14,287 14,559 14,703 14,505r 15,080 15,211 1. The Board's series on amounts of credit covers most short- and intermediate-term 3. Includes retailers and gasoline companies. credit extended to individuals that is scheduled to be repaid (or has the option of 4. Outstanding balances of pools upon which securities have been issued; these repayment) in two or more installments. Data in this table also appear in the Board's G. 19 balances are no longer carried on the balance sheets of the loan originator. (421) monthly statistical release. For ordering address, see inside front cover. 5. Totals include estimates for certain holders for which only consumer credit totals are 2. Comprises mobile home loans and all other installment loans that are not included in available. automobile or revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be secured or unsecured. 1.56 TERMS OF CONSUMER INSTALLMENT CREDIT1 Percent per year except as noted 1994 1995 IItteemm 11999922 11999933 11999944 Dec. Jan. Feb. Mar. Apr. May June INTEREST RATES 9.29 8.09 8.12 n.a. n.a. 9.70 n.a. n.a. 9.78 n.a. Commercial banks2 14.04 13.47 13.19 n.a. n.a. 14.10 n.a. n.a. 14.03 n.a. 1 48-month new car 22 2244--mmoonntthh ppeerrssoonnaall n.a. n.a. 15.69 n.a. n.a. 16.14 n.a. n.a. 16.15 n.a. Credit card plan n.a. n.a. 15.77 n.a. n.a. 15.27 n.a. n.a. 16.23 n.a. 3 All accounts 4 Accounts assessed interest 9.93 9.48 9.79 10.72 11.35 11.89 11.95 11.74 11.43 11.08 Auto finance companies 13.80 12.79 13.49 14.48 14.57 15.06 15.10 14.99 14.78 14.63 5 New car 6 Used car OTHER TERMS3 54.0 54.5 54.0 53.9 53.9 54.1 54.5 54.6 54.4 53.9 Maturity (months) 47.9 48.8 50.2 50.3 52.0 52.0 52.1 52.2 52.2 52.3 7 New car 8 Used car 89 91 92 92 92 92 92 92 92 92 Loan-to-value ratio 97 98 99 100 99 99 99 100 99 99 9 New car 10 Used car 13,584 14,332 15,375 16,187 16,068 15,774 15,826 16,029 16,155 16,083 Amount financed (dollars) 9,119 9,875 10,709 11,309 11,185 11,181 11,220 11,505 11,396 11,518 11 New car 12 Used car 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 Digitized fo(r4 2F1R) mAoSnthElyR s tatistical release. For ordering address, see inside front cover. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • October 1995 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1993 1994 1995 Transartinn rnfptmrv nr wrtnr 11999900 11999911 11999922 11999933 11999944 Q3 Q4 Ql Q2 Q3 04 Ql Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors.... 635.6 475.8 536.1 622.1 595.0 613.8 659.6 634.7 530.2 580.8 634.4 816.0 By sector and instrument 2 U.S. 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 388.7 197.5 232.1 366.0 439.2 440.4 385.5 424.1 407.3 445.8 479.4 544.2 By instrument 6 Tax-exempt obligations 48.7 68.7 31.1 75.5 -34.1 65.2 27.3 2.6 -25.4 -63.2 -50.4 -65.6 7 Corporate bonds 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 Mortgages 199.5 161.4 123.9 155.7 186.5 222.1 148.5 162.8 170.4 221.2 191.6 213.0 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 -6.0 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 -20.2 -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 18.5 135.8 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 -24.7 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 63.0 -48.2 46.3 17.0 -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 plus foreign 659.4 489.6 557.4 669.1 585.2 696.9 682.6 568.3 520.1 589.1 663.3 871.7 Financial sectors 29 Total net borrowing by financial sectors 202.9 152.6 237.1 289.1 451.8 438.9 361.6 518.7 366.7 403.1 518.5 282.5 By instrument 30 U.S. government-related 167.4 145.7 155.8 164.2 284.3 287.3 143.3 336.8 254.7 243.1 302.4 125.4 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 83.6 112.1 119.5 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 Private 35.5 6.8 81.3 124.9 167.5 151.6 218.4 182.0 112.0 160.0 216.1 157.1 35 Corporate bonds 46.3 67.6 78.5 118.2 105.6 143.4 138.1 156.3 91.4 86.9 87.9 115.2 36 Mortgages .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 80.6 172.1 167.8 53.4 140.8 146.6 152.1 249.0 62.9 41 Federally related mortgage pools 150.3 136.6 115.6 83.6 112.1 119.5 89.9 196.0 108.1 91.0 53.4 62.5 42 Private 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 3.4 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 MARKETS'—Continued 1993 1994 1995 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 11999944 Q3 04 Q1 Q2 Q3 Q4 Q1 All sectors 53 Total net borrowing, all sectors 862.3 642.2 794.5 958.2 1,037.0 1,135.8 1,044.2 1,087.1 886.8 992.2 1,181.9 1,154.2 54 U.S. government securities 414.4 424.0 459.8 420.3 444.9 460.7 417.5 566.5 377.6 378.1 457.4 397.2 55 Tax-exempt securities 48.7 68.7 31.1 75.5 -34.1 65.2 27.3 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 1.3 68.3 6.4 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 19.7 215.4 296.0 440.1 169.1 513.0 430.1 344.4 213.1 162.9 -44.1 100.9 63 Mutual funds 65.3 151.5 211.9 320.0 138.3 363.9 287.7 236.2 144.0 165.4 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 • October 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 11999944 Q3 Q4 Ql Q2 Q3 Q4 Ql NET LENDING IN CREDIT MARKETS2 . 1 Total net lending in credit markets 862.3 642.2 794.5 958.2 1,037.0 1,135.8 1,044.2 1,087.1 886.8 992.2 1,181.9 1,154.2 2 Private domestic nonfinancial sectors 190.1 -7.5 72.0 -3.4 235.8 -52.8 85.8 295.0 299.1 109.5 239.7 -26.0 3 Households 157.2 -39.6 70.7 -19.7 319.4 -83.0 174.3 350.1 400.0 183.5 344.0 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 U.S. 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 26.6 100.5 122.6 133.3 125.0 203.7 127.7 65.1 124.1 216.1 267.9 9 Financial sectors 553.0 612.5 633.9 857.3 692.0 1,079.0 762.5 710.9 538.8 768.0 750.4 931.5 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 83.6 112.1 119.5 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 fimds 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 90.3 123.7 169.6 7.6 186.9 138.9 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 14.6 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 862.3 642.2 794.5 958.2 1,037.0 1,135.8 1,044.2 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 44.6 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 19.2 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 65.3 151.5 211.9 320.0 138.3 363.9 287.7 236.2 144.0 165.4 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 -11.6 -27.4 3.4 -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 2,280.9 1,885.1 2345.2 2367.2 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 82.5 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 -49.1 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 2,228.8 1,839.5 2,288.6 2322.7 2,218.9 1,8793 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 11999944 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Nonfinancial sectors 1 Total credit market debt owed by 1111,,118811..55 1111,,772200..77 1122337700..77 1122,,996655..66 12,153.3 1122,,337700..77 1122,,448888..99 1122,,662299..99 1122,,776677..33 1122,,996655..66 13,128.5 By sector and instrument 2 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 3,557.9 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 9,034.2 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 6 Tax-exempt obligations 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 7 Corporate bonds 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 Mortgages 3,920.0 4,043.9 4,220.6 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 3,149.6 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 304.8 293.6 289.0 290.4 288.2 289.0 288.8 289.9 291.5 290.4 291.1 11 Commercial 755.8 710.3 700.8 688.5 699.0 700.8 692.1 691.8 689.9 688.5 693.8 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 707.8 720.2 707.2 759.0 706.0 707.2 720.4 731.3 738.9 759.0 780.7 By borrowing sector 17 Household 3,784.7 4,002.3 4,294.3 4,645.6 4,190.9 4,294.3 4,335.5 4,426.7 4,527.4 4,645.6 44,,668866..66 18 Nonfinancial business 3,709.3 3,710.5 3,749.3 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 Farm 135.0 136.0 138.3 140.7 138.7 138.3 136.6 141.3 142.8 140.7 138.2 20 Nonfarm noncorporate 1,116.4 1,074.1 1,050.3 1,063.8 1,053.4 1,050.3 1,050.9 1,054.6 1,058.4 1,063.8 1,080.2 21 Corporate 2,458.0 2,500.4 2,560.7 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 911.1 927.5 990.6 942.3 985.4 990.6 986.0 984.6 957.8 942.3 925.3 23 Foreign credit market debt held in United States.. 298.8 310.9 357.8 348.1 351.3 357.8 340.3 339.2 339.8 348.1 361.1 24 Bonds 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 76 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 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 11,480J 12,031.6 12,728.5 13,313.7 12,504.5 12,728.5 12,829.3 12,969.0 13,107.1 13,313.7 13,489.5 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 3,757.3 3,818.4 By instrument 30 U.S. 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 U.S. 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 1,588.9 1,625.7 35 Corporate bonds 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 maiket 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 663388..33 700.6 771166..33 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 4? 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 Busts (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 15,036.3 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 CCoorrppoorraattee aanndd ffoorreeiiggnn bboonnddss 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 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 n.e.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 Digitized for F1.R DAatSa Ein Rth is table also appear in the Board's Z.l (780) quarterly statistical release, http://frasert.asbltelos Lu.i2s tfherodu.goh rLg.4/. For ordering address, see inside front cover. Federal Reserve Bank of St. Louis

A44 Domestic Financial Statistics • October 1995 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES' 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 14,2323 15,036.3 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 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 13 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 16,028.7 17,071.0 15,709.2 16,028.7 16,255.0 16,492.9 16,729.9 17,071.0 17307.9 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 3b 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 liabilities 29,609.6 31360.1 33,783.1 35,638.3 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 42,813.4 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 1995 MMeeaassuurree 11999922 11999933 11999944 Nov. Dec. Jan. Feb. Mar. Apr/ Mayr Juner July 1 Industrial production1 107.6 112.0 118.1 120.3 121.7 122.0 122.1 122.0 121.2 121.2 121.1 121.3 Market groupings ? 106.5 110.7 115.9 117.5 118.7 119.1 119.1 118.9 118.0 111188..00 111188..11 111188..11 3 Final, total 109.0 113.4 118.4 119.8 121.2 121.6 121.8 121.6 121.0 120.9 121.1 121.3 4 Consumer goods 105.9 109.4 113.2 113.9 115.5 115.7 115.7 114.9 114.4 114.2 114.2 114.2 5 Equipment 113.4 119.3 126.5 128.9 130.1 130.9 131.2 132.0 131.3 131.4 132.0 132.4 6 98.8 102.4 108.1 110.6 110.9 111.3 110.9 110.7 108.9 109.2 108.8 108.2 7 Materials 109.2 114.1 121.5 124.6 126.3 126.5 126.7 126.7 126.1 126.2 125.8 126.3 Industry groupings 8 Manufacturing 108.0 112.9 119.7 122.6 124.2 124.5 124.2 124.2 123.3 112233..22 112233..11 112222..88 9 Capacity utilization, manufacturing (percent)2.. 79.2 80.9 83.4 84.4 85.2 85.2 84.7 84.4 83.5 83.1 82.8 82.3 10 Construction contracts3 97.3 105.2r 114.2r 116.0 108.0 110.0 113.0 115.0r 105.0 115.0 115.0 111.0 11 Nonagricultural employment, total4 106.5 108.4 111.3 113.2 113.4 113.6 113.9 114.1 114.1 114.0 114.3 114.3 12 Goods-producing, total 94.2 94.3 95.6 98.0 98.2 98.5 98.6 98.8 98.6 98.2 98.2 97.9 13 Manufacturing, total 95.3 94.8 95.1 97.1 97.2 97.4 97.5 97.5 97.4 97.1 97.0 96.5 14 Manufacturing, production workers 94.9 94.9 96.1 98.5 98.7 98.9 99.1 99.1 99.0 98.6 98.3 97.7 15 Service-producing 110.5 112.9 116.3 118.1 118.3 118.4 118.8 119.0 119.0 119.1 119.4 119.6 16 Personal income, total 135.6 141.4 150.0 153.7 154.7 156.0 156.8 157.6 157.9 157.6 158.2 n.a. 17 Wages and salary disbursements 131.6 136.2 145.0 148.1 149.0 150.0 150.7 150.9 151.7 150.7 151.6 n.a. 18 Manufacturing 118.0 120.0 126.0 127.9 128.6 129.0 131.0 130.6 128.9 128.1 128.4 n.a. 19 Disposable personal income 137.0 142.5 150.8 154.7 155.8 156.8 157.6 158.4 157.0 158.2 158.7 n.a. 20 Retail sales5 126.4 134.7 145.2 149.8 150.0 150.7 149.6 150.6 150.5 152.2 153.4 153.3 Prices6 ?1 Consumer (1982-84=100) 140.3 144.5 148.2 149.7 149.7 150.3 150.9 151.4 151.9 152.2 115522..55 115522..55 22 Producer finished goods (1982=100) 123.2 124.7 125.5 126.1 126.2 126.6 126.9 127.1' 127.6 128.0 128.2 128.3 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. 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 1994 1995 CCaatteeggoorryy 11999922 11999933 11999944 Dec. Jan. Feb. Mar. Apr. May' June' July HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 126,982 128,040 131,056 131,725 132,136 132,308 132,511 132,737 131,811 131,869 132,519 2 Nonagricultural industries3 114,391 116,232 119,651 121,038 121,064 121,469 121,576 121,478 120,962 121,034 121,550 3 Agriculture 3,207 3,074 3,409 3,532 3,575 3,656 3,698 3,594 3,357 3,451 3,409 4 Number 9,384 8,734 7,996 7,155 7,498 7,183 7,237 7,665 7,492 7,384 7,559 5 Rate (percent of civilian labor force) 7.4 6.8 6.1 5.4 5.7 5.4 5.5 5.8 5.7 5.6 5.7 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 108,604 110,525 113,423 115,624 115,810 116,123 116,302 116,310 116,248 116,498 116,553 7 Manufacturing 18,104 18,003 18,064 18,472 18,502 18,523 18,525 18,506 18,456 18,422 18,337 8 Mining 635 611 604 592 590 588 589 583 582 582 578 9 Contract construction 4,492 4,642 4,916 5,166 5,201 5,213 5,256 5,242 5,190 5,231 5,231 10 Transportation and public utilities 5,721 5,787 5,842 6,121 6,129 6,156 6,175 6,184 6,177 6,189 6,197 11 Trade 25,354 25,675 26,362 26,988 27,011 27,069 27,047 27,062 27,045 27,115 27,186 17 Finance 6,602 6,712 6,789 6,931 6,927 6,929 6,938 6,924 6,925 6,934 6,941 13 Service 29,052 30,278 31,805 32,135 32,228 32,404 32,524 32,548 32,630 32,756 32,816 14 Government 18,653 18,817 19,041 19,219 19,222 19,241 19,248 19,261 19,243 19,269 19,267 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 • October 1995 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1994 1995 1994 1995 1994 1995 Q3 Q4 Ql Q2r Q3 Q4 Ql Q2 Q3 Q4 Ql Q2r Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 1 Total industry 118.8 120.5 122.0 121.2 140.9 141.9 143.1 144.5 84.3 84.9 85.2 83.9 2 Manufacturing 120.5 122.7 124.3 123.2 144.2 145.3 146.6 148.2 83.6 84.5 84.7 83.1 3 Primary processing3 115.9 118.4 119.3 117.1 131.6 132.3 133.2 134.2 88.1 89.5 89.5 87.3 4 Advanced processing4 122.7 124.8 126.6 126.1 150.0 151.3 152.9 154.7 81.8 82.5 82.8 81.5 5 Durable goods 126.5 129.4 131.6 130.3 151.6 153.1 154.9 157.1 83.4 84.6 84.9 83.0 6 Lumber and products 106.6 107.9 107.6 103.8 116.0 116.5 117.1 118.0 91.9 92.7 91.9 88.0 7 Primary metals 114.1 119.4 120.4 116.9 125.2 125.4 126.7 127.5 91.1 95.2 95.0 91.7 8 Iron and steel 115.8 123.3 125.4 120.9 128.4 128.8 130.9 131.7 90.2 95.8 95.9 91.8 9 Nonferrous 111.4 113.9 113.7 111.4 120.5 120.5 120.9 121.6 92.4 94.5 94.1 91.6 10 Industrial machinery and equipment 162.6 167.5 171.5 173.3 181.6 184.1 187.8 192.6 89.6 91.0 91.3 90.0 11 Electrical machinery 163.5 169.4 174.0 177.0 184.1 188.5 193.8 199.9 88.8 89.9 89.8 88.5 12 Motor vehicles and parts 135.0 141.5 145.9 136.1 160.3 162.2 164.2 166.5 84.2 87.2 88.8 81.7 13 Aerospace and miscellaneous transportation equipment 82.1 80.8 81.5 82.2 129.4 129.1 128.8 128.5 63.5 62.6 63.3 64.0 14 Nondurable goods 113.8 115.3 116.1 115.3 135.5 136.3 137.1 138.0 84.0 84.6 84.7 83.5 15 Textile mill products 108.9 111.6 111.8 108.7 121.4 122.0 122.7 123.5 89.7 91.4 91.1 88.0 16 Paper and products 118.5 120.6 120.3 119.6 127.1 127.7 128.4 129.3 93.2 94.4 93.6 92.5 17 Chemicals and products 124.4 126.0 129.7 127.7 153.3 154.7 156.2 157.6 81.1 81.4 83.1 81.0 18 Plastics materials 126.9 130.2 134.3 130.8 131.6 132.6 97.0 98.9 101.3 19 Petroleum products 104.9 106.5 107.8 106.5 115.2 115.1 115.1 115.3 91.1 92.5 93.7 92.4 20 Mining 100.1 99.2 100.3 100.7 111.5 111.4 111.4 111.4 89.8 89.0 90.0 90.4 21 Utilities 118.1 116.3 118.2 119.2 135.4 135.8 136.3 136.8 87.2 85.6 86.8 87.1 22 Electric 118.2 117.3 118.5 119.9 133.1 133.6 134.1 134.7 88.8 87.8 88.4 89.0 1973 1975 Previous cycle5 Latest cycle6 1994 1995 High Low High Low High Low July Feb. Mar. Apr.' May.r June Julyp Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.8 84.9 78.0 84.1 85.3 84.9 84.1 83.9 83.6 83.4 2 Manufacturing 88.9 70.8 87.3 70.0 85.2 76.6 83.3 84.7 84.4 83.5 83.1 82.8 82.3 3 Primary processing3 92.2 68.9 89.7 66.8 89.0 77.9 87.7 89.4 89.0 88.0 87.5 86.5 85.8 4 Advanced processing4 87.5 72.0 86.3 71.4 83.5 76.2 81.5 82.8 82.5 81.8 81.4 81.3 80.9 5 Durable goods 88.8 68.5 86.9 65.0 84.0 73.7 82.8 84.9 84.6 83.4 82.8 82.7 82.2 6 Lumber and products 90.1 62.2 87.6 60.9 93.3 76.3 92.2 91.7 89.6 89.1 87.2 87.6 86.3 7 Primary metals 100.6 66.2 102.4 46.8 92.8 74.0 90.0 94.5 94.9 92.6 92.3 90.2 88.8 8 Iron and steel 105.8 66.6 110.4 38.3 95.7 72.1 90.5 94.9 96.2 93.3 92.6 89.6 88.1 9 Nonferrous 92.9 61.3 90.5 62.2 88.7 75.0 89.6 94.2 93.4 91.8 91.9 91.1 89.7 10 Industrial machinery and equipment 96.4 74.5 92.1 64.9 84.0 72.5 88.9 91.1 90.8 90.2 90.0 89.7 89.8 11 Electrical machinery 87.8 63.8 89.4 71.1 84.9 76.6 88.4 89.8 89.5 88.5 88.5 88.6 89.6 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 85.1 57.6 81.1 89.3 87.8 83.9 80.7 80.6 77.6 13 Aerospace and miscellaneous transportation equipment 77.0 66.6 81.1 66.9 88.4 79.4 63.9 63.4 64.0 64.1 63.9 63.9 63.0 14 Nondurable goods 87.9 71.8 87.0 76.9 86.7 80.4 84.0 84.6 84.3 83.8 83.7 83.0 82.6 15 Textile mill products 92.0 60.4 91.7 73.8 92.1 78.9 90.3 90.4 90.4 90.2 88.4 85.4 84.1 16 Paper and products 96.9 69.0 94.2 82.0 94.8 86.5 91.8 93.7 93.7 92.7 93.8 91.1 92.6 17 Chemicals and products 87.9 69.9 85.1 70.1 85.9 78.9 81.6 83.0 82.5 81.3 81.2 80.6 80.4 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 97.9 100.6 97.5 97.1 97.0 19 Petroleum products 96.7 81.1 89.5 68.2 88.5 83.7 90.5 93.5 94.2 92.8 92.1 92.3 93.0 20 Mining 94.4 88.4 96.6 80.6 86.5 86.0 89.8 90.3 89.9 90.4 90.3 90.6 91.5 21 Utilities 95.6 82.5 88.3 76.2 92.6 83.2 88.0 87.5 87.1 86.4 87.9 87.1 90.0 22 Electric 99.0 82.7 88.3 78.7 94.8 86.5 89.5 88.7 88.8 88.1 90.0 89.0 92.7 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic For the ordering address, see 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. lfr-26. For a detailed description of the industrial ing and publishing; chemical products such as drugs and toiletries; agricultural chemicals; production index, see "Industrial Production: 1989 Developments and Historical Revi- leather and products; machinery; transportation equipment; instruments; and miscellasion," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. neous manufactures. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally 5. Monthly highs, 1978-80; monthly lows, 1982. adjusted index of industrial production to the corresponding index of capacity. 6. Monthly highs, 1988-89; monthly lows, 1990-91. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1994 1995 1994 GGrroouupp por- aavvgg.. tion July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.r Mayr June JJuullyypp Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 118.1 118.2 119.1 119.0 119.5 120.3 121.7 122.0 122.1 122.0 121.2 121.2 121.1 121.3 7 60.9 115.9 116.2 116.7 116.4 116.9 117.5 118.7 119.1 119.1 118.9 118.0 118.0 118.1 118.1 46.6 118.4 118.5 119.2 118.9 119.2 119.8 121.2 121.6 121.8 121.6 121.0 120.9 121.1 121.3 4 Consumer goods, total 28.5 113.2 113.3 113.8 113.0 113.0 113.9 115.5 115.7 115.7 114.9 114.4 114.2 114.2 114.2 Durable consumer goods 5.5 119.4 118.0 120.7 119.1 119.4 120.5 123.4 124.5 123.4 121.4 119.4 116.3 116.7 114.7 6 Automotive products 2.5 125.5 119.5 124.9 123.8 124.5 127.1 131.1 131.7 132.3 129.7 126.1 121.0 122.9 119.3 7 Autos and trucks 1.6 125.4 115.0 126.0 122.5 122.3 126.5 131.4 132.7 133.5 130.8 124.9 119.0 120.2 115.4 8 Autos, consumer .9 94.9 86.5 91.7 90.2 92.9 94.0 100.5 103.6 103.6 103.1 94.4 88.2 86.6 87.7 9 Trucks, consumer .7 180.7 166.6 189.0 181.5 175.5 185.8 187.3 184.6 187.1 180.0 180.2 175.3 182.2 165.5 10 Auto parts and allied goods .9 123.2 126.6 120.0 123.9 126.6 125.7 127.8 126.9 127.0 124.8 126.1 122.9 126.1 125.1 11 Other 3.0 114.1 116.7 117.1 115.2 115.2 115.0 116.8 118.3 115.9 114.3 113.8 112.3 111.4 110.8 17 Appliances televisions and air conditioners .7 126.0 129.7 135.1 130.2 124.9 126.9 131.5 132.1 125.8 122.7 121.9 112244..66 122.7 124.3 N Carpeting and furniture .8 105.0 108.4 106.9 104.1 107.4 105.9 108.0 110.2 107.9 106.5 106.9 102.4 100.7 99.5 14 Miscellaneous home goods 1.5 113.8 115.3 114.6 114.6 114.9 114.5 114.9 116.5 115.8 114.7 113.8 112.3 112.2 111.2 11 Nondurable consumer goods 23.0 111.8 112.2 112.2 111.7 111.5 112.4 113.7 113.6 113.9 113.5 113.3 113.8 113.8 114.2 16 Foods and tobacco 10.3 110.5 110.6 111.2 111.9 112.2 112.4 114.3 113.1 112.9 112.9 113.8 114.4 114.9 114.7 17 Clothing 2.4 95.9 96.5 95.9 95.5 96.2 96.2 96.8 96.1 94.7 94.6 93.6 93.0 91.8 89.7 18 Chemical products 4.5 129.7 131.1 129.8 127.5 127.2 130.5 134.0 137.0 136.6 135.9 133.7 133.5 133.2 133.5 19 Paper products 2.9 104.7 105.2 105.9 105.2 103.6 104.6 104.3 103.4 104.1 102.9 104.2 103.7 103.4 103.9 70 Energy 2.9 113.9 114.3 113.1 110.5 109.8 110.6 109.6 110.4 114.1 113.3 111.2 114.7 114.0 119.7 71 Fuels .9 106.7 105.8 105.8 107.4 103.9 109.8 107.4 107.4 109.1 110.6 109.9 108.3 108.4 109.2 22 Residential utilities 2.1 116.8 117.8 116.1 111.8 112.2 110.7 110.3 111.6 116.0 114.3 111.6 117.3 116.3 124.0 n 18.1 126.5 126.4 127.5 128.0 128.8 128.9 130.1 130.9 131.2 132.0 131.3 131.4 132.0 132.4 74 Business equipment 14.0 146.7 146.9 148.9 149.5 150.9 151.0 152.6 153.7 154.5 155.9 154.9 154.9 156.0 156.5 75 Information processing and related 5.7 176.4 177.1 179.7 181.1 183.2 184.2 188.3 188.7 189.1 192.3 193.7 194.1 197.8 200.6 76 Computer and office equipment 1.5 284.2 282.6 288.9 295.8 300.5 305.7 311.9 318.0 325.3 331.8 340.0 346.9 356.2 369.4 77 4.0 120.9 122.1 122.3 123.0 124.4 124.1 124.1 125.9 126.1 126.2 124.8 125.6 125.8 126.1 78 Transit 2.6 137.9 132.6 137.9 136.8 137.1 137.5 137.8 139.7 143.4 144.7 140.8 137.4 137.9 135.0 79 Autos and trucks 1.2 148.0 138.2 149.4 147.7 149.2 151.6 152.6 157.2 157.7 154.9 147.1 142.2 143.1 140.8 30 Other 1.7 129.4 132.6 133.5 133.3 134.3 133.1 133.1 133.5 132.9 132.6 130.4 131.2 128.3 128.0 31 Defense and space equipment 3.4 71.0 69.9 69.2 68.8 68.7 69.0 68.7 68.6 67.7 67.5 66.8 66.8 66.9 66.4 37. Oil and gas well drilling .5 90.8 93.7 89.6 93.9 88.3 86.0 86.0 86.7 89.1 85.7 89.2 91.9 86.4 89.6 33 Manufactured homes .2 137.3 133.3 134.5 138.4 142.0 143.1 153.6 153.6 147.4 148.3 147.2 150.4 152.4 34 Intermediate products, total 14.3 108.1 109.1 109.2 108.6 109.9 110.6 110.9 111.3 110.9 110.7 108.9 109.2 108.8 108.2 35 Construction supplies 5.3 106.8 107.9 108.2 108.6 109.7 109.8 111.6 112.2 111.0 110.5 108.6 107.3 107.4 106.5 36 Business supplies 9.0 109.1 110.0 109.9 108.7 110.1 111.3 110.7 110.9 111.0 110.9 109.3 110.5 109.8 109.4 37 39.1 121.5 121.4 122.8 122.9 123.4 124.6 126.3 126.5 126.7 126.7 126.1 126.2 125.8 126.3 38 Durable goods materials 20.6 131.2 130.9 132.6 133.3 134.2 136.0 138.6 139.1 139.2 139.2 138.4 138.3 138.3 138.1 39 Durable consumer parts 3.9 132.2 130.4 133.2 133.1 133.8 135.8 139.7 139.1 139.1 138.3 134.7 132.7 132.6 129.5 40 Equipment parts 7.5 143.1 143.8 145.2 146.7 149.0 150.7 152.3 153.6 155.1 156.2 157.7 158.8 160.3 163.1 41 Other 9.1 121.3 121.1 122.3 122.8 122.7 124.6 127.3 127.6 126.7 126.3 124.9 124.7 123.6 122.5 47 3.0 119.7 118.8 119.3 121.1 121.3 123.2 126.0 125.6 124.8 125.2 123.5 123.9 121.3 120.1 43 Nondurable goods materials 8.9 118.4 118.6 120.3 119.8 120.3 121.5 122.8 122.3 121.8 121.7 120.9 121.4 119.5 119.7 44 Textile materials 1.1 105.3 104.8 105.7 105.9 106.9 110.3 108.7 109.8 108.5 108.8 108.1 106.7 102.3 100.7 45 Paper materials 1.8 118.7 117.5 122.5 121.5 120.5 122.1 121.3 120.8 122.1 124.1 121.9 125.8 120.2 122.8 46 Chemical materials 4.0 123.2 123.4 124.8 124.0 124.6 125.9 127.5 128.6 128.3 127.6 127.0 127.4 126.8 126.9 47 Other 2.0 116.9 118.6 118.1 118.2 119.5 119.3 123.4 119.1 116.8 116.0 115.8 114.7 115.1 114.3 48 Energy materials 9.6 105.2 105.2 106.1 105.6 105.2 104.9 105.3 105.6 106.6 106.6 106.7 106.7 107.0 108.8 49 Primary energy 6.3 100.3 100.3 100.9 100.8 100.3 100.7 101.7 101.7 102.0 102.5 102.4 101.8 102.5 104.0 50 Converted fuel materials 3.3 114.9 114.9 116.3 115.1 115.1 113.4 112.3 113.4 115.6 114.7 115.2 116.5 115.8 118.4 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.2 117.6 118.1 118.7 118.6 119.1 119.8 121.1 121.4 121.4 121.4 120.8 121.0 120.9 121.2 52 Total excluding motor vehicles and parts 95.2 117.1 117.7 118.2 118.0 118.5 119.2 120.5 120.8 120.8 120.8 120.3 120.6 120.4 120.8 53 Total excluding computer and office equipment 98.3 115.4 115.5 116.4 116.1 116.6 117.4 118.7 118.9 118.9 111188..77 117.9 111177..88 111177..66 111177..66 54 Consumer goods excluding autos and trucks . 26.9 112.4 113.2 113.0 112.4 112.4 113.1 114.5 114.6 114.5 113.9 113.8 113.9 113.9 114.2 55 Consumer goods excluding energy 25.6 113.1 113.2 113.8 113.3 113.3 114.2 116.2 116.3 115.9 115.1 114.8 114.2 114.2 113.6 56 Business equipment excluding autos and trucks 12.8 146.5 147.7 148.8 149.5 151.0 150.9 152.5 153.3 154.1 115555..99 155.6 115566..00 115577..11 115588..00 57 Business equipment excluding computer and office equipment 12.5 130.7 131.1 132.7 132.7 133.8 133.6 134.7 135.4 135.6 113366..66 135.0 113344..33 113344..88 113344..33 58 Materials excluding energy 29.5 127.3 127.2 128.8 129.2 129.9 131.6 133.8 134.0 133.9 133.9 133.0 133.1 132.5 132.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • October 1995 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 Group SIC2 pro- 1994 code por- avg. tion July Aug. Sept. Oct. Nov. Dec Apr.r Mayr June Julyp Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 118.1 118.2 119.1 119.0 119.5 120.3 121.7 122.0 122.1 122.0 121.2 121.2 121.1 121.3 60 Manufacturing 85.5 119.7 119.8 120.9 120.9 121.5 122.6 124.2 124.5 124.2 124.2 123.3 123.2 123.1 122.8 61 Primary processing 26.5 115.3 115.3 116.3 116.2 116.6 118.4 120.3 119.8 119.1 118.9 117.7 117.4 116.3 115.7 62 Advanced processing 59.0 121.8 121.9 123.1 123.1 123.8 124.6 126.0 126.6 126.6 126.7 126.0 125.9 126.3 126.2 63 Durable goods 45.1 125.5 125.2 127.0 127.2 128.0 129.1 131.2 131.6 131.5 131.6 130.4 130.1 130.5 130.2 64 Lumber and products "24 2.0 106.0 106.8 105.5 107.6 106.7 106.7 110.4 110.2 107.4 105.2 104.9 102.9 103.5 102.2 65 Furniture and fixtures 25 1.4 111.4 114.0 115.5 112.4 114.8 113.0 114.7 116.0 115.6 113.8 112.7 110.7 110.8 110.1 66 Stone, clay, and glass products 32 2.1 104.9 104.3 105.8 105.8 105.4 106.9 110.1 108.7 107.4 108.1 105.8 106.0 106.0 106.1 67 Primary metals 33 3.1 114.5 112.7 113.5 116.0 115.9 119.1 123.0 120.9 119.8 120.5 117.8 117.6 115.3 113.6 68 Iron and steel 331,2 1.7 118.3 116.1 113.0 118.2 118.8 121.9 129.3 125.9 124.3 126.1 122.6 122.0 118.3 116.5 69 Raw steel .1 107.9 104.7 107.0 109.9 109.0 114.2 121.9 114.6 117.2 117.2 114.3 112.4 112.7 70 Nonferrous 333-6,9 1.4 109.3 108.0 113.6 112.7 111.8 115.2 114.8 114.2 113.8 113.1 111.5 111.8 111.1 109^5 71 Fabricated metal products. . . 34 5.0 110.8 111.7 112.4 111.6 112.2 113.3 115.3 115.3 114.9 114.6 112.9 113.7 113.6 112.2 72 Industrial machinery and equipment 35 7.9 159.9 160.6 162.6 164.6 166.5 167.5 168.5 171.4 171.1 172.0 172.3 173.3 174.2 175.8 73 Computer and office equipment 357 1.7 284.2 282.6 288.9 295.8 300.5 305.7 311.9 318.0 325.3 331.8 340.0 346.9 356.2 369.4 74 Electrical machinery 36 7.3 160.0 161.5 164.1 165.0 166.9 168.8 172.5 172.9 174.0 175.2 175.1 177.0 178.8 182.6 75 Transportation equipment.. . 37 9.6 109.7 105.7 109.5 108.8 109.0 110.5 111.9 112.6 113.5 112.9 110.1 107.7 107.9 105.1 76 Motor vehicles and parts . 371 4.8 137.9 129.6 138.1 137.4 138.4 141.4 144.6 146.1 146.7 144.8 139.0 134.4 134.8 130.5 77 Autos and light trucks . 371 2.5 131.9 120.8 131.9 128.4 128.6 132.7 138.4 140.0 140.8 138.2 131.3 124.8 125.6 121.4 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.8 82.6 82.8 82.3 81.4 80.8 80.9 80.6 80.4 81.7 82.3 82.4 82.1 82.1 80.9 79 Instruments 38 5.4 107.4 108.5 108.7 108.0 108.2 107.7 108.9 108.4 107.7 108.5 108.4 107.2 108.0 108.0 80 Miscellaneous 39 1.3 116.2 118.6 117.1 117.0 118.4 118.6 117.6 119.1 120.3 119.0 118.2 117.3 117.9 116.3 81 Nondurable goods 40.5 113.3 113.6 114.0 113.7 114.2 115.4 116.4 116.5 116.1 115.8 115.4 115.5 114.8 114.6 82 Foods 20 9.4 112.8 113.4 113.7 114.6 113.4 113.9 114.7 115.9 115.7 115.4 115.3 116.5 116.6 116.7 83 Tobacco products 21 1.6 96.5 93.7 96.2 96.1 104.5 101.5 108.0 97.3 96.4 97.9 104.1 103.1 104.9 103.3 84 Textile mill products 22 1.8 109.0 109.4 109.0 108.3 110.6 112.0 112.2 113.3 110.9 111.2 111.2 109.2 105.6 104.3 85 Apparel products 23 2.2 96.3 97.0 96.8 96.8 96.9 96.8 97.0 96.6 95.8 95.4 93.9 93.5 91.6 89.8 86 Paper and products 26 3.6 117.4 116.6 120.2 118.7 118.9 121.3 121.7 119.8 120.3 120.6 119.6 121.2 118.1 120.2 87 Printing and publishing 27 6.8 101.1 102.1 101.5 100.9 101.4 102.0 101.6 101.3 100.8 100.4 99.7 100.2 99.5 99.1 88 Chemicals and products .... 28 9.9 124.1 124.7 124.7 123.7 123.8 126.2 128.0 130.4 129.7 129.2 127.8 127.9 127.5 127.4 89 Petroleum products 29 1.4 105.3 104.3 105.2 105.3 104.0 107.6 107.7 107.4 107.6 108.5 106.9 106.2 106.5 107.4 90 Rubber and plastic products . 30 3.5 133.5 134.5 134.5 134.7 136.7 138.3 140.0 140.2 140.5 139.1 139.6 136.6 136.4 134.3 91 Leather and products 31 .3 85.8 86.3 85.5 85.4 85.6 84.5 84.4 82.9 82.8 82.7 80.2 80.5 79.2 77.0 92 Mining 6.8 99.8 100.1 100.0 100.1 99.2 98.3 100.1 100.0 100.6 100.2 100.7 100.6 100.9 101.9 93 Metal 10 .4 159.4 159.5 156.6 160.0 158.9 154.3 156.2 158.5 160.4 159.3 158.7 162.3 163.5 163.9 94 Coal 12 1.0 112.0 108.6 111.4 110.7 110.2 110.1 117.8 117.9 118.6 117.4 114.1 109.7 111.9 114.5 95 Oil and gas extraction 13 4.7 93.0 93.9 93.5 93.7 92.2 91.2 92.2 91.2 92.3 91.6 93.0 93.8 93.5 94.1 96 Sterne and earth minerals 14 .6 107.0 107.9 106.6 106.7 109.3 109.9 109.9 115.1 112.0 114.8 114.2 112.5 114.0 115.5 97 Utilities 7.7 118.1 119.0 118.8 116.5 117.2 116.5 115.2 116.5 119.2 118.9 118.0 120.3 119.2 123.5 98 Electric 49L3PT 6.1 117.8 119.0 118.4 117.1 117.9 117.5 116.5 117.2 119.0 119.3 118.6 121.2 120.0 125.2 99 Gas 492,3PT 1.6 119.2 118.9 120.4 114.2 114.4 112.3 109.8 113.7 120.1 117.3 115.9 116.4 116.0 116.5 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.7 118.6 119.2 119.8 119.9 120.5 121.5 122.9 123.2 122.9 122.9 122.4 122.5 122.4 122.4 101 Manufacturing excluding office and computing machines ... 83.8 116.5 116.6 117.6 117.5 118.1 119.1 120.6 120.8 120.5 120.4 119.4 119.2 119.0 118.5 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 1,707.0 2,006.2 2,002.1 2,020.2 2,015.6 2,020.4 2,037.2 2,056.5 2,063.2 2,066.5 2,065.1 2,049.6 2,048.3 2,051.4 2,052.4 103 Final 1,314.6 1,576.3 1,569.3 1,586.6 1,584.2 1,584.4 1,598.4 1,615.1 1,621.1 1,626.4 1,626.1 1,615.5 1,614.2 1,619.0 1,621.3 104 Consumer goods 866.6 982.5 979.0 987.3 981.5 977.0 988.5 999.6 1,000.2 1,001.9 997.3 989.6 987.1 987.6 986.4 105 Equipment 448.0 593.8 590.3 599.3 602.7 607.3 609.9 615.5 620.9 624.5 628.7 625.9 627.1 631.4 634.9 106 Intermediate 392.5 429.8 432.9 433.5 431.4 436.0 438.8 441.4 442.0 440.1 439.0 434.1 434.1 432.4 431.1 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. Bulletin, vol. 81 (January 1995), pp. 16-26. For a detailed description of the industrial For the ordering address, see the inside front cover. The latest historical revision of the production index, see "Industrial Production: 1989 Developments and Historical Reviindustrial production index and the capacity utilization rates was released in November sion," Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204. 1994. See "Industrial Production and Capacity Utilization: A Revision," Federal Reserve 2. Standard industrial classification. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1994 1995 IItteemm 11999922 11999933 11999944 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.' May' June Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,095 1,199 1,372 1,426 1,401 1,358 1,420 1,293 1,282 1,235 1,243 1,243 1,275 2 One-family 911 987 1,068 1,066 1,046 1,025 1,105 990 931 911 905 930 958 3 Two-family or more 184 213 303 360 355 333 315 303 351 324 338 313 317 4 Started 1,200 1,288 1,457 1,511 1,451 1,536 1,545 1,366 1,319 1,238 1,269 1,282 1,293 5 One-family 1,030 1,126 1,198 1,235 1,164 1,186 1,250 1,055 1,048 987 1,009 988 1,030 6 Two-family or more 170 162 259 276 287 350 295 311 271 251 260 294 263 7 Under construction at end of period1 612 680 762 773 779 787 791 792 797 769 763 757 762 8 One-family 473 543 558 590 587 587 584 578 579 552 544 536 536 9 Two-family or more 140 137 204 183 192 200 207 214 218 217 219 221 226 10 Completed 1,158 1,193 1,347 1,400 1,376 1,371 1,388 1,436 1,302 1,443 1,334 1,330 1,251 11 One-family 964 1,040 1,160 1,158 1,169 1,136 1,173 1,209 1,080 1,222 1,089 1,076 1,035 12 Two-family or more 194 153 187 242 207 235 215 227 222 221 245 254 216 13 Mobile homes shipped 210 254 304 307 314 322 347 361 335 333 318 329 329 Merchant builder activity in one-family units 14 Number sold 610 666 670 691 707 642 627 643 575 612r 610 686 728 15 Number for sale at end of period' 265 293 338 328 330 335 338 342 347 347r 348 347 347 Price of units sold (thousands of dollars)2 16 Median 121.3 126.1 130.4 129.7 132.0 129.9 135.0 127.9 135.0 130.0 133.0 133.9 132.0 17 Average 144.9 147.6 153.7 157.2 153.0 155.4 159.6 147.4 160.2 153.3' 157.4 157.6 161.8 EXISTING UNITS (one-family) 18 Number sold 3,520 3,800 3,946 3,870 3,820 3,690 3,760 3,610 3,420 3,620 3,390 3,550 3,800 Price of units sold (thousands of dollars)2 19 Median 103.6 106.5 109.6 108.9 107.5 108.7 109.1 108.1 107.0 107.9 108.1 109.0 116.2 20 Average 130.8 133.1 136.4 135.8 133.0 134.7 135.6 135.3 133.4 134.5 134.2 135.4 143.3 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 435,022 464,504 506,904 518,324 521,296 520,183 521,771 521,054 521,429 523,467 523,597 515,816 520,408 ?.? Private 315,695 339,161 376,566 384,460 382,946 387,052 386,103 384,806 383,652 383,301 383,356 376,680 379,784 73 Residential 187,870 210,455 238,884 242,215 240,484 242,447 243,565 241,938 240,207 237,894 235,138 232,074 230,231 74 Nonresidential 127,825 128,706 137,682 142,245 142,462 144,605 142,538 142,868 143,445 145,407 148,218 144,606 149,553 25 Industrial buildings 20,720 19,533 21,121 21,935 21,894 25,060 22,769 22,715 23,370 23,911 24,984 24,907 25,122 26 Commercial buildings 41,523 42,627 48,552 50,738 51,195 52,008 53,491 53,338 53,687 55,439 55,069 51,785 55,020 77 Other buildings 21,494 23,626 23,912 23,559 23,677 24,147 24,694 24,373 24,039 23,062 23,922 24,326 23,939 28 Public utilities and other 44,088 42,920 44,097 46,013 45,696 43,390 41,584 42,442 42,349 42,995 44,243 43,588 45,472 ?9 Public 119,322 125,342 130,337 133,865 138,349 133,131 135,668 136,248 137,777 140,166 140,241 139,135 140,624 30 Military 2,502 2,454 2,319 2,361 2,344 2,354 2,784 2,925 2,624 3,048 2,869 2,602 2,601 31 Highway 34,899 37,431 39,882 40,519 40,992 39,283 38,464 38,574 38,681 40,667 41,047 38,763 40,624 32 Conservation and development 6,021 5,978 6,228 7,339 7,197 6,331 7,466 6,681 7,128 7,139 6,386 5,939 6,051 33 Other 75,900 79,479 81,908 83,646 87,816 85,163 86,954 88,068 89,344 89,312 89,939 91,831 91,348 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 • October 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 llleeevvveeelll,,, IIIttteeemmm 1994 1995r 1995 JJJuuulllyyy 11999944 11999955 111999999555 111 JJuullyy JJuullyy Sept. Dec. Mar. June Mar.r Apr.r May June July CONSUMER PRICES2 (1982-84=100) 1 All items 2.8 2.8 3.6 1.9 3.2 3.2 .2 .4 .3 .1 .2 152.5 2 Food 2.8 2.7 5.1 3.9 .0 3.6 .0 .7 .1 .1 .2 148.1 3 Energy items .9 1.2 9.2 .4 -1.1 5.4 -.5 .4 .5 .5 -.8 108.1 4 All items less food and energy 2.9 3.0 2.6 2.0 4.1 3.0 .3 .4 .2 .2 .2 161.1 5 Commodities 1.8 1.1 .9 .3 2.6 .6 .1 .2 .0 -.1 .1 138.3 6 Services 3.4 3.8 3.6 2.6 4.8 4.3 .4 .4 .3 .3 .3 174.1 PRODUCER PRICES (1982=100) 7 Finished goods .6 1.8 1.9 2.2 3.2 .9 .2 .3 .0 -.1 .0 128.3 8 Consumer foods 1.0 1.8 1.9 9.2 -1.2 -4.9 -.1 -.3 -.6 -.3 1.2 128.5 9 Consumer energy .0 .5 3.2 .0 11.3 2.0 .0 1.8 -.2 -1.0 -2.5 80.0 10 Other consumer goods -.4 2.2 1.7 .6 2.9 3.2 .2 .2 .4 .2 .2 142.0 11 Capital equipment 2.2 1.9 2.1 -.3 3.0 2.4 .1 .1 .2 .2 .1 136.7 Intermediate materials 12 Excluding foods and feeds 2.0 6.5 6.2 7.2 10.6 3.9 .4 .6 .3 .0 .0 126.7 13 Excluding energy 2.5 7.4 6.8 8.3 10.5 4.2 .4 .6 .2 .2 .3 136.1 Crude materials 14 Foods -3.6 1.1 -13.5 -1.2 -4.6 -.4 -2.4 -1.0 -3.0 4.0 4.1 104.7 15 Energy .4 -10.1 -19.2 -7.6 -4.5 15.3 -.7 5.5 1.6 -3.4 -5.4 67.7 16 Other 9.1 13.6 20.3 27.9 21.9 4.1 .9 .8 -.3 .6 -1.8 176.7 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rentalequivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A51 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1994 1995 AAccccoouunntt 11999922 11999933 11999944 Q2 Q3 Q4 Ql Q2 GROSS DOMESTIC PRODUCT 1 Total 6,020.2 6,343.3 6,738.4 6,689.9 6,791.7 6,897.2 6,977.4 7,011.8 By source 2 Personal consumption expenditures 4,136.9 4,378.2 4,628.4 4,586.4 4,657.5 4,734.8 4,782.1 4,838.3 3 Durable goods 492.7 538.0 591.5 580.3 591.5 617.7 615.2 615.1 4 Nondurable goods 1,295.5 1,339.2 1,394.3 1,381.4 1,406.1 1,420.7 1,432.2 1,444.3 5 Services 2,348.7 2,501.0 2,642.7 2,624.7 2,659.9 2,696.4 2,734.8 2,778.9 6 Gross private domestic investment 788.3 882.0 1,032.9 1,034.4 1,055.1 1,075.6 1,107.8 1,087.4 7 Fixed investment 785.2 866.7 980.7 967.0 992.5 1,020.8 1,053.3 1,054.0 8 Nonresidential 561.4 616.1 697.6 683.3 709.1 732.8 766.4 777.4 9 Structures 171.1 173.4 182.8 181.8 184.6 192.0 198.6 204.0 10 Producers' durable equipment 390.3 442.7 514.8 501.5 524.5 540.7 567.8 573.4 11 Residential structures 223.8 250.6 283.0 283.6 283.4 288.0 286.8 276.5 17 Change in business inventories 3.0 15.4 52.2 67.4 62.6 54.8 54.5 33.4 13 Nonfarm -2.7 20.1 45.9 60.4 53.4 47.4 54.1 38.0 14 Net exports of goods and services -30.3 -65.3 -98.2 -97.6 -109.6 -98.9 -111.1 -122.4 15 Exports 638.1 659.1 718.7 704.5 730.5 765.5 778.8 797.9 16 Imports 668.4 724.3 816.9 802.1 840.1 864.4 889.9 920.4 17 Government purchases of goods and services 1,125.3 1,148.4 1,175.3 1,166.7 1,188.8 1,185.8 1,198.7 1,208.5 18 Federal 449.0 443.6 437.3 435.1 444.3 431.9 434.4 434.4 19 State and local 676.3 704.7 738.0 731.5 744.5 753.8 764.3 774.1 By major type of product 20 Final sales, total 6,017.2 6,327.9 6,686.2 6,622.5 6,729.1 6,842.4 6,922.9 6,978.4 21 Goods 2,292.0 2,390.4 2,532.4 2,493.7 2,543.6 2,603.3 2,638.1 2,643.1 77 Durable 968.6 1,032.4 1,118.8 1,099.4 1,125.8 1,151.8 1,175.0 1,172.7 73 Nondurable 1,323.4 1,358.1 1,413.6 1,394.3 1,417.8 1,451.5 1,463.1 1,470.3 74 Services 3,227.2 3,405.5 3,576.2 3,555.4 3,603.6 3,641.9 3,680.6 3,735.4 25 Structures 498.1 532.0 577.6 573.4 581.9 597.3 604.3 599.9 26 Change in business inventories 3.0 15.4 52.2 67.4 62.6 54.8 54.5 33.4 27 Durable goods -13.0 8.6 34.8 38.2 44.1 36.3 48.0 28.2 28 Nondurable goods 16.0 6.7 17.4 29.2 18.5 18.5 6.5 5.2 MEMO 29 Total GDP in 1987 dollars 4,979.3 5,134.5 5,344.0 5,314.1 5,367.0 5,433.8 5,470.1 5,477.3 NATIONAL INCOME 30 Total 4,829.5 5,131.4 5,458.4 5,430.7 5,494.9 5,599.4 5,688.4 n.a. 31 Compensation of employees 3,591.2 3,780.4 4,004.6 3,979.3 4,023.7 4,095.3 4,157.3 4,183.2 32 Wages and salaries 2,954.8 3,100.8 3,279.0 3,257.2 3,293.9 3,356.4 3,403.4 3,422.1 33 Government and government enterprises 567.3 583.8 602.8 601.9 604.4 609.0 617.2 620.3 34 Other 2,387.5 2,517.0 2,676.2 2,655.4 2,689.6 2,747.4 2,786.2 2,801.8 35 Supplement to wages and salaries 636.4 679.6 725.6 722.0 729.7 738.9 753.9 761.0 36 Employer contributions for social insurance 307.7 324.3 344.6 343.6 346.0 350.2 354.3 357.1 37 Other labor income 328.7 355.3 381.0 378.4 383.7 388.7 399.6 403.9 38 Proprietors' income1 418.7 441.6 473.7 471.3 467.0 485.7 493.6 489.9 39 Business and professional1 374.4 404.3 434.2 431.9 437.1 444.0 449.2 451.9 40 Farm1 44.4 37.3 39.5 39.3 29.8 41.7 44.4 38.0 41 Rental income of persons2 -5.5 24.1 27.7 34.1 32.6 29.0 25.4 24.0 42 Corporate profits' 405.1 485.8 542.7 546.4 556.0 560.3 569.7 n.a. 43 Profits before tax3 395.9 462.4 524.5 523.1 538.1 553.5 570.6 n.a. 44 Inventory valuation adjustment -6.4 -6.2 -19.5 -14.1 -19.6 -32.1 -39.0 -27.8 45 Capital consumption adjustment 15.7 29.5 37.7 37.4 37.5 38.8 38.1 36.1 46 Net interest 420.0 399.5 409.7 399.7 415.7 429.2 442.4 n.a. 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • October 1995 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1994 1995 11999922 11999933 1994 Q2 Q3 Q4 Ql Q2 PERSONAL INCOME AND SAVING 1 Total personal income 5,154.3 5,375.1 5,701.7 5,659.9 5,734.5 5,856.6 5,962.0 6,004.0 2 Wage and salary disbursements 2,974.8 3,080.8 3,279.0 3,257.2 3,293.9 3.356.4 3,403.4 3,422.1 4 5 6 7 3 G C S D e o i o r s M m v v tr e i a m i c r n b e n o u u m d t f i i i a n e v t c d n y e t u t - u p s i r a n t r i r n o d n i d e d u g s u s g t c r o i i v n e g s e rn in m d e u n s t t r e ie n s t erprises 7 5 6 9 5 5 6 7 8 6 7 7 8 2 7 . . . . . 6 6 3 3 3 1, 7 5 7 5 0 7 8 8 0 2 3 3 8 1 1 . . . . . 8 8 4 9 4 1, 8 6 7 6 1 0 1 4 1 0 2 7 8 8 9 . . . . . 8 5 5 2 5 1, 6 6 8 7 1 0 1 4 1 0 1 2 2 1 1 . . . . . 9 5 8 6 2 1, 6 7 6 8 1 5 0 1 2 1 3 4 8 1 4 . . . . . 5 4 8 3 3 1. 8 6 7 6 1 2 0 6 3 4 9 9 9 7 0 . . . . . 5 0 6 3 5 1, 6 7 6 8 1 3 7 1 4 6 8 6 7 8 0 . . . . . 1 8 2 5 9 1, 6 7 6 8 1 2 2 8 4 7 0 9 3 2 6 . . . . . 3 5 1 3 5 8 Other labor income 328.7 355.3 381.0 378.4 383.7 388.7 399.6 403.9 9 Proprietors' income1 418.7 441.6 473.7 471.3 467.0 485.7 493.6 489.9 10 Business and professional1 374.4 404.3 434.2 431.9 437.1 444.0 449.2 451.9 11 Farm1 44.4 37.3 39.5 39.3 29.8 41.7 44.4 38.0 12 Rental income of persons2 -5.5 24.1 27.7 34.1 32.6 29.0 25.4 24.0 13 Dividends 161.0 181.3 194.3 191.7 196.9 202.7 205.5 208.1 14 Personal interest income 665.2 637.9 664.0 649.4 674.2 701.1 723.6 734.2 15 Transfer payments 860.2 915.4 963.4 957.6 969.0 979.7 1,004.8 1,017.4 16 Old-age survivors, disability, and health insurance benefits 414.0 444.4 473.5 470.7 476.5 483.1 496.7 503.6 17 LESS: Personal contributions for social insurance 248.7 261.3 281.4 279.9 282.9 286.6 293.8 295.7 18 EQUALS: Personal income 5,154.3 5,375.1 5,701.7 5,659.9 5,734.5 5,856.6 5,962.0 6,004.0 19 LESS: Personal tax and nontax payments 648.6 686.4 742.1 746.4 744.1 754.7 777.6 807.9 20 EQUALS: Disposable personal income 4,505.8 4,688.7 4,959.6 4,913.5 4,990.3 5,101.9 5,184.4 5,196.1 21 LESS: Personal outlays 4,257.8 4,496.2 4,756.5 4,712.4 4,787.0 4,869.3 4,920.7 4,981.4 22 EQUALS: Personal saving 247.9 192.6 203.1 201.1 203.3 232.6 263.7 214.7 MEMO 2 2 2 3 4 5 G P D P e e r i r r s o s p s o c o s n a s d a p a l o i b t m a l c e o e n ( p s 1 t s e 9 i u r c 8 s m 7 o p p n r t a o i d l d o o n u i l n c la e t c r x o s p m ) e e n ditures 1 1 1 9 3 4 , , , 4 1 2 8 1 7 9 0 9 . . . 7 4 0 1 1 1 9 3 4 , , , 8 3 3 7 9 4 8 0 1 . . . 8 8 0 2 1 1 0 3 4 , , , 4 7 6 7 1 9 5 5 6 . . . 8 4 0 2 1 1 0 3 4 , , , 3 6 6 8 5 2 9 0 5 . . . 7 9 0 2 1 1 0 4 3 . , . 5 6 7 3 9 1 6 7 6 . . . 5 0 6 2 1 1 0 3 4 , , , 7 8 9 3 5 2 9 3 7 . . . 8 5 0 2 1 1 0 3 5 , , , 8 8 0 3 8 4 6 0 8 . . . 3 1 0 2 1 1 0 4 3 , , , 8 9 9 1 6 3 8 7 5 . . . 6 0 9 26 Saving rate (percent) 5.5 4.1 4.1 4.1 4.1 4.6 5.1 4.1 GROSS SAVING 27 Gross saving 722.9 787.5 920.6 923.3 922.6 950.3 1,006.0 n.a. 28 Gross private saving 980.8 1,002.5 1,053.5 1,041.4 1,052.7 1,082.7 1,126.4 n.a. 29 Personal saving 247.9 192.6 203.1 201.1 203.3 232.6 263.7 214.7 30 Undistributed corporate profits' 94.3 120.9 135.1 142.3 139.5 130.7 132.6 n.a. 31 Corporate inventory valuation adjustment -6.4 -6.2 -19.5 -14.1 -19.6 -32.1 -39.0 -27.8 Capital consumption allowances 32 Corporate 396.8 407.8 432.2 425.9 432.6 438.0 445.3 454.7 33 Noncorporate 261.8 261.2 283.1 272.1 277.3 281.3 284.7 288.2 34 Government surplus, or deficit (-), national income and product accounts -257.8 -215.0 -132.9 -118.1 -130.1 -132.3 -120.4 n.a. 35 Federal -282.7 -241.4 -159.1 -145.1 -154.0 -161.1 -148.6 n.a. 36 State and local 24.8 26.3 26.2 27.0 23.9 28.8 28.2 n.a. 37 Gross investment 731.7 789.8 889.7 899.3 901.5 907.9 947.4 n.a. 38 Gross private domestic investment 788.3 882.0 1,032.9 1,034.4 1,055.1 1,075.6 1,107.8 1,087.4 39 Net foreign investment -56.6 -92.3 -143.2 -135.1 -153.6 -167.7 -160.4 n.a. 40 Statistical discrepancy 8.8 2.3 -30.9 -24.0 -21.1 -42.4 -58.6 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A53 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1994 1995 IItteemm ccrreeddiittss oorr ddeebbiittss 11999922 11999933 11999944 Ql Q2 Q3 Q4 Qlp 1 Balance on current account -61,548 -99,925 -151,245 -30,271 -37,986 -39,714 -43,276 -40,503 ? Merchandise trade balance -96,106 -132,618 -166,099 -36,490 -41,494 -44,627 -43,488 -45,052 3 Merchandise exports 440,352 456,823 502,485 118,445 122,730 127,384 133,926 138,059 4 Merchandise imports -536,458 -589,441 -668,584 -154,935 -164,224 -172,011 -177,414 -183,111 Military transactions, net -2,142 448 2,148 -31 376 1,124 679 621 6 Other service transactions, net 58,767 57,328 57,739 13,505 14,195 14,696 15,342 14,408 7 Investment income, net 10,080 9,000 -9,272 116 -2,285 -2,533 -4,571r -2,698 8 U.S. government grants -15,083 -16,311 -15,814 -2,378 -3,703 -3,488 -6,245 -2,954 9 U.S. government pensions and other transfers -3,735 -3,785 -4,247 -1,057 -1,063 -1,064 -1,063 -782 10 Private remittances and other transfers -13,330 -13,988 -15,700 -3,936 -4,012 -3,822 -3,931 -4,046 11 Change in U.S. government assets other than official reserve assets, net (increase, —) -1,661 -330 -322 401 491 -283 --993311 2233 12 Change in U.S. official reserve assets (increase, —) 3,901 -1,379 5,346 -59 3,537 -165 2,033 -5,318 N Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) 2,316 -537 -441 -101 -108 -111 -121 -867 15 Reserve position in International Monetary Fund -2,692 -44 494 -3 251 273 -27 -526 16 Foreign currencies 4,277 -797 5,293 45 3,394 -327 2,181 -3,925 17 Change in U.S. private assets abroad (increase, —) -68,115 -182,880 -130,875 -37,125 -10,001 -27,492 -56,258 -58,656 18 Bank-reported claims3 20,895 29,947 915 869 15,107 1,590 -16,651 -34,474 19 Nonbank-reported claims 45 1,581 -32,621 -1,891 -10,230 -8,051 -12,449 20 U.S. purchases of foreign securities, net -46,415 -141,807 -49,799 -16,457 -7,128 -10,976 -15,238 -5,778 21 U.S. direct investments abroad, net -42,640 -72,601 -49,370 -19,646 -7,750 -10,055 -11,920 -18,404 22 Change in foreign official assets in United States (increase, +) 40,466 72,146 39,409 10,977 9,162 19,691 -421 21,336 23 U.S. Treasury securities 18,454 48.952 30,723 857 5,919 16,477 7,470 9,949 24 Other U.S. government obligations 3,949 4,062 6,025 215 2,360 2,222 1,228 982 25 Other U.S. government liabilities4 2,180 1,706 2,211 851 174 494 692 -242 26 Other U.S. liabilities reported by U.S. banks' 16,571 14,841 2,923 9,807 1,674 1,298 -9,856 10,382 27 Other foreign official assets5 -688 2,585 -2,473 -753 -965 -800 45 265 28 Change in foreign private assets in United States (increase, +) 113,357 176,382 251,956 69,413 37,364 60,045 85,136 63,744 29 U.S. bank-reported liabilities3 15,461 20,859 114,396 31,839 28,231 19,650 34,676 8,647 30 U.S. nonbank-reported liabilities 13,573 10,489 -4,324 2,478 -2,047 487 -5,242 31 Foreign private purchases of U.S. Treasury securities, net 36,857 24,063 33,811 9,771 -7,317 5,428 25,929 29,670 32 Foreign purchases of other U.S. securities, net 29,867 79,864 58,625 21,117 12,551 14,762 10,195 15,647 33 Foreign direct investments in United States, net 17,599 41,108r 49,448 4,208 5,946 19,718 19,578 9,780 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy -26,399 35,985 -14,269 -13,336 -2,567 -12,082 13,718 19,374 36 Due to seasonal adjustment 5,274 587 -6,641 782 6,537 37 Before seasonal adjustment -26,399 35,985 -14,269 -18,610 -3,154 -5,441 12,936 13,017 MEMO Changes in official assets 38 U.S. official reserve assets (increase, —) 3,901 -1,379 5,346 -59 3,537 -165 22,,003333 --55,,331188 39 Foreign official assets in United States, excluding line 25 (increase, +) 38,286 70,440 37,198 10,126 8,988 19,197 -1,113 2211,,557788 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 5,942 -3,717 -1,184 -1,651 -4,217 33,,556644 11,,112200 --337799 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 • October 1995 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1994 1995 IItteemm 11999922 11999933 11999944 Dec. Jan. Feb. Mar. Apr. Mayr Junep 1 Goods and services, balance -39,480 -74,841 -106,212 -7,894 -10,616 -9,611 -9,793 -11,422 -11,049 -11,312 2 Merchandise -96,106 -132,618 -166,099 -13,272 -15,946 -14,427 -14,679 -16,547 -16,129 -16,415 3 Services 56,626 57,777 59,887 5,378 5,330 4,816 4,886 5,125 5,080 5,103 4 Goods and services, exports 618,969 644,578 701,201 63,185 61,989 62,093 64,820 63,994 65,238 64,481 5 Merchandise 440,352 456,823 502,485 46,172 44,772 45,482 47,805 46,946 48,154 47,390 6 Services 178,617 187,755 198,716 17,013 17,217 16,611 17,015 17,048 17,084 17,091 7 Goods and services, imports -658,449 -719,420 -807,413 -71,079 -72,605 -71,704 -74,613 -75,416 -76,287 -75,793 8 Merchandise -536,458 -589,441 -668,584 -59,444 -60,718 -59,909 -62,484 -63,493 -64,283 -63,805 9 Services -121,991 -129,979 -138,829 -11,635 -11,887 -11,795 -12,129 -11,923 -12,004 -11,988 MEMO 10 Balance on merchandise trade, Census basis -84,501 -115,568 -150,630 -12,010 -15,047 -13,506 -13,024 -14,954 -14,211 -14,651 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 Dec. Jan. Feb. Mar. Apr. May June Julyp 1 Total 77,719 71,323 73,442 74,335 76,027 81,439 86,761 88,756 90,549 90,063 91,534 2 Gold stock, including Exchange Stabilization Fund1 11,057 11,056 11,053 11,051 11,050 11,050 11,053 11,055 11,054 11,054 11,053 3 Special drawing rights2,3 11,240 8,503 9,039 10,039 10,154 11,158 11,651 11,743 11,923 11,869 11,487 4 Reserve position in International Monetary Fund2 9,488 11,759 11,818 12,030 12,120 12,853 13,418 14,206 14,278 14,276 14,761 5 Foreign currencies4 45,934 40,005 41,532 41,215 42,703 46,378 50,639 51,752 53,294 52,864 54,233 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 Dec. Jan. Feb. Mar. Apr. May June Julyp 1 Deposits 968 205 386 250 185 188 370 166 227 167 190 Held in custody 2 U.S. Treasury securities2 281,107 314,481 379,394 441,866 439,139 447,206 459,694 469,482 474,181 482,506 505,613 3 Earmarked gold3 13,303 13,118 12,327 12,033 12,033 12,033 11,964 11,897 11,800 11,725 11,728 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 Apr. May 1 Total1 412,624 483,002 520,278 517,028 527,311 542,742r 552,394r 560,149r By type 2 Liabilities reported by banks in the United States' 54,967 72,731 74,109 80,326 83,67 lr 85,348r 84,733r 3 U.S. Treasury bills and certificates3 104,596 139,570 133,014 134,341 141,716 146,417 154,575 U.S. Treasury bonds and notes 4 Marketable 210,931 212,237 254,059 255,888 257,998 262,020 265,164 263,354 5 Nonmarketable4 v 4,532 5,652 6,109 6,137 6,095 6,135 6,174 6,209r 6 US. securities other than U.S. Treasury securities' 37,598 44,205 47,809 47,880 48,551 49,200 49,291 51,278 By area 7 Europe' 189,230 207,121 215,024 212,376 213,876 218,355 216,537 217,593r 8 Canada 13,700 15,285 17,235 18,041 18,655 19,268 19,248 19,631 9 Latin America and Caribbean 37,973 55,898 41,192 36,982 42,201 39,847r 42,476' 44,728r 10 Asia 164,690 197,702 236,819 240,019 244,650 256,849 266,093 270,523 11 Africa 3,723 4,052 4,179 4,335 4,066 4,583 4,200 4,281 12 Other countries6 3,306 2,942 5,827 5,273 3,861 3,838 3,838 3,391 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 US. Department of the Treasury data and on data reported to the foreign currencies through 1974) and Treasury bills issued to official institutions of department by banks (including Federal Reserve Banks) and securities dealers in the foreign countries. United States, and on the 1989 benchmark survey of foreign portfolio investment in the 4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds and United States. notes payable in foreign currencies; zero coupon bonds are included at current value. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United 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 73,016 83,343 89,475 96,190 2 Banks' claims 73,195 62,799 60,663 56,852 63,446 59,711 72,468 3 Deposits 26,192 24,240 20,289 21,562 20,493 19,445 24,256 4 Other claims 47,003 38,559 40,374 35,290 42,953 40,266 48,212 5 Claims of banks' domestic customers2 3,398 4,432 7,320 6,734 7,367 12,229 11,487 1. Data on claims exclude foreign currencies held by US. 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 • October 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 Dec. Jan. Feb. Mar. Apr. May Junep BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 810,259 925,418 1,017,034 1,017,034 1,012,916 1,020,092 l,029,959r l,036,255r 1,042,736 1,054,720 2 Banks' own liabilities 606,444 625,665 721,751 721,751 724,503 725,495 723,876r 719,727' 724,150 733,081 3 Demand deposits 21,828 21,573 23,373 23,373 23,424 24,058 22,656 22,916 23,526 22,107 4 Time deposits2 160,385 175,078 186,363 186,363 187,988 185,726 184,218r 180,666' 185,330 194,068 5 Other3 93,237 110,635 115,269 115,269 124,844 125,641 120,129 123,072 126,869 120,716 6 Own foreign offices4 330,994 318,379 396,746 396,746 388,247 390,070 396,873 393,073 388,425 396,190 7 Banks' custodial liabilities5 203,815 299,753 295,283 295,283 288,413 294,597 306,083 316,528' 318,586 321,639 8 U.S. Treasury bills and certificates6 127,644 176,739 162,825 162,825 156,670 160,353 170,138 175,540 182,046 181,857 9 Other negotiable and readily transferable instruments7 21,974 36,289 42,177 42,177 40,502 43,378 44,921 48,278' 40,331 44,956 10 Other 54,197 86,725 90,281 90,281 91,241 90,866 91,024 92,710 96,209 94,826 11 Nonmonetary international and regional organizations8.. . 9,350 10,936 8,506 8,506 9,821 8,291 9,263 8,690 8,510 8,987 12 Banks' own liabilities 6,951 5,639 8,076 8,076 9,355 7,642 8,639 7,527 7,543 8,183 13 Demand deposits 46 15 29 29 24 35 31 214 34 89 14 Time deposits2 3,214 2,780 3,198 3,198 3,715 3,484 3,899 3,954 3,491 4,329 15 Other3 3,691 2,844 4,849 4,849 5,616 4,123 4,709 3,359 4,018 3,765 16 Banks' custodial liabilities5 2,399 5,297 430 430 466 649 624 1,163 967 804 17 U.S. Treasury bills and certificates6 1,908 4,275 281 281 280 407 314 763 510 312 18 Other negotiable and readily transferable instruments7 486 1,022 149 149 181 242 307 400 456 492 19 Other 5 0 0 0 5 0 3 0 1 0 20 Official institutions9 159,563 220,908 212,301 212,301 207,123 214,667 225,387r 231,765' 239,308 245,990 21 Banks' own liabilities 51,202 64,231 59,280 59,280 62,097 67,314 69,170r 67,783' 68,848 73,019 22 Demand deposits 1,302 1,601 1,564 1,564 1,598 1,587 1,705 1,485 1,575 1,401 23 Time deposits2 17,939 21,654 23,211 23,211 22,673 25,384 23,899r 25,792' 27,486 27,412 24 Other3 31,961 40,976 34,505 34,505 37,826 40,343 43,566 40,506 39,787 44,206 25 Banks' custodial liabilities5 108,361 156,677 153,021 153,021 145,026 147,353 156,217 163,982 170,460 172,971 26 U.S. Treasury bills and certificates6 104,596 151,100 139,570 139,570 133,014 134,341 141,716 146,417 154,575 154,517 27 Other negotiable and readily transferable instruments7 3,726 5,482 13,245 13,245 11,972 12,943 14,351 17,473 15,771 18,325 28 Other 39 95 206 206 40 69 150 92 114 129 29 Banks10 547,320 592,208 681,727 681,727 678,182 678,595 685,280r 681,065' 679,753 685,753 30 Banks' own liabilities 476,117 478,792 567,776 567,776 564,116 561,898 565,23 lr 558,650' 560,248 566,165 31 Unaffiliated foreign banks 145,123 160,413 171,030 171,030 175,869 171,828 168,358r 165,577' 171,823 169,975 32 Demand deposits 10,170 9,719 10,628 10,628 10,243 10,954 10,788 10,667 11,365 10,451 33 Time deposits2 90,296 105,192 111,460 111,460 112,178 107,429 107,657' 99,079' 102,280 110,350 34 Other3 44,657 45,502 48,942 48,942 53,448 53,445 49,913 55,831 58,178 49,174 35 Own foreign offices4 330,994 318,379 396,746 396,746 388,247 390,070 396,873 393,073 388,425 396,190 36 Banks' custodial liabilities5 71,203 113,416 113,951 113,951 114,066 116,697 120,049 122,415' 119,505 119,588 37 U.S. Treasury bills and certificates6 11,087 10,712 11,218 11,218 10,992 12,328 15,723 15,717 14,437 15,022 38 Other negotiable and readily transferable instruments7 7,555 17,020 14,234 14,234 14,137 15,232 15,254 15,815' 10,955 11,409 39 Other 52,561 85,684 88,499 88,499 88,937 89,137 89,072 90,883 94,113 93,157 40 Other foreigners 94,026 101,366 114,500 114,500 117,790 118,539 110,029' 114,735' 115,165 113,990 41 Banks' own liabilities 72,174 77,003 86,619 86,619 88,935 88,641 80,836' 85,767' 87,511 85,714 42 Demand deposits 10,310 10,238 11,152 11,152 11,559 11,482 10,132 10,550 10,552 10,166 43 Time deposits2 48,936 45,452 48,494 48,494 49,422 49,429 48,763' 51,841' 52,073 51,977 44 Other3 12,928 21,313 26,973 26,973 27,954 27,730 21,941 23,376 24,886 23,571 45 Banks' custodial liabilities5 21,852 24,363 27,881 27,881 28,855 29,898 29,193 28,968 27,654 28,276 46 U.S. Treasury bills and certificates6 10,053 10,652 11,756 11,756 12,384 13,277 12,385 12,643 12,524 12,006 47 Other negotiable and readily transferable instruments7 10,207 12,765 14,549 14,549 14,212 14,961 15,009 14,590 13,149 14,730 48 Other 1,592 946 1,576 1,576 2,259 1,660 1,799 1,735 1,981 1,540 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 9,111 17,567 17,895 17,895 16,442 17,137 16,759 17,651 11,938 11,539 1. Reporting banks include all types of depository institutions, as well as some brokers 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to and dealers. official institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in "Other 7. Principally bankers acceptances, commercial paper, and negotiable time certificates negotiable and readily transferable instruments." of deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the Inter- 4. For U.S. banks, includes amounts owed to own foreign branches and foreign American Development Bank, and the Asian Development Bank. Excludes "holdings of subsidiaries consolidated in quarterly Consolidated Reports of Condition filed with bank dollars" of the International Monetary Fund. regulatory agencies. For agencies, branches, and majority-owned subsidiaries of foreign 9. Foreign central banks, foreign central governments, and the Bank for International banks, consists principally of amounts owed to the head office or parent foreign bank, and Settlements. to foreign branches, agencies, or wholly owned subsidiaries of the head office or parent 10. Excludes central banks, which are included in "Official institutions." foreign bank. 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A57 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1994 1995 IItteemm 11999922 11999933 11999944 Dec. Jan. Feb. Mar. Apr. May Junep AREA 50 Total, all foreigners 810,259 925,418 1,017,034 1,017,034 1,012,916 1,020,092 l,029,959r l,036,255r l,042,736r 1,054,720 51 Foreign countries 800,909 914,482 1,008,528 1,008,528 1,003,095 1,011,801 l,020,696r l,027,565r 1,034,226' 1,045,733 5? Europe 307,670 377,193 393,021 393,021 393,767 386,599 380,685 367,143 375,743 372,178 53 Austria 1,611 1,917 3,649 3,649 3,236 4,021 4,012 4,030 3,963 3,858 54 Belgium and Luxembourg 20,567 28,621 21,758 21,758 21,679 22,094 23,886 22,813 25,673 21,044 55 Denmark 3,060 4,517 2,784 2,784 2,662 1,971 2,396 2,567 2,811 2,432 56 Finland 1,299 1,872 1,436 1,436 2,403 1,754 1,223 2,029 1,709 1,456 57 France 41,411 39,746 44,971 44,971 42,464 44,314 41,300 38,410 40,907 45,595 58 Germany 18,630 26,613 27,175 27,175 28,521 27,497 28,276 28,453 31,939 33,348 59 Greece 913 1,519 1,393 1,393 1,234 2,065 2,264 2,195 2,199 2,365 60 Italy 10,041 11,759 10,882 10,882 10,269 12,021 8,686 9,417 9,815 10,373 61 Netherlands 7,365 16,096 16,723 16,723 15,629 15,891 15,784 12,545 14,623 11,446 67, Norway 3,314 2,966 2,338 2,338 2,309 2,147 2,066 1,374 1,289 1,305 63 Portugal 2,465 3,366 2,846 2,846 2,863 4,007 2,810 2,940 2,860 2,652 64 Russia 577 2,511 2,714 2,714 2,047 2,642 3,469 5,011 7,042 7,177 65 Spain 9,793 20,493 14,655 14,655 15,149 11,106 11,675 9,859 9,827 10,543 66 Sweden 2,953 2,572 3,093 3,093 2,258 2,247 2,474 1,801 1,445 3,344 67 Switzerland 39,440 41,561 41,881 41,881 39,518 40,100 39,355 41,258 39,986' 47,383 68 Turkey 2,666 3,227 3,341 3,341 3,621 2,701 2,513 3,624 3,188 3,256 69 United Kingdom 111,805 133,936 163,577 163,577 173,906 162,638 159,908 152,462' 149,451' 139,125 70 Yugoslavia11 504 570 245 245 261 258 211 222 229 220 71 Other Europe and other former U.S.S.R.12 29,256 33,331 27,760 27,760 23,938 27,325 28,477 26,133R 26,787' 25,256 72 Canada 22,420 20,229 24,612 24,612 26,503 26,568 27,034 28,563 27,731' 29,237 73 Latin America and Caribbean 317,228 361,660 422,720 422,720 410,039 421,335 421,976 431,013R 430,622' 444,059 74 Argentina 9,477 14,477 17,199 17,199 12,790 11,886 9,978 10,154 10,368 10,873 75 Bahamas 82,284 73,800 103,684 103,684 95,227 98,833 100,370 97,301R 92,523' 96,913 76 Bermuda 7,079 7,841 8,467 8,467 8,906 8,554 8,798 8,815R 8,539' 7,156 77 Brazil 5,584 5,301 9,140 9,140 9,004 10,628 10,860 13,114 15,613 18,250 78 British West Indies 153,033 193,574 229,560 229,560 229,934 233,318 235,839 243,707' 242,488' 252,155 79 Chile 3,035 3,183 3,114 3,114 2,966 3,327 3,587 3,446 2,958 3,488 80 Colombia 4,580 3,171 4,579 4,579 4,309 4,037 3,644 3,598 3,432 3,276 81 Cuba 3 33 13 13 12 5 5 6 5 5 8? Ecuador 993 880 873 873 1,340 1,511 1,117 1,054 1,050 1,179 83 Guatemala 1,377 1,207 1,121 1,121 1,057 1,079 1,062 1,094 1,071 1,130 84 Jamaica 371 410 529 529 447 464 491 422 542 449 85 Mexico 19,454 28,018 12,243 12,243 12,608 16,770 15,750 17,246 18,263 19,248 86 Netherlands Antilles 5,205 4,686 4,530 4,530 3,834 4,495 4,013 4,076 6,013' 3,990 87 Panama 4,177 3,582 4,542 4,542 4,836 4,281 4,361 4,810 5,002 4,308 88 Peru 1,080 926 899 899 901 892 893 931 1,014 997 89 Uruguay 1,955 1,611 1,594 1,594 1,798 1,610 1,754 1,930 2,105 2,030 90 Venezuela 11,387 12,786 13,975 13,975 13,461 12,970 12,632 12,130 12,416' 11,248 91 Other 6,154 6,174 6,658 6,658 6,609 6,675 6,822 7,179 7,220' 7,364 9? 143,540 144,575 155,629 155,629 159,796 166,066 178,400r 187,621' 187,059' 188,513 China 93 People's Republic of China 3,202 4,011 10,066 10,066 12,911 15,661 12,017 12,138 9,459 10,579 94 Republic of China (Taiwan) 8,408 10,627 9,825 9,825 9,168 9,941 10,021 9,630 9,187 9,745 95 Hong Kong 18,499 17,178 17,165 17,165 18,446 18,150 19,888r 20,069' 22,987' 22,976 96 India 1,399 1,114 2,338 2,338 2,296 2,119 2,354 2,194 1,942 2,105 97 Indonesia 1,480 1,986 1,587 1,587 1,612 1,957 2,107 1,696 2,632 2,119 98 Israel 3,773 4,435 5,155 5,155 5,471 4,953 5,003 5,411 5,331 4,573 99 Japan 58,435 61,466 64,256 64,256 61,878 63,200 77,846 84,761 83,180 83,348 100 Korea (South) 3,337 4,913 5,124 5,124 4,781 4,175 4,357 4,747 5,034 4,996 101 Philippines 2,275 2,035 2,714 2,714 2,616 2,363 2,297 2,257 2,730' 2,539 10? Thailand 5,582 6,137 6,466 6,466 8,226 9,906 9,564 10,416 11,595 11,485 103 Middle Eastern oil-exporting countries13 21,437 15,824 15,475 15,475 16,189 14,935 15,516 15,730 15,639 16,871 104 Other 15,713 14,849 15,458 15,458 16,202 18,706 17,430 18,572 17,343' 17,177 105 5,884 6,633 6,511 6,511 6,363 6,203 6,817 7,218 8,030' 8,012 106 Egypt 2,472 2,208 1,867 1,867 1,749 1,830 1,781 2,102 2,045 2,143 107 Morocco 76 99 97 97 92 73 70 66 73 90 108 South Africa 190 451 433 433 285 400 706 401 542 596 109 Zaire 19 12 9 9 10 10 9 12 10 18 110 Oil-exporting countries14 1,346 1,303 1,343 1,343 1,409 1,122 1,599 1,328 1,303 1,418 111 Other 1,781 2,560 2,762 2,762 2,818 2,768 2,652 3,309 4,057' 3,747 117 Other 4,167 4,192 6,035 6,035 6,627 5,030 5,784 6,007 5,041 3,734 113 Australia 3,043 3,308 5,141 5,141 5,395 4,351 5,024 4,912 4,256 2,944 114 Other 1,124 884 894 894 1,232 679 760 1,095 785 790 115 Nonmonetary international and regional organizations.. . 9,350 10,936 8,506 8,506 9,821 8,291 9,263 8,690 8,510' 8,987 116 International15 7,434 6,851 7,437 7,437 8,455 7,138 8,092 7,153 6,531' 7,335 117 Latin American regional16 1,415 3,218 613 613 865 582 576 666 1,067 804 118 Other regional17 501 867 456 456 501 571 595 871 912 848 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 14. Comprises Algeria, Gabon, Libya, and Nigeria. 12. Includes the Bank for International Settlements. Since December 1992, has 15. Principally the International Bank for Reconstruction and Development. Excludes included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and "holdings of dollars" of the International Monetary Fund. Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United 17. Asian, African, Middle Eastern, and European regional organizations, except the Arab Emirates (Trucial States). Bank for International Settlements, which is included in "Other Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • October 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 Dec. Jan. Feb. Mar. Apr.' May Junep 1 Total, all foreigners 499,437 484,689 480,962 480,962 482,534 475,227 489,877r 479,109 481,410 515,625 2 Foreign countries 494,355 482,284 476,371 476,371 478,952 474,343 486,143r 476,172 479,788 513,080 3 Europe 123,377 121,934 123,669 123,669 125,768 122,435 126,622r 121,791 121,986 127,605 4 Austria 331 413 692 692 350 425 589 461 756 581 5 Belgium and Luxembourg 6,404 6,529 6,649 6,649 5,553 4,816 7,372r 8,425 8,051 5,137 6 Denmark 707 382 1,029 1,029 478 636 723 549 508 598 7 Finland 1,418 594 691 691 716 452 564 700 431 394 8 France 14,723 11,537 12,244 12,244 12,702 11,948 13,279r 12,878 13,832 15,100 y Germany 4,222 7,693 6,652 6,652 8,460 7,640 7,009 7,090 6,574 7,896 10 Greece 717 679 592 592 668 751 601r 550 407 442 n Italy 9,047 8,835 6,041 6,041 6,609 6,538 6,399 6,209 6,219 6,764 12 Netherlands 2,468 3,063 3,709 3,709 3,741 44,,220000 3,163r 3,527 5,978 4,337 13 Norway 355 396 504 504 1,069 998888 1,442 1,295 1,382 1,019 14 Portugal 325 834 938 938 988 1,045 907 915 990 1,208 15 Russia 3,147 2,310 949 949 1,148 759 770 657 511 508 16 Spain 2,755 2,761 3,529 3,529 2,941 2,800 3,066 2,076 2,138 3,564 17 Sweden 4,923 4,082 4,096 4,096 3,826 4,038 3,372 3,522 3,319 2,934 18 Switzerland 4,717 6,565 7.490 7,490 9,020 8,056 7,839' 7,383 7,615 10,275 19 Turkey 962 1,300 874 874 560 882 690 810 722 757 20 United Kingdom 63,430 61,641 65,560 65,560 64,933 64,650 67,559r 63,344 61,258 64,814 21 Yugoslavia2 569 536 265 265 265 265 247 247 248 229 22 Other Europe and other former U.S.S.R.3 2,157 1,784 1,165 1,165 1,741 1,546 1,031r 1,153 1,047 1,048 23 Canada 13,845 18,534 18,030 18,030 18,859 18,933 20,235r 17,440 20,520 19,678 24 Latin America and Caribbean 218,078 223,345 221,388 221,388 221,874 220,111 224,106r 224,136 222,562 241,004 25 Argentina 4,958 4.416 5,788 5,788 5,837 6,312 6,253 6,142 6,316 6,550 26 Bahamas 60,835 63,256 66,042 66,042 64,728 63,877 65,105 64,352 62,211 62,924 27 Bermuda 5,935 8,059 7,526 7,526 14,594 10,944 8,522 11,423 10,202 7,738 28 Brazil 10,773 11,813 9,485 9,485 9,744 10,016 10,751 10,760 11,039 11,360 29 British West Indies 101,507 98,661 95,744 95,744 90,577 91,924 96,38 lr 94,029 95,155 113,633 30 Chile 3,397 3,619 3,794 3,794 3,866 4,207 4,348 4,247 3,867 4,319 31 Colombia 2,750 3,179 4,003 4,003 3,816 3,818 3,983 3,928 4,034 4,030 32 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 884 680 680 680 707 659 567 565 663 767 34 Guatemala 262 288 366 366 346 349 379 359 353 344 35 Jamaica 162 195 254 254 253 278 275 262 258 263 36 Mexico 14,991 15,864 17,672 17,672 17,338 17,216 17,187r 17,182 17,375 17,277 37 Netherlands Antilles 1,379 2,682 1,055 1,055 1,205 1,437 1,187 1,333 1,778 2,065 38 Panama 4,654 2,893 2,179 2,179 2,155 2,340 2,470r 2,507 2,433 2,683 39 Peru 730 656 996 996 1,057 1,117 1,096 1,116 1,095 1,363 40 Uruguay 936 954 486 486 420 390 344 345 377 355 41 Venezuela 2,525 2,907 1,828 1,828 1,705 1,725 1,649 1,679 1,662 1,638 42 Other 1,400 3,223 3,490 3,490 3,526 3,502 3,609 3,907 3,744 3,695 43 131,789 111,720 107,114 107,114 105,673 110066,,778888 110099,,443388'' 106,678 108,642 111188,,446622 China 44 People's Republic of China 906 2,271 845 845 933 869 841 980 879 1,144 45 Republic of China (Taiwan) 2,046 2,623 1,381 1,381 1,245 1,213 1,549' 1,534 1,519 1,794 46 Hong Kong 9,642 10,872 9,237 9,237 10,271 11,285 14,404' 11,603 12,068 14,830 47 India 529 589 990 990 1,103 1,059 1,039 1,139 1,126 1,157 48 Indonesia 1,189 1,527 1,462 1,462 1,486 1,424 1,513' 1,463 1,427 1,538 49 Israel 820 826 692 692 672 683 811 683 783 949 50 Japan 79,172 59,945 59,230 59,230 55,268 57,191 55,534' 55,176 58,403 60,990 51 Korea (South) 6,179 7,536 10,276 10,276 10,848 10,754 12,284 11,913 12,203 12,564 52 Philippines 2,145 1,409 636 636 564 548 550' 496 532 915 53 Thailand 1,867 2,170 2,902 2,902 2,880 2,635 2,778 2,740 2,752 2,685 54 Middle Eastern oil-exporting countries4 18,540 15,109 13,732 13,732 14,044 13,341 13,069 13,292 11,643 12,570 55 Other 8,754 6,843 5,731 5,731 6,359 5,786 5,066 5,659 5,307 7,326 56 4,279 3,857 3,008 3,008 2,942 2,902 2,875' 2,741 2,751 2,918 57 Egypt 186 196 225 225 227 234 205 181 237 204 58 Morocco 441 481 429 429 415 442 424 440 454 686 59 South Africa 1,041 633 665 665 657 596 644 584 579 563 60 Zaire 4 4 2 2 2 2 2 2 2 2 61 Oil-exporting countries5 1.002 1,129 842 842 825 772 731 700 658 657 62 Other 1,605 1,414 845 845 816 856 869' 834 821 806 63 Other 2,987 2,894 3,162 3,162 3,836 3,174 2,867' 3,386 3,327 3,413 64 Australia 2,243 2,071 2,219 2,219 2,198 1,912 1,759' 1,805 1,914 2,045 65 Other 744 823 943 943 1,638 1,262 1,108 1,581 1,413 1,368 66 Nonmonetary international and regional organizations6. . . 5,082 2,405 4,591 4,591 3,582 884 3,734 2,937 1,622 2,545 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 11999944 Dec. Jan. Feb. Mar.r Apr.r May Junep 1 Total 559,495 538,471 556,191 556,191 571,711 ?, Banks' claims 499,437 484,689 480,962 480,962 482,534 475,227 489,877 479,109 481,410 515,625 3 Foreign public borrowers 31,367 29,095 23,470 23,470 24,100 18,181 23,712 22,173 19,077 23,124 4 Own foreign offices2 303,991 284,310 283,135 283,135 278,928 279,276 292,153 282,659 286,056 300,461 5 Unaffiliated foreign banks 109,342 100,030 110,862 110,862 104,330 105,383 104,729 104,244 103,280 110,555 6 Deposits 61,550 48,841 59,065 59,065 54,445 54,145 53,178 54,648 51,095 58,286 7 Other 47,792 51,189 51,797 51,797 49,885 51,238 51,551 49,596 52,185 52,269 8 All other foreigners 54,737 71,254 63,495 63,495 75,176 72,387 69,283 70,033 72,997 81,485 9 Claims of banks' domestic customers3 60,058 53,782 75,229 75,229 81,834 10 Deposits 15,452 21,111 36,190 36,190 36,528 11 Negotiable and readily transferable instruments4 31,474 18,991 25,731 25,731 30,823 12 Outstanding collections and other claims 13,132 13,680 13,308 13,308 14,483 MEMO 13 Customer liability on acceptances 8,655 7,829 8,313 8,313 8,393 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 38,623 26,364 27,185 27,185 27,459 2288,,772266 34,303 2266,,226644 2299,,000077 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 States' 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.r 1 Total 195,302 195,119 199,844 190,777 193,973 197,587 197,410 By borrower 2 Maturity of one year or less 162,573 163,325 170,134 164,960 167,271 171,949 169,082 3 Foreign public borrowers 21,050 17,813 17,765 13,244 17,370 15,530 15,739 4 All other foreigners 141,523 145,512 152,369 151,716 149,901 156,419 153,343 5 Maturity of more than one year 32,729 31,794 29,710 25,817 26,702 25,638 28,328 6 Foreign public borrowers 15,859 13,266 10,809 8,053 7,385 7,697 7,694 7 All other foreigners 16,870 18,528 18,901 17,764 19,317 17,941 20,634 By area Maturity of one year or less 8 Europe 51,835 53,300 56,574 51,153 58,784 56,500 53,824 9 Canada 6,444 6,091 7,664 8,278 7,212 7,266 7,352 10 Latin America and Caribbean 43,597 50,376 58,948 59,723 57,782 60,031 62,958 11 Asia 51,059 45,709 41,335 39,036 36,661 40,422 38,190 12 Africa 2,549 1,784 1,820 1,798 1,520 1,365 1,223 13 All other3 7,089 6,065 3,793 4,972 5,312 6,365 5,535 Maturity of more than one year 14 Europe 3,878 5,367 5,205 3,744 4,034 3,861 4,494 15 Canada 3,595 3,287 2,558 2,474 2,654 2,459 3,611 16 Latin America and Caribbean 18,277 15,312 13,976 12,551 12,665 12,220 12,989 17 Asia 4,459 5,038 5,587 4,763 5,047 4,732 5,165 18 Africa 2,335 2,380 1,936 1,850 1,840 1,553 1,592 19 All other3 185 410 448 435 462 813 477 1. Reporting banks include all types of depository institutions, as well as some brokers 2. Maturity is time remaining to maturity. 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 • October 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. 1 Total 343.6 346.5 361.1 377.1 388.4 404.5 474.1r 483.5r 484.5r 491.6r 538.6r 2 G-10 countries and Switzerland 137.6 132.9 142.5 150.0 153.3 161.8 179.8' 174.7' 183.2' 187.7' 204.4' 3 Belgium and Luxembourg .0 5.6 6.1 7.0 7.1 7.4 8.0 8.6' 9.6' 6.9 8.1 4 France 11.0 15.3 13.5 14.0 12.3 11.7 16.4 18.9 20.7 19.2 19.8 5 Germany 8.3 9.3 9.9 10.8 12.4 12.6 30.0' 25.3' 24.5' 24.0' 30.3 6 Italy 5.6 6.5 6.7 7.9 8.7 7.6 15.5 14.0 11.6 11.7' 10.6' 7 Netherlands .0 2.8 3.6 3.7 3.7 4.7 4.1 3.6 3.4' 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 69.9' 64.7' 78.3' 82.4' 87.8' 11 Canada 5.8 6.3 8.2 8.0 9.7 6.8 7.7 9.6 9.8 9.6 10.5 12 Japan 22.6 19.3 20.4 17.9 16.8 17.8 19.1' 20.5 16.4 20.8' 24.4' 13 Other industrialized countries 22.8 24.0 25.4 27.2 26.0 24.6 41.2' 41.6' 41.4' 45.2 43.6' 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 4.2' 4.5 4.8' 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 13.0' 13.6 13.9' 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 3.1 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 15.3' 12.6 25 OPEC2 14.5 16.1 16.6 15.7 14.8 17.4 22.6' 21.3' 21.4' 21.9' 19.1' 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 4.5' 4.3' 3.7' 3.6' 3.4' 28 Indonesia 2.7 3.0 3.1 3.1 2.8 3.3 3.3' 3.1' 3.2' 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 1.0' 1.0' 1.0 .8' .7 31 Non-OPEC developing countries 63.9 72.1 74.4 76.7 77.0 82.6 93.1' 93.6' 93.5' 97.7' 99.8' Latin America 32 Argentina 4.8 6.6 7.1 6.6 7.2 7.7 8.6' 9.6' 10.3' 10.8' 11.1' 33 Brazil 9.6 10.8 11.6 12.3 11.7 12.0 12.2' 11.5' 8.9' 8.0' 8.8' 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 17.8 18.4' 18.0' 19.2' 18.1' 17.5' 37 Peru .4 .5 .4 .4 .3 .4 .6 .6 .6 .5 .6 38 Other 2.1 2.6 2.7 2.7 2.7 3.0 2.8 2.8' 2.8' 2.7' 2.5' Asia China 39 People's Republic of China .3 .7 .6 1.6 .5 2.0 .8 .8 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 10.6' 41 India 3.0 3.2 3.1 3.1 2.9 3.2 3.6 3.7 3.8' 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 14.1 14.3 14.1 16.2 16.9 44 Malaysia 2.3 3.1 3.4 3.7 4.1 4.4 5.2 5.2 5.7 4.4 3.9' 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 3.8 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 1.0' .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 71.4 78.1 79.6' 76.0 69.6' 84.1' 57 Bahamas 11.9 6.9 9.7 7.1 12.7 10.8 13.7 13.4 13.6 9.8 12.2 58 Bermuda 2.3 6.2 4.1 4.5 5.5 8.1 8.5 6.1 5.4 7.4 8.4 59 Cayman Islands and other British West Indies 15.8 21.8 17.6 15.6 15.1 17.4 17.6 23.3 21.2 19.9 19.3' 60 Netherlands Antilles 1.2 1.1 1.6 2.5 2.8 2.6 3.5 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 1.8' 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 13.0 10.6 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 55.7' 69.4' 65.7' 66.7' 84.9' 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 States' Millions of dollars, end of period 1993 1994 1995 Type of liability, and area or country 11999911 11999922 11999933 Dec. Mar. June Sept. Dec. Mar. 1 Total 44,708 45,511 50,369 50,369 52,059 55,383 57,204 54,644 51,468 2 Payable in dollars 39,029 37,456 38,750 38,750 38,552 42,957 42,734 39,700 37,580 3 Payable in foreign currencies 5,679 8,055 11,619 11,619 13,507 12,426 14,470 14,944 13,888 By type 4 Financial liabilities 22,518 23,841 28,959 28,959 30,413 33,245 35,850 32,848 29,852 5 Payable in dollars 18,104 16,960 18,545 18,545 18,930 22,819 23,262 19,792 17,745 6 Payable in foreign currencies 4,414 6,881 10,414 10,414 11,483 10,426 12,588 13,056 12,107 7 Commercial liabilities 22,190 21,670 21,410 21,410 21,646 22,138 21,354 21,796 21,616 8 Trade payables 9,252 9,566 8,811 8,811 8,976 9,913 9,552 10,013 10,162 9 Advance receipts and other liabilities . . . 12,938 12,104 12,599 12,599 12,670 12,225 11,802 11,783 11,454 10 Payable in dollars 20,925 20,496 20,205 20,205 19,622 20,138 19,472 19,908 19,835 11 Payable in foreign currencies 1,265 1,174 1,205 1,205 2,024 2,000 1,882 1,888 1,781 By area or country Financial liabilities 12 Europe 12,003 13,387 18,810 18,810 20,510 23,689 23,792 20,870 16,804 13 Belgium and Luxembourg 216 414 175 175 525 524 661 495 612 14 France 2,106 1,623 2,539 2,539 2,606 1,590 2,241 1,727 2,046 15 Germany 682 889 975 975 1,214 939 1,467 1,961 1,755 16 Netherlands 1,056 606 534 534 564 533 648 552 633 17 Switzerland 408 569 634 634 1,200 631 633 688 883 18 United Kingdom 6,528 8,610 13,332 13,332 13,793 18,255 16,827 14,709 10,025 19 Canada 292 544 859 859 508 698 618 625 1,817 20 Latin America and Caribbean 4,784 4,053 3,359 3,359 3,554 3,125 3,139 3,021 3,024 21 Bahamas 537 379 1,148 1,148 1,158 1,052 1,112 926 931 22 Bermuda 114 114 0 0 120 115 15 80 149 23 Brazil 6 19 18 18 18 18 7 207 58 24 British West Indies 3,524 2,850 1,533 1,533 1,613 1,297 1,344 1,160 1,231 25 Mexico 7 12 17 17 14 13 15 0 10 26 Venezuela 4 6 5 5 5 5 5 5 5 27 Asia2 5,381 5,818 5,689 5,689 5,650 5,694 8,149 8,147 8,011 28 Japan 4,116 4,750 4,620 4,620 4,638 4,760 6,947 7,013 6,990 29 Middle Eastern oil-exporting countries 13 19 23 23 24 24 31 35 27 30 Africa 6 6 133 133 133 9 133 135 156 4 0 123 123 124 0 123 123 122 31 Oil-exporting countries 52 33 109 109 58 30 19 50 40 32 All other5 Commercial liabilities 8,701 7,398 6,835 6,835 6,550 6,921 6,867 6,855 6,906 33 Europe 248 298 239 239 251 254 287 231 273 34 Belgium and Luxembourg 1,039 700 655 655 554 712 742 763 696 35 France 1,052 729 684 684 577 670 552 611 510 36 Germany 710 535 688 688 628 649 674 723 576 37 Netherlands 575 350 375 375 388 473 391 335 389 38 Switzerland 2,297 2,505 2,047 2,047 2,151 2,311 2,351 2,450 2,857 39 United Kingdom 40 Canada 1,014 1,002 879 879 1,039 1,070 1,068 1,038 1,203 41 Latin America and Caribbean 1,355 1,533 1,666 1,666 1,908 2,007 1,790 1,865 1,541 42 Bahamas 3 3 21 21 8 2 6 19 8 43 Bermuda 310 307 350 350 493 418 200 345 265 44 Brazil 219 209 216 216 211 217 148 163 98 45 British West Indies 107 33 27 27 20 24 33 23 29 46 Mexico 307 457 483 483 556 705 673 576 512 47 Venezuela 94 142 126 126 150 194 192 279 273 48 Asia2 9,334 10,594 10,992 10,992 10,939 10,979 10,514 11,077 10,961 49 Japan 3,721 3,612 4,314 4,314 4,617 4,389 4,235 4,808 4,794 50 Middle Eastern oil-exporting countries 1,498 1,889 1,542 1,542 1,542 1,841 1,688 1,610 1,804 51 Africa 715 568 464 464 490 523 482 442 464 52 Oil-exporting countries 327 309 171 171 199 247 271 262 248 53 Other5 1,071 575 574 574 720 638 633 519 541 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 • October 1995 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1993 1994 1995 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999911 11999922 11999933 Dec. Mar. June Sept. Dec. Mar. 1 Total 45,262 45,073 48,197 48,197 49,125 48,436 50,320 55,783 51,372r 2 Payable in dollars 42,564 42,281 44,920 44,920 45,746 44,763 46,839 52,641 47,047r 3 Payable in foreign currencies 2,698 2,792 3,277 3,277 3,379 3,673 3,481 3,142 4,325r By type 4 Financial claims 27,882 26,509 27,528 27,528 28,461 27,064 28,672 32,714 27,920 5 Deposits 20,080 17,695 15,681 15,681 15,973 15,769 16,570 18,645 16,573 6 Payable in dollars 19,080 16,872 15,146 15,146 15,471 15,164 16,009 18,194 15,979 7 Payable in foreign currencies 1,000 823 535 535 502 605 561 451 594 8 Other financial claims 7,802 8,814 11,847 11,847 12,488 11,295 12,102 14,069 11,347 9 Payable in dollars 6,910 7,890 10,655 10,655 11,301 9,972 10,914 13,009 10,180 10 Payable in foreign currencies 892 924 1,192 1,192 1,187 1,323 1,188 1,060 1,167 11 Commercial claims 17,380 18,564 20,669 20,669 20,664 21,372 21,648 23,069 23,452r 12 Trade receivables 14,468 16,007 17,666 17,666 17,769 18,552 18,867 20,204 20,503r 13 Advance payments and other claims 2,912 2,557 3,003 3,003 2,895 2,820 2,781 2,865 2,949r 14 Payable in dollars 16,574 17,519 19,119 19,119 18,974 19,627 19,916 21,438 20,888r 15 Payable in foreign currencies 806 1,045 1,550 1,550 1,690 1,745 1,732 1,631 2,564r By area or country Financial claims 16 Europe 13,441 9,331 7,249 7,249 7,257 6,698 8,042 7,638 7,222 17 Belgium and Luxembourg 13 8 134 134 125 83 114 86 69 18 France 269 764 826 826 790 995 831 800 805 19 Germany 283 326 526 526 466 459 413 540 443 20 Netherlands 334 515 502 502 503 472 503 429 606 21 Switzerland 581 490 530 530 535 509 747 523 490 22 United Kingdom 11,534 6,252 3,535 3,535 3,699 3,062 4,326 4,395 3,867 23 Canada 2,642 1,833 2,032 2,032 2,207 3,080 3,164 3,801 4,090 24 Latin America and Caribbean 10,717 13,893 16,031 16,031 15,968 14,591 14,808 18,723 14,798 25 Bahamas 827 778 1,310 1,310 1,285 1,281 1,070 2,329 905 26 Bermuda 8 40 125 125 34 39 52 27 37 27 Brazil 351 686 654 654 672 466 411 520 487 28 British West Indies 9,056 11,747 12,536 12,536 12,704 11,792 12,143 14,802 12,574 29 Mexico 212 445 868 868 850 614 655 606 472 30 Venezuela 40 29 161 161 26 33 32 35 27 31 640 864 1,657 1,657 2,550 2,234 2,175 1,835 1,457 32 Japan 350 668 892 892 1,657 1,349 662 931 584 33 Middle Eastern oil-exporting countries2 5 3 3 3 5 2 19 141 4 34 Africa 57 83 99 99 76 74 87 249 77 35 Oil-exporting countries3 1 9 1 1 0 1 1 0 9 36 All other4 385 505 460 460 403 387 396 468 276 Commercial claims 37 Europe 8,193 8,451 9,097 9,097 8,772 8,925 8,783 9,579 9,078r 38 Belgium and Luxembourg 194 189 184 184 177 179 174 217 199 39 France 1,585 1,537 1,947 1,947 1,830 1,779 1,766 1,886 1,797 40 Germany 955 933 1,018 1,018 947 938 880 1,046 1,000 41 Netherlands 645 552 423 423 355 294 330 314 334 42 Switzerland 295 362 432 432 415 686 538 559 562 43 United Kingdom 2,086 2,094 2,369 2,369 2,342 2,434 2,490 2,554 2,41 lr 44 Canada 1,121 1,286 1,360 1,360 1,483 1,468 1,503 1,543 l,993r 45 Latin America and Caribbean 2,655 3,043 3,284 3,284 3,573 3,903 3,971 4,147 4,112r 46 Bahamas 13 28 11 11 13 18 34 9 16 47 Bermuda 264 255 182 182 222 295 246 234 202 48 Brazil 427 357 463 463 422 502 473 614 615' 49 British West Indies 41 40 71 71 58 67 49 83 58 50 Mexico 842 924 994 994 1,014 1,047 1,137 1,244 i,ior 51 Venezuela 203 345 296 296 296 305 394 355 291r 52 Asia 4,591 4,866 5,906 5,906 5,851 6,141 6,433 6,745 6,960r 53 Japan 1,899 1,903 2,173 2,173 2,353 2,359 2,448 2,497 2,121' 54 Middle Eastern oil-exporting countries2 620 693 716 716 668 616 616 700 685r 55 Africa 430 554 521 521 515 492 462 473 474r 56 Oil-exporting countries3 95 78 85 85 102 90 68 76 15' 57 Other4 390 364 501 501 470 443 496 582 835r 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 Jan.- Dec. Jan. Feb. Mar. Apr. May Junep June U.S. corporate securities STOCKS 1 Foreign purchases 319,664 350,558 204,031 28,094 24,999 29,443 35,332 30,082r 38,769 45,406 2 Foreign sales 298,086 348,648 201,723 29,727 25,893 29,685 37,653 29,206r 36,087 43,199 3 Net purchases, or sales (—) 21,578 1,910 2,308 -1,633 -894 -242 -2,321 876 2,682 2,207 4 Foreign countries 21,306 1,900 2,366 -1,635 -930 -197 -2,291 877 2,692 2,215 5 Europe 10,658 6,717 -1,328 -1,110 -516 -10 -1,304 165r 381 -44 6 France -103 -201 -757 -119 -255 -27 -250 -80 -66 -79 7 Germany 1,642 2,110 -1,468 -158 -157 -55 -243 -261 -528 -224 8 Netherlands -602 2,251 1,399 652 278 232 296 349 174 70 9 Switzerland 2,986 -30 -2,292 8 -389 -78 -475 -673 -476 -201 in United Kingdom 4,559 840 2,643 -1,265 253 -51 -309 1,125r 1,382 243 n Canada -3,213 -1,160 -1,039 175 129 27 -333 - 197r 75 -740 17 Latin America and Caribbean 5,719 -2,108 3,709 -577 991 766 -243 570 -26 1,651 13 Middle East' -321 -1,142 -355 -86 -22 -133 -73 59 -87 -99 14 Other Asia 8,198 -1,207 1,000 -171 -1,469 -851 -342 314 2,013 1,335 15 Japan 3,825 1,190 -2,096 -174 -860 -541 -321 29 86 -489 16 Africa 63 29 0 -25 -36 0 -10 -10 41 15 17 Other countries 202 771 379 159 -7 4 14 -24 295 97 18 Nonmonetary international and regional organizations 272 10 -58 2 3366 -45 --3300 -1 --1100 -8 BONDS2 19 Foreign purchases 283,824 291,084 136,027 18,931 19,247 22,789 25,390 18,163r 22,830 27,608 20 Foreign sales 217,824 229,520 96,024 14,702 12,626 16,354 17,552 14,111 16,609 18,772 21 Net purchases, or sales (-) 66,000 61,564 40,003 4,229 6,621 6,435 7,838 4,052r 6,221 8,836 22 Foreign countries 65,462 60,679 40,244 3,889 6,417 6,489 8,151 4,035r 6,309 8,843 73 Europe 22,587 38,708 32,481 2,711 6,807 6,037 4,976 2,27 r 4,944 7,446 74 France 2,346 242 -435 4 157 296 -85 -874 27 44 75 Germany 887 657 2,433 451 1,516 526 -176 -83 -17 667 76 Netherlands -290 3,322 134 28 -241 126 154 -37 191 -59 77 Switzerland -627 1,055 65 12 -85 304 -61 -87 124 -130 78 United Kingdom 19,686 33,283 30,353 1,929 5,416 4,800 5,248 3,396r 4,764 6,729 79 Canada 1,668 2,958 1,329 445 245 175 289 184 277 159 30 Latin America and Caribbean 15,691 5,442 2,008 662 -655 -480 1,285 889 678 291 31 Middle East1 3,248 771 870 -193 59 119 328 326 -26 64 37 Other Asia 20,846 12,153 3,284 240 -28 595 1,150 356 426 785 33 Japan 11,569 5,486 1,745 -174 -396 132 570 275 871 293 34 Africa 1,149 -7 57 8 8 -4 22 -11 -5 47 35 Other countries 273 654 215 16 -19 47 101 20 15 51 36 Nonmonetary international and regional organizations 538 885 -241 340 204 -54 -313 17 -88 -7 Foreign securities 37 Stocks, net purchases, or sales (-) -62,691 -47,232 -13,951 -2,359 -159 -1,086 -2,844 —2,148r -3,632 -4,082 38 Foreign purchases 245,490 386,942 165,428 26,332 26,303 27,154 28,995 24,485r 29,213 29,278 39 Foreign sales 308,181 434,174 179,379 28,691 26,462 28,240 31,839 26,633r 32,845 33,360 40 Bonds, net purchases, or sales ( —) -80,377 -9,332 -16,031 300 -802 -1,851 -1,189 -199' -4,294 -7,096 41 Foreign purchases 745,952 848,334 433,355 66,461 68,120 61,226 79,056 53,639r 75,190 96,124 42 Foreign sales 826,329 857,666 449,386 66,161 68,922 63,077 80,245 54,438r 79,484 103,220 43 Net purchases, or sales (—), of stocks and bonds .... -143,068 -56,564 -29,982 -2,059 -961 -2,937 -4,033 —2,947r -7,926 -11,178 44 Foreign countries -143,232 -57,084 -29,642 -2,814 -1,025 -2,773 -3,944 —3,103r -7,930 -10,867 45 Europe -100,872 -2,726 -16,566 -2,809 1,599 -1,290 -1,871 -1,902r -7,479 -5,623 46 Canada -15,664 -7,481 -2,919 1,643 -187 850 -1,150 -1,195 -5 -1,232 47 Latin America and Caribbean -7,600 -18,387 -3,299 373 -308 -2,496 -1,282 584 483 -280 48 -15,159 -24,272 -6,869 -2,026 -2,044 13 9 -533 -1,388 -2,926 49 Africa -185 -467 -179 -88 1 -116 85 -14 -68 -67 50 Other countries -3,752 -3,751 190 93 -86 266 265 -43 527 -739 51 Nonmonetary international and regional organizations 164 520 -340 755 64 -164 -89 156 4 -311 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, 2. Includes state and local government securities and securities of U.S. government Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • October 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 Jan.- Dec. Jan. Feb. Mar. Apr. May Junep June 1 Total estimated 23,552 78,796 76,389 11,752 9,578 14,103 9,211 6,400 14,519 22,578 2 Foreign countries 23,368 78,632 76,123 11,964 10,252 13,385 9,107 6,416 14,568 22,395 3 Europe -2,373 38,608 25,987 8,300 3,258 13,294 3,109 3,152 509 2,665 4 Belgium and Luxembourg 1,218 1,098 -306 434 134 107 51 62 -512 -148 5 Germany -9,976 5,709 -3,801 725 60 -543 1,461 1,216 -4,129 -1,866 6 Netherlands -515 1,254 3,017 156 2,388 -239 -7 -243 40 1,078 7 Sweden 1,421 794 296 61 -35 97 30 -70 211 63 8 Switzerland -1,501 481 77 681 141 165 -418 -173 353 9 9 United Kingdom 6,197 23,438 22,939 6,243 579 10,448 3,099 2,251 5,203 1,359 10 Other Europe and former U.S.S.R 783 5,834 3,765 0 -9 3,259 -1,107 109 -657 2,170 11 Canada 10,309 3,491 4,340 -559 3,177 1,486 434 -1,391 201 433 1? Latin America and Caribbean -4,561 -10,179 7,419 978 636 -3,268 -2,332 3,212 3,803 5,368 13 Venezuela 390 -319 794 91 -211 329 387 184 -16 121 14 Other Latin America and Caribbean -5,795 -20,493 6,117 74 3,028 -3,325 -3,358 2,189 2,425 5,158 15 Netherlands Antilles 844 10,633 508 813 -2,181 -272 639 839 1,394 89 16 20,582 47,042 37,391 3,640 3,577 1,730 8,445 1,189 9,845 12,605 17 Japan 17,070 29,518 23,290 2,067 3,444 2,316 4,167 1,487 6,291 5,585 18 Africa 1,156 240 276 58 -9 49 -9 -36 39 242 19 Other -1,745 -570 710 -453 -387 94 -540 290 171 1,082 20 Nonmonetary international and regional organizations 184 164 266 -212 -674 718 104 -16 -49 183 21 International -330 526 11 -131 -708 608 458 -294 356 -409 22 Latin American regional 653 -154 155 -3 -6 199 -367 228 -528 629 MEMO 23 Foreign countries 23,368 78,632 76,123 11,964 10,252 13,385 9,107 6,416 14,568 22,395 7.4 Official institutions 1,306 41,822 20,217 608 1,829 2,110 4,022 3,144 -1,810 10,922 25 Other foreign2 22,062 36,810 55,906 11,356 8,423 11,275 5,085 3,272 16,378 11,473 Oil-exporting countries 76 Middle East2 -8,836 -38 188 -405 -360 -89 152 733 -1,063 815 27 -5 0 2 -1 0 0 1 0 0 1 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of 3. Comprises Algeria, Gabon, Libya, and Nigeria. foreign countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest and Exchange Rates A65 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1 Percent per year, averages of daily figures Rate on Aug. 31, 1995 Rate on Aug. 31, 1995 Rate on Aug. 31, 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.. 3.5 Aug. 1995 Germany... 3.5 Aug. 1995 Norway 4.75 Feb. 1994 Belgium. 3.5 Aug. 1995 Italy 9.0 June 1995 Switzerland 2.5 Aug. 1995 Canada.. 6.59 Aug. 1995 Japan 1.0 Apr. 1995 United Kingdom 12.0 Sept. 1992 Denmark 5.0 Aug. 1995 Netherlands 3.5 Aug. 1995 France2 . 5.0 July 1994 1. Rates shown are mainly those at which the central bank either discounts or makes 2. Since February 1981, the rate has been that at which the Bank of France discounts advances against eligible commercial paper or government securities for commercial Treasury bills for seven to ten days. banks or brokers. For countries with more than one rate applicable to such discounts or advances, the rate shown is the one at which it is understood that the central bank transacts the largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES' Percent per year, averages of daily figures 1995 TTyyppee oorr ccoouunnttrryy 11999922 11999933 11999944 Jan. Feb. Mar. Apr. May June July 1 Eurodollars 3.70 3.18 4.63 6.14 6.15 6.13 6.03 5.89 5.79 5.79 2 United Kingdom 9.56 5.88 5.45 6.68 6.61 6.64 6.64 6.63 6.73 6.74 3 Canada 6.76 5.14 5.57 8.14 8.32 8.16 7.56 7.07 6.69 6.62 4 Germany 9.42 7.17 5.25 5.00 4.96 4.58 4.49 4.43 4.46 4.35 5 Switzerland 7.67 4.79 4.03 3.77 3.62 3.33 3.29 3.09 2.77 2.79 6 Netherlands 9.25 6.73 5.09 5.03 5.03 4.60 4.41 4.21 4.14 4.02 7 France 10.14 8.30 5.72 5.70 7.77 7.60 7.29 7.04 6.31 5.81 8 Italy 13.91 10.09 8.45 9.07 10.98 10.94 10.38 10.91 10.93 10.45 9 Belgium 9.31 8.10 5.65 5.33 6.21 5.22 5.16 4.62 4.52 4.41 10 Japan 4.39 2.96 2.24 2.27 2.11 1.55 1.31 1.16 .91 .82 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 • October 1995 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1995 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999922 11999933 11999944 Mar. Apr. May June July Aug. 1 Australia/dollar2 73.521 67.993 73.161 73.452 73.564 72.716 71.959 72.792 74.137 2 Austria/schilling 10.992 11.639 11.409 9.898 9.720 9.912 9.854 9.765 10.168 i Belgium/franc 32.148 34.581 33.426 29.035 28.419 29.009 28.790 28.562 29.735 4 Canada/dollar 1.2085 1.2902 1.3664 1.4077 1.3762 1.3609 1.3775 1.3612 1.3552 5 China, P.R./yuan 5.5206 5.7795 8.6404 8.4483 8.4421 8.3370 8.3288 8.3207 8.3253 6 Denmark/krone 6.0372 6.4863 6.3561 5.6281 5.4391 5.5194 5.4604 5.4073 5.6060 7 Finland/markka 4.4865 5.7251 5.2340 4.3967 4.2884 4.3386 4.3134 4.2592 4.3170 8 France/franc 5.2935 5.6669 5.5459 4.9756 4.8503 4.9869 4.9172 4.8307 4.9727 9 Germany/deutsche mark 1.5618 1.6545 1.6216 1.4061 1.3812 1.4096 1.4012 1.3886 1.4456 10 Greece/drachma 190.81 229.64 242.50 228.53 225.19 228.46 226.56 225.45 232.38 11 Hong Kong/dollar 7.7402 7.7357 7.7290 7.7318 7.7336 7.7351 7.7356 7.7385 7.7416 12 India/rupee 28.156 31.291 31.394 31.587 31.407 31.418 31.404 31.385 31.592 13 Ireland/pound2 170.42 146.47 149.69 159.76 162.80 161.98 162.87 163.96 160.25 14 Italy/lira 1,232.17 1,573.41 1,611.49 1,688.99 1,710.89 1,652.78 1,639.75 1,609.71 1,607.18 15 Japan/yen 126.78 111.08 102.18 90.52 83.69 85.11 84.64 87.40 94.74 16 Malaysia/ringgit 2.5463 2.5738 2.6237 2.5464 2.4787 2.4684 2.4396 2.4500 2.4813 17 Netherlands/guilder 1.7587 1.8585 1.8190 1.5774 1.5474 1.5779 1.5686 1.5557 1.6195 18 New Zealand/dollar2 53.792 54.127 59.358 64.598 66.723 66.740 66.947 67.417 65.687 19 Norway/krone 6.2142 7.1009 7.0553 6.2730 6.2050 6.2980 6.2387 6.1710 6.3438 20 Portugal/escudo 135.07 161.08 165.93 147.92 145.89 148.40 147.63 145.88 149.88 21 Singapore/dollar 1.6294 1.6158 1.5275 1.4216 1.3986 1.3947 1.3953 1.3984 1.4116 22 South Africa/rand 2.8524 3.2729 3.5526 3.6013 3.6035 3.6574 3.6627 3.6404 3.6402 23 South Korea/won 784.66 805.75 806.93 781.81 770.61 764.43 763.88 760.05 768.88 24 Spain/peseta 102.38 127.48 133.88 128.58 124.14 123.22 121.71 119.71 123.45 25 Sri Lanka/rupee 44.013 48.211 49.170 49.627 49.371 49.558 50.210 50.899 51.227 26 Sweden/krona 5.8258 7.7956 7.7161 7.2787 7.3455 7.3072 7.2631 7.1749 7.2383 27 Switzerland/franc 1.4064 1.4781 1.3667 1.1709 1.1384 1.1693 1.1588 1.1556 1.1962 28 Taiwan/dollar 25.160 26.416 26.465 26.102 25.491 25.537 25.784 26.278 27.234 29 Thailand/baht 25.411 25.333 25.161 24.760 24.572 24.663 24.672 24.755 24.960 30 United Kingdom/pound2 176.63 150.16 153.19 160.02 160.73 158.74 159.48 159.52 156.68 MEMO 31 United States/dollar3 86.61 93.18 91.32 83.69 81.81 82.73 82.27 81.90 84.59 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—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 ofU.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 October 1995 A68 Pro forma balance sheet and income statements for priced service operations March 31, 1992 August 1992 A80 June 30, 1992 October 1992 A70 March 31, 1995 August 1995 A76 June 30, 1995 October 1995 A72 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 Residential lending reported under the Home Mortgage Disclosure Act 1994 September 1995 A68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • October 1995 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 Item in I c T B l o u F t d a s i l ' n g o IB nl F y s 3 inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 1 Total assets4 764,039r 323,151' 582,058' 263,276 77,191' 33,444 65,726 18,134 2 Claims on nonrelated parties 684,29 lr 186,164' 515,903 150,021 72,710 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 US. 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 4400 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 33,,666600 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 386,967' 50,609' 261,578' 36,018 58,126' 8,981 38,841 1,371 14 Total securities, book value 88,984 11,839 81,355' 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) 41,521r 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 70 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 8,815' 2,781 7,558 2,430 615' 343 415 0 7? Commercial banks in United States 6,818' 275 6,013 75 158' 0 343 200 23 Other 24,398 850 23,412 651 165 115 729 0 74 Total loans, gross 298,133' 38,782' 180,318 25,385 53,905' 8,321 36,089 855 75 LESS: Unearned income on loans 150 12 95 7 36 2 7 0 26 EQUALS: Loans, net 297,982' 38,770' 180,223 25,377 53,869' 8,318 36,082 855 Total loans, gross, by category 77 Real estate loans 38,230' 262 21,716 95 1111,,117700'' 116666 33,,119900 00 78 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 00 00 00 00 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 24,985 788' 20,071 638 2,231 48 2,207 83 37 Commercial and industrial loans 179,159' 11,323' 100,681 8,313 30,907' 1,644 27,325 333 38 US. addressees (domicile) 157,328' 54 85,047' 41 28,103' 4 26,380' 0 39 Non-U.S. addressees (domicile) 21,831 11,269' 15,634' 8,272 2,804' 1,640 945' 333 40 Acceptances of other banks 676 61 497 54 39 0 67 0 41 US. 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 117744 6666 9977 2200 44 Loans for purchasing or carrying securities (secured and unsecured) 7,553 30 7,189 30 220011 00 6666 00 45 5,222 210 2,626 174 446 0 1,920 0 46 Assets held in trading accounts 36,472' 276 27,151' 276 1,024 0 8,297' 0 47 All other assets 68,136' 4,848 59,190' 3,887 4,651' 662 3,297' 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 .... 56,102' 4,848 50,630' 3,887 2,105' 662 2,904' 225 52 Net due from related depository institutions 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 79,747 n.a. 66,156 n.a. 44,,448811 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. 111133,,225555 n.a. 1155,,993333 n.a. 55,,004444 55 Total liabilities4 764,039' 323,151' 582,058r 263,276 77,191r 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 A69 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 I l B o u t F d a s i l n g I o B n F ly s exc T I l B o u t F d a s i l ng I o B n F ly s exc T I l B o u t F 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 103,383r 11,899 83,622 7,553 4,398 503 8,053' 20 59 U.S. addressees (domicile) 89,508r 78 75,841 78 2,595 0 7,191' 0 60 Non-U.S. addressees (domicile) 13,875r 11,821 7,781 7,475 1,803 503 8 62' 20 61 Commercial banks in United States (including IBFs) 28,156 64,191r 25,768 59,598' 360 2,378 1,537 1,978 6? U.S. branches and agencies of other foreign banks 15,119 59,135r 14,240 55,004' 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 8,852r 135,907' 8,468 126 888' 107 2,746 97' 5,313 65 Foreign branches of U.S. banks 3,26 lr 4,815 3,200 4,294 0 292 60' 124 66 Other banks in foreign countries 5,59 lr 131,092' 5,267 122,595' 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 6,070r 4,680 296 410 72 U.S. addressees (domicile) 4,333r 3,619 221' 404 73 Non-U.S. addressees (domicile) l,736r 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 S36' 632 39 2 78 Foreign branches of U.S. banks 3 2 0 0 79 Other banks in foreign countries 334' 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 5,710r 4,569 245 397 85 U.S. addressees (domicile) 4,197 3,556 186 391 86 Non-U.S. addressees (domicile) l,513r 1,013 58 6 87 Commercial banks in United States (including IBFs) 83 77 3 0 88 U.S. branches and agencies of other foreign banks 8 n.a. 6 n a. 0 n a. 0 n.a. 89 Other commercial banks in United States 75 70 3 0 90 Banks in foreign countries sor 605 38 2 91 Foreign branches of US. banks 3 2 0 0 92 Other banks in foreign countries 798' 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 97,313r 78,941 4,102 7,644 98 U.S. addressees (domicile) 85,175r 72,222 2,373 6,787' 99 Non-U.S. addressees (domicile) 12,138r 6,720 1,729 856' 100 Commercial banks in United States (including IBFs) 28,056 25,676 355 1,536 101 US. 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 8,016r 7,835 68 95r 104 Foreign branches of U.S. banks 3,258r 3,198 0 60' 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) 64,191' 59,598' 2,378 1,9 78 113 US. branches and agencies of other foreign banks 59,135' 55,004' 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 135,907' 1?6 888' 2,746 5,313 116 Foreign branches of U.S. banks 4,815 4,294 292 124 117 Other banks in foreign countries 131,092' 122,595' 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

A70 Special Tables • October 1995 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 in I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 170 Federal funds purchased and securities sold under agreements to repurchase 64,115 13,094 53,158 8,303 6,947 3,463 3,586' 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 1?7 Other commercial banks in United States 9,080r 241 6,576' 82 1,589 159 883 0 P3 Other 45,052r 9,524 40,500' 6,697 2,426 1,905 2,016' 915 124 Other borrowed money 106,160r 49,998' 61,094' 22,791' 34,035' 22,542' 8,348' 3,666' 175 Owed to nonrelated commercial banks in United States (including IBFs) 35,406r 19,009' 14,708 5,338 16,731 12,239 2,713 992 126 Owed to U.S. offices of nonrelated U.S. banks 8,046r 1,798' 4,493 594 2,496' 1,081' 763 77 177 Owed to U.S. branches and agencies of nonrelated foreign banks 27,359r 17,212' 10,215 4,744 14,235' 11,158' 1,950 915 128 Owed to nonrelated banks in foreign countries 31,430r 29,191' 18,025 16,043 10,190 10,077 2,513 2,513 1?9 Owed to foreign branches of nonrelated U.S. banks 1,549r 1,450' 669 613 709 704 76 76 no Owed to foreign offices of nonrelated foreign banks 29,880' 27,741' 17,356 15,430 9,480 9,373 2,437 2,436 131 Owed to others 39,325r 1,798 28,361 1,411 7,114 227 3,122' 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 12,590 n.a. 99,,007733 n.a. 22,,551166 n. a. 441199 n. a. 134 Trading liabilities 31,409r 25' 23,967' 24' 19 1 7,390' 0 135 Other liabilities to nonrelated parties 48,942r 5,131' 45,197' 4,337' 1,440 581 2,044' 161 136 Net due to related depository institutions5 114,604r 21,636' 47,504 15,070 20,817' 534 25,269 4,237 137 Net owed to head office and other related depository institutions5 114,604' n.a. 47,504 n.a. 20,817' n.a. 2255,,226699 n a. 138 Net owed to establishing entity, head office, and other related depository institutions5 n.a. 21,636' 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 0 125 29 42 00 140 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 105,507' 58,859 18,283' 17,283 143 Predetermined interest rates 61,750' n.a. 34,140' n a. 11,531' n.a. 11,701 n.a. 144 Floating interest rates 43,756' 24,719' 6,752 5,581 145 Commercial and industrial loans with remaining maturity of more than one year 73,652' 41,822 12,625' 10,042 146 Predetermined interest rates 18,185' 10,363' 3,111 3,379 147 Floating interest rates 55,467' 31,459' 9,513' 6,663 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies All 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 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 ng I o B n F ly s exc T IB l o u F t d a s i l ng I o B n F ly s exc T IB l o u t F 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 1 1 t t nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss 148,088 126,550 5,237 9,582 111144449999 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 111,917 95,631 2,795 7,573 111155550000 OOOOtttthhhheeeerrrr ttttiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 111155551111 TTTTiiiimmmmeeee CCCC oooorrrr DDDD mmmm ssss oooo iiiinnnn rrrreeee ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 28,211 n \ .a. 24,419 n1.a. 1,496 nJ.a. 1,603 n1.a. wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss 7,960 6,500 945 407 All states2 New York California Illinois inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s 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 64,08 r n.a. 31,678 n.a. 26,626 n.a. 4,297 n.a. 111155554444 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd5555 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.l 1, 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

A72 Special Tables • October 1995 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES A. Pro forma balance sheet Millions of dollars Item June 30, 1995 Short-term assets (Note I) Imputed reserve requirement on clearing balances 404.3 Investment in marketable securities 3,638.7 Receivables 63.0 Materials and supplies 8.1 Prepaid expenses 25.5 Items in process of collection 2,125.1 Total short-term assets 6,264.7 Long-term assets (Note 2) 349.0 Furniture and equipment 162.8 Leases and leasehold improvements 23.0 Prepaid pension costs 221.3 Total long-term assets 756.2 Total assets 7,020.9 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 4,096.2 Deferred-availability items 2,071.8 Short-term debt 96.7 Total short-term liabilities 6,264.7 Long-term liabilities Obligations under capital leases 3.8 Long-term debt 159.5 Postretirement/postemployment benefits obligation 170.8 Total long-term liabilities 334.1 Total liabilities 6,598.8 422.1 Total liabilities and equity (Note 3) 7,020.9 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 June 30, 1995 Six months ended June 30, 1995 Revenue from services provided to depository institutions (Note 4) 183.1 365.1 Operating expenses (Note 5) 161.8 330.7 Income from operations 21.3 34.3 Imputed costs (Note 6) Interest on float 3.1 8.8 Interest on debt 4.1 8.1 Sales taxes 2.9 5.1 FDIC insurance 1.8 11.9 5.4 27.4 Income from operations after imputed costs 9.4 6.9 Other income and expenses (Note 7) Investment income on clearing balances 61.6 125.5 Earnings credits 55.8 5.8 110.1 15.3 Income before income taxes 15.1 22.3 Imputed income taxes (Note 8) 4.7 6.9 Income before cumulative effect of a change in accounting principle 10.4 15.4 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 10.4 .8 MEMO Targeted return on equity (Note 10) 9.6 17.7 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 A73 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 second 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 457.6 Prepaid expenses include salary advances and travel advances for priced-service Unrecovered float 41.2 personnel. Float subject to recovery 416.4 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 42.2 adjustments for intra-System items that would otherwise be double-counted on a consoli- As-of adjustments 210.5 dated Federal Reserve balance sheet; adjustments for items associated with non-priced Direct charges 77.9 items, such as those collected for government agencies; and adjustments for items Per-item fees 85.8 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 Consists of long-term assets used solely in priced services, the priced-services portion of adjustments to the institution's reserve or clearing balance or by valuing the float at the long-term assets shared with nonpriced services, and an estimate of the assets of the Board federal funds rate and billing the institution directly. Float recovered through per-item fees of Governors used in the development of priced services. Effective Jan. 1, 1987, the is valued at the federal funds rate and has been added to the cost base subject to recovery Reserve Banks implemented the Financial Accounting Standards Board's Statement of in the second quarter of 1995. Financial Accounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly, the Federal Reserve Banks recognized credits to expenses of $8.7 million in (7) OTHER INCOME AND EXPENSES the second quarter of 1995, $7.2 million in the first quarter of 1995 and corresponding increases 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). TTie PSAF consists of the taxes that would have been (8) INCOME TAXES paid and the return on capital that would have been provided had priced services been furnished by a private-sector firm. Other short-term liabilities include clearing balances Imputed income taxes are calculated at the effective tax rate derived from the PSAF model maintained at Reserve Banks and deposit balances arising from float. Other long-term (see note 3). liabilities consist of obligations on capital leases. (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 $ 1.7 expenses for Board staff members were $.7 million in both the first and second quarters of million for the second quarter of 1995 and $.3 million for the first quarter of 1995. The 1995. The credit to expenses under SFAS 87 (see note 2) is reflected in operating Reserve Banks plan to recover these amounts, along with a finance charge, by the end of expenses. the year 2000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Index to Statistical Tables References are to pages A3-A73 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Depository institutions Agricultural loans, commercial banks, 21,22 Reserve requirements, 9 Assets and liabilities (See also Foreigners) Reserves and related items, 4, 5, 6, 13 Banks, by classes, 18-23 Deposits (See also specific types) Domestic finance companies, 36 Banks, by classes, 4, 18-23 Federal Reserve Banks, 11 Federal Reserve Banks, 5, 11 Financial institutions, 28 Interest rates, 16 Foreign banks, U.S. branches and agencies, 23, 68-71 Turnover, 17 Automobiles Discount rates at Reserve Banks and at foreign central banks and Consumer installment credit, 39 foreign countries (See Interest rates) Production, 47, 48 Discounts and advances by Reserve Banks (See Loans) Dividends, corporate, 35 BANKERS acceptances, 11, 12, 21-24, 26 Bankers balances, 18-23, 68-71. (See also Foreigners) EMPLOYMENT, 45 Bonds (See also U.S. government securities) Eurodollars, 26 New issues, 34 Rates, 26 Branch banks, 23 FARM mortgage loans, 38 Business activity, nonfinancial, 45 Federal agency obligations, 5, 10, 11, 12, 31, 32 Business expenditures on new plant and equipment, 35 Federal credit agencies, 33 Business loans (See Commercial and industrial loans) Federal finance Debt subject to statutory limitation, and types and ownership CAPACITY utilization, 46 of gross debt, 30 Capital accounts Receipts and outlays, 28, 29 Banks, by classes, 18 Treasury financing of surplus, or deficit, 28 Federal Reserve Banks, 11 Treasury operating balance, 28 Central banks, discount rates, 65 Federal Financing Bank, 33 Certificates of deposit, 26 Federal funds, 7, 21, 22, 23, 26, 28 Commercial and industrial loans Federal Home Loan Banks, 33 Commercial banks, 21, 22 Federal Home Loan Mortgage Corporation, 33, 37, 38 Weekly reporting banks, 21-23 Federal Housing Administration, 33, 37, 38 Commercial banks Federal Land Banks, 38 Assets and liabilities, 18-23 Federal National Mortgage Association, 33, 37, 38 Commercial and industrial loans, 18-23 Federal Reserve Banks Consumer loans held, by type and terms, 39 Condition statement, 11 Deposit interest rates of insured, 16 Discount rates (See Interest rates) Loans sold outright, 22 U.S. government securities held, 5, 11, 12, 30 Real estate mortgages held, by holder and property, 38 Federal Reserve credit, 5, 6, 11, 12 Time and savings deposits, 4 Federal Reserve notes, 11 Commercial paper, 24, 26, 36 Federal Reserve System Condition statements (See Assets and liabilities) Balance sheet for priced services, 72 Construction, 45, 49 Condition statement for priced services, 72 Consumer installment credit, 39 Federally sponsored credit agencies, 33 Consumer prices, 45 Finance companies Consumption expenditures, 52, 53 Assets and liabilities, 36 Corporations Business credit, 36 Profits and their distribution, 35 Loans, 39 Security issues, 34, 65 Paper, 24, 26 Cost of living (See Consumer prices) Financial institutions, loans to, 21, 22, 23 Credit unions, 39 Float, 5 Currency in circulation, 5, 14 Flow of funds, 40-44 Customer credit, stock market, 27 Foreign banks, assets and liabilities of U.S. branches and agencies, 22, 23, 68-71 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 Ownership by individuals, partnerships, and Foreigners corporations, 22, 23 Claims on, 55, 58, 59, 60, 62 Turnover, 17 Liabilities to, 22, 54, 55, 56, 61, 63, 64 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 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 Depository institutions, 4, 5, 6, 13 INCOME, and expenses, Federal Reserve System, 72 Federal Reserve Banks, 11 Income, personal and national, 45, 51, 52 U.S. reserve assets, 54 Industrial production, 45, 47 Residential mortgage loans, 37 Installment loans, 39 Retail credit and retail sales, 39, 45 Insurance companies, 30, 38 Interest rates Bonds, 26 SAVING Consumer installment credit, 39 Flow of funds, 40-44 Deposits, 16 National income accounts, 51 Federal Reserve Banks, 8 Savings institutions, 38, 39, 40 Foreign central banks and foreign countries, 65 Savings deposits (See Time and savings deposits) Money and capital markets, 26 Securities (See also specific types) Mortgages, 37 Federal and federally sponsored credit agencies, 33 Prime rate, 25 Foreign transactions, 63 International capital transactions of United States, 53-65 New issues, 34 International organizations, 55, 56, 58, 61, 62 Prices, 27 Inventories, 51 Special drawing rights, 5, 11, 53, 54 Investment companies, issues and assets, 35 State and local governments Investments (See also specific types) Deposits, 21, 22 Banks, by classes, 18-23 Holdings of U.S. government securities, 30 Commercial banks, 4, 18-23 New security issues, 34 Federal Reserve Banks, 11,12 Ownership of securities issued by, 21, 23 Financial institutions, 38 Rates on securities, 26 Stock market, selected statistics, 27 LABOR force, 45 Stocks (See also Securities) Life insurance companies (See Insurance companies) New issues, 34 Loans (See also specific types) Prices, 27 Banks, by classes, 18-23 Commercial banks, 18-23 Student Loan Marketing Association, 33 Federal Reserve Banks, 5, 6, 8, 11, 12 Federal Reserve System, 72 Financial institutions, 38 TAX receipts, federal, 29 Thrift institutions, 4. (See also Credit unions and Savings Insured or guaranteed by United States, 37, 38 institutions) Time and savings deposits, 4, 14, 16, 18-23 MANUFACTURING Trade, foreign, 54 Capacity utilization, 46 Treasury cash, Treasury currency, 5 Production, 46, 48 Treasury deposits, 5, 11, 28 Margin requirements, 27 Treasury operating balance, 28 Member banks (See also Depository institutions) Federal funds and repurchase agreements, 7 UNEMPLOYMENT, 45 Reserve requirements, 9 U.S. government balances Mining production, 48 Commercial bank holdings, 18-23 Mobile homes shipped, 49 Treasury deposits at Reserve Banks, 5, 11, 28 Monetary and credit aggregates, 4, 13 U.S. government securities Money and capital market rates, 26 Bank holdings, 18-23, 30 Money stock measures and components, 4, 14 Dealer transactions, positions, and financing, 32 Mortgages (See Real estate loans) Federal Reserve Bank holdings, 5, 11, 12, 30 Mutual funds, 35 Foreign and international holdings and Mutual savings banks (See Thrift institutions) transactions, 11, 30, 64 Open market transactions, 10 NATIONAL defense outlays, 29 Outstanding, by type and holder, 30, 31 National income, 51 Rates, 26 U.S. international transactions, 53-66 OPEN market transactions, 10 Utilities, production, 48 PERSONAL income, 52 VETERANS Administration, 37, 38 Prices Consumer and producer, 45, 50 Stock market, 27 WEEKLY reporting banks, 18-23 Prime rate, 25 Wholesale (producer) prices, 45, 50 Producer prices, 45, 50 Production, 45, 47 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman EDWARD W. KELLEY, JR. ALAN S. BLINDER, Vice Chairman LAWRENCE B. LINDSEY OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE JOSEPH R. COYNE, Assistant to the Board EDWIN M. TRUMAN, Staff Director DONALD J. WINN, Assistant to the Board LARRY J. PROMISEL, Senior Associate Director THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Deputy Congressional Liaison DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board THOMAS A. CONNORS, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board PETER HOOPER III, Assistant Director PORTIA W. THOMPSON, Equal Employment Opportunity KAREN H. JOHNSON, Assistant Director Programs Adviser CATHERINE L. MANN, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION J. VIRGIL MATTINGLY, JR., General Counsel DIVISION OF RESEARCH AND STATISTICS SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel DAVID J. STOCKTON, Deputy Director KATHLEEN M. O'DAY, Associate General Counsel MARTHA BETHEA, Associate Director ROBERT DEV. FRIERSON, Assistant General Counsel WILLIAM R. JONES, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel MYRON L. KWAST, Associate Director PATRICK M. PARKINSON, Associate Director OFFICE OF THE SECRETARY THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director WILLIAM W. WILES, Secretary MARTHA S. SCANLON, Deputy Associate Director JENNIFER J. JOHNSON, Deputy Secretary PETER A. TINSLEY, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary and Ombudsman FLINT BRAYTON, Assistant Director DAY W. RADEBAUGH, JR., Assistant Secretary1 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 DONALD L. KOHN, Director ROGER T. COLE, Deputy Associate Director DAVID E. LINDSEY, Deputy Director JAMES I. GARNER, Deputy Associate Director BRIAN F. MADIGAN, Associate Director HOWARD A. AMER, Assistant Director RICHARD D. PORTER, Deputy Associate Director GERALD A. EDWARDS, JR., Assistant Director VINCENT R. REINHART, Assistant Director STEPHEN M. HOFFMAN, JR., Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board LAURA M. HOMER, Assistant Director JAMES V. HOUPT, Assistant Director DIVISION OF CONSUMER JACK P. JENNINGS, Assistant Director AND COMMUNITY AFFAIRS MICHAEL G. MARTINSON, Assistant Director RHOGER H PUGH, Assistant Director GRIFFITH L. GARWOOD, Director SIDNEY M. SUSSAN, Assistant Director GLENN E. LONEY, Associate Director MOLLY S. WASSOM, Assistant Director DOLORES S. SMITH, Associate Director WILLIAM SCHNEIDER, Project Director, MAUREEN P. ENGLISH, Assistant Director National Information Center IRENE SHAWN MCNULTY, Assistant Director 1. On loan from the Division of Information Resources Management Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 SUSAN M. PHILLIPS JANET L. YELLEN OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS S. DAVID FROST, Staff Director CLYDE H. FARNSWORTH, JR., Director SHEILA CLARK, EEO Programs Director DAVID L. ROBINSON, Deputy Director (Finance and Control) DIVISION OF HUMAN RESOURCES LOUISE L. ROSEMAN, Associate Director MANAGEMENT CHARLES W. BENNETT, Assistant Director 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 BRENT L. BOWEN, Inspector General GEORGE E. LIVINGSTON, Controller DONALD L. ROBINSON, Assistant Inspector General STEPHEN J. CLARK, Assistant Controller (Programs and BARRY R. SNYDER, Assistant Inspector General Budgets) DARRELL R. PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director DIVISION OF INFORMATION RESOURCES MANAGEMENT STEPHEN R. MALPHRUS, Director MARIANNE M. EMERSON, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director ELIZABETH B. RIGGS, Assistant Director RICHARD C. STEVENS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • September 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 THOMAS E. DAVIS, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary WILLIAM G. DEWALD, Associate Economist JOSEPH R. COYNE, Assistant Secretary WILLIAM C. HUNTER, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID E. LINDSEY, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel FREDERIC S. MISHKIN, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel LARRY J. PROMISEL, Associate Economist MICHAEL J. PRELL, Economist CHARLES J. SIEGMAN, Associate Economist EDWIN M. TRUMAN, Economist LAWRENCE SLIFMAN, Associate Economist LYNN E. BROWNE, Associate Economist DAVID J. STOCKTON, 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

A79 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, Newark, New Jersey 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

A80 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

A81 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

A82 Maps of the Federal Reserve System 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- recendy in December 1991. tories as follows: the New York Bank serves the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 2-B 3-C 4-D 5-E Baltimere MD NY % Pittsburgh WV * c friffalo DE / ^ VMA NJ NY CT RI ••H^fiiati BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 7-G 8-H KY J f S f e fe .;. - Louisville —™ p •Memphis ^ ^ t v• '• •'* Jacfe&onville Liftle m CHICAGO Eel:/ *» Miaq}§ ATLANTA ST. LOUIS *• * i * * -I ' MINNEAPOLIS 10-J 12-L KANSAS CITY 11-K —I m EL P«OL •Los Angeles DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 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 John C. Whitehead 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 Robert A. Hopkins Louisville 40232 Daniel L. Ash Howard Wells Memphis 38101 Woods E. Eastland John P. Baumgartner MINNEAPOLIS 55480 Gerald A. Rauenhorst Gary H. Stern Jean D. Kinsey Colleen K. Strand Helena 59601 Matthew J. Quinn John D. Johnson KANSAS CITY 64198 Herman Cain Thomas M. Hoenig A. Drue Jennings Richard K. Rasdall Denver 80217 Sandra K. Woods Kent M. Scott1 Oklahoma City 73125 Ernest L. Holloway Mark L. Mullinix Omaha 68102 vacancy Harold L. Shewmaker DALLAS 75201 Cece Smith Robert D. McTeer, Jr. Roger R. Hemminghaus Tony J. Salvaggio El Paso 79999 W. Thomas Beard III Sammie C. Clay Houston 77252 Isaac H. Kempner III Robert Smith, III1 San Antonio 78295 Carol L. Thompson James L. Stull1 SAN FRANCISCO .... 94120 Judith M. Runstad Robert T. Parry James A. Vohs Patrick K. Barron Los Angeles 90051 Anita E. Landecker John F. Moore1 Portland 97208 Ross R. Runkel Raymond H. Laurence Salt Lake City 84125 Gerald R. Sherratt Andrea P. Wolcott Seattle 98124 George F. Russell, Jr. Gordon Werkema1 * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607. 1. Senior Vice President. 2. Assistant Vice President. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis