Federal Reserve Bulletin, 1996-03

VOLUME 82 • NUMBER 3 • MARCH 1996 FEDERAL RESERVE BULLETIN 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 199 THE MEXICAN PESO CRISIS: IMPLICATIONS Availability of transcripts of meetings of the FOR INTERNATIONAL FINANCE Federal Open Market Committee held during 1990. The Mexican peso crisis has raised legitimate questions about Mexican economic policies Availability of preliminary figures on operating before and during the events of December 1994 income of the Federal Reserve Banks. and January 1995, but its propagation through Final rule implementing amendments to Reguinternational financial markets has also pointed lation K. to broader questions about those markets. This article considers the international financial Policy modifications regarding arrangements for implications of the peso crisis from three per- third-party access to Fedwire. spectives: the creditors and their markets, the Final rule regarding banking organizations' countries receiving large capital inflows, and the reporting of suspicious activities. functioning of the international financial system. Request for comments on Truth in Lending rules on home equity lines of credit. 210 TREASURY AND FEDERAL RESERVE FOREIGN EXCHANGE OPERATIONS Publication of investment guide on community development. During the fourth quarter of 1995, the dollar appreciated modestly, strengthening 3.7 percent Availability of revised lists of over-the-counter against the Japanese yen and 0.5 percent against stocks and of foreign stocks subject to margin the German mark. The dollar also rose 0.6 perregulations. cent on a trade-weighted basis against the currencies of the other Group of Ten countries. The U.S. monetary authorities did not undertake any 223 MINUTES OF THE FEDERAL OPEN intervention operations during the quarter. MARKET COMMITTEE MEETING HELD ON DECEMBER 19, 1995 214 INDUSTRIAL PRODUCTION AND CAPACITY At its meeting on December 19, 1995, the Com- UTILIZATION FOR JANUARY 1996 mittee adopted a directive that called for some Industrial production declined 0.6 percent in slight easing in the degree of pressure on January, to 121.9 percent of its 1987 average, reserve conditions during the intermeeting after slight gains in the previous two months. period but that contained no presumption about Capacity utilization dropped 0.8 percentage the likely direction of any intermeeting policy point in January, to 81.9 percent. change. 217 ANNOUNCEMENTS 231 LEGAL DEVELOPMENTS Policy actions by the Board of Governors and Various bank holding company, bank service by the Federal Open Market Committee. corporation, and bank merger orders; and pend- Appointments of new members to the Thrift ing cases. Institutions Advisory Council. Appointments of new members to the Consumer Advisory Council. A1 FINANCIAL AND BUSINESS STATISTICS Amendment to the risk-based capital standard of These tables reflect data available as of the Basle Committee on Banking Supervision. January 29, 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

The Mexican Peso Crisis: Implications for International Finance Edwin M. Truman, Staff Director of the Board's This three-way perspective is somewhat arbitrary Division of International Finance, prepared this and, therefore, not entirely satisfactory. First, it is article. oversimplified, particularly to the extent that it identifies creditors with investors in industrial countries, On December 20, 1994, the government of Mexico recipients of capital inflows (net or gross) with develannounced the devaluation of its currency, surprising oping countries, and the international financial sysfinancial markets and precipitating the so-called tem with the governments (and the central banks) of Mexican peso crisis. The devaluation came after three creditor countries and with the international financial years during which Mexico had followed an institutions that are held responsible for its smooth exchange rate policy of maintaining the peso within operation. In today's liberalized financial markets, a well-defined band against the U.S. dollar. During potential creditors include investors in developing 1994, this policy had come under pressure as the countries, industrial countries are large-scale recipi- Mexican current account deficit rose to about $29 bilents of international capital flows, and authorities lion (8 percent of Mexican gross domestic product), both in developing countries and in industrial coun- Mexico's international reserves declined about twotries have a stake in the efficient and effective functhirds, and the government of Mexico issued more tioning of the international financial system. Thus, than $25 billion of peso-denominated short-term debt the notion that it is either appropriate or desirable for whose face value was indexed to the U.S. dollar. The developed countries to operate under one set of rules devaluation on December 20 failed to stabilize peso while developing countries operate under another is financial markets; two days later, the Mexican increasingly off the mark. authorities were forced to allow the peso to float Second, the origins of the Mexican peso crisis can freely, and its external value plummeted. In response, be traced, in part, to trends in the globalization of monetary and fiscal policies were tightened signifinance over the past decade, trends with respect to ficantly, and Mexico received an unprecedented the technology of markets, the liberalization of finanpackage of external financial support from the Intercial systems, and diversification of investors' portnational Monetary Fund, the Exchange Stabilization folios. Whether these factors or Mexico's economic Fund of the U.S. Department of the Treasury, the policy decisions, or neither, were more important in Federal Reserve, the Bank of Canada, and the Bank determining what happened in Mexico in late 1994 for International Settlements. and early 1995 does not need to be agreed upon for While the Mexican peso crisis has raised legitimate the sake of my argument. I stipulate merely that the questions about Mexican economic policies before behavior of financial markets during the Mexican and during the events of December 1994 and Janucrisis has more in common with their behavior during ary 1995, its propagation through international finanthe European monetary crises of 1992 and 1993 and cial markets has also pointed to broader questions the bond market collapse in 1994 than many observabout the international institutional and financial ers may be willing to contemplate or acknowledge.1 environment. This article considers the implications Moreover, the similarities between the economic polifor international finance of the Mexican experience. cies contributing to the Mexican crisis and those It focuses on these implications from three distinct and somewhat stylized perspectives: the creditors and their markets, the countries receiving large capital inflows, and the functioning of the international 1. Chairman Alan Greenspan testified before the Congress on January 26, 1995, that "although the speed of transmission of positive financial system. economic events has been an important plus for the world in recent years, it is becoming increasingly obvious—and Mexico is the first major case—that significant mistakes in macroeconomic policy also NOTE. An earlier version of this article was prepared for and reverberate around the world at a prodigious pace." Statement before presented at the Aspen Institute seminar "The Future of the World the Committee on Foreign Relations, U.S. Senate, Federal Reserve Economy" in August 1995. Bulletin, vol. 81 (March 1995), p. 261. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

200 Federal Reserve Bulletin • March 1996 contributing to the European monetary crises attest Second is the apparent decline in the role of comthat the former was not a unique or unidimensional mercial banks. Net flows directly involving foreign event.2 commercial banks (also included in the "other" Third, establishing the lessons to be learned from entries) were the principal source of capital inflows the Mexican experience is complex, particularly as from 1973 to 1982 for developing countries in Asia there is no consensus on the factors behind the crisis. and the Western Hemisphere. During the debt-crisis The International Monetary Fund (IMF) has listed period of the 1980s, countries in the latter group three major views regarding such factors—adverse domestic political and external economic shocks, an unsustainable external position, and domestic policy 1. Average annual net capital flows to developing countries, slippages—and has noted that these views are not selected periods, 1973-94 mutually exclusive.3 Moreover, the IMF's list of Billions of U.S. dollars explanations largely omits economic and financial Area 1973-76 1977-82 1983-89 1990-94 trends and developments originating outside Mexico. In part because there is no consensus on the factors All developing countries Total capital inflows 14.8 30.5 8.8 104.8 behind the Mexican crisis, there is no consensus Foreign direct investment plus portfolio investment .. -1.8 .7 19.8 82.7 about what should have been done or not done during Foreign direct investment 3.7 11.2 13.3 39.1 the crisis. Therefore, the lessons one person draws Ot P he o r r 1 t folio investment 1 -5 6 . . 5 6 -1 2 0 9 . . 5 8 -11 6 . . 0 5 4 2 3 2 . . 6 2 from the crisis are likely to be quite different from In Asia those another person draws. Total capital inflows 6.7 15.8 16.7 52.2 Foreign direct investment plus portfolio investment 1.4 3.3 6.6 35.8 Foreign direct THE CREDITORS AND THEIR MARKETS investment 1.3 2.7 5.2 23.4 Portfolio investment .1 .6 1.4 12.4 i Other1 5.3 12.5 10.1 16.3 The summary overview of capital flows to develop- In Western Hemisphere ing countries shown in table 1 incorporates several Total capital inflows 13.0 26.3 -16.6 40.0 Foreign direct investment WOtM» trends that have emerged since the early 1970s. First plus portfolio investment 2.4 6.9 3.2 38.5 is the decline in the role for official capital inflows. Foreign direct Although not shown separately, these inflows are investment 2.2 5.3 4.4 11.9 Portfolio investment .2 1.6 -1.2 26.6 included in the "other" category, and in recent years Other1 10.6 19.4 -19.8 1.5 their importance in total capital inflows to developing Other developing countries Total capital inflows -4.9 -11.6 8.7 12.7 countries in Asia and the Western Hemisphere has ! Foreign direct investment declined substantially. Regarding total net capital plus portfolio investment -5.6 -9.5 10.0 8.3 inflows to all developing countries, borrowing from Foreign direct MpMis; investment .2 3.2 3.7 3.8 official creditors declined from $20 billion per year Portfolio investment -5.8 -12.7 6.3 4.6 between 1987 and 1990 (60 percent of total net Other1 .7 -2.1 -1.3 §f 4 m .3 j flows) to $16 billion per year between 1991 and 1994 Mexico Total capital inflows n.a. 9.7 -2.1 21.2 (11 percent of total net flows).4 Foreign direct investment plus portfolio investment n.a. 2.3 .1 18.7 Foreign direct investment n.a. 1.6 1.2 4.9 Portfolio investment n.a. .7 -1.1 13.8 Other1 n.a. 7.4 -2.2 2.5 2. These parallels are much too interesting, complex, and contro- NOTE. Flows exclude exceptional financing from the International Monetary versial to be explored extensively in this article, but they are important Fund or International Bank for Reconstruction and Development as well as to an understanding of today's financial world. bilateral official or private-sector reschedulings or arrears. A number of countries do not report assets and liabilities separately. For these 3. International Monetary Fund, "Factors behind the Financial countries, it is assumed that there are no outflows, so that liabilities are set equal Crisis in Mexico," World Economic Outlook (May 1995), pp. 90-97. to the net value. To the extent that this assumption is not valid, the data 4. These data are compiled on a different basis from that used for underestimate the gross value. table 1 and among other things include "exceptional financing," Adjustments are also made to net out the effects of bonds exchanged for which is important and comes from the official sector even for the commercial bank loans in debt and debt service reduction operations and to more advanced developing countries. The comparable figures for provide additional detail on selected private capital flows. developing countries in the Western Hemisphere are net borrowing Regional classifications correspond to those in the International Monetary from official creditors of $7.9 billion per year from 1987 to 1990 and Fund's International Finance Statistics but exclude capital exporting countries net repayments of $0.7 billion per year from 1991 to 1994. Finally, for such as Kuwait and Saudi Arabia; "other developing countries" are those in the Africa regional grouping and the Middle East and Europe grouping. twenty-two countries classified by the IMF as market borrowers, net n.a. Not available. inflows from official creditors were $2.6 billion per year from 1987 to 1. Consists of net lending to the official sector (including general government 1990 (14 percent of the total) and $3.2 billion per year from 1991 to and the monetary authority) and net lending to the private sector by banks and 1994 (3.6 percent of total) (IMF, World Economic Outlook, institutions such as insurance companies and pension funds. tables A33, A34, and A35). SOURCE. International Monetary Fund, World Economic Outlook database. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Mexican Peso Crisis 201 experienced a reversal of such flows; and during the countries experienced a reversal of inflows from first half of the 1990s, bank flows played only a banks in the 1980s (embedded in "other" in table 1), moderate role. These data, however, do not reveal and they were relatively large beneficiaries of net the extent to which commercial and investment portfolio inflows during the first half of the 1990s. banks were involved in intermediating international Finally, the pattern of net flows to Mexico has been capital flows. Although these institutions are heavily broadly the same as that for the group of Western involved in the placement and arrangement of port- Hemisphere developing countries.5 folio capital flows, the data include as banking flows only assets that are booked on the balance sheets of those financial institutions. For example, when the The Unfolding of the Peso Crisis peso crisis erupted in December 1994, Mexican commercial banks had about $4 billion in certificates of The lessons that observers draw from the Mexican deposit outstanding to nonresidents; an overwhelm- experience for the creditors and their markets greatly ing proportion of those deposits had been placed or depend on the perceived uniqueness of Mexico's brokered by foreign financial institutions. circumstances.6 As we have seen, portfolio capital Third is the absolute and relative rise in importance flows were important for Mexico, but they were also of net foreign direct investment. This trend reflects a important to other countries in Latin America. In the widespread belief that this type of capital inflow has Mexican case, however, the portfolio inflows were advantages in terms of both relative stability and the concentrated in instruments with relatively short countercyclical nature of the associated servicing re- maturities that were also readily transferable. Morequirements; consequently, a more hospitable attitude over, by the time the crisis hit, a large proportion of in recipient countries toward such inflows has devel- those instruments were tesobonos—short-term oblioped over the past decade or so. gations of the Mexican government whose peso value Fourth is the dramatic increase in net portfolio was linked to the value of the dollar. At the end of investment. These flows take many forms, including 1993, foreigners also were very large holders of investments in equity markets as well as investments cetes—short-term government securities whose value in marketable debt instruments—denominated in was not linked to the dollar. domestic as well as in foreign currencies. In con- Indeed, one of the curiosities of the Mexican expesidering t^ie implications of the recent Mexican rience was that, over the course of 1994, international experience, one must distinguish among these sub- investors (Mexican as well as foreign) as a group sold categories of portfolio investments because the cetes but willingly purchased tesobonos, instruments investments involve a variety of risks—price risk, paying a much lower interest rate than that of cetes liquidity risk, and exchange rate risk. Broadly speak- but a higher rate than that of similar U.S. government ing, two types of investor are behind those flows: obligations. This trend continued even after middirect holders of the instruments in question and 1994, when it became clear that the outstanding stock indirect holders through investment trusts or mutual of tesobonos was larger than Mexico's foreign funds. Whatever their type, investors seek to maxi- exchange holdings. By definition, the return associmize their return given their appetite for risk. Unlike ated with cetes involved both an exchange rate and a many direct investors, portfolio investors often have credit (transfer) risk, whereas the return associated relatively near-term horizons—that is, the future that with tesobonos involved principally the latter; but concerns them is a relatively brief period of time— both risks were substantial.7 regardless of the maturity of the underlying instruments. Unlike direct investors and traditional commercial bank lenders, they assume that they can 5. In 1990-94, net portfolio investment was about two-thirds of net liquidate their investments fairly quickly in wellcapital inflows to Mexico and the developing countries of the Western developed trading markets. Moreover, near-term Hemisphere and was just under a quarter for developing countries in relative rates of return are important, as perhaps are Asia. 6. The same qualification applies to the lessons for the recipients of considerations of capital gains and losses, for some capital inflows and for the international financial system. instruments. 7. For example, at the end of November 1994, the ninety-one-day cetes rate was 15.60 percent, a spread of 988 basis points over the U.S. Fifth is the differing patterns of net capital flows three-month Treasury bill rate of 5.72 percent, whereas the ninety-oneacross developing countries and groups of develop- day tesobono rate was 7.49, a spread of only 177 basis points. ing countries. The Asian countries have long received Technically, some exchange risk was originally associated with tesobonos because their principal was only indexed to the dollar; but the a larger proportion of their net inflows through forprincipal was paid in pesos, and the holder had to handle or cover the eign direct investment. The Western Hemisphere conversion of the pesos into dollars. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

202 Federal Reserve Bulletin • March 1996 Another observation about the Mexican situation marked-to-market basis, holders of tesobonos sufmay help to explain the relatively large ex ante gap fered nontrivial, but temporary, paper losses as well between the rate on cetes and that on tesobonos: as did holders of other, longer-dated Mexican debt Since 1976, the international financial community, instruments such as Brady bonds.9 Nevertheless, the led by the U.S. authorities, had come to the financial widespread perception is that portfolio investors in assistance of Mexico on numerous occasions. The Mexican paper suffered no losses as a consequence of size and novelty of these operations may have sug- the peso crisis and, on the whole, that they were gested to investors that Mexico was a different, if not well-rewarded for the limited risks taken. unique, sovereign borrower. An alternative explana- When the crisis erupted, investors panicked, not tion is that investors did not fully appreciate that only investors in the Mexican stock market and in tesobonos were a potential indirect claim on Mex- Mexico's debt instruments but also investors in simiico's international reserves. lar instruments issued by borrowers in other coun- Nevertheless, when the crisis broke, a large num- tries, especially countries in the same part of the ber of geographically dispersed investors were caught world or perceived to be in similar circumstances. holding short-term claims on Mexico that could not These contagion sales of assets were induced by at be serviced without incurring a massive short-run least two forces. First, as perceived risks rose and depreciation of the peso. The investors realized that expected returns fell, individual investors wanted to their investment strategies had been based on one or disinvest. Second, institutional holders such as more false premises concerning the nature of Mexi- mutual funds, faced with actual or threatened co's exchange rate regime or the probability that they redemptions, liquidated their holdings not only of could liquidate their holdings before any crisis hit. Mexican paper but also of the paper of other coun- Also, although this explanation is difficult to prove, tries, especially if they could do so while limiting investors may have believed that "bondholders" their capital losses. These patterns can be seen in the would not be affected in a crisis because, even during sympathetic movements in the stripped yields on the severe debt crises of the 1980s, there were only Brady bonds of various countries in Latin America isolated instances of failures by countries to meet the and elsewhere (chart 1). original terms of this type of obligation. Finally, In the end, the wealth of Mexico's external crediinvestors may have excessively embraced the so- tors as a group was only marginally affected by losses called Washington consensus that the policy regimes following the crash of the peso. The principal reasons in Mexico and similar countries had fundamentally were that the investors were numerous and that Mexichanged in a direction that would produce sustained, can paper was not a large portion of any final, nonrapid economic expansion.8 Mexican investor's total portfolio; a secondary rea- In actuality, holders of some types of portfolio son was that some of the investors benefited from the claims on Mexico suffered losses in 1994-95, and actions taken to stave off a larger crisis. However, the holders of other claims did not. Holders of equity Mexican situation was not unique. As long as no securities suffered losses, or at least paper losses. The major institution or group of institutions is heavily Mexican stock market dropped two-thirds in dollar invested in claims on such a country or a group of terms between December 19, 1994, and March 9, similarly situated countries, creditors and their mar- 1995, when it hit its low, and as of the end of kets are likely to suffer only limited damage. Conse- January 1996 was still about one-third below its level quently, they are unlikely to be motivated to act in before the peso's devaluation. The remaining foreign concert with the issuer to limit losses on their investand domestic holders of cetes also suffered losses in ments; they have every incentive to step back from dollar terms when their instruments matured over the their investments and to dispose of them quickly, course of 1995. thereby adding to pressures in financial markets. On a Holders of the tesobonos have not in the end global basis, portfolio investments in developing suffered losses; the Mexican government has been countries amounted to about $250 billion as of the able to honor its obligations, initially paying out pesos and meeting the resulting demand for dollars out of its reserves and later paying off foreign holders 9. Brady bonds are obligations of the Mexican government issued of tesobonos directly in dollars. However, on a in 1990 in exchange for commercial bank claims. They were issued at an interest rate or principal amount reduced from that of the original obligations, and their principal and short-run interest payments are backed by collateral held at the Federal Reserve Bank of New York in the form of U.S. Treasury securities. They are called Brady bonds 8. See Paul Krugman, "Dutch Tulips and Emerging Markets," after former Secretary of the Treasury Nicholas Brady, who put Foreign Affairs, vol. 74 (July/August 1995), pp. 28^4. forward the plan that led to their issuance. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Mexican Peso Crisis 203 1. Secondary market yields on stripped Brady bonds The situation in 1994-95 contrasts with that in the of selected countries, Dec. 1994-Jan. 1996 debt crisis of the early 1980s, when a small number of international commercial banks—roughly twentyl-atin America five in total—held a major share of Mexico's debt. In 1982, commercial banks accounted for 70 percent of Argentina Mexico's external debt, and claims on Mexico by the top nine U.S. commercial banks amounted to 50 percent of their capital. At the end of 1994, foreign commercial banks held less than 40 percent of Mexico's international debt, and claims on Mexico by the top nine U.S. commercial banks represented only 15 percent of their capital. Had Mexico defaulted this time, the consequences for those institutions would have been painful but not life-threatening. J L J 1 1 L Elsewhere Bulgaria Implications for the Creditors The 1994-95 Mexican peso crisis is likely to be unique in at least one respect: In future liquidity crises, holders of large portfolio claims on the country facing the crisis are much less likely to avoid capital losses by relying on official actions that extend large-scale financial assistance to the country in question. The fundamental point is that the scale of potential financial assistance needed to stave off a J i Li -1 I full-blown crisis in Mexico has proved to be much Dec. Mar. June Sept. Dec. larger than anyone could have imagined as recently NOTE. Yields of Brady par bonds stripped of U.S. Treasury collateral on as 1994, and the scale of any similar operation in the principal and interest. future (even allowing for the special circumstances of the Mexican case) is likely to be larger than the official sector will be able or willing to assemble. end of 1994 (table 1). Although this number is large, Moreover, as noted above, the widespread percepit represents less than Vi percent of total portfolio holdings of investors in industrial countries.10 tion, whether accurate or not, is that many portfolio investors were inappropriately protected from the Although investors would not have been happy losconsequences of their investment decisions. ing, say, half the value of their investments in developing countries, even that result was likely to impose A further implication of the Mexican experience is only small aggregate losses in terms of wealth, wel- that investors will be, or at least should be, more fare, and demand.11 careful in the future. At a minimum, they should improve their early-warning systems. Many investors One circumstance is clear in Mexico's case and in reportedly did not understand developments in that of many other countries as well: the lowered Mexico in 1993-94; if they had, they would not have concentration and importance of commercial banks. invested so heavily in tesobonos. On the other hand, many of the investors, or at least their advisors, did in fact understand what was 10. As of 1992, the total GDP of high-income countries was three happening in Mexico in 1994; and either the managtimes U.S. GDP; and as of year-end 1994, the financial wealth of U.S. ers of the investments ignored those developments, households equaled $18 trillion. If the wealth-GDP ratio for all or they believed that they could divest before a high-income countries is the same as the U.S. ratio, financial wealth of households in high-income countries equaled about $54 trillion when full-blown crisis erupted. Just as in the European the peso crisis broke out (International Bank for Reconstruction and monetary crises of 1992 and 1993, many investors Development, World Development Report, Oxford University Press, were mistaken. Thus, a third implication of the Mexi- 1994; and Federal Reserve, U.S. flow of funds accounts). 11. However, portfolio investments in these markets could become can peso crisis is that institutions need to pay more a larger share of global portfolios. Moreover, in terms of global attention to their risk-management systems in the growth, the indirect consequences of the hypothesized loss in value in broadest sense of that term. High or rising yields on early 1995 might have been substantial. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

204 Federal Reserve Bulletin • March 1996 debt instruments should serve as signals to their claims on developing countries in the form of marketholders that compensation is being paid in advance able debt instruments, the recipient countries had to for the costs of a possible default or capital loss. compensate investors for the potential risks involved. Holders of portfolio claims on developing coun- Investors should have considered borrowers in develtries, as well as the financial institutions involved in oping countries to be similar to high-risk borrowers placing the instruments (whether or not they continue in domestic markets. By qualifying to borrow in to hold any in their own portfolios), should not expect these markets, borrowers in developing countries that the next sovereign liquidity crisis will unfold in began to compete with a broader group of potential the same way the Mexican crisis did. Their planning borrowers, not only in other developing countries but should have two dimensions: They should expect to also in developed countries. Moreover, the competitake more extensive losses, and, in part to improve tion was based on judgments concerning the adethe risk-reward trade-off, they may want to consider quacy of the returns considering the risks involved— how they might participate responsibly in the ex post evaluations that are relatively easy to make, at least resolution of crisis situations should these situations in principle. But the comparisons are inherently occur. multisided. Thus, when yields declined on the bonds issued by industrial countries, yields on instruments issued THE RECIPIENTS OF CAPITAL INFLOWS by developing countries became relatively more attractive. (As discussed above, perhaps investors The changing pattern of international capital flows began to reach for higher yields without being as has both a supply side and a demand side. The informed as they might have been about the risks previous section presented primarily the demand for involved.) Similarly, when yields in industrial couna different mixture of investments than had been tries rose in 1994, those offered by developing characteristic of the 1970s or 1980s; this section countries, such as Mexico, became relatively less presents the supply side. attractive. The issue is whether, as a consequence of From the standpoint of the recipient countries, the these structural changes, the borrowing countries 1990s opened up new opportunities to attract foreign have become more vulnerable to external financial capital. Those new opportunities were, in part, the shocks. consequence of changes in the political and social philosophies that governed the economic policies of the recipient countries.12 These countries became Lessons for the Capital Recipients more hospitable to foreign direct investment by relaxing restrictions, rewriting discriminatory regulations, The principal lesson from the 1994-95 peso crisis for and reworking the landscape of the public sector recipients of capital inflows derives from the size, through massive privatization programs that, in turn, scope, and speed of the crisis once it broke. By the caused portfolio investments in equity securities to standards of the 1980s, this was a new world. become more attractive. The forces of economic The 1982 Mexican crisis took about six months to reform led to more flexible economies, economies develop from the peso's devaluation in February to that in principle were better equipped to respond to mid-August, when it became clear that the Mexican shocks. However, the investments involved two-way authorities would be unable to service their sovereign risks, at least potentially, because the recipient coun- obligations. Not until December were mechanisms tries to some extent became more exposed to the risk more or less fully in place to contain the situation. of a sharp change in investor sentiment. Funds that About $3V2 billion in official bridge loans in August easily flowed in and financed current account deficits sufficed to buy time to establish more permanent could also easily seek to flow out if conditions or solutions, but three months passed before an agreeperceptions changed. ment with the IMF was completed to repay those The proposition about the increased risk to the loans.13 recipient country is debatable, and it deserves closer In 1994-95, the pre-crisis period lasted about a scrutiny than it can receive here. However, an illustra- month, from mid-November to mid-December. An tion may suffice. To induce foreign investors to hold $18 billion package of promised short-term financial 12. Some have argued that the "Washington consensus" on poli- 13. Bridge loans are short-term official credits extended with an cies may have been overblown or overinterpreted in terms of its assured source of repayment, usually from international financial short-term implications for growth. institutions such as the IMF and World Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Mexican Peso Crisis 205 assistance was developed within two (holiday) weeks, policies. In the Mexican case, these changes were not but by mid-January it was clear that the classical, made immediately, either because the authorities 1982 type of approach had failed to arrest the down- were paralyzed by their governmental transition as ward spiral of confidence. The U.S. Administration President Zedillo succeeded President Salinas or sought, and initially received, support from congres- because they did not understand the fundamental sional leaders for a $40 billion program of guarantees issue. Supporting the latter interpretation is the fact for Mexican government borrowings in international that the Mexicans did not request IMF support until markets to refinance its short-term dollar and dollar- the first week of January. linked debt. That approach was abandoned on Janu- A final lesson from the Mexican experience is ary 31 in favor of the approach now being followed. more of a question than a firm conclusion. Has the Thus, the crisis phase lasted a mere six weeks; after changing nature of international capital flows left another six weeks, around mid-March, confidence recipient countries more vulnerable to shocks? On began to return to Mexico (see chart 1). Of course, the negative side, one can argue that countries can important differences between Mexico in 1982 more easily attract capital flows and that, because and Mexico in 1995 make comparisons somewhat they are now more open and more flexible, they can problematic. No one should doubt, however, that the more easily do without the capital inflows and adjust 1982 approach quickly proved to be inadequate in to their loss with less (not zero, but less) pain—at 1994-95, whether or not it deserved that fate. least as measured in terms of lost output. On the A second lesson from the Mexican experience is affirmative side, the unforgiving nature of capital merely a variation on a familiar, long-standing theme: markets may seem to imply that countries are more If a country is going to run a large current account susceptible to severe punishment (in terms, again, of deficit financed by net private capital inflows, it must lost output) for small policy errors, although this ensure that the funds are being wisely invested. This increased market discipline may contribute to more is the first principle for any type of borrowing. In the responsible policies.16 As a practical matter, whether international context, it is relatively easy to articulate borrowing countries are more vulnerable to shocks but extremely difficult to apply. However, Mexico's today or not, they are less likely to receive much current account deficit was clearly being driven partly cooperation from their creditors in helping to cope by a decline in national savings from more than with a crisis once it has erupted because individual 18 percent of GDP in 1988-90 to less than 14 percent creditors are more numerous and dispersed and have of GDP in 1994, and there was essentially no change less of a stake in the success or failure of efforts to in gross domestic investment.14 Thus, Mexico's resolve or contain a financial crisis. domestic savings rate was relatively low, and when the Mexican economy increased its reliance on foreign savings, very little of the foreign money went to Policy Implications for Capital Recipients increased domestic investment.15 Three lessons of the Mexican experience pertain to Regardless of where one comes down on the issue of other aspects of governmental policy. First, countries whether capital-importing developing countries are should not be tempted to try to sustain overvalued more vulnerable to shocks in today's globalized exchange rates too long; this principle is also easy to capital markets, one implication for the recipients of articulate but not so easy to apply. Second, and an large-scale net capital inflows is that the authorities in easier lesson to apply, countries should avoid exces- these countries will need to pay a good deal more sive reliance on short-term borrowing; because for- attention than they have in the recent past to potential eign as well as domestic investors buy internal as shocks, both external and internal. They will need to well as external debt, this lesson clearly applies to develop their own early warning systems, which both areas of debt management. Third, when a coun- should differ from, and be independent of, the early try must devalue or otherwise change its exchange- warning systems that investors or official internarate regime, it should make compensating and tional financial organizations use because the requirecomplementary changes in other macroeconomic ments and risks are inherently different. 14. IMF, "Factors behind the Financial Crisis in Mexico," p. 92. 15. At least according to the aggregate statistics. Arguably, with 16. This lesson involving today's global financial markets is far the increased flexibility and openness of the Mexican economy, the from unique to Mexico's situation. It is central to the evaluation of the actual investments were more efficient and productive in the 1990s European monetary crises of 1992 and 1993 and the behavior of bond than earlier. markets in 1994. It is also subject to dispute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

206 Federal Reserve Bulletin • March 1996 Strengthening the domestic banking system is key has negative fiscal consequences, as interest receipts to shock-proofing the economies of the borrowing on external reserve holdings are less than interest countries. Such shock-proofing is clearly needed, payments on domestic obligations. A fourth possibilwhether because (1) those banking systems lack the ity is resorting to controls on capital inflows. A fifth managerial or financial strength to exploit liberalized is some combination of the above. financial markets effectively, (2) national supervisory The capital controls "solution" has attracted systems are underdeveloped, or (3) international capi- increased favorable attention in some quarters in the tal flows exert discipline over macroeconomic poli- aftermath of the Mexican crisis.18 However, in many cies (with consequent strains on banking systems). In cases, only countries with sound macroeconomic the Mexican case, all three rationales were present. policies and high domestic savings rates can afford The newly privatized banks lacked strength and to limit capital inflows, and even they pay a price by managerial experience, the effective maturity of their distorting intertemporal decisionmaking. Moreover, foreign currency liabilities was much less than that of when these countries do restrict some kinds of their corresponding assets, the supervisory system inflows (for example, short-term borrowing), they are was underdeveloped, and the weaknesses of the bank- reluctant to restrict other kinds of flows (for example, ing system contributed to the reluctance of the author- into stock markets or in the form of trade credits). ities to take the macroeconomic policy steps that Once the possibility of allowing some forms of shortwould have been necessary to contain the peso crisis term or portfolio capital inflows is opened up, the once a devaluation appeared inevitable. nature of any ensuing crisis is at most a matter of A second set of implications relates to macroeco- degree. Finally, the notion that capital controls are a nomic policies in the countries receiving capital good idea for developing countries but a bad idea for inflows. Many advocates of the use of exchange rates developed countries runs counter to the observation as nominal anchors for expectations about economic that at the margin these two groups of countries policies have been forced by recent events to retreat cannot and should not be distinguished.19 somewhat from their advocacy; it would be unfortunate if the pendulum now swung to the other extreme of absolutely freely floating exchange rates. The THE FUNCTIONING OF THE INTERNATIONAL search for a workable, happy medium must continue. FINANCIAL SYSTEM At the same time, recipient countries will need to rethink the way they calibrate their monetary poli- The principal change in the functioning of the intercies, their debt management policies, and their fiscal national financial system in recent years has been the policies. Fiscal policy has a role to play in striking diminished role of governments. This trend is evident the proper balance between savings and investment— not only in the privatization and market-opening that is, with respect to judging and achieving a sus- reforms in the non-industrial world but also in the tainable current account balance—not only in deregulation in the industrial world. The Ministry of industrial-country recipients of net capital inflows Finance no longer has quite the unchallenged power like the United States but also in developing coun- and influence it once had in Japan, and financial tries like Mexico.17 markets have become increasingly deregulated in all Faced with unwanted capital inflows, as Mexico industrial countries.20 was in 1992 and 1993, countries confront difficult choices. One choice is to tighten fiscal policy further, 18. For example, the 64th Annual Report, 1994-95 of the Bank for even if tightening involves running a substantial fis- International Settlements said that "emerging economies should percal surplus. Another is to allow the real exchange rate haps be . . . more prudent in dismantling controls on short-term capital inflows" (p. 210). to appreciate. A third choice is to sterilize capital 19. Lawrence Summers, the Treasury Department's Under Secreinflows and build up reserves, an approach that often tary for International Affairs during the crisis, has expressed my bias with his characteristic zing: "It is clear that we would all rather live in countries in which capital is trying to get in, rather than in countries from which capital is trying to get out. That suggests that countries 17. William Cline points out in his retrospective look at the debt should be very cautious about imposing capital controls with the crises of the 1980s that the flaw in former British Chancellor of the objective of discouraging capital inflows" (Lawrence H. Summers, Exchequer Nigel Lawson's dictum that current account deficits do not Remarks at Symposium on Capital Flows, Jerusalem, Israel, April 3, matter so long as they are accompanied by balanced budgets or 1995). surpluses applies equally to developing countries and developed coun- 20. One does not need to go so far as to argue that central bankers tries, and he correctly diagnosed this flaw as applying to the Mexican are like the little Dutch boy with his finger in the dike against the case well before the crisis broke. William R. Cline, International Debt onslaught of stateless money as Steven Solomon does in his book The Reexamined (Washington: Institute for International Economics, Confidence Game (Simon and Schuster, 1995) to recognize that the 1995). international financial system has changed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Mexican Peso Crisis 207 This trend toward deregulation has been driven by room and easily convince them that a systemic crisis some of the same forces that are behind the global- is, first and foremost, a crisis for their own instituization of financial markets and financial flows: tions. The number of important players is now much technological change and improvements in global larger, and each perceives that it has less of a stake in communications. These forces have also facilitated the successful resolution of a crisis situation. Thus, the relative rise in the importance of securities mar- when the Mexican authorities in December 1994 kets and the relative decline in the role of depository called upon the commercial banks to assemble a line institutions as direct financial intermediaries (that is, of credit to help Mexico cope with what appeared to as institutions that book both assets and liabilities on be a liquidity crisis, the commercial bankers' princitheir balance sheets). pal focus was on the terms of the deal rather than on No trend toward increased volatility has been the rationale for the deal. Whether this judgment was observed in those markets for financial assets that short-sighted or mistaken is open to debate. have been freely functioning for extended periods of A closely related lesson concerns the lack of contime—for example, the market for U.S. Treasury sensus in the official community about the nature of securities and spot markets among the major curren- the Mexican crisis and whether it involved so-called cies. Recorded volatility has, however, increased in systemic risk. From a broad perspective, the situation markets that previously were controlled; whereas in contained four possible elements of systemic risk. the earlier era prices were tightly controlled, so that First was the risk to banking systems in countries sharp movements were ruled out or transactions were other than Mexico; this narrow definition of systemic never consummated, now prices are allowed to risk focuses on depository institutions that are the respond to shocks. core of monetary and payment systems and that have As noted above, the authorities have responded to access to governmental safety nets for depository these developments with a mixture of fear and awe. institutions. Although bank claims on Mexico were a At one extreme, their concern about the scale of smaller share of Mexico's debt in early 1995 than in potential disturbances sometimes appears to handcuff 1982, a full-blown Mexican crisis, which could have them in their efforts to implement appropriate macro- affected a number of other major borrowing couneconomic policies. At the other extreme, they have tries, could have been a real threat to at least some sought to exploit new opportunities, including new national banking systems.21 ways of raising money. Could the Brady bond market Second was the risk to the broader international have developed without the debt crisis of the 1980s financial system, covering not only depository instituand without the financial technology to support it? tions but other types of financial institutions and Without this market to provide valuation benchmarks extending to stock and bond markets around the for trading in securities of developing countries, globe. As argued previously, the loss of financial would it have been as easy for borrowers to price and wealth as a consequence of contagion from the Mexicome to market with other securities? These are can crisis was not likely to have been large enough difficult questions on which to reach firm conclu- by itself to have had a major impact on wealth, sions. However, my answer to both questions is welfare, or demand in the industrial countries; but negative. such adverse financial or psychological effects could not be ruled out. Third was the risk to economic activity around the Lessons for the Financial Authorities world, the possibility not only that the Mexican economy might go into a deep and prolonged recession The principal lesson from the Mexican experience for with negative spillover effects but also that the Mexithe functioning of the international financial system can crisis might spread to other borrowers and impart is that the authorities must now rethink how they a global deflationary impetus of considerable size. interact with the market in crisis situations. As noted From the perspective of the end of December 1994, earlier, gone are the days when the G-10 central this risk was seen as neither very large nor very banks could quickly assemble a bridge loan that troublesome after the vigorous growth in most of the would serve to stabilize expectations about the situation in a major borrowing country. Also gone are the days when the Managing Director of the IMF and the 21. According to data from the Bank for International Settlements, Chairman of the Board of Governors of the Federal which are not fully comparable for the two dates, bank claims on developing countries that are not members of the Organization of Reserve System could gather representatives of the Petroleum Exporting Countries rose from $247 billion in Decemmajor private international financial institutions in a ber 1982 to $489 billion in December 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

208 Federal Reserve Bulletin • March 1996 industrial countries in 1994; against the early 1996 able failing, given that financial authorities are often background of slowing growth in many industrial behind the curve in such matters, is that the Mexican countries (several still with high unemployment rates) authorities chose to prevent the development of forand deep fissures in the Japanese financial system, ward or futures market contracts in pesos. Neverthethis risk might be evaluated differently. less, this policy was inconsistent with other elements Finally, there was the risk to the global trend of market-oriented reform in Mexico. Some observtoward market-oriented reforms that had swept the ers would like to see financial sector reforms in developing world over the previous decade, drawing countries like Mexico phased in more slowly. Others into the mainstream not only other countries in Latin argue that in the Mexican case the absence of finan- America and the economies in transition in East and cial market facilities such as a forward or futures Central Europe and the former Soviet Union but also market to absorb pressures associated with the peso's countries such as China and India. What if the devaluation was one (but only one) of the reasons authorities in Mexico (a country seen at the forefront that the peso crisis of 1994-95 was more virulent of this trend) concluded from their experience that than the European monetary crisis of 1992. they had chosen the wrong model and then reverted to a model emphasizing nonmarket solutions? What would be the reaction in other formerly like-minded Policy Implications for the International countries? Whether this consideration is relevant Financial System under the heading of "systemic risk" is debatable, but the authorities in most major borrowing countries The first implication of the Mexican experience for did sit down in January 1995 to consider the implica- the international financial system is that effective tions of the Mexican situation for their economic and collective action requires a broader consensus on the financial strategies.22 nature of systemic risks in these types of situations. The fundamental issue is not primarily that all An evaluation should take full account of the moral these elements of systemic risk were present in the hazard implications—that is, feedback effects on Mexican situation, although I think they were. The decisions by borrowers, investors, and international point is that in the Mexican case there was no con- financial institutions—of adopting too broad or sensus on the nature or size of the systemic risk explicit a definition of systemic risk. What were the involved, nor is there likely to be in future cases. stakes for the international financial system and the Consequently, the lack of consensus in the official world economy as Mexico was forced to devalue community, as well as in private financial markets, on the peso in December 1994? What were the potential what to do about the situation is not surprising.23 systemic implications? The U.S. authorities did not A final lesson from the Mexican experience con- see them the same way that the authorities in some of cerns the issue of transparency and markets, because the other major countries did.24 these affect the way the global financial system func- The second implication is that efforts to understand tions. In the absence of full and accurate information, the functioning of financial markets and to safeguard markets tend to trade on the basis of false premises, their integrity should not be confined to markets in and investors react violently when the truth or a new the industrial countries. Here, again, the Mexican rumor surfaces. In retrospect, the Mexican authorities experience reveals the continuum extending from the were clearly less than fully forthcoming about their most sophisticated trading in foreign exchange mareconomic and financial situation; they were more kets involving the major currencies to domestic finantransparent than critics in the market have argued, but cial markets in developing countries. they were not as transparent as they might have been. Third is the implication for preventive activities. For example, until early 1995, Mexico announced its How best can the international financial community international reserve position only three times a year (private-sector as well as public-sector, including the or when otherwise convenient. A more understand- international financial institutions) increase the probability that situations like the Mexico crisis either will not arise or will not involve such massive shocks 22. Again, see Krugman for a contrarian view: the Mexican peso to the economy of the country directly involved or to crisis marked a healthy "beginning of the deflation of the Washington consensus" ("Dutch Tulips and Emerging Markets," p. 31). 23. This lack of consensus was exacerbated by the apparent success, by mid-1995, of international efforts to stabilize Mexico's external financial situation. Some have argued that such success proves that 24. This is not a clean distinction because disagreements about the the official response to the Mexican crisis was not necessary, while nature of the threat were mixed with disagreements about whose others have argued, incorrectly in my view, the reverse. responsibility it was to meet the threat. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Mexican Peso Crisis 209 the world economy and financial system? Among the to deal with these situations without distorting incenelements of better prevention are increased transpar- tives with respect to decisions of the various players ency and provision of data to markets, and three (the moral hazard issue). types of early warning system—one for the recipient A search for a better way to manage these crises country, one for the market participants, and one for might proceed on the assumption that all crises will the official international financial organizations. not, and perhaps should not, be preventable. But the Fourth, assuming that prevention is only 90 per- analysis might also assume that decisionmakers will cent of any cure (at best), what scope should there perceive a need to manage a crisis so that it does be for international rescue operations in such circum- minimal damage to the functioning of the internastances? Here the beginning of a consensus is in the tional financial system and the world economy; in communique that came out of the Halifax Summit of other words, the option of leaving the country to Heads of State and Government of the Group of work out its problems with the market will not be Seven Countries in July 1995.25 Few object to the attractive in most circumstances. Finally, the analysis principle that multilateral financial support should might assume that external emergency resources may be potentially available to deal with certain crisis well be inadequate to handle all such situations. situations. However, considerable differences of view Under these assumptions, the answer to the quesexist about how to define those crisis situations, tion of whether there should be a better way to handle about whether it is realistic (in light of trends in these crises obviously is yes. But such an obvious international financial markets) to think that the mul- answer to a complex question suggests the need tilateral institutions can mobilize enough financial to examine the stated assumptions. At the same resources to deal with the "next Mexico" or the time, more orderly workout arrangements to govern "fifth Mexico" thereafter, and moreover, about how international debt crises should be examined. For example, would an officially sanctioned standstill procedure that potentially would govern all external financial relations of a country in a crisis situation 25. From the Halifax communique: be either feasible or desirable?26 Any prediction as If prevention fails, financial market distress requires that multilat- to the results of such an examination is premature; eral institutions and major economies be able to respond where however, they are more likely to be evolutionary than appropriate in a quick and coordinated fashion. Financing mechanisms must operate on a scale and with the timeliness required to revolutionary. manage shocks effectively. In this context we urge the IMF to: establish a new standing procedure—"Emergency Financing Mechanism"—which would provide faster access to Fund arrangements with strong conditionality and larger up-front disbursements 26. The Halifax communique cautiously endorsed such an examiin crisis situations. To support this procedure, we ask: the G-10 and nation: "Recognizing the complex legal and other issues posed in debt other countries with the capacity to support the system to develop crisis situations by the wide variety of sources of international finance financing arrangements with the objective of doubling as soon as involved, we would encourage further review by G-10 Ministers and possible the amount currently available under the GAB [General Governors of other procedures that might also usefully be considered Arrangements to Borrow] to respond to financial emergencies. for their orderly resolution." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

210 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report describes Treasury and System mark. The dollar also rose 0.6 percent on a tradeforeign exchange operations for the period from weighted basis against other Group of Ten (G-10) October through December 1995. It was presented by currencies.2 Toward the end of the quarter, the dollar Peter R. Fisher, Executive Vice President, Federal consolidated in increasingly narrow ranges, and trad- Reserve Bank of New York, and Manager for Foreign ing activity declined as market participants reduced Operations, System Open Market Account. Soo J. their appetite for risk before year-end. The U.S. Shin was primarily responsible for preparation of the monetary authorities did not undertake any interreport.1 vention operations during the quarter. In other operations, the U.S. Treasury's Exchange Stabilization During the fourth quarter of 1995, the dollar appreci- Fund (ESF) and the Federal Reserve System received ated modestly, strengthening 3.7 percent against the repayments from Mexico of $350 million each on Japanese yen and 0.5 percent against the German their respective short-term swap arrangements, and 1. The charts for the report are available on request from Publica- 2. The dollar's movements on a trade-weighted basis in terms of tions Services, Mail Stop 127, Board of Governors of the Federal other G-10 currencies are measured using an index developed by staff Reserve System, Washington, DC 20551. at the Board of Governors of the Federal Reserve System. 1. Foreign exchange holdings of U.S. monetary authorities, based on current exchange rates Millions of dollars Quarterly changes in balances by source BBaallaannccee,, BBaallaannccee,, IItteemm SSeepptt.. 3300,, 11999955 Net purchases Impact of Investment Currency DDeecc.. 3311,, 11999955 and sales1 sales2 income ad v j a u l s u t a m ti e o n n t s3 FEDERAL RESERVE Deutsche marks 13,429.8 .0 .0 132.6 -47.8 13,514.7 Japanese yen 7,152.9 .0 .0 9.3 -289.8 6,872.4 Mexican pesos4 956.2 -362.4 .0 12.4 -4.3s 601.9 Interest receivables6 114.1 113.5 Other cash flow from investments7 -3.3 Total 21,653.0 21,099.1 U.S. TREASURY EXCHANGE STABILIZATION FUND Deutsche marks 6,795.1 .0 .0 67.5 -24.2 6,838.4 Japanese yen 10,509.3 .0 .0 4.4 -425.6 10,088.1 Mexican pesos4 11,500.0 -#)8.9 .0 258.9 ,0s 11,150.0 Interest receivables6 304.0 302.6 Other cash flow from investments7 -12.7 Total 29,108.5 28,366.4 NOTE. Figures may not sum to totals because of rounding. 5. Valuation adjustments on peso balances do not affect profit and loss 1. Purchases and sales include foreign currency sales and purchases related to because the effect is offset by the unwinding of the forward contract at the official activity, swap drawings and repayments, and warehousing. repayment date. Note that the ESF does not mark to market its peso holdings, 2. Calculated using marked-to-market exchange rates; represents the differ- but the Federal Reserve System does. ence between the sale exchange rate and the most recent revaluation exchange 6. Interest receivables for the ESF are revalued at month-end exchange rates. rate. Realized profits and losses on sales of foreign currencies, computed as the Interest receivables for the Federal Reserve System are carried at cost and are difference between the historic cost-of-acquisition exchange rate and the sale not marked to market until interest is paid. exchange rate, are shown in table 2. 7. Cash flow differences from payment and collection of funds between 3. Foreign currency balances are marked to market monthly at month-end quarters. exchange rates. 4. See table 4 for a breakdown of Mexican swap activities. Note that the investment income on Mexican swaps is sold back to the Bank of Mexico. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

211 they renewed the same arrangements in the amount troubled housing loan corporations (jusen). These of $650 million each for an additional ninety days. concerns were manifested in additional premia on yen- and dollar-denominated LIBOR (London Interbank Offered Rate) deposits that Japanese banks had SUBDUED YEAR-END MARKET ACTIVITY to pay to borrow money. Although the Japan premium subsequently receded, concerns about the The dollar opened the quarter at DM 1.4273 and health of the Japanese banking system continued to ¥99.55 and proceeded to fluctuate between linger through the remainder of the quarter. DM 1.3808 and DM 1.4550 and ¥99.28 and ¥104.12 during the period. In the environment of limited risk-taking witnessed during the quarter, countervail- TENSIONS AMONG CURRENCIES IN THE ing political and economic developments in the EUROPEAN UNION United States and other countries helped keep the dollar in these relatively narrow ranges. The dollar As the quarter began, the dollar eased against the closed the quarter at DM 1.4339 and ¥103.20. mark. Among the factors adversely affecting the dollar, tensions among currencies in the European Union (EU) remained most discernible. These strains spo- GRADUAL APPRECIATION OF THE DOLLAR radically escalated as public sector strikes against AGAINST THE YEN social-security-reform measures intensified in France, and uncertainty in Italy regarding the future of Prime The dollar modestly extended its gains against the Minister Dini's government threatened to jeopardize yen from the previous quarter as the wide differential the 1996 budget process. In late October, as these in interest rates and signs of reduced trade imbal- events increasingly drew the attention of market parances between the United States and Japan continued ticipants, the German mark generally strengthened to favor the dollar. In addition, the prospects for fiscal against other EU currencies. Subsequently the dollar consolidation in the United States combined with a sustained losses against the mark to reach the quarbetter U.S. economic outlook relative to other major ter's low of DM 1.3808. Later, however, the French economies also helped to support market sentiment government demonstrated its commitment to prefor the dollar. serve the core social-security-reform measures, and As in the previous quarter, market participants continued to anticipate increased private capital out- 2. Net profits or losses (-) on U.S. Treasury flows from Japan as a result of low domestic interest and Federal Reserve foreign exchange operations, rates and the sizable amount of domestic debt maturbased on historical cost-of-acquisition exchange rates ing in the fourth quarter. The substantial decrease in Millions of dollars Japan's current account surplus also contributed to the negative sentiment toward the yen. Furthermore, U.S. Treasury Federal Exchange Period and item most Japanese exporters were perceived to be absent Reserve Stabilization Fund from the marketplace, having already filled their hedging requirements. On the other hand, Japanese Valuation profits and losses on outstanding assets and liabilities, institutional investors reportedly purchased dollars in Sept. 30, 1995 Deutsche marks 2,939.8 1,079.0 conjunction with acquisitions of U.S. government Japanese yen 2,016.4 2,964.7 securities. Amidst these factors the dollar rose to the Total 4,956.3 4,043.7 quarter's high of ¥104.12 on November 2. Realized profits and losses The dollar also benefited, in part, from market from foreign currency sales, Sept. 30-Dec. 31, 1995 perceptions of a weak Japanese banking system and Deutsche marks .0 .0 of a lack of transparency in Japanese bank accounting Japanese yen .0 .0 practices and disclosures of nonperforming loans. Total .0 .0 After several Japanese banks were downgraded by a Valuation profits and losses on credit rating agency, short-term funding costs for outstanding assets and liabilities, Dec. 31, 19951 nearly all Japanese banks increased sharply, exacer- Deutsche marks 2,892.0 1,054.8 Japanese yen 1,726.6 2,539.2 bated by year-end funding pressures. Stress on the Japanese banking system was highlighted by prob- 4,618.6 3,593.9 lems related to Daiwa Bank's operations in the NOTE. Figures may not sum to totals because of rounding. 1. Valuation profits or losses are not affected by peso holdings, which are United States and the lack of a resolution to the canceled by forward contracts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

212 Federal Reserve Bulletin • March 1996 Italy's 1996 budget process advanced. As a result, the The positive effect on the dollar stemming from mark reversed its earlier trend and weakened against expectations of lower European interest rates was other European currencies. In turn, this weakening partly offset by increasing expectations of monetary trend helped the dollar to recover against the mark. easing in the United States, where signs of somewhat slower economic growth and subdued inflationary pressures persisted. On December 19 the Federal EXPECTATIONS OF LOWER INTEREST RATES Reserve reduced the federal funds rate 25 basis IN EUROPE points. Subsequently, expectations of monetary easing in Europe outpaced expectations in the United As the quarter progressed, expectations that Euro- States and remained a dollar-supportive factor. pean interest rates would decline, bolstered by evidence of slowing economic growth and subsiding inflationary pressures in major European countries, UNCERTAINTIES SURROUNDING THE U.S. boosted the dollar to the quarter's high of DM 1.4550 BUDGET NEGOTIATIONS against the mark on December 8. Subsequently central banks in Germany, the United Kingdom, France, Throughout the quarter, the apparent consensus on and several other European countries lowered their achieving a balanced budget in the United States was official interest rates 25-50 basis points in December, viewed by market participants as a positive developa development that led market participants to expect ment for U.S. asset markets. At times, however, parfurther easing. ticularly toward the end of the quarter, concerns about the ceiling on the U.S. Treasury's borrowing authority somewhat impeded the dollar's gains. In 3. Currency arrangements the U.S. government securities market, the protracted Millions of dollars impasse in budget negotiations raised concerns about Institution Amount of Outstanding, possible disruptions in the regular Treasury auction facility Dec. 31, 1995 schedule and contractions in the supply of Treasury FEDERAL RESERVE securities. Because foreign exchange market partici- RECIPROCAL CURRENCY ARRANGEMENTS pants generally did not take significant dollar posi- Austrian National Bank 250 0 tions based on the potential outcome of the budget National Bank of Belgium 1.000 negotiations, however, the net effect of these con- Bank of Canada 2,000 National Bank of Denmark 250 cerns on the dollar was muted. Bank of England 3,000 Bank of France 2,000 Deutsche Bundesbank 6,000 Bank of Italy 3,000 Bank of Japan 5,(XX) 0 Bank of Mexico1 NORTH AMERICAN DEVELOPMENTS Regular swaps 3,000 650 Temporary swaps 3,000 0 Netherlands Bank 500 Bank of Norway 250 In Canada financial markets were volatile preceding Bank of Sweden 300 the referendum on Quebec independence. In the third Swiss National Bank 4,000 week of October, the Canadian dollar fell to a four- Bank for International Settlements Dollars against Swiss francs 600 month low of Can$1.3790 against the U.S. dollar as Dollars against other authorized European currencies 1,250 0 opinion polls indicated an even split between "yes" and "no" votes. After the secessionist referendum Total 35,400 650 was defeated, the Canadian dollar recovered, but U.S. TREASURY EXCHANGE STABILIZATION FUND given the narrow margin of defeat, focus turned CURRENCY ARRANGEMENTS immediately to the possibility of another referendum Deutsche Bundesbank 1,000 0 in the near future. Bank of Mexico1 After the referendum, market participants increas- Regular swaps 3,000 650 United Mexican States1 ingly anticipated monetary easing by the Bank of Medium-term swaps 10,500 Canada, and the Canadian dollar resumed its weaken- Total' 11,150 ing trend against the U.S. dollar. On December 20 the 1. Facilities available to Mexico comprise short-term swaps between the Bank of Canada lowered its overnight call rate Bank of Mexico and both the Federal Reserve and the ESF, as well as medium- 25 basis points after the Federal Reserve's policy term swaps and government guarantees between the government of Mexico and the ESF. The total amount available from both medium-term swaps and govern- easing. The Canadian dollar traded calmly for the ment guarantees is $20 billion, less any outstanding drawings on the shortremainder of the month. term facilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 213 4. Drawings/rollovers and repayments (-) by Mexican TREASURY AND FEDERAL RESERVE monetary authorities FOREIGN EXCHANGE RESERVES Millions of dollars Out- Out- The U.S. monetary authorities did not undertake any Item standing, Oct. Nov. Dec. standing, intervention operations this quarter. At the end of the Sept. 30, Dec. 31, 1995 1995 quarter, the current values of the German mark and Japanese yen reserve holdings of the Federal Reserve Reciprocal currency arrangements with System and the ESF were $20.5 billion and $17.0 bilthe Federal Reserve Bank of Mexico lion respectively. The U.S. monetary authorities Regular 1,000 -350 650 -650' invest all of their foreign currency balances in a 650' variety of official instruments that yield market- Currency arrangements related rates of return and that have a high degree of with the US Treasury Exchange Stabilization liquidity and credit quality. A significant portion of Fund these holdings are invested in German and Japanese Bank of Mexico Regular 1,000 -350 0 0 650 government-issued securities. As of December 31 the -6501 650' Federal Reserve and the ESF held $7.3 billion and Medium-term 10,500 0 0 0 10,500 $10.9 billion, respectively, in German and Japanese NOTE. Data are on a value-date basis. government securities either directly or under repur- 1. Remainder of February 2 drawing was renewed on October 30 for an addi- chase agreement.3 In addition, the ESF held $10.5 biltional ninety days. lion equivalent in nonmarketable Mexican government securities in connection with the medium-term swap arrangement. • In Mexico financial markets encountered abrupt selling pressures in the first half of the quarter as political concerns and worse-than-expected economic data rekindled doubts about the timing of and pros- 3. This sentence is corrected and revised from the original text of the "Treasury and Federal Reserve Foreign Exchange Operations" pects for economic recovery. The ensuing selloff was report released February 7, 1996. exacerbated by the reluctance among many investors to hold Mexican assets toward year-end. Near the end of the quarter, the Mexican monetary authorities tightened liquidity conditions and purchased pesos in the foreign exchange market to dampen volatility. The Mexican financial markets stabilized, and the peso, at NP 7.70, closed the quarter 17.2 percent weaker against the dollar. MEXICAN SWAP ACTIVITY On October 11 Mexico made partial repayment on its short-term swap arrangements with the U.S. monetary authorities. A total of $700 million was repaid, divided evenly between the Federal Reserve System and the ESF. Subsequently the respective short-term arrangements, with principal amounts totaling $1.3 billion, were renewed on October 30 for ninety days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

214 Industrial Production and Capacity Utilization for January 1996 Released for publication February 16 output of business equipment rose 1 percent, boosted by further gains in the production of computers and a Industrial production declined 0.6 percent in January return to a near-normal level of output for aircraft after slight gains in the previous two months. The production; the latter had been sharply curtailed by a output of most major market groups decreased, partly strike at a major aircraft producer from early October as a result of the blizzard that hit the East Coast early to mid-December. The increase in aircraft and parts in January. The production of motor vehicles and boosted total output 0.1 percent in January. At parts dropped 4 percent, with a portion of the curtail- 121.9 percent of its 1987 average, industrial proment occurring during the week of the storm. The duction was about unchanged from January 1995. Industrial production indexes Twelve-month percent change Twelve-month percent change Total industry Manufacturing Materials Durable manufacturing Products Nondurable manufacturing Capacity and industrial production Ratio scale, 1987 production = 100 Ratio scale, 1987 production =100 Total industry Capacity Manufacturing Capacity Production Production Percent of capacity Percent of capacity Total industry Manufacturing Utilization Utilization 1981 1983 1985 1987 1989 1991 1993 1995 1981 1983 1985 All series are seasonally adjusted. Latest series, January. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

215 Industrial production and capacity utilization, January 1996 Industrial production, index, 1987= 100 Percentage change Category 11999955 11999966 19951 1996 JJaann.. 11999955 ttoo Oct/ Nov.r Dec.r Jan.P Oct/ Nov/ Dec/ Jan.P JJaann.. 11999966 Total 122.2 122.4 122.6 121.9 -.5 .2 .2 -.6 .1 Previous estimate 122.3 122.7 122.8 -.4 .3 .1 Major market groups Products, total2 118.3 118.6 119.0 118.2 -.9 .3 .3 -.6 -.2 Consumer goods 114.9 115.5 115.3 113.6 -1.0 .6 -.2 -1.4 -1.6 Business equipment 156.5 156.8 158.5 160.0 -1.1 .2 1.1 1.0 4.5 Construction supplies 108.3 109.2 110.6 109.1 -.1 .8 1.3 -1.4 -.6 Materials 128.1 128.3 128.2 127.6 .0 .1 .0 -.5 .4 Major industry groups Manufacturing 124.4 124.5 124.7 124.0 -.4 .1 .1 -.6 -.1 Durable 133.5 134.3 134.8 134.2 -.7 .6 .4 -.5 1.8 Nondurable 114.3 113.8 113.5 112.6 .0 -.5 -.3 -.7 -2.6 Mining 98.2 98.1 98.0 97.7 -1.8 -.1 -.1 -.3 -2.9 Utilities 121.6 123.3 124.1 123.0 -.9 1.4 .6 -.9 4.9 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1995 1996 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, JJJaaannn... 111999999555 11996677--9955 11998822 11998888--8899 tttooo Jan. Oct/ Nov/ Dec/ Jan.P JJJaaannn... 111999999666 Total 82.1 71.8 84.9 85.1 82.9 82.8 82.7 81.9 3.9 Previous estimate 83.0 83.0 82.8 Manufacturing 81.4 70.0 85.2 84.6 82.1 82.0 81.8 81.0 4.4 Advanced processing 80.7 71.4 83.5 82.5 80.5 80.3 80.1 79.3 4.9 Primary processing .. 82.6 66.8 89.0 89.7 86.0 85.9 ' 85.6 85.0 2.9 Mining 87.4 80.6 86.5 89.8 87.6 87.5 87.4 87.2 .1 Utilities 86.9 76.2 92.6 87.3 89.8 90.9 91.4 90.6 1.1 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. Capacity utilization dropped 0.8 percentage point in ances, fell; the production of parts for equipment, January, to 81.9 percent. which includes parts for aircraft and components for When analyzed by market group, the data show high-technology equipment, was about unchanged. that the output of consumer goods declined 1.4 per- However, the output of basic metals rose as the cent; the drop in motor vehicle assemblies accounted production of steel increased. The production of nonfor about one-third of the decline. In other categories, durable goods materials dropped sharply because of such as goods for the home, production also was continued weakness in the output of textiles, paper, weak, exacerbated by the effects of the storm. Apart and chemicals. The production of energy materials from the ongoing strength in computers and the boun- also declined; coal mining, which had been disrupted ceback in aircraft, the output of business equipment during the week of the storm, fell about 5 percent. declined about Vi percent mainly because of the drop When analyzed by industry group, the data show in motor vehicles; the production of industrial equip- that manufacturing output declined 0.6 percent, held ment remained sluggish, having changed little, on down, in part, by the negative effects of the blizzard; balance, since last August. the reduction in motor vehicles and parts production With a sharp drop in the production of lumber and accounted for about half of the overall decline. plywood, the output of construction supplies fell Among durables, the production of steel and com- 1.4 percent. The production of materials declined puters increased sharply, but the output of most other 0.5 percent. The output of durable goods materials major industries declined. Among nondurables, prodecreased 0.3 percent, with mixed results among the duction in all major industries fell, with sizable ( major subcategories. The output of parts for con- declines occurring in textiles and apparel. Production sumer durables, mainly motor vehicles and appli- in mining fell 0.3 percent, and the output at utilities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

216 Federal Reserve Bulletin • March 1996 declined 0.9 percent. Electricity generation declined, utilization rate fell 0.8 percentage point, to 79.3 perwith demand for the month as a whole not as much cent, and was more than 1 percentage point below its above normal as it had been in December. 1967-95 average. For primary-processing industries, The factory operating rate dropped 0.8 percent- the rate declined 0.6 percentage point, to 85.0 perage point, to 81.0 percent, its lowest level since cent, but remained more than 2 percentage points November 1993. Utilization rates were down for all above its long-run average. In mining, the utilization manufacturing industries except for petroleum and rate declined 0.2 percentage point, and the operating products. For advanced-processing industries, the rate for utilities was down 0.8 percentage point. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

217 Announcements POLICY ACTIONS BY THE BOARD OF panel was established by the Board in 1980 and GOVERNORS AND BY THE FEDERAL OPEN includes savings and loan, savings bank, and credit MARKET COMMITTEE union representatives. The council meets at least four times each year with the Board of Governors to The Federal Reserve on January 31, 1996, announced discuss developments relating to thrift institutions, the following policy actions: the housing industry, mortgage finance, and certain regulatory issues. • The Board of Governors approved a reduction The new council president for 1996 is Ms. E. Lee in the discount rate from 5LA percent to 5 percent, Beard, President and CEO, First Federal Savings & effective immediately. Loan Association, Hazleton, Pennsylvania. The new • In a related move, the Federal Open Market vice president is Mr. David F. Holland, Chairman, Committee agreed that the reduction would be President, and CEO, Boston Federal Savings Bank, reflected fully in interest rates in the reserve markets. Boston, Massachusetts. This is expected to result in a reduction in the federal The five new members, named for two-year terms funds rate of 25 basis points, from about 5V2 percent that began January 1, are the following: to about 5LA percent. Barry C. Burkholder, President and CEO, Bank United of Texas FSB, Houston, Texas. Moderating economic expansion in recent months has reduced potential inflationary pressures going Michael T. Crowley, Jr., President and CEO, Mutual Savings Bank, Milwaukee, Wisconsin. forward. With price and cost trends already subdued, a slight easing of monetary policy is consistent with Douglas A. Ferraro, President and CEO, Bellco First Federal Credit Union, Englewood, Colorado. contained inflation and sustainable growth. In taking the discount action, the Board approved Charles R. Rinehart, Chairman and CEO, Home Savings requests submitted by the Boards of Directors of the of America, FSB, Irwindale, California. Federal Reserve Banks of New York, Philadelphia, Ronald W. Stimpson, President and CEO, Leader Fed- Cleveland, Atlanta, Minneapolis, and Dallas. Subse- eral Bank for Savings, Memphis, Tennessee. quently the Board approved actions by the Board of Directors of the Federal Reserve Bank of San Francisco, also effective January 31, and by the APPOINTMENTS OF NEW MEMBERS TO THE Boards of Directors of the Federal Reserve Banks of CONSUMER ADVISORY COUNCIL Boston, Richmond, Chicago, and Kansas City, effective February 1, and by the Board of Directors of The Federal Reserve Board on January 19, 1996, the Federal Reserve Bank of St. Louis, effective named nine new members to its Consumer Advisory February 5. Council to replace those members whose terms have expired and designated a new chairman and vice chairman of the council for 1996. The Consumer Advisory Council was established APPOINTMENTS OF NEW MEMBERS TO THE by the Congress in 1976, at the suggestion of the THRIFT INSTITUTIONS ADVISORY COUNCIL Board, to advise the Board on the exercise of its duties under the Consumer Credit Protection Act and The Federal Reserve Board on January 2, 1996, on other consumer-related matters. The thirtyannounced the names of five new members of its member council, with staggered three-year terms of Thrift Institutions Advisory Council and designated a office, meets three times a year at the Board's offices new president and vice president of the council for in Washington, D.C. 1996. Katharine W. McKee, Associate Director of the The council is an advisory group made up of Center for Community Self-Help in Durham, North twelve representatives from thrift institutions. The Carolina, was designated chairman. Her term will run Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

218 Federal Reserve Bulletin • March 1996 through December 1996. Julia M. Seward, Vice income borrowers that encompasses homebuyer education, President and Corporate Community Reinvestment appropriate lending products, credit quality, and earlyintervention credit counseling as well as inspection ser- Officer for Signet Bank in Richmond, Virginia, was vices and home maintenance training programs. Dr. Justa designated vice chairman. Her term on the council was previously the director of the NHS of Kensington/ ends in December 1997. Windsor Terrace in Brooklyn. Before that, she was an The nine new members are the following: adjunct assistant professor at Queens College, City University of New York (CUNY), and taught undergraduate and Richard S. Amador graduate courses in housing, neighborhoods, and commu- Los Angeles, California nity organizations. She received a Ph.D. from CUNY's Graduate School and University Center in 1984. Mr. Amador is President and CEO of CHARO Community Development Corporation, a diversified community and Errol T. Louis economic development nonprofit corporation. The corpora- Brooklyn, New York tion has the following subsidiaries: CHARO Entrepreneurial Business Center, CHARO Housing Development Mr. Louis is Treasurer and Manager of the Central Brook- Corporation, CHARO Career Center, CHARO Environ- lyn Federal Credit Union, which he cofounded in 1993. He mental Services, MidCity Plant Growers, MidCity Prop- previously served as associate director of the National erty Management, CHARO Child Care Centers, and Federation of Community Development Credit Unions, CHARO Industries, a light industrial assembly and packag- where he managed a grant- and program-related investing plant. Mr. Amador currently serves on the Los Angeles ment from the Ford Foundation to strengthen the capacity Economic Task Force and the Los Angeles Legal Corps. of credit unions in low-income communities throughout Over the years he has held numerous other federal, state, the United States. He received a bachelor's degree from and local appointments, including the Mayor's Blue Rib- Harvard University and a master's degree from Yale Unibon Committee on Affordable Housing, the President's versity and is completing a doctoral dissertation at Yale on Commission on Manpower Policy, and the California State the role of credit in urban development. Mr. Louis is an Job Training and Placement Services Board (which he active participant on the New York City CRA Task Force served as Chairman). He is also a past President of the and the Coalition for Sound Community Lending. He also Latin Business Association. serves on the boards of the National Association of Community Development Loan Funds and the Non-profit Facilities Fund. Heriberto Flores Springfield, Massachusetts William N. Lund Mr. Flores has served as President and CEO of the Bright- Falmouth, Maine wood Development Corporation (BDC) since 1989. BDC was founded in 1982 to bring housing and economic devel- Mr. Lund is Acting Director of the Office of Consumer opment in Springfield's North End through partnerships Credit Regulation for the State of Maine and was adminisamong lenders, government officials, and area businesses. trator of its predecessor agency, the Bureau of Consumer Mr. Flores has brought micro-loans for small minority Credit Protection, for eight years. His agency enforces the businesses and home ownership to North End's mostly Maine Consumer Credit Code and regulates mortgage com- Hispanic population. With assets of more than $25 million pany licensing, credit sales and consumer loans, debt colin property, BDC has a portfolio that includes a newly lection, and credit reporting. The agency conducts annual constructed $2.5 million shopping center, La Plaza del compliance examinations of several hundred mortgage Mercado, and a $3 million neighborhood medical clinic, company, collection agency, retail creditor, and credit El Centro de Salud Medico, Inc., will be completed this reporting agency offices. Mr. Lund just completed a term winter. Mr. Flores also serves as executive director of the as president of the National Association of Consumer New England Farm Workers' Council, a $17 million non- Credit Administrators, the organization of state consumer profit service agency that administers educational, training, credit regulators from the United States and Canada. He is and assistance programs throughout New England. He is past president of the Association of Uniform Consumer on the Board of Trustees of the University of Massachu- Credit Code States, which consists of regulators from setts. Mr. Flores has served on the board of directors of states whose credit laws are based on the Uniform Conthe Minority Enterprise Investment Corporation, which sumer Credit Code. Mr. Lund received a law degree from reviews and grants loans to minority businesses in the University of Maine School of Law. Massachusetts. Margot Saunders Francine C. Justa Washington, D.C. New York, New York Ms. Saunders is Managing Attorney for the Washington Dr. Justa is Executive Director of New York City's Neigh- office of the National Consumer Law Center (NCLC). In borhood Housing Services, a member of the Neighborhood this capacity, she represents the interests of low-income Reinvestment Corporation's national network. Her sixty- consumers before the Congress on credit and utilities matfive-member staff operates six community-based NHS ters and provides assistance to local legal service organizaprograms, a homeownership center, and city wide lending tions, private attorneys, government agencies, and others programs with a corporate budget and loan funds totaling around the nation. NCLC, which is based in Boston, $22 million. She also co-chairs the National Homeowner- publishes a comprehensive set of consumer law manuals ship Campaign, an affordable-housing program for low- and conducts national and state consumer-law training Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 219 conferences; NCLC areas of expertise include Truth in opment to designate twelve "Model Industrial Corridors." Lending, mortgage foreclosures, consumer credit, and CANDO's City-Wide Development Corporation has packstudent loans. Before joining NCLC in 1991, Ms. Saunders aged 130 loans for more than $42 million in private financwas an attorney with the North Carolina Legal Services ing. Its Self-Employment Loan Fund, which makes loans Resource Center and the Governor's Advocacy Council for under $10,000 for start-up and businesses, has loaned more Children and Youth, in Raleigh, and with the Legal Aid than $145,000 to minority or women entrepreneurs. Before Society of Northwest North Carolina, in Winston-Salem. joining CANDO, Mr. Wysocki was with the National Ms. Saunders received a law degree from the University of Training and Information Center (NTIC). Mr. Wysocki North Carolina School of Law. is Secretary of the National Community Reinvestment Coalition. He serves on Chicago's Empowerment Zone Gregory D. Squires Coordinating Council and is a longstanding member of the Milwaukee, Wisconsin Neighborhood Lending Review Boards for both First- Chicago-NBD and Harris Bank. Mr. Squires is a Professor in the Department of Sociology at the University of Wisconsin-Milwaukee. His research Other Council members, whose terms continue has focused on the racial effects of urban redevelopment initiatives and mortgage lending and property insurance through 1996 and 1997, are listed below (together redlining. Mr. Squires served three years as president of the with the expiration date of each one's term of office). board of the Northwest Side Community Development Corporation in Milwaukee. He is a member of the advisory Thomas R. Butler, President and Chief Operating Offiboard to the Metropolitan Milwaukee Fair Housing Councer, NOVUS Services, Inc., Riverwoods, Illinois, Decemcil and a consultant to the Fair Lending Coalition in ber 31, 1997. Milwaukee. For the past two years he has been on leave from the university to head the newly created Insurance Robert A. Cook, Partner, Venable, Baetjer and Howard, Unit in HUD's Office of Fair Housing and Equal Opportu- Baltimore, Maryland, December 31, 1997. nity, which developed policies clarifying the application of Alvin J. Cowans, President and CEO, McCoy Federal the Fair Housing Act to the property insurance industry. Credit Union, Orlando, Florida, December 31, 1996. Before joining the University of Wisconsin, he was a research analyst with the U.S. Commission on Civil Rights. Elizabeth G. Flores, Senior Vice President, Laredo Mr. Squires received Ph.D. and master's degrees from National Bank, Laredo, Texas, December 31, 1996. Michigan State University and a bachelor's degree from Northwestern University. Emanuel Freeman, President, Greater Germantown Housing Development Corporation, Philadelphia, Pennsylvania, December 31, 1997. George P. Surgeon Arkadelphia, Arkansas David C. Fynn, Manager of Regulatory Risk, National City Corporation, Cleveland, Ohio, December 31, 1997. Mr. Surgeon is President and CEO of Southern Development Bancorporation (Southern) and President and CEO of Robert G. Greer, Vice Chairman, Northern Trust Bank Elk Horn Bank and Trust Company of Arkadelphia. He is of Texas, N.A., Houston, Texas, December 31, 1997. also Executive Vice President of the Shorebank Corporation in Chicago, a post he has held since 1985. Southern's Kenneth R. Harney, Journalist, Washington Post Writers primary purpose is to serve as the catalyst for economic Group, Chevy Chase, Maryland, December 31, 1997. development in rural and other less developed communi- Gail K. Hillebrand, Litigation Counsel, West Coast ties in Arkansas to benefit lower-income residents. Since Regional Office, Consumers Union of U.S., Inc., San beginning operations in 1988, the bank holding company Francisco, California, December 31, 1997. and its nonbank affiliates have originated $37 million in nontraditional development investments in rural Arkansas. Terry Jorde, President and CEO, Towner County State Mr. Surgeon also serves as a director of the Arkadelphia Bank, Cando, North Dakota, December 31, 1997. Chamber of Commerce and a member of the advisory Eugene I. Lehrmann, President, American Association council of the U.S. Small Business Administration for the of Retired Persons, Madison, Wisconsin, December 31, Little Rock region. Mr. Surgeon has also served on 1997. the Community Development Lending Subcommittee of the American Bankers Association. Ronald A. Prill, Vice President, Credit, Dayton Hudson Corporation, Minneapolis, Minnesota, December 31, 1997. Theodore J. Wysocki, Jr. Lisa Rice-Coleman, Executive Director, Fair Housing Chicago, Illinois Center, Toledo, Ohio, December 31, 1997. Mr. Wysocki is Executive Director of CANDO—the Chicago Association of Neighborhood Development John R. Rines, President, General Motors Acceptance Organizations. CANDO is the largest citywide economic Corporation, Detroit, Michigan, December 31, 1997. development coalition in the United States, with Anne B. Shlay, Associate Director, Institute for Public 80 community-based nonprofit organizations and more Policy Studies, Temple University, Philadelphia, Pennsylthan 123 affiliate members (including more than 40 banks). vania, December 31, 1996. It has been the primary advocate for industrial retention and retail expansion in Chicago neighborhoods and has Reginald J. Smith, President, United Missouri Mortgage worked with the city's Department of Planning and Devel- Company, Kansas City, Missouri, December 31, 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

220 Federal Reserve Bulletin • March 1996 John E. Taylor, President and CEO, The National meeting are issued with an approximate six-week lag, Community Reinvestment Coalition, Washington, D.C., while decisions made at each meeting are announced December 31, 1996. that day. Lorraine VanEtten, Vice President and Community The 1990 transcripts have been lightly edited to Lending Officer, Standard Federal Bank of Troy, Troy, enhance readability and to redact confidential mate- Michigan, December 31, 1996. rial, such as information pertaining to individual for- Lily K. Yao, Chairman and CEO, Pioneer Federal Sav- eign central banks and private business information. ings Bank, Honolulu, Hawaii, December 31, 1996. Copies of the transcripts are available from the Board's Freedom of Information Office, Room MP-500, Federal Reserve Board, Washington, DC AMENDMENT TO THE RISK-BASED CAPITAL 20551 (202) 452-3684. STANDARD OF THE BASLE COMMITTEE ON BANKING SUPERVISION AVAILABILITY OF PRELIMINARY FIGURES The Basle Committee on Banking Supervision on ON OPERATING INCOME January 19, 1996, issued an amendment to its risk- OF THE FEDERAL RESERVE BANKS based capital standard to address market risks for internationally active banks. The amendment is con- Preliminary figures announced on January 17, 1996, tained in the following three documents: indicate that operating income of the Federal Reserve Banks amounted to $25,395 billion during 1995. Net • Overview of the Amendment to the Capital income before payment of dividends, additions to Accord to Incorporate Market Risks surplus, and payments to the Treasury totaled • Amendment to the Capital Accord to Incorporate $23,896 billion. About $23,382 billion was paid to Market Risks the U.S. Treasury during 1995. • Supervisory Framework for the Use of "Back- Federal Reserve System income is derived primatesting" in Conjunction with the Internal Models rily from interest earned on U.S. government securi- Approach to Market Risk Capital Requirements. ties that the Federal Reserve has acquired through open market operations. Income from the provision The amendment covers risks in foreign exchange of financial services amounted to $739 million. and commodities transactions and in traded debt and Operating expenses of the twelve Reserve Banks equity instruments. It was issued for public comment and branches totaled $1,695 billion. In addition, earnby the committee in April 1995 and by the U.S. ings credits in the amount of $249 million were federal banking agencies in July. The amendment granted to depository institutions under the Monetary will become effective at the end of 1997 after Control Act of 1980. Assessments to Reserve Banks completion of appropriate rulemaking procedures in for Board expenditures totaled $160.5 million, and participating countries. the cost of currency amounted to $370 million. The documents may be obtained by contacting Net additions to income amounted to $894 million. Publications Services, Mail Stop 127, Board of Net additions to income resulted primarily from Governors of the Federal Reserve System, Washing- unrealized gains on assets denominated in foreign ton, DC 20551. currencies to reflect current market exchange rates. Statutory dividends to member banks were $230.5 million. AVAILABILITY OF TRANSCRIPTS OF MEETINGS Under the policy established by the Board of Gov- OF THE FEDERAL OPEN MARKET COMMITTEE ernors at the end of 1964, all net income after the statutory dividend to member banks and the amount The Federal Reserve on January 23, 1996, made necessary to equate surplus to paid-in capital is transavailable for public inspection transcripts of meetings ferred to the U.S. Treasury as interest on Federal of the Federal Open Market Committee (FOMC) that Reserve notes. were held during 1990. The package includes transcripts of eight regularly scheduled meetings and four telephone conference calls. REGULATION K: FINAL RULE Procedures adopted by the FOMC early last year provide for the public release of transcripts for an The Federal Reserve Board issued on January 24, entire year with a five-year lag. Minutes of each 1996, a final rule implementing amendments to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 221 Board's Regulation K (International Banking Opera- The rule was developed by the Federal Reserve, tions) to permit the establishment of U.S. represen- the other federal banking agencies, and the Financial tative offices by certain foreign banks through prior Crimes Enforcement Network of the U.S. Department notice procedures. of the Treasury (FinCEN). These prior notice procedures are designed to The rule significantly reduces reporting burdens, permit foreign banks that meet certain requirements while at the same time improving the ability of law to establish representative offices without the need to enforcement authorities to investigate and prosecute file a formal application with the Board. The rule was criminal offenses involving the nation's financial effective immediately. institutions. Also, the amendments clarify that only those for- The new suspicious activity reporting rule accomeign banking organizations subject to the Interna- plishes the following: tional Banking Act and the Bank Holding Company • Combines the current criminal referral rules of Act may establish under general consent procedures the Federal Reserve and the other federal banking a representative office to engage in limited adminisagencies with FinCEN's suspicious activity reporting trative functions in connection with their existing requirements relating to money laundering offenses U.S. banking operations. • Creates a uniform reporting form and instruc- Lastly, the Board has determined to review and tions for the new "Suspicious Activity Report" act upon inquiries by "special purpose government (SAR) for use by banking organizations to report all banks" seeking exemptions from regulation under violations the Foreign Bank Supervision Enhancement Act on • Requires the filing of only one form with the basis that they do not fall within the definition of FinCEN "foreign bank" under Regulation K. Such inquiries • Enables a filer, through computer software that will be handled on a case-by-case basis. will be provided by the Federal Reserve to all of the domestic and foreign banking organizations it super- POLICY MODIFICATIONS REGARDING vises, to prepare an SAR on a computer and file it by ARRANGEMENTS FOR THIRD-PARTY ACCESS magnetic media, such as a computer diskette or tape TO FEDWIRE • Raises the thresholds for mandatory reporting in two categories and creates a threshold for the The Federal Reserve Board on January 25, 1996, reporting of suspicious transactions related to money announced that it had approved policy modifications laundering and violations of the Bank Secrecy Act to address Fedwire third-party access arrangements to reduce the reporting burdens of banking involving a service provider that is located outside organizations the United States. These changes were effective Feb- • Emphasizes recent changes in the law that proruary 1,1996. vide a safe harbor from civil liability to banking In general, foreign service provider arrangements organizations and their employees for reporting of will be subject not only to the conditions applicable known or suspected criminal offenses or suspicious to domestic service provider arrangements but also to activities. several additional conditions related to information and examination access. These incremental require- Substantially identical rules on reporting suspiments are intended to ensure that the Federal cious activity are being issued by FinCEN, the Office Reserve's oversight of Fedwire is not diminished or of the Comptroller of the Currency, the Federal inappropriately limited by activity conducted outside Deposit Insurance Corporation, the Office of Thrift the United States and that the Federal Reserve's Supervision, and the National Credit Union supervisory objectives are met. Administration. FINAL RULE FOR BANKING ORGANIZATIONS' REQUEST FOR COMMENTS ON RULES REPORTING OF SUSPICIOUS ACTIVITIES UNDER TRUTH IN LENDING The Federal Reserve Board announced on Febru- The Federal Reserve Board on January 29, 1996, ary 5, 1996, a final rule to simplify the process for requested public comment on whether the rules under reporting suspected crimes and suspicious activities Truth in Lending provide adequate protection for by banking organizations supervised by the Federal consumers seeking home equity lines of credit. Com- Reserve. The final rule is effective April 1, 1996. ments were requested by April 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

222 Federal Reserve Bulletin • March 1996 PUBLICATION OF INVESTMENT GUIDE ON ther information, contact the Division of Consumer COMMUNITY DEVELOPMENT and Community Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551 The Federal Reserve Board announced on January 4, (202) 452-3378. 1996, publication of Community Development Investments: A Guide for State Member Banks and Bank Holding Companies, along with an annual update of community development investments by bank hold- AVAILABILITY OF REVISED LISTS OF ing companies. OVER-THE-COUNTER STOCKS AND OF FOREIGN The new Guide provides an overview of policies STOCKS SUBJECT TO MARGIN REGULATIONS and procedures governing the formation of community development corporations (CDCs) and other uses The Federal Reserve Board on January 26, 1996, of equity investments for community development published a revised list of over-the-counter stocks purposes. that are subject to its margin regulations (OTC list). The Guide also covers key regulatory and strategic Also published was a revised list of foreign equity issues that financial institutions should address when securities (foreign list) that meet the margin criteria making investments in CDCs, low-income housing in Regulation T (Credit by Brokers and Dealers). limited partnerships, or other community develop- These lists are published for the information of lendment entities and projects that benefit low- and ers and the general public. moderate-income communities. The lists became effective February 12, 1996, and The Guide revises an earlier publication, originally supersede the previous lists that were effective issued in 1991, to reflect changes to the Federal November 13, 1995. The next revision of the lists is Reserve Act authorizing community development scheduled to be effective May 1996. investments for state member banks, and a new inter- The changes that were made to the revised OTC pretation of Regulation Y (Bank Holding Companies list, which now contains 4,337 OTC stocks, are as and Change in Bank Control) for community devel- follows: opment investments by bank holding companies. The Guide discusses the conditions under which institu- • Two hundred forty-one stocks have been tions may make community development invest- included for the first time, 201 under National Market ments without obtaining prior approval from the System (NMS) designation Federal Reserve and those circumstances when prior • Forty-one stocks previously on the list have been approval must be sought. removed for substantially failing to meet the require- The companion publication—Directory: Bank ments for continued listing Holding Company Community Development • One hundred eighteen stocks have been removed Investments—consists of descriptive profiles of exist- for reasons such as listing on a national securities ing CDCs and investments made by bank holding exchange or involvement in an acquisition. companies. Each profile includes information on the amount of initial capital invested by an institution, a The OTC list is composed of OTC stocks that have description of the community development projects been determined by the Board to be subject to margin or activities undertaken or planned, and contact per- requirements in Regulations G (Securities Credit by sons who can provide additional information on the Persons other than Banks, Brokers, or Dealers), T, organization and operations of the CDC or other and U (Credit by Banks for Purchasing or Carrying community development investment activity. Margin Stocks). It includes OTC stocks qualifying In issuing the publications, the Federal Reserve under Board criteria and also includes all OTC stocks also emphasized that bank holding companies or state designated as NMS securities. Additional NMS secumember banks that are considering making commu- rities may be added in the interim between quarterly nity development investments are encouraged to Board publications; these securities are immediately consult with both the Community Affairs staff and marginable upon designation as NMS securities. the Applications staff at their District Federal Reserve The foreign list specifies those foreign equity secu- Bank. rities that are eligible for margin treatment at broker- Single or multiple copies of both publications can dealers. There were no additions, name changes, or be obtained by contacting the Community Affairs deletions from the foreign list; it contains 701 foreign Office of a District Federal Reserve Bank. For fur- equity securities. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

223 Minutes of the Federal Open Market Committee Meeting Held on December 19,1995 A meeting of the Federal Open Market Committee Mr. Ramm,1 Section Chief, Division of Research was held in the offices of the Board of Governors of and Statistics, Board of Governors Ms. Low, Open Market Secretariat Assistant, the Federal Reserve System in Washington, D.C., on Division of Monetary Affairs, Board of Tuesday, December 19, 1995, at 9:00 a.m. Governors Present: Messrs. Beebe, Goodfriend, Lang, Rosenblum, Mr. Greenspan, Chairman and Sniderman, Senior Vice Presidents, Federal Mr. McDonough, Vice Chairman Reserve Banks of San Francisco, Richmond, Mr. Blinder Philadelphia, Dallas, and Cleveland Mr. Hoenig respectively Mr. Kelley Ms. Rosenbaum, Vice President, Mr. Lindsey Federal Reserve Bank of Atlanta Mr. Melzer Ms. Perelmuter, Assistant Vice President, Ms. Minehan Federal Reserve Bank of New York Mr. Moskow Mr. Weber, Senior Research Officer, Ms. Phillips Federal Reserve Bank of Minneapolis Ms. Yellen Mr. Evans, Senior Economist, Federal Reserve Bank of Chicago Messrs. Boehne, Jordan, McTeer, and Stern, Alternate Members of the Federal Open By unanimous vote, the minutes of the meeting of Market Committee the Federal Open Market Committee held on November 15, 1995, were approved. Messrs. Broaddus and Parry, Presidents The Report of Examination of the System Open of the Federal Reserve Banks of Richmond and San Francisco respectively Market Account, conducted by the Board's Division of Reserve Bank Operations and Payment Systems as Mr. Guynn, President-elect, of the close of business on September 29, 1995, was Federal Reserve Bank of Atlanta accepted. The Manager of the System Open Market Account Mr. Kohn, Secretary and Economist reported on developments in foreign exchange Mr. Bernard, Deputy Secretary markets during the period November 15, 1995, Mr. Coyne, Assistant Secretary Mr. Gillum, Assistant Secretary through December 18, 1995. There were no System Mr. Mattingly, General Counsel open market transactions in foreign currencies during Mr. Prell, Economist this period, and thus no vote was required of the Mr. Truman, Economist Committee. The Manager also reported on developments in Ms. Browne, Messrs. Davis, Dewald, Lindsey, domestic financial markets and on System open mar- Mishkin, Promisel, Siegman, Slifman, and Stockton, Associate Economists ket transactions in government securities and federal agency obligations during the period November 15, Mr. Fisher, Manager, System Open Market Account 1995, through December 18, 1995. By unanimous vote, the Committee ratified these transactions. Mr. Ettin, Deputy Director, Division of Research and By unanimous vote, the Committee authorized the Statistics, Board of Governors renewal until December 13, 1996, of the System's Mr. Madigan, Associate Director, Division of Monetary Affairs, Board of Governors Mr. Simpson, Associate Director, Division of 1. Did not attend portion of meeting covering the monetary policy Research and Statistics, Board of Governors discussion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

224 Federal Reserve Bulletin • March 1996 regular reciprocal currency ("swap") arrangement of facturer; that strike, very recently settled, had also $3 billion with the Bank of Mexico and the System's exerted a slightly depressing effect on production in participation in the North American Framework November. Production of motor vehicles and parts Agreement with the monetary authorities of Canada also fell, on net, in October and November. Further and Mexico. Both were due to terminate on Janu- growth outside the aircraft and motor vehicle indusary 31, 1996. The additional temporary $3 billion tries was paced by continuing strength in the producswap arrangement with the Bank of Mexico, tion of business equipment. Outside manufacturing, approved by the Committee on February 1, 1995, the output of utilities was boosted in November by would lapse on January 31, 1996, in line with its demand associated with unusually cold weather. original terms. Business fixed investment was continuing to grow The Committee then turned to a discussion of the at a rapid pace, with much of the strength stemming economic and financial outlook and the implementa- from the persisting and vigorous expansion in spendtion of monetary policy over the intermeeting period ing for office and computing equipment. However, ahead. A summary of the economic and financial the recent gains in total business investment had information available at the time of the meeting and moderated from the extraordinary pace evident in of the Committee's discussion is provided below, 1994 and early 1995, and they also were less widefollowed by the domestic policy directive that was spread among major categories of business equipapproved by the Committee and issued to the Federal ment than they had been earlier. New orders for Reserve Bank of New York. nondefense capital goods other than computers and The information available at this meeting sug- aircraft had leveled out, although shipments were gested that the expansion of economic activity had being maintained at high levels by still-large backslowed substantially after a strong gain in such activ- logs of unfilled orders. Producers of aircraft had ity during the third quarter. Data on employment and received very sizable new orders recently, but shipaggregate hours worked since late summer were con- ments of completed aircraft had been held back in sistent with moderate further increases in overall recent months by the strike at a major firm. Outlays economic activity. Industrial production had changed for nonresidential construction were continuing to little on balance after a sizable rise in the third advance briskly, with construction of commercial quarter. On the spending side, robust advances in structures posting sizable increases recently. Overall business fixed investment continued to provide con- drilling and mining activity also had continued to siderable impetus to the economy. The available move higher, led by increased exploration for natural information on consumer expenditures pointed to gas. somewhat reduced gains in recent months, and indi- Total nominal retail sales rose considerably in cators of housing demand suggested on balance that November, more than offsetting a drop in October; activity in housing markets had tended to stabilize over the two months, retail sales advanced at a slower after several months of considerable strengthening. pace than the average rate in the second and third Consumer prices had risen relatively slowly in recent quarters. Much of the November increase reflected months, while increases in labor compensation had strong gains in sales of consumer durables, including remained comparatively subdued. improved sales of motor vehicles. In the nondurables Nonfarm payroll employment continued to grow sector, a sizable rise in November about reversed a at a pace roughly in line with the expansion of the decline in October. Recent surveys of consumer senlabor force in recent months, with gains concen- timent pointed to generally positive attitudes. trated in the private service-producing sectors. The After having recorded robust advances during the published information indicated some further third quarter, most indicators of housing activity sugdeclines in factory and government jobs in October gested little further change more recently. However, and November. Although aggregate hours of private considerable strength in mortgage applications associproduction workers fell in November, they remained ated with lower mortgage rates, together with survey appreciably above their average level in the third indications of an upturn in house-buying intentions, quarter. The unemployment rate edged up to 5.6 per- pointed to strengthening housing construction over cent in November, equaling its average for the third coming months. Housing starts were down in Octoquarter. ber, the latest month for which these data were avail- Industrial production was little changed on balance able, after a large increase in the third quarter. over October and November after a sizable increase Data for October indicated a sizable accumulation in the third quarter. A decline in October was largely of business inventories. In manufacturing, stocks accounted for by a strike at a major aircraft manu- grew at a rate only moderately below the brisk pace Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 225 in the third quarter, and the rise continued to be At its meeting on November 15, 1995, the Comconcentrated in the capital goods industries. The mittee adopted a directive that called for maintaining aggregate ratio of inventories to sales in manufactur- the existing degree of pressure on reserve positions ing was somewhat above the lows in late 1994 and and that did not include a presumption about the early 1995. In the wholesale sector, a buildup in likely direction of any adjustments to policy during stocks of capital equipment accounted for the bulk of the intermeeting period. The directive stated that in the accumulation in October, and the inventory-to- the context of the Committee's long-run objectives sales ratio in this sector remained on an uptrend. A for price stability and sustainable economic growth, sharp rise in retail inventories in October was led and giving careful consideration to economic, finanby a large increase in stocks at auto dealers and cial, and monetary developments, slightly greater at general merchandise and apparel outlets. The reserve restraint or slightly lesser reserve restraint inventory-to-sales ratio for the retail sector as a whole would be acceptable during the intermeeting period. was at its high for the year, but signs of overstocking, The reserve conditions associated with this directive apart from motor vehicles, were limited. were expected to be consistent with moderate growth After having strengthened appreciably in the third in M2 and M3 over coming months. quarter, federal government purchases were now lag- Open market operations were directed toward ging and exerting some retarding effect on overall maintaining the existing degree of pressure on reserve economic activity. The decline in federal purchases positions throughout the intermeeting period. The in part represented the transitory effects of govern- federal funds rate averaged a bit above the expected ment shutdowns and the restraining effects of spend- rate of 53/4 percent over the period. The bunching of ing cuts imposed by continuing resolutions and by settlements of several Treasury issues that had curtailed appropriations in bills that already had been resulted from debt ceiling disruptions and the midenacted into law. At the state and local government December corporate tax date were among the factors levels, however, available data pointed to continued, exerting pressure on the funds rate. Most other shortrelatively strong growth in purchases. term interest rates fell slightly, and longer-term inter- The nominal deficit on U.S. trade in goods and est rates extended earlier declines during the interservices changed little in September (latest data avail- meeting period. Market expectations of some easing able). Measured on a quarterly average basis, how- of monetary policy appeared to be reinforced by ever, the deficit declined substantially in the third market interpretations of the incoming information as quarter, with the reduction about equally divided further evidence that overall demand would be between a rise in the value of exports and a drop restrained and that the risks of a pickup in inflationin the value of imports. Increases in exports were ary pressures had diminished. Over the intermeeting widespread among the major categories of trade, interval, major indexes of stock prices continued to while reductions in imports were concentrated in move higher in concert with the rise in bond prices. categories in which there had been large gains in the The sluggish performance of the broad monetary second quarter. Available data pointed to subdued aggregates since August continued in November. growth in most of the major foreign industrial coun- Despite the persistence of low opportunity costs assotries in the second half of 1995. ciated with holding M2 assets, M2 growth was rela- Consumer prices had risen more slowly on balance tively modest in November after a slight contraction in recent months than they had during the first half of in October. M3 growth slowed further in November, the year. In November, the total index for consumer partly as a result of a shift of funding by borrowers prices was unchanged, and consumer prices exclud- toward capital market instruments to take advantage ing food and energy were up only slightly. In con- of lower long-term market rates. Nonetheless, trast, producer prices of finished goods registered a because of robust expansion earlier in the year, M2 relatively large increase in November, and the com- remained in the upper half of its 1995 range through ponent of this index excluding food and energy November and M3 expanded at a rate at the upper posted its largest rise since January. At the same time, end of its range. Growth of total domestic nonfinanprices of intermediate materials declined a bit further cial debt had slowed somewhat in recent months, in November. According to recent survey results, reflecting reduced expansion of both private and fedconsumers now expected less inflation over the year eral borrowing, and for 1995 to date, this debt meaahead and also over the next five to ten years. The sure had grown at a rate around the midpoint of its available data on wages and worker benefits contin- monitoring range. ued on balance to display a relatively subdued trend In foreign exchange markets, the trade-weighted of increases in labor compensation. value of the dollar in terms of the other G-10 curren- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

226 Federal Reserve Bulletin • March 1996 cies rose slightly further on balance over the inter- ciably from the brisk pace of the summer months. meeting period. Declining interest rates in several The members generally agreed that the most likely major foreign industrial countries, evidently induced course for the economy remained one of moderate by disappointing economic growth in those countries, growth. Expansion at or near potential was seen as appeared to have a firming effect on the dollar in the most probable outcome, associated at least in part relation to European currencies. The dollar changed with the favorable effects on business and consumer little against the Japanese yen over the period after a spending of lower interest rates, higher equity prices, sharp advance earlier. The Mexican peso appreciated and an ample availability of credit. However, a numa bit in relation to the dollar over the period. ber of members expressed concern that the strength The staff forecast prepared for this meeting sug- of final demands would not be sufficient to support gested that the growth of economic activity would growth near the economy's potential, absent a policy slow substantially from the very strong pace now adjustment. One factor that might retard growth was indicated for the third quarter. Although this forecast a higher level of real short-term interest rates owing did not differ significantly from that prepared for the to the favorable performance of inflation. Members November meeting, less growth than expected earlier noted that consumer price increases had remained seemed likely in the current quarter. Over the forecast relatively subdued and below expectations in recent horizon, however, the economy was still projected to months, despite the generally high levels of utilizaexpand at a pace that would keep activity close to the tion of both labor and capital resources that had economy's potential. The forecast anticipated that the prevailed through much of the year. Several comexpansion in consumer spending would slow a bit in mented that the effects of new technologies, gains in response to diminished gains in disposable income productivity, global competitive pressures on busiassociated with less rapid advances in spending in nesses, and restraint in wage setting might imply that other sectors of the economy. The rise that had inflation would edge down further. Others expressed occurred in the value of financial assets held by concern that the prospects for further reductions in households would be a positive factor helping to inflation seemed quite limited in the context of prosupport consumer spending but one that would be jected high levels of resource use, including tight offset to a degree by the difficulties of an increasing labor markets in many parts of the country. number of households in servicing their growing In the Committee's discussion of regional developdebts. The greater affordability of housing stemming ments, members reported that anecdotal and other from the earlier decline in mortgage rates was pro- information pertaining to regional activity suggested jected to help sustain homebuilding activity at a that the moderation in nationwide economic growth relatively high level. In the context of reduced growth was evident across most of the nation, with the rate of in sales and profits, business investment in new expansion ranging from slow to moderate in different equipment and structures was projected to increase areas of the country. Overall levels of business activmore moderately after several years of rapid advance. ity continued to vary widely, from relatively weak in Although indications of excess inventories were some areas to comparatively robust in others. Condilimited, slower growth in sales and ongoing efforts tions also were uneven across industries, particularly to reduce inventory costs were projected to lead to in manufacturing, where flagging auto sales and some smaller increases in stocks over the projection period. further inventory accumulation contrasted sharply Exports were expected to be bolstered to some extent with brisk demand for a range of producers durable by the projected improvement in the economies of goods, notably office and computing equipment, and major trading partners. Although a great deal of building products. Despite indications that job growth uncertainty still surrounded the fiscal outlook, the had been relatively limited, labor markets remained forecast continued to incorporate an appreciable tight in many parts of the country and there were degree of fiscal restraint. Given the projected out- more, albeit still limited, reports of rising wage preslook, rates of utilization of labor and capital resources sures; in some areas, however, labor market condiwould remain relatively high, and the underlying tions appeared to have eased somewhat recently. trend of price inflation was seen as unlikely to change In their discussion of developments in key sectors significantly over the projection period. of the economy, members commented that the data In the Committee's discussion of current and and the anecdotal information on consumer spending prospective developments, members noted that the had been mixed. For the holiday season, reports information that had become available since the indicated that retail sales had been disappointing thus November meeting tended to confirm earlier indica- far, though sales appeared to be holding up relatively tions that the economic expansion had slowed appre- well in some sections of the country and for higher- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 227 priced luxury items more generally. Consumers had timing of tax and spending initiatives aimed at an remained very cautious despite considerable promo- eventual balancing of the budget and the extent of the tional sales activity, perhaps anticipating even more fiscal contraction over time could not be forecast with aggressive markdowns of prices as the shopping sea- any precision. In the interim, much of the federal son neared its end. Members noted that the reluctance government was closed, and while federal workers of consumers also might be reflecting a sense of were expected to get paid eventually, their spending continued job insecurity in an environment of ongo- and that of federal contractors might be damped until ing business restructuring and downsizing, higher the situation was resolved. The members believed, debt service burdens and rising delinquency rates, however, that in light of the plans being put forward, and the satisfaction of pent-up demand for durable the fiscal drag imposed by likely federal budget goods. While these factors might be exerting an developments would not be unusually large over the inhibiting influence on consumers, the members gen- next few years. erally viewed moderate growth in consumer spending In reviewing the outlook for inflation, members as a reasonable expectation in the context of further referred to the generally favorable price and cost projected expansion in disposable incomes. The experience of recent months. Several pointed to subincrease in household wealth associated with the dued increases in labor compensation and to anecstrong performance of the bond and stock markets dotal indications that upward pressures on wages and might tend to boost consumer spending relative to benefits remained scattered despite tightness in many disposable incomes, although one member suggested labor markets. In this environment, and with the that the highly concentrated nature of wealth hold- economy expected to expand at a comparatively modings might limit any positive effect on aggregate erate pace over the forecast period, many members consumption. With regard to housing, members took anticipated that inflation would remain relatively note of the recent declines in single-family housing stable despite continuing high levels of resource utilistarts and sales after a strong third quarter. They zation, and some believed that it might record a remarked, however, that some of their contacts were somewhat improved performance. One argument anticipating that the declines in mortgage interest advanced in support of a possibly better performance rates over recent months to their current relatively was that the recent experience, which had been more low levels would foster a wave of mortgage refinanc- favorable than expected given capacity utilization ing and a pickup in housing demand in the spring. levels, was perhaps suggestive of the effects of rapid Business fixed investment was expected to grow technological improvements on productivity, the at a pace appreciably below that observed in recent enhanced efficiencies from greater economic specialyears but nonetheless to continue supplying consid- ization around the world, and the influence of heighterable impetus to the expansion. Strong profits and ened job insecurity on wages and prices. Another cash flows, along with the ample availability of was the possible effect on future wage demands of financing on attractive terms, were favorable factors the lower inflation expectations that now prevailed. in the outlook; on the other hand, a weakening trend Although no member saw greater inflation as having in final demand, notably in consumer outlays, likely a high probability, several did refer to risks in that would have a negative effect on business capital direction, including the possibility of greater presspending. Several members reported that commer- sures on resources stemming from faster than curcial and other nonresidential construction activity rently anticipated economic growth. remained brisk in various regions around the nation. In the Committee's discussion of policy for the A number of members commented on business intermeeting period ahead, all the members either inventory developments. Overall inventories of motor favored or could accept a slight easing in the degree vehicles were on the high side, and inventory accu- of pressure on reserve positions. One argument cited mulation more generally appeared to be running in favor of some easing was that the policy stance, as somewhat ahead of sales. There were no indications indexed by the prevailing real federal funds rate, was that serious overhangs were emerging, but there were becoming somewhat restrictive as inflation and inflarisks that efforts to hold down stocks would damp tionary expectations moderated, leaving real shortproduction over the near term. term rates higher than anticipated. In addition, with The outlook for fiscal policy continued to be markets expecting a reduction in the federal funds clouded by the uncertainty surrounding the outcome rate in coming months, an unchanged policy was of the debate between the Congress and the Adminis- likely to lead to a backup in intermediate- and longtration. The members anticipated that the result of the term rates. Although there was no sign that a cumuladebate would be considerable fiscal restraint, but the tive deterioration in economic performance was about Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

228 Federal Reserve Bulletin • March 1996 to get under way, the downside risks to the expansion the direction of the next policy move was not clear in appeared to have increased and a modest easing the view of some members. would better position policy to guard against the At the conclusion of the Committee's discussion, possibility that over the longer term the expansion all the members indicated that they favored or could would begin to fall short of the economy's potential, support a directive that called for some slight easing especially with fiscal policy likely to be at least in the degree of pressure on reserve conditions during moderately restrictive. In any case, the recent slow- the intermeeting period but that contained no preing of the economic expansion, combined with the sumption about the likely direction of any intermeetwage and price restraint evident at current levels of ing policy change. Accordingly, in the context of the resource utilization and continuing business efforts to Committee's long-run objectives for price stability expand capacity, suggested that there was little risk and sustainable economic growth, and giving careful of a pickup in inflation. Indeed, the favorable infla- consideration to economic, financial, and monetary tion experience over the last half year raised the developments, the Committee decided that slightly possibility of continued modest price improvement. greater or slightly lesser monetary restraint would be A number of members, though willing to accept a acceptable during the intermeeting period. A staff slight easing, preferred an unchanged policy stance. analysis indicated that the reserve conditions contem- While inflation had slowed from the elevated plated at this meeting would be consistent with modpace observed in the early part of the year, there was erate growth of M2 and M3 over coming months. little hard evidence to indicate that it would decline The Federal Reserve Bank of New York was authoany further over the forecast horizon or that there rized and directed, until instructed otherwise by the had been a significant increase in the sustainable Committee, to execute transactions in the System growth rate of the economy. A few members also Account in accordance with the following domestic expressed concern about the possible repercussions policy directive: in financial markets of an easing action that would follow an already strong rally in bond and stock The information reviewed at this meeting suggests a substantial slowing in the expansion of economic activity prices. In the circumstances, these members quesafter a strong gain in the third quarter. Nonfarm payroll tioned whether a somewhat easier policy stance employment increased further in November, but the civilwould prove consistent with the Committee's objec- ian unemployment rate edged up to 5.6 percent. Industrial tive of fostering further progress toward price sta- production was little changed on average over October and bility. Moreover, although the available evidence on November after a moderate rise in the third quarter. Total nominal retail sales rose somewhat on balance over Octothe economy's current performance remained ber and November. Housing starts were down in October mixed, the moderation in economic growth after the after a large increase in the third quarter. However, orders third-quarter surge did not seem at this time to signal for nondefense capital goods point to substantial expansion a growing shortfall of the economy from its potential. of spending on business equipment in the near term, and Instead, the economy was likely in this view to nonresidential construction has risen appreciably further. Wage trends have been stable and consumer prices have continue to grow at a generally acceptable rate at or risen relatively slowly on average in recent months. near capacity, and a few members saw some potential Most market interest rates have declined slightly since for somewhat faster growth at a pace that over time the Committee meeting on November 15. In foreign could intensify inflationary pressures. Accordingly, exchange markets, the trade-weighted value of the dollar in they preferred to wait for further evidence on infla- terms of the other G-10 currencies has risen slightly on tion trends and the performance of the economy, but balance over the intermeeting period. The substantial moderation in the growth of M2 and M3 they indicated that in light of the uncertainties that since midsummer continued in November; however, for were involved and the small amount of easing that the year through November, M2 expanded at a rate in the was proposed they would not dissent from the major- upper half of its range for 1995 and M3 grew at a rate at ity position. the upper end of its range. Growth in total domestic nonfinancial debt has slowed somewhat in recent months but for With regard to possible adjustments to policy durthe year to date remains around the midpoint of its monitoring the intermeeting period, all the members endorsed ing range. a proposal to retain an intermeeting instruction in the The Federal Open Market Committee seeks monetary directive that did not incorporate any presumption and financial conditions that will foster price stability and about the direction of a possible intermeeting change. promote sustainable growth in output. In furtherance of these objectives, the Committee at its meeting in July While such a change in policy could not be ruled out, reaffirmed the range it had established on January 31the potential need for a further intermeeting policy February 1 for growth of M2 of 1 to 5 percent, measured adjustment appeared remote at this juncture. The from the fourth quarter of 1994 to the fourth quarter of risks to the outlook seemed generally in balance, and 1995. The Committee also retained the monitoring range of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 229 3 to 7 percent for the year that it had set for growth of total restraint would be acceptable in the intermeeting period. domestic nonfinancial debt. The Committee raised the 1995 The contemplated reserve conditions are expected to be range for M3 to 2 to 6 percent as a technical adjustment to consistent with moderate growth in M2 and M3 over take account of changing intermediation patterns. For coming months. 1996, the Committee established on a tentative basis the same ranges as in 1995 for growth of the monetary aggre- Votes for this action: Messrs. Greenspan, McDonough, gates and debt, measured from the fourth quarter of 1995 to Blinder, Hoenig, Kelley, Lindsey, Melzer, Ms. Minehan, the fourth quarter of 1996. The behavior of the monetary Mr. Moskow, Mses. Phillips and Yellen. Votes against aggregates will continue to be evaluated in the light of this action: None. progress toward price level stability, movements in their velocities, and developments in the economy and financial It was agreed that the next meeting of the Commitmarkets. tee would be held on Tuesday-Wednesday, Janu- In the implementation of policy for the immediate future, ary 30-31, 1996. the Committee seeks to decrease slightly the existing degree of pressure on reserve positions. In the context of The meeting adjourned at 1:05 p.m. the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, Donald L. Kohn slightly greater reserve restraint or slightly lesser reserve Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

231 Legal Developments FINAL RULE—AMENDMENT TO REGULATION K Section 211.24—Approval of offices of foreign banks; procedures for applications; standards for The Board of Governors is amending 12 C.F.R. Part 211, approval; representative office activities and Subpart B of Regulation K (Foreign Banking Organiza- standards for approval; preservation of existing tions), to permit the establishment of U.S. representative authority. offices by certain foreign banks through prior notice procedures. These prior notice procedures are designed to permit foreign banks meeting certain requirements to establish () % % % a (2) * * * representative offices without the need to file a formal application with the Board. A foreign bank that is subject (i) Prior notice for certain representative offices. Afto federal regulation under the Bank Holding Company ter providing 45 days' prior written notice to the Act (BHC Act), either directly or through the International Board, a foreign bank that is subject to the BHC Act, Banking Act (IBA), and that the Board has previously either directly or through section 8(a) of the IBA determined is subject to comprehensive supervision or (12 U.S.C. 3106(a)), may establish: regulation on a consolidated basis by its home country (A) A regional administrative office; or supervisor, or which previously has been approved for a (B) A representative office, but only if the Board representative office by Board order, would be permitted to has previously determined that the foreign bank establish a full service representative office by prior notice. proposing to establish a representative office is sub- In addition, the amendments clarify that only those foreign ject to comprehensive supervision or regulation on banking organizations subject to the IBA and the BHC Act a consolidated basis by its home country supervimay establish under general consent procedures a represensor, or previously has been approved for a representative office to engage in limited administrative functions tative office by Board order. The Board may waive in connection with their existing U.S. banking operations. the 45-day period if it finds that immediate action is Lastly, the Board has determined to review and act upon required by the circumstances presented. The noinquiries by "special purpose government banks" seeking tice period shall commence at the time the notice is exemptions from regulation under the Foreign Bank Superreceived by the appropriate Reserve Bank. The vision Enhancement Act (FBSEA) on the basis that they do Board may suspend the period or require Board not fall within the definition of "foreign bank" under approval prior to the establishment of such an office Regulation K. Such inquiries would be handled on a caseif the notification raises significant policy, prudenby-case basis. tial or supervisory concerns. Effective January 24, 1996, 12 C.F.R. Part 211 is (ii) General consent for representative offices. The amended as follows: Board grants its general consent for a foreign bank that is subject to section 8(a) of the IBA (12 U.S.C. 3106(a)), to establish a representative office that solely engages in limited administrative functions (such as Part 211—International Banking Operations separately maintaining back office support systems) (Regulation K) that are clearly defined, are performed in connection with the United States banking activities of the for- 1. The authority citation for 12 C.F.R. Part 211 continues eign bank, and do not involve contact or liaison with to read as follows: customers or potential customers beyond incidental contact with existing customers relating to administra- Authority: 12 U.S.C. 221 et seq., 1818, 1841 et seq., 3101 tive matters (such as verification or correction of et seq., 3901 et seq.). account information), provided that the foreign bank notifies the Board in writing within 30 days of the 2. Section 211.24 is amended by: establishment of the representative office. a. Revising paragraphs (a)(2)(i) and (a)(2)(h); and b. Redesignating paragraph (d)(3) as paragraph (d)(4), and adding a new paragraph (d)(3). (d) * * * (3) Special purpose foreign government banks. A for- The revisions and addition read as follows: eign government-owned organization engaged in bank- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

232 Federal Reserve Bulletin • March 1996 ing activities in its home country that are not commer- 7.8 percent of total deposits in depository institutions in the cial in nature may apply to the Board for a determination state. that the organization is not a foreign bank for purposes Citizens and Allied own depository institutions that comof this section. A written request setting forth the basis pete directly in four banking markets in North Carolina.3 for such a determination may be submitted to the Re- Consummation of this proposal would not cause the levels serve Bank of the District in which the foreign organiza- of market concentration as measured by the Herfindahltion's representative office is located in the United States Hirschman Index ("HHI")4 to exceed the Department of or to the Board in the case of a proposed establishment Justice merger guidelines in any of these banking markets,5 of a representative office. The Board will review and act and numerous competitors would remain in each banking upon each such request on a case-by-case basis. market. Based on all the facts of record, the Board concludes that the consummation of this proposal would not have a significantly adverse effect on competition or on the ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT concentration of banking resources in any relevant market. In light of all the facts of record, the Board also con- Orders Issued Under Section 3 of the Bank Holding cludes that the financial and managerial resources and Company Act future prospects of Citizens, Allied, and their respective subsidiaries are consistent with approval of the proposal, as First Citizens BancShares, Inc. are the other supervisory factors that the Board must con- Raleigh, North Carolina sider under section 3 of the BHC Act. Order Approving Acquisition of a Bank Holding Convenience and Needs Considerations Company In acting on an application to acquire a depository institu- First Citizens BancShares, Inc., Raleigh ("Citizens"), a tion under the BHC Act, the Board must consider the bank holding company within the meaning of the Bank convenience and needs of the communities to be served Holding Company Act ("BHC Act"), has applied under and take into account the records of the relevant depository section 3 of the BHC Act (12 U.S.C. § 1842) to merge with Allied Bank Capital, Inc., Sanford ("Allied"), and indirectly acquire Allied's wholly owned subsidiaries, Summit 3. The banking markets are Sanford, Durham-Chapel Hill RMA, Savings Bank, Inc., SSB, Sanford ("Summit"), and Peo- Raleigh RMA, and Wilmington RMA. The Sanford banking market is ples Savings Bank, Inc., SSB, Wilmington ("Peoples"), all approximated by Lee County. The Durham-Chapel Hill RMA banking in North Carolina. market is approximated by the Durham-Chapel Hill RMA, the rest of Durham County, the rest of Orange County (minus the portion in the Notice of the application, affording interested persons an Burlington RMA), and all of Chatham County. The Raleigh RMA opportunity to submit comments, has been published (60 banking market is approximated by the Raleigh RMA and the rest of Federal Register 54,374 (1995)). The time for filing com- Franklin, Harnett, Johnston, and Wake Counties. The Wilmington ments has expired, and the Board has considered the appli- RMA banking market is approximated by the Wilmington RMA, the rest of Brunswick County and all of Pender County. cation and all comments received in light of the factors set 4. Market deposit data are as of June 30, 1994. Market share data forth in section 3 of the BHC Act. are based on calculations in which the deposits of thrift institutions are Citizens, with total consolidated assets of $7.2 billion,1 included at 50 percent. The Board previously has indicated that thrift controls four commercial banks in North Carolina, Vir- institutions have become, or have the potential to become, major competitors of commercial banks. See Midwest Financial Group, 75 ginia, and West Virginia. Allied, with total consolidated Federal Reserve Bulletin 386 (1989); National City Corporation, 70 assets of $270 million, controls two savings banks in North Federal Reserve Bulletin 743 (1984). Because the deposits of Summit Carolina. Citizens is the fifth largest depository institution and Peoples would be controlled by a bank holding company on in North Carolina, controlling total deposits of $5.7 billion, consummation of this proposal, those deposits are included at representing 7.5 percent of total deposits in depository 100 percent in the calculation of pro forma market share. See Norwest institutions in the state.2 Allied is the 27th largest deposi- Corporation, 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669, 670 n.9 (1990). tory institution in North Carolina, controlling total deposits 5. The HHIs would increase as follows after consummation of this of $219.4 million, representing less than 1 percent of total proposal: Sanford-56 points to 1898 points; Durham-Chapel Hill deposits in depository institutions in the state. Upon con- RMA-no increase; Raleigh RMA-12 points to 1165 points; and Wilmington RMA-45 points to 1371 points. Under the revised Department summation of this proposal, Citizens would remain the of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, fifth largest depository institution in North Carolina, con- 1984), a market in which the post-merger HHI is above 1800 is trolling total deposits of $5.9 billion, representing considered highly concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department 1. Asset data are as of September 30, 1995. has stated that the higher than normal HHI thresholds for screening 2. State deposit data are as of December 31, 1994. In this context, bank mergers for anticompetitive effects implicitly recognize the depository institutions include commercial banks, savings banks, and competitive effect of limited-purpose lenders and other non-depository savings associations. financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 233 institutions under the Community Reinvestment Act the applications process.10 Bank received its second con- (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the secutive "outstanding" rating in its most recent examinafederal financial supervisory agencies to encourage finan- tion for CRA performance from its primary federal supervicial institutions to help meet the credit needs of the local sor, the Federal Deposit Insurance Corporation ("FDIC") communities in which they operate, consistent with their as of April 11, 1994 (the "1994 Examination").11 Citisafe and sound operation. To accomplish this end, the CRA zens's other subsidiary banks all received "outstanding" or requires the appropriate federal supervisory authority to "satisfactory" CRA performance ratings in their most re- "assess the institution's record of meeting the credit needs cent CRA performance examinations. Summit and Peoples of its entire community, including low- and moderate- received "satisfactory" CRA performance ratings from the income neighborhoods, consistent with the safe and sound FDIC in their most recent CRA performance examinations operation of such institutions," and to take that record into as of March 13, 1995, and February 7, 1994, respectively. account in its evaluation of these applications.6 The Board received comments criticizing the CRA per- B. HMDA and Mortgage Lending Activities formance record of Citizens in helping to meet the mortgage and small business credit needs of low- and moderate- The Board has carefully reviewed 1992, 1993, and 1994 income and minority individuals and in investing in HMDA data filed by Bank in 11 MSAs in North Carolina, communities with predominately low- and moderate- in light of Protestants' allegations.12 These data indicate income and minority residents.7 In addition, Protestants that Bank has been increasing its home mortgage lending assert, on the basis of data filed under the Home Mortgage to African-American and low- and moderate-income bor- Disclosure Act ("HMDA") for 1991 through 1994, that rowers. For example, from 1992 to 1994, the percentage of Citizens's lead subsidiary bank, First Citizens Bank-NC, HMDA-reportable loan applications from African Ameri- Raleigh, North Carolina ("Bank"), illegally discriminates cans increased from 3 percent to 11.8 percent of total against minority borrowers.8 applications. In addition, the percentage of loans to African The Board has carefully reviewed the CRA performance Americans increased from 2 percent to 8.8 percent of total record of Bank, all comments and Citizens's responses, originations from 1992 to 1994.13 During this period, Bank and all other relevant facts of record in light of the CRA, also increased its percentage of applications from and the Board's regulations, and the Statement of the Federal originations to low- and moderate-income borrowers. Ap- Financial Supervisory Agencies Regarding the Community plications from these borrowers increased from 14.2 per- Reinvestment Act ("Agency CRA Statement").9 cent of total applications in 1992 to 17.6 percent in 1994, and originations increased from 11.9 percent of total originations to 16.9 percent of total originations.14 Record of CRA Performance A. Examination Record of CRA Performance 10. Id. at 13,742. The Agency CRA Statement provides that a CRA examina- 11. Protestants dispute this rating as too high and argue that this tion is an important and often controlling factor in the examination should not be given significant weight because Protestants believe that Bank's CRA performance in North Carolina during consideration of an institution's CRA record and that rethe period covered by the 1994 Examination was not outstanding. ports of these examinations will be given great weight in Protestants place significant weight on their evaluation of Bank's mortgage lending activities in North Carolina. The 1994 Examination reflects the most current assessment of Bank's CRA performance by the FDIC and is based on an on-site review of the lending performance and CRA policies of Bank. Accordingly, it has been considered 6. 12 U.S.C. § 2903. in reviewing Protestants' allegations in a manner consistent with the 7. Commenters opposing this proposal include the Community Agency CRA Statement. The Board also has considered the HMDA Reinvestment Association of North Carolina ("CRA*NC"); the data discussed in this order and Bank's activities since the 1994 Durham Affordable Housing Coalition; The People's Alliance; Down- Examination. The Board has forwarded Protestants' comments to the town Housing Improvement Corp.; North Carolina Community Devel- FDIC for consideration. opment Initiative, Inc.; North Carolina Community Land Trustees; 12. The Board also has reviewed 1993 and 1994 HMDA data filed Land Loss Prevention Project; New Directions for Downtown, Inc.; by Summit and Peoples in light of Protestants' assertion that these two Southeast Raleigh Community Development Corporation; WallTown banks had a poor record of lending to low- and moderate-income and Community Association; and the Charlotte Organizing Project (collec- minority loan applicants in 1994. tively "Protestants"). The Board also received comments on several 13. Applications from African Americans increased from 134 in issues raised by Protestants from an individual who does not object to 1992 to 730 in 1994, and originations to African Americans increased approval of this application. during this time period from 73 to 443. 8. Protestants contend that these data indicate that Bank's level of 14. From 1992 to 1994, applications from low- and moderatemortgage lending to low- and moderate-income and minority borrow- income borrowers increased from 640 to 1,090, and originations ers, particularly African-American borrowers, has been consistently increased from 447 to 851. In addition, the lending record of Peoples lower than that of other banks in the Metropolitan Statistical Areas and Summit also improved from 1993 to 1994. For example, the ("MSAs") in which Bank operates, and has been decreasing. Protes- percentage of applications received by Summit from Africantants make similar allegations about Bank's level of performance in American borrowers increased from 5.2 percent to 12.6 percent of small business and community development lending activities. One total applications, and originations increased from 4.1 percent to Protestant criticized Bank's outreach efforts to its community. 10.3 percent of total originations. Applications received by Summit 9. 54 Federal Register 13,742 (1989). from low- and moderate- income borrowers increased from 3.7 per- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

234 Federal Reserve Bulletin • March 1996 These data also show, however, that denial rates varied internal second review program for declined mortgage by racial group. The Board is concerned when an institu- applications to determine whether the applicant qualified tion's record indicates disparities in lending to minority for the loan requested or might qualify for some other applicants, and the Board believes that all banks are obli- mortgage loan product offered by Bank.18 Bank provides gated to ensure that their lending practices are based on continuous training in fair lending and CRA compliance.19 criteria that assure not only safe and sound lending, but In addition, with the help of a consulting firm, Bank also equal access to credit by creditworthy applicants re- developed a two-day diversity training program that more gardless of race. The Board recognizes, however, that than 700 Bank officers have attended since January 1994. HMDA data alone provide an incomplete measure of an The Board also notes that Bank has developed special institution's lending in its community.15 The Board also loan products to address the needs of low- and moderaterecognizes that HMDA data have limitations that make the income borrowers. For example, Bank, in consultation data an inadequate basis, absent other information, for with one of the Protestants, introduced the Shelter Source concluding that an institution has engaged in illegal dis- loan product in 1991. This product permits low down crimination in lending. payments and closing costs, and offers flexible underwrit- The 1994 Examination did not find any practices that ing criteria. Bank originally committed $15 million over a were intended to discourage credit applications and found three-year period to this program, and committed an addithat Bank solicited applications from all segments of the tional $20 million in 1993. Bank has originated more than community, including individuals residing in low- and $39 million in Shelter Source loans since 1991, including moderate-income census tracts.16 Furthermore, the 1994 250 loans in 1994. Bank also offers special affordable Examination found that Bank was in compliance with the housing loan products through a Farmers Home Adminissubstantive provisions of antidiscrimination laws and regu- tration ("FmHA") program and the Fannie Mae Commulations.17 The Board also notes that Bank has developed an nity Home Buyers Program, and originated 670 loans totalling almost $32 million under these programs in 1994. cent to 31.9 percent of total applications, and originations increased C. Other Lending Programs and Investment in from 4.1 percent to 30.3 percent of total originations. The percentage Community Development of applications received by Peoples from African-American borrowers increased from 3.8 percent to 9.4 percent of total applications, and Bank indicates that it is primarily a small business lender. originations increased from 2.3 percent to 4.6 percent of total origina- As of November 1995, 70 percent of Bank's commercial tions. Applications from low- and moderate-income borrowers increased from 5.5 percent to 7.9 percent of total applications, and loans were for principal amounts of $80,000 or less, and originations increased from 3.8 percent to 4.6 percent of total origina- almost 90 percent were for principal amounts of $250,000 tions. or less. Bank also actively participates in government- 15. For example, mortgage loans made in areas outside an MSA guaranteed loan programs through three Small Business where a bank has a branch currently are not required to be reported by Administration ("SBA") programs and programs sponcensus tract under HMDA. Approximately 45 percent of Bank's branches are located outside an MSA. In addition, more than 400 sored by the FmHA. Bank qualifies under SBA's Certified loans made to date under Bank's Shelter Source program, a lending Lender Program to give three-day processing on SBAprogram designed to help low- and moderate-income individuals guaranteed loans, and participates in the SBA's LOWDOC purchase affordable housing, have been made to borrowers residing program. Bank also participates in the SBA 504 program, outside an MSA. 16. Protestants maintain that in telephone inquiries for loan informa- which provides 100 percent financing and flexible undertion by a minority applicant and non-minority applicant with similar writing criteria. As of November 1995, Bank reported 18 financial qualifications, employees in eight branches of Bank treated SBA loans under this program, for a total original principal minorities in a disparate manner. The 1994 Examination, however, balance of $6.8 million. As of this same date, Bank also found no significant weaknesses in Bank's fair lending compliance. The 1994 Examination noted that Bank has been active in addressing antidiscrimination issues, and that, during 1993, Bank used an independent consultant to evaluate 42 of its branches for evidence of of examination and other supervisory information provided by the disparate treatment by initial customer contact employees and lending FDIC relating to the FDIC's review of corrective actions taken by personnel, using testers paired on the basis of sex or race. Bank. 17. Protestants contend that technical violations of the Fair Housing 18. Bank uses a third level of review by senior management to Act ("FHA"), the Equal Credit Opportunity Act ("ECOA") (collec- evaluate the effectiveness of the second review process and to help it tively, "fair lending laws") and HMDA cited in Bank's CRA perfor- assess and address issues relating to Bank's underwriting criteria, loan mance examinations constitute a pattern and practice of fair lending policies and procedures, and training. Protestants maintain that 30 to law violations. Protestants also cite, as evidence of illegal discrimina- 40 percent of the loan denials are reversed by the third review, thereby tion, an internal memorandum by a Bank officer admonishing employ- indicating systemic problems in Bank's underwriting and approval ees to improve compliance. procedures. Bank responds that the third review is used principally for Bank has taken steps to insure that such violations do not occur in the purpose of making appropriate modifications to its lending stanthe future. For example, in late 1994, Bank engaged an independent dards. For example, as a result of this review by senior management, consulting firm to assist in revising its compliance policies and proce- Bank developed more liberal household income standards under the dures, and Bank revised its entire HMDA data collection and report- Shelter Source program. ing program in 1994 and 1995. In addition, Bank centralized its 19. Bank held a week-long "train the trainer" fair lending complicompliance functions in a single Compliance Department in Novem- ance program for approximately 100 senior retail lending officers and ber 1994, and created a separate position of Lending Compliance department managers. These officers then conducted three-day train- Officer. The Board has reviewed all facts of record, including reports ing sessions that were attended by all of Bank's lending officers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 235 had 38 FmHA loans outstanding, for a total original princi- ange Community Housing Corporation Assistance Propal balance of $15 million. In addition, as of December 18, gram to provide first mortgage financing for borrowers 1995, the Bank had originated 889 small farm loans, total- earning 80 percent or less of the county median income, ling $87.5 million. Bank representatives meet with organi- and helped Project Homestead CDC of Greensboro, North zations such as the North Carolina Association of Minority Carolina, provide affordable housing assistance for low Businesses and the North Carolina Institute of Minority income families. Businesses to assist in ascertaining the credit needs of minority businesses. Bank also has sponsored roundtable D. Other Aspects of CRA Performance discussions with individuals from businesses owned by minorities and women, and has held four seminars to assist The 1994 Examination found that Bank engaged in extenminorities in starting and operating businesses. sive efforts to ascertain the credit needs of the communities As the result of a special task force evaluation, Bank it serves through its officer call program and used the made several changes in its small business lending pro- information it gathers to develop new products or modify gram, which include improvements to its credit underwrit- existing products to serve these communities.21 For examing and approval process to provide for faster credit deci- ple, one series of ascertainment calls resulted in Bank's sions. When fully implemented, Bank's new program will developing a special loan product to help meet the need for be structured to accommodate new businesses and busi- affordable housing in a rural county. Bank's ascertainment nesses that are expanding their operations. efforts are managed directly by its regional CRA commit- The 1994 Examination found that Bank had a satisfac- tees, which communicate with numerous government offitory awareness of community development opportunities cials, affordable housing developers, low-income consumand maintains a high level of participation in community ers and nonprofit agencies, and other minority and development projects. For example, Bank committed to consumer groups.22 Bank markets its small business prodprovide $1.2 million of the total $12 million in financing ucts through newspaper and radio advertising, direct mail, made available by a consortium of financial institutions for loan officer calls, contacts with government agencies, and multi-family housing projects for low-income families and participation in and sponsorship of small business conferthe elderly administered by the Community Investment ences. Examiners also found that Bank markets its Shelter Corporation of North Carolina. Bank has made loans in Source affordable housing products to low- and moderateexcess of $500,000 for such projects since 1993. In addi- income and minority consumers by using advertising that tion, Bank participated in four projects sponsored by the focuses on these potential borrowers, such as advertise- Monroe-Union County Community Development Corpora- ments in newspapers with high percentages of minority tion, including a $120,000 line of credit for construction of readers.23 six affordable homes for low- and moderate-income resi- The 1994 Examination found that Bank's record of dents of Union County. Also in 1993, Bank committed opening and closing branches was satisfactory. Bank has a $200,000 to the Downtown Lincolnton Loan Pool, which policy concerning procedures to open, close, or modify the offers loans to renovate downtown properties, and hours of any branch office. In the event of a branch closing, $200,000 to the Newton Downtown Redevelopment Com- the policy requires an impact study analyzing the reason mission Loan Pool. Bank participates with the City of for closing the branch and the proximity of other branches Winston-Salem and eleven other lenders in a $1,700,000 owned by Citizens and other financial institutions. Bank Tandem Loan Program that fosters neighborhood revital- offers a number of low-cost services at all branch offices, ization by financing the purchase and rehabilitation of owner-occupied housing. In December 1993, the Bank made a loan to the Standard Development Company for the 21. Protestants allege that Bank's redesignation of its service community to an area encompassing a five-mile radius around each of its construction of seven low- to moderate-income housing branches will adversely affect low- and moderate-income and minorunits in Mount Airy. Bank, along with the City of ity residents and indicates that Bank will provide unequal levels of Asheville's Housing Authority, also financed the purchase service to these residents outside its delineated community. The redesand rehabilitation of a 26-unit rental complex near down- ignation of Bank's service community was in response to comments town Asheville. Bank also participates in the Elizabeth from FDIC examiners during the 1994 Examination. The Board also notes that Bank's new designated communities include contiguous City Revitalization Loan Pool. low-income and minority census tracts. Bank provided a grant to the City of Wilson for adminis- 22. One Protestant criticized Bank's outreach to the Protestant's tration costs to help develop the Freeman Place Project, an community. The 1994 Examination stated that Bank created 30 area CRA committees and 118 local advisory boards that function as inner-city, single-family housing development for houseliaison between the community and Bank, and that Bank seeks to have holds whose members earn 70 percent or less of the county the local advisory boards represent the population in the communities. median family income.20 Bank also worked with the Or- In addition, each of the area CRA committees develops a CRA action plan which includes contacts with key individuals and organizations in the area. The area CRA committees are required to call on each contact included on their contact list at least annually. 20. Bank also provides first mortgage financing under the Shelter 23. Bank has committed a minimum of 5 percent of its total Source loan program for eligible borrowers seeking to acquire hous- advertising budget to advertising focused on low- and moderateing in this development. Two such mortgages, totalling $72,000, were income and minority customers. During 1993, Bank spent approxioriginated in 1995. mately 10.8 percent of its budget on this type of advertising. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

236 Federal Reserve Bulletin • March 1996 including checking and savings accounts with no monthly conditioned on Citizens compliance with all the commitservice charge for senior citizens; low-cost basic checking ments made in connection with this application. The comaccounts; and check cashing services for recipients of mitments and conditions relied on by the Board in reaching government checks. this decision shall be deemed to be conditions imposed in writing by the Board in connection with its findings and E. Conclusion Regarding Record of CRA decision, and, as such, may be enforced in proceedings Performance under applicable law. This proposal may not be consummated before the fif- The Board has carefully considered all the facts of record, teenth calendar day following the effective date of this including Protestants' comments, in reviewing the CRA order, or later than three months after the effective date of performance record of Citizens's subsidiary banks.24 Based this order, unless such period is extended for good cause by on a review of the entire record of performance, including the Board or by the Federal Reserve Bank of Richmond, the information provided by Protestants and Citizens,25 and acting pursuant to delegated authority. relevant reports of examination, the Board concludes that By order of the Board of Governors, effective Januconvenience and needs considerations, including the CRA ary 17, 1996. performance records of the institutions involved in this proposal, are consistent with approval of this application. Voting for this action: Chairman Greenspan, Vice Chairman Based on the foregoing and all other facts of record, the Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. Board has determined that the application should be, and hereby is, approved.26 The Board's approval is expressly JENNIFER J. JOHNSON Deputy Secretary of the Board 24. One Protestant criticizes Bank for failing to comply with all the Huntington Bancshares, Incorporated terms of its 1991 CRA performance agreement with CRA*NC. This Columbus, Ohio Protestant also contends that Citizens made misleading statements about the agreement during the processing of this application. Bank responds that it used its best efforts to comply with all the terms of the Huntington Bancshares Florida, Inc. agreement, but did not meet some of the goals due to factors beyond Columbus, Ohio its control. The Board previously has noted that neither the CRA nor the Agency CRA Statement requires depository institutions to enter Order Approving the Acquisition of Banks into agreements with particular organizations, and that agreements between banking organizations and community-based groups are private arrangements that are not enforceable by the Board. Fleet Finan- Huntington Bancshares, Incorporated, and Huntington cial Group, 82 Federal Reserve Bulletin 50 (1996). Accordingly, in Bancshares Florida, Inc., both of Columbus, Ohio (collecreviewing this proposal, the Board has focused on the programs and tively, "Huntington"), bank holding companies within the policies that Bank has in place to serve the credit needs of its entire meaning of the Bank Holding Company Act ("BHC Act"), community. have applied under section 3 of the BHC Act 25. CRA*NC has requested that the Board delay action on this application until after it meets with the FDIC to discuss the 1994 Examination. In addition, Protestants assert that the Board should require Citizens to furnish additional information to the Board and Protestants regarding certain aspects of Bank's CRA performance and fair lending compliance, including data about Bank's non-MSA mortgage lending, descriptions of the nature of Bank's relationships with certain facts as part of the record. In particular, Protestants maintain local housing agencies and community groups, and information con- that Citizens made misleading statements about Bank's efforts under cerning branch locations and loan-to-deposit ratios. A commenter the 1991 CRA performance agreement with CRA*NC and the parties' states that the Board should arrange for independent telephone and negotiations over a new agreement, and about Bank's community in-lobby testing for discriminatory practices at Bank, and should development activities and its third review process. Section 3(b) of the condition any approval on a requirement that Citizens engage an BHC Act does not require the Board to hold a public hearing or independent research firm to test regularly for discriminatory practices meeting on an application unless the appropriate supervisory authority at Bank. The Board is required by the BHC Act and Board rules to act for the bank to be acquired makes a timely written recommendation of on applications submitted under section 3 of the BHC Act within denial of the proposal. The appropriate supervisory authority has not specified time periods. As previously noted, the Board's action is objected to approval of this application. Generally, under its rules, the based on all the facts of record, including, not only the 1994 Examina- Board may, in its discretion, hold a public meeting or hearing on an tion, but also the Bank's activities since this examination and all of its application to clarify factual issues related to the application and to CRA and fair lending practices, procedures and policies. Furthermore, provide an opportunity for testimony, if appropriate. 12 C.F.R. as noted above, Bank has already employed a consultant to test the 262.3(e) and 262.25(d). In the Board's view, all parties have had manner in which Bank employees deal with customers and its compli- ample opportunity to submit their comments, including the opportuance with fair lending laws. Based on all the facts of record, the Board nity to supplement their comments after the close of the comment concludes that the record is sufficient to act on this application at this period, and Protestants have submitted written comments that have time and that delay or, in the alternative, denial on the grounds of been considered by the Board. Protestants have failed to demonstrate informational insufficiency of this application is not warranted. Fur- why such submissions are inadequate in this case to present their thermore, in view of the programs and policies already in place at views. 12 C.F.R. 262.3(e). For these reasons, and based on all the facts Bank, the Board does not believe the proposed conditions are war- of record, the Board has determined that a public meeting or hearing is ranted in this case. not necessary to clarify the factual record in this application, or 26. Protestants requested that the Board hold a public meeting or otherwise warranted in this case. Accordingly, Protestants' request for hearing on this application to clarify factual disputes and present a public meeting or hearing on this application is denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 237 (12 U.S.C. § 1842) to acquire all the voting shares of Peo- Other Considerations ples Bank of Lakeland, Lakeland, Florida ("Bank").1 Notice of the proposal, affording interested persons an Huntington and Bank do not compete directly in any opportunity to submit comments, has been published (60 relevant banking market. Based on all the facts of record, Federal Register 55,579 (1995)). The time for filing com- the Board has concluded that consummation of this proments has expired, and the Board has considered the appli- posal would not result in any significantly adverse effects cations and all comments received in light of the factors set on competition or the concentration of banking resources forth in section 3 of the BHC Act. in any relevant banking market. The financial and manage- Huntington, with total consolidated assets of $20.2 bil- rial resources and future prospects of Huntington and Bank lion, operates subsidiary banks in Ohio, Michigan, Indiana, are consistent with approval, as are the other supervisory Kentucky, West Virginia, and Florida, and engages directly factors the Board must consider under section 3 of the and through subsidiaries in a broad range of permissible BHC Act. nonbanking activities.2 Huntington is the 21st largest commercial banking organization in Florida, controlling depos- Convenience and Needs Considerations its of approximately $476.9 million, representing less than 1 percent of total deposits in commercial banking organiza- In acting on an application to acquire a depository institutions in the state.3 Bank, with total consolidated assets of tion under the BHC Act, the Board must consider the $523.3 million, is the 24th largest commercial banking convenience and needs of the communities to be served organization in Florida, controlling deposits of approxi- and take into account the records of the relevant depository mately $430.6 million, representing less than 1 percent of institutions under the Community Reinvestment Act total deposits in commercial banking organizations in the (12 U.S.C § 2901 et seq.) ("CRA"). The CRA requires the state. On consummation of this proposal, Huntington federal financial supervisory agencies to encourage finanwould become the 12th largest commercial banking organi- cial institutions to help meet the credit needs of the local zation in Florida, controlling deposits of approximately communities in which they operate, consistent with their $907.5 million, representing less than 1 percent of total safe and sound operation. To accomplish this end, the CRA deposits in commercial banking organizations in the state. requires the appropriate federal supervisory authority to "assess the institution's record of meeting the credit needs Interstate Analysis of its entire community, including low- and moderateincome neighborhoods, consistent with the safe and sound Section 3(d) of the BHC Act, as amended by Section 101 operation of such institution," and to take that record into of the Riegle-Neal Interstate Banking and Branching Effi- account in its evaluation of bank expansion proposals.6 ciency Act of 1994, allows the Board to approve an appli- The Board received comments from the Cincinnati cation by a bank holding company to acquire control of a Branch of the National Association for the Advancement bank located in a state other than the home state of such of Colored People ("Protestant") criticizing the CRA bank holding company, if certain conditions are met.4 record of performance of Huntington's lead subsidiary These conditions are met in this case.5 In view of all the bank, The Huntington National Bank, Columbus, Ohio facts of record, the Board is permitted to approve this ("HNB"). Protestant maintains, on the basis of 1994 data proposal under section 3(d) of the BHC Act. filed under the Home Mortgage Disclosure Act ("HMDA"), that HNB's efforts in ascertainment, marketing and lending have been inadequate to meet the credit 1. Bank would be merged into The Huntington National Bank of needs of residents in low- and moderate-income and minor- Lakeland, Lakeland, Florida ("HNB-Lakeland"), a de novo to sec- ity neighborhoods in Cincinnati.7 tion 18(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)). As part of this proposal, Huntington also has applied under section 3 of the BHC Act to acquire HNB-Lakeland. 2. Asset data are as of June 30, 1995. 3. State deposit data are as of September 30, 1995. 6. 12 U.S.C. § 2903. 4. 12 U.S.C. § 1842(d). Pub. L. No. 103-328, 108 Stat. 2338 (1994). 7. Protestant also refers to a 1995 settlement agreement between a A bank holding company's home state is that state in which the mortgage lending subsidiary of HNB, The Huntington Mortgage operations of the bank holding company's banking subsidiaries were Company ("Mortgage Company"), and the Department of Justice principally conducted on July 1, 1966, or the date on which the involving Mortgage Company's policy of allowing its employees to company became a bank holding company, whichever is later. Hun- share with Mortgage Company in any excess in origination charges or tington's home state for purposes of the BHC Act is Ohio. interest rates above Mortgage Company's base rates ("overages"). An 5. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B). examination by the OCC in August 1994 showed that Huntington had Huntington's subsidiary banks are adequately capitalized and ade- taken steps to address concerns about the effects of the overages quately managed. Bank has been in existence and continuously oper- practice. In addition, the agreement between Mortgage Company and ated for the minimum periods of time required under Florida law. In the Department of Justice recognized that Mortgage Company had addition, on consummation of this proposal, Huntington and its affili- developed and implemented new procedures and standards to monitor ates would control less than 10 percent of the total amount of deposits the pricing of residential first mortgage loans, and permitted Mortgage of insured depository institutions in the United States and less than Company to resume its overages practice on all loan products as long 30 percent of the total amount of deposits of insured depository as the overages were limited to no more than 1 percent of the loan institutions in Florida. All other requirements of section 3(d) of the amount. Based on all the facts of record, the Board does not believe BHC Act also would be met on consummation of this proposal. that Protestant's comments warrant denial of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

238 Federal Reserve Bulletin • March 1996 The Board has carefully reviewed the CRA performance loans) received by HNB from applicants in low- and records of Huntington, its subsidiaries, and Bank; all com- moderate-income census tracts has increased. For example, ments received; responses to those comments by Hunting- the percentage of total HMDA loan applications received ton; and all other relevant facts of record in light of the by HNB from applicants in low- and moderate-income CRA, the Board's regulations, and the Statement of the census tracts doubled from 1993 to 1994. Federal Financial Supervisory Agencies Regarding the The 1994 Examination found no evidence that HNB had Community Reinvestment Act ("Agency CRA State- violated antidiscrimination laws or regulations or engaged ment").8 in illegal discriminatory practices. OCC examiners also considered HNB to have generally solicited credit applica- Record of Performance Under the CRA tions throughout its delineated community, and the examiners' analysis of the geographic distribution of loans made A. CRA Performance Examinations by HNB reflected a reasonable penetration of all segments of the market in communities such as Cleveland, Colum- The Agency CRA Statement provides that a CRA examina- bus, Dayton, Lima, Mansfield, and Toledo.11 In the Cincintion is an important and often controlling factor in the nati MSA, HNB has taken steps to increase the geographic consideration of an institution's CRA record and that re- distribution of loans. For example, HNB has two full-time ports of these examinations will be given great weight in business originators assigned to the inner-city communithe applications process.9 The Board notes that HNB re- ties. Examiners also noted that HNB is attempting to ceived a "satisfactory" rating from its primary federal increase penetration levels in low- and moderate-income supervisor, the OCC, as of August 1994 ("1994 Examina- communities in Cincinnati through its Community Cention").10 Huntington's remaining subsidiary banks received tered Banking program ("CCB").12 either "outstanding" or "satisfactory" ratings from their The 1994 Examination found that the levels of lending primary federal supervisors in the most recent examina- by HNB and Mortgage Company were significant and tions of their CRA performance. Bank also was rated reflected a general responsiveness to meeting the credit "satisfactory" for CRA performance by its primary federal needs of its communities. CCB was specifically noted as supervisor, the Federal Deposit Insurance Corporation, as demonstrating a financial commitment to low- and of September 1993. moderate-income communities where it had been introduced. HNB also has been an active participant in Small B. HMDA Data and Lending Activities Business Administration and other government-sponsored loan programs. The Board has carefully reviewed 1993 and 1994 HMDA The 1994 Examination also found HNB's marketing and data for HNB and Mortgage Company for Hamilton advertising programs to be sound and reasonably designed County in the Cincinnati Metropolitan Statistical Area to inform all segments of the bank's delineated communi- ("MSA") in light of Protestant's comments. These data ties about the bank's products and services.13 In addition, indicate that, although overall home purchase applications OCC examiners concluded that HNB had an adequate received by HNB declined, the total number of home policy on opening and closing offices and provided reasonpurchase applications received by HNB from African able access to banking services in communities throughout Americans increased, and HNB's applications from Afri- its large branching network, including Akron, Cleveland, can Americans, as a percentage of total applications re- Columbus, Lima, Lorain, Mansfield, and Toledo. The 1994 ceived, was higher than the aggregate percentage received Examination noted that HNB has acquired branches in by all HMDA reporters. The number of loans to African low- and moderate-income areas in Cincinnati since 1992. Americans also increased during this period. HNB also has provided a full-service mobile branch to Home purchase loan applications received by HNB from serve three predominantly minority communities in Cincinapplicants in low- and moderate-income census tracts in Hamilton County, as a percentage of total loan applica- 11. Examiners reviewed loan data, including HMDA data, for 1992, tions, increased slightly in 1994. In the entire Cincinnati 1993, and the first five months of 1994. MSA, the total number of all HMDA loan applications 12. CCB was introduced in 1992 and operates in eight Ohio commu- (home purchase, refinancings, and home improvement nities, including Cincinnati, to market special credit and deposit products to meet the credit needs of low- and moderate-income neighborhoods. For example, CCB has a special mortgage loan pro- 8. 54 Federal Register 13,742 (1989). gram that features a low down payment requirement (5 percent) 9. Id. at 13,745. without private mortgage insurance and with more flexible underwrit- 10. Protestant maintains that comments by OCC examiners in the ing criteria. CCB also offers credit counseling and educational pro- 1994 Examination that identify several areas in which HNB could grams for low- and moderate-income individuals. improve its CRA performance support Protestant's contentions that 13. Examiners noted that CCB is HNB's principal method of HNB's CRA performance record is inadequate. While the OCC iden- ascertaining unmet credit needs in low- and moderate-income commutified certain areas for possible improvement, it determined that the nities, including low- and moderate-income communities in the Cinoverall CRA performance of HNB was "satisfactory." The Board also cinnati MSA. HNB also has formed Community Advisory Councils in notes that HNB has proposed measures to address the OCC's com- numerous communities, including Cincinnati, which are composed of ments, and that HNB's progress in these areas will be evaluated by the community leaders and representatives of HNB, to further attempt to OCC in future CRA performance examinations. ascertain the credit needs of its communities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 239 nati. In Dayton, examiners noted that HNB managed to findings and decision, and, as such, may be enforced in effect loan penetration levels in low- and moderate-income proceedings under applicable law. areas equivalent to its penetration in the entire Dayton The acquisition of Bank shall not be consummated becommunity through means other than branches by using fore the fifteenth calendar day following the effective date alternative delivery systems and a broad range of advertis- of this order, or later than three months following the ing. effective date of this order, unless such period is extended for good cause by the Board or by the Federal Reserve C. Conclusion Regarding Convenience and Needs Bank of Cleveland, acting pursuant to delegated authority. Factors By order of the Board of Governors, effective January 5, 1996. The Board has carefully considered the entire record, including the comments filed in this case, in reviewing the Voting for this action: Chairman Greenspan, Vice Chairman convenience and needs factors under the BHC Act. Based Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. on a review of the entire record of performance, including information provided by Protestant and Huntington, the JENNIFER J. JOHNSON Deputy Secretary of the Board CRA performance examinations and other information from the banks' primary supervisors, and the other facts of record, the Board believes that the efforts of Huntington, its Orders Issued Under Sections 3 and 4 of the Bank subsidiaries, and Bank to help meet the credit needs of all Holding Company Act segments of their communities, including low- and moderate-income neighborhoods, are consistent with ap- Chemical Banking Corporation proval of these applications. For these reasons, and based New York, New York on all the facts of record, the Board concludes that conve- Chemical Bank nience and needs considerations, including the CRA perfor- New York, New York mance records of the companies and banks involved in this proposal, are consistent with approval of these applica- Order Approving the Merger of Bank Holding tions. Companies and Banks Conclusion Chemical Banking Corporation, New York, New York ("Chemical"), a bank holding company within the mean- Based on a review of the entire record in this case, including of the Bank Holding Company Act ("BHC Act"), has ing the commitments made to the Board by Huntington, the filed various applications and notices seeking the Board's Board has determined that these applications should be, and hereby are, approved.14 The Board's approval is specif- approval for the merger of Chemical with The Chase Manhattan Corporation, New York, New York ("Chase"), ically conditioned on compliance by Huntington with all and the merger of their subsidiary banks in New York, commitments made in connection with these applications. Chemical Bank and The Chase Manhattan Bank, N.A. The commitments and conditions relied on by the Board in ("Chase Bank"). The resulting bank holding company reaching this decision are deemed to be conditions imwould be known as The Chase Manhattan Corporation posed in writing by the Board in connection with its ("New Chase") and the merged bank would be known as The Chase Manhattan Bank ("New Chase Bank"). Applications and notices have been filed under sections 3,1 4(c)(8), 4(c)(13) and 4(c)(14) of the BHC Act 14. Protestant alleges that there are an insufficient number of (12 U.S.C. §§ 1842, 1843(c)(8), (13) & (14));2 sec- African-American loan officers, underwriters, appraisers and branch tion 18(c) of the Federal Deposit Insurance Act managers in Huntington's southern region and that this indicates illegal employment discrimination by Huntington. The Board notes (12 U.S.C. § 1828(c)); and sections 9, 25 and 25A of the that because Huntington's subsidiary banks employ more than Federal Reserve Act (12 U.S.C. §§ 321, 601, 611).3 50 people, serve as depositories of government funds, and act as agent Notice of the proposal, affording interested persons an in selling or redeeming U.S. savings bonds and notes, they are reopportunity to submit comments, has been published (60 quired by Department of Labor Regulations to: (i) File annual reports with the Equal Employment Opportunity Commission ("EEOC"); and (ii) Have in place a written affirmative action compliance program, 1. In connection with the proposal, Chemical and Chase each have which states their efforts and plans to achieve equal opportunity in applied to acquire options to purchase up to 19.9 percent of the voting the employment, hiring, promotion, and separation of personnel. shares of the other. These options would become moot upon consum- See 41 C.F.R. 60-1.7(a) and 60-1.40. The Board also notes that, mation of Chemical's merger with Chase. pursuant to Department of Labor Regulations, Huntington is required 2. The nonbanking subsidiaries of Chase for which Chemical has to file an annual report with the EEOC covering all employees in its provided notice as required under section 4 of the BHC Act are listed corporate structure. The EEOC has jurisdiction for determining in Appendix A. whether companies are in compliance with the equal employment 3. The locations of the branches the resulting bank requests apstatutes. To date, there has been no finding or adjudication of illegal proval to establish pursuant to sections 9 and 25 of the Federal employment practices by Huntington. Reserve Act are listed in Appendix B. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

240 Federal Reserve Bulletin • March 1996 Federal Register 54,373 (1995)). The public comment met in this case.6 In view of all the facts of record, the period for these applications and notices was extended Board is permitted to approve this proposal under sectwice, providing interested persons more than 50 days to tion 3(d) of the BHC Act. submit written comments on the proposal (60 Federal Register 55,716 (1995); Press Release dated November 24, Competitive Considerations 1995). In light of the extensive public interest in this proposal, the Board and the New York State Banking Section 3(c)(2) of the BHC Act and the Bank Merger Act Department held a public meeting on November 16 and 17, provide that the Board may not approve an application by a 1995, in New York, New York, to permit interested per- bank holding company to acquire another bank holding sons an opportunity to present oral testimony on the pro- company if the effect of the acquisition in any section of posal. the country "may be substantially to lessen competition ... The Board received comments on the proposal from unless [the Board] finds that the anticompetitive effects of approximately 212 commenters. Of these commenters, 140 the proposed transaction are clearly outweighed in the testified at the public meeting. Written comments were public interest by the probable effect of the transaction received from many of those who spoke at the public in meeting the convenience and needs of the community meeting and from 72 other commenters. to be served." 12 U.S.C. § 1842(c)(2); 12 U.S.C. Reports on the competitive effects of the merger were § 1828(c)(5)(B). requested from the United States Attorney General, Fed- The Board received several comments from individuals eral Deposit Insurance Corporation ("FDIC"), and the and organizations ("commenters") pertaining to the com- Office of the Comptroller of the Currency ("OCC"), as petitive impact of the proposal. A number of these comrequired by the Bank Merger Act. The time for filing menters advocated approval of the proposal, and contended comments has expired, and the Board has considered the that consummation of the proposal would have procompetiapplications and notices and all comments received in light tive effects, creating an entity better able to compete in of the factors set forth in the BHC Act, the Bank Merger national and global banking and non-banking markets. Act, and the Federal Reserve Act. Other commenters asserted that Chemical's acquisition Chemical, with total consolidated assets of approxi- of Chase would adversely affect competition and reduce mately $178.5 billion, operates banks in New York, Dela- the availability and quality of banking and non-banking ware, New Jersey, and Texas.4 Chemical is the fourth products in the New York Banking Market, as well as other largest commercial banking organization in the United communities served by both institutions. Several of these States, with assets representing approximately 2.6 percent commenters disputed the definition of the relevant product of banking assets held by commercial banking organiza- markets in which to assess the competitive effects of the tions in the United States ("total U.S. banking assets"). proposal, as well as the definition of the appropriate geo- Chemical also engages in a number of permissible non- graphic market in which to assess the competitive effects of banking activities nationwide. Chase, with total consoli- the proposal in the New York City area. In the view of dated assets of approximately $118.8 billion, operates several commenters, local customers in areas such as the banks in New York, Delaware, New Jersey, and Florida. Bronx have no reasonable alternatives for banking services Chase is the eighth largest commercial banking organiza- except depository institutions located in the Bronx or adjation the United States, with assets representing approxi- cent areas, and banking organizations in these areas, such mately 1.9 percent of total U.S. banking assets. Upon as New Chase, would be able to raise prices or reduce consummation of the proposal, New Chase would become service without concern about competition from outside the largest commercial banking organization in the United this area.7 States, with total consolidated assets of approximately $297.3 billion, representing approximately 4.5 percent of total U.S. banking assets and 4.1 percent of total deposits in holding company's banking subsidiaries were principally conducted banks and savings associations insured by the FDIC. on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. For purposes of the BHC Act, the home state of Chemical is New York. Interstate Analysis 6. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B). Chemical is adequately capitalized and adequately managed. Chase's Section 3(d) of the BHC Act, as amended by Section 101 banks have been in existence and continuously operated for the minimum periods of time required under the laws of the states of of the Riegle- Neal Interstate Banking and Branching Effi- Delaware and Florida. New Jersey does not have a state age requireciency Act of 1994, allows the Board to approve an appliment. In addition, on consummation of this proposal, Chemical and its cation by a bank holding company to acquire control of a affiliates would control less than 10 percent of the total amount of bank located outside the bank holding company's home deposits of insured depository institutions in the United States and less state if certain conditions are met.5 These conditions are than 30 percent of the total amount of deposits of insured depository institutions in Delaware, Florida, and New Jersey, states for which this proposal does not constitute an initial entry. All other requirements of section 3(d) of the BHC Act also would be met on consummation of 4. Asset and deposit data are as of June 30, 1995. this proposal. 5. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding 7. One commenter has suggested that, in order to mitigate the company's home state is that state in which the operations of the bank potential adverse competitive effects of this proposal, the Board solicit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 241 Product Market with these precedents and studies, and on the basis of the facts of record in this case, the Board concludes that the In order to determine the effect of a particular transaction cluster of banking products and services represents the on competition, it is necessary first to designate the area of appropriate line of commerce for analyzing the competitive effective competition between the parties. The courts have effects of this proposal. held that the area of effective competition is decided by reference to the "line of commerce" or product market and Geographic Market a geographic market. The Board traditionally has recognized that the appropri- Once the relevant line of commerce or product market has ate product market for evaluating bank mergers and acqui- been defined, the appropriate geographic market in which sitions is the cluster of products (various kinds of credit) competition for the supply and demand of this line of and services (such as checking accounts and trust adminis- commerce occurs must be defined. In defining the relevant tration) offered by banking institutions.8 Two commenters geographic market, the Board consistently has sought to have objected to the Board's focus on the "cluster of identify the area in which the cluster of products and banking services" suggesting that the Board conduct mar- services is provided by the competing institutions and in ket surveys of several communities, notably the Bronx and which purchasers of the products and services seek to upstate New York, as a means of determining the effect of obtain these products and services.13 The Supreme Court the proposal on competition in various geographic areas has indicated that this is the area in which the effect of an and individual banking products, such as small business acquisition will be direct and immediate.14 In applying lending. these standards to bank acquisition proposals, the Board The Supreme Court has emphasized that it is the cluster and the Court consistently have held that the geographic of products and services that, as a matter of trade reality, market for the cluster of services is local in nature.15 In makes banking a distinct line of commerce.9 According to delineating the relevant geographic market in which to the Court, this clustering facilitates the convenient access assess the competitive effects of a bank acquisition or to these products and services, and vests the cluster with merger, the Board reviews worker commuting patterns, as economic significance beyond the individual products and indicated by census data; population density; and other services that constitute the cluster.10 The courts have con- indicia of economic integration and the transmission of tinued to follow this position.11 Several recent studies competitive forces among banks. These factors indicate the support the conclusion that both businesses and households area over which competitive forces act to affect the pricing still seek to obtain this cluster of services.12 Consistent and availability of banking products and services. Banking markets, therefore, generally are larger than an individual bank's service area. Competing banks need not serve the same set of customers in order to affect or be affected by commitments from Chase, Chemical and New Chase that they not bid pricing and product decisions by each other or other banks on any part of the National Westminster franchise, because such an because factors indicating economic integration transmit acquisition would further decrease competition. Commenter also competitive forces over larger areas.16 stated that there is a danger that the New York Banking Market will become incrementally more concentrated, and that the proposed In applying these principles, the Federal Reserve Bank merger should be reviewed in this context. No such combinations of of New York ("FRBNY") has employed a methodology the type referred to by commenter have been announced, and the competitive effects of any potential future combination of companies that defines the retail banking market around major cities would have to be analyzed based on the facts of those proposals. or population concentrations by identifying a market core 8. See Chase Manhattan Corporation, 81 Federal Reserve Bulletin as cities or counties that contain substantial employment 883 (1995); The Bank of New York Company, Inc., 74 Federal Reserve opportunities and then grouping surrounding counties with Bulletin 257, 261 (1988). 9. United States v. Philadelphia National Bank, 374 U.S. 321, 357 (1963) ("Philadelphia National"). Accord United States v. Connecticut National Bank, 418 U.S. 656 (1974); United States v. Phillipsburg concluded that, on average, businesses surveyed obtained 2.37 ser- National Bank, 399 U.S. 350 (1969) ("U.S. v. Phillipsburg"). vices from their primary financial institutions. 10. U.S. v. Phillipsburg, 399 U.S. at 361 (1969). 13. See, e.g., Sunwest Financial Services, Inc., 73 Federal Reserve 11. See United States v. Central State Bank, 621 F. Supp. 1276 Bulletin 463 (1987); Pikeville National Corporation, 71 Federal Re- (W.D. Mich. 1985), aff'd per curiam, 817 F.2d 22 (6th Cir. serve Bulletin 240 (1985); Wyoming Bancorporation, 68 Federal 1987)("Central State"). Reserve Bulletin 313 (1982), aff'd, 729 F.2d 687 (10th Cir. 1984). 12. Elliehausen and Wolken, Banking Markets and the Use of 14. Philadelphia National, 374 U.S. at 357 (1963). In that case, the Financial Services by Households, 78 Federal Reserve Bulletin 169 court stated that the "area of effective competition in the known line (1992) (households continue to purchase the unique set of services of commerce must be charted by careful selection of the market area and products as a bundle); and Elliehausen and Wolken, Banking in which the seller operates, and to which the purchaser can practica- Markets and the Use of Financial Services by Small- and Medium- bly turn for supplies." Id. at 359 (emphasis in original) (quoting Sized Businesses, 76 Federal Reserve Bulletin 726 (1990) (businesses Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 327 (1961). tended to purchase other banking products and services from the 15. Philadelphia National, 374 U.S. at 361 (1963). The court has financial institutions where they maintained their primary transaction reasoned that banking is a service industry in which "convenience of accounts). According to the 1990 study, businesses surveyed obtained location is essential to effective competition," and that "the factor of a mean of 2.29 services from financial institutions where they main- inconvenience localizes banking competition as effectively as high tained transaction accounts and a mean of 1.08 service from institu- transportation costs in other industries." Id. at 358. tions where they did not maintain transaction accounts. The study also 16. See Pennbancorp, 69 Federal Reserve Bulletin 548 (1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

242 Federal Reserve Bulletin • March 1996 significant patterns of commuting into those cores as part The Board has carefully considered the effects that conof the same banking market. The criteria for adding coun- summation of this proposal would have on competition in ties to the market delineation become more stringent as the these nine banking markets in light of all the facts of counties become more remote from the core.17 record, including the number of competitors that would remain and the increase in the concentration of total depos- Competitive Analysis its in depository institutions23 in these markets ("market deposits"), as measured by the HHI.24 Consummation of Chemical and Chase own depository institutions that com- this proposal would not exceed the threshold standards in pete directly in nine banking markets in the states of New the Department of Justice Merger Guidelines in any of the York, New Jersey, Delaware, and Florida.18 Included in banking markets in which Chemical and Chase compete these markets is the Metropolitan New York-New Jersey directly. In addition, numerous competitors would remain Banking Market ("New York Banking Market").19 Before in all these markets.25 evaluating the effects of the proposal in this market, the Board considered comments that the New York Banking Market is not properly defined.20 The Board also considered that data gathered by the Census Bureau in 1990 demographically and commercially integrated by commuting, retail, indicate extensive commuting within the New York Bank- and wholesale trade patterns. It typically includes a central city or ing Market.21 The level of commuting, as well as the large cities and all adjacent continuously built up areas and certain other areas. See St. Joseph Valley Bank, supra at 674. See Appendix C for number of banks and offices that would remain in the the delineations of each RMA in New York State in which Chemical's market, would tend to transmit competitive forces throughand Chase's subsidiary banks compete. out the entire area.22 23. Market deposit data are as of June 30, 1994. One commenter disputed the Board's consideration of savings association deposits in the market, noting that many thrifts do not provide the relevant products and services or range of services of commercial banks. The 17. For a detailed discussion of the FRBNY methodology defining Board notes that it has regularly included savings association deposits banking markets, see David Holdsworth, "Definition of Banking in the calculation of market share on a 50-percent weighted basis. See Markets in New Jersey and New York," manuscript, FRBNY, Decem- e.g., Comerica, Inc., 81 Federal Reserve Bulletin 476 (1995); First ber 1994. Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991). As the Board 18. These markets are: Metropolitan New York-New Jersey; Buf- previously has explained, thrift institutions have been granted statufalo, New York; Rochester, New York; Albany, New York; Syracuse, tory authority in recent years to offer virtually all the products and New York; Binghamton, New York; Elmira-Corning, New York; services that previously were available only through commercial West Palm Beach, Florida; and Wilmington, Delaware. See Appen- banks, including authority to offer personal and commercial transacdix C for market definitions. tion accounts, to make all types of commercial and consumer loans, 19. The Metropolitan New York-New Jersey banking market in- and to engage in certain leasing, credit card, and other activities. WM cludes New York City; Nassau, Orange, Putnam, Rockland, Suffolk, Bancorp, 76 Federal Reserve Bulletin 788 (1990); First Union Corpo- Sullivan, and Westchester Counties in New York; Bergen, Essex, ration, 76 Federal Reserve Bulletin 83 (1990); Midwest Financial Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Group, 75 Federal Reserve Bulletin 386 (1989). Many thrift institu- Somerset, Sussex, Union, Warren, and a portion of Mercer Counties in tions do, in fact, exercise these broader powers to compete directly in New Jersey; Pike County in Pennsylvania; and portions of Fairfield providing the full cluster of banking products and services, and others and Litchfield Counties in Connecticut. have the authority to exercise these powers in response to market 20. The Board also has considered commenters' contention that needs. The partial weighting of thrift deposits takes account of the fact Bronx County should be considered a separate banking market. The that all thrifts do not fully exercise their authority. Nonetheless, worker commutation rate into and out of Bronx County is very high inclusion of thrift institutions in the analysis of the competitive effects and out-of- county banks are in close proximity to Bronx County retail of bank acquisition proposals appropriately reflects the fact that thrift customers. The commutation rate between Bronx County and other institutions have become significant participants in marketing the parts of New York City and Westchester County is 73 percent, which cluster of products and services. far exceeds the 15 or 20 percent rate that is generally recognized to be 24. Under the revised Department of Justice Merger Guidelines, 49 sufficient to transmit market information and effects. Additionally, Federal Register 26,823 (June 29, 1984) ("DOJ Guidelines"), a 16 percent of all primary banking relationships maintained by Bronx- market in which the post-merger HHI is above 1000 is considered to based small businesses were with banks that did not have branches in be moderately concentrated and a market above 1800 is considered to the Bronx. Accordingly, the Board finds that the Bronx County section be highly concentrated. The Justice Department has informed the of the New York Banking Market is not a separate banking market. Board that a bank merger or acquisition generally will not be chal- 21. The Board previously has recognized that commuting patterns lenged (in the absence of other factors indicating anticompetitive are a significant factor in the determination of a relevant geographic effects) unless the post-merger HHI is at least 1800 and the merger banking market. See Crestar Bank, 81 Federal Reserve Bulletin 200, increases the HHI by more than 200 points. The Justice Department 201 fn. 5 (1995); St. Joseph Valley Bank, 68 Federal Reserve Bulletin has stated that the higher than normal HHI thresholds for screening 673 (1982); U.S. Bancorp, 67 Federal Reserve Bulletin 60, 61 fn. 2 bank mergers for anticompetitive effects implicitly recognize the (1981). competitive effect of limited-purpose lenders and other non-depository 22. The Board notes that in some cases it has used the smaller, more financial entities. densely populated, Ranally Metropolitan Area ("RMA") as a guide in 25. The markets and the HHI increases are as follows: In New York defining the relevant geographic banking market. Were the Board to State: Albany (2 points to 1180); Binghamton (94 points to 1231); assume in this case that the relevant geographic markets for competi- Buffalo (3 points to 2015); Elmira-Corning (9 points to 1355); Rochtive analysis should be based on the relevant RMA, the resulting ester (18 points to 1152); Syracuse (26 points 1585). In the Metropolincreases in the Herfindahl-Hirschman Index ("HHI") levels in each itan New York-New Jersey banking market, the HHI would increase market would not exceed the threshold standards in the Department of by 240 points to 776. In the Wilmington, Delaware, banking market, Justice Merger Guidelines. An RMA generally consists of a defined the HHI would increase by 43 points to 1081. In the West Palm Beach, geographical area with a relatively high population density that is Florida, banking market, the HHI would remain at 1193. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 243 Several commenters argued that the competitive effects Financial, Managerial and Futures Prospects of this proposals should be evaluated for individual bank- Considerations ing products, in particular, small business lending, lending to medium-sized businesses, cash management services to This merger would create the largest banking organization both small and medium-sized businesses, unit investment in the United States. The boards of directors of Chemical trusts, syndicated lending, funds transfer services, corpo- and Chase believe that the merger would create a premier rate trust services, foreign exchange services, as well as global financial services company with the financial and trust, custody, transfer agency, asset management, account- managerial resources to compete effectively in the rapidly ing and administration services. After carefully consider- changing and consolidating marketplace for banking and ing all the facts of record, including the comments and financial services. The companies also believe that the information provided by commenters,26 the Board con- combined company would be a stronger financial services cludes that each of these products or services is an element company with greater product and geographic diversity of the cluster of products and services included in the than either is individually. A number of commenters have commercial banking line of commerce and that the cluster raised concerns about the financial and managerial reof banking products and services is the appropriate product sources of the combined organizations.29 market for analyzing the competitive effects of this propos- The Board has carefully considered the financial and al.27 managerial resources and future prospects of the compa- After considering the competitive effects of this proposal nies and banks involved and the effect of the proposed on the market for these products and services individually, merger on those resources. The Board previously has stated however, the Board concludes that consummation of the and continues to believe that capital adequacy is an espeproposal would be unlikely to result in any significantly cially important factor in the analysis of bank holding adverse competitive effects, because there are numerous company expansion proposals. The Board expects banking providers of these products and services and the markets organizations contemplating expansion to maintain strong for these products and services are unconcentrated. An capital levels substantially above the minimum levels specanalysis of the likely competitive effects of this proposal in ified in the Board's Capital Adequacy Guidelines. In this each of these products or services is contained in Appen- case, the Board notes that the capital ratios of Chemical, dix D. Chase, Chemical Bank and Chase Bank currently exceed The Board sought comments from the United States the minimum capital levels by over 200 basis points. The Attorney General, the OCC, and the FDIC on the competi- pro forma capital ratios for both New Chase and New tive effects of this proposal. The Attorney General re- Chase Bank also exceed the minimum capital levels by viewed the proposed transaction and has indicated to the over 200 basis points. Board that the Attorney General does not conclude that it Chemical and Chase believe they can achieve significant would have a significantly adverse effect on competition in cost savings and operational efficiencies as a result of this any relevant market. The OCC and FDIC did not object to merger. These cost savings are expected to result from a consummation of the proposal or indicate that it would number of factors, including consolidation of business have any significantly adverse competitive effects in any lines and elimination of redundant corporate operations. relevant banking market. The cost savings would enable the organization to operate Based on all the facts of record, including the competi- more efficiently, resulting in strengthening of its financial tive structure of the relevant markets, their attractiveness to position and ability to provide services to its communities. potential entrants, and the number of competitors that would remain, and after careful review of the comments, the Board concludes that consummation of the proposal would not result in any significantly adverse effects on 29. Several commenters expressed concern that the size of New competition or the concentration of banking resources in Chase would force the United States government to provide substanthe New York Banking Market or any other relevant bank- tial financial support to New Chase if it were to experience financial ing market.28 difficulties. Several commenters also expressed concern that the management of Chase and Chemical cannot generate profits except through eliminating jobs, closing branches and taking other costcutting measures that would adversely affect the community, and that the board of directors of New Chase would be overcompensated and 26. Commenters also alleged that a market exists for products that unwieldy. Other commenters stated that particular actions taken by would improve a financial institution's record of serving the conve- Chase and Chemical reflect adversely on their managerial resources. nience and needs of its community as defined in the CRA, and that For example, one commenter alleged that Chase's management did this "CRA product market" would be adversely affected by the not take appropriate action when it learned that one of its office proposed merger. Possible adverse effects on the convenience and buildings contained asbestos. Another commenter stated that staff of a needs of the communities to be served are addressed below. Chemical branch have repeatedly made mistakes on a corporate bank 27. See Chase Manhattan Corporation, 81 Federal Reserve Bulletin account. In addition, several commenters suggested that allegations 883 (1995)("Chase Order")- The Bank of New York Company, Inc., relating to the convenience and needs factor also raise adverse mana- 74 Federal Reserve Bulletin 257 (1988). gerial concerns. The Board has considered these matters and other 28. Analysis of the competitive effects of products and services comments in light of reports of examination assessing the managerial offered by nonbank subsidiaries of Chase and Chemical is provided resources and policies of Chemical and Chase and the overall perforinfra in the section on nonbank activities. mance records of the management of Chemical and Chase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

244 Federal Reserve Bulletin • March 1996 The facts of record also demonstrate that Chemical and tion," and to take that record into account in its evaluation Chase have competent and experienced management. The of bank expansion proposals.32 Board notes that the board of New Chase would be comprised of senior executives from each company who have A. Public Comments on Convenience and Needs extensive banking experience and knowledge of the markets in which Chemical and Chase operate.30 The Board provided an extended period for comment in Based on these considerations and all the facts of record this case and, as previously noted, held a public meeting in in this case, the Board concludes that the financial and New York City at which interested persons could present managerial resources and future prospects of Chemical and oral testimony, including testimony on the convenience Chase are consistent with approval of the proposal. The and needs factors and the CRA performance records of the Board also has concluded that the other supervisory factors depository institutions involved in this proposal.33 The that it must consider under section 3 of the BHC Act, the Board received comments related to the convenience and Bank Merger Act,31 and section 9 of the Federal Reserve needs aspects of the proposal from individuals, representa- Act are consistent with approval of this proposal. tives of community-based and nonprofit organizations, small-business owners, members of Congress, and local Convenience and Needs Considerations and state government officials. Approximately 115 commenters supported the proposal In acting on applications under the relevant statutes, the or commented favorably about the CRA performance Board must consider the convenience and needs of the records of Chemical or Chase.34 Many of these commentcommunities to be served, and take into account the records ers commended Chemical or Chase for participating in of the relevant depository institutions under the Commu- programs that provide affordable housing and mortgage nity Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). financing for low- and moderate-income individuals, spon- The CRA requires the federal financial supervisory agen- soring community development activities through intermecies to encourage financial institutions to help meet the diaries and loan pools, and providing financial support for credit needs of the local communities in which they oper- non-profit organizations. Some commenters noted that ate, consistent with their safe and sound operation. To Chase or Chemical have actively participated in homeaccomplish this end, the CRA requires the appropriate buyer, consumer credit, or other educational programs with federal supervisory authority to "assess the institution's community-based and nonprofit organizations. Other comrecord of meeting the credit needs of its entire community, menters related their favorable experiences with specific including low- and moderate-income neighborhoods, con- programs or services offered by Chemical or Chase.35 sistent with the safe and sound operation of such institu- 32. 12 U.S.C. § 2903. 30. Several commenters alleged that Chase and Chemical have 33. Several commenters requested an additional extension of the engaged in activities that involve excessive risk and that neither comment period. Each of these commenters submitted written comorganization has sufficient internal controls to manage the risk of its ments or oral testimony during the public comment period. In light of activities. These commenters allege that Chemical and Chase engaged the extended period for public comment in this case, the opportunity in and reported losses from high-risk activities in foreign countries, to submit oral testimony, the fact that the requesters were able to and including Latin America and Russia; Chase Bank incurred losses in did provide comments in this case, and the other facts of record, the the derivatives markets and Chemical Bank incurred losses in the Board has determined not to grant these requests for a further extenforeign exchange market; and Chase Bank mismanaged employee sion of the comment period. benefit plan funds, causing the plans to lose money. In evaluating the 34. These commenters included: managerial resources of Chemical and Chase, the Board considered (1) New York City—United States Representative Floyd Flake; New confidential examination information reviewing and evaluating the York State Senator William Larkin; New York State Assembly activities and internal controls of Chase and Chemical. members Robert Straniere, Gregory Becker and Charles O'Shea; 31. New Chase Bank would retain a number of operating subsidiar- New York City Housing Partnership; The Greater Harlem Chamber ies of Chase Bank. One commenter stated that a number of activities of Commerce; Neighbors Helping Neighbors; and Asian American currently conducted through operating subsidiaries of Chase Bank Business Development Center; violate the Glass-Steagall Act and other laws and that the activities (2) Upstate New York—Albany-Colonie Regional Chamber of would violate the BHC Act and the Board's Regulation H if they were Commerce; Black Ministers Alliance/Greater Rochester National conducted in operating subsidiaries of New Chase Bank. The activi- Association for the Advancement of Colored People; Urban League ties of the operating subsidiaries of Chase Bank are currently con- of Rochester; and Broome County Economic Development Alliducted in conformance with the requirements of the OCC. Upon ance; transfer to New Chase Bank, a state member bank, the activities (3) Connecticut—Planning and Economic Development Commiswould be conducted in conformance with applicable state and federal sion, Bridgeport; Community Economic Development Fund, law and the Board's regulations. The activities of these subsidiaries Bridgeport; and Urban League of Southwestern Connecticut; and appear to conform to the Glass—Steagall Act. In addition, Chemical (4) New Jersey—Paterson Economic Development Corporation. has committed that New Chase Bank will operate these subsidiaries in 35. Some commenters argued that the Board should not give any accordance with the conditions imposed by or commitments made to weight to the number of commenters supporting the merger or to the the OCC in connection with the establishment of such subsidiaries by testimony or submissions of certain commenters supporting the Chase Bank. If, after the merger, the Board finds that any of the merger. Those commenters alleged that a number of the supporters subsidiaries are operating in violation of law or regulation, the Board made inaccurate statements about the performance of Chase and has ample authority to require modification or termination of such Chemical under the CRA, or expressed support for the merger because activities. Chase and/or Chemical personnel served on their boards of directors, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 245 Approximately 97 commenters either opposed the nience and needs factor, including proposed branch clomerger, raised concerns about the CRA performance of sures. Chemical or Chase, or requested that the Board approve In reviewing the convenience and needs factor, including the merger subject to conditions proposed by the comment- the CRA performance records of Chemical and Chase and ers.36 A majority of commenters objecting to the proposal their subsidiary depository institutions, the Board has carecriticized the CRA performance record of Chase or Chem- fully considered the information and comments submitted ical in helping to meet the credit and banking needs of low- in writing as well as the comments and testimony preand moderate-income neighborhoods and communities sented orally at the public meeting.38 with predominately minority populations in New York City and upstate New York.37 Other commenters criticized the B. Overview of the CRA Performance Records of CRA performance records or overall lending records of Chase and Chemical Chase or Chemical in California, Connecticut, New Jersey, Delaware, and Texas. Commenters also raised other issues Chemical's lead bank, Chemical Bank, which controls over that the Board has considered in reviewing the conve- 80 percent of Chemical's total assets, received an overall CRA performance rating of "outstanding" from the Federal Reserve Bank of New York at its most recent examinaor because they received grants to pursue activities unrelated to tion for CRA performance, as of March 13, 1995 ("Chemmeeting the credit needs of low- and moderate-income communities, ical Bank Exam"). This is the second consecutive CRA such as immunization and school programs. The description in this performance rating of "outstanding" received by Chemical order of the number of commenters does not represent a weighting by Bank.39 All of Chemical's other subsidiary banks received the Board of the comments. The Board has considered the testimony and written submissions of all commenters supporting and opposing "outstanding" or "satisfactory" ratings at the most recent this proposal, in light of the full record in this case and the factors the examinations of their CRA performance by their primary Board is required to consider under the BHC Act, Bank Merger Act federal supervisors.40 and Edge Act. Chase's lead bank, Chase Bank, received an overall 36. The commenters included: (1) New York City and Long Island—New York State Senator Franz CRA performance rating of "satisfactory" from the OCC, Leichter ; New York State Reinvestment Alliance (statewide coali- its primary federal supervisor, at its most recent examination of community groups); Inner City Press/Community on the tion for CRA performance, as of October 28, 1993 ("Chase Move (community organization based in the South Bronx); Yucahu, Bank Exam").41 All of Chase's other subsidiary banks Inc. (nonprofit organization serving East Harlem); Asian Americans received "outstanding" or "satisfactory" ratings at the for Equality; Red Hook Banking Committee (community group based in the Red Hook section of Brooklyn); Northwest Bronx Community & Clergy Coalition; Association for Neighborhood & Housing Development, Inc.; Economic Opportunity Commission of Nassau County; South Bronx/Inner City Prospective Homeowners' Association; South Bronx/Inner City Small Business Alliance; and Economic Opportunity Commission of Long Island/Mid-Island Restoration Committee; 38. The Board also has considered additional comments filed after (2) Upstate New York—Quincy Tax Services, Rochester; Citizen the close of the public comment period. Under the Board's rules, the Action of Binghamton; Broome County CRA Coalition; and Board may in its discretion take into consideration the substance of Greater Rochester County Reinvestment Coalition; such comments. 12 C.F.R. 262.3(e). (3) Delaware—Delaware Community Reinvestment Action Coun- 39. The previous examination of Chemical Bank for CRA perforsel; mance was as of August 1993. (4) Texas—Freedmen's Town Association, Inc. and Texas Commu- 40. The CRA performance rating for Chemical's subsidiary banks nity Reinvestment Coalition; and in New Jersey, Delaware, Florida and Texas are discussed in detail in (5) California—City-County Reinvestment Task Force, San Diego, this order as part of the state-by-state performance evaluations. Chemand The Greenlining Institute/Greenlining Coalition. ical Bank, N.A., Jericho, New York ("CBNA"), was rated "satisfacto- 37. In general, commenters alleged that: ry" by the OCC, as of September 30, 1994. The examiners noted that (1) Chemical and Chase have poor records of lending to minorities CBNA works with Chemical Bank to fulfill its obligations under the and in minority and low- and moderate-income communities; CRA. (2) Data reported under the Home Mortgage Disclosure Act 41. One commenter submitted internal OCC memoranda related to ("HMDA") by Chase and Chemical suggest that the organizations Chase Bank's application for approval from the OCC to merge with engage in illegal racial discrimination and redlining; United States Trust Company of New York that commenter alleges (3) Chase and Chemical do not have a sufficient number of branches support the commenter's position that the OCC's determinations or ATMs or provide adequate branch services in low- and moderate- regarding the CRA performance of Chase Bank are arbitrary and income and minority communities (for example, several comment- capricious and that the Board cannot rely on the OCC's fair lending or ers stated that services at Chemical Bank and Chase Bank branches CRA performance examinations of Chase Bank or the OCC's prior in low- and moderate-income communities are inferior to services approval of a number of Chase Bank applications. The OCC reoffered by the banks in other communities and that Chemical Bank sponded to these allegations by stating that the memoranda do not and Chase Bank charge high fees and have high minimum balance have any connection to its CRA or fair lending examinations and are requirements for basic checking and savings accounts); documents that are isolated aspects of the OCC's deliberative process (4) Chase and Chemical engage in an inadequate amount of small in its consideration of the Chase/U.S. Trust merger application. The business lending, particularly in low- and moderate-income and Board has considered the commenter's allegations and the OCC's minority communities and to minority-owned small businesses; and responses. Based on all the facts of record, the Board concludes that (5) Chase's and Chemical's levels of ascertainment, marketing and the commenter has not demonstrated that the OCC's CRA or fair outreach activities in minority and low- and moderate-income com- lending examinations or its application review process are arbitrary, munities are inadequate. capricious or otherwise unreliable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

246 Federal Reserve Bulletin • March 1996 most recent examinations of their CRA performance by nounced that it had already completed an earlier pledge to their primary federal supervisors.42 make $ 1 billion in CRA-related investments over the fiveyear period that had begun in 1992. C. CRA Commitment D. Performance Within CRA Delineations In connection with this proposal, Chemical has announced an $18.1 billion five-year nationwide community invest- 1. New York and Connecticut. ment plan for New Chase. Of the total, $4.2 billion has been allocated to New York State, with $3.2 billion to New The Chemical Bank Exam and Chase Bank Exam found York City. Components of the plan include: the community delineation for the banks to be reasonable45 (1) $13.5 billion in affordable mortgages nationwide, and that a geographic analysis of lending data demonincluding $858 million in New York State; strated that there was a reasonable penetration throughout (2) $3.4 billion in loans and investments to assist small each bank's delineation, including low- and moderatebusinesses and community-based nonprofit organiza- income census tracts46 The Chemical Bank Exam and tions, including approximately $1 billion in loans to Chase Bank Exam included fair lending examinations of small businesses in low- and moderate-income areas;43 the two banks which found no evidence of discrimination (3) $1.2 billion in loans and investments for affordable or other illegal credit practices. housing and commercial and economic development, including $906 million in New York State; and a. Chemical Bank (4) $70 million in major philanthropic initiatives and contributions to community-based and nonprofit organi- Lending Activities. Chemical Bank engages in a variety of zations in low- and moderate-income communities na- lending programs designed to help meet the credit needs of tionwide. the communities in its service area, including the credit needs of low- and moderate- income neighborhoods. For Chemical has stated that New Chase would issue an example, Chemical Bank offers special mortgage products annual public announcement on its performance under the to assist in meeting the housing-related credit needs of community investment plan. Chemical also has stated that low- and moderate-income individuals in New York City representatives of New Chase would meet with interested and surrounding areas. Chemical has developed the Neighgroups periodically to discuss New Chase's performance in borhood Homebuyers Mortgage ("NH Mortgage"), an aftheir local communities44 In early 1994, Chemical an- fordable mortgage product that requires less cash for closing than most conventional mortgage products and offers flexible underwriting criteria. Chemical Bank also participates in the Neighborhood Housing Services ("NHS") 42. In May 1995, Chase Bank merged Chase Manhattan Bank of Cash Program, which permits prospective homeowners to Connecticut, N.A., Bridgeport, Connecticut ("Connecticut Bank"), into Chase Bank, through a multi-step corporate reorganization of obtain a loan from NHS to cover part of downpayment Chase's banks in New York and Connecticut. Connecticut Bank costs. In 1994, Chemical Bank originated 1147 NH Mortreceived an overall CRA performance rating of "satisfactory" from gages in New York State, totalling $112.8 million. Chemithe OCC, its primary federal supervisor, at its most recent examination cal also has created the Affirmative Mortgage Program to for CRA performance, as of October 1993. In addition, Chase recently originate home mortgage loans to applicants who do not sold the assets and liabilities of The Chase Manhattan Bank of Maryland, Baltimore, Maryland ("Chase Bank MD"). Prior to this sale, Chase Bank MD had received an overall CRA performance rating of "satisfactory" from the Federal Reserve Bank of Richmond, as of February 1995. of New Chase and the projected cost savings and profitability of New 43. Chemical has stated that the five-year goal for loans to and Chase. Several commenters also argued that the program does not investments in small businesses and not-for-profit organizations in provide an adequate means for community groups to monitor whether New York State is $2.42 billion. New Chase meets its goals. 44. Several commenters contended that Chase and Chemical repre- 45. Several commenters maintained that Chase and Chemical should sentatives have been uncooperative in meeting with community- based expand their relevant service areas beyond their banks' delineated organizations and have been unwilling to reach agreements to provide communities because their mortgage lending subsidiaries operate naloans, grants or assistance in specific amounts, or to participate in tionwide. The geographic scope of the delineated communities of the particular programs or projects. The Board believes that, while com- bank subsidiaries of Chase and Chemical that have been examined for munications by depository institutions with community groups pro- CRA performance have been determined by federal regulators to be vide a valuable method of assessing and determining how an institu- reasonable and not to arbitrarily exclude any low- and moderatetion may best address the credit needs of the community, the CRA income communities. does not require that a depository institution enter into an agreement 46. Chemical Bank operates commercial lending offices in upstate with any organization. Accordingly, in reviewing this proposal, the New York. Chemical does not maintain any full service branches and Board has focused on the programs and policies that Chemical and does not market its mortgage products in upstate New York. Several Chase have in place to serve the credit needs of their entire communi- commenters stated that examiners did not give enough consideration ties. See Fifth Third Bancorp, 80 Federal Reserve Bulletin 838 (1994). to Chemical Bank's CRA performance in upstate New York. In Many commenters were critical of the $18.1 billion pledge, stating evaluating Chemical Bank's CRA performance, examiners took into that it is largely unenforceable, too vague to be meaningful, does not consideration Chemical Bank's community development and other represent a significant increase over the current investment levels of activities in upstate New York in light of the nature of its banking Chase and Chemical, and is too low relative to the estimated asset size presence within its delineated upstate communities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 247 meet the underwriting criteria for other affordable mort- Chemical Bank also offers SBA-guaranteed loans in gage products offered by Chemical Bank. Chemical Bank amounts up to $500,000. As of December 31, 1994, it had currently holds $38 million of these mortgages on its total outstanding SB A loans of $8.4 million. In addition, in books. the Spring of 1995, Chemical Bank began offering SB A In addition, Chemical Bank participates in the State of loans under the new SBA FA$TRACK Program, which New York Mortgage Agency ("SONYMA") mortgage pro- permits Chemical Bank to use its own lending products to gram, which provides qualified low- and moderate-income originate small business loans with the traditional SBA applicants with home mortgages. In 1994 and the first two guarantee. Chemical Bank has booked 46 FA$TRACK quarters of 1995, Chemical Bank originated 51 SONYMA loans since May 1995. Chemical Bank also has made loans loans totalling $4.24 million. Chemical also participates in under the SBA Section 7A Program and the SBA Minority the New York City Home Improvement Program ("HIP"), Pre-Qualification Loan Program. which provides low-interest home improvement loans to Chemical also participates in the New York City Small low-income homeowners. As of June 1995, Chemical Bank Business Reserve Fund ("NYC Fund"), which is suphad 256 HIP loans outstanding totalling $1.7 million. ported by a 5 percent reserve payment from New York Chemical also has committed over $1 million to the Capi- City. Since 1992, Chemical Bank has made 26 NYC Fund tal Affordable Housing Funding Corporation, an Albany- loans totalling $2.35 million. Chemical Bank also provides based organization, to provide mortgages on l-to-4 family financial support to a number of financial intermediaries homes to families earning less than 50 percent of the that provide financing to small businesses in New York MSA's median income. City and upstate New York, including the New York Com- Chemical Bank also has developed products to meet the munity Investment Company, Ibero-American Corporaconsumer credit needs of low- and moderate-income com- tion, New York Business Development Corporation, and munities. In 1994, Chemical Bank introduced the Mini Mid-Hudson Bankers Small Business Loan Fund. Quick Home Secured Loan and the Mini Quick Creditline. Affordable Housing and Community Development. From These products permit a homeowner to borrow between January 1994 to June 1995, Chemical Bank provided $5,000 and $14,999 without paying any fees and subject to $69.1 million in financing for affordable housing construcunderwriting guidelines that are designed to meet the needs tion and rehabilitation projects in its delineated communiof low- and moderate-income borrowers. ties, including the Williamsburgh and East New York The Chemical Bank Exam stated that the geographic sections of Brooklyn, Harlem and the Bronx. In addition, distribution of Chemical Bank's small business lending Chemical has committed $50 million to the New York shows that it is reaching all segments of the small business Equity Fund, a joint venture between the Enterprise Founmarket. In 1994, Chemical Bank originated 1,936 small dation and Local Initiatives Support Corporation. The New business loans totalling $110.9 million in its downstate York Equity Fund develops affordable housing for low- New York delineation, including 369 loans totalling income and homeless families. $24.3 million to small businesses located in low- and- Chemical also has supported the development of affordmoderate-income census tracts. In New York City, Chemi- able housing in upstate New York. For example, Chemical cal Bank originated 1,323 small business loans for has provided financial support to the Community Lending $80 million in 1994. Approximately half of the small Corporation to assist in the development of affordable business loans made by Chemical Bank in the Bronx and housing in Buffalo, Rochester, Syracuse and Albany. In Brooklyn were to small businesses in low- and moderate- addition, Chemical Bank, through its Housing Opportuniincome communities. ties Program ("HOP"), provides both general operating Chemical Bank offers credit products to meet the needs support grants and recoverable grants to not-for-profit of small businesses in low- and moderate-income commu- housing organizations. In 1994, for example, Chemical nities. For example, the CAN-DO program is a low-equity provided $860,000 in overhead support grants to 116 not- "character lending" program that reduces equity require- for-profit housing organizations in New York State, includments for small businesses. In addition, Chemical Bank ing the Capital District Community Loan Fund. recently introduced the Minority- and Women- Owned Chemical has provided technical and advisory services Business Contractor Program, which provides financing to to small businesses in New York City through its Business contracting firms owned by women and minorities to en- Resource Center in Manhattan. The Business Resource able them to accept contracts and sub-contracts on pri- Center was established in 1994 and provides free consultvately and publicly sponsored projects.47 ing services and financial advice to small business owners and potential entrepreneurs that need technical assistance 47. Several commenters stated that Chemical and Chase should acquire more goods and services from businesses owned by women of business with 113 of these applicants. New Chase plans to continue and minorities. Chemical has stated that its Minority- and Women- this program after consummation of this acquisition. While the Board Owned Business Development Program provides technical and other fully supports programs designed to stimulate and create economic assistance to businesses owned by women and minorities to enable opportunities for all members of society, the Board believes that them to have an equal opportunity to bid on Chemical Bank contracts. consideration of Chemical's or Chase's third-party contracting activi- Since 1993, Chemical Bank has received more than 600 applications ties is beyond the scope of the CRA and other relevant banking to participate in the Program. Chemical Bank has done $55.3 million statutes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

248 Federal Reserve Bulletin • March 1996 to get started or to improve their performance. The Busi- also participates in the New York Mortgage Coalition ness Resource Center has assisted nearly 1,000 clients, of ("NY Coalition"), an organization formed by several New which approximately 66 percent were businesses owned by York financial institutions that contracts with nonprofit women and minorities. Chemical has announced that New organizations that serve low- and moderate- income com- Chase would establish another Business Resource Center munities in New York City, Long Island, and Westchester, in Brooklyn. Chemical also provides loans, grants and to provide information and counseling to prospective technical assistance to not-for-profit organizations that en- homeowners. Since 1993, Chemical Bank has originated courage entrepreneurship and business expansion in low- more than 75 mortgages totaling $8.4 million through income communities.48 referrals from the NY Coalition. Chemical Bank recently developed a new program Chemical Bank also advertises its small business and to support community development credit unions mortgage products through its branch network and media ("CDCUs"). This program has three parts: a three-year, that serve low- and moderate-income and minority commu- $250,000 recoverable grant to the National Federation of nities. In addition, Chemical Bank makes community lead- Community Development Credit Unions, which will use ers and public officials aware of its products and programs the money to make deposits in CDCUs throughout New through its quarterly newsletter, "In the Community." York State; $50,000 in grants to help four CDCUs gain Branch Banking Services. The Chemical Bank Exam access to one or more Automated Teller Machine ("ATM") found that Chemical Bank's branches offered business networks; and in-kind donation of Chemical Bank ATMs hours and services that were tailored to the convenience to CDCUs. Chemical Bank also recently donated a branch and needs of the community and that were frequently building in the Bedford Stuyvesant section of Brooklyn to reviewed for their effectiveness.50 Chemical Bank offers the Central Brooklyn Federal Credit Union. special deposit products designed to meet the needs of low- Ascertainment and Marketing. The 1995 Chemical Bank and moderate-income communities, including lifeline Exam found that Chemical Bank had an effective ascertain- checking and savings accounts. Chemical Bank's lifeline ment program for its downstate community and a separate checking program does not have minimum balance requireand adequate program for its upstate community. Ascer- ments, permits 10 free transactions per month, and has a tainment efforts at Chemical Bank are primarily conducted monthly maintenance fee of $4. The lifeline savings acby Community Development Group staff, who meet regu- count requires a $250 minimum balance to avoid fees and larly with community groups. To assist in ascertaining allows for 3 transactions per month. Chemical Bank procommunity credit needs, in 1992 Chemical Bank formed a vides lifeline checking and savings account holders with Community Advisory Board ("CAB"), which meets quar- access to their accounts directly or through a Chemical terly and is comprised of 31 community leaders and ex- Bank ATM card. Chemical Bank markets these products in perts in community development from throughout the English and Spanish. bank's delineated communities, who are active in the fields Chase Bank also offers a lifeline checking account, and of housing, economic development, education and social Chemical Bank and Chase Bank have over 230,000 lifeline services. Based on the CAB's suggestions, Chemical Bank checking customers. Chemical has stated that New Chase has developed several new programs and products, includ- Bank would adopt Chemical Bank's lifeline checking and ing two commercial lending programs, the Houses of Wor- savings products with no increase in fees. ship lending program and CAN-DO program.49 Chemical In addition, in September 1994, Chemical Bank intro- Bank also ascertains community credit needs through its duced its Checks-to-Cash Club ("CC Club"). The CC "Streetbanker" program. Each Streetbanker is assigned Club provides check cashing for a one percent fee, low cost responsibility for a specific geographic territory, and Street- money orders, and other services to customers that otherbankers have participated in over 263 meetings with com- wise do not have banking relationships with Chemical munity organizations since January 1994. Bank. A $15 annual membership fee is charged for this The Chemical Bank Exam found Chemical's marketing program. Currently the CC Club is available at eight efforts to be effective. Chemical Bank regularly holds branches in low- and moderate-income communities. homebuyer seminars in its branches and at trade shows. Chemical has indicated that it intends to expand the pro- From 1994 through June 1995, Chemical Bank conducted gram to a number of new locations. Chemical Bank, 334 homebuyer seminars, including 29 in Spanish, which through an arrangement with New York City's Human were attended by approximately 7,050 people. Chemical Resources Administration, also disburses public assistance benefits and food stamps at many of its New York City branches. 48. Chemical also indicated that New Chase would establish a Nonprofit Resource Center to provide services and support to nonprofit organizations, community development corporations, and other community-based organizations. This Resource Center would provide assistance with loans and grants, as well as seminars and technical 50. Chemical has stated that both Chase and Chemical make conassistance on cash management systems, strategic planning and other certed efforts to hire people from the local community and to hire topics. multilingual staff. Chemical also represented that customer satisfac- 49. The Community Advisory Board would be continued at New tion surveys are conducted to monitor branch performance, and would Chase Bank. be conducted again after the merger. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 249 Several commenters stated that neither Chemical Bank staff in these branches would be increased to ensure that nor Chase Bank currently operate enough branches or service levels are maintained. In the seven communities ATMs in low- and moderate-income communities, and that where branch consolidations have been announced, New both banks, but particularly Chemical, previously have Chase plans to invest $3.9 million in capital improvements closed branches in low- and moderate-income neighbor- in the surviving branches and add nine new 24-hour ATM hoods.51 In addition, many commenters stated that the machines54 proposed branch closures by New Chase Bank would ad- Chemical also has stated that New Chase Bank would versely affect communities in which the branches were establish new branches in the South Bronx and Harlem.55 located. In addition, New Chase Bank would install a total of 46 Chemical Bank operates 185 branches in New York new 24-hour multilingual ATMs in low- and moderate- City, including 45 in low- and moderate-income communi- income communities in New York City, including 16 in the ties. Of the branches in low- and moderate-income commu- Bronx and 14 in Brooklyn.56 nities, 13 are in the Bronx and 14 are in Brooklyn.52 Chase Chemical also has announced that it expects New Chase Bank operates 107 branches in New York City, including Bank to close 93 other branches after the merger. These 24 branches in low- and moderate-income communities. branches are not located in low- and moderate-income Chase Bank also operates 81 branches in upstate New communities. Chemical has stated that it does not have a York, including 15 branches in low- and moderate-income final branch closure plan for branches that are not located communities. in low- and moderate-income neighborhoods. Commenters The Board has reviewed the branch closing policies of have stated that the proposed branch closures in non-low- Chemical Bank and Chase Bank. Chemical Bank's policy and moderate-income communities would adversely affect requires the bank to consider a number of factors, includ- the convenience and needs of communities in which they ing current market conditions, market potential, customer are located, and commenters expect New Chase Bank to satisfaction and product usage, demographics and commu- close additional branches in low- and moderate- income nity needs. In addition, there are discussions with commu- communities after consummation of the proposed merger. nity representatives before Chemical Bank closes a branch There is no evidence in the record that the non-low- and in a low- and moderate-income neighborhood. Chase Bank moderate-income communities in which Chase and Chemis required to consider similar factors under its branch ical currently have branches are underserved by financial closing policy. The Chase Bank Exam and Chemical Bank institutions. As discussed above, both Chemical and Chase Exam stated that the banks' records of opening and closing have adequate branch closing policies, which New Chase branches has not had a negative impact on its communities, will follow in connection with its determination to close including low- and moderate-income communities. branches. This policy requires consideration of the effect of Chemical has announced that only seven of the 69 the branch closure on the availability of banking services branches that would be operated by New Chase Bank in in the community. In addition, the FDI Act requires an low- and moderate-income communities in New York City insured depository institution to submit a notice of any would be closed as a result of the proposed merger. Each proposed branch closing to the appropriate federal banking case involves the consolidation of a branch into another agency no later than 90 days before the date of the proexisting branch that is located within two blocks.53 Chemi- posed branch closing.57 Customers of the insured deposical has stated that many of the remaining branches would tory institution also must be notified. The Joint Agency receive physical improvements before the merger and that Policy Statement on Branch Closings ("Joint Policy Statement") requires that the notice: (1) Identify the branch to be closed and specify the 51. Several commenters stated that Chemical Bank abandoned proposed date of closing; upstate New York in 1994, when it sold its retail branches to Fleet Financial Group. Commenters also stated that Chase Bank is in the (2) Provide a detailed statement of the reasons for the process of abandoning upstate New York through branch closures and decision to close the branch; and sales. Commenters stated that the banks that acquire Chase's branches may not be able to provide the same resources to communities as Chase. The Board notes that the effect of these sales on the convenience and needs of the communities must be reviewed in connection with review of the acquisition proposal. 52. Commenters have criticized Chemical for its announcement that Chemical's Bruckner Plaza branch would be consolidated into its Castle Hill branch sometime during the first half of 1996. Chemical 54. For example, Chemical has stated that the Chemical Bank has stated that this consolidation is unrelated to the proposed merger branch at 149th Street in the South Bronx would receive $400,000 in and that the Castle Hill branch would undergo $350,000 in capital improvements to expand teller and platform services to accommodate improvements to increase capacity for platform, teller, ATM, and safe increased customer volume. deposit facilities to accommodate the expected additional customer 55. The new branch in the South Bronx is in an area that currently volume. does not have a branch. A multilingual ATM and customer service 53. Chemical also has announced that New Chase Bank would staff would be available at this branch. reconfigure three branches in low- and moderate-income communities 56. Chemical has stated, for example, that two new 24-hour ATMs as primarily automated facilities. These branches are located within would be installed at a branch adjacent to the Red Hook community of three blocks of full service branches of Chemical Bank or Chase Brooklyn. Bank. 57. See 12 U.S.C. § 1831r-l. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

250 Federal Reserve Bulletin • March 1996 (3) Provide statistical or other information in support of Because of the limitations of HMDA data, the Board such reasons consistent with the institution's written considers the results of fair lending examinations and other policy for branch closings.58 sources of information in evaluating allegations that a banking organization has violated fair lending laws. In this While Chemical has not made a final determination regard- case, the Chemical Bank Exam indicated that examiners ing the branches it will close in non-low- and moderate- did not find any evidence of discrimination or other illegal income neighborhoods, any branch closings by New Chase credit practices. The Chemical Bank Exam also stated that Bank, particularly branch closings in low- and moderate- directors and senior management have developed policies, income neighborhoods, will be assessed by examiners as procedures and training programs to ensure that the bank part of the CRA performance evaluation of the bank, and does not illegally discourage or prescreen applicants. All will be reviewed by the Board in future applications to declined mortgage applications from lower-income indiacquire depository facilities. viduals and applicants seeking to purchase homes in low- HMD A Data. The Board has carefully reviewed 1993 and moderate-income neighborhoods are reviewed by and 1994 HMDA data reported by Chemical for New York Chemical Bank's Affordable Mortgage Review Committee State, including the New York and Nassau-Suifolk to ensure that all credit criteria and lending policies are MSAs.59 These data generally show that Chemical is pro- administered equally and fairly for all customers seeking mortgage financing. Chemical Bank also provides fair viding housing-related loans in low- and moderate- income lending training to staff involved in the loan process. and minority communities in its delineation, despite a general reduction in overall lending volume. For example, in 1994 in Upper Manhattan, Chemical Bank originated 63 b. Chase Bank loans within low- and moderate- income census tracts, which represented more than 20 percent of all loans origi- Lending Activities. Chase Bank and its affiliates offer a nated within such communities. By comparison, Chemical number of products designed to meet housing-related credit Bank originated approximately 8 percent of all loans origi- needs in low- and moderate-income communities in Chase nated within New York City in 1994. Also in 1994, the Bank's delineation. For example, in 1993, Chase Bank number of loan applications received by Chemical Bank introduced a Tax Advantage Installment Loan product from the South Bronx represented 19 percent of its total ("TAIL") to meet the financing needs of residents of Co-op loan applications from Bronx County, while all lenders City and Concourse Village, both in the Bronx. This prodreceived 16 percent of their Bronx County loan applica- uct offers applicants up to 100 percent financing for cooptions from the South Bronx. In addition, the percentage of erative units, with no application or appraisal fees and total loan applications received by Chemical from minori- minimal closing costs. In 1994, 278 TAIL loans were ties and Chemical's origination rates for minorities in- originated, and 95 TAIL loans had been originated through creased in 1994 for the New York MSA. However, HMDA June 30, 1995. data also indicate that there are disparities in the origina- In addition, in 1994 Chase introduced two new products tion rates for minorities compared to those for non-minority to meet the credit needs of low- and moderate-income applicants. communities in upstate New York, the $500 Down Mort- The Board is concerned when an institution's record gage program and the Closing Cost Assistance Loan proindicates disparities in lending to minority applicants, and gram.60 The $500 Down Mortgage requires only $500 in it believes that all banks are obligated to ensure that their equity from a qualified borrower and is offered through lending practices are based on criteria that assure not only partnerships with local community groups that offer homesafe and sound lending, but also equal access to credit by buyer education and credit counseling. As of June 30, creditworthy applicants regardless of race. The Board rec- 1995, Chase had originated over $5.5 million of such ognizes, however, that HMDA data alone provide an in- loans. Borrowers also can receive up to $4,500 through the complete measure of an institution's lending in its commu- Closing Cost Assistance Loan program. nity. The Board also recognizes that HMDA data have Chase also offers its 97% LTV Chase Portfolio ("97% limitations that make the data an inadequate basis, absent Program") and Chase Risk Share ("Risk Share Program") other information, for conclusively determining that an products in Chase Bank's delineated communities. Both of institution has engaged in illegal discrimination in making these affordable mortgage products have low downpaylending decisions. ment requirements and flexible underwriting standards. From January 1, 1995 to June 30, 1995, Chase originated loans totalling $5 million through the 97% Program and loans totalling $2.4 million through the Risk Share Pro- 58. 58 Federal Register 49,083 (1993). The Joint Policy Statement also provides that the branch closing notice procedure does not apply gram in New York and Connecticut. In addition, Chase to the movement of branches within the same immediate neighborhood that does not substantially affect the nature of the business or the customers served. Such occurrences involving only short distances are viewed essentially as branch consolidations or relocations under the Joint Policy Statement. 60. Chase introduced these products in Rochester, Syracuse and 59. These data were reported by Chemical Bank and Chemical Buffalo in 1994, and in Binghamton, Jamestown and Albany in the Residential Mortgage Company. first quarter of 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 251 offers its Mortgage Settlement Assistance Installment Loan applications from businesses in low- and moderate-income Program to aid in the financing of closing costs. communities that have been declined by SDOl or SD03. Chase also originates affordable mortgages through the Of the 55 loans reviewed thus far in 1995, 22 loans for Federal National Mortgage Association's Community $1.5 million have been approved by the Small Business Homebuyer Program and the SONYMA, FHA and VA Group using various government guaranty programs. programs. From January 1994 to June 30, 1995, Chase Chase Bank also participates in the NYC Fund. As of originated 386 SONYMA loans totalling $28 million and June 30, 1995, Chase had originated 70 loans to small 568 FHA and VA loans totalling $32 million in New York businesses totalling $3.1 million through the NYC Fund, and Connecticut. Chase Bank also originates HIP loans. As including 2 loans totalling $25,000 in the South Bronx.62 of June 30, 1995, Chase Bank had originated 22 HIP loans. Chase Bank also participates in programs that provide As of December 31, 1994, Chase Bank had 9,911 loans loans to small businesses in low- and moderate-income outstanding to small businesses in New York and Connect- communities in Connecticut, including the Urbank Proicut, 23 percent of which were to small businesses in low- gram and the Community Economic Development Fund and moderate-income communities. In New York City in ("CED Fund"). In 1994, the CED Fund approved six loans 1994, Chase Bank originated 177 loans totalling totalling $1.3 million. In addition, Chase has provided $14.6 million to small businesses. In upstate New York in financial support to a number of community development 1994, Chase Bank originated 777 small business loans for corporations that serve the credit needs of small businesses $64 million, of which 160 loans were to small businesses throughout its delineation. in low- and moderate-income communities. In addition, in Affordable Housing and Community Development. Chase the first half of 1995, Chase Bank originated 583 small has provided significant financing to a large number of business loans within its delineated communities, of which organizations that develop housing for low- and moderate- 175 were to small businesses in low- and moderate-income income residents in the New York City area, including communities. residents of Upper Manhattan, Brooklyn and the South Chase Bank is an SBA-certified lender. Chase Bank also Bronx. Chase participates in the Community Preservation is a participant in the SBA "low doc" program and the Corporation, New York Equity Fund, New York City new SBA FA$TRACK loan program. As of June 30, 1995, Housing Authority Turnkey Program, Long Island Hous- Chase Bank had 87 SBA loans outstanding totalling ing Partnership, and New York City Housing Partnership $16 million. ("NYCHP").63 Chase also has provided financial support Chase Bank has made efforts to improve the services it to affordable housing projects in upstate New York through provides to small businesses. In May 1994, Chase estab- the Community Lending Corporation. lished its Small Business Group in recognition of the need Ascertainment and Marketing. Chase markets its affordto focus delivery of small business services through the use able mortgage products through a variety of media, includof non-traditional and government assisted programs.61 ing through newspapers, radio stations and television sta- The Small Business Group has developed a Small Business tions that primarily serve low- and moderate-income and Plan to increase lending to small businesses in low- and minority communities. Chase Bank also sponsors first-time moderate-income areas and improve its marketing to busi- homebuyers seminars. In 1994, Chase Bank sponsored 261 nesses owned by minorities and women. Since its inception in May 1994, the Small Business Group has approved $14 million in loans ranging in size from $10,000 to 62. Chase and Chemical also have participated in the development $500,000. Of these loans, 70 percent were to small busi- and financing of the New York Community Investment Company, nesses in low- and moderate-income communities and which was created by the 11 New York Clearing House banks to 62 percent of the loans were to businesses owned by provide loans to small businesses located in New York City's lowand moderate-income communities. minorities and women. The Small Business Group also has 63. Chase and Chemical participate in the NYCHP program as developed a second review process for small business loan construction lenders and mortgage lenders. As part of this program, the NYCHP assembles a pool of eligible prospective homebuyers based on a review of the income, assets, employment records, and credit history of interested individuals. Individuals are randomly cho- 61. Within Chase Bank's delineated communities, Chase provides sen from the pool to acquire affordable homes with funding provided small business lending through its Small Business Group and through in part by NYCHP. Several commenters have stated that Chemical and two other delivery systems: Chase, through their participation in the pool selection process, violate (1) Service Delivery Option 1 ("SDOl") provides complex, larger fair lending laws and HMDA by failing to provide adverse action credit facilities to small business customers whose overall relation- notices to applicants rejected by NYCHP and by failing to report such ship with Chase Bank is managed through a dedicated relationship denials in HMDA data. A large number of New York City banks manager; and provide construction and end loans in connection with NYCHP- (2) Service Delivery Option 3 ("SD03") ordinarily provides sponsored projects. The program is administered, however, by smaller credit facilities to small business customers who receive NYCHP. The process for selecting eligible prospective homebuyers Chase Bank products through a Chase Bank branch and branch appears to be controlled by NYCHP and is substantially the same staff. SDOl and SD03 serve customers with annual sales of up to regardless of the financial institution that is chosen to make construc- $10 million. tion or end loans. The Federal Reserve System has begun discussions The Small Business Group serves businesses with less than with the NYCHP about their procedures and will continue these $1 million in annual sales and businesses owned by women and discussions to assure compliance with all federal fair lending and minorities. reporting laws. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

252 Federal Reserve Bulletin • March 1996 such seminars in New York and Connecticut and 20 in the received by Chase from within low- and moderate-income U.S. Virgin Islands and Puerto Rico. From January 1, 1995 communities increased by 26 percent and 14 percent, reto June 30, 1995, Chase sponsored 165 mortgage seminars spectively. In Chase Connecticut's delineation, the number in New York, Connecticut, and the U.S Virgin Islands, in of loan applications received from African Americans and which approximately 4,700 prospective homebuyers partic- from within low- and moderate-income census tracts also ipated. Seminars have been conducted in Spanish, Creole, increased in 1994.68 The Chase Bank Exam found that Korean, Chinese and Russian. In addition, the Chase Bank Chase's fair lending program is designed to ensure ongo- Exam noted that Chase Bank's outreach and ascertainment ing, equal treatment of applicants and compliance with fair efforts have led to a number of new products and programs. lending laws.69 Chase markets small business products primarily through its relationship managers, who make sales calls, participate 2. Texas in trade shows, and organize seminars. From January 1994 to June 1995, Chase conducted 60 small business seminars. Texas Commerce Bank, N.A., Houston, Texas ("Texas To complement the activities of the relationship managers, Commerce"), was rated "outstanding" by the OCC, its Chase markets small business products through direct mail- primary federal supervisor, at its most recent examination ings and newspapers, including newspapers that are circu- for CRA performance, as of September 14, 1994 ("Texas lated primarily in minority communities. Commerce Exam").70 The Texas Commerce Exam stated Branch Banking Services. The Chase Bank Exam stated that the geographic distribution of credit extensions, applithat Chase Bank's branch locations provided reasonable cations, and denials represented a reasonable pattern access to most segments of its delineated community.64 As throughout its delineated communities, and that Texas discussed elsewhere in this order, Chase Bank offers a Commerce had made a significant investment in new lifeline checking account to serve the needs of low- and branches in low- and moderate-income communities. Exmoderate-income individuals and operates a number of aminers also found no evidence of prohibited or illegal branches in low- and moderate-income communities. discriminatory practices at Texas Commerce or TCB-San HMDA Data. The Board has carefully reviewed 1993 Angelo.71 and 1994 HMDA data reported by Chase affiliates that Several commenters stated that Texas Commerce has not originate loans in Chase Bank's community delineation, met the banking needs of low- and moderate-income comwhich includes New York and Connecticut.65 These data munities. Commenters also allege that the activities of generally reflect that Chase is providing housing-related Texas Commerce violate fair lending laws. loans within low- and moderate-income and minority com- Chemical offers special mortgage products to assist in munities and to minority borrowers throughout the commu- meeting housing-related credit needs of low- and moderatenities it serves in New York and Connecticut. In this income individuals in Texas, including the Affirmative regard, despite a decline in overall lending, the number of Mortgage Program, 2+2 Unsecured Loans,72 and Affordloan applications received by Chase from minorities and able Home Improvement Loan Program. As of August from low- and moderate-income and minority communities 1995, Texas Commerce had originated 1,698 mortgage in the New York MSA increased in 1994.66 In addition, loans, totalling $77 million, through the Affirmative Mortdespite an overall decline in the total number of applica- gage Program. In addition, as a result of the Affordable tions received by Chase within the Nassau/Suffolk and Home Improvement Loan program, Chemical has indi- Syracuse MS As in 1994,67 the number of applications cated that origination of home improvement loans in lowby Chase from low- and moderate-income census tracts within upstate 64. The 1993 CRA performance examination of Connecticut Bank New York MSAs has increased. The 1995 lending data submitted by also found that the bank's office locations were reasonably accessible Chase is preliminary and, consequently, has not been relied on by the to the entire community. Board in this case. 65. For 1993 HMDA data, these affiliates include Chase Bank, 68. Chase Bank and Chase Connecticut did not include the City of Connecticut Bank, Chase Home Mortgage Corporation, and Chase Hartford within their delineations. Chemical has indicated that New U.S. Consumer Services, Inc. ("CUSCS"). For 1994 HMDA data, Chase Bank would include the City of Hartford within its community these affiliates include Chase Manhattan Bank and Chase Manhattan delineation. Mortgage Corporation ("Chase Mortgage"). Chase Mortgage was 69. This program is discussed elsewhere in this order. formed by merging Chase Home Mortgage Corporation with Troy & 70. Chemical also operates in Texas through Texas Commerce Bank Nichols, Inc. ("Troy & Nichols") and American Residential Mort- - San Angelo, N.A., San Angelo, Texas ("TCB-San Angelo"). TCBgage Company ("American Residential"), which Chase acquired in San Angelo was rated "satisfactory" by the OCC, its primary federal 1993 and 1994, respectively. The 1994 HMDA data include data for supervisor, at its most recent examination for CRA performance, as of Troy & Nichols and American Residential. September 15, 1994. 66. The HMDA data indicate that Chase received 224 loan applica- 71. The Texas Commerce Exam noted that OCC examiners retions from the South Bronx in 1994, an increase of 56 percent. These viewed 650 real estate mortgage and home improvement loan applicadata also indicate that the number of loan applications received by tions to determine whether there was any evidence of illegal discrimi- Chase from within low- and moderate-income census tracts in Upper natory activities or results. Manhattan increased in 1994. 72. This program is designed to assist low- and moderate-income 67. Chemical and Chase submitted preliminary HMDA data for the mortgage applicants with downpayment and closing costs. Under this first two quarters of 1995 for a number of MS As. Chemical has stated program, applicants may obtain loans for up to two percent of the that these data generally indicate that the percentage of loans received home's sale price. In 1994, 96 loans were made through this program. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 253 and moderate-income areas increased by over 150 percent pliance with fair lending regulations through internal aufrom 1993 to 1994. dits. Texas Commerce originated 2,938 small business loans totalling $472 million in 1994, including over 1,000 loans 3. New Jersey to small businesses in low- and moderate-income areas.73 Texas Commerce also is a preferred lender in the SBA's Chemical recently reorganized its banking operations in Houston region and has certified status in other regions. New Jersey and currently operates in New Jersey through Texas Commerce originated approximately 168 SBA- Chemical Bank New Jersey, N.A., East Brunswick, New guaranteed and other small business credit-enhanced loans Jersey ("Chemical-NJ"). Chemical previously operated totalling $21 million in 1994. In addition, in 1994, Texas two banks in New Jersey, Chemical Bank New Jersey, Commerce streamlined its small business loan applications N.A. ("Old Chemical-NJ"), and Princeton Bank and Trust process to provide more rapid and convenient services to Company, N.A. ("PBT"), both of East Brunswick, New small businesses. Jersey.77 Old Chemical-NJ and PBT were both rated "satis- The Texas Commerce Exam stated that Texas Com- factory" by their primary supervisor, the OCC, at the most merce has a comprehensive ascertainment process. Out- recent examination of their CRA performance, as of Aureach efforts include contacts with a wide range of neigh- gust 31, 1993.78 Examiners conducted fair lending reviews borhood groups and community and government officials. of Old Chemical-NJ and PBT and did not find any evi- Examiners noted that ascertainment activities have resulted dence of prohibited discriminatory practices. In addition, in the construction of additional branches in low- and the examination of Old Chemical-NJ ("Old Chemical-NJ moderate-income areas,74 enhancement of the bank's af- Exam") stated that the geographic distribution of the fordable mortgage programs, and implementation of lower- bank's credit extensions, applications and denials was adecost personal and business checking accounts. In addition, quate. examiners concluded that Texas Commerce markets its Commenters stated that Chemical is not effectively servproducts and services throughout its delineated commu- ing the needs of minority and low- to moderate-income nity, using a variety of media and other means. individuals in New Jersey.79 The Old Chemical-NJ Exam The Texas Commerce Exam also stated that Texas Com- found that Old Chemical-NJ made significant efforts to merce is a leader in community development activities. As address affirmatively a substantial portion of its communiof July 1995, Texas Commerce had lent or committed ty's identified credit needs through the origination of home $58.5 million to community development projects in Texas. mortgage and small business loans. The examination report The Board has reviewed 1993 and 1994 HMDA data for noted that Old Chemical-NJ provided a variety of lending Chemical's subsidiaries that originate loans in Texas.75 programs for low- and moderate-income individuals and These data indicate that the number of home-related loan small businesses. For example, Old Chemical-NJ provided applications received by Chemical from minorities and affordable mortgage loans through the Affordable Mortlow- and moderate-income census tracts increased substan- gage and Welcome Home Mortgage products. In 1994, Old tially from 1993 to 1994. In addition, these data indicate that Chemical received a higher percentage of its total loan applications from minorities and low- and moderate- 77. In October 1995, Old Chemical-NJ was sold to an unaffiliated commercial banking organization and PBT purchased 39 branches of income census tracts in the Dallas and Houston MSAs in Old Chemical-NJ located in northern New Jersey. PBT became 1994 than in 1993, and that the percentage of applications Chemical-NJ. received by Chemical from such census tracts and individ- 78. PBT provided private banking services to meet the banking uals exceeded the percentages for lenders in the aggregate needs of high net worth individuals. Examiners of PBT noted that an in 1994.76 effective referral system with Old Chemical-NJ had been adopted to ensure that the credit needs of the entire community were met. In this Texas Commerce has taken a number of steps to ensure regard, PBT's delineated communities were located entirely within that all loan applicants are treated equally in the lending the delineated communities of Old Chemical-NJ. process. For example, Texas Commerce has established 79. Chase operates in New Jersey through The Chase Manhattan second review programs for mortgage, home improvement Bank of New Jersey, N.A., Oradell, New Jersey ("Chase-NJ"). Chase-NJ was established in March 1995 to acquire a portion of the and small business lending, and it regularly assesses comassets and liabilities of a failed savings association from the Resolution Trust Corporation and has not yet been examined for performance under the CRA. As discussed by the Board in a previous order, Chase has hired a community investment officer for Chase-NJ and has developed a CRA statement and community investment plan for the 73. These loans were to businesses with annual revenues of bank. See The Chase Manhattan Corporation, 81 Federal Reserve $10 million or less. Bulletin 883 (1995) ("Chase"). Several commenters have stated that 74. In the last two years, Texas Commerce has opened three Chase-NJ's community delineation, which includes Bergen and Pasbranches in low- and moderate-income communities in Houston and a saic Counties, should be expanded to include other communities branch in a low- and moderate-income community in Dallas. because Chase-NJ solicits deposits and markets Chase products 75. These subsidiaries include Texas Commerce Bank, TCB-San throughout New Jersey. Chase-NJ's delineation was prepared using Angelo, and Chemical Residential Mortgage Corporation. the existing boundary and effective lending territory methods. See 76. One commenter stated that Chemical has broken its promise to 12 C.F.R. 228.3(b). Based on the facts of record, Chase-NJ's commucause Texas Commerce to expand its banking services in the Freed- nity delineation appears reasonable. Chemical-NJ's delineation also men's Town section of Houston. appears reasonable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

254 Federal Reserve Bulletin • March 1996 Chemical-NJ originated $26 million in Affordable Mort- activities are exempt from the CRA. See 12 C.F.R. gages and $9.6 million in Welcome Home Mortgages. The 228.11(c)(3). Old Chemical-NJ Exam also stated that Old Chemical-NJ Chase's Delaware banking subsidiary, The Chase Manhad sound marketing and advertising programs which pro- hattan Bank (USA), Wilmington, Delaware ("ChUSA"), a vided its communities with a high level of awareness about specialized bank primarily engaged in credit card operathe bank's credit products and services. Residential mort- tions, received an "outstanding" rating from the FDIC at gage loans and small business loans in Chemical-NJ's its most recent examination for CRA performance as of delineation are currently being originated by Chemical August 30, 1994 ("ChUSA Exam"). Bank and its affiliates.80 As discussed elsewhere in the The Board received comments alleging that Chemical's order, Chemical Bank offers a variety of products designed and Chase's subsidiaries in Delaware have violated the to serve the needs of low- and moderate-income communi- CRA, ECOA, and other fair lending laws, have inadequate ties.81 ascertainment and marketing activities, and have a poor The Board has reviewed 1993 and 1994 HMDA data for record of lending to minorities and in low- and moderate- Chemical in New Jersey.82 These data generally indicate income areas in the Wilmington-Newark MSA. Some comthat Chemical has provided housing-related loans to minor- menters challenged the rating given to ChUSA in its most ity and low- and moderate- income individuals and neigh- recent exam by the FDIC. borhoods throughout the delineated communities Chemical Delaware law prohibits ChUSA from taking retail deposserves in New Jersey. Although the number of loan applica- its, making loans, or directly marketing lending products in tions received by Chemical in New Jersey in 1994 de- Delaware.83 Accordingly, the examination rating for creased, the number of loan applications received from ChUSA was based on ChUSA's nonlending activities. No minorities and low- and moderate-income census tracts evidence of prohibited discriminatory or other illegal credit increased substantially. For example, mortgage applica- practices by ChUSA were found by the examiners. The tions from African Americans in the New Jersey Counties ChUSA Exam noted that ChUSA's management actively of the Philadelphia MSA increased from 93 in 1993 to 135 pursues contacts with local and state government officials, in 1994, and applications from Hispanics increased from nonprofit community groups, minority-owned and small 35 in 1993 to 80 in 1994 in those same counties. Applica- businesses, affordable housing developers, and other comtions from borrowers in low- and moderate-income census munity based lenders. Management also attends commutracts in the New Jersey Counties of the Philadelphia MSA nity affairs meetings that enhance their awareness of comincreased from 118 in 1993 to 180 in 1994. In addition, the munity needs and programs or projects that address those percentage of applications received by Chemical in New needs. Jersey from minority and low- and moderate-income cen- Although ChUSA is prohibited by state law from disus tracts and minorities exceeded the percentages for rectly marketing its credit products to Delaware residents, lenders in the aggregate in 1994. examiners noted that ChUSA's management implemented a successful call program to inform the community of the 4. Delaware bank's willingness to assist in community development programs. Through its contributions to a local organization Chemical's subsidiary bank in Delaware, Chemical Bank that maintains a revolving loan fund, ChUSA has assisted Delaware, Wilmington, Delaware ("Chemical-DE"), is low- and moderate-income first-time homebuyers with only incidentally involved in granting credit to the public downpayment and settlement costs. Examiners noted in the and is engaged primarily in the business of providing ChUSA Exam that ChUSA's involvement in community wholesale cash management controlled disbursement ser- programs has assisted in the development of more than 400 vices to corporations. The Board has previously deter- affordable homes, the rehabilitation of more than 200 afmined by regulation that institutions engaged in these fordable rental units, and has facilitated the development of a second mortgage program to cover downpayment and closing cost for first-time homeowners. ChUSA supports small business development by funding loan pools that provide capital for fledgling businesses. 80. Chemical has provided financing for the development of affordable housing in New Jersey. Since 1992, Chemical has provided over As noted in the ChUSA Exam, ChUSA was a participant in $27 million in loans for the development of affordable housing a public/private initiative that extended 23 small business throughout New Jersey. Chemical also has provided grants for loans and was responsible for creating over 300 jobs in community-based housing development organizations in New Jersey. Delaware. In addition, ChUSA has worked with local Thus far in 1995, Chemical has awarded 40 grants totalling $280,000 to assist in the development of more than 100 units of affordable business groups to develop and provide business training housing. courses to enhance the managerial and sales skills of small 81. Chemical has indicated that the CRA and community development activities of Chemical-NJ are being supervised by Chemical Bank's Community Development Group. Chemical also has stated that Chemical- NJ has retained several individuals who were members of Old Chemical- NJ's community development group. 82. These data were reported by Old Chemical-NJ, PBT, and Chemical Residential Mortgage Corporation. 83. Del. Code Ann. tit. 5, § 1404. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 255 business owners.84 The bank has donated the use of its in Florida.88 These data indicate that Chemical substanfacilities for these training sessions. The ChUSA Exam tially increased its housing-related lending activities in stated that six of the thirteen participants in the first train- Florida in 1994, and that the percentage of total loan ing session received loans to start businesses. applications received by Chemical from Hispanics increased significantly and is greater than the percentage for 5. Florida lenders in the aggregate in 1994. In addition, the percentage of total loan applications received by Chemical from Chemical and Chase each have a subsidiary financial insti- minority and low- and moderate- income census tracts tution in Florida, Chemical Bank, FSB, Palm Beach, Flor- increased in 1994. ida ("Chemical FSB"),85 and Chase Manhattan Private Chase Private Bank has not been examined for CRA Bank (Florida), N.A., Tampa, Florida ("Chase Private performance since it reorganized its activities to focus on Bank"). Chemical FSB received an overall CRA perfor- private banking. Recent CRA initiatives of Chase Private mance rating of "satisfactory" from the Office of Thrift Bank include introducing the Mortgage Settlement Assis- Supervision, its primary federal supervisor, at its most tance Program in Palm Beach and Dade Counties and recent examination for CRA performance, as of March 6, providing financial support to the First Housing Develop- 1995 ("Chemical FSB Exam"), and Chase Private Bank ment Corporation. Chase Private Bank also has provided was rated "satisfactory" by the OCC, as of October 1993 financial support to a number of nonprofit organizations ("Chase Private Bank Exam").86 The Chemical FSB Exam that operate in Florida. and Chase Private Bank Exam stated that examiners did The Board has reviewed 1993 and 1994 HMDA data not find any evidence of discrimination or other illegal reported by Chase in counties served by Chase Private credit practices. The Board received comments criticizing Bank. These data indicate that origination rates for minorthe lending performance of Chemical and Chase in Florida. ity applicants improved and the number of applications The Chemical FSB Exam stated that Chemical FSB's received from low- and moderate-income and minority lending activities have effectively penetrated low- and census tracts increased in 1994. In addition, the OCC moderate-income segments of its delineated communi- conducted a fair lending examination of Chase Private ties.87 Examiners also stated that the volume of residential Bank in connection with the Chase Private Bank Exam. lending by Chemical FSB represents a significant commit- The Chase Private Bank Exam stated that there was no ment to residential lending in light of the institution's evidence that Chase Private Bank is prescreening or disprivate banking business strategy and the relatively low couraging individuals from applying for credit. Examiners level of deposits generated from within the delineated also concluded that Chase's policies, procedures and traincommunity. As of September 21, 1995, Chemical FSB had ing programs effectively addressed the requirements of the approximately $1.7 million outstanding in affordable hous- fair lending regulations. ing loans, including 11 originated in 1995. Chemical FSB participates in affordable housing programs and provides E. Other Convenience and Needs Considerations financial support to affordable housing organizations operating within its community. In addition, in 1994, Chemical Previous Reviews of Chase's Compliance and CRA made a commitment to invest $5 million over a four-year Records. The Board recently reviewed Chase's compliance period for the development of multi-family affordable with fair lending laws and record of performance under the housing in low-income areas of Florida. CRA in connection with two separate applications under The Board has reviewed 1993 and 1994 HMDA data section 3 of the BHC Act.89 In considering Chase's complireported by Chemical in counties served by Chemical FSB ance with fair lending laws, the Chase Orders noted the conclusions by the OCC, the primary federal supervisor for Chase Bank, that Chase Bank had not engaged in illegal discriminatory lending or credit practices.90 84. ChUSA also aids a local credit union that serves a low-income community by providing staff for loan analysis and technical expertise. 85. Chemical FSB is engaged in a private banking business and 88. Chemical FSB and Chemical Residential Mortgage made loans offers traditional deposit and credit products only as an adjunct to within these communities in 1993 and 1994. other services, such as investment management, estate planning and 89. See The Chase Manhattan Corporation, 81 Federal Reserve trust administration. Bulletin 467 (1995) and Chase (together, "Chase Orders"). Because a 86. Chase Private Bank was formerly known as The Chase Manhat- number of commenters reiterate issues raised and considered in contan Bank of Florida, N.A. In December 1994, Chase Private Bank sold nection with the Chase Orders, the Board incorporates in this order a substantial portion of its branch assets and liabilities and its current the reasons, evidence and conclusions explained in the Chase Orders. focus is on private banking. 90. The Board received several comments alleging fair lending 87. Examiners noted that Chemical FSB established a Los Angeles violations by Chase that are identical to those previously addressed in branch in March 1995. One commenter stated that the lending activi- the Chase Orders, including that Chase steers prospective borrowers ties of Chemical Residential Mortgage Company indicate that Chemi- to its subsidiary bank or mortgage company in a discriminatory cal is discriminating against low- and moderate-income communities manner and that a program offered by Chase Bank that permits and minorities in Florida, including communities that fall within customers to avoid transaction or account fees by maintaining mini- Chemical FSB's CRA delineation. Chemical Residential Mortgage mum balances violates the fair lending laws. One commenter also Company's activities are discussed elsewhere in this order. stated that a Chemical program that permits customers to avoid fees Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

256 Federal Reserve Bulletin • March 1996 HMDA Data in General. Commenters noted that Chem- in the Chase Orders, in 1993 the OCC conducted perforical and Chase engage in significant mortgage lending mance and fair lending examinations of Chase Bank, Conactivities throughout the United States,91 and allege that necticut Bank and Chase's subsidiary mortgage compa- HMDA data reported by Chemical and Chase92 suggest nies, and found no evidence of illegal discrimination. that their nationwide lending activities ignore the needs of In the last year, Chase Mortgage has introduced a numminorities and low- and moderate-income and minority ber of products designed to increase loans to low- and communities and violate fair lending laws.93 moderate-income communities. The Risk Share Affordable CBNA's Fair Lending Committee ("Fair Lending Com- Housing Program and Chase 97% LTV Mortgage products mittee") monitors the fair lending activities of Chemical permit low downpayments and higher debt-to- income Mortgage. A comprehensive fair lending examination of ratios than offered in the secondary market. Chase Mort- CBNA was conducted in conjunction with the most recent gage also established its Minimum Compensation Proreview of its CRA performance.94 Examiners concluded gram, which provides a minimum compensation level for that CBNA had established comprehensive policies and loan originations regardless of loan size to give loan origiprocedures that provide personnel with appropriate guid- nators incentives to serve customers seeking relatively ance. Examiners did not find any evidence that CBNA small housing-related loans. In addition, Chase Mortgage engaged in any illegal discriminatory practices or lending. has taken certain steps to increase its lending in low- and The Fair Lending Committee of CBNA created a multi- moderate- income communities in the Southern California ple review committee to review samples of loan applica- market. For example, the Chase Assisted Settlement for tions approved or denied by Chemical Mortgage to ensure Home Buyers program, which offers an unsecured loan to that credit criteria are being equitably applied and to re- assist borrowers in paying closing costs and in making downpayments, is offered exclusively in San Diego and view all denied applications from low- and moderate- Los Angeles. Chase Mortgage also has engaged in certain income applicants. CBNA has distributed a Fair Lending advertising and marketing activities designed to increase Manual to Chemical Mortgage and provides fair lending training to Chemical Mortgage employees.95 its loans in low- and moderate-income communities in Southern California and Chemical has stated that New As discussed in the Chase Orders, Chase has a compre- Chase would support a mortgage counseling program in hensive national fair lending program that is designed to conjunction with ACORN in Los Angeles. assure equal treatment of applicants and compliance with fair lending laws. Chase also has taken a number of steps Elimination of Jobs. A number of commenters expressed designed to assure the equal treatment of low- and concern that the merger would result in the loss of a moderate-income and minority borrowers by all Chase significant number of jobs, including jobs in New York entities. These efforts, which are discussed in the Chase City. Chase and Chemical have taken a number of steps to Orders, include a second review program, a periodic anal- mitigate the impact of job losses from the proposed merger. ysis of HMDA data, a comparative mortgage loan file For example, Chemical has stated that both organizations review, and a "mystery shopper" program.96 As discussed would make every effort to use normal attrition to achieve personnel reductions. In addition, each organization's human resource department has developed guidelines for staff selection. These guidelines provide for job decisions to be by maintaining minimum balances violates fair lending laws. For the made by management of the relevant line of business and reasons stated in the Chase Orders, the Board does not believe that these allegations support a finding that either Chase Bank or Chemical human resources personnel. All personnel decisions would Bank is engaged in any illegal discriminatory practices, or warrant be reviewed by corporate employee relations personnel. denial of this proposal. Chemical also has stated that career transition programs 91. Chemical and Chase have mortgage lending subsidiaries that would be available to help employees find new positions.97 make loans throughout the United States, Chemical Residential Mortgage Company ("Chemical Mortgage"), a subsidiary of CBNA, and Chase Mortgage, a subsidiary of Chase Bank. 92. Several commenters stated that the Board should not take into consideration loans made by American Residential Mortgage Company in 1994 before its was acquired by Chase. lending and sets consistent standards for all Chase entities (bank and 93. Commenters raised concerns about lending in California and a nonbank) and all Chase credit products, including mortgage, auto, large number of MSAs in the United States, including San Diego and credit card, small business, educational, home equity, and installment Los Angeles, California; Detroit, Illinois; Baltimore, Maryland; Bos- loan products. ton, Massachusetts; Washington, D.C.; and Houston and Dallas, 97. These programs would include: Texas. Chemical operates a bank in Texas and Chemical FSB has a (1) A Redeployment Task Force that would review open positions branch in Los Angeles. Otherwise, neither Chemical nor Chase has a and available people in New Chase (displaced employees would be subsidiary bank serving these cities. given advance notice of open positions and an opportunity to apply 94. The fair lending performance of Chemical Mortgage was not for those positions); reviewed. (2) Outplacement assistance, including office facilities, seminars, 95. In addition, Chemical Mortgage and Chase Mortgage are cur- individual and group counseling, resume preparation, interview rently subject to the supervisory authority of the OCC as subsidiaries training, career assessment, and other activities, which would be of national banks. available to displaced staff members throughout their active job 96. One commenter stated that Chase's other lending activities, search; and including automobile financing, violate fair lending laws. Chase's fair (3) Financial support for retraining and education to assist displaced lending program covers all of Chase's consumer and small business employees to acquire new skills and knowledge. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 257 Conclusion Regarding Convenience and Needs that these and other initiatives proposed by Chemical Considerations would help New Chase to improve the already adequate CRA performance records of Chemical and Chase. The Board has carefully considered the entire record, in- In this light, after carefully considering all the facts of cluding the substantial public comments in this case, in record, including the testimony at the public meetings, the reviewing the convenience and needs factors under the comments received, the responses of Chemical and Chase, relevant banking statutes.98 A number of commenters have relevant reports of examination, and other supervisory inraised both specific and general concerns about the ade- formation, the Board concludes that the convenience and quacy of the CRA programs of Chemical and Chase and needs considerations, including the CRA records of perforthe effect of the proposal on the availability of future mance of Chemical and Chase, are consistent with apbanking services in low- and moderate-income areas. Other proval of these applications.99 commenters believe that the current CRA programs of Chemical and Chase are very productive and expect that Public Meeting the proposed merger would strengthen existing programs. Based on a review of the entire record of performance, A number of commenters have maintained that the proincluding information provided by the commenters, the posed merger would have a significant impact in areas Board believes that efforts by Chemical and Chase to help outside New York City, and that the Board should hold meet the credit needs of all segments of the communities public meetings in these areas, including upstate New served by their banks, including low- and moderate- in- York, Texas and California. Section 3(b) of the BHC Act come neighborhoods, are substantial and, on balance, satis- does not require the Board to hold a public hearing on an factory. This conclusion is confirmed by the most recent application unless the appropriate supervisory authority for CRA examination reports for the subsidiary banks of the bank to be acquired makes a timely written recommen- Chemical and Chase. dation of denial of the application. In this case, the Board Chemical has announced certain measures that would be has not received such a recommendation from any state or implemented by New Chase to improve the services it federal supervisory authority. Under section 4 of the BHC would provide to its communities. For example, Chemical Act, the Board may order a hearing on an application or has announced that New Chase would increase its support notice "if there are disputed issues of material fact that of small businesses and community-based nonprofit organi- cannot be resolved in some other manner." 12 C.F.R. zations by increasing its lending by 10 percent per year 225.23(g). Under the Board's rules, the Board may, in its discretion, hold a public hearing or meeting on an applicaover the next five years. Chemical also has indicated that tion to clarify factual issues related to the application and New Chase Bank would make capital improvements to a to provide an opportunity for testimony, if appropriate. number of branches to offset the effects of branch closures 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully in low- and moderate-income communities and would inconsidered these requests in light of all the facts of record. stall a significant number of new 24-hour ATMs in low- As explained above, the Board did hold a two-day public and moderate-income communities. The Board believes meeting on this proposal at which approximately 140 commenters provided testimony. In the Board's view commenters have had ample opportunity to submit their views and 98. Some commenters suggested that the Board deny, delay consid- have, in fact, submitted numerous materials that have been eration of, or extend the public comment period for this proposal to considered by the Board in acting on these applications and permit more information to be obtained and considered by the Board and/or commenters, including results of a new CRA examination of notices. Commenters' requests fail to demonstrate why Chase Bank, results of a fair lending examination of the mortgage their substantial written submissions, and, in some cases, operations of Chemical and Chase requested by commenters, detailed oral testimony, do not adequately present their allegations. information on branch closings, and additional data on small business Based on all the facts of record, the Board has determined and other lending activities. A number of commenters also requested that additional public hearings or meetings are not necesthat the Board require Chemical and Chase to submit additional information related to the convenience and needs and other factors the sary to clarify the factual record in these applications and Board must consider in acting on this application. The Board is notices or otherwise warranted in this case, and the rerequired under applicable law and its processing procedures to act on applications submitted under the BHC Act and the Bank Merger Act within specified time periods. The Board notes, moreover, that the commenters and Chemical and Chase have had an extended opportunity, including a two-day public meeting, to submit information for 99. The Board received comments from several individuals and the record and have, in fact, provided substantial submissions. As small business owners relating to specific loan applications or transacdiscussed above, the Board has carefully reviewed the record in this tions with Chemical or Chase banks. One commenter also stated that case, including information provided by commenters about the CRA the banks have permitted funds held in customer accounts to be performance records of Chemical and Chase since the most recent accessed by customers' creditors. In addition, two commenters subperformance examinations of these banks and information relating to mitted comments concerning Chase's foreclosure policies and practhe prospective effects of this merger on the convenience and needs of tices. These comments, which related to private disputes arising out of the communities to be served. Based on all the facts of record, the individual transactions, were provided to the banks and to the appro- Board concludes that the record is sufficient to act on this proposal at priate federal supervisor for review. In light of all the facts of record, this time, and that delay or denial of this proposal on the grounds of the Board concludes that these matters do not warrant denial of this informational insufficiency is not warranted. proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

258 Federal Reserve Bulletin • March 1996 quests for additional public hearings or meetings on these New Chase would not account for a dominant share of applications and notices are denied. secondary market transactions in bank-eligible or bankineligible securities, either within the primary dealer com- Other Considerations munity or among the larger set of broker-dealers. Chemical, Chase and nine other bank holding companies Chemical also has filed notice under section 4(c)(8) of the own a joint-venture that operates an electronic funds trans- BHC Act to acquire the nonbank subsidiaries of Chase and fer network, InfiNet Payment Services, Inc. ("InfiNet"). thereby engage in a number of securities-related activities, When the Board approved this joint-venture in 1994, it advisory activities, providing management consulting ad- considered the possibility of adverse competitive effects on vice to unaffiliated bank and nonbank depository institu- small banks that did not own but participated in InfiNet and tions and certain other advisory services, leasing and lend- found that several safeguards in InfiNet's operating rules ing activities, community development activities, mortgage were sufficient to protect the small bank participants.103 As banking activities, and trust company activities. Chemical a result of this proposal the combined power of the applialso has provided notice to increase its ownership interest cants to influence InfiNet policies and procedures would be in a joint venture with other banking organizations that lessened by a reduction in the number of InfiNet directors operate a retail electronic funds transfer network. The that New Chase would be permitted to elect, as well as a Board has determined by regulation and order that the reduction in the outstanding voting shares of InfiNet that proposed activities are closely related to banking for pur- New Chase would be entitled to vote.104 poses of section 4(c)(8) of the BHC Act.100 Chemical has Chemical and Chase both engage in equipment leasing stated that New Chase would conduct these activities in and secured lending, primarily through several nonbank accordance with the Board's regulations and orders approv- subsidiaries and also through subsidiaries of their commering these activities for bank holding companies. cial banks. The market for equipment leasing is national is In order to approve these notices, the Board also must scope for many leased products and international in scope determine that the acquisition of the nonbanking subsidiar- for several others, with many active bank and nonbank ies of Chase and performance of the proposed activities by participants, including large domestic and foreign banks, New Chase can reasonably be expected to produce benefits finance companies, independent leasing companies, and to the public that outweigh possible adverse effects, such as subsidiaries of equipment manufacturers. As a result of this undue concentration of resources, decreased or unfair com- large group of competitors, the combined leasing activities petition, conflicts of interests, or unsound banking practic- of Chase and Chemical would not result in a dominant es.101 The Board has carefully considered the competitive market position for New Chase, or unduly lessen competiimpact of the proposed merger on nonbank activities en- tion. Among domestic bank holding companies, Chemical gaged in by Chemical and Chase.102 ranks 22d in terms of the total dollar volume of lease Both Chemical and Chase conduct permissible securities financing receivables to customers in the United States, activities through nonbank subsidiaries. These subsidiaries and Chase ranks sixth. New Chase would rank fourth, with are primarily engaged in underwriting and dealing in Trea- a share of 6 percent of the leasing market held by bank sury securities and general obligation municipal securities holding companies.105 Even if leasing activities were to be ("bank-eligible securities"), as well as underwriting and broken into separate submarkets, the creation of New dealing in other types of debt and equity securities ("bank- Chase still would not adversely affect competition in any of ineligible securities"). Adverse effects on competition as a these submarkets.106 result of the proposal are unlikely in light of the national New Chase would conduct trust and custody activities, scope of the activities and the large number of investment and provide shareholder services, investment advisory acbanks and bank holding company subsidiaries that provide tivities, and various other products and services through these services. New Chase would have a market share of nonbank subsidiaries that it also provides through its comapproximately 3.5 percent in the major debt underwriting mercial banking subsidiaries. As previously stated in this categories in which it participates, and a negligible market order, the Board does not find that this proposal would share in equity underwriting. In terms of dealing activities, adversely affect competition in any of these markets or submarkets whether the activities were performed as an element of the cluster of banking services or as an indepen- 100. See 12 C.F.R. 225.25(b)(3), (b)(4), (b)(7), and (b)(9); Canadian Imperial Bank of Commerce, et al., 76 Federal Reserve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al., 75 Federal 103. The Bank of New York Company, Inc. et al., 80 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities Industries Reserve Bulletin 1107 (1994)("B0NY Order"). Ass'n v. Board of Governors of the Federal Reserve System, 900 F.2d 104. BONY Order at 1109. 360 (D.C. Cir. 1990); Citicorp, et al, 73 Federal Reserve Bulletin 473 105. This estimate of New Chase's share of the leasing market does (1987), aff'd sub nom. Securities Industry Ass'n v. Board of Gover- not take into account the net contribution of finance companies to total nors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, leasing. Including finance companies in the total reduces New Chase's denied, 486 U.S. 1059 (1988). pro forma market share to between 1.8 percent and 2.6 percent. 101. 12U.S.C. § 1843(c)(8). 106. New Chase would be active in the submarkets of motor vehicle 102. As noted supra commenters have alleged that the proposal leasing and general business equipment leasing, but data for these would have a negative impact on competition in the nonbank products submarkets suggests that New Chase's market share would be less such as securities and brokerage services. than 4 percent and approximately 1 percent respectively. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 259 dent service by a nonbank subsidiary. With one exception, tion 211.5(c)(2) of Regulation K (12 C.F.R. 211.5(c)(2)) to each banking activity conducted would meet the DOJ acquire all the shares of certain foreign companies owned Guidelines for activities not conducted within banking by Chase.110 Chemical has provided notice under section institutions.107 4(c)(14) of the BHC Act (12 U.S.C. § 1843(c)(14)) and In addition, consummation of the proposal would pro- section 211.34 of Regulation K (12 C.F.R. 211.34) to acduce gains in efficiency and permit Chemical and Chase to quire Chase Trade, Inc., an export trading company. In share expertise, which would enhance the services pro- addition, Chemical has provided notice pursuant to section vided to customers. Based on all the facts of record, the 25A of the Federal Reserve Act (12 U.S.C. § 611 et seq.) competitive structure of these markets, the attractiveness of (the "Edge Act") and section 211.4 of Regulation K these markets to potential entrants, and the numerous com- (12 C.F.R. 211.4) to acquire Chase Manhattan Overseas petitors that would remain, the Board concludes that con- Banking Corporation, New York, New York, and Chase summation of the proposal would not result in significantly Bank International, New Castle County, Delaware, both adverse effects such as undue concentration of resources, corporations chartered under the Edge Act, and all the decreased or unfair competition, conflicts of interests, or foreign subsidiaries, joint ventures, and portfolio investunsound banking practices that might outweigh the public ments of those corporations. benefits of this proposal in any nonbank product market.108 Accordingly, the Board has determined that the balance of Conclusion public interest factors it must consider under section 4(c)(8) of the BHC Act is favorable and consistent with approval. Based on the foregoing, including the commitments made Chemical Bank has also applied under section 9 of the to the Board by Chemical in connection with these applica- Federal Reserve Act (12 U.S.C. § 321 et seq.) to establish tions and notices, and in light of all the facts of record, the branches at the offices of Chase Bank listed in Appen- Board has determined that these applications and notices dix B.109 The Board has considered the factors it is re- should be, and hereby are, approved.111 The Board's apquired to consider when reviewing applications for estab- proval is specifically conditioned on compliance by Chemlishing branches pursuant to section 9 of the Federal ical and New Chase with all commitments made in connec- Reserve Act (12 U.S.C. § 322) and, for the reasons dis- tion with these applications and notices as well as the cussed in this order, finds those factors to be consistent conditions discussed in this order. with approval. The Board's determination as to the nonbanking activi- Chemical has requested approval under section 4(c)(13) ties to be conducted by Chemical is subject to all the of the BHC Act (12 U.S.C. § 1843(c)(13)) and sec- conditions in the Board's Regulation Y, including those in sections 225.7 and 225.23(g) (12 C.F.R. 225.7 and 225.23(g)), and to the Board's authority to require such 107. As stated in Appendix D, the effects of the proposal would be modification or termination of the activities of a holding an increase of 153 points to a level of 1301 in the domestic custody market and 151 points to level of 1036 in the global custody market. company or any of its subsidiaries as the Board finds While this would exceed the DOJ Guidelines, supra, for nonbank acquisitions, several factors suggest that both services are likely to remain competitive. After consummation of the proposed merger, neither market would be considered highly concentrated under the 110. Chase Leasing (Japan) Limited and its five wholly owned DOJ Guidelines. More than two dozen other banks provide custodial subsidiaries (Chase Air Japan Co., Ltd; Chase Aviation Japan Co., services and many have substantial financial resources with which Ltd; CM Leasing Asia Co., Ltd.; First Chase Aircraft Leasing Co., they could increase their volume of custodial services and attract the Ltd.; and Marunouchi Leasing Co., Ltd.). customers of current providers of these services. Additionally, price 111. Several commenters also alleged that New Chase would not competition for these services is high, and there is evidence of recent have a sufficient number of African Americans and other minorities in rapid declines in the fees charged for these services. senior management positions. Other commenters alleged that the 108. Chemical proposes to merge Chase's section 20 subsidiary, proposal would result in a loss of jobs that currently are held by Chase Securities, Inc., with and into its section 20 subsidiary, Chemi- minorities. The Board notes that, because New Chase's subsidiary cal Securities, Inc., both of New York, New York. One commenter banks would employ more than 50 people, serve as depositories of stated that Chase lacks internal controls and would adversely affect government funds, and act as agents in selling or redeeming U.S. Chemical Securities, Inc. The Board has reviewed all the facts of savings bonds and notes, they are required by regulations of the record, including examination and inspection reports assessing the Department of Labor to: managerial resources and policies of Chase; Chase Securities, Inc.; (1) File annual reports with the Equal Employment Opportunity Chemical and Chemical Securities, Inc.; and has concluded that there Commission; and is no basis for this allegation. (2) Have in place a written affirmative action compliance program 109. Chase Bank, which has its main office in New York, also which states efforts and plans to achieve equal opportunity in the operates branches in Connecticut. New Chase Bank, which will also employment, hiring, promotion, and separation of personnel. have its main office in New York, proposes to retain the Connecticut See 41 C.F.R. 60-1.7(a), 60-1.40. The Board also notes that, branches of Chase Bank following the merger of Chase Bank and pursuant to regulations of the Department of Labor, New Chase, as the Chemical Bank. The operation of branches in Connecticut by a New parent company, also would be required to file an annual report with York chartered bank is permitted under New York State law. In the Equal Employment Opportunity Corporation covering all employaddition, Connecticut law permits an out-of-state bank to operate ees in its entire corporate structure. The EEOC has jurisdiction for branches in Connecticut under certain circumstances and the Connect- determining whether companies are in compliance with the equal icut Banking Commissioner has indicated that Connecticut does not employment statutes. The Board is not aware of any finding or object to the continued operation by New Chase Bank of the former adjudication of illegal employment practices, to date, by Chemical or branches of Chase Bank in Connecticut. Chase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

260 Federal Reserve Bulletin • March 1996 necessary to assure compliance with, or to prevent evasion engage in trust company activities pursuant to 12 C.F.R. of, the provisions and purposes of the BHC Act and the 225.25(b)(3). Board's regulations and orders issued thereunder. The com- (6) 12.54 percent of the outstanding voting shares of InfiNet mitments and conditions relied on by the Board in reaching Payment Services, Inc., Hackensack, New Jersey (InfiNet), this decision are deemed to be conditions imposed in and thereby own a total of 23.07 percent of the outstanding writing by the Board in connection with its findings and voting shares of InfiNet, and thereby engage in operating decision, and as such may be enforced in proceedings retail electronic funds transfer networks and data processing under applicable law. and related activities pursuant to 12 C.F.R. 225.25(b)(7). The acquisition of Chase's subsidiary banks shall not be (7) Certain nonbank subsidiaries that hold loans or leases consummated before the fifteenth calendar day following pursuant to authority granted in a letter from the Federal the effective date of this order, and the banking and non- Reserve Bank of New York dated April 5, 1985. banking transactions shall not be consummated later than (8) Chase Fixed Income Advisers, Inc., New York, New York, three months following the effective date of this order, and thereby indirectly acquire a 64 percent interest in Chase unless such period is extended for good cause by the Board & MD Sass Partners, New York, New York, and thereby or by the Federal Reserve Bank of New York, acting engage in investment advisory activities pursuant to pursuant to delegated authority. 12 C.F.R. 225.25(b)(4). By order of the Board of Governors, effective January 5, 1996. Appendix B Voting for this action: Chairman Greenspan, Vice Chairman Branches to be Established Pursuant to Section 9 and Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. 601 of the Federal Reserve Act JENNIFER J. JOHNSON A. Branches and Remote ATMs of the Chase Manhattan Deputy Secretary of the Board Bank (National Association) that will become branches and remote ATMs of the Chase Manhattan Bank Upon the Appendix A Merger of the Chase Manhattan Bank (National Association) into Chemical Bank Chemical has filed notices under section 4(c)(8) of the BHC Act to acquire the nonbanking subsidiaries of Chase, Full-Service Branches (Address, City/Town, County, including: State, Zip Code) (1) Chase Securities, Inc., New York, New York, which is engaged in underwriting and dealing in debt securities, (1) 369 East 149th Street, Borough of Bronx, City of New equity securities and bank-eligible instruments, acting as York, New York 10455 agent in the private placement of securities, buying and (2) 3821 White Plains Road, Borough of Bronx, City of New selling securities on the order of investors as riskless princi- York, New York 10467 pal, providing certain advisory and securities brokerage services pursuant to Board Order dated August 15, 1988, (3) 35 Westchester Square, Borough of Bronx, City of New and providing management consulting advice to unaffiliated York, New York 10461 bank and nonbank depository institutions and certain other (4) 11 Hugh J. Grant Circle, Borough of Bronx, City of New advisory services pursuant to approval received from the York, New York 10462 Federal Reserve Bank of New York acting under delegated (5) 4200 Baychester Avenue, Borough of Bronx, City of New authority dated April 6, 1990; York, New York 10466 (2) Chase Manhattan Realty Leasing Corporation, Chase Com- (6) 3528 East Tremont Avevue, Borough of Bronx, City of mercial Corporation, Chase Manhattan Leasing Corpora- New York, New York 10465 tion, and Clark Rental Corporation, all of New York, New (7) 2 West Fordham Road, Borough of Bronx, City of New York, and Chase Third Century Leasing Co., Rochester, York, New York 10468 New York, and engage in leasing and lending activities (8) 5560 Broadway, Borough of Bronx, City of New York, pursuant to 12C.FR. 225.25(b)(5) and 12C.ER. New York 10463 225.25(b)(1); (9) 3217 Westchester Avenue, Borough of Bronx, City of New (3) Chase Community Development Corporation, New York, York, New York 10461 New York, and thereby engage in community development (10) 270 East 137th Street, Borough of Bronx, City of New activities pursuant to 12 C.F.R. 225.25(b)(6); York, New York 10454 (4) Chase Home Mortgage Corporation of the Southeast and (11) 4622 13th Avenue, Borough of Brooklyn, City of New Chase Mortgage Finance Corporation, both of Tampa, Flor- York, New York 11219 ida, and thereby engage in mortgage banking activities (12) 1000 Nostrand Avenue, Borough of Brooklyn, City of pursuant to 12 C.F.R. 225.25(b)(1); New York, New York 11225 (5) The Chase Manhattan Trust Company of California, Na- (13) 6510 Avenue U, Borough of Brooklyn, City of New tional Association, San Francisco, California, and thereby York, New York 11234 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 261 (14) 9313 3rd Avenue, Borough of Brooklyn, City of New (43) 1025 Madison Avenue, Borough of Manhattan, City of York, New York 11209 New York, New York 10021 (15) 140 58th Street, Borough of Brooklyn, City of New York, (44) 101 Park Avenue, Borough of Manhattan, City of New New York 11220 York, New York 10016 (16) 722 Brighton Beach Avenue, Borough of Brooklyn, City (45) 350 Park Avenue, Borough of Manhattan, City of New of New York, New York 11235 York, New York 10022 (17) 4323 18th Avenue, Borough of Brooklyn, City of New (46) 410 Park Avenue, Borough of Manhattan, City of New York, New York 11218 York, New York 10022 (18) 1501 Avenue M, Borough of Brooklyn, City of New (47) 241 East 42nd Street, Borough of Manhattan, City of York, New York 11230 New York, New York 10017 (19) 2771 Nostrand Avenue, Borough of Brooklyn, City of (48) 110 West 52nd Street, Borough of Manhattan, City of New York, New York 11223 New York, New York 10019 (20) 7415 5th Avenue, Borough of Brooklyn, City of New (49) Rockefeller Plaza, Borough of Manhattan, City of New York, New York 11209 York, New York 10112 (21)4 Chase Metrotech Center, Borough of Brooklyn, City of (50) 200 East 57th Street, Borough of Manhattan, City of New New York, New York 11245 York, New York 10022 (22) 33 East 23rd Street, Borough of Manhattan, City of New (51) 161 Dyckman Street, Borough of Manhattan, City of York, New York 10110 New York, New York 10040 (23) 623 Broadway, Borough of Manhattan, City of New (52) 515 Audubon Avenue, Borough of Manhattan, City of York, New York 10012 New York, New York 10040 (24) 400 East 23rd Street, Borough of Manhattan, City of New (53) 2218 Fifth Avenue, Borough of Manhattan, City of New York, New York 10010 York, New York 10037 (25) 15 East 26th Street, Borough of Manhattan, City of New (54) 2065 Second Avenue, Borough of Manhattan, City of York, New York 10010 New York, New York 10029 (26) 60 East 42nd Street, Borough of Manhattan, City of New (55) 1 Chase Manhattan Plaza, Borough of Manhattan, City of York, New York 10017 New York, New York 10081 (27) 40 West 34th Street, Borough of Manhattan, City of New (56) 302 West 12th Street, Borough of Manhattan, City of York, New York 10001 New York, New York 10014 (28) 100 West 57th Street, Borough of Manhattan, City of (57) 284 Eighth Avenue, Borough of Manhattan, City of New New York, New York 10019 York, New York 10011 (29) 825 United Nations Plaza, Borough of Mahattan, City of (58) 185 Canal Street, Borough of Manhattan, City of New New York, New York 10017 York, New York 10013 (30) 535 Fifth Avenue, Borough of Manhattan, City of New (59) 1 Lincoln Plaza, Borough of Manhattan, City of New York, New York 10017 York, New York 10023 (31) 2099 Broadway, Borough of Manhattan, City of New (60) 2 Fifth Avenue, Borough of Manhattan, City of New York, New York 10023 York, New York 10011 (32) 1 New York Plaza, Borough of Manhattan, City of New (61) 120 World Trade Center Concourse, Borough of Manhat- York, New York 10081 tan, City of New York, New York 10048 (33) 4 Columbus Circle, Borough of Manhattan, City of New (62) 255 East 86th Street, Borough of Manhattan, City of New York, New York 10019 York, New York 10028 (34) 214 Broadway, Borough of Manhattan, City of New (63) 201 East 79th Street, Borough of Manhattan, City of New York, New York 10038 York, New York 10021 (35) 84 Fifth Avenue, Borough of Manhattan, City of New (64) 345 Hudson Street, Borough of Manhattan, City of New York, New York 10011 York, New York 10014 (36) 1211 6th Avenue, Borough of Manhattan, City of New York, New York 10036 (65) 2 Bowery, Borough of Manhattan, City of New York, (37) 399 Seventh Avenue, Borough of Manhattan, City of New York 10013 New York, New York 10001 (66) 596 Fort Washington Avenue, Borough of Manhattan, (38) 45 Madison Avenue, Borough of Manhattan, City of New City of New York, New York 10033 York, New York 10010 (67) 388 Greenwich Street, Borough of Manhattan, City of (39) 270 Madison Avenue, Borough of Manhattan, City of New York, New York 10013 New York, New York 10016 (68) 307 Columbus Avenue, Borough of Manhattan, City of (40) 726 Madison Avenue, Borough of Manhattan, City of New York, New York 10023 New York, New York 10021 (69) 251 West 135th Street, Borough of Manhattan, City of (41) 1441 Broadway, Borough of Manhattan, City of New New York, New York 10030 York, New York 10018 (70) Columbia Presbytarian, Harkness Pavilion, 180 ft. from (42) 380 Madison Avenue, Borough of Manhattan, City of Washington Ave., Borough of Manhattan, City of New New York, New York 10017 York, New York 10032 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

262 Federal Reserve Bulletin • March 1996 (71) 540 Columbus Avenue, Borough of Manhattan, City of 100) 66-02 Grand Avenue, Maspeth, Borough of Queens, New York, New York 10024 City of New York, New York 11378 (72) 37-67 75th Street, Jackson Heights, Borough of Queens, 101) 51-15 Metropolitan Avene, Ridgewood, Borough of City of New York, New York 11372 Queens, City of New York, New York 11385 (73) 37-94 103rd Street, Corona, Borough of Queens, City of 102) 74-03 Metropolitan Avenue, Middle Village, Borough New York, New York 11368 of Queens, City of New York, New York 11379 (74) 59-01 Roosevelt Avenue, Woodside, Borough of Queens, 103) 70-46 Austin Street, Forest Hills, Borough of Queens, City of New York, New York 11377 City of New York, New York 11375 (75) 257 Beach 116th Street, Rockaway, Borough of Queens, 104) 666 Forest Avenue, Borough of Staten Island, City of City of New York, New York 11694 New York, New York 10310 (76) 184-01 Hillside Avenue, Jamaica Estates, Borough of 105) 200 New Dorp Lane, Borough of Staten Island, City of Queens, City of New York, New York 11432 New York, New York 10306 (77) 65-49 Myrtle Avenue, Glendale, Borough of Queens, 106) 1151 Hylan Boulevard, Borough of Staten Island, City City of New York, New York 11385 of New York, New York 10305 (78) 161-10 Jamaica Avenue, Jamaica, Borough of Queens, 107) 230 Arden Avenue, Borough of Staten Island, City of City of New York, New York 11432 New York, New York 10312 (79) 84-01 Jamaica Avenue, Woodhaven, Borough of Queens, 108) 1 Hollow Lane, Lake Success, Nassau County, New City of New York, New York 11421 York 11040 (80) 81-35 Lefferts Boulevard, Kew Gardens, Borough of 109) 22 Grace Avenue, Great Neck, Nassau County, New Queens, City of New York, New York 11415 York 11021 (81) 74-02 101st Avenue, Ozone Park, Borough of Queens, 110) 930 Rosedale Road, South Valley Stream, Nassau City of New York, New York 11416 County, New York 11581 (82) 96-19 101st Avenue, Ozone Park, Borough of Queens, 111) 1900 Hempstead Turnpike, East Meadow, Nassau City of New York, New York 11416 County, New York 11554 (83) 114-20 Jamaica Avenue, Richmond Hill, Borough of 112) 3479 Merrick Road, Seaford, Nassau County, New York Queens, City of New York, New York 11418 11783 (84) 111-18 Liberty Avenue, Richmond Hill, Borough of 113) 267 Old Country Road, Carle Place, Nassau County, Queens, City of New York, New York 11419 New York 11758 (85) 252-34 Northern Boulevard, Little Neck, Borough of 114) Harbourview Shopping Center, 1500 Old Northern Bou- Queens, City of New York, New York 11363 levard, Roslyn, Nassau County, New York 11576 (86) 43-01 Bell Boulevard, Bayside, Borough of Queens, City 115) 1820 Grand Avenue, Baldwin, Nassau County, New of New York, New York 11361 York 11510 (87) 163-20 Northern Boulevard, Flushing, Borough of 116) 425 Glen Cove Road, East Hills, Nassau County, New Queens, City of New York, New York 11358 York 11577 (88) 39-15 Main Street, Flushing, Borough of Queens, City of 117) 330 Plandome Road, Manhasset, Nassau County, New New York, New York 11354 York 11030 (89) 187-08 Horace Harding Boulevard, Fresh Meadows, 118) 365 South Oyster Bay Road, Plainview, Nassau County, Borough of Queens, City of New York, New York 11365 New York 11803 (90) 215-48 Jamaica Avenue, Queens Village, Borough of 119) 220 West Jericho Turnpike, Syosset, Nassau County, Queens, City of New York, New York 11428 New York 11791 (91) 153-15 Cross Island Parkway, Whitestone, Borough of 120) 416-418 Central Avenue, Cedarhurst, Nassau County, Queens, City of New York, New York 11357 New York 11516 (92) 104-17 Queens Boulevard, Forest Hills, Borough of 121) 3140 Long Beach Road, Oceanside, Nassau County, Queens, City of New York, New York 11375 New York 11572 (93) 32-12 Broadway, Astoria, Borough of Queens, City of 122) 1149 Wantagh Avenue, Wantagh, Nassau County, New New York, New York 11106 York 11793 (94) 22^15 31st Street, Astoria, Borough of Queens, City of 123) Mineola Business & Professional Bkg. Ctr., 106 Old New York, New York 11105 Country Rd., Mineola, Nassau County, New York 11501 (95) 30-30 Steinway Street, Astoria, Borough of Queens, City 124) 2122 Merrick Avenue, Merrick, Nassau County, New of New York, New York 11103 York 11566 (96) 46-01 Greenpoint Avenue, Sunnyside, Borough of 125) 7970 Jericho Turnpike, Woodbury, Nassau County, New Queens, City of New York, New York 11104 York 11797 (97) 44-04 21st Street, Long Island City, Borough of Queens, 126) 900 Stewart Avenue, Garden City, Nassau County, New City of New York, New York 11101 York 11530 (98) 47^10 21st Street, Long Island City, Borough of Queens, 127) 2469 Hempstead Turnpike, East Meadow, Nassau City of New York, New York 11101 County, New York 11554 (99) 66-60 Fresh Pond Road, Ridgewood, Borough of Queens, 128) 4276 Hempstead Turnpike, Bethpage, Nassau County, City of New York, New York 11385 New York 11714 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 263 129) 2111 Northern Boulevard, Manhasset, Nassau County, (158) Millwood Shopping Center, Rts. 100 & 133, Millwood, New York 11030 Westchester County, New York 10546 130) Merrick Road, Rockville Centre, Nassau County, New (159) 1019 Yonkers Avenue, Yonkers, Westchester County, York 11570 New York 10704 131) 301 North Broadway, Jericho, Nassau County, New (160) 87 Nepperhan Avenue, Yonkers, Westchester County, York 11753 New York 10701 132) 350 North Broadway, Jericho, Nassau County, New (161) Cross River Plaza, Routes 35 and 124, Cross River, York 11753 Westchester County, New York 10518 133) One Jericho Plaza, Jericho, Nassau County, New York (162) 45 Quaker Ridge Road, New Rochelle, Westchester 11753 County, New York 10804 134) K-Mart Plaza, Rte. 17M, Monroe, Orange County, New (163) 16 Guion Place, New Rochelle, Westchester County, York 10950 New York 10802 135) Southeast Plaza, Rte. 22, Brewster, Putnam County, (164) 270 North Avenue, New Rochelle, Westchester County, New York 10509 New York 10801 136) One Blue Hill Plaza, Pearl River, Rockland County, (165) 360 White Plains Road, Eastchester, Westchester New York 10965 County, New York 10709 137) 715 Route 304, Bardonia, Rockland County, New York (166) 73 Purchase Street, Rye, Westchester County, New York 10954 10580 138) Bohemia Business & Professional Banking Center, 3900 (167) 275 Halstead Avenue, Harrison, Westchester County, Veterans Highway, Bohemia, Suffolk County, New York New York 10528 11716 (168) Chatsworth & Palmer Avenues, Larchmont, Westchester 139) 56 Main Street, Islip, Suffolk County, New York 11751 County, New York 10538 140) 135 Pinelawn Road, Melville, Suffolk County, New (169) 747 White Plains Road, Eastchester, Westchester York 11747 County, New York 10583 141) 50 Route 111, Smithtown, Suffolk County, New York (170) 360 South Broadway, Tarry town, Westchester County, 11787 New York 10591 142) 285 Middle Country Road, Selden, Suffolk County, New (171) 16 Main Street, Mount Kisco, Westchester County, New York 11784 York 10549 143) 2801 Route 112, Medford, Suffolk County, New York (172) 17 Washington Avenue, Pleasantville, Westchester 11763 County, New York 10570 144) 721 Fort Salonga Road, Northport, Suffolk County, New (173) 1844 Pleasantville Road, Briarcliff, Westchester County, York 11768 New York 10510 145) 120 Commerce Drive, Hauppauge, Suffolk County, New (174) 707 Westchester Avenue, White Plains, Westchester York 11788 County, New York 10460 146) 401 Broad Hollow Road, Melville, Suffolk County, New (175) 31 Mamaroneck Avenue, White Plains, Westchester York 11746 County, New York 10601 147) 420 Montauk Highway, West Islip, Suffolk County, New (176) 501 Mamaroneck Avenue, White Plains, Westchester York 11795 County, New York 10605 148) 307 Main Street, Huntington, Suffolk County, New York (177) 1214 Mamaroneck Avenue, White Plains, Westchester 11743 County, New York 10605 149) 42 Vanderbilt Motor Parkway, Commack, Suffolk (178) 305 North Street, White Plains, Westchester County, County, New York 11725 New York 10605 150) 10 Smith Haven Mall (Store No. B-3), Lake Grove, (179) 566 North Broadway, White Plains, Westchester County, Suffolk County, New York 11755 New York 10603 151) 3 South Central Park Avenue, Hartsdale, Westchester (180) 1825 East Main Street, Peekskill, Westchester County, County, New York 10530 New York 10566 152) 2 Overhill Road, Scarsdale, Westchester County, New (181) Routes 202 & 100, Somers, Westchester County, New York 10583 York 10589 153) 2035 Crompond Road, Yorktown Heights, Westchester (182) Route 6 & Lee Road, Jefferson Valley, Westchester County, New York 10598 County, New York 10535 154) 875 Saw Mill River Road, Ardsley, Westchester County, (183) 800 Central Park Avenue, Yonkers, Westchester County, New York 10502 New York 10704 155) 511 Gramatan Avenue, Mount Vernon, Westchester (184) 1755 Monroe Avenue, Rochester, Monroe County, New County, New York 10552 York 14618 156) 203 Wolfs Lane, Pelham, Westchester County, New (185) 245 Merchants Road, Rochester, Monroe County, New York 10803 York 14609 157) 711 Bedford Road, Bedford Hills, Westchester County, (186) 1130 Main Street East, Rochester, Monroe County, New New York 10507 York 14609 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

264 Federal Reserve Bulletin • March 1996 (187) 1950 Empire Boulevard, Webster, Monroe County, New (216) 58 East Pulteney Street, Corning, Steuben County, New York 14580 York 14830 (188) 865 Fairport Road, East Rochester, Monroe County, (217) 4124 Pearsall Street, Williamson, Wayne County, New New York 14445 York 14589 (189) 1982 East Ridge Road, Irondequoit, Monroe County, (218) 815 Route 31, Macedon, Wayne County, New York New York 14622 14502 (190) 674 Titus Avenue, Irondequoit, Monroe County, New (219) 4425 East Genesee Street, DeWitt, Onondaga County, York 14617 New York 13066 (191) 88 Irondequoit Mall Drive, Irondequoit, Monroe County, (220) 6004 Court Street Road, DeWitt, Onondaga County, New York 14622 New York 13206 (192) One Chase Square, Rochester, Monroe County, New (221) 801 James Street, Syracuse, Onondaga County, New York 14643 York 13203 (222) One Lincoln Center, Syracuse, Onondaga County, New (193) 260 Crittenden Boulevard, Rochester, Monroe County, York 13202 New York 14620 (223) 329 Fayette Street, Manlius, Onondaga County, New (194) 560 Monroe Avenue, Rochester, Monroe County, New York 13104 York 14607 (224) 249 North Main Street, Minoa, Onondaga County, New (195) 2159 Fairport Nine Mile Point Road, Penfield, Monroe York 13116 County, New York 14426 (225) One MONY Plaza, Carrier Tower, Syracuse, Onondaga (196) 595 Mosley Road, Fairport, Monroe County, New York County, New York 13202 14450 (197) 31 State Street, Pittsford, Monroe County, New (226) 649 South Crouse Avenue, Syracuse, Onondaga County, York 14534 New York 13210 (198) 520 Portland Avenue, Rochester, Monroe County, New (227) 5788 East Circle Drive, Cicero, Onondaga County, New York 14605 York 13039 (199) University of Rochester, Todd Union Bldg., Joseph C. (228) 3508 West Genesee Street, Camillus, Onondaga County, Wilson Blvd., Rochester, Monroe County, New York 14627 New York 13219 (200) 920 Holt Road, Webster, Monroe County, New York (229) 4169 Elmcrest Road, Clay, Onondaga County, New 14580 York 13090 (201) 66 Main Street, Brockport, Monroe County, New York (230) 420 7th North Street, Salina, Onondaga County, New 14220 York 13088 (202) 2900 Dewey Avenue, Rochester, Monroe County, New (231) 4800 South Salina Street, Syracuse, Onondaga County, York 14616 New York 13205 (203) 1 Main Street West, Rochester, Monroe County, New (232) 150 Main Street, Oneida, Madison County, New York York 14614 13421 (204) 6 Spencerport Road, Gates, Monroe County, New York (233) 204 West First Street, Oswego, Oswego County, New 14606 York 13126 (205) 1575 East Henrietta Road, Henrietta, Monroe County, (234) 23 Main Street, Bemus Point, Chautauqua County, New New York 14623 York 14712 (206) 3917 Lake Avenue, Rochester, Monroe County, New (235) 20 West Main Street, Falconer, Chautauqua County, York 14612 New York 14733 (207) 2300 Buffalo Road, Rochester, Monroe County, New (236) 19 East Main Street, Frewsburg, Chautauqua County, York 14612 New York 14738 (208) 690 Long Pond Road, Greece, Monroe County, New (237) 2-8 Third Street, Jamestown, Chautauqua County, New York 14612 York 14701 (209) 358 Greece Ridge Center Drive, Greece, Monroe (238) 1 West Sixth Street, Jamestown, Chautauqua County, County, New York 14626 New York 14701 (210) 4390 Buffalo Road, North Chili, Monroe County, New (239) 281 East Fairmount Avenue, Lakewood, Chautauqua York 14514 County, New York 14750 (211) 1 Rochester Street, Scottsville, Monroe County, New (240) 76 South Erie Street, Mayville, Chautauqua County, York 14546 New York 14757 (212) 36 Genesee Street, Rochester, Monroe County, New (241) 737 Foote Avenue, Jamestown, Chautauqua County, York 14611 New York 14701 (213) 2130 Chili Avenue, Gates, Monroe County, New York (242) 1635 West Third Street, Jamestown, Chautauqua 14624 County, New York 14701 (214) 130 South Main Street, Canandaigua, Ontario County, (243) 904 Broadway, Buffalo, Erie County, New York 14212 New York 14420 (244) 6348 Transit Road, Depew, Erie County, New York (215) 2-8 East Market Street, Corning, Steuben County, New 14043 York 14830 (245) 295 Main Street, Buffalo, Erie County, New York 14203 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 265 (246) 6532 East Quaker Road, Orchard Park, Erie County, (275) 1460 State Street, Bridgeport, Fairfield County, Connect- New York 14127 icut 06605 (247) 2225 Colvin Boulevard, Tonawanda, Erie County, New (276) 3030 Park Avenue, Bridgeport, Fairfield County, Con- York 14150 necticut 06606 (248) 5930 Main Street, Williamsville, Erie County, New (277) 45 Prospect Street, Stamford, Fairfield County, Connect- York 14221 icut 06904 (249) 33 West State Street, Binghamton, Broome County, (278) 1066 Hope Street, Stamford, Fairfield County, Connect- New York 13901 icut 06907 (250) 315 Conklin Avenue, Binghamton, Broome County, (279) 274 Hope Street, Stamford, Fairfield County, Connecti- New York 13903 cut 06906 (251) 149-153 Robinson Street, Binghamton, Broome County, (280) 454 Boston Post Rd. - Old Kgs Highway, Darien, New York 13904 Fairfield County, Connecticut 06820 (252) 1310 North Street, Endicott, Broome County, New York (281) 211 E. Putnam Avenue, Cos Cob, Fairfield County, 13760 Connecticut 06807 (253) Five Mile Point Plaza, Kirkwood, Broome County, New (282) 24 Arcadia Road, Old Greenwich, Fairfield County, York 13795 Connecticut 06870 (254) 181 Clinton Street, Binghamton, Broome County, New (283) 122 Main Street, New Canaan, Fairfield County, Con- York 13905 necticut 06840 (255) 1085 Chenango Street, Fenton, Broome County, New (284) 21 East Avenue, New Canaan, Fairfield County, Con- York 13901 necticut 06840 (256) 2 Court Street, Binghamton, Broome County, New York (285) Greenwich Financial Center, 3A Pickwick Plaza, Green- 13901 wich, Fairfield County, Connecticut 06830 (257) 20 Jenison Avenue, Johnson City, Broome County, New (286) 2855 Main Street, Stratford, Fairfield County, Connecti- York 13790 cut 06497 (258) Oakdale Mall (Store No. 19), Reynolds Road and Harry (287) 2366 Main Street, Stratford, Fairfield County, Connecti- L Drive, Johnson City, Broome County, New York 13790 cut 06497 (259) 4481 Vestal Parkway East, Vestal, Broome County, New (288) 3226 Main Street, Stratford, Fairfield County, Connecti- York 13850 cut 06497 (260) Main Street and 119th Street, Whitney Point, Broome (289) Quality Street, Trumbull, Fairfield County, Connecticut County, New York 13862 06611 (261) Front & Lake Streets, Oswego, Tioga County, New (290) 456 Monroe Turnpike, Monroe, Fairfield County, Con- York 13827 necticut 06468 (262) 1766 Union Street, Niskayuna, Schenectady County, (291) 915 White Plains Road, Trumbull, Fairfield County, New York 12309 Connecticut 06611 (263) 20 Corporate Woods Boulevard, Colonie, Albany (292) 1 Commerce Road, Newtown, Fairfield County, Con- County, New York 12211 necticut 06470 (264) 1090 Post Road East, Westport, Fairfield County, Con- (293) 860 Bridgeport Avenue, Shelton, Fairfield County, Connecticut 06880 necticut 06484 (265) 184 Main Street, Westport, Fairfield County, Connecti- (294) 234 Main Street, Danbury, Fairfield County, Connecticut 06880 cut 06810 (266) 1401 Post Road, Fairfield, Fairfield County, Connecticut (295) Rt. 6 and Payne Rd., Danbury, Fairfield County, Con- 06430 necticut 06810 (267) 2272 Black Rock Turnpike, Fairfield, Fairfield County, (296) 146 Greenwood Avenue, Bethel, Fairfield County, Con- Connecticut 06430 necticut 06801 (268) 161 Hillside Road, Fairfield, Fairfield County, Connecti- (297) 34 Danbury Road, Wilton, Fairfield County, Connecticut 06430 cut 06897 (269) 784 Villa Avenue, Fairfield, Fairfield County, Connecti- (298) 125 Danbury Road, Ridgefield, Fairfield County, Concut 06430 necticut 06877 (270) 961 Main Street, Bridgeport, Fairfield County, Connect- (299) 33 Old Ridgefield Road, Wilton, Fairfield County, Conicut 06801 necticut 06897 (271) 1071 East Main Street, Bridgeport, Fairfield County, (300) 927 Farmington Avenue, West Hartford, Hartford Connecticut 06608 County, Connecticut 06107 (272) 2093 Main Street, Bridgeport, Fairfield County, Con- (301) 1065 Main Street, East Hartford, Hartford County, Connecticut 06606 necticut 06108 (273) 50 Washington Street, Norwalk, Fairfield County, Con- (302) 712 Main Street, Watertown, Litchfield County, Connecticut 06854 necticut 06795 (274) 123 Boston Avenue, Bridgeport, Fairfield County, Con- (303) 370 Boston Post Road, Milford, New Haven County, necticut 06610 Connecticut 06460 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

266 Federal Reserve Bulletin • March 1996 (304) 975 South Main Street, Cheshire, New Haven County, (4) Bear Stearns ATM, One Metrotech Center, Borough of Connecticut 06410 Brooklyn, City of New York, New York 11201 (305) 771 Boston Post Road, Milford, New Haven County, (5) Wyckoff Heights Medical Ctr ATM, 374 Stockholm Street, Connecticut 06460 Borough of Brooklyn, City of New York, New York 11237 (306) 24 Washington Avenue, North Haven, New Haven (6) Lexington Avenue & 75th St. ATM, 1050 Lexington County, Connecticut 06473 Avenue, Borough of Manhattan, City of New York, New (307) 124 Temple Street, New Haven, New Haven County, York 10021 Connecticut 06510 (7) Pace University ATM, 1 Pace Plaza, Borough of Manhat- (308) 234 Church Street, New Haven, New Haven County, tan, City of New York, New York 10038 Connecticut 06510 (8) Beth Israel Medical Center ATM, 10 Nathan D. Perlman (309) 195 Grand Street, Waterbury, New Haven County, Con- PI., Borough of Manhattan, City of New York, New York necticut 06702 10003 (310) 252 Chase Avenue, Waterbury, New Haven County, (9) 124 West 60th Street ATM, 124 West 60th Street, Borough Connecticut 06720 of Manhattan, City of New York, New York 10019 (311) 403 Middlebury Road, Middlebury, New Haven County, (10) 2 Chase Plaza ATM, 2 Chase Plaza, Borough of Manhat- Connecticut 06762 tan, City of New York, New York 10061 (312) 198 Meadow Street, Naugatuck, New Haven County, (11) Dewey, Ballantine ATM, 1380 Avenue of the Americas, Connecticut 06770 Borough of Manhattan, City of New York, New York (313) 1030 Wolcott Street, Waterbury, New Haven County, 10019 Connecticut 06705 (12) Guardian Life Insurance Co ATM, 201 Park Avenue (314) Upstate Mobile ATM #1 (Branch Number 90253C)1 South, Borough of Manhattan, City of New York, New (315) Upstate Mobile ATM #2 (Branch Number 90254C)2 York 10003 (316) 725 East 233nd Street, Borough of Bronx, City of New (13) Maiden Lane ATM, 33 Maiden Lane, Borough of Man- York, New York 10466 hattan, City of New York, New York 10038 (317) 1650 Gun Hill Road, Borough of Bronx, City of New (14) Proskauer, Rose, Goetz & Mendelsohn ATM, 1585 York, New York 10469 Broadway, Borough of Manhattan, City of New York, New (318) 3555 Johnson Avenue, Borough of Bronx, City of New York 10036 York, New York 10463 (15) Rockefeller University ATM, Plaza Building, 1230 York (319) 2 East Kingsbridge Road, Borough of Bronx, City of Avenue, Borough of Manhattan, City of New York, New New York 10468 York 10021 (320) 875 Manhattan Avenue, Borough of Brooklyn, City of (16) St. Vincent Hospital ATM, 152 West 11th Street, Bor- New York, New York 11222 ough of Manhattan, City of New York, New York 10011 (321) 260 Broadway, Borough of Brooklyn, City of New (17) Salomon Brothers ATM, 7 World Trade Center, Borough York, New York 11211 of Manhattan, City of New York, New York 10048 (322) 16 Court Street, Borough of Brooklyn, City of New (18) SONY Theatres ATM, Lincoln Square Building, 1255 York, New York 11241 Broadway, Borough of Manhattan, City of New York, New (323) 8523 20th Avenue, Borough of Brooklyn, City of New York 10023 York, New York 11214 (19) 24th Street & 8th Ave ATM, 284 8th Avenue, Borough of Manhattan, City of New York, New York 10011 Electronic Facilities3 (20) St. Johns University ATM, Grand Central & Utopia Pkwys, Borough of Queens, City of New York, New York (1) Lutheran Medical Center ATM, 180 - 58th Street, Borough 11439 of Brooklyn, City of New York, New York 12220 (21) US Open ATM (Seasonal), USTA National Tennis Cen- (2) Metrotech/S.I.A.C. ATM, 2 Metrotech Center, 9th Floor, ter, Borough of Queens, City of New York, New York Borough of Brooklyn, City of New York, New York 11201 11388 (3) New York Telephone ATM, 95-101 Willoughby Street, (22) Hofstra University ATM, 1000 Fulton Avenue, Union- Lobby, Borough of Brooklyn, City of New York, New York dale, Nassau County, New York 11583 11201 (23) Nassau Community College ATM, Stewart Avenue, Garden City, Nassau County, New York 11530 (24) 1985 Marcus Avenue ATM, 1985 Marcus Avenue, 1st Fl, 1. Licensed as a full-service branch to conduct business anywhere Lake Success, Nassau County, New York 11040 within 36 designated counties in upstate New York, except that it may (25) Metropolitan Life ATM, 2928 Express Drive North, not conduct business in home office protected communities within Hauppauge, Suffolk County, New York 11722 those counties. 2. Licensed as a full-service branch to conduct business anywhere (26) SUNY Farmingdale ATM, Roosevelt Hall, Ground Floor, within 36 designated counties in upstate New York, except that it may Farmingdale, Suffolk County, New York 11735 not conduct business in home office protected communities within (27) Technicon Instruments Corp. ATM, 511 Benedict Avethose counties. 3. These are unmanned stand-alone ATMs. nue, Tarrytown, Westchester County, New York 10591 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 267 (28) MBIA Co.- Armonk ATM, 113 King Street, Armonk, (55) Lourdes Hospital ATM, 169 Riverside Dr., Binghamton, Westchester County, New York 10504 Broome County, New York 13905 (29) NYNEX Corporation ATM, 1113 Westchester Avenue, (56) Macedon ATM, 1503 Canadaigua Rd. South, Macedon, 1st Fl., White Plains, Westchester County, New York 10460 Wayne County, New York 14502 (30) Westchester County Medical Center ATM, Main Hospi- (57) Newark-Wayne Community Hospital ATM, Drive Park tal, Lobby Level, Valhalla, Westchester County, New York Avenue and Main., Newark, Essex County, New Jersey 10595 14513 (31) Indian Point ATM, 295 Broadway, Buchanan, Westches- (58) Oswego University ATM, 1157 Route 104 West, Oster County, New York 10511 wego, Oswego County, New York 13126 (32) Landmark ATM, 777 Old Saw Mill River Road, Tarry- (59) Quality Markets, 249 Fluvanna Ave., Jamestown, Chautown, Westchester County, New York 10591 tauqua County, New York 14701 (33) United Hospital Medical Center ATM, 406 Boston Post (60) WCA Hospital ATM, 207 Foote Ave., Jamestown, Chau- Road, 1st Fl., Port Chester, Westchester County, New York tauqua County, New York 14701 10593 (34) Bridgeport ATM, 999 Broad Street, Bridgeport, Fairfield Foreign Branches4 County, Connecticut 06904 (1) Calle Arenales 707, Piso 5, Buenos Aires 1061, Capital (35) General Reinsurance ATM, 695 East Main Street, Stam- Fed'l, Argentina ford, Fairfield County, Connecticut 06904 (2) Da Costa Building, 68 Grenfell Street, Level 2, Adelaide, (36) Fairfield University ATM, North Benson Road, Fairfield, SA 5000, Australia Fairfield County, Connecticut 06430 (3) 87 Wickham Terrace, Brisbane, QLD 4000, Australia (37) Gartner Group ATM, 88 Top Gallant Road, Stamford, (4) 55 Northbourne Avenue, Unit 5, Canberra, A.C.T., Fairfield County, Connecticut 06904 Australia (38) Liz Clairborne ATM, One Clairborne Avenue, North (5) AMP Building, 86 Collins Street - Ground Level, Hobart, Bergen, Bergen County, Connecticut 07047 TAS 7000, Australia (39) Brockport South ATM, 6505 Brockport-Spencerport Rd., (6) 461 Bourke Street, Melbourne, VIC 3000, Australia Brockport, Monroe County, New York 14420 (7) 95 William Street, Level C, Perth, WA 6000, Australia (40) Corning Glass ATM, Corning Glass Center, GC-2, (8) World Trade Centre, 1 Jamison Street, Levels 33-36, Houghton Park, Monroe County, New York 14830 Sydney, Australia (41) Gateway Centre ATM, 150 East Main Street, Rochester, (9) Shirley & Charlotte Streets, Nassau, Bahamas Monroe County, New York 14647 (10) Sheraton Tower, Lfs. 1-4, Bahrain Commercial Complex, (42) Greece Ridge Center ATM, 271 Greece Ridge Drive, Manama, Bahrain Rochester, Monroe County, New York 14626 (11) Blue Tower, Avenue Louise 326, 9th Floor, B-1050 (43) Irondequoit Mall ATM, 88 Irondequoit Mall Dr., Irond- Brussels, Belgium equoit, Monroe County, New York 14622 (12) Wickham's Cay, Roadtown, Tortola, Bristish Virgin Is- (44) Long Ridge ATM, 1334 Long Pond Rd., Rochester, lands Monroe County, New York 14626 (13) Chase House, Greville Street, St. Helier, Jersey, JE48QH (45) Univesity of Rochester Medical Center ATM, University (14) Agustinas 1235, 5th Floor, Santiago, Chile of Rochester, Elm wood Ave., Rochester, Monroe County, (15) Tianjin Int'l. Bldg., Room 1401, 75 Nanjing Road, Tian- New York 14627 jin 300050, People's Republic of China (46) Midtown ATM, 299 Midtown Plaza, Rochester, Monroe (16) 42 Rue Washington, 75008 Paris, France County, New York 14604 (17) Zweigniederlassung Frankfurt, Alexanderstrasse 59, (47) Roberts Wesleyan ATM, 2301 Westside Dr., Rochester, 60489 Frankfurt/Main, Germany Monroe County, New York 14624 (18) 3 Korai Street, Athens, Greece (48) Rush Rhees Library ATM, University of Rochester, Li- (19) 87 Akti Miaouli, Piraeus, Greece brary Rd., Rochester, Monroe County, New York 14627 (20) Causeway Bay Branch, Ground Floor, Thai Kong Build- (49) Seneca ATM, 20 S. Clinton Ave., Rochester, Monroe ing, 480-482, Hennessy Road, Hong Kong County, New York 14604 (21) Central Branch, Alexandria House, 6 Ice House Street, Central, Hong Kong (50) St. Mary's Hospital ATM, 89 Genesee St., Rochester, Monroe County, New York 14611 (22) Hennessy Road Branch, Ground Floor, 313-317B Hennessy Road, Hong Kong (51) Carrier Dome ATM, Syracuse University, Irving Avenue, (23) Wanchai Branch, Shanghai Industrial Investment Build- Syracuse, Onondaga County, New York 13244 ing, 48-62 Hennessy Road, Wanchai, Hong Kong (52) Goldstein Student Center ATM, Syracuse University, (24) Hunghom Branch, 21 Ma Tau Wai Road, Hunghom, Skytop Rd., Syracuse, Onondaga County, New York 13210 Kowloon, Hong Kong (53) Schine Student Center ATM, 303 University PL, Syracuse, Onondaga County, New York 13210 (54) Ingram ATM, 1759 Wehrle Dr., Williamsville, Erie 4. All branches listed are full-service branches unless otherwise County, New York 14221 noted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

268 Federal Reserve Bulletin • March 1996 (25) Mongkok Branch, 720 Nathan Road, Mongkok, (57) Surcursal en Espana, Peonfas, 2, 7, Planta (La Piovera), Kowloon, Hong Kong 28042 Madrid, Spain (26) Silvercord Branch, Ground Floor, Shop 30-33, 30 Canton (58) 63, Rue du Rhone, 1204 Geneva, Switzerland Road, Tsim Sha Tsui, Kowloon, Hong Kong (59) 33, Gartenstrasse, 8002 Zurich, Switzerland (27) Maker Chambers VI, F, Nariman Point, Bombay 400 021, (60) Walsin Lihwa Information Building, Ninth Floor, No. 115 India Min Shing East Road, Section 3, Taipei, Taiwan, R.O.C. (28) Plaza Chase, Jl. Jend. Sudirman Kav. 21, Jakarta 12920, Indonesia (61) Bubhajit Building, 209 North Sathorn Road, Silom, (29) Piazza Meda 1, 20121 Milan, Italy Bangkok, Bangkok 10500, Thailand (30) Via M Mercati 39, 00197 Rome, Italy (62) Yildiz Pasta Caddesi 52, Dedeman Ticaret Merkezi, Kat (31) Crystal Tower 22, 1-2-27, Shiromi, Chuo-ku, Osaka 540, 11, 80700 Esentepe - Istanbul, Turkey Japan (63) Woolgate House, Coleman Street, London EC2P 2HD, (32) Tokyo New Kaijo Building, 1-2-1, Marunouchi, United Kingdom Chiyoda-Ku, Tokyo 100, Japan (64) 11A-11B Curacao Gade, P.O. Box 309600, St. Thomas, (33) Chase Plaza, 34-35, Chung-Dong, Choong-Ku, Seoul, U.S. Virgin Island 00808 Korea 100-120 (65) American Yacht Harbor Branch, Red Hook, St. Thomas, (34) Level 5, Lot 3B, Wisma Lazenda, Jalan Kemajuan, 87007 U.S. Virgin Islands 00801 WP Labuan, Malaysia (35) Atrium - Fourth Floor, Strawinskylaan 3077, 1077 2X (66) 26-A Estate Charlotte Amalie, St. Thomas, U.S. Virgin Amsterdam, The Netherlands Islands 00802 (36) Simpson Bay, Friendly Island Shopping Center, P.O. Box (67) 4 and 5 Estate Orange Grove, Christiansted, St. Croix, 921, St. Maarten, Netherlands Antilles U.S. Virgin Islands 00820 (37) Mullet Bay Branch, Mullet Bay, St. Maarten, Netherlands (68) 1102 King Street, Suite 2, Christiansted, St. Crois, U.S. Antilles Virgin Islands 4904 (38) Phillipsburg Branch, A Cannegieter Street, Pondfill, Phill- (69) 90-C Cruz Bay, St. John, U.S. Virgin Islands 00820 ipsburg, St. Maarten, Netherlands Antilles (39) ATM Site, Avenida Ricardo J. Alfaro-, Universidad Santa (70) Estate Thomas Branch, St. Thomas, U.S. Virgin Islands Maria La Antigua, Panama City, Panama 00802 (40) ATM Site, Avenida Ricardo J. Alfaro-, Supermercado El Rey, Panama City, Panama B. Chemical has also given notice pursuant to sec- (41) Plaza Cinco de Mayo Branch, Avenida Central y Avenida tion 211.3(a)(3) of the Board's Regulation K (12 C.F.R. Mexico #22-18, Panama City, Panama 211.3(a)(3)), of its intention to establish branches in the (42) El Dorado Branch, Boulevard El Dorado, Calle 17B following locations, which are Chase branches in countries Norte, Panama City, Panama in which Chemical does not have a branch, and that Chem- (43) Betania Branch, Via Simon Bolivar y Calle Harry Eno, ical would acquire as a result of the merger: Australia Edificio Helvezia, Panama City, Panama (Sydney, Melbourne, Brisbane, Hobart, Adelaide, Perth (44) Warehouse, Roscam Branch, El Paical, Calle Ira y Calle and Canberra): Belgium (Brussels); the British Virgin K, Panama City, Panama Islands (Tortola); Chile (Santiago); China (Tianjin); Greece (45) Rfo Abajo Branch, Via Expana - Plaza Altos del Rio, (Athens, Piraeus, and Salonika); India (Bombay); Indone- Panama City, Panama sia (Jakarta); Malaysia (Labuan); The Netherlands (Am- (46) David Branch, Avenida Domingo Diaz Central y Calle C sterdam); Netherlands Antilles (Mullet Bay, St. Maarten; Norte, David, Panama Philipsburg, St. Maarten); Panama (Plaza Chase, Panama (47) Chitre Branch, Avenida Hennera #3961, Chitre, Panama City; Plaza Cinquo de Mayo, Panama City; Betania, Pan- (48) Colon Branch, Calle 11 y Avenida Bolivar #10-123, ama City; Rio Abajo, Panama City; Citre; Colon; Colon Colon, Panama Free Zone; David; Balboa; El Dorado); Puerto Rico (Hato (49) Zona Libre Branch, Calle 14 y Avenida Roosevelt - Rey); Switzerland (Geneva, Zurich); Thailand (Bangkok); Edificio N ° 36, Colon Free Zone, Panama Turkey (Istanbul); U.S. Virgin Islands (Waterfront, (50) Land - Balboa, Balboa Road & Pearson Street, Panama St. Thomas; Estate Thomas, St. Thomas; Cruz Bay Quar- City, Panama ter, St. John; Orange Grove, St. Croix; King Christian, (51) Plaza Chase Branch, Urbanization Margella, Avenida St. Croix). Aquilino De La Guardia y Calle 48, Panama City, Panama (52) 15 F, Pacific Star Building, Makati & Sen. Gil J. Puyat Ave., Metro Manila, Philippines Appendix C (53) Hato Rey Headquarters, 254 Munoz Rivera Avenue, GPO 1990, San Juan, Puerto Rico 00936 Local banking markets where Chemical's and Chase's (54) 50 Raffles Place, #09-01 Shell Tower, Singapore 0104 subsidiary banks compete. Federal Reserve Board delinea- (55) 505 Yung An Road, Singapore 2261 tion ("Board delineation") of all banking markets and (56) Paseo de Gracia 60, 08007 Barcelona, Spain RMA definitions of New York State banking markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 269 Metropolitan New York-New Jersey Rochester, New York Board delineation: Genesee, Livingston, Monroe, Ontario, Board delineation: New York City; Nassau, Orange, Put- Seneca, Wayne, and Yates Counties and parts of Allegany, nam, Rockland, Suffolk, Sullivan, and Westchester Coun- Orleans, Steuben and Wyoming Counties. ties in New York; Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, RMA: Monroe County, the towns of Kendall and Murray Sussex, Union, Warren, and a portion of Mercer Counties in Orleans County, the towns of Bergen and Le Roy in in New Jersey; Pike County in Pennsylvania; and portions Genesee County, the towns of Avon, Caledonia, Lima, and of Fairfield and Litchfield Counties in Connecticut. Livonia in Livingston County, the towns of West Bloomfield, East Bloomfield, Victor, Farmington, and Manchester RMA: New York City; Long Island, Putnam, Rockland, in Ontario County, and towns of Ontario, Walworth, Maceand Westchester Counties, and the southern portion of Orange County in New York; Bergen, Essex, Hudson, don, Williamson, Marion, Palmyra, and Sodus in Wayne Middlesex, Passaic, Union Counties, and parts of Hunter- County. don, Monmouth, Ocean, Sommerset, Sussex, and Warren, and Mercer Counties in New Jersey; and 17 municipalities Syracuse, New York in Fairfield and Litchfield Counties in Connecticut. Board delineation: Cayuga, Onondaga and Oswego Counties and parts of Cortland and Madison Counties. Albany, New York RMA: Portions of Onondaga County, southern tier of Board delineation: Albany, Columbia, Fulton, Greene, towns in Oswego County and towns of Sullivan, Lenox, Hamilton, Montgomery, Rensselaer, Saratoga, Sche- Lincoln and Cazenova in Madison County. nectady, Schoharie, Warren, and Washington Counties. Wilmington, Delaware RMA: The eastern half of Albany County, the towns of Stuyvesant, Kinderhook, and Chatham in Columbia Board delineation: Newcastle County, Delaware, and Cecil County, the town of Perth in Fulton County, the town of County, Maryland. Amsterdam in Montgomery County, the northern half of Rensselaer County, the southern half of Saratoga County, West Palm Beach, Florida and the western half of Schenectady County. Board delineation: Palm Beach County east of Loxa- Binghamton, New York hatchee, and the towns of Indiantown and Hobe Sound in Martin County. Board delineation: Broome and Tioga Counties and parts Appendix D of Chenango County, New York, and Susquehanna County, Pennsylvania. Individual Banking Product and Service Analysis RMA: Most of Broome County and the towns of Newark With respect to small business lending,1 in the New York Valley and Osewego in Tioga County, New York and the RMA 320 commercial banks and thrifts would remain in town of Great Bend in Susquehanna County, Pennsylvania. the RMA, 22 of which have over $100 million of outstanding small business loans, as do 12 of the 136 banks and Buffalo, New York thrifts in the New York City portion of the New York RMA. Currently, small business loans are unconcentrated. Board delineation: Erie and Niagara Counties plus parts of Substantial local resources, in the form of deposits, would Cattaraugus, Orleans and Wyoming Counties. remain to support loan expansion in response to demand by small businesses that do not choose to borrow from New RMA: Most of Erie County and the western half of Nia- Chase. Were an HHI constructed for small business loans, gara County. consummation of the proposal would increase the HHI by approximately 119 points to a level of 863. This is within the DOJ guidelines' definition of an unconcentrated bank- Elmira-Corning, New York ing market. With respect to the other New York State banking mar- Board delineation: Chemung County plus parts of Schuyler kets for small business lending, deposit-based HHI statisand Steuben Counties. RMA: Elmira RMA consists of the western half of 1. Small business loans are defined as non-real estate consumer and Chemung County. Corning is not part of an RMA. industrial loans with origination value of less than $1 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

270 Federal Reserve Bulletin • March 1996 tics indicate that the effect of the proposal on small busi- would hold no more than 2.5 percent of total assets in ness loan concentration would be moderate. In each RMA, discretionary accounts. New Chase would face numerous competitors for small The market for personal and employee benefit trust business loans. services is considered to be state or regional in scope, Subsidiary banks of both Chemical and Chase provide rather than national.5 In New York State, New Chase domestic and global custody services. Domestic and global would not have a dominant position with respect to discrecustodians safeguard securities on behalf of institutional tionary accounts, with 15.2 percent of total assets. Numerinvestors, as well as provide various other administrative ous large competitors also would remain in New York functions. Were an HHI to be constructed for this activity, State. The market for corporate trust services is national in the effects of the proposal would be an increase of 153 scope. New Chase would have a significant, but not domipoints to a level of 1301 in the domestic custody market nant share of corporate and municipal bond trusteeships, and 151 points to level of 1036 in the global custody with approximately 10.6 percent of the national total of market. Several factors suggest that both services are likely trusteeships. Significant adverse competitive effects are to remain competitive. More than two dozen other banks unlikely, given the presence of other large competitors that provide custodial services. Many of these banks have sub- would remain in this market and the fact that many purstantial financial resources with which they could increase chasers of corporate trust services are themselves sophistitheir volume of custodial services and attract the customers cated participants in financial markets. of current providers of these services. Additionally, price In the New York Banking Market, residential mortgage competition in these submarkets is high, and there is evi- origination would remain an unconcentrated business after dence of recent rapid declines in the fees charged for these consummation of this proposal. Many providers of this services.2 service would remain and would have capacity to increase Similarly, Chemical's and Chase's subsidiary banks pro- mortgage origination levels in order to meet demand, given vide shareholder services such as recording the ownership the size of these providers and their ability to securitize of securities issued by publicly held corporations and by mortgages. Unlike the market for mortgage origination, mutual funds. The market for shareholder services is na- which is local, the market for mortgage servicing is national in scope and customers are not limited to regional tional in scope. New Chase would become the leading banks for these services. Although Chemical Bank cur- servicer of mortgages in the nation, with approximately rently is the largest provider of these services and Chase is 3.6 percent of total residential mortgages serviced. The the tenth largest provider of these services, were an HHI market for mortgage servicing would remain moderately constructed for the product, consummation of this proposal concentrated following the acquisition, however, with the would result in an increase of 69 points to a level of 1280. HHI increasing by approximately 103 points to a level of The market for these services would remain moderately 1107. concentrated and would meet the DO J Guidelines.3 The market for syndicated lending is also national in Both Chemical and Chase conduct the bulk of their scope and Chemical is a leader in syndicated lending. personal and corporate trust activities through their subsid- Nonetheless, the fee generating service of loan syndication iary banks. Currently, there are 2892 individual commer- is likely to remain highly competitive after the proposed cial banks, savings banks, and trust companies providing transaction, with several large bank and non-bank competpersonal and employee benefit trust services.4 These insti- itors. Noncompetitive behavior would be difficult, given tutions hold a total of approximately 12 million trust ac- the size and sophistication of borrowers, and their access to counts containing approximately $11.6 trillion of assets. commercial paper markets.6 Upon consummation of the proposal, New Chase would control less than 1 percent of all accounts and approximately 6 percent of assets nationally. Significant adverse competitive effects are unlikely, given that New Chase 5. The number of trust accounts and the dollar volume of assets in these accounts is out of proportion to the population and per capita personal income of New York State, indicating that this business line 2. One commenter expressed concern about possible adverse com- is conducted to a significant degree at the national, and not the state, petitive effects with respect to unit investment trust services. Recently level. The effect would be to overstate the market share of New Chase the Board has determined that unit investment trust services and in the local market. domestic custody services must be analyzed together, because the 6. Commenters also have questioned the competitive effects regardresources required to engage in one type of service are essentially the ing several other banking product submarkets, including checking same as those required to engage in the other service. Chase Order at accounts, savings accounts, working capital loans to small and me- 883. dium sized businesses, cash management services to small and me- 3. This statistic may overstate the competitive effect of the proposal dium sized businesses, and foreign exchange transactions. These because it is based only on those transfer agents who serve corporate products are among the broad array of traditional products within the issuers and does not account for the larger numbers of shareholder cluster of banking services. Even viewed on an individual product service providers that currently specialize in serving mutual funds. basis, there are numerous providers of these products in the New York Additionally, corporations can and do provide shareholder services for State banking markets in which Chemical and Chase compete. Many themselves. of these providers have the capacity to expand output significantly and 4. All data pertaining to the market for personal and corporate trust the ability to adjust their product mix in response to demand. Thereactivities are as of December 31, 1994. fore, adverse effects on competition are unlikely for these products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 271 National City Corporation conditions are met in this case.5 In view of all the facts of Cleveland, Ohio record, the Board is permitted to approve this proposal under section 3(d) of the BHC Act. Order Approving the Acquisition of Bank Holding Companies Competitive and Other Considerations National City Corporation, Cleveland, Ohio ("NCC"), a NCC and Integra do not compete in any banking market. bank holding company within the meaning of the Bank Based on all the facts of record, the Board concludes that Holding Company Act ("BHC Act"), has applied under consummation of this proposal would not result in any section 3 of the BHC Act (12U.S.C. § 1842) to acquire significantly adverse effect on competition or the concen- Integra Financial Corporation ("Integra"), and thereby in- tration of banking resources in any relevant banking mardirectly acquire Integra's wholly owned subsidiary holding ket. In light of all facts of record, the Board also concludes company, Integra Holding Company, both in Pittsburgh, that the financial and managerial resources and future Pennsylvania, and its subsidiary banks, Integra Bank, Pitts- prospects of NCC, Integra, and their respective subsidiarburgh, ("Integra Bank"), and Integra Trust Company, Na- ies, are consistent with approval, as are the other supervitional Association, Punxsutawney, both in Pennsylvania.1 sory factors the Board must consider under section 3 of the NCC also has provided notice pursuant to section 4 of BHC Act.6 the BHC Act (12 U.S.C. § 1843) and section 225.23 of the Board's Regulation Y (12C.F.R. 225.23) to acquire Ad- Convenience and Needs Considerations vent Guaranty Corporation, Advent Insurance Company, and Integra Life Insurance Company, all in Franklin, Penn- In acting on an application to acquire a depository institusylvania, and thereby engage in credit- related insurance tion under the BHC Act, the Board must consider the activities pursuant to section 225.25(b)(8)(i) of the Board's convenience and needs of the communities to be served Regulation Y.2 and take into account the records of the relevant depository Notice of this proposal, affording interested persons an institutions under the Community Reinvestment Act opportunity to submit comments, has been published (60 (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA requires the Federal Register 55,580 (1995)). The time for filing com- federal financial supervisory agencies to encourage finanments has expired, and the Board has considered the pro- cial institutions to help meet the credit needs of the local posal and all comments received in light of the factors set communities in which they operate, consistent with their forth in sections 3 and 4 of the BHC Act. safe and sound operation. To accomplish this end, the CRA NCC, with total consolidated assets of approximately requires the appropriate federal supervisory authority to $34.8 billion, operates subsidiary banks in Ohio, Indiana, "assess the institution's record of meeting the credit needs and Kentucky.3 NCC is the 27th largest commercial bank- of its entire community, including low- and moderateing organization in the United States, controlling less than income neighborhoods, consistent with the safe and sound 1 percent of total United States banking assets. NCC also operation of such institution," and to take that record into engages in a broad range of permissible nonbanking activi- account in its evaluation of bank holding company applicaties in the United States through its subsidiaries. Integra, tions.7 with total consolidated assets of $14.6 billion, is the fourth largest commercial banking organization in Pennsylvania, controlling $10.2 billion in deposits, representing approxiholding company's banking subsidiaries were principally conducted mately 8 percent of the total deposits in commercial bankon July 1, 1966, or the date on which the company became a bank ing organizations in the state. holding company, whichever is later. For purposes of the BHC Act, NCC's home state is Ohio. Interstate Analysis 5. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B). NCC is adequately capitalized and adequately managed. Upon consummation of this proposal, NCC and its affiliates would control less Section 3(d) of the BHC Act, as amended by Section 101 than 10 percent of the total amount of deposits of insured depository of the Riegle- Neal Interstate Banking and Branching Effiinstitutions in the United States, and less than 30 percent of the total ciency Act of 1994, allows the Board to approve an appli- amount of deposits of insured depository institutions in Pennsylvania. cation by a bank holding company to acquire control of a Pennsylvania law does not impose a limit on the total amount of bank located in a state other than the home state of such insured deposits that may be acquired nor require that an acquired bank holding company, if certain conditions are met.4 The bank be in operation for a minimum period of time. 6. The Board received comments opposing this proposal on the basis of a class action lawsuit filed by the commenter against Integra. The lawsuit alleges that Integra breached an agreement to act as 1. NCC also has applied to acquire options to purchase up to trustee under a program offered through an insurance company 19.9 percent of the voting shares of Integra in connection with this whereby certain customers of the bank could obtain group health proposal. insurance. The Board notes that this matter involves a contractual 2. 12 C.F.R. 225.25(b)(8)(i). dispute in its preliminary stages of litigation. The pending civil action 3. Asset and deposit data are as of September 30, 1995. would provide parties with an adequate remedy if commenter's allega- 4. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding tions can be sustained. company's home state is that state in which the operations of the bank 7. 12 U.S.C. § 2903. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

272 Federal Reserve Bulletin • March 1996 The Board received comments from the Ohio CRA the applications process.9 The Board notes that 14 of Alliance and the Coalition on Homelessness and Housing NCC's 18 banks, including all the Ohio bank subsidiaries, in Ohio ("Protestants") criticizing NCC's record of lend- received "outstanding" ratings at their most recent CRA ing and investing in some of its service communities.8 performance examinations from their primary federal su- Protestants allege, on the basis of data filed under the pervisors at their most recent examinations, the remaining Home Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.) four subsidiary banks received "satisfactory" ratings from ("HMDA") in 1994, that NCC's subsidiary bank in Cleve- their primary federal supervisors at their most recent CRA land engages in illegal discrimination in its mortgage lend- examinations. In particular, National City Bank, Cleveland, ing. Protestants also contend that NCC's record of making Ohio ("Cleveland Bank"), which is the lead bank for NCC HMDA-reportable loans in low- and moderate-income and accounts for approximately 29 percent of NCC's total communities in Cleveland and investing in rental housing assets, received an "outstanding" rating from the Office projects for low- and moderate-income residents through- of the Comptroller of the Currency ("OCC"), as of out Ohio is inadequate. August 31, 1995 ("1995 Examination"). Integra's subsid- The Board has carefully reviewed the CRA performance iary banks received either "outstanding" or "satisfactory" records of NCC, Integra, and their respective subsidiary ratings from their primary federal supervisors at their most banks; all comments received on these applications; NCC's recent CRA performance examinations.10 responses to those comments; and all other relevant facts of record, in light of the CRA, the Board's regulations, and B. HMDA Data and Lending Activities the Statement of the Federal Financial Supervisory Agencies Regarding the Community Reinvestment Act ("Agen- The Board has carefully reviewed HMDA data for Clevecy CRA Statement"). land Bank for 1992, 1993, and 1994, in light of the comments received on this proposal.11 HMDA data for Cleve- Record of Performance Under the CRA land Bank indicate that the number of applications from and loans to African Americans increased from 1992 to A. CRA Performance Examinations 1994, and the proportion of such applications and loans The Agency CRA Statement provides that a CRA examination is an important and often controlling factor in the 9. Id. at 13,745. consideration of an institution's CRA record, and that 10. An individual commenter contends that errors by Integra Bank reports of these examinations will be given great weight in personnel resulted in improper charges and poor service on his account and on the account of another individual acting as a guarantor on an automobile loan. NCC has informed the Board that both of these matters have been addressed and that collection activities concerning the guarantor of the automobile loan have been halted. 8. Protestants also maintain that NCC does not provide basic This commenter also maintains that Integra Bank closed branches in banking services at all its subsidiary banks and that it charges higher neighborhoods with predominately minority residents and thereby fees for banking services than consumers can afford to pay, including diminished banking services for these communities. Examiners found fees for cashing government benefit checks at some NCC subsidiary that Integra had adequate branch closing policies, which include banks and fees on Interest on Lawyer Trust Accounts ("IOLTA"). assessment of the potential impact of a branch closure and consulta- NCC states that all its subsidiary banks offer a basic checking account tion with members of the community for their views on the impact of that provides low-cost banking services. NCC subsidiary banks also a potential closure and ways to minimize any adverse impact. In some offer a full range of banking services throughout their delineated cases, the bank held town meetings in neighborhoods that would be communities, including lending services to assist low- and moderate- affected by branch closures. income individuals, such as credit counselling. While the Board Other Protestants also object to the recent announcement by NCC's recognizes that banks help serve the banking needs of their communi- subsidiary bank in Dayton, National City Bank, Dayton, Ohio ("Dayties by making basic banking services available at nominal or no ton Bank"), announcement of the proposed closure of a branch in charge, the CRA does not require banks to limit the fees they charge Riverdale that serves primarily low- and moderate-income and minorfor services. There is no evidence in the record of this case that the ity customers. NCC maintains a formal branch closing policy that fees charged by NCC for its services are based in any manner on a provides for communication with community groups and civic leaders factor prohibited under antidiscrimination laws. before branch closings, and states that the proposed closing would be Protestants also contend that NCC's subsidiary banks aggregated considered in accordance with these guidelines. Examiners also have accounts for purposes of charging service fees on IOLTA, thereby noted that Dayton Bank's previous branch closings have not signifireducing the net interest rate paid on these accounts that is used to cantly affected the provision of banking services to the bank's delinfund legal services for low-income individuals. NCC's subsidiary eated community. Moreover, recent amendments to the Federal Debanks recently revised their policy on these accounts, no longer posit Insurance Act and the Joint Agency Policy Statement on Branch aggregating the accounts, as well as offering a premium on the rate of Closings require prior notice to the appropriate federal banking agency interest earned by these accounts. Protestants have requested that and the branch's customers of a proposed branch closing, a detailed NCC return interest that Protestants allege was wrongfully withheld, statement of the reasons for the decision to close the branch, and and that the Board delay action on this proposal until this matter is statistical or other information in support of these reasons consistent resolved. The Board notes that this is a matter of state law within the with the institution's written policy for branch closings. The Board jurisdiction of state authorities and courts. The BHC Act does not also notes that this closing will be assessed by examiners as part of the provide the Board with the authority to adjudicate claims under state institution's CRA performance evaluation, and may be reviewed by law. As also noted below, the Board is required under applicable law the Board in future applications to acquire a depository facility. and its processing procedures to act on applications submitted under 11. These data include home improvement loans and refinancings of the BHC Act within specified time periods. home mortgage loans, as well as home purchase loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 273 compared to applications by and loans to white applicants offered throughout the bank. The bank also has a formal also increased. In 1992, for example, 434 African Ameri- second review program for reviewing real estate mortgage cans applied for HMDA-reportable loans. Cleveland Bank loans for which denial is recommended, and the bank originated loans to 229 of these applicants. In 1994 the conducts an annual comparative file review program for number of African-American applicants increased to 628, approved and denied home purchase loans to determine if and the bank originated loans to 451 of these applicants.12 all applicants with similar credit characteristics are treated From 1992 to 1994, applications from and loans to similarly.15 individuals in low- and moderate-income census tracts Cleveland Bank also offers a variety of conventional and increased in absolute numbers and as a percentage of all government-insured loan products to assist in meeting the applications and originations. In 1992, for example, the housing- related credit needs of all residents in its service bank received 709 applications for HMDA-reportable loans communities. The bank offers several mortgage products from low- and moderate-income census tracts, and origi- for low- and moderate-income borrowers, including the nated loans to 310 of these applicants. By 1994, Cleveland CHAMP, RIGHT, and At Home home improvement lend- Bank received 1191 HMDA applications from low- and ing programs.16 In 1994, Cleveland Bank originated 1,070 moderate-income tracts, and originated loans to 873 of RIGHT and CHAMP loans totalling $67.4 million. As of these applicants. In 1992,10.8 percent of Cleveland Bank's June 30, 1995, the bank had originated an additional 185 loan originations were in low- and moderate-income cen- RIGHT and CHAMP loans totalling $14.2 million.17 sus tracts. By 1994, that percentage had increased to Cleveland Bank also originated 160 At Home loans total- 22.7 percent of total originations.13 ling $664,000 in 1994. As of June 30, 1995, the bank had These HMDA data, however, also reflect disparities in the rate of denials by racial group. The Board is concerned when the record of an institution indicates disparities in 15. Protestants note that lending discrimination complaints have lending to minority applicants, and it believes that all been filed with the Department of Housing and Urban Development ("HUD") and the Ohio Civil Rights Commission ("OCRC") against banks are obligated to ensure that their lending practices NCC's subsidiary bank in Toledo, National City Bank, Northwest, are based on criteria that assure not only safe and sound Toledo, Ohio ("Toledo Bank"). The most recent CRA performance lending, but also equal access to credit by creditworthy examination by the OCC, Toledo Bank's primary federal supervisor, applicants regardless of race. The Board recognizes, how- found no substantive evidence of prohibited discrimination or other ever, that HMDA data alone provide an incomplete mea- illegal credit practices at the bank. Moreover, these complaints are under review and no finding of illegal discrimination has been made sure of an institution's lending in its community. The against the bank by either agency. The Board believes that HUD and Board also recognizes that HMDA data have limitations OCRC have adequate authority to address any violations of law if that make the data an inadequate basis, absent other infor- complainants' allegations can be sustained. In addition, the bank's mation, for concluding that an institution has engaged in primary federal supervisor retains full supervisory authority to take illegal discrimination in making lending decisions. appropriate action, and the Board would consider any final finding of illegal discrimination in future applications by NCC to acquire a The 1995 Examination of Cleveland Bank found no depository facility. prohibited discriminatory or other illegal credit practices 16. CHAMP is a mortgage program available to low- and moderatethat would discourage applicants from applying for the income purchasers of units in new or renovated housing projects in Cleveland. CHAMP loans offer flexible underwriting criteria and types of credit detailed in the bank's CRA statement and reduced interest rates. The RIGHT mortgage program is designed for found that the bank complied with fair lending laws and borrowers with insufficient funds for a downpayment, and offers regulations.14 Examiners also concluded that Cleveland flexible underwriting criteria, including flexible income requirements. Bank's policies, procedures, and training programs were The At Home loan program provides home improvement loans to comprehensive in addressing fair lending issues and in low- and moderate-income borrowers under flexible lending criteria. 17. Protestants criticize Cleveland Bank's recent decision to require assuring that employees did not discourage applications or private mortgage insurance ("PMI") for CHAMP and RIGHT loans. discriminate against members of any group. For example, NCC states that Cleveland Bank would not deny any loan under these lending and branch personnel receive ongoing training in programs solely on the basis that PMI has not been purchased by the fair lending and CRA issues, and diversity training is borrower. When an otherwise qualified borrower cannot afford to purchase PMI, NCC states that Cleveland Bank would make the loan and retain it as a portfolio loan. Protestants also allege that Dayton Bank intends to change the 12. In 1992, 10.3 percent of Cleveland Bank's HMDA loan applica- underwriting criteria of its RIGHT loan program in a manner that tions were from African Americans and 7.9 percent of all loan would make the program less available to low- and moderate-income originations were to African-American applicants. By 1994, applica- borrowers. NCC states that Dayton Bank plans to modify its undertions from African Americans rose to 13.3 percent of all applications writing criteria in the RIGHT loan program because of an unusually received by the bank, and originations increased to 11.7 percent of high delinquency rate. The CRA requires depository institutions to total originations. conduct their CRA- related activities consistent with the safe and 13. During this period, applications from these census tracts re- sound operation of the institution. Moreover, Dayton Bank particiceived by the bank, increased from 16.8 percent to 25.2 percent of pates in a variety of other programs, including the Fresh Start prototal applications. gram, which is a government- guaranteed lending program that en- 14. Examiners analyzed residential purchase mortgage applications ables borrowers to obtain one loan for the purchase and rehabilitation by sampling denied loan applications from African Americans and of owner-occupied, single-family housing in low- and moderateapproved applications from nonminority borrowers. The examiners income areas. Dayton Bank also participates with several other financoncluded that the bank applied its underwriting criteria fairly, regard- cial institutions in the Neighborhood Lending Partnership, which was less of the applicant's race. formed to offer special loan terms to low-income residents of Dayton. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

274 Federal Reserve Bulletin • March 1996 originated an additional 117 At Home loans totalling the institutions involved in this proposal, are consistent $496,000. with approval of these applications.19 Cleveland Bank participates in a number of different government-sponsored lending programs, such as those Nonbanking Activities offered by the Small Business Administration, the State of Ohio, the City of Cleveland, the Federal Housing Adminis- NCC also has given notice, pursuant to section 4(c)(8) of tration, the Veterans Administration, and the Farmers the BHC Act, of its proposal to acquire Advent Guaranty Home Administration, and the bank also offers guaranteed Corporation, Advent Insurance Company, and Integra Life student loans. The 1995 Examination found that Cleveland Insurance Company, all of Franklin, Pennsylvania, and Bank actively engages in small business lending, and noted thereby engage in credit-related insurance activities pursuthat the bank has become a leader in the extension of ant to section 225.25(b)(8)(i) of Regulation Y.20 The Board government- guaranteed small business loans. Examiners previously has determined by regulation that the proposed also noted that many of the bank's government-guaranteed activities are closely related to banking for purposes of small business loans were made to businesses operating in section 4(c)(8) of the BHC Act. NCC has committed that it inner cities that have large low- and moderate-income will conduct these activities in accordance with the Board's populations and higher than average levels of unemploy- regulations. ment and generally low levels of new economic develop- In every case under section 4 of the BHC Act, the Board ment. considers the financial condition and resources of the appli- NCC also assists local developers of housing projects for cant and its subsidiaries and the effect of the transaction on low- and moderate-income residents in several markets those resources.21 Based on all the facts of record, the where NCC's subsidiary banks operate, including Cleve- Board has concluded that financial and managerial considland and Dayton, through its community development cor- erations are consistent with approval. poration, National City Community Development Corpora- In order to approve this notice, the Board also must tion, Cleveland, Ohio ("CDC"). Since its formation in determine that the performance of the proposed nonbank- 1982, CDC has invested approximately $62 million in ing activities "can reasonably be expected to produce affordable housing projects, through equity participations, benefits to the public . . . that outweigh possible adverse tax credits, loans, and loan guarantees. Approximately effects, such as undue concentration of resources, de- $42 million of this total was invested in low-income hous- creased or unfair competition, conflicts of interests, or ing tax credits, with more than $25 million allocated to unsound banking practices." 12U.S.C. § 1843(c)(8). This projects in Ohio. proposal should enable NCC to provide greater convenience, a broader array of products, and improved services Conclusion Regarding Convenience and Needs Factors to its customers and to customers of Integra's nonbank subsidiaries. The record in this case indicates that there are The Board has carefully considered all the facts of record, numerous providers of these services, and there is no including information provided by the Protestants, NCC's evidence in the record to indicate that consummation of responses, and relevant reports of examination.18 In light of all the facts of record, and the reasons discussed above, the Board concludes that convenience and needs consider- 19. Protestants requested the Board to hold a public hearing on this ations, including the overall CRA performance records of proposal to address the performance of NCC under the CRA. Section 3(b) of the BHC Act does not require the Board to hold a public hearing on an application unless the appropriate supervisory authority for the bank to be acquired makes a timely written recommendation of 18. Protestant questions NCC's reaching an agreement with denial of the application. In this case, the Board has not received such community- based organizations in Pennsylvania but refusing to enter a recommendation from any state or federal supervisory authority. into a similar agreement with Ohio community-based organizations. Under its rules, the Board may, in its discretion, hold a public Protestant requests the Board to delay or deny this proposal unless hearing or meeting on an application to clarify factual issues related to such an agreement can be reached. The Board believes that, while the application and to provide an opportunity for testimony, if approcommunications by depository institutions with community-based priate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully groups provide a valuable method of assessing and determining how considered these requests in light of all the facts of record. In the an institution may best address the credit needs of the community, the Board's view, Protestants have had ample opportunity to submit their CRA does not require that a depository institution enter into an views, including a four-week extension of the public comment period, agreement or negotiations with any particular organization. Accord- and have, in fact, submitted materials that have been considered by the ingly, in reviewing this proposal, the Board has focused on the Board in acting on this application. The Protestants' requests fail to programs and policies that NCC has in place to serve the credit needs demonstrate why their written submissions do not adequately present of each of its communities. See Fifth Third Bancorp, 80 Federal their allegations. Based on all the facts of record, the Board has Reserve Bulletin 838 (1994). The Board is also required under applica- determined that public hearings or meetings are not necessary to ble law and its processing procedures to act on applications submitted clarify the factual record in this application, or otherwise warranted in under the BHC Act within specified time periods. The Board notes, this case, and the requests for public hearings or meetings on this moreover, that the Protestants and NCC have had a sufficient opportu- application are denied. nity to provide, and have, in fact, provided, substantive submissions 20. 12 C.F.R. 225.25(b)(8)(i). that have been carefully reviewed. Based on all the facts of record, the 21. See 12 C.F.R. 225.24. See also The Fuji Bank, Limited, 75 Board concludes that the record is sufficient to act on this proposal at Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG. 73 this time, and that delay or denial of this proposal is not warranted. Federal Reserve Bulletin 155 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 275 this proposal is likely to result in any significantly adverse eral Deposit Insurance Act (12 U.S.C. § 1828(c)) (the effects, such as undue concentration of resources, de- "Bank Merger Act") to merge with Adams Savings & creased or unfair competition, conflicts of interests, or Loan Association, Grant ("Adams Savings and Loan"), unsound banking practices that would outweigh the public both in Nebraska, with Adams Bank surviving the merger. benefits of this proposal. Accordingly, the Board has deter- Adams Bank also has applied under section 9 of the mined that the balance of public interest factors it must Federal Reserve Act (12 U.S.C. § 321) to establish a branch consider under section 4(c)(8) of the BHC Act is favorable at the location of Adams Savings and Loan.1 and consistent with approval. Notice of the applications, affording interested persons an opportunity to submit comments, has been given in Conclusion accordance with the Bank Merger Act and the Board's Rules of Procedure (12 C.F.R. 262.3(b)). As required by Based on the foregoing and all other facts of record, the Bank Merger Act, reports on the competitive effects of including all the commitments made by NCC in connec- the merger were requested from the United States Attorney tion with this proposal, the Board has determined that the General and the Federal Deposit Insurance Corporation application and notice should be, and hereby are, approved. ("FDIC"). The time for filing comments has expired, and The Board's approval is expressly conditioned on compli- the Board has considered the applications and all the facts ance by NCC with all the commitments made by NCC in of record in light of the factors set forth in the Bank Merger connection with this proposal and with the conditions Act and section 9 of the Federal Reserve Act. referred to in this order. The Board's determinations on the The Board received comments from a competing bank proposed nonbanking activities also are subject to all the ("Protestant") maintaining that the proposal would violate conditions set forth in Regulation Y, including those in state bank branching law. Nebraska law generally restricts sections 225.7 and 225.23(g) of Regulation Y, and to the banks like Adams Bank that are located in a county with a Board's authority to require such modification or termina- population of less than 100,000 to a specified number of tion of the activities of a bank holding company or any of branches within the corporate limits of the city were the its subsidiaries as the Board finds necessary to ensure bank is located.2 compliance with, or to prevent evasions of, the provisions With the approval of the Nebraska Director of Banking of the BHC Act and the Board's regulations and orders and Finance ("Director"), however, a bank may also estabissued thereunder. These commitments shall be deemed to lish branches without regard to this limitation by convertbe conditions imposed in writing by the Board in connec- ing branches acquired through merger with another bank or tion with its findings and decision, and, as such, may be with a savings association ("cross-industry merger").3 The enforced in proceedings under applicable law. Director has approved several cross- industry mergers of The banking acquisition shall not be consummated be- banks with de novo savings associations that were strucfore the fifteenth calendar day following the effective date tured identically to this proposal, and the Director's staff of this order, and this proposal shall not be consummated has concluded informally that this proposal is consistent later than three months after the effective date of this order, with the branching provisions of Nebraska law.4 The Direcunless such period is extended for good cause by the Board tor has not taken action on this proposal. or by the Federal Reserve Bank of Cleveland, acting pursu- Based on all the facts of record, and the considerations ant to delegated authority. discussed above, the Board concludes that this proposal is By order of the Board of Governors, effective Janu- consistent with Nebraska bank branching law. ary 22, 1996. Voting for this action: Vice Chairman Blinder and Governors Kelley, Lindsey, and Phillips. Absent and not voting: Chairman 1. Adbanc Inc., the parent bank holding company of Adams Bank, Greenspan and Governor Yellen. would form Adams Savings and Loan as a state-chartered, uninsured savings and loan association in Grant that would be immediately JENNIFER J. JOHNSON merged into Adams Bank. Adams Bank would retain the savings Deputy Secretary of the Board association's office in Grant as a branch. The thrift would be formed solely for the purpose of establishing a branch outside Ogallala and would not engage in any activities. 2. Neb. Rev. Stat. § 8-157 (2) (Supp. 1995). ORDERS ISSUED UNDER BANK MERGER ACT 3. Neb. Rev. 5m/. § 8-157 (3) (Supp. 1995); Neb. Rev. Stat. § 8- 1510 (Reissue 1991). 4. Nebraska law provides that a state-chartered savings and loan Adams Bank & Trust association has the same rights, powers, and privileges as a federally Ogallala, Nebraska chartered savings and loan association doing business in Nebraska. Neb. Rev. Stat. § 8-355 (Supp. 1995). The Director has determined Order Approving the Merger of a Bank and Savings and that, because a federally chartered savings and loan association has the Loan Association and Establishment of a Bank Branch power to serve as an interim association for the purposes of effecting a transaction of this nature under 12 C.F.R. 541.18, a state savings and loan association may be chartered for the same purpose. As required Adams Bank & Trust, Ogallala ("Adams Bank"), a state for cross-industry mergers, the Director has held a public hearing on member bank, has applied under section 18(c) of the Fed- this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

276 Federal Reserve Bulletin • March 1996 Adams Bank is the 23d largest commercial banking Chemical Bank Bay Area organization in Nebraska, controlling deposits of Bay City, Michigan $127.4 million, representing less than 1 percent of the total deposits in commercial banking organizations in the state.5 Order Approving the Merger of Banks and Establishment This proposal represents a de novo expansion of the exist- of Bank Branches ing banking operations of Adams Bank, and the bank would not acquire any deposits or assets as a result of this Chemical Bank Bay Area, Bay City ("Chemical/Bay proposal. In light of all the facts of record, the Board Area"), a state member bank, has applied under section concludes that consummation of the proposal would not 18(c) of the Federal Deposit Insurance Act have any significantly adverse effect on competition or the (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to merge concentration of banking resources in any relevant banking with Chemical Bank Huron, Standish ("Chemical/ market. Huron"), both in Michigan, with Chemical/Bay Area as The Board also concludes that the financial and manage- the surviving institution after the merger. Chemical/Bay rial resources and future prospects of Adams Bank are Area also has applied under section 9 of the Federal consistent with approval of this application, as are the Reserve Act (12 U.S.C. § 321) to establish branches at the convenience and needs of the communities to be served, current locations of the Chemical/Huron branches.1 and the other supervisory factors that the Board is required Notice of the applications, affording interested persons to consider under the Bank Merger Act and the Federal an opportunity to submit comments, has been given in Reserve Act.6 accordance with the Bank Merger Act and the Board's Based on the foregoing and all the facts of record, the Rules of Procedure (12 C.F.R. 262.3(b)). As required by Board has determined that these applications should be, the Bank Merger Act, reports on the competitive effects of and hereby are, approved. The Board's approval of this the merger were requested from the United States Attorney proposal is conditioned on compliance by Adams Bank General, the Office of the Comptroller of the Currency, the with the commitments made in connection with this appli- Office of Thrift Supervision, and the Federal Deposit Insurcation and receipt by Adams Bank of all required state ance Corporation ("FDIC"). The time for filing comments approvals. For purposes of this action, the commitments has expired, and the Board has considered these applicaand conditions relied on in reaching this decision are both tions and all the facts of record, in light of the factors set conditions imposed in writing by the Board and, as such, forth in the Bank Merger Act and section 9 of the Federal may be enforced in proceedings under applicable law. Reserve Act. The merger of Adams Bank and Adams Savings and Chemical/Bay Area and Chemical/Huron are wholly Loan may not be consummated before the fifteenth calen- owned subsidiaries of Chemical Financial Corporation, dar day following the effective date of this order, and this Midland, Michigan ("Chemical"). Chemical controls ten proposal may not be consummated later than three months banks and is the ninth largest commercial banking organiafter the effective date of this order, unless such period is zation in Michigan, controlling deposits of $1.3 billion, extended by the Board or by the Federal Reserve Bank of representing approximately 1.7 percent of the total deposits Kansas City, acting pursuant to delegated authority. in commercial banking organizations in the state.2 This By order of the Board of Governors, effective Janu- proposal represents a reorganization of Chemical's existing ary 17, 1996. banking operations, and, therefore, consummation of the proposal would not have any significantly adverse effect on Voting for this action: Chairman Greenspan, Vice Chairman competition or the concentration of banking resources in Blinder, and Governors Kelley, Lindsey, Phillips, and Yellen. any relevant banking market. The Board also concludes that the financial and manage- JENNIFER J. JOHNSON rial resources and future prospects of Chemical/Bay Area Deputy Secretary of the Board and Chemical/Huron are consistent with approval. Convenience and Needs Considerations 5. Deposit data are as of June 30, 1994. 6. Protestant also maintains that the proposal would not serve the In acting on an application under the Bank Merger Act, the convenience and needs of the community and would unduly harm Board is required to consider the convenience and needs of financial institutions currently providing services to the community by the communities to be served and take into account the introducing an additional competitor in a market that the Protestant records of the relevant depository institutions under the believes is already "over-banked." The Board previously has noted that the promotion of competition should be viewed as a positive Community Reinvestment Act (12 U.S.C. § 2901 et seq.) consideration in evaluating proposals under the Bank Merger Act. See ("CRA"). The CRA requires the federal financial supervi- Wellington State Bank, 82 Federal Reserve Bulletin 183 (1996). Isno ry agencies to encourage financial institutions to help addition, Adams Bank received an "outstanding" rating for performeet the credit needs of the local communities in which mance under the Community Reinvestment Act ("CRA") at its most recent examination for CRA performance from the FDIC, its previous primary federal supervisor, as of August 1992. Adams Bank also plans to introduce banking products and services that are currently unavail- 1. The locations are listed in the Appendix. able to the community, such as trust services. 2. Deposit data are as of June 30, 1995. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 277 they operate, consistent with their safe and sound opera- mortgages with low down payments through the Affordtion. To accomplish this end, the CRA requires the appro- able Gold Mortgage Program and M.G.I.C. Mortgage Loan priate federal supervisory authority to "assess the institu- Program, and participates in a state- sponsored mortgage tion's record of meeting the credit needs of its entire lending program with the Michigan State Housing Develcommunity, including low- and moderate-income neigh- opment Authority ("MSHDA"). The bank's Residential borhoods, consistent with the safe and sound operation of Mortgage Pre- Qualification Program is in place to help such institution" and to take that record into account in its applicants determine their borrowing capacity and needs. evaluation of applications under the Bank Merger Act.3 Chemical/Bay Area also offers a low interest rate loan The Board received comments from the Saginaw Rein- program to finance exterior improvement and maintenance vestment Coalition, Saginaw, Michigan ("Protestant"), al- of buildings, and the Home Show Special, a home imleging, on the basis of data filed under the Home Mortgage provement loan with no fees, processing charges, or clos- Disclosure Act ("HMDA"), that Chemical/Bay Area's af- ing costs. In addition, Chemical/Bay Area participates in filiate, Chemical Bank and Trust Company, Midland, several special loan programs to provide funding for new Michigan ("Midland Bank"), has illegally discriminated and expanding businesses, including its "5-6-7 Business against minority borrowers, particularly in the City of Maintenance Loan Program" which offers low interest rate Saginaw, Michigan ("Saginaw"). Protestant also contends loans to local businesses to finance property maintenance that Midland Bank has had a poor record of helping to and improvements. The bank also sponsors a "Money meet the credit needs of low- and moderate-income areas Bonanza Program" which offers consumer loans with no since the enactment of the CRA in 1977. application fee, no loan processing fee, and no closing In considering the convenience and needs factor under costs up to a maximum amount of $20,000. the Bank Merger Act, the Board has carefully reviewed the Midland Bank also offers the Affordable Gold Mortgage entire record of CRA performance of Chemical's subsid- Program and M.G.I.C. Mortgage Loan Program and particiary banks, the comments received and information pro- ipates in the state-sponsored mortgage lending program vided by Chemical, and all other relevant facts of record in with the MSHDA. In addition, Midland Bank participates light of the CRA, the Board's regulations, and the State- in federal insured loan programs, including programs ofment of the Federal Financial Supervisory Agencies Re- fered by the Small Business Administration, the Farmers garding the Community Reinvestment Act ("Agency CRA Home Administration, the Federal Housing Administra- Statement").4 tion, and the Veterans Administration. The Board has carefully reviewed Midland Bank's 1993 and 1994 HMDA data in light of Protestant's comments. Record of CRA Performance The Board notes that Midland Bank expanded its delineated service area in late 1992 to encompass all of Sagi- The Agency CRA Statement provides that a CRA examina- naw, including the city's 11 census tracts with predomition is an important and often controlling factor in the nately minority residents. Since then, Midland Bank has consideration of an institution's CRA record, and that taken a number of steps to improve its record of CRAreports of these examinations will be given great weight in related lending in Saginaw. For example, the bank joined a the applications process.5 The Board notes that Midland lending consortium in Saginaw to provide mortgage loan Bank received a "satisfactory" rating from the Federal financing in low-income census tracts in the city. This Reserve Bank of Chicago ("Reserve Bank") in its most consortium of seven financial institutions has committed recent CRA performance examination, as of August 21, $1.4 million, which includes $500,000 from Midland Bank. 1995 ("1995 Examination"). Chemical/Huron received a Through October 1995, the consortium provided financing "satisfactory" rating from its primary federal supervisor, for 43 properties in Saginaw's low-income census tracts. the FDIC, in its most recent CRA performance examina- In addition, Midland Bank has increased its outreach, tion, as of May 16, 1994.6 ascertainment and marketing efforts to focus on the credit Chemical/Bay Area, which is the applicant and would be needs of all residents in Saginaw. The bank assigned a the surviving bank in the proposed merger, received an mortgage originator to market mortgage loans in Saginaw "outstanding" rating from the Reserve Bank in its most to help increase the amount of mortgage lending within the recent CRA performance examination, as of April 6, 1994. city. Midland Bank sponsored a free Home Buyer Seminar As part of its elforts to help meet the credit needs of its and two Home Buyers Fairs in Saginaw in 1994. Midland entire community, Chemical/Bay Area offers several spe- Bank's outreach and ascertainment efforts also include cial loan programs to address the needs of low- and participation in the Saginaw African-American Minority moderate-income individuals. In particular, the bank offers Business Association, the Saginaw Minority Business Development Center, and the Neighborhood Renewal Services of Saginaw, Inc. Midland Bank's branch officers 3. 12 U.S.C. § 2903. made more than 2,600 calls in Saginaw and Saginaw 4. 54 Federal Register 13,742 (1989). Township from July 1993 through June 1995. In addition, 5. Id. at 13,745. the bank's marketing efforts focus on Saginaw's low- and 6. Chemical's other subsidiary banks all received "outstanding" or moderate-income areas through advertising in the CRA "satisfactory" ratings from their primary federal supervisors in their Monitor and the Saginaw Banner. most recent examinations for CRA performance. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

278 Federal Reserve Bulletin • March 1996 Midland Bank has submitted a written plan to increase facts of record, including Protestant's comments, Chemiits lending activities in Saginaw.7 This plan includes active cal's responses, and the CRA records of performance dissolicitation of mortgage and installment loan applications cussed above. The Board concludes that the CRA records from members of the metropolitan Saginaw area, and nu- of Chemical's subsidiary banks, including Midland Bank's merous initiatives to inform the Saginaw community of the CRA-related activities in Saginaw, are satisfactory. In light bank's loan products. For example, Midland Bank will use of all the facts of record, and for the reasons discussed its CRA Call Program to reach housing groups, municipal- above, including the conditions in this order, the Board ities, nonprofit organizations, and civic and community concludes that considerations relating to the convenience leaders, educational seminars, brochures, and contacts with and needs of the communities to be served, including the Saginaw realtors. In addition, Midland Bank assigned the CRA performance records of Chemical's subsidiary banks, manager of a branch located in Saginaw County to oversee are consistent with approval of this proposal. business development and community reinvestment in the Based on the foregoing and all the facts of record, the Saginaw market. The manager will serve as a liaison with Board has determined that these applications should be, local community groups in an effort to identify and address and hereby are, approved. The Board's approval of this community credit needs. proposal is conditioned on compliance by Chemical/Bay The Board notes that the 1995 Examination did not find Area with the commitments made in connection with this any evidence of practices intended to discourage applica- proposal and the conditions discussed in this order. For tions for any kind of credit listed in the Midland Bank's purposes of this action, the commitments and conditions CRA statement. Examiners found no evidence of any pro- relied on in reaching this decision are both conditions hibited discriminatory credit practices and concluded that imposed in writing by the Board and, as such, may be Midland Bank is in compliance with the substantive provi- enforced in proceedings under applicable law. sions of antidiscrimination laws and regulations, including The merger of Chemical/Huron with and into Chemical/ the Equal Credit Opportunity Act and the Fair Housing Act Bay Area may not be consummated before the fifteenth ("fair lending laws").8 In addition, the bank established a calendar day following the effective date of this order, and second review committee in 1994 to assess all consumer this proposal may not be consummated later than three and mortgage loan applications for which denial is recom- months after the effective date of this order, unless such mended in order to ensure compliance with fair lending period is extended by the Board or by the Federal Reserve laws.9 Bank of Chicago, acting pursuant to delegated authority. By order of the Board of Governors, effective Janu- C. Conclusion Regarding Convenience and Needs ary 22, 1996. Factors Voting for this action: Vice Chairman Blinder and Governors In reviewing the convenience and needs considerations in Kelley, Lindsey, and Phillips. Absent and not voting: Chairman this proposal, the Board has carefully considered all the Greenspan and Governor Yellen. JENNIFER J. JOHNSON 7. Midland Bank must provide quarterly reports to the Reserve Deputy Secretary of the Board Bank on its progress in implementing this plan for a period of two years. 8. Protestant alleges that Midland Bank has arbitrarily excluded low- and moderate-income areas from its delineated service commu- Appendix nity because the bank's 1990 CRA performance examination questioned the lack of lending in low- and moderate-income areas immediately outside the bank's delineated community. Protestant also Branch offices of Chemical!Huron to be established by maintains that the bank refuses to do business in areas with predomi- Chemical!Bay Area: nately minority residents. The 1995 Examination found the bank's community delineation to be reasonable, and concluded that this area did not exclude any low- and moderate-income areas or neighbor- 1. 220 S. Main Street, Standish, Michigan hoods that the bank could be reasonably expected to serve. 2. 144 W. Huron Street, AuGres, Michigan 9. The committee is responsible for reviewing the basis of the loan 3. 3858 N. M-13, Pinconning, Michigan denial, all sources of income considered in the application, and the alternatives discussed with the customer. 4. 311 Harrison, Prescott, Michigan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 279 ACTIONS TAKEN UNDER SECTIONS 5(D)(3) AND 18(C) OF THE FEDERAL DEPOSIT INSURANCE 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. Acquiring Bank(s) Acquired Thrift Reserve Bank Approval Date The Fifth Third Bank of First Nationwide Bank, F.S.B., Cleveland December 26, 1995 Northeastern Ohio, Dallas, Texas Cleveland, Ohio APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) Effective Date FNB Financial Corporation, The Interim First National Bank of Three January 25, 1996 Three Rivers, Michigan Rivers, Three Rivers, Michigan Section 4 Applicant(s) Bank(s) Effective Date SouthTrust Corporation, Bankers First Corporation, January 11, 1996 Birmingham, Alabama Augusta, 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 Applicant(s) Bank(s) Reserve Bank Effective Date ABS Investors, LLC, Cobb American Bank & Trust Atlanta January 4, 1996 Atlanta, Georgia Company, Marietta, Georgia Admiral Steel Corporation, Munden Bankshares, Inc., Kansas City January 22, 1996 Alsip, Illinois Munden, Kansas American National Corporation, Else Investment Company, Kansas City January 22, 1996 Omaha, Nebraska Fairbury, Nebraska Banknorth Group, Inc., First Massachusetts Bank, N.A. Boston January 25, 1996 Burlington, Vermont Worchester, Massachusetts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

280 Federal Reserve Bulletin • March 1996 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Beulah Bancorporation, Inc., Fairview Bank, Minneapolis January 24, 1996 Sioux Falls, South Dakota Fairview, Montana BNCCORP, Inc., BNC National Bank of Minnesota, Minneapolis January 2, 1996 Bismarck, North Dakota Minneapolis, Minnesota C Bar M, Inc., Union State Bank, Dallas January 3, 1996 Carrizo Springs, Texas Carrizo Springs, Texas Central and Southern Holding Central and Southern Bank of Atlanta January 12, 1996 Company, Greensboro, Milledgeville, Georgia Greensboro, Georgia Centura Banks, Inc., First Commercial Holding Company, Richmond January 19, 1996 Rocky Mount, North Carolina Asheville, North Carolina CJSB Bancorporation, Inc., Columbus Junction State Bank, Chicago January 23, 1996 Columbus Junction, Iowa Columbus Junction, Iowa CNB Bancshares, Inc., Du Quoin Bancorp, Inc., St. Louis January 23, 1996 Evansville, Indiana Du Quoin, Illinois Commercial Guaranty Bancshares, First Commercial Bank, N.A., Kansas City December 27, 1995 Inc., Overland Park, Kansas Shawnee Mission, Kansas Community Bancshares of Coast Community Bank, Atlanta January 5, 1996 Mississippi, Inc., Biloxi, Mississippi Forest, Mississippi Crosstown Holding Company, Balaton Agency, Inc., Minneapolis January 23, 1996 Ham Lake, Minnesota Balaton, Minnesota Cullen/Frost Bankers, Inc., Park National Bank of Houston, Dallas January 12, 1996 San Antonio, Texas Houston, Texas The New Galveston Company, Wilmington, Delaware Dakotah Bankshares, Inc., Peoples State Bank, Minneapolis January 23, 1996 Fairmount, North Dakota Fairmount, North Dakota First Banks, Inc., CCB Bancorp, St. Louis January 18, 1996 Clayton, Missouri Santa Ana, California QCB Bancorp, Long Beach, California First Celina Corporation, The First State Bank, Dallas January 4, 1996 Celina, Texas Celina, Texas First Hardee Holding Corporation, First National Bank of Wachula, Atlanta December 27, 1995 Wachula, Florida Wachula, Florida First Manistique Corporation, South Range State Bank, Minneapolis December 29, 1995 Manistique, Michigan South Range, Michigan New Bank of South Range, South Range, Michigan First United Bancorporation, The Community Bank of Greenville, Richmond January 25, 1996 Anderson, South Carolina N.A., Greenville, South Carolina Fulton Financial Corporation, Gloucester County Bankshares, Inc., Philadelphia January 19, 1996 Lancaster, Pennsylvania Woodbury, New Jersey The Bank of Gloucester County, Deptford Township, New Jersey Grandview Bankshares, Inc., Cherokee County Bancshares, Inc., Kansas City January 18, 1996 Tahlequah, Oklahoma Hulbert, Oklahoma Harbor Springs Financial Services, Select Bank, Chicago January 23, 1996 Inc., Grand Rapids Township, Michigan Harbor Springs, Michigan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 281 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Heritage Financial Services, Inc., First National Bank of Lockport, Chicago January 18, 1996 Tinley Park, Illinois Lockport, Illinois Hibernia Corporation, Bunkie Bancshares, Inc., Atlanta December 22, 1995 New Orleans, Louisiana Bunkie, Louisiana ISB Financial Corp, W.S.B., Inc., Chicago January 24, 1996 Iowa City, Iowa Washington, Iowa Washington State Bank, Washington, Iowa Norwood Financial Corp., Wayne Bank, Philadelphia January 16, 1996 Honesdale, Pennsylvania Honesdale, Pennsylvania Pittsburgh Home Financial Corp. Pittsburgh Home Savings Bank, Cleveland January 23, 1996 Pittsburgh, Pennsylvania Pittsburgh, Pennsylvania Quanah Financial Corporation, Quanah Bancshares, Inc., Dallas January 25, 1996 Quanah, Texas Quanah, Texas First National Bank, Quanah, Texas Quanah Financial Corporation Quanah Financial Corporation, Dallas January 25, 1996 Employee Stock Ownership Plan, Quanah, Texas Quanah, Texas Quanah Bancshares, Inc., Quanah, Texas First National Bank, Quanah, Texas Republic Bancshares, Inc., Republic Bank, Atlanta January 4, 1996 St. Petersburg, Florida St. Petersburg, Florida Sharon Bancshares, Inc., Weakley County Bancshares, Inc. St. Louis January 25, 1996 Sharon, Tennessee Dresden, Tennessee Swanton Agency, Inc., Farmers State Bank, Kansas City January 22, 1996 Swanton, Nebraska Plymouth, Nebraska Thumb Bancorp, Inc., Thumb National Bank and Trust Chicago December 27, 1995 Pigeon, Michigan Company, Pigeon, Michigan West Pointe Bancshares, Inc. West Pointe Bank, Chicago January 23, 1996 Oshkosh, Wisconsin Oshkosh, Wisconsin WFC, Inc., Viking State Bank, Chicago December 22, 1995 Waukon, Iowa Decorah, Iowa Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Adam Financial Corporation, To engage de novo in the activity of Dallas January 5, 1996 Bryan, Texas making and servicing loans Banknorth Group, Inc., Stratevest Group, National Association, Boston January 11, 1996 Burlington, Vermont Burlington, Vermont Bourbon Bancshares, Inc., The Jessamine First Federal Savings Cleveland December 18, 1995 Paris, Kentucky and Loan Association of Nicholasville, Nicholasville, Kentucky Carolina First Corporation, Blue Ridge Finance Company, Inc., Richmond December 29, 1995 Greenville, South Carolina Greenville, South Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

282 Federal Reserve Bulletin • March 1996 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Central Bancorporation, Inc., First American Savings Bank, S.S.B., Dallas January 12, 1996 Fort Worth, Texas Bedford, Texas Central Bancorporation of Delaware, Inc., Wilmington, Delaware Colonial Banc Corp., Ron Stewart Appraisal Enterprises, Cleveland December 27, 1995 Eaton, Ohio Eaton, Ohio First Bancshares, Inc., I & I, Inc., Atlanta December 28, 1995 Grove Hill, Alabama Grove Hill, Alabama First Sleepy Eye Bancorporation, Meadowview Townhomes Limited Minneapolis January 8, 1996 Inc., Partnership, Sioux Falls, South Dakota Sleepy Eye, Minnesota Monocacy Bancshares, Inc., Royal Oak Savings Bank, F.S.B., Richmond December 22, 1995 Taneytown, Maryland Randallstown, Maryland Montgomery Bancorporation, Inc., Traditional Bank, FSB, Cleveland December 15, 1995 Mount Sterling, Kentucky Lexington, Kentucky Saban S.A., Brooklyn Bancorp, Inc., New York December 22, 1995 Marina Bay, Gibraltar Brooklyn, New York RNYC Holdings Limited, CrossLand Federal Savings Bank, Marina Bay, Gibraltar Brooklyn, New York Republic New York Corporation, New York, New York Shorebank Corporation, Austin Labor Force Initiative, Chicago December 28, 1995 Chicago, Illinois Chicago, Illinois Societe Generale, FIMAT Facilities Management, New York December 22, 1995 Paris, France Chicago, Illinois Southern National Corporation, To engage in lending activities Richmond December 29, 1995 Winston-Salem, North Carolina UJB Financial Corp., UJB Commercial Corp., New York January 2, 1996 Princeton, New Jersey Chatham, New Jersey APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Applicant(s) Bank(s) Reserve Bank Effective Date Adams Bank & Trust, Adams Savings & Loan Association, Kansas City January 18, 1996 Ogallala, Nebraska North Platte, Nebraska Bank of Clarke County, First Union National Bank of Virginia, Richmond January 11, 1996 Berryville, Virginia Roanoke, Virginia Centura Bank, First Commercial Bank, Richmond January 19, 1996 Rocky Mount, North Carolina Asheville, North Carolina Community Bank of Mississippi, Community Bank, Atlanta January 17, 1996 Forest, Mississippi Indianola, Mississippi Farmers State Bank of Conrad, Farmers State Bank of Cut Bank, Minneapolis January 24, 1996 Conrad, Montana Cut Bank, Montana Firstar Bank Minocqua, Firstar Bank Madison, N.A., Chicago January 10, 1996 Minocqua, Wisconsin Madison, Wisconsin Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 283 Applications Approved—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Firstar Bank Wisconsin, Firstar Bank Grantsburg, N.A., Chicago January 10, 1996 Madison, Wisconsin Grantsburg, Wisconsin Firstar Bank Eau Claire, N.A., Eau Claire, Wisconsin Firstar Bank Rice Lake, N.A. Rice Lake, Wisconsin Firstar Bank Manitowoc, Manitowoc, Wisconsin Firstar Bank Oshkosh, N.A., Oshkosh, Wisconsin Firstar Bank Green Bay, Green Bay, Wisconsin Firstar Bank Fond du Lac, N.A., Fond du Lac, Wisconsin Firstar Bank Sheboygan, N.A., Sheboygan, Wisconsin Firstar Bank Appleton, Appleton, Wisconsin Firstar Bank Wausau, N.A., Wausau, Wisconsin Southeastern Bank of Florida, Compass Bank, Atlanta December 28, 1995 Alachua, Florida Jacksonville, Florida PENDING CASES INVOLVING THE BOARD OF and the acquisition of U.S. Trust by Chase Manhattan GOVERNORS Corporation, New York, New York. On September 12, 1995, the court denied petitioners' motion for an emergency This list of pending cases does not include suits against the stay of the Board's orders. Federal Reserve Banks in which the Board of Governors is not Jones v. Board of Governors, No. 95-1359 (D.C. Cir., filed named a party. July 17, 1995). Petition for review of a Board order dated June 19, 1995, approving the application by First Com- Lee v. Board of Governors, No. 96-4008 (2nd Cir., filed merce Corporation, New Orleans, Louisiana, to acquire January 19, 1996). Petition for review of a Board order Lakeside Bancshares, Lake Charles, Louisiana. On Novemdated January 5, 1996, approving the applications and no- ber 15, 1995, the court granted the Board's motion to tices by Chemical Banking Corporation to merge with The dismiss. On December 26, 1995, the petitioner filed a Chase Manhattan Corporation, both of New York, New request for reconsideration. York, and by Chemical Bank to merge with The Chase Beckman v. Greenspan, No. 95-35473 (9th Cir., filed May 4, Manhattan Bank, N.A., both of New York, New York. 1995). Appeal of dismissal of action against Board and Menick v. Greenspan, No. 95-CV-01916 (D. D.C., filed Octo- others seeking damages for alleged violations of constituber 10, 1995). Complaint alleging sex, age, and handicap tional and common law rights. The appellants' brief was discrimination in employment. filed on June 23, 1995; the Board's brief was filed on Kuntz v. Board of Governors, No. 95-1495 (D.C. Cir., filed July 12, 1995. September 21, 1995). Petition for review of Board order Board of Governors v. Hotchkiss, Adversary No. 95-3146 dated August 23, 1995, approving the applications of The (Bankr. N.D. Ohio, filed May 1, 1995). Action to declare a Fifth Third Bank, Cincinnati, Ohio, to acquire certain assets restitution obligation arising from a Board consent order and assume certain liabilities of 12 branches of PNC Bank, non-dischargeable in bankruptcy. On December 15, 1995, Ohio, N.A., Cincinnati, Ohio, and to establish certain the court granted the Board's motion for summary judgbranches. The Board's motion to dismiss was filed on ment. On December 22, 1995, the debtor filed a notice of October 26, 1995. appeal to the district court. Lee v. Board of Governors, No. 94-4134 (2nd Cir., filed Board of Governors v. Scott, Misc. No. 95-127 (LFO/PJA) (D. August 22,1995). Petition for review of Board orders dated D.C., filed April 14, 1995). Application to enforce an ad- July 24, 1995, approving certain steps of a corporate reorgaministrative investigatory subpoena for documents and tesnization of U.S. Trust Corporation, New York, New York, timony. On August 3, 1995, the magistrate judge issued an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

284 Federal Reserve Bulletin • March 1996 order granting in part and denying in part the Board's Hand, a former employee of BancFirst, Oklahoma City, application. On September 18, 1995, the intervenor moved Oklahoma. for reconsideration of a portion of the magistrate's ruling. Money Station, Inc. v. Board of Governors, No. 95-1182 (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 Financial Corp., Philadelphia, Pennsylvania; PNC Bank Corp., WRITTEN AGREEMENTS APPROVED BY FEDERAL Pittsburgh, Pennsylvania; and KeyCorp, Cleveland, Ohio, RESERVE BANKS to acquire certain data processing assets of National City Corporation, Cleveland, Ohio, through a joint venture sub- Charter State Bank sidiary. The Board's brief was filed November 16, 1995. Beebe, Arkansas Oral argument is scheduled for February 2, 1996. Jones v. Board of Governors, No. 95-1142 (D.C. Cir., filed March 3, 1995). Petition for review of a Board order dated February 2, 1995, approving the applications by First Com- The Federal Reserve Board announced on January 16, merce Corporation, New Orleans, Louisiana, to merge with 1996, the execution of a Written Agreement by and among City Bancorp, Inc., New Iberia, Louisiana, and First Bank- the Charter State Bank, Beebe, Arkansas; Charter Mortshares, Inc., Slidell, Louisiana. The Board's brief was filed gage and Investments, Inc., North Little Rock, Arkansas; December 22, 1995. Oral argument on the petition for and the Federal Reserve Bank of St. Louis. review is scheduled for February 27,1996. In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., filed January 6, 1995). Action to enforce subpoena seeking predecisional supervisory documents sought in connection with First Western Bank an action by Bank of New England Corporation's trustee in Cooper City, Florida bankruptcy against the Federal Deposit Insurance Corporation. The Board filed its opposition on January 20, 1995. Oral argument on the motion was held July 14, 1995. The Federal Reserve Board announced on January 2, 1996, Board of Governors v. Pharaon, No. 91-CIV-6250 (S.D. New the execution of a Written Agreement by and among the York, filed September 17, 1991). Action to freeze assets of First Western Bank, Cooper City, Florida; the Federal individual pending administrative adjudication of civil Reserve Bank of Atlanta; and the State Comptroller and money penalty assessment by the Board. On September 17, Banking Commissioner of the State of Florida. 1991, the court issued an order temporarily restraining the transfer or disposition of the individual's assets. Mercantile Capital Corp. FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD Boston, Massachusetts OF GOVERNORS Patricia Hand Oklahoma City, Oklahoma The Federal Reserve Board announced on January 30, 1996, the execution of a Written Agreement between the The Federal Reserve Board announced on January 2, 1996, Federal Reserve Bank of Boston and Mercantile Capital the issuance of an Order of Prohibition against Patricia Corp., Boston, Massachusetts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance A28 Federal fiscal and financing operations DOMESTIC FINANCIAL STATISTICS A29 U.S. budget receipts and outlays A30 Federal debt subject to statutory limitation Money Stock and Bank Credit A30 Gross public debt of U.S. Treasury— Types and ownership A4 Reserves, money stock, liquid assets, and debt A31 U.S. government securities measures dealers—Transactions A5 Reserves of depository institutions, Reserve Bank A32 U.S. government securities dealers— credit Positions and financing A6 Reserves and borrowings—Depository A33 Federal and federally sponsored credit institutions agencies—Debt outstanding A7 Selected borrowings in immediately available funds—Large member banks Securities Markets and Corporate Finance Policy Instruments A34 New security issues—Tax-exempt state and local governments and corporations A8 Federal Reserve Bank interest rates A35 Open-end investment companies—Net sales A9 Reserve requirements of depository institutions and assets A10 Federal Reserve open market transactions A35 Corporate profits and their distribution A36 Domestic finance companies—Assets and Federal Reserve Banks liabilities, and consumer, real estate, and business All Condition and Federal Reserve note statements credit A12 Maturity distribution of loan and security holdings Real Estate Monetary and Credit Aggregates A37 Mortgage markets A3 8 Mortgage debt outstanding A13 Aggregate reserves of depository institutions and monetary base Consumer Installment Credit A14 Money stock, liquid assets, and debt measures A16 Deposit interest rates and amounts outstanding— A39 Total outstanding commercial and BIF-insured banks A39 Terms A17 Bank debits and deposit turnover Flow of Funds Commercial Banking Institutions A40 Funds raised in U.S. credit markets A18 Assets and liabilities, Wednesday figures A42 Summary of financial transactions A43 Summary of credit market debt outstanding Weekly Reporting Commercial Banks— A44 Summary of financial assets and liabilities Assets and liabilities A21 Large reporting banks DOMESTIC NONFINANCIAL STATISTICS A23 Branches and agencies of foreign banks Selected Measures Financial Markets A45 Nonfinancial business activity— A24 Commercial paper and bankers dollar Selected measures acceptances outstanding A45 Labor force, employment, and unemployment A25 Prime rate charged by banks on short-term A46 Output, capacity, and capacity utilization business loans A47 Industrial production—Indexes and gross value A26 Interest rates—money and capital markets A49 Housing and construction All Stock market—Selected statistics A50 Consumer and producer prices Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Federal Reserve Bulletin • March 1996 DOMESTIC NONFINANCIAL STATISTICS- A60 Claims on foreign countries— CONTINUED Combined domestic offices and foreign branches Selected Measures—Continued Reported by Nonbanking Business A51 Gross domestic product and income Enterprises in the United States A52 Personal income and saving A61 Liabilities to unaffiliated foreigners A62 Claims on unaffiliated foreigners INTERNATIONAL STATISTICS Securities Holdings and Transactions Summary Statistics A63 Foreign transactions in securities A53 U.S. international transactions—Summary A64 Marketable U.S. Treasury bonds and A54 U.S. foreign trade notes—Foreign transactions A54 U.S. reserve assets A54 Foreign official assets held at Federal Reserve Banks Interest and Exchange Rates A55 Selected U.S. liabilities to foreign official A65 Discount rates of foreign central banks institutions A65 Foreign short-term interest rates A66 Foreign exchange rates Reported by Banks in the United States A55 Liabilities to and claims on foreigners A56 Liabilities to foreigners A67 GUIDE TO STATISTICAL RELEASES AND A58 Banks' own claims on foreigners SPECIAL TABLES A59 Banks' own and domestic customers' claims on foreigners A59 Banks' own claims on unaffiliated foreigners A68 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 of include not fully guaranteed issues) as well as direct obligarounding. 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 • March 1996 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1995 1995 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Ql Q2 Q3 Q4 Aug. Sept. Oct. Nov. Dec. Reserves of depository institutions1 1 Total -3.7 -8.0 -1.2 -7.2 -2.9 -3.1 -11.4 -11.7 1.4 2 Required -4.0 -7.0 -2.3 -8.0 -.8 -2.3 -14.4 -8.9 -5.9 3 Nonborrowed -2.4 -8.6 -2.2 -6.7 -1.1 -3.0 -10.8 -10.8 .3 4 Monetary base3 6.4 6.3 1.0 2.4 3.3 1.1 3.3 .7 4.8 Concepts of money, liquid assets, and debt4 5 Ml .0 -.9 -1.0 -5.7 -1.7r -3.8r -10.4 -3.6r -3.8 6 M2 1.7 4.4 7.7 2.8 8.3 4.4 -1.0 2.5r 6.1 7 M3 4.4 6.9r 8.8r 3.6 8.2r 4.5r 3.3r ,9r 3.6 8 L 6.4 7.8r 9.6r n.a. 8.1r 8.7r 4.5r .6 n.a. 9 Debt 5.3 7.0 4.6r n.a. 4.6r 3.4r 3.5r 5.2 n.a. Nontransaction components 10 In M25 2.5 6.8r 11.6r 6.6 12.8 8.0 3.2 5.2' 10.2 11 In M3 only6 18.6r 19.4r 14.0r 7.6 7.5r 5.3r 24. lr ~6.7r -8.4 Time and savings deposits Commercial banks 12 Savings, including MMDAs -13.2 -7.3 10.3 13.2 14.5 11.7 11.2 11.0r 23.7 13 Small time7 24.3 23.4 9.8 2.0 5.5 1.9 1.3r 2.1' -.2 14 Large time8'9 12.7 12.6r 13.0r 22.9 9.4r 11.2r 42.5r 18.6r 7.0 Thrift institutions 15 Savings, including MMDAs -20.5 -14.5 -5.8 -2.7 -7.0 -.3 .0 -7.0 -2.4 16 Small time7 21.4r 26.3r 3.6r 2.7 2.0 2.3 2.7 3.7 2.3 17 Large time8 24.0r 15.4r 13.7r 9.8 9.9 8.2 17.8r 3.2r 1.6 Money market mutual funds 18 General purpose and broker-dealer 7.9 18.1 43.3 15.9 37.7 17.6 9.9 12.6 14.3 19 Institution-only 10.0 27.1 29.3 6.6 -9.0 15.4 12.9 -5.6 10.1 Debt components4 20 Federal 5.1 5.4 4.6 n.a. 2.0 .8 2.9 4.4 n.a. 21 Nonfederal 5.4r 7.5 4.6r n.a. 5.5r 4.3r 3.7r 5.5 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- funds. Excludes amounts held by depository institutions, the U.S. government, money market ing during preceding month or quarter. funds, and foreign banks and official institutions. Also excluded is the estimated amount of 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with overnight RPs and Eurodollars held by institution-only money market funds. Seasonally regulatory changes in reserve requirements. (See also table 1.20.) adjusted M3 is computed by adjusting its non-M2 component as a whole and then adding this 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally result to seasonally adjusted M2. adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury component of the money stock, plus (3) (for all quarterly reporters on the "Report of securities, commercial paper, and bankers acceptances, net of money market fund holdings of Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted between current vault cash and the amount applied to satisfy current reserve requirements. 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 nonfinancial Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of sectors—the federal sector (U.S. government, not including government-sponsored enterdepository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all prises or federally related mortgage pools) and the nonfederal sectors (state and local commercial banks other than those owed to depository institutions, the U.S. government, and governments, households and nonprofit organizations, nonfinancial corporate and nonfaim foreign banks and official institutions, less cash items in the process of collection and Federal noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, which are derived from the Federal Reserve Board's flow of funds accounts, are breakcredit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted (that is, discontinuities in the data have been smoothed into the series) and adjusted Ml is computed by summing currency, travelers checks, demand deposits, and month-averaged (that is, the data have been derived by averaging adjacent month-end levels). OCDs, each seasonally adjusted separately. 5. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund balances M2: Ml plus (1) overnight (and continuing contract) repurchase agreements (RPs) issued (general purpose and broker-dealer), (3) savings deposits (including MMDAs), and (4) small by all depository institutions and overnight Eurodollars issued to U.S. residents by foreign time deposits. branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits 6. Sum of (1) large time deposits, (2) term RPs, (3) term Eurodollars of U.S. residents, (time deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in and (4) money market fund balances (institution-only), less (5) a consolidation adjustment both taxable and tax-exempt general-purpose and broker-dealer money market funds. Ex- that represents the estimated amount of overnight RPs and Eurodollars held by institutioncludes individual retirement accounts (IRAs) and Keogh balances at depository institutions only money market funds. This sum is seasonally adjusted as a whole. and money market funds. Also excludes all balances held by U.S. commercial banks, money 7. Small time deposits—including retail RPs—are those issued in amounts of less than market funds (general purpose and broker-dealer), foreign governments and commercial $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions banks, and the U.S. government. Seasonally adjusted M2 is computed by adjusting its non-Mi are subtracted from small time deposits. component as a whole and then adding this result to seasonally adjusted Ml. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those M3: M2 plus (1) large time deposits and term RP liabilities (in amounts of $100,000 or 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 Kingdom depository institutions, the U.S. government, and foreign banks and official institutions. and Canada, and (3) balances in both taxable and tax-exempt, institution-only money market 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 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 410,695 413,165 412,622 414,222 416,410r 415,293 421,941 U.S. government securities2 2 Bought outright—System account 370,901 373,648 378,548 375,660 373,897 373,735 376,886 379,348 378,879 3 Held under repurchase agreements 3,227 3,249 5,626 371 4,423 6,377 5,611 575 4,848 Federal agency obligations 4 Bought outright 2,876 2,796 2,654 2,812 2,812 2,761 2,692 2,6680 2,6370 5 Held under repurchase agreements 4790 3200 3430 710 7100 1609 560 0 0 6 Acceptances Loans to depository institutions 1 7 Adjustment credit 45 166 139 36 311 360 4 516 8 Seasonal credit 2040 670 400 630 620 580 430 390 430 9 Extended credit 10 Float 537 901 1,180 1,116 779 l,124r 382 806 2,769 11 Other Federal Reserve assets 32,425 32,018r 32,231 32,492 31,228 31,825r 31,189 31,855 32,249 12 Gold stock 11,051 11,050 11,050 11,051 11,050 11,050 11,050 11,050 11,050 13 Special drawing rights certificate account 10,168 10,168 10,168 10,168 10,168 10,168 10,168 10,168 10,168 14 Treasury currency outstanding 23,799 23,860 23,921 23,853 23,867 23,881 23,895 23,909 23,923 ABSORBING RESERVE FUNDS 15 Currency in circulation 411,565 414,005 419,549 413,058 414,227821 416,621 416,409 417,416 418,787 16 Treasury cash holdings 315 287 271 295 278 276 271 271 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,384 5,410 6,762 6,024 5,125 5,614 5,942 5,559 8,633 18 Foreign 179 203 204 177 198 241 183 177 210 19 Service-related balances and adjustments .. 4,874 5,108r 5,486 4,989 5,250 5,21 lr 5,239 5,371 5,250 20 Other 386 326 366 347 325 283 298 323 304 21 Other Federal Reserve liabilities and capital , 12,938 13,006 12,847 12,952 13,155 13,135 12,701 12,626 13,164 22 Reserve balances with Federal Reserve Banks' 20,071 19,897' 20,414 19,850 20,701 20,125' 20,930 18,677 20,465 End-of-month figures Wednesday figures Nov. 29 Dec. 6 Dec. 13 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 409,828 412,867' 428,451 413,040 416,500 415,423' 419,714 416,609 429,336 U.S. government securities2 2 Bought outright—System account 371,227 373,819 378,197 374,930 373,887 374,228 377,865 378,858 378,439 3 Held under repurchase agreements 2,290 6,983 12,762 2,600 5,104 5,475 6,357 2,012 8,235 Federal agency obligations 4 Bought outright 2,812 2,6920 2,634 2,812 2,812 2,6920 2,692 2,6370 2,6370 5 Held under repurchase agreements 2100 0 1,1000 5000 1,0601 0 3900 0 0 6 Acceptances Loans to depository institutions 1 7 Adjustment credit 5 111 3 2,164 302 6 2 3,432 8 Seasonal credit 1203 500 240 630 580 520 410 390 450 9 Extended credit 10 Float 833 -1,817' 118 1,286 370 949' 724 723 4,125 11 Other Federal Reserve assets 32,332 31,136 33,504 30,846 31,043 31,724' 31,639 32,338 32,424 12 Gold stock 11,051 11,050 11,050 11,050 11,050 11,050 11,050 11,050 11,050 13 Special drawing rights certificate account 10,168 10,168 10,168 10,168 10,168 10,168 10,168 10,168 10,168 14 Treasury currency outstanding 23,825 23,895 23,951 23,853 23,867 23,881 23,895 23,909 23,923 ABSORBING RESERVE FUNDS 15 Currency in circulation 411,767 416,682 424,192 414,22681 1 416,373 417,527 417,534 418,792 421,267 16 Treasury cash holdings 314 276 270 278 276 271 272 270 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 7,018 5,703 5,979 5,256 6,505 6,439 5,782 5,556 11,383 18 Foreign 275 194 386 194 195 167 230 179 220 19 Service-related balances and adjustments .., 5,006 5,239' 6,348 4,989 5,250 5,211' 5,239 5,371 5,250 20 Other 375 282 932 344 280 278 328 318 308 21 Other Federal Reserve liabilities and capital 13,073 12,697 12,342 12,843 12,936 12,866 12,460 12,648 12,959 22 Reserve balances with Federal Reserve Banks' 17,045 16,908' 23,171 19,943 19,767 17,759' 22,985 18,599 22,820 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 3. Excludes required clearing balances and adjustments to compensate for float. 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic NonfinancialS tatistics • March 1996 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1993 1994 1995 1995 Dec. Dec. Dec. June July Aug. Sept. Oct. Nov. Dec. 1 Reserve balances with Reserve Banks2 29,374 24,658 20,442 21,058 20,840 20,565 20,519 20,055 20,066 20,442 2 Total vault cash3 36,818 40,365 42,117 39,839 40,522 40,177 40,648 40,561 40,575 42,117 3 Applied vault cash4 33,484 36,682 37,459 35,986 36,550 36,255 36,640 36,345 36,332 37,459 4 Surplus vault cash5 3,334 3,683 4,658 3,853 3,971 3,923 4,008 4,216 4,244 4,658 5 Total reserves6 62,858 61,340 57,901 57,044 57,390 56,819 57,159 56,400 56,397 57,901 6 Required reserves 61,795 60,172 56,622 56,079 56,300 55,832 56,209 55,319 55,454r 56,622 7 Excess reserve balances at Reserve Banks7 1,063 1,168 1,278 964 1,090 988 950 1,081 943r 1,278 8 Total borrowings at Reserve Banks8 82 209 257 272 371 282 278 245 204 257 9 Seasonal borrowings 31 100 40 172 231 258 252 199 73 40 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for two week periods ending on dates indicated 1995 1996 Aug. 30 Sept. 13 Sept. 27 Oct. 11 Oct. 25 Nov. 8 Nov. 22 Dec. 6 Dec. 20 Jan. 3 1 Reserve balances with Reserve Banks2 20,395 21,029 20,182 19,886 20,496 19,334 20,270 20,438r 19,563 21,563 2 Total vault cash3 39,324 40,554 40,628 41,153 39,855 41,123 40,218 40,653 42,943 41,865 3 Applied vault cash4 35,491 36,693 36,556 36,805 35,770 36,846 36,071 36,274 38,053 37,350 4 Surplus vault cash5 3,833 3,862 4,072 4,348 4,086 4,277 4,148 4,379 4,890 4,516 5 Total reserves6 55,886 57,722 56,738 56,690 56,265 56,180 56,341 56,712r 57,615 58,912 6 Required reserves 55,153 56,879 55,781 55,312 55,406 55,129 55,544 55,623r 56,508 57,313 7 Excess reserve balances at Reserve Banks7 733 843 957 1,378 860 1,052 797 l,089r 1,107 1,599 8 Total borrowings at Reserve Banks8 288 268 274 338 227 121 236 233 300 218 9 Seasonal borrowings 272 245 261 240 204 116 63 51 41 34 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 5. Total vault cash (line 2) less applied vault cash (line 3). ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 2. Excludes required clearing balances and adjustments to compensate for float and (line 3). includes other off-balance-sheet "as-of" adjustments. 7. Total reserves (line 5) less required reserves (line 6). 3. Total "lagged" vault cash held by depository institutions subject to reserve 8. Also includes adjustment credit. requirements. Dates refer to the maintenance periods during which the vault cash may be used 9. Consists of borrowing at the discount window under the terms and conditions estabto satisfy reserve requirements. The maintenance period for weekly reporters ends sixteen lished for the extended credit program to help depository institutions deal with sustained days after the lagged computation period during which the vault cash is held. Before Nov. 25, liquidity pressures. Because there is not the same need to repay such borrowing promptly as 1992, the maintenance period ended thirty days after the lagged computation period. with traditional short-term adjustment credit, the money market effect of extended credit is 4. All vault cash held during the lagged computation period by "bound" institutions (that similar to that of nonborrowed reserves. is, those whose required reserves exceed their vault cash) plus the amount of vault cash applied during the maintenance period by "nonbound" institutions (that is, those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit Al 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of daily figures 1995, week ending Monday SSoouurrccee aanndd mmaattuurriittyy Oct. 30 Nov. 6 Nov. 13 Nov. 20 Nov. 27 Dec. 4 Dec. 11 Dec. 18 Dec. 25 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 87,443 88,385 87,007r 85,795r 83,570r 92,013 91,010 95,899 93,042 2 For all other maturities 1155,,990066 15,801 1166,,227722 15,698 1166,,008822'' 14,382 1144,,220088 14,556 1155,,774499 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 18,531 20,008 20,485r 20,475 21,528 22,676 22,680 20,692 20,590 4 For all other maturities 22,598 22,303 22,979 21,854 22,400 19,903 20,178 19,985 21,315 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 17,892 17,442 17,047 17,922 17,546 19,435 16,784 18,413 16,121 6 For all other maturities 36,216 31,849 34,156 28,791 28,864 25,700 27,003 24,221 25,024 All other customers 7 For one day or under continuing contract 42,351 42,910 40,802 43,971 41,183 44,887 42,598 43,097 41,224 8 For all other maturities 16,833 16,488 18,640 16,976 21,046 16,251 16,079 16,103 17,141 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 61,281 60,195 59,269 56,296 57,482r 60,904 58,461 63,983 67,332 10 To all other specified customers2 27,924 30,663 31,801 31,080 29,735 30,909 28,636 32,478 30,494 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 banks Data in this table also appear in the Board's H.5 (507) weekly statistical release. For and official institutions, and U.S. government agencies, ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic NonfinancialS tatistics • March 1996 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit' Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 2/ O 5/ n 9 6 Effective date Previous rate 2/ O 5/ n 9 6 Effective date Previous rate 2/ O 5/ n 9 6 Effective date Previous rate Boston 5.00 2/1/96 5.25 5.40 2/1/96 5.50 5.90 2/1/96 6.00 New York 1/31/96 Philadelphia 1/31/96 Cleveland 1/31/96 Richmond 2/1/96 Atlanta 1/31/96 Chicago 2/1/96 St. Louis 2/5/96 Minneapolis 1/31/96 Kansas City 2/1/96 Dallas 1/31/96 San Francisco 5.00 1/31/96 5.25 5.40 2/1/96 5.50 5.90 2/1/96 6.00 Range of rates for adjustment credit in recent years4 Range (or F.R. Bank Range (or F.R. Bank Range (or Effective date level)—All of level)—All of Effective date level)—All F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks In effect Dec. 31, 1977 1981—Nov. 2 13-14 13 1988—Aug. 9 .. .. 6-6.5 6.5 6 13 13 11 6.5 6.5 1978—Jan. 9 6-6.5 6.5 Dec. 4 12 12 20 6.5 6.5 1989—Feb. 24 .... 6.5-7 7 May 11 6.5-7 7 1982—July 20 11.5-12 11.5 27 .... 7 7 12 7 7 23 11.5 11.5 July 3 7-7.25 7.25 Aug. 2 11-11.5 11 1990—Dec. 19 6.5 6.5 10 7.25 7.25 3 11 11 Aug. 21 7.75 7.75 16 10.5 10.5 1991—Feb. 1 .... 6-6.5 6 Sept. 22 8 8 27 10-10.5 10 4 .... 6 6 Oct. 16 8-8.5 8.5 30 10 10 Apr. 30 .... 5.5-6 5.5 20 8.5 8.5 Oct. 12 9.5-10 9.5 May 2 ... . 5.5 5.5 Nov. 1 8.5-9.5 9.5 13 9.5 9.5 Sept. 13 5-5.5 5 3 9.5 9.5 Nov. 22 9-9.5 9 17 .... 5 5 1979—July 20 10 10 Dec. 2 14 6 8.5 9 - 9 9 9 Nov. 61 ..... ... 4 4 .5 .5 -5 4 4 . . 5 5 Aug. 17 10-10.5 10.5 15 8.5-9 8.5 Dec. 20 .... 3.5-4.5 3.5 20 10.5 10.5 17 8.5 8.5 24 .... 3.5 3.5 Sept. 19 10.5-11 11 Oct. 21 8 11 1 - 1 1 2 1 1 1 2 1984—Apr. 1 9 3 8.5 9 - 9 9 9 1992—July 21 ........ 3- 3 3 .5 3 3 10 12 12 Nov. 21 8.5-9 8.5 26 8.5 8.5 1994—May 17 3-3.5 3.5 1980—Feb. 15 12-13 13 Dec. 24 18 .... 3.5 3.5 19 13 13 Aug. 16 3.5-4 4 May 29 12-13 13 1985—May 20 7.5-8 7.5 18 .... 4 4 30 12 12 24 7.5 7.5 Nov. 15 4-4.75 4.75 June 13 11-12 11 17 .... 4.75 4.75 July 2 1 8 6 101-11 1 1 1 1 0 1986—Mar. 1 7 0 7- 7 7 .5 7 7 1995—Feb. 1 ... . 4.75-5.25 5.25 29 10 10 Apr. 21 6.5-7 6.5 9 .. . . 5.25 5.25 Sept. 26 11 11 23. 6.5 6.5 Nov. 17 12 12 July 11 6 6 1996—Jan. 31.... 5.00-5.25 5.00 Dec. 5 12-13 13 Aug. 21 5.5-6 5.5 Feb. 5 . . . . 5.00 5.00 8 13 13 22 5.5 5.5 1981—May 5 13-14 14 In effect Feb. 5, 1996 5.00 5.00 14 14 1987—Sept. 4 5.5-6 6 11 6 6 1. Available on a short-term basis to help depository institutions meet temporary needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that cannot be met through reasonable alternative sources. The highest rate established flexible rate somewhat above rates charged on market sources of funds is charged. The rate for loans to depository institutions may be charged on adjustment credit loans of unusual size ordinarily is reestablished on the first business day of each two-week reserve maintenance that result from a major operating problem at the borrower's facility. period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis 2. Available to help relatively small depository institutions meet regular seasonal needs for points. funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 4. For earlier data, see the following publications of the Board of Governors: Banking and that cannot be met through special industry lenders. The discount rate on seasonal credit takes Monetary Statistics, 1914-1941, and 1941-1970', and the Annual Statistical Digest, 1970into account rates charged by market sources of funds and ordinarily is reestablished on the 1979. first business day of each two-week reserve maintenance period; however, it is never less than In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit the discount rate applicable to adjustment credit. borrowings by institutions with deposits of $500 million or more that had borrowed in 3. May be made available to depository institutions when similar assistance is not successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was reasonably available from other sources, including special industry lenders. Such credit may in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed be provided when exceptional circumstances (including sustained deposit drains, impaired on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to access to money market funds, or sudden deterioration in loan repayment performance) or 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, practices involve only a particular institution, or to meet the needs of institutions experiencing and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the difficulties adjusting to changing market conditions over a longer period (particularly at times surcharge was changed from a calendar quarter to a moving thirteen-week period. The of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is surcharge was eliminated on Nov. 17, 1981. charged on extended-credit loans outstanding less than thirty days; however, at the discretion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Requirement TTyyppee ooff ddeeppoossiitt Percentage of deposits Effective date Net transaction accounts2 1 $0 million-$52.0 million3 33333 1111122222/////1111199999/////9999955555 1111100000 1111122222/////1111199999/////9999955555 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 1. Required reserves must be held in the form of deposits with Federal Reserve Banks succeeding calendar year by 80 percent of the percentage increase in the total reservable or vault cash. Nonmember institutions may maintain reserve balances with a Federal liabilities of all depository institutions, measured on an annual basis as of June 30, No Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For corresponding adjustment is made in the event of a decrease. Effective Dec. 19, 1995, the previous reserve requirements, see earlier editions of the Annual Report or the Federal exemption was raised from $4.2 million to $4.3 million. The exemption applies only to Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions accounts that would be subject to a 3 percent reserve requirement. include commercial banks, mutual savings banks, savings and loan associations, credit 4. The reserve requirement was reduced from 12 percent to 10 percent on unions, agencies and branches of foreign banks, and Edge Act corporations. Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that 2. Transaction accounts include all deposits against which the account holder is permitted report quarterly. to make withdrawals by negotiable or transferable instruments, payment orders of with- 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits drawal, and telephone and preauthorized transfers for the purpose of making payments to with an original maturity of less than 1 years was reduced from 3 percent to 1 [/i percent for third persons or others. However, money market deposit accounts (MMDAs) and similar the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that accounts subject to the rules that permit no more than six preauthorized, automatic, or other began Dec. 27, 1990. The reserve requirement on nonpersonal time deposits with an original transfers per month, of which no more than three may be checks, are savings deposits, not maturity of 1'/> years or more has been zero since Oct. 6, 1983. transaction accounts. For institutions that report quarterly, the reserve requirement on nonpersonal time deposits The Monetary Control Act of 1980 requires that the amount of transaction accounts against with an original maturity of less than 1 Vi years was reduced from 3 percent to zero on Jan. 17, which the 3 percent reserve requirement applies be modified annually by 80 percent of the 1991. percentage change in transaction accounts held by all depository institutions, determined as of 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero June 30 of each year. Effective Dec. 19, 1995, the amount was decreased from $54.0 million in the same manner and on the same dates as was the reserve requirement on nonpersonal to $52.0 million. time deposits with an original maturity of less than 1 Vi years (see note 5). 3. Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the amount of reservable liabilities subject to a zero percent reserve requirement each year for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic NonfinancialS tatistics • March 1996 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1995 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 11999922 11999933 11999944 May June July Aug. Sept. Oct. Nov. U.S. TREASURY SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 14,714 17,717 17,484 0 4,470 0 433 409 1,350 4,271 2 Gross sales 1,628 0 0 0 0 0 0 0 0 0 3 Exchanges 308,699 332,229 376,277 31,663 42,983 25,213 39,195 30,333 29,397 39,057 4 Redemptions 1,600 0 0 0 0 0 0 0 900 0 Others within one year 5 Gross purchases 1,096 1,223 1,238 0 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 7,174 2,177 2,063 7,805 0 1,745 6,108 8 Exchanges -30,543 -36,582 -21,444 -7,374 -1,392 -562 -5,599 0 -2,049 -4,937 9 Redemptions 0 0 0 0 0 300 0 485 0 0 One to five years 1U Gross purchases 13,118 10,350 9,168 0 0 0 0 100 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shifts -34,478 -27,140 -6,004 -6,694 -2,177 -2,063 -3,379 0 -1,745 -5,292 13 Exchanges 25,811 0 17,801 5,374 1,392 562 4,905 0 22,,004499 33,,223377 Five to ten years 14 Gross purchases 2,818 4,168 3,818 0 0 0 0 0 0 400 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shifts -1,915 0 -3,145 1,248 0 0 -319 0 0 -816 17 Exchanges 3,532 0 22,,990033 22,,000000 0 0 11,,880000 0 0 11,,770000 More than ten years 18 Gross purchases 2,333 3,457 3,606 0 0 0 0 100 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shifts -269 0 -918 -1,728 0 0 -525 0 0 0 21 Exchanges 1,200 0 775 0 0 0 11,,110000 0 0 0 All maturities 22 Gross purchases 34,079 36,915 35,314 0 4,470 0 433 609 1,350 4,671 23 Gross sales 1,628 0 0 0 0 0 0 0 0 0 24 Redemptions 1,600 767 2,337 0 0 0 0 0 1,385 0 Matched transactions 25 Gross purchases 1,480,140 1,475,941 1,700,836 155,027 170,083 166,674 179,571R 195,830 216,755 226,340 2B Gross sales 1,482,467 1,475,085 1,701,309 153,534 171,959 163,490 185,71 R 198,587 213,161 228,419 Repurchase agreements 27 Gross purchases 378,374 475,447 309,276 35,158 40,989 8,527 4,130 43,286 28,825 44,569 28 Gross sales 386,257 470,723 311,898 34,377 28,196 24,851 1,075 39,896 32,980 39,876 29 Net change in U.S. Treasury securities 20,642 41,729 29,882 2,274 15,387 -13,141 -2,651 1,241 -597 7,285 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 30 262 333 122 46 83 120 Repurchase agreements 33 Gross purchases 14,565 35,063 52,696 6,155 1,941 711 1,610 1,434 3,740 3,763 34 Gross sales 14,486 34,669 52,696 5,955 2,180 1,172 1,510 1,459 3,605 3,973 35 Net change in federal agency obligations -554 -380 -1,002 170 -501 -794 -22 -71 52 -330 36 Total net change in System Open Market Account.. . 20,089 41,348 28,880 2,444 14,886 -13,935 -2,673 1,170 -54 S 6,955 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market Account; all other figures increase such holdings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1995 1995 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 Oct. 31 Nov. 30 Dec. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,050 11,050 11,050 11,050 11,050 11,051 11,050 11,050 2 Special drawing rights certificate account 10,168 10,168 10,168 10,168 10,168 10,168 10,168 10,168 3 Coin 432 433 447 446 433 460 442 424 Loans 4 To depository institutions 354 47 41 3,477 64 124 55 135 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 2,692 2,692 2,637 2,637 2,634 2,812 2,692 2,634 8 Held under repurchase agreements 0 390 0 0 0 210 0 1,100 9 Total U.S. Treasury securities 379,703 384,222 380,870 386,674 387,865 373,517 380,802 390,959 10 Bought outright2 374,228 377,865 378,858 378,439 381,141 371,227 373,819 378,197 11 Bills 183,737 183,868 183,776 183,357 186,059 181,136 183,328 183,116 12 Notes 147,881 150,588 151,013 151,013 151,013 147,418 147,881 151,013 13 Bonds 42,610 43,410 44,069 44,069 44,069 42,673 42,610 44,069 14 Held under repurchase agreements 5,475 6,357 2,012 8,235 6,724 2,290 6,983 12,762 15 Total loans and securities 382,749 387,351 383,548 392,788 390,563 376,663 383,549 394,829 16 Items in process of collection 5,712 6,938 6,396 10,279 7,534 8,015 4,319 4,769 17 Bank premises 1,146 1,152 1,152 1,153 1,153 1,139 1,146 1,126 Other assets 18 Denominated in foreign currencies' 21,424 21,058 21,069 21,080 21,091 21,376 21,049 21,099 19 All other4 9,085 9,362 10,053 10,149 10,566 9,876 8,860 11,258 20 Total assets 441,766 447,512 443,883 457,113 452,557 438,748 440,582 454,723 LIABILITIES 21 Federal Reserve notes 394,354 394,343 395,602 398,060 401,409 388,715 393,505 400,935 22 Total deposits 29,855 34,675 30,292 40,079 32,022 29,911 30,549 36,908 23 Depository institutions 22,972 28,339 24,238 28,168 25,786 22,284 24,369 29,611 24 U.S. Treasury—General account 6,439 5,782 5,556 11,383 5,779 7,018 5,703 5,979 25 Foreign—Official accounts 167 230 179 220 178 275 194 386 26 Other 278 328 318 308 279 375 282 932 27 Deferred credit items 4,690 6,035 5,341 6,015 6,289 7,049 3,832 4,538 28 Other liabilities and accrued dividends5 4,516 4,453 4,317 4,592 4,466 4,432 4,645 4,409 29 Total liabilities 433,416 439,505 435,552 448,746 444,186 430,107 432,531 446,790 CAPITAL ACCOUNTS 30 Capital paid in 3,958 3,958 3,960 3,962 3,966 3,923 3,958 3,966 31 Surplus 3,683 3,679 3,683 3,683 3,683 3,683 3,671 3,966 32 Other capital accounts 709 370 689 721 722 1,034 422 0 33 Total liabilities and capital accounts 441,766 447,512 443,883 457,113 452,557 438,748 440,582 454,723 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 496,481 503,956 508,332 501,563 500,554 488,911 506,035 500,174 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 478,321 479,323 482,152 484,322 482,173 482,369 477,946 481,044 36 LESS: Held by Federal Reserve Banks 83,966 84,980 86,550 86,262 80,765 93,654 84,441 80,109 37 Federal Reserve notes, net 394,354 394,343 395,602 398,060 401,409 388,715 393,505 400,935 Collateral held against notes, net 38 Gold certificate account 11,050 11,050 11,050 11,050 11,050 11,051 11,050 11,050 39 Special drawing rights certificate account 10,168 10,168 10,168 10,168 10,168 10,168 10,168 10,168 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 373,136 373,124 374,383 376,842 380,191 367,496 372,286 379,717 42 Total collateral 394,354 394,343 395,602 398,060 401,409 388,715 393,505 400,935 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 3. Valued monthly at market exchange rates. release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with bills maturing within ninety days. Federal Reserve Banks—and excludes securities sold and scheduled to be bought back under 5. Includes exchange-translation account reflecting the monthly revaluation at market 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 • March 1996 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 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 Oct. 31 Nov. 30 Dec. 31 1 Total loans 354 47 41 3,477 64 124 55 87 2 Within fifteen days' 348 18 12 3,472 63 48 29 85 3 Sixteen days to ninety days 6 29 29 5 76 26 2 4 Total U.S. Treasury securities 379,703 384,222 380,870 386,674 387,865 371,227 373,819 378,197 5 Within fifteen days' 20,151 19,650 15,018 18,480 23,906 11,078 5,924 7,580 6 Sixteen days to ninety days 87,792 89,756 94,251 91,994 87,359 88,044 87,792 93,738 7 Ninety-one days to one year 122,576 122,238 117,938 122,538 122,938 121,873 130,641 123,217 8 One year to five years 82,678 85,273 85,273 85,273 85,273 84,610 82,956 85,273 9 Five years to ten years 30,876 30,876 31,469 31,469 31,469 29,992 30,876 31,469 10 More than ten years 35,630 36,430 31,921 36,921 36,921 35,630 35,630 36,921 11 Total federal agency obligations 2,692 3,082 2,637 2,637 2,634 2,812 2,692 2,634 12 Within fifteen days' 372 445 3 243 240 224 372 240 13 Sixteen days to ninety days 384 704 701 461 474 680 384 474 14 Ninety-one days to one year 531 528 540 540 527 538 531 527 15 One year to five years 853 853 841 841 841 853 853 841 16 Five years to ten years 527 527 527 527 527 427 527 527 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 in NOTE. Total acceptances data have been deleted from this table because data are no longer accordance with maximum maturity of the agreements. 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 1995 IItteemm 11999922 11999933 11999944 11999955 DDeecc.. DDeecc.. DDeecc.. DDeecc.. May June July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS2222 1111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss3333 54.35 60.50 59.34 56.34 57.76 57.35 57.66 57.52 57.37 56.82 56.27 56.34 2222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss4444 54.23 60.42 59.13 56.08 57.61 57.08 57.28 57.23 57.09 56.58 56.07 56.08 3333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 54.23 60.42 59.13 56.08 57.61 57.08 57.28 57.23 57.09 56.58 56.07 56.08 4444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 53.20 59.44 58.17 55.06 56.88 56.39 56.57 56.53 56.42 55.74 55.33 55.06 5555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee6666 351.12 386.60 418.22 434.40 430.69 429.76 429.66 430.86 431.25 432.42 432.67 434.40 Not seasonally adjusted 6666 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss7777 56.06 62.37 61.13 58.01 56.82 57.13 57.49 56.93 57.29 56.54 56.56 58.01 7777 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 55.93 62.29 60.92 57.76 56.68 56.85 57.12 56.65 57.01 56.30 56.35 57.76 8888 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt 55.93 62.29 60.92 57.76 56.68 56.85 57.12 56.65 57.01 56.30 56.35 57.76 9999 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss8888 54.90 61.31 59.96 56.74 55.95 56.16 56.40 55.95 56.34 55.46 55.62 56.74 11110000 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee9999 354.55 390.59 422.51 438.98 429.29 430.26 431.30 431.08 431.62 431.57 433.18 438.98 NNNNOOOOTTTT AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS11110000 11111111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss"""" 56.54 62.86 61.34 57.90 56.76 57.04 57.39 56.82 57.16 56.40 56.40 57.90 11112222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 56.42 62.78 61.13 57.64 56.61 56.77 57.02 56.54 56.88 56.15 56.19 57.64 11113333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 56.42 62.78 61.13 57.64 56.61 56.77 57.02 56.54 56.88 56.15 56.19 57.64 11114444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 55.39 61.80 60.17 56.62 55.88 56.08 56.30 55.83 56.21 55.32 55.45r 56.62 11115555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee11112222 360.90 397.62 427.25 444.41 433.47 434.57 435.56 435.59 436.20 436.32 438.16 444.41 11116666 EEEExxxxcccceeeessssssss rrrreeeesssseeeerrrrvvvveeeessss11113333 1.16 1.06 1.17 1.28 .88 .96 1.09 .99 .95 1.08 .94 1.28 11117777 BBBBoooorrrrrrrroooowwwwiiiinnnnggggssss ffffrrrroooommmm tttthhhheeee FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee .12 .08 .21 .26 .15 .27 .37 .28 .28 .25 .20 .26 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly 8. To adjust required reserves for discontinuities that are due to regulatory changes in statistical release. Historical data starting in 1959 and estimates of the effect on required reserve requirements, a multiplicative procedure is used to estimate what required reserves 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. Break- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve adjusted required reserves include required reserves against transactions deposits and nonper- System, Washington, DC 20551. sonal time and savings deposits (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus changes in reserve requirements. (See also table 1.10.) (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all adjusted required reserves (line 4) plus excess reserves (line 16). those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, difference between current vault cash and the amount applied to satisfy current reserve break-adjusted total reserves (line 1) less total borrowings of depository institutions from the requirements. Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no 5. Extended credit consists of borrowing at the discount window under the terms and adjustments to eliminate the effects of discontinuities associated with regulatory changes in conditions established for the extended credit program to help depository institutions deal reserve requirements. with sustained liquidity pressures. Because there is not the same need to repay such 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve borrowing promptly as with traditional short-term adjustment credit, the money market effect requirements. of extended credit is similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for component of the money stock, plus (3) (for all quarterly reporters on the "Report of all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve difference between current vault cash and the amount applied to satisfy current reserve requirements. Since the introduction of contemporaneous reserve requirements in February requirements. 1984, currency and vault cash figures have been measured over the computation periods 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess ending on Mondays. 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 • March 1996 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1995' Item 1992 1993 1994 1995 Dec. Dec. Dec. Dec. Sept. Oct. Nov. Dec. Seasonally adjusted Measures2 1 Ml 1,024.4 1,128.6 1,148.0 1,122.9 1,139.8 1,129.9 1,126.5 1,122.9 2 M2 3,515.3 3,583.6 3,617.0' 3,780.6 3,756.8 3,753.8 3,761.6 3,780.6 3 M3 4,182.9 4,242.3 4,303.9 4,563.5 4,534.0 4,546.6 4,550.0 4,563.5 4 L 5,069.2r 5,154.4r 5,283.9' n.a. 5,624.6 5,645.6 5,648.3 n.a. 5 Debt 11,881.7' 12,516.4' 13,153.2' n.a. 13,704.1 13,744.3 13,804.2 n.a. MI components 6 Currency" 292.8 322.1 354.5 372.5 369.1 370.5 371.0 372.5 7 Travelers checks4 8.1 7.9 8.4 8.9 8.8 8.8 8.8 8.9 8 Demand deposits5 338.9 383.9 382.2 389.1 389.8 387.3 387.0 389.1 9 Other checkable deposits6 384.6 414.7 402.9 352.5 372.0 363.4 359.7 352.5 Nontransaction components 10 In M27 2,490.9 2,455.0 2,468.9 2,657.7 2,617.0 2,623.9 2,635.2 2,657.7 11 In M3 only8 667.6 658.7 687.0 782.9 777.2 792.8 788.4 782.9 Commercial banks 12 Savings deposits, including MMDAs 754.7 785.8 752.3 775.6 746.7 753.7 760.6 775.6 13 Small time deposits9 508.1 468.6 502.6 572.4 570.6 571.2 572.5 572.4 14 Large time deposits10' 11 286.7 271.2 296.6 343.5 324.8 336.3 341.5 343.5 Thrift institutions 15 Savings deposits, including MMDAs 428.9 429.8 391.9 355.7 358.5 358.5 356.4 355.7 16 Small time deposits9 361.1 316.5 318.3 360.8 358.2 359.0 360.1 360.8 17 Large time deposits10 67.1 61.6 64.9 75.4 74.0 75.1 75.3 75.4 Money market mutual funds 18 General purpose and broker-dealer 356.9 360.1 389.0 476.9 462.6 466.4 471.3 476.9 19 Institution-only 200.2 198.1 180.8 216.6 213.5 215.8 214.8 216.6 Debt components 20 Federal debt 3,068.6 3,328.3 3,497.6 n.a. 3,623.8 3,632.6 3,645.8 n.a. 21 Nonfederal debt 8,813.1r 9,188.1' 9,655.6' n.a. 10,080.3 10,111.7 10,158.4 n.a. Not seasonally adjusted Measures2 22 Ml 1,046.0 1,153.7 1,173.7 1,149.0 1,135.8 1,129.5 1,134.9 1,149.0 23 M2 3,533.6 3,606.1 3,640.5 3,804.6 3,746.7 3,750.9 3,770.6 3,804.6 24 M3 4,201.4 4,266.1 4,330.0 4,590.9 4,521.5 4,541.9 4,566.4 4,590.9 25 L 5,099. lr 5,189.1' 5,321.8' n.a. 5,602.8 5,634.8 5,673.9 n.a. 26 Debt 11,883.2r 12,509.3' 13,145.8' n.a. 13,657.0 13,703.1 13,767.7 n.a. Ml components 27 Currency3 295.0 324.8 357.6 376.0 369.2 369.9 371.6 376.0 28 Travelers checks4 7.8 7.6 8.1 8.6 9.3 8.9 8.7 8.6 29 Demand deposits5 354.4 401.8 400.3 407.7 388.2 390.8 395.6 407.7 30 Other checkable deposits6 388.9 419.4 407.6 356.7 369.1 359.8 359.1 356.7 Nontransaction components 31 In M27 2,487.7 2,452.5 2,466.8 2,655.6 2,610.9 2,621.4 2,635.8 2,655.6 32 In M3 only8 667.7 660.0 689.5 786.3 774.8 791.1 795.8 786.3 Commercial banks 33 Savings deposits, including MMDAs 752.9 784.3 751.1 774.6 746.9 753.9 762.9 774.6 34 Small time deposits9 507.8 468.2 502.2 571.8 571.1 571.9 572.1 571.8 35 Large time deposits10, " 286.2 270.8 296.3 343.2 326.0 337.1 343.3 343.2 Thrift institutions 36 Savings deposits, including MMDAs 427.9 429.0 391.2 355.2 358.6 358.6 357.4 355.2 37 Small time deposits9 360.9 316.2 318.1 360.4 358.5 359.4 359.9 360.4 38 Large time deposits10 67.0 61.5 64.8 75.4 74.2 75.3 75.7 75.4 Money market mutual funds 39 General purpose and broker-dealer 355.1 358.3 387.1 474.5 454.9 459.1 467.0 474.5 40 Institution-only 201.7 200.0 183.1 219.6 209.0 212.9 217.4 219.6 Repurchase agreements and Eurodollars 41 Overnight and continuing 83.2 96.5 117.2 119.0 120.9 118.5 116.4 119.0 42 Term 127.8 143.9 157.8 162.5 178.8 178.3 172.7 162.5 Debt components 43 Federal debt 3,069.8 3,329.5 3,499.0 n.a. 3,606.8 3,610.1 3,635.9 n.a. 44 Nonfederal debt 8,813.4' 9,179.8' 9,646.9r n.a. 10,050.2 10,093.0 10,131.8 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) weekly these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term statistical release. Historical data starting in 1959 are available from the Money and Reserves Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve separately, and then adding this result to M3. System, Washington, DC 20551. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial 2. Composition of the money stock measures and debt is as follows: sectors—the federal sector (U.S. government, not including government-sponsored enter- Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of prises or federally related mortgage pools) and the nonfederal sectors (state and local depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all governments, households and nonprofit organizations, nonfinancial corporate and nonfarm commercial banks other than those owed to depository institutions, the U.S. government, and noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and foreign banks and official institutions, less cash items in the process of collection and Federal corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of which are derived from the Federal Reserve Board's flow of funds accounts, are breakwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, adjusted (that is, discontinuities in the data have been smoothed into the series) and credit union share draft accounts, and demand deposits at thrift institutions. Seasonally month-averaged (that is, the data have been derived by averaging adjacent month-end levels). adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository OCDs, each seasonally adjusted separately. institutions. M2: Ml plus (1) overnight (and continuing contract) repurchase agreements (RPs) issued 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. by all depository institutions and overnight Eurodollars issued to U.S. residents by foreign Travelers checks issued by depository institutions are included in demand deposits. branches of U.S. banks worldwide, (2) savings (including MMDAs) and small time deposits 5. Demand deposits at commercial banks and foreign-related institutions other than those (time deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in owed to depository institutions, the U.S. government, and foreign banks and official instituboth taxable and tax-exempt general purpose and broker-dealer money market funds. Ex- tions, less cash items in the process of collection and Federal Reserve float. cludes individual retirement accounts (IRAs) and Keogh balances at depository institutions 6. Consists of NOW and ATS account balances at all depository institutions, credit union and money market funds. Also excludes all balances held by U.S. commercial banks, money share draft account balances, and demand deposits at thrift institutions. market funds (general purpose and broker-dealer), foreign governments and commercial 7. Sum of (1) overnight RPs and overnight Eurodollars, (2) money market fund balances banks, and the U.S. government. Seasonally adjusted M2 is computed by adjusting its non-Mi (general purpose and broker-dealer), (3) savings deposits (including MMDAs), and (4) small component as a whole and then adding this result to seasonally adjusted Ml. 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 Kingdom that represents the estimated amount of overnight RPs and Eurodollars held by institutionand Canada, and (3) balances in both taxable and tax-exempt, institution-only money market only money market funds. funds. Excludes amounts held by depository institutions, the U.S. government, money market 9. Small time deposits—including retail RPs—are those issued in amounts of less than funds, and foreign banks and official institutions. Also excluded is the estimated amount of $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are overnight RPs and Eurodollars held by institution-only money market funds. Seasonally subtracted from small time deposits. adjusted M3 is computed by adjusting its non-M2 component as a whole and then adding this 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those result to seasonally adjusted M2. booked at international banking facilities. L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury 11. Large time deposits at commercial banks less those held by money market funds, securities, commercial paper, and bankers acceptances, net of money market fund holdings of 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

A16 Domestic Nonfinancial Statistics • March 1996 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1995R Item 1993 1994 Dec. Dec. Apr. May June July Aug. Sept. Oct. Nov. Dec. Interest rates (annual effective yields)2 INSURED COMMERCIAL BANKS 2 1 S N a e v g i o n t g i s a b d le e p o o r s d it e s r 3 of withdrawal accounts 2 1 . . 4 8 6 6 2 1 . . 9 9 2 6 2 3 . . 0 1 1 4 2 3 . . 0 1 0 9 3 1 . . 1 9 7 7 3 1 . . 1 9 3 3 3 1 . . 1 9 2 3 3 1 . . 1 9 4 4 3 1 . . 1 9 1 3 3 1 . . 1 9 3 5 3 1 . . 1 9 0 2 Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 2.65 3.79 4.29 4.25 4.20 4.17 4.10 4.10 4.11 4.12 4.11 4 92 to 182 days 2.91 4.44 4.94 4.93 4.81 4.77 4.77 4.75 4.75 4.74 4.69 5 183 days to 1 year 3.13 5.12 5.61 5.49 5.27 5.18 5.15 5.14 5.15 5.12 5.03 6 7 M M o o r r e e t t h h a a n n 2 1 [ A y ea y r e a to rs 2 '/i years 4 3 . . 2 5 8 5 5 6 . . 7 3 4 0 6 6 . . 0 3 5 7 5 6. . 1 8 1 2 5 5 . . 5 7 3 9 5 5 . . 3 6 8 2 5 5 . . 3 6 9 3 5 5. . 3 6 2 0 5 5. . 3 5 1 6 5 5 . . 4 2 9 7 5 5 . . 4 1 1 8 BIF-INSURED SAVINGS BANKS4 9 8 N Sa e v g i o n t g ia s b d le e p o o r s d i e ts r 3 of withdrawal accounts 2 1 . . 6 8 3 7 2 1 . . 8 9 7 4 2 1 . . 9 9 4 9 2 1 . . 9 9 3 7 2 1 . . 9 9 7 8 2 1 . . 9 9 7 7 2 1 . . 9 9 6 8 2 1 . . 9 9 6 8 2 1 . . 9 9 7 7 2 1 . . 9 9 9 4 2 1 . . 9 9 9 1 Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 2.81 3.80 4.19 4.27 4.24 4.28 4.34 4.29 4.34 4.45 4.44 11 92 to 182 days 3.02 4.89 5.39 5.34 5.22 5.16 5.12 5.08 5.06 5.02 4.95 12 183 days to 1 year 3.31 5.52 5.87 5.82 5.61 5.47 5.45 5.35 5.32 5.28 5.19 13 More than 1 year to 2 Vi years 3.67 6.09 6.25 6.09 5.78 5.62 5.60 5.51 5.50 5.46 5.32 14 More than 2 Vi years 4.62 6.43 6.60 6.33 5.99 5.82 5.78 5.74 5.69 5.64 5.46 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts 305,237 304,896 288,118 275,446 276,406 274,140 267,644 253,174 258,411 259,259 252,581 lb Savings deposits3 767,035 737,068 701,152 715,843 721,498 726,697 735,930 744,839 747,943 767,431 793,062 1/ Personal 598,276 580,438 552,941 561,875 566,220 570,299 575,204 584,239 587,235 599,787 627,904 18 Nonpersonal 168,759 156,630 148,211 153,968 155,279 156,398 160,726 160,600 160,707 167,644 165,159 Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 29,362 32,265 31,626 31,655 32,258 33,142 30,937 29,804 29,940 31,083 32,652 20 92 to 182 days 109,050 96,650 94,853 93,084 92,364 91,975 90,796 92,220 94,418 97,401 96,704 21 183 days to 1 year 145,386 163,062 180,583 185,983 189,110 189,011 189,565 189,338 188,859 188,043 187,580 22 More than 1 year to 2'/5 years 139,781 164,395 190,756 195,557 198,805 202,467 204,453 203,548 206,993 211,169 211,399 23 More than 2 Vl years 180,461 192,712 195,385 194,400 195,689 195,623 201,306 200,182 200,201 202,357 203,390 24 IRA and Keogh plan deposits 144,011 144,097 147,829 149,496 149,488 150,426 150,648 149,570 151,094 151,869 152,446 BIF-INSURED SAVINGS BANKS4 25 Negotiable order of withdrawal accounts 11,191 11,175 10,965 10,967 11,237 11,147 10,999 11,408 11,317 11,613 12,620 2b Savings deposits3 80,376 70,082 67,423 67,349 66,952 66,409 66,478 69,752 69,636 70,265 71,150 21 Personal 77,263 67,159 64,163 64,127 63,736 63,194 63,149 66,403 66,193 66,688 67,698 28 Nonpersonal 3,113 2,923 3,259 3,222 3,216 3,215 3,329 3,349 3,443 3,577 3,452 Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 2,746 2,144 1,783 1,804 1,555 1,769 1,856 1,739 1,768 1,903 2,106 30 92 to 182 days 12,974 11,361 11,254 11,323 10,939 11,030 11,079 11,258 11,231 11,848 12,677 31 183 days to 1 year 17,469 18,391 21,070 21,491 21,545 21,969 22,294 24,837 25,036 25,887 26,934 32 More than 1 year to 2'/5 years 16,589 17,787 23,402 23,996 24,413 24,876 25,029 27,825 27,755 28,247 28,689 33 More than 2 V2 years 20,501 21,293 22,662 22,548 22,733 22,713 22,563 23,351 23,470 23,574 24,101 34 IRA and Keogh plan accounts 19,791 19,008 20,157 20,200 20,196 20,286 20,333 21,913 21,784 21,758 21,768 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 day 4. Includes both mutual and federal savings banks. 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 1995 BBaannkk ggrroouupp,, oorr ttyyppee ooff ddeeppoossiitt 1199992222 1199993322 1199994422 May June Julyr Aug. Sept.r Oct. DEBITS Seasonally adjusted Demand deposits3 1 All insured banks 313,128.1 334,784.1 369,029.1 423,264.5 413,335.1 391,053.7 407,389.4r 397,843.6 409,420.7 2 Major New York City banks 165,447.7 171,224.3 191,168.8 217,587.7 203,342.3 197,712.2 206,835.9 207,576.7 210,389.5 3 Other banks 147,680.4 163,559.7 177,860.3 205,676.7 209,992.8 193,341.5 200,553.5r 190,266.9 199,031.2 4 Other checkable deposits4 3,780.3 3,481.5 3,798.6 4,236.4 4,142.3 3,593.7 4,236. lr 4,366.8 4,643.3 5 Savings deposits (including MMDAs)5 3,309.1 3,497.4 3,766.3 4,022.4 4,326.8 3,986.7 4,745.4r 4,898.4 5,336.5 DEPOSIT TURNOVER Demand deposits3 6 All insured banks 825.9 785.9 817.4 943.3 901.8 849.3 887.9 858.0 896.4 7 Major New York City banks 4,795.3 4,198.1 4,481.5 5,170.7 4,718.9 4,624.7 4,970.9 5,018.0 5,130.2 8 Other banks 428.7 424.6 435.1 505.8 505.7 462.9 480.7 450.5 478.8 9 Other checkable deposits4 14.4 11.9 12.6 15.0 15.1 12.9 15.5 16.3 17.9 10 Savings deposits (including MMDAs)5 4.7 4.6 4.9 5.6 6.0 5.5 6.5 6.6 7.1 DEBITS Not seasonally adjusted Demand deposits3 11 All insured banks 313,344.9 334,899.2 369,121.8 412,762.0 425,855.1 390,226.6 421,875.3r 395,203.2 409,045.5 12 Major New York City banks 165,595.0 171,283.5 191,226.0 207,259.8 209,349.5 196,873.1 213,958.6 207,994.2 212,506.0 13 Other banks 147,749.9 163,615.7 177,895.7 205,502.2 216,505.6 193,353.5 207,916.7r 187,209.0 196,539.5 14 Other checkable deposits4 3,783.6 3,481.7 3,795.6 4,070.1 4,261.6 3,525.4 4,203.3r 4,431.9 4,519.6 15 Savings deposits (including MMDAs)5 3,310.0 3,498.3 3,764.4 3,982.3 4,432.7 4,054.1 4,750. lr 4,849.1 5,082.6 DEPOSIT TURNOVER Demand deposits3 16 All insured banks 826.1 786.1 818.2 936.5 941.3 848.2 936.7 856.4 884.4 17 Major New York City banks 4,803.5 4,197.9 4,490.3 5,095.1 4,972.0 4,657.5 5,343.0 5,069.5 5,149.9 18 Other banks 428.8 424.8 435.3 513.6 527.7 462.8 506.7r 445.3 466.6 19 Other checkable deposits4 14.4 11.9 12.6 14.5 15.7 12.9 15.6 16.7 17.7 20 Savings deposits (including MMDAs)5 4.7 4.6 4.9 5.6 6.1 5.6 6.5 6.6 6.8 1. Historical tables containing revised data for earlier periods can be obtained from the 4. As of January 1994, other checkable deposits (OCDs), previously defined as automatic Publications Section, Division of Support Services, Board of Governors of the Federal transfer to demand deposits (ATSs) and negotiable order of withdrawal (NOW) accounts, Reserve System, Washington, DC 20551. were expanded to include telephone and preauthorized transfer accounts. This change Data in this table also appear in the Board's G.6 (406) monthly statistical release. For 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 • March 1996 1.26 ASSETS AND LIABILITIES OF COMMERCIAL BANKS1 Billions of dollars Monthly averages Wednesday figures Account 1994 1995r 1995 Dec. June July Aug. Sept. Oct. Nov. Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 ALL COMMERCIAL Seasonally adjusted BANKING INSTITUTIONS Assets 1 Bank credit 3,319.1r 3,512.1 3,529.1 3,543.0 3,563.0 3,565.9 3,570.2 3,574.0 3,563.8 3,564.2 3,577.9 3,577.0 2 Securities in bank credit 949.4r 986.0 976.6 982.5 987.0 985.9 982.1 983.3 980.4 985.6 984.5 985.3 3 U.S. government securities 728.4r 711.0 705.8 710.4 707.8 712.6 712.6 708.7 707.1 709.0 710.2 709.0 4 Other securities 221.0 275.0 270.8 272.1 279.2 273.3 269.5 274.6 273.3 276.6 274.3 276.2 5 Loans and leases in bank credit2 . . . 2,369.6r 2,526.1 2,552.5 2,560.5 2,576.1 2,580.0 2,588.1 2,590.7 2,583.3 2,578.6 2,593.4 2,591.8 6 Commercial and industrial 643.2 692.3 697.8 699.0 702.9 703.5 708.3 710.8 710.1 709.8 709.7 710.5 7 Real estate 999.9r 1,051.6 1,062.9 1,068.2 1,072.1 1,074.8 1,076.3 1,073.6 1,074.5 1,073.1 1,073.8 1,071.6 8 Revolving home equity 75.4 77.6 78.0 78.4 78.7 78.7 79.1 79.4 78.9 79.3 79.5 79.7 9 Other 924.5 974.0 984.9 989.8 993.4 996.2 997.2 994.2 995.6 993.9 994.3 991.9 10 Consumer 451.9 478.1 481.1 486.3 489.2 489.1 491.2 492.8 489.5 490.5 492.8 495.9 11 Security3 74.7r 89.7 89.2 84.6 87.2 84.8 84.0 80.2 78.8 73.1 83.9 80.3 12 Other 200. r 214.4 221.4 222.4 224.6 227.7 228.3 233.3 230.4 232.1 233.3 233.5 13 Interbank loans4 172.4 187.2 195.1 192.3 196.2 200.1 200.6 198.6 192.0 188.8 197.2 207.6 14 Cash assets5 208.9 211.5 214.3 209.2 212.6 220.8 211.7 221.2 218.0 210.9 222.8 221.0 15 Other assets6 222.9r 222.9 224.6 224.4 228.3 227.1 226.3 230.4 231.8 231.1 230.9 225.9 16 Total assets7 3,867.1r 4,076.8 4,106.0 4,112.1 4,143.3 4,157.2 4,152.4 4,167.9 4,149.4 4,139.0 4,172.6 4,175.2 Liabilities 17 Deposits 2,526.8 2,584.7 2,610.0 2,616.1 2,629.3 2,643.8 2,635.3 2,648.8 2,646.1 2,636.7 2,650.0 2,646.2 18 Transaction 797. lr 781.3 793.5 784.9 782.4 780.2 765.1 770.3 770.3 762.6 773.2 771.2 19 Nontransaction 1,729.8 1,803.4 1,816.6 1,831.2 1,846.9 1,863.6 1,870.2 1,878.5 1,875.8 1,874.1 1,876.8 1,874.9 20 Large time 362.6 395.9 400.8 407.3 413.9 423.0 423.7 421.3 421.6 422.5 424.2 418.1 21 Other 1,367.2 1,407.4 1,415.7 1,424.0 1,433.1 1,440.6 1,446.5 1,457.1 1,454.2 1,451.6 1,452.6 1,456.8 22 Borrowings 607.3r 677.0 693.2 673.7 677.9 675.2 656.0 673.7 639.5 654.4 691.8 690.7 23 From banks in the U.S 176.1 187.9 201.8 197.5 201.3 206.1 202.6 205.9 196.8 195.4 205.1 216.4 24 From nonbanks in the U.S 431.2r 489.1 491.4 476.2 476.6 469.1 453.3 467.7 442.6 459.0 486.7 474.3 25 Net due to related foreign offices 225.6 243.7 236.4 247.9 254.0 259.1 263.0 258.6 257.2 251.9 259.3 258.3 26 Other liabilities8 176.4r 223.8 213.5 215.1 222.9 220.0 219.1 222.0 228.9 228.4 218.5 216.0 27 Total liabilities 3,536.2r 3,729.2 3,753.2 3,752.8 3,784.1 3,798.2 3,7735 3,803.1 3,771.7 3,771.4 3,819.6 3,811.2 28 Residual (assets less liabilities)9 330^ 347.7 352.8 359.3 359.2 359.0 378.9 364.8 377.7 367.6 353.0 363.9 Not seasonally adjusted Assets 29 Bank credit 3,335.8r 3,508.5 3,515.8 3,533.1 3,558.1 3,564.4 3,579.7 3,590.1 3,581.3 3,581.2 3,596.9 3,586.6 30 Securities in bank credit 945.1' 986.7 972.0 980.1 982.6 983.7 982.9 977.0 982.2 981.8 977.8 969.1 31 U.S. government securities 727.6 710.7 701.9 711.2 709.6 711.3 713.5 707.7 711.8 712.0 710.9 701.5 32 Other securities 217.5 276.0 270.1 268.9 273.0 272.4 269.4 269.3 270.4 269.8 266.9 267.6 33 Loans and leases in bank credit2 ... 2,390.7r 2,521.8 2,543.8 2,553.0 2,575.5 2,580.7 2,596.8 2,613.1 2,599.1 2,599.4 2,619.2 2,617.5 34 Commercial and industrial 643.9' 694.2 697.1 695.6 699.1 701.0 707.9 711.2 708.6 706.9 711.7 713.2 35 Real estate 1,006.3 1,051.3 1,062.3 1,067.5 1,073.3 1,077.5 1,081.5 1,080.6 1,082.3 1,082.2 1,080.7 1,078.0 36 Revolving home equity 75.4 77.7 78.1 78.5 79.0 79.3 79.5 79.4 79.2 79.4 79.4 79.5 37 Other 930.8 973.7 984.2 988.9 994.3 998.2 1,001.9 1,001.2 1,003.1 1,002.9 1,001.3 998.5 38 Consumer 456.8 475.5 478.8 485.8 490.3 489.1 491.3 498.1 491.0 493.8 498.8 503.7 39 Security3 19.9 85.6 83.8 81.5 85.5 84.2 86.3 85.2 83.1 81.4 89.5 83.9 40 Other 203.8r 215.1 221.9 222.7 227.2 228.9 229.8 238.1 234.2 235.0 238.5 238.7 41 Interbank loans4 183.0 184.2 190.9 187.6 192.5 198.4 202.4 211.2 206.2 202.0 209.7 214.9 42 Cash assets5 222.7 209.6 211.2 201.5 214.1 221.2 218.1 236.1 220.0 218.2 235.5 243.3 43 Other assets6 228.4r 221.5 224.2 226.2 228.8 229.0 229.0 235.8 236.4 237.0 235.0 232.3 44 Total assets7 3,913.4r 4,066.9 4,085.5 4,091.6 4,136.5 4,156.5 4,172^ 4^16.6 4,1873 4,181.7 4^20.4 4,220.5 Liabilities 45 Deposits 2,559.6r 2,581.8 2,600.9 2,602.0 2,625.7 2,639.3 2,650.6 2,680.8 2,667.1 2,660.0 22,,667755..00 2,679.9 46 Transaction 832.7 775.7 784.2 768.9 779.6 777.9 779.5 805.9 788.2 784.4 880044..11 815.0 47 Nontransaction 1,726.8 1,806.1 1,816.7 1,833.2 1,846.1 1,861.5 1,871.1 1,875.0 1,878.9 1,875.6 1,871.0 1,864.9 48 Large time 361.1 398.4 400.1 408.0 413.8 420.8 422.9 419.6 421.1 422.3 421.7 416.1 49 Other 1,365.7 1,407.7 1,416.6 1,425.2 1,432.3 1,440.7 1,448.2 1,455.4 1,457.7 1,453.3 1,449.2 1,448.8 50 Borrowings 619^ 684.0 694.1 682.6 687.8 682.5 676.3 687.0 671.8 668.3 707.2 690.4 51 From banks in the U.S 185.0 187.8 198.1 195.3 199.2 203.6 207.6 216.6 211.4 207.3 215.0 220.2 52 From nonbanks in the U.S 434.9r 496.2 496.0 487.4 488.6 478.9 468.7 470.4 460.3 461.0 492.1 470.2 53 Net due to related foreign offices 230.3r 237.8 233.9 243.0 247.6 258.4 262.7 264.0 252.3 259.6 259.5 274.4 54 Other liabilities8 179.3r 219.0 210.6 214.4 222.5 221.5 225.0 225.8 234.8 233.3 220.4 219.2 55 Total liabilities 3,589. lr 3,722.5 3,739.5 3,742.1 3,783.6 3,801.7 3314.6 3,857.6 3326.0 3,821.2 3362.1 3363.9 56 Residual (assets less liabilities)9 324.3r 344.4 346.0 349.4 352.9 354.8 357.9 358.9 361.3 360.5 358.4 356.7 Footnotes appear on followingp age. 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 Dec. lune July Aug. Sept. Oct. Nov. Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 DOMESTICALLY CHARTERED Seasonally adjusted COMMERCIAL BANKS Assets 57 Bank credit 2,968.1 3,098.9 3,110.5 3,123.7 3,139.2 3,146.4 3,154.4 3,162.2 3,150.0 3,152.7 3,165.1 3,168.3 58 Securities in bank credit 868.6r 858.4 849.2 852.4 857.3 856.6 855.3 856.6 853.2 857.1 857.3 859.5 59 U.S. government securities 669.4' 646.9 641.4 643.0 643.2 648.5 648.4 645.4 643.0 645.1 646.3 647.1 60 Other securities 199.2 211.5 207.8 209.3 214.0 208.1 206.9 211.1 210.2 212.0 211.0 212.4 61 Loans and leases in bank credit2 2,099.5r 2,240.6 2,261.3 2,271.3 2,281.9 2,289.8 2,299.1 2,305.6 2,296.7 2,295.6 2,307.8 2,308.8 62 Commercial and industrial 480.5 519.0 523.4 524.4 526.5 528.8 532.2 531.8 530.7 529.8 530.9 532.8 63 Real estate 959.0 1,013.4 1,025.0 1,031.1 1,035.4 1,037.8 1,039.8 1,038.0 1,039.0 1,037.6 1,037.9 1,036.0 64 Revolving home equity 75.4 77.6 78.0 78.4 78.7 78.6 79.1 79.4 78.9 79.3 79.5 79.7 65 Other 883.6 935.8 946.9 952.7 956.7 959.2 960.7 958.6 960.1 958.3 958.5 956.3 66 Consumer 451.9 478.1 481.1 486.3 489.2 489.1 491.2 492.8 489.5 490.5 492.8 495.9 67 Security3 45.4 55.4 52.1 50.4 50.8 50.4 52.7 55.3 53.5 50.9 57.5 56.2 68 Other 162.7 174.6 179.7 179.1 180.0 183.7 183.2 187.7 184.1 186.9 188.7 188.0 69 Interbank loans4 149.4 164.8 173.2 165.5 168.6 168.4 170.4 176.0 168.4 164.5 176.9 182.6 70 Cash assets5 181.9 184.5 187.5 182.7 187.1 194.3 183.0 192.3 189.4 182.9 193.4 192.0 71 Other assets6 167.7 170.3 172.6 172.0 173.6 174.2 173.6 178.3 178.5 176.3 179.9 176.1 72 Total assets7 3,410.9 3,561.5 3,586.7 3,587.2 3,611.8 3,626.7 3,625.2 3,652.5 3,630.1 3,620.4 3,659.2 3,662.8 Liabilities 73 Deposits 2,369.7r 2,424.3 2,447.5 2,448.3 2,457.3 2,468.3 2,465.8 2,483.2 2,478.7 2,470.9 2,482.7 2,482.7 74 Transaction 786.8 772.1 784.0 775.5 773.3 771.1 755.4 760.1 760.3 752.4 763.4 760.2 75 Nontransaction 1,582.8 1,652.2 1,663.5 1,672.8 1,684.0 1,697.2 1,710.4 1,723.1 1,718.4 1,718.6 1,719.3 1,722.5 76 Large time 219.3 247.6 247.9 248.9 252.5 258.4 265.8 266.2 265.5 266.6 266.9 265.2 77 Other 1,363.5 1,404.6 1,415.6 1,423.9 1,431.4 1,438.8 1,444.6 1,456.8 1,452.9 1,451.9 1,452.3 1,457.3 78 Borrowings 506.7 563.6 573.1 556.0 562.0 565.3 552.9 570.0 539.2 548.5 588.2 586.8 79 From banks in the U.S 161.8 168.5 182.0 179.2 182.9 186.9 183.8 188.1 180.3 177.9 188.0 197.7 80 From nonbanks in the U.S 344.9 395.0 391.1 376.8 379.1 378.5 369.1 381.9 358.9 370.6 400.1 389.1 81 Net due to related foreign offices.... 77.4 90.2 82.2 91.0 93.4 94.7 90.1 92.5 85.3 86.9 92.4 95.6 82 Other liabilities8 127.9 146.7 139.1 139.3 145.8 142.6 143.2 147.4 150.1 150.6 145.2 144.8 83 Total liabilities 3,081.7r 3,224.7 3,241.9 3,234.5 3,258.5 3,270.8 3,252.0 3,293.0 3,253.2 3,256.9 3,308.4 3309.9 84 Residual (assets less liabilities)9 329.2r 336.7 344.7 352.6 353.2 355.8 373.2 359.5 376.9 363.5 350.8 352.9 Not seasonally adjusted Assets 85 Bank credit 2,975.8 3J099.8 3,100.7 3,115.6 3,137.6 3,147.4 3,163.4 3,170.4 3,162.4 3,162.0 3,176.6 3,168.8 86 Securities in bank credit 862.4 861.4 845.6 850.2 854.3 853.8 855.6 849.3 853.8 851.9 850.1 843.6 87 U.S. government securities 666.3 647.8 638.4 644.1 645.5 647.0 647.9 642.1 645.5 644.8 644.5 637.6 88 Other securities 196.1 213.6 207.2 206.1 208.8 206.8 207.7 207.2 208.3 207.1 205.6 206.0 89 Loans and leases in bank credit2 2,113.5r 2238.4 2,255.2 2,265.4 2,283.3 2,293.6 2,307.8 2,321.0 2,308.6 2,310.1 2,326.6 2,325.1 90 Commercial and industrial 480.2 520.8 522.2 520.6 523.2 527.4 532.1 531.2 529.4 527.6 531.6 533.0 91 Real estate 965.5r 1,013.2 1,024.4 1,030.2 1,036.5 1,040.5 1,044.9 1,045.1 1,046.5 1,046.6 1,045.1 1,042.7 92 Revolving home equity 75.4 77.6 78.0 78.5 79.0 79.3 79.5 79.4 79.1 79.4 79.4 79.5 93 Other 890.0 935.6 946.4 951.7 957.4 961.2 965.3 965.6 967.3 967.3 965.6 963.1 94 Consumer 456.8 475.5 478.8 485.8 490.3 489.1 491.3 498.1 491.0 493.8 498.8 503.7 95 Security3 45.9 54.2 50.1 49.3 50.9 51.1 54.4 55.9 54.6 53.3 59.0 55.2 96 Other 165.0 174.6 179.7 179.5 182.4 185.4 185.2 190.8 187.2 188.7 192.1 190.6 97 Interbank loans4 157.5 163.1 168.7 162.0 163.9 165.5 173.5 186.0 181.6 175.2 188.2 185.4 98 Cash assets5 195.6 182.0 184.2 174.3 187.2 193.8 189.5 207.1 191.9 190.3 206.0 213.4 99 Other assets6 170.0 169.6 173.0 173.0 175.1 176.4 175.3 180.6 179.6 177.9 181.3 180.2 100 Total assets7 3,442.4 3,557.6 3,570.0 3,568.1 3,606.9 3,626.7 3,645.2 3,687.6 3,658.9 3,648.7 3,695.6 3,691.2 Liabilities 101 Deposits 2,402.5r 2,418.4 2,438.5 2,434.6 2,454.6 2,467.8 2,482.5 2,515.1 2,501.0 2,494.2 2,507.4 2,514.4 102 Transaction 822.2 766.6 774.7 759.5 769.9 768.5 769.7 795.4 778.4 774.2 793.8 803.5 103 Nontransaction 1,580.2 1,651.8 1,663.8 1,675.1 1,684.6 1,699.3 1,712.8 1,719.7 1,722.6 1,720.0 1,713.6 1,710.9 104 Large time 217.7 247.2 248.0 250.7 253.5 259.4 265.9 264.1 265.6 265.9 264.2 261.5 105 Other 1,362.5 1,404.6 1,415.9 1,424.4 1,431.1 1,439.9 1,446.9 1,455.6 1,457.0 1,454.1 1,449.4 1,449.4 106 Borrowings 518.0 568.6 571.3 562.9 571.2 572.9 574.3 581.6 567.3 562.4 600.7 586.6 107 From banks in the U.S 169.3 168.2 178.0 177.2 180.3 185.3 188.2 197.0 192.9 187.7 196.0 200.4 108 From nonbanks in the U.S 348.7 400.5 393.3 385.7 390.9 387.5 386.1 384.6 374.4 374.7 404.7 386.2 109 Net due to related foreign offices .... 74.3 89.6 81.8 89.1 88.7 92.0 88.4 89.3 82.5 85.7 88.7 94.0 110 Other liabilities8 129.1 142.9 138.0 138.1 145.5 145.2 147.9 148.5 152.7 151.8 146.2 145.3 111 Total liabilities 3,123.8 3,219.5 3,229.6 3,224.7 3,259.9 3,277.8 3,293.1 3,334.5 3,303.4 3,294.0 3,343.0 3,340.3 112 Residual (assets less liabilities)9 318.5r 338.1 340.3 343.4 346.9 348.9 352.1 353.1 355.4 354.7 352.6 350.8 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • March 1996 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 condition commercial banks in the United States. (large domestic); other domestically chartered commercial banks (small domestic); branches 5. Includes vault cash, cash items in process of collection, demand balances due from and agencies of foreign banks; New York State investment companies, and Edge Act and depository institutions in the United States, balances due from Federal Reserve Banks, and agreement corporations (foreign-related institutions). Excludes international banking facili- other cash assets. ties. Data are Wednesday values, or pro rata averages of Wednesday values. Large domestic 6. Excludes the due-from position with related foreign offices, which is included in lines banks constitute a universe; data for small domestic banks and foreign-related institutions are 25, 53, 81, and 109. estimates based on weekly samples and on quarter-end condition reports. Data are adjusted 7. Excludes unearned income, reserves for losses on loans and leases, and reserves for for breaks caused by reclassifications of assets and liabilities. transfer risk. Loans are reported gross of these items. 2. Excludes federal funds sold to, reverse repurchase agreements with, and loans to 8. Excludes the due-to position with related foreign offices, which is included in lines 25, commercial banks in the United States. 53, 81, and 109. 3. Consists of reserve repurchase agreements with broker-dealers and loans to purchase 9. This balancing item is not intended as a measure of equity capital for use in capital and carry securities. adequacy analysis. 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 Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 ASSETS 1 Cash and balances due from depository institutions 135,624 111,258 128,292' 117,603 112,645 120,350 120,325 132,782 135,731 2 U.S. Treasury and government securities 299,893 300,140 300,710 300,094 299,211 295,945 294,078 293,721 287,130 3 Trading account 21,730 22,176 24,475 24,622 25,727 24,777 24,664 25,360 24,206 4 Investment account 278,163 277,965 276,235 275,472 273,484 271,169 269,413 268,361 262,924 5 Mortgage-backed securities' 107,042 107,153 106,431 107,743 108,360 108,567 107,276 107,841 106,509 All others, by maturity 6 One year or less 44,980 45,009 44,696 43,791 42,618 43,437 43,358 47,093 44,425 7 One year through five years 69,938 70,072 69,460 69,021 68,385' 67,784 68,222 63,798 63,346 y 8 Other se M cu o r r i e t i t e h s a n five years 1 5 2 6 4 , , 2 9 0 7 2 5 1 5 2 5 3 , , 7 8 3 6 1 8 1 5 2 5 4 , , 6 1 4 2 7 4 1 5 2 4 3 , , 9 5 1 3 7 3 1 5 2 4 3 , , 1 2 2 5 0 9 1 5 2 1 4 , , 3 9 8 3 1 7 1 5 2 0 3 , . 5 7 5 8 7 1 1 4 2 9 2 , , 6 2 2 4 9 4 1 4 2 8 2 , , 6 6 4 1 4 3 n 10 T In r v a e d s in tm g e a n c t c a o c u c n o t unt 63 1 , , 9 4 7 4 6 7 64 1 , , 2 6 3 3 7 6 64 1 , , 8 6 7 4 1 2 65 1 , , 1 8 8 0 0 6 64 1 , , 6 8 7 7 7 3 65 1 , , 3 6 5 1 3 7 65 1 , , 2 5 6 6 1 2 64 1 , , 4 9 8 5 9 5 64 1 , , 5 7 4 8 1 0 12 State and local government, by maturity 19,568 19,555 19,543 19,623 19,636 19,459 19,320 19.281 19,236 13 One year or less 5,005 5,004 5,010 5,027 5,010 4,893 4,839 4,797 4,768 14 More than one year 14,563 14,551 14.534 14,597 14,627 14,566 14,480 14,485 14,469 15 Other bonds, corporate stocks, and securities 44,409 44,682 45,327 45,557 45,041 45,894 45,942 45.207 45,304 16 Other trading account assets 59,552 57,995 57,612 56,546 56,708 57,967 56,957 55,800 56,292 17 Federal funds sold2 107,070 112,585 111,975 102,337 101,015 107,412 102,984 118,032 110,392 18 To commercial banks in the United States 69,511 72,904 73,241 66,752 66,340 70,763 67,252 80,700 75,328 19 To nonbank brokers and dealers in securities 32,666 35,125 34,341 32,587 30,614 32,068 30,350 32,102 30,039 20 To others3 4,894 4,556 4,393 2,999 4,061 4,581 5,382 5,230 5,025 21 Other loans and leases, gross l,266,775r 1,268,627 1,266,389 1,268,439 1,264,866 1,265,990 1,267,861 1,280,728 1,285,819 22 Commercial and industrial 351,129r 350,157 350,063 350,775' 348,765 346,887 345,062 348,160 348,301 23 Bankers acceptances and commercial paper 1,509 1,444 1,744 1,546 1,553 1,397 1,408 1,303 1,361 24 All other 349,620' 348,714 348,319 349,230' 347,213 345,490 343,654 346,856 346,940 25 U.S. addressees 347,000' 346,109 345,705 346,611' 344,666 342,893 341,034 344,222 344,362 26 Non-U.S. addressees 2,620 2,605 2,614 2,619 2,547 2,598 2,619 2,634 2,578 27 Real estate loans 502,050' 505,254 503,089 502,003 501,942 503,908 503,280 502.174 500,811 28 Revolving, home equity 47,985 47,985 48,039 48,038 48,026 47,604 47,737 47,802 47,851 29 All other 454,065' 457,269 455,050 453,965 453,916 456,304 455,543 454,372 452,960 30 To individuals for personal expenditures 246,105 246,407 246,579 246,405 247,279 246,720 248,965 252,181 255,852 31 To depository and financial institutions 63,959 66,542 66,885 66,324 66,143 66,281 66,582 67,724 73,208 32 Commercial banks in the United States 35,731 38,342 38,820 37,936 37,541 37,712 38,203 38,735 44,319 33 Banks in foreign countries 3,425 2,881 2,806 3,024 3,213 3,078 2,877 4,075 3,560 34 Nonbank depository and other financial institutions 24,803 25,318 25,258 25,364 25,390 25,491 25,501 24,914 25,329 35 For purchasing and carrying securities 16,153 14,989 14,031 16,342 15,434 16,006 16,599 20,609 18,950 36 To finance agricultural production 6,583 6,520 6,615 6,537 6,461 6,470 6,504 6,498 6,546 37 To states and political subdivisions 10,887 10,794 10,857 10,905' 10,838 10,769 10,936 10,807 10,672 38 To foreign governments and official institutions 995 1,422 1,015 983 1,009 1,021 1,131 1,091 1,121 39 All other loans 30,292 27,548 28,098 28,836 27,555 28,060 28,792 31,221 29,664 40 Lease-financing receivables 38,623 38,994 39,157 39,330 39,439 39,867 40,011 40,262 40,693 41 LESS: Unearned income 1,769 1,783 1,758 1,749 1,725 1,736 1,732 1,731 1,756 42 Loan and lease reserve' 33,441 33,665 33,698 33,628 33,499 33,696 33,714 33,620 33,462 43 Other loans and leases, net 1,231,565' 1,233,179 1,230,933 1,233,062 1,229,642 1,230,558 1,232,415 1,245,378 1,250,601 44 All other assets 140,848' 135,967' 141,529' 136,574' 136,991' 142,186 140,102 145,197 141,609 45 Total assets 2,039,975r 2,016,997r 2,037,563r 2,013,202r 2,002,762r 2,021,387 2,013,684 2,057,352 2,048,075 Footnotes appear on the following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 DomesticN onfinancial Statistics • March 1996 1.27 ASSETS AND LIABILITIES OF LARGE WEEKLY REPORTING COMMERCIAL BANKS—Continued Millions of dollars, Wednesday figures 1995 AAccccoouunntt Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 LIABILITIES 46 Deposits 1,210,610' 1,187,592' 1,216,900' 1,192,446 1,184,303 1,204,606 1,201,670 1,213,783 1,218,759 47 Demand deposits 320,418R 296,080' 324,605' 306,325' 301,358' 311,726 312,584 327,561 335,375 48 Individuals, partnerships, and corporations 267,027R 252,694' 271,349' 255,518' 254,936' 262,860 263,352 270,614 280,300 49 Other holders 53,391' 43,386' 53,257' 50,807 46,422 48,866 49,232 56,947 55,075 50 States and political subdivisions 9,297 7,835 9,098 8,760 8,856 8,204 8,635 9,874 10,388 51 U.S. government 2,596 1,504 3,277 2,501 1,765 1,806 1,878 2,356 1,895 52 Depository institutions in the United States 26,003' 18,867' 25,601' 21,493 19,811 20,880 19,885 22,719 23,659 53 Banks in foreign countries 5,551' 4,816 5,213 5,653 5,601 5,134 5,166 4,986 5,837 54 Foreign governments and official institutions 515 962 592 1,159 655 818 625 675 596 55 Certified and officers' checks 9,428 9,401 9,475 11,240 9,733 12,023 13,043 16,337 12,700 56 Transaction balances other than demand deposits4 100,915' 99,941' 99,498' 98,053' 97,243' 96,862 95,104 96,214 95,598 57 Nontransaction balances 789,278 791,571 792,797 788,069 785,703 796,017 793,982 790,009 787,786 58 Individuals, partnerships, and corporations 765,544 769,127 770,448 765,499 763,554 773,329 771,699 768,201 765,976 59 Other holders 23,734 22,443 22,349 22,570 22,149 22,688 22,283 21,808 21,810 60 States and political subdivisions 19,865 19,907 19,678 20,002 19,694 20,288 19,959 19,561 19,413 61 U.S. government 2,243 816 787 692 665 594 628 554 623 62 Depository institutions in the United States 1,297 1,400 1,571 1,559 1,496 1,512 1,404 1,393 1,474 63 Foreign governments, official institutions, and banks .. 328 320 314 317 294 294 293 300 300 64 Liabilities for borrowed money5 420,095' 417,919 415,329 411,051 409,951 407,642 401,659 435,642 419,336 65 Borrowings from Federal Reserve Banks 0 0 0 2,163 300 0 0 3,405 0 66 Treasury tax and loan notes 5,343 -9' 2,699' 5,753' 6,439' 3,232 5,028 30,895 17,120 67 Other liabilities for borrowed money6 414,752' 417,928' 412,630' 403,136' 403,212' 404,410 396,631 401,342 402,216 68 Other liabilities (including subordinated notes and debentures) ... 218,444' 219,839' 213,359' 217,281' 216,579' 216,366 217,477 215,403 218,814 69 Total liabilities l,849,149r 1,825,350' l,845,588r l,820,778r l,810,833r 1,828,613 1,820,807 1,864,829 1,856,908 70 Residual (total assets less total liabilities)7 190,826 191,647 191,975' 192,424 191,929 192,774 192,878 192,524 191,167 MEMO 71 Total loans and leases, gross, adjusted, plus securities8 1,693,472' 1,693,973 1,691,136 1,689,715 1,684,469 1,685,808 1,683,248 1,695,289 1,686,307 72 Time deposits in amounts of $100,000 or more 117,924 116,769 117,391 117,269 116,249 116,043 116,040 114,751 112,070 73 Loans sold outright to affiliates9 1,383 1,372 1,363 1,352 1,351 1,328 1,318 1,309 1,294 74 Commercial and industrial 281 281 281 281 279 279 279 279 277 75 Other 1,102 1,091 1,082 1,071 1,072 1,049 1,038 1,030 1,017 76 Foreign branch credit extended to U.S. residents10 26,318 26,211 25,576' 25,849 26,122 26,125 26,120 26,414 27,092 77 Net owed to related institutions abroad 85,214 86,397 76,844 83,322 87,056 77,108 79,467 82,925 88,027 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 of 3. Includes allocated transfer risk reserve. 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 (ATS) subsidiaries of the holding company. accounts, and telephone and preauthorized transfers of savings deposits. 10. Credit extended by foreign branches of domestically chartered weekly reporting banks 5. Includes borrowings only from other than directly related institutions. to nonbank U.S. residents. Consists mainly of commercial and industrial loans, but includes 6. Includes federal funds purchased and securities sold under agreements to repurchase. an unknown amount of credit extended to other than nonfinancial businesses. 7. This balancing item is not intended as a measure of equity capital for use in capitaladequacy 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 Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 ASSETS 1 Cash and balances due from depository institutions 17,255 17,925 18,320 18,402 17,138 17,596 17,445 18,439 18,852 2 U.S. Treasury and government agency securities 43,929r 43,45 lr 42,874' 44,636' 43,467' 44,123 44,605 44,127 42,680 3 Other securities 40,726r 38,950r 40,592' 39,999' 40,191' 40,228 40,464 39,537 39,985 4 Federal funds sold1 37,318 38,391 29,293 27,005 30,002 27,315 27,534 25,573 29,623 5 To commercial banks in the United States 13,476 14,290 8,908 8,435 10,032 8,761 9,952 7,415 11,597 6 To others2 23,842 24,101 20,384 18,570 19,970 18,554 17,582 18,158 18,026 7 Other loans and leases, gross 177,600 177,032 177,210 178,962 180,797 180,857 180,452 182,299 182,989 8 Commercial and industrial 113,876 113,500 113,689 114,694 116,502 116,785 116,560 117,064 117,715 9 Bankers acceptances and commercial paper . 4,464 4,448 4,454 4,632 4,648 4,602 4,542 4,358 4,548 10 All other 109,412 109,052 109,235 110,062 111,854 112,183 112,018 112,706 113,166 11 U.S. addressees 104,580 104,225 104,325 104,955 106,706 107,087 106,909 107,399 107,448 12 Non-U.S. addressees 4,832 4,827 4,910 5,107 5,147 5,095 5,110 5,307 5,718 13 Loans secured by real estate 22,794 22,779 22,754 22,740 22,623 22,202 22,027 22,057 22,016 14 Loans to depository and financial institutions 28,355 28,782 28,641 28,780 29,246 30,231 29,724 29,708 30,290 15 Commercial banks in the United States 3,899 4,058 3,605 3,736 3,486 3,239 3,118 3,117 2,746 16 Banks in foreign countries 3,014 2,932 2,972 3,046 3,119 3,145 2,994 3,129 3,254 17 Nonbank financial institutions 21,442 21,792 22,064 21,998 22,641 23,846 23,612 23,462 24,290 18 For purchasing and carrying securities 6,616 6,044 5,807 6,812 6,503 5,611 6,152 7,458 6,417 19 To foreign governments and official institutions 463 440 463 452 455 467 452 455 452 20 All other 4,122 4,115 4,392 4,113 4,102 4,171 4,153 4,168 4,574 21 Other assets (claims on nonrelated parties) 42,107r 40,73 lr 40,431' 40,681' 39,971' 43,138 45,088 40,703 39,567 22 Total assets3 383,662R 381,796R 373,403R 374,201R 376,381R 380,121 381,261 378,404 380,079 LIABILITIES 23 Deposits or credit balances owed to other than directly related institutions 109,003 108,947 106,360 104,999 105,647 104,370 105,439 107,409 105,326 24 Demand deposits4 4,077 4,033 4,240 4,077 4,010 4,059 4,380 4,398 5,094 25 Individuals, partnerships, and corporations .... 3,098 3,051 3,109 3,022 3,145 3,145 3,190 3,620 4,016 26 Other 979 982 1,131 1,056 865 914 1,190 777 1,079 27 Nontransaction accounts 104,927 104,914 102,120 100,921 101,638 100,311 101,059 103,011 100,231 28 Individuals, partnerships, and corporations .... 75,103 75,492 73,247 72,801 73,555 72,925 74,155 74,527 71,569 29 Other 29,824 29,422 28,873 28,121 28,083 27,386 26,904 28,484 28,663 30 Borrowings from other than directly related institutions 75,109 73,574 69,343 70,245 67,879 72,197 73,498 74,531 72,072 31 Federal funds purchased5 44,782 45,233 42,372 44,715 43,455 45,535 44,606 45,723 44,607 32 From commercial banks in the United States . . 7,857 8,262 9,103 8,967 8,511 8,425 9,166 9,760 9,503 33 From others 36,925 36,970 33,268 35,748 34,945 37,110 35,440 35,963 35,104 34 Other liabilities for borrowed money 30,327 28,341 26,971 25,530 24,424 26,662 28,892 28,808 27,466 35 To commercial banks in the United States 4,397 4,524 4,688 4,605 4,670 4,446 4,551 4,498 4,587 36 To others 25,930 23,817 22,283 20,925 19,754 22,217 24,341 24,310 22,878 37 Other liabilities to nonrelated parties 62,157r 61,118r 62,029' 62,132' 62,808' 65,823 66,092 60,434 59,897 38 Total liabilities6 383,662R 381,796R 373,403R 374,201R 376,38LR 380,121 381,261 378,404 380,079 MEMO 39 Total loans (gross) and securities, adjusted 282,199r 279,476' 277,456' 278,431' 280,939' 280,522 279,985 281,004 280,935 40 Net owed to related institutions abroad 112,667r 112,841' 110,989' 112,310' 115,231' 110,865 110,559 108,304 116,402 1. Includes securities purchased under agreements to resell. 5. Includes securities sold under agreements to repurchase. 2. Includes transactions with nonbank brokers and dealers in securities. 6. For U.S. branches and agencies of foreign banks having a net "due to" position, 3. For U.S. branches and agencies of foreign banks having a net "due from" position, includes net owed to related institutions abroad. includes net due from related institutions abroad. 7. Excludes loans to and federal funds transactions with commercial banks in the United 4. Includes other transaction deposits. States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • March 1996 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 June July Aug. Sept. Oct. Nov. Commercial paper (seasonally adjusted unless noted otherwise) 1111 AAAAllllllll iiiissssssssuuuueeeerrrrssss 562,656 528,832 545,619 555,075 595,382 648,819 657,938 660,719 669,686 673,392 671,081 FFFFiiiinnnnaaaannnncccciiiiaaaallll ccccoooommmmppppaaaannnniiiieeeessss'''' 2222 DDDDeeeeaaaalllleeeerrrr----ppppllllaaaacccceeeedddd ppppaaaappppeeeerrrr2222,,,, ttttoooottttaaaallll 214,706 212,999 226,456 218,947 223,038 251,555 262,695 261,904 268,838 271,299 277,337 3333 DDDDiiiirrrreeeeccccttttllllyyyy ppppllllaaaacccceeeedddd ppppaaaappppeeeerrrr3333,,,, ttttoooottttaaaallll 200,036 182,463 171,605 180,389 207,701 218,005 215,473 215,361 213,883 215,214 214,420 4444 NNNNoooonnnnffffiiiinnnnaaaannnncccciiiiaaaallll ccccoooommmmppppaaaannnniiiieeeessss4444 147,914 133,370 147,558 155,739 164,643 179,259 179,770 183,454 186,965 186,879 179,324 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 AAAAllllllll ooootttthhhheeeerrrr 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 institutions. personal, and mortgage financing; factoring, finance leasing, and other business lending; The reporting group is revised every January. Beginning January 1995, data for Bankers insurance underwriting; and other investment activities. 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 for 3. As reported by financial companies that place their paper directly with investors. 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 t a e ge Period Av r e a r t a e ge Period Av r e a r te a ge 1993 Jan 1 66..0000 1993 6.00 1994—Jan 6.00 1995—Jan 8.50 1994 7.15 Feb 6.00 Feb 9.00 1994—Mar. 24 6.25 11999955 88..8833 6.06 9.00 Apr. 19 6.75 Apr. 6.45 Apr 9.00 May 17 7.25 1993--Jan 6.00 May 6.99 May 9.00 Aug. 16 7.75 Feb 6.00 June 7.25 June 9.00 Nov. 15 8.50 Mar. 6.00 July 7.25 July 8.80 Apr 6.00 Aug 7.51 Aug 8.75 1995—Feb. 1 9.00 May 6.00 Sept 7.75 Sept 8.75 July 7 8.75 June 6.00 Oct 7.75 Oct 8.75 Dec. 20 8.50 July 6.00 Nov 8.15 Nov 8.75 Aug 6.00 Dec 8.50 Dec 8.65 1996—Feb. 1 8.25 Sept 6.00 Oct 6.00 1996—Jan 8.50 Nov 6.00 Dec 6.00 1. The prime rate is one of several base rates that banks use to price short-term business Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) loans. The table shows the date on which a new rate came to be the predominant one quoted monthly statistical releases. For ordering address, see inside front cover, by a majority of the twenty-five largest banks by asset size, based on the most recent Call Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • March 1996 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 11999933 11999944 11999955 Sept. Oct. Nov. Dec. Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 3.02 4.21 5.83 5.80 5.76 5.80 5.60 5.91 5.75 5.73 5.90 5.48 2 Discount window borrowing2,4 3.00 3.60 5.21 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 3.17 4.43 5.93 5.82 5.81 5.80 5.84 5.80 5.83 5.87 5.83 5.83 4 3-month 3.22 4.66 5.93 5.74 5.82 5.74 5.64 5.72 5.67 5.65 5.61 5.61 5 6-month 3.30 4.93 5.93 5.66 5.71 5.59 5.43 5.53 5.46 5.44 5.42 5.39 Finance paper, directly placed3,5,7 6 1-month 3.12 4.33 5.81 5.71 5.71 5.69 5.70 5.67 5.74 5.77 5.69 5.60 7 3-month 3.16 4.53 5.78 5.58 5.66 5.59 5.47 5.58 5.51 5.47 5.46 5.39 8 6-month 3.15 4.56 5.68 5.45 5.51 5.35 5.20 5.29 5.23 5.22 5.19 5.12 Bankers acceptances3,5,8 9 3-month 3.13 4.56 5.81 5.66 5.71 5.64 5.52 5.62 5.56 5.57 5.49 5.46 10 6-month 3.21 4.83 5.80 5.58 5.61 5.47 5.34 5.43 5.39 5.38 5.31 5.28 Certificates of deposit, secondary market3,9 11 1-month 3.11 4.38 5.87 5.74 5.75 5.75 5.75 5.81 5.81 5.81 5.71 5.64 12 3-month 3.17 4.63 5.92 5.73 5.79 5.74 5.62 5.73 5.67 5.67 5.60 5.53 13 6-month 3.28 4.96 5.98 5.73 5.76 5.64 5.49 5.59 5.51 5.52 5.47 5.42 14 Eurodollar deposits, 3-month3,10 3.18 4.63 5.93 5.74 5.81 5.75 5.64 5.75 5.69 5.69 5.59 5.56 U.S. Treasury bills Secondary market3,5 15 3-month 3.00 4.25 5.49 5.28 5.28 5.36 5.14 5.33 5.32 5.26 5.02 4.89 16 6-month 3.12 4.64 5.56 5.30 5.32 5.27 5.13 5.25 5.20 5.19 5.09 4.98 17 1-year 3.29 5.02 5.60 5.31 5.28 5.14 5.03 5.11 5.08 5.06 55..0011 4.94 Auction average3,5,11 18 3-month 3.02 4.29 5.51 5.26 5.30 5.35 5.16 5.32 5.29 5.30 5.15 4.91 19 6-month 3.14 4.66 5.59 5.28 5.34 5.29 5.15 5.25 5.19 5.20 5.15 5.04 20 1-year 3.33 5.02 5.69 5.21 5.30 5.15 5.06 n.a. n.a. 5.06 n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 3.43 5.32 5.94 5.62 5.59 5.43 5.31 5.39 5.35 5.35 5.30 5.21 22 2-year 4.05 5.94 6.15 5.81 5.70 5.48 5.32 5.40 5.33 5.38 5.35 5.22 23 3-year 4.44 6.27 6.25 5.89 5.77 5.57 5.39 5.47 5.38 5.42 5.43 5.29 24 5-year 5.14 6.69 6.38 6.00 5.86 5.69 5.51 5.59 5.49 5.55 5.56 5.44 25 7-year 5.54 6.91 6.50 6.13 5.97 5.83 5.63 5.74 5.60 5.66 5.69 5.56 2B 10-year 5.87 7.09 6.57 6.20 6.04 5.93 5.71 5.82 5.68 5.73 5.78 5.64 27 20-year 6.29 7.49 6.95 6.65 6.45 6.33 6.12 6.25 6.10 6.13 6.19 6.06 28 30-year 6.59 7.37 6.88 6.55 6.37 6.26 6.06 6.19 6.04 6.07 6.12 6.00 Composite 29 More than 10 years (long-term) 6.45 7.41 6.93 6.63 6.43 6.31 6.11 6.24 6.09 6.12 6.17 6.04 STATE AND LOCAL NOTES AND BONDS Moody's series13 30 5.38 5.77 5.80 5.71 5.74 5.63 5.40 5.55 5.60 5.40 5.29 5.29 31 Baa 5.83 6.17 6.10 5.90 5.95 5.79 5.66 5.72 5.74 5.68 5.61 5.00 32 Bond Buyer series14 5.60 6.18 5.95 5.91 5.80 5.64 5.45 5.54 5.35 5.51 5.51 5.44 CORPORATE BONDS 33 Seasoned issues, all industries15 7.54 8.26 7.83 7.56 7.39 7.30 7.11 7.22 7.10 7.12 7.16 7.05 Rating group 34 7.22 7.97 7.59 7.32 7.12 7.02 6.82 6.94 6.81 6.83 6.87 6.76 35 Aa 7.40 8.15 7.72 7.45 7.27 7.18 6.99 7.10 6.99 7.01 7.04 6.93 36 A 7.58 8.28 7.83 7.56 7.39 7.32 7.13 7.24 7.12 7.14 7.19 7.07 37 Baa 7.93 8.63 8.20 7.93 7.75 7.68 7.49 7.61 7.48 7.50 7.54 7.43 38 A-rated, recently offered utility bonds16 7.46 8.29 7.86 7.55 7.36 7.30 7.10 7.14 7.10 7.13 7.10 6.98 MEMO Dividend-price ratio17 39 Common stocks 2.78 2.82 2.56 2.42 2.41 2.37 2.30 2.33 2.28 2.28 2.34 2.31 1. The daily effective federal funds rate is a weighted average of rates on trades through 12. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Depart- New York brokers. ment 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 used 3. Annualized using a 360-day year for bank interest. in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys' 4. Rate for the Federal Reserve Bank of New York. 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 selected 6. An average of offering rates on commercial paper placed by several leading dealers for long-term bonds. firms whose bond rating is AA or the equivalent. 16. Compilation of the Federal Reserve. This series is an estimate of the yield on recently 7. An average of offering rates on paper directly placed by finance companies. offered, A-rated utility bonds with a thirty-year maturity and five years of call protection. 8. Representative closing yields for acceptances of the highest-rated money center banks. Weekly data are based on Friday quotations. 9. An average of dealer offering rates on nationally traded certificates of deposit. 17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in 10. Bid rates for Eurodollar deposits at 11:00 a.m. London time. Data are for indication the price index. purposes only. NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and 11. Auction date for daily data; weekly and monthly averages computed on an issue-date G. 13 (415) monthly statistical releases. For ordering address, see inside front cover. basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets All 1.36 STOCK MARKET Selected Statistics 1995 IInnddiiccaattoorr 11999933 11999944 11999955 Apr. May June July Aug. Sept. Oct. Nov. Dec. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 249.71 254.16 291.18 274.38 281.81 289.52 298.18 300.05 310.41 311.78 317.58 327.90 2 Industrial 300.10 315.32 367.40 347.69 357.01 366.75 379.13 379.79 390.42 389.63 398.66 412.11 3 Transportation 242.68 247.17 270.14 254.36 254.70 256.80 279.15 285.63 295.54 291.16 300.06 303.53 4 Utility 114.55 104.96 114.61 104.70 106.02 108.12 109.59 111.06 114.67 123.59 119.49 173.95 5 Finance 216.55 209.75 238.48 219.38 228.45 236.26 240.49 245.27 260.72 265.12 266.12 273.36 6 Standard & Poor's Corporation (1941-43 = 10)1 451.63 460.42 541.72 507.91 523.83 539.35 557.37 559.11 578.77 582.92 595.53 614.57 7 American Stock Exchange (Aug. 31, 1973 = 50)2 438.77 449.49 498.13 471.54 487.03 492.60 513.25 526.86 547.64 530.26 529.93 538.01 Volume of trading (thousands of shares) 8 New York Stock Exchange 263,374 290,652 346,009 331,184 341,905 345,547 363,780 309,879 352,184 369,386 360,199 384,310 9 American Stock Exchange 18,188 17,951 20,387 19,404 19,266 24,622 23,283 21,825 25,422 17,865 16,724 21,085 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 60,310 61,160 76,680 62,520 64,070 66,340 67,600 71,440 77,076 75,005 77,875 76,680 Free credit balances at brokers4 11 Margin accounts5 12,360 14,095 16,250 12,440 13,403 13,710 13,830 13,900 14,806 14,753 15,590r 16,250 12 Cash accounts 27,715 28,870 34,340 26,670 27,464 29,860 28,600 29,190 29,796 29,908 30,340 34,340 Margin requirements (percent of market value and effective date)6 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. In July 1976 a financial group, composed of banks and insurance companies, was added collateralized by securities. Margin requirements on securities other than options are the to the group of stocks on which the index is based. The index is now based on 400 industrial difference between the market value (100 percent) and the maximum loan value of collateral stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and as prescribed by the Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, 40 financial. effective May 1, 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective 2. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting Nov. 1, 1971. previous readings in half. On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the 3. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has initial margin required for writing options on securities, setting it at 30 percent of the current included credit extended against stocks, convertible bonds, stocks acquired through the market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the exercise of subscription rights, corporate bonds, and government securities. Separate report- required initial margin, allowing it to be the same as the option maintenance margin required ing of data for margin stocks, convertible bonds, and subscription issues was discontinued in by the appropriate exchange or self-regulatory organization; such maintenance margin rules April 1984. must be approved by the Securities and Exchange Commission. Effective Jan. 31, 1986, the 4. Free credit balances are amounts in accounts with no unfulfilled commitments to SEC approved new maintenance margin rules, permitting margins to be the price of the option brokers and are subject to withdrawal by customers on demand. plus 15 percent of the market value of the stock underlying the option. 5. Series initiated in June 1984. Effective June 8, 1988, margins were set to be the price of the option plus 20 percent of the 6. Margin requirements, stated in regulations adopted by the Board of Governors pursuant market value of the stock underlying the option (or 15 percent in the case of stock-index to the Securities Exchange Act of 1934, limit the amount of credit that can be used to options). purchase and carry "margin securities" (as defined in the regulations) when such credit is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • March 1996 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1995 11999933 11999944 11999955 July Aug. Sept. Oct. Nov. Dec. U.S. budget1 1 Receipts, total 1,153,226 1,257,45 lr 1,350,576 92,749 96,560 143,219 95,593 90,008 138,271 2 On-budget 841,292 922,425r 999,496 65,788 69,265 112,510 72,200 63,651 110,322 3 Off-budget 311,934 335,026 351,080 26,961 27,295 30,709 23,393 26,357 27,949 4 Outlays, total 1,408,532 l,460,553r 1,514,389 106,328 130,411 135,933 118,352 128,458 132,984 5 On-budget 1,141,945 l,181,181r 1,225,724 80,931 104,135 105,098 92,151 101,767 121,753 6 Off-budget 266,587 279,372 288,665 25,397 26,276 30,836 26,200 26,691 11,232 7 Surplus or deficit (-), total -255,306 -203,370 -163,813 -13,579 -33,851 7,286 -22,758 -38,450 5,286 8 On-budget -300,653 258,756r -226,228 -15,143 -34,870 7,412 -19,951 -38,116 -11,431 9 Off-budget 45,347 55,654 62,415 1,564 1,019 -126 -2,807 -334 16,717 Source of financing (total) 10 Borrowing from the public 248,594 184,696' 171,288 10,627 16,071 -6,618 13,353 38,339 -18,358 11 Operating cash (decrease, or increase (-)) 6,283 16,564 -2,007 11,635 30,776 -19,820 16,755 -4,911 5,610 12 Other2 429 1,842' -5,468 -8,683 -12,996 19,152 -7,350 5,022 7,462 MEMO 13 Treasury operating balance (level, end of period) 52,506 35,942 37,949 48,905 18,129 37,949 21,194 26,105 20,495 14 Federal Reserve Banks 17,289 6,848 8,620 11,206 4,767 8,620 7,018 5,703 5,979 15 Tax and loan accounts 35,217 29,094 29,329 37,700 13,363 29,329 14,176 20,402 14,515 1. Since 1990, oflf-budget items have been the social security trust funds (federal old-age net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loansurvivors insurance and federal disability insurance) and the U.S. Postal Service. valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCE. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; Outlays of the U.S. Government; and U.S. Office of Management and Budget, Budget of the accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous U.S. Government. liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS' Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1994 1995 1995 11999944 11999955 HI H2 HI H2 Oct. Nov. Dec. RECEIPTS 1 All sources 1,257,453 1,350,576 652,234 625,557 710,542 656,400 95,593 90,008 138,271 2 Individual income taxes, net 543,055 590,157 275,052 273,474 307,498 292,393 51,840 39,524 53,179 3 Withheld 459,699 499,898 225,387 240,062 251,398 256,918 46,918 39,945 50,597 4 Presidential Election Campaign Fund 70 69 63 10 58 9 0 1 0 5 Nonwithheld 160,047 175,815 117,937 42,031 132,006 43,100 5,899 1,991 3,227 6 Refunds 76,761 85,624 68,325 9,207 75,958 10,058 978 2,414 646 Corporation income taxes 7 Gross receipts 154,205 174,422 80,536 78,392 92,132 88,302 4,813 3,056 3388,,995544 8 Refunds 13,820 17,334 6,933 7,331 10,399 7,518 2,633 1,362 932 9 Social insurance taxes and contributions, net . . . 461,475 484,474 248,301 220,141 261,837 224,269 32,104 38,199 37,762 10 Employment taxes and contributions2 428,810 451,046 228,714 206,613 228,663 211.323 30,549 34,919 37,123 11 Self-employment taxes and contributions3 . 24,433 27,127 20,762 4,135 23,429 3,557 -98 91 333 12 Unemployment insurance 28,004 28,878 17,301 11,177 18,001 10,702 1,214 2,940 223 13 Other net receipts4 4,661 4,550 2,284 2,349 2,267 2,247 342 340 416 14 Excise taxes 55,225 57,485 26,444 30,062 27,452 30,014 4,453 5,154 4,870 15 Customs deposits 20,099 19,300 9,500 11,042 8,847 9,849 1,786 1,593 1,439 16 Estate and gift taxes 15,225 14,764 8,197 7,071 7,424 7,718 1,160 1,349 1,383 17 Miscellaneous receipts5 21,988 27,306 11,170 13,305 15,749 11,374 2,070 2,496 1,618 OUTLAYS 18 All types 1,460,553 1,514,428 710,620 752,151 760,824 752,505 118,352 128,458 132,984 19 National defense 281,563 272,179 133,844 141,885r 135,931 132,954 18,353 21,234 25,376 20 International affairs 17,083 16,448 5,800 11,889 4,727 6,994 1,074 1,616 431 21 General science, space, and technology 16,227 17,563 8,502 7,604 8,611 8,810 1,427 1,474 1,274 22 Energy 5,219 5,146 2,237 2,923 2,358 2,203 348 489 -163 23 Natural resources and environment 21,064 23,328 10,111 11.911 10,273 12,633 2,835 2,245 1,711 24 Agriculture 15,057 9,763 7,451 7,623 4,039 3,062 1,109 2,291 708 25 Commerce and housing credit -5,122 -18,740 -4,962 -4,270 -13,936 -4,412 -1,661 -1,465 -451 26 Transportation 38,134 38,555 16,739 21,835 18,192 19,931 3,128 3,284 3,117 27 Community and regional development 10,454 11,000 4,571 6,283r 4,858 6,085 943 1,087 912 28 Education, training, employment, and social services 46,307 52,706 19,262 27,450r 25,738 24,820 3,556 4.185 3,623 29 Health 106,836 114,760 53,195 54,147 58,759 57,013 9,657 10,189 8,567 30 Social security and Medicare 464,312 495,701 232,777 236,817 251,975 251,388 40,732 41,947 43,299 31 Income security 214,036 220,214 109,080 101,806 117,639 104,214 14,522 18,134 19,738 32 Veterans benefits and services 37,642 37,935 16,686 19,761 19,267 18,684 1,594 3,280 4,435 33 Administration of justice 15,238 16,255 7,718 7,753 8,062 8,113 1,223 1,258 1,233 34 General government 11,316 13,856 5,084 7,355 5,797 7,623 1,712 717 1,924 35 Net interest6 202,957 232,175 99,844 109,434r 116,170 119,350 20,565 19,058 19,934 36 Undistributed offsetting receipts7 -37,772 -44,455 -17,308 -20,066 -17,632 -26,994 -2,765 -2,565 -2,683 1. Functional details do not sum to total outlays for calendar year data because revisions to 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. monthly totals have not been distributed among functions. Fiscal year total for outlays does 6. Includes interest received by trust funds. not correspond to calendar year data because revisions from the Budget have not been fully 7. Rents and royalties for the outer continental shelf, U.S. government contributions for distributed across months. employee retirement, and certain asset sales. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCE. U.S. Department of the Treasury, Monthly Treasury Statement of Receipts and 3. Old-age, disability, and hospital insurance. Outlays of the U.S. Government; and U.S. Office of Management and Budget, Budget of the 4. Federal employee retirement contributions and civil service retirement and U.S. Government, Fiscal Year 1996. disability fund. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic NonfinancialS tatistics • March 1996 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1993 1994 1995 IItteemm Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 4,562 4,602 4,673 4,721 4,827 4,891 4,978 5,001 n.a. 2 Public debt securities 4,536 4,576 4,646 4,693 4,800 4,864 4,951 4,974 4,989 3 Held by public 3,382 3,434 3,443 3,480 3,543 3,610 3,635 n.a. 4 4 Held by agencies 1,154 1,142 1,203 1,213 1,257 1,255 1,317 1,321 1 5 Agency securities 27 26 28 29 27 27 27 27 n.a. 6 7 H H e e l l d d b b y y p ag u e b n li c c i es 27 0 2 0 6 27 0 2 0 9 27 0 26 0 27 0 n n . . a a . . •I 8 Debt subject to statutory limit 4,446 4,491 4,559 4,605 4,711 4,775 4,861 4,885 4,900 9 Public debt securities 4,445 4,491 4,559 4,605 4,711 4,774 4,861 4,885 4,900 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,900 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 the participation certificates, notes to international lending organizations, and District of Colum- United States and Treasury Bulletin. bia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1995 TTyyppee aanndd hhoollddeerr 11999922 11999933 11999944 11999955 Q1 Q2 Q3 Q4 1 Total gross public debt 4,177.0 4,535.7 4,800.2 4,988.7 4,864.1 4,951.4 4,974.0 4,988.7 By type 2 Interest-bearing 4,173.9 4,532.3 4,769.2 4,964.4 4,860.5 4,947.8 4,950.6 4,964.4 3 Marketable 2,754.1 2,989.5 3,126.0 3,307.2 3,227.3 3,252.6 3,260.5 3,307.2 4 Bills 657.7 714.6 733.8 760.7 756.5 748.3 742.5 760.7 5 Notes 1,608.9 1,764.0 1,867.0 2,010.3 1,938.2 1,974.7 1,980.3 2,010.3 6 Bonds 472.5 495.9 510.3 521.2 517.7 514.7 522.6 521.2 7 Nonmarketable' 1,419.8 1,542.9 1,643.1 1,657.2 1,633.2 1,695.2 1,690.2 1,657.2 8 State and local government series 153.5 149.5 132.6 104.5 122.9 121.2 113.4 104.5 9 Foreign issues2 37.4 43.5 42.5 40.8 41.8 41.4 41.0 40.8 10 Government 37.4 43.5 42.5 40.8 41.8 41.4 41.0 40.8 11 Public .0 .0 .0 .0 .0 .0 .0 .0 12 Savings bonds and notes 155.0 169.4 177.8 181.9 178.8 180.1 181.2 181.9 13 Government account series3 1,043.5 1,150.0 1,259.8 1,299.6 1,259.2 1,322.0 1,324.3 1,299.6 14 Non-interest-bearing 3.1 3.4 31.0 24.3 3.6 3.6 23.3 24.3 By holder4 15 U.S. Treasury and other federal agencies and trust funds 1,047.8 1,153.5 1,257.1 1,254.7 1,316.6 1,320.8 16 Federal Reserve Banks 302.5 334.2 374.1 369.3 389.0 374.1 17 Private investors 2,839.9 3,047.7 3,168.0 3,239.2r 3,245.0r 3,279.5 18 Commercial banks 294.4 322.2 290.6 307.5r 291.1' 295.0 19 Money market funds 79.7 80.8 67.6 67.7 58.7 64.2 20 Insurance companies 197.5 234.5 242.8 249.2r 253.5r 255.0 21 Other companies 192.5 213.0 226.5 n.a. 230.3 227.7 224.1 n a. 22 State and local treasuries 476.7 508.9 440.8r 402.7r 375.8r 370.0 Individuals 23 Savings bonds 157.3 171.9 180.5 181.4 182.6 183.5 24 Other securities 131.9 137.9 150.7r 161.4 161.6 162.4 25 Foreign and international5 549.7 623.0 688.6 729.0r 784. r 847.8 26 Other miscellaneous investors6 760.2 755.4 879.9r 910.0r 903.4r 877.5 1. Includes (not shown separately) securities issued to the Rural Electrification Administra- 5. Consists of investments of foreign balances and international accounts in the United tion, depository bonds, retirement plan bonds, and individual retirement bonds. States. 2. Nonmarketable series denominated in dollars, and series denominated in foreign cur- 6. Includes savings and loan associations, nonprofit institutions, credit unions, mutual rency 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 actual SOURCES. U.S. Treasury Department, data by type of security, Monthly Statement of the holdings; data for other groups are Treasury estimates. Public Debt of the United States; data by holder, Treasury Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1995 1995, week ending IItteemm Sept. Oct. Nov. Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Dec. 27 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 48,527 45,143 57,449 49,500 61,110 76,647 51,747 42,849 52,604 59,422 63,364 41,678 Coupon securities, by maturity 2 Five years or less 89,933 90,911 94,354 106,331 102,544 84,443 93,256 94,036 98,063 93,082 94,515 57,128 3 More than five years 49,005 49,652 49,453 51,779 48,882 49,291 57,066 39,249 63,752 45,811 45,429 22,603 4 Federal agency 24,972 24,297 25,999 26,012 27,912 24,657 26,202 25,154 26,334 23,038 27,843 27,813 5 Mortgage-backed 29,574 30,050 34,639 27,425 56,101 35,160 22,998 23,445 46,112 49,166 29,672 12,273 By type of counterparty With interdealer broker 6 U.S. Treasury 110,578 107,881 114,455 120,333 123,848 116,751 116,031 98,686 121,087 118,376 115,336 68,973 7 Federal agency 661 712 779 881 881 909 664 624 860 649 724 470 8 Mortgage-backed 11,127 11,589 12,595 11,492 17,754 14,568 8,887 8,638 16,360 19,343 12,312 5,091 With other 9 U.S. Treasury 76,887 77,825 86,801 87,277 88,689 93,629 86,038 77,448 93,332 79,940 87,972 52,436 10 Federal agency 24,311 23,586 25,220 25,131 27,031 23,748 25,538 24,530 25,474 22,389 27,118 27,343 11 Mortgage-backed 18,447 18,461 22,044 15,933 38,347 20,592 14,111 14,806 29,752 29,823 17,360 7,182 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 990 606 774 908 1,025 915 527 577 903 907 390 345 Coupon securities, by maturity 13 Five years or less 2,070 1,577 2,118 1,733 1,832 1,444 2,570 2,390 3,682 1,798 2,082 835 14 More than five years 16,073 14,681 14,396 15,696 13,829 15,234 16,203 11,456 17,398 14,199 14,180 5,150 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 n.a. 0 0 0 0 0 Coupon securities, by maturity 18 Five years or less 1,602 2,129 1,659 2,492 2,518 1,422 1,664 1,001 985 1,227 1,272 918 19 More than five years 4,257 4,714 4,587 4,647 4,580 5,049 5,778 2,691 5,771 3,175 4,366 2,881 20 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 21 Mortgage-backed 897 983 1,108 571 1,922 1,270 1,015 310 1,229 618 537 1,161 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 of delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt primary dealers. Monthly averages are based on the number of trading days in the month. securities are included when the time to delivery is more than five business days. Forward Transactions are assumed evenly distributed among the trading days of the report week. contracts for mortgage-backed agency securities are included when the time to delivery is Immediate, forward, and futures transactions are reported at principal value, which does not more than thirty business days. include accrued interest; options transactions are reported at the face value of the underlying 3. Futures transactions are standardized agreements arranged on an exchange. All futures securities. 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 on 2. Outright transactions include immediate and forward transactions. Immediate delivery an organized exchange or in the over-the-counter market, and include options on futures refers to purchases or sales of securities (other than mortgage-backed federal agency securi- contracts on U.S. Treasury and federal agency securities. ties) for which delivery is scheduled in five business days or less and "when-issued" NOTE, "n.a." indicates that data are not published because of insufficient activity. securities that settle on the issue date of offering. Transactions for immediate delivery of mortgage- Major changes in the report form filed by primary dealers induced a break in the dealer data backed agency securities include purchases and sales for which delivery is scheduled in thirty business series as of the week ending July 6, 1994. 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 NonfinancialS tatistics • March 1996 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1995 1995, week ending Sept. Oct. Nov. Nov. 1 Nov. 8 Nov. 15 Nov. 22 Nov. 29 Dec. 6 Dec. 13 Dec. 20 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 7,744 -64 11,391 -3,245 883 27,013 11,183 7,340 20,027 28,476 1133,,881122 Coupon securities, by maturity 2 Five years or less 7,088 14,476 12,423 20,395 18,006 6,063 7,567 14,980 25,979 18,846 20,330 3 More than five years -17,370 -15,124 -9,732 -13,579 -10,673 -11,541 -7,770 -8,333 -10,167 -10,082 -13,002 4 Federal agency 21,837 24,009 21,768 24,188 26,453 21,572 20,156 18,767 20,212 21,058 21,540 5 Mortgage-backed 32,596 36,240 35,869 33,432 34,810 34,594 35,726 38,109 39,964 39,497 39,062 NET FUTURES POSITIONS4 By type of deliverable security 6 U.S. Treasury bills -2,437 -3,462 -5,175 -5,420 -4,751 -4,674 -5,451 -5,938 -4,142 -1,899 -1,973 Coupon securities, by maturity 7 Five years or less 952 -930 -4,508 -2,804 -4,437 -4,570 -4,849 -4,598 -3,263 -4,088 -5,242 8 More than five years -8,204 -13,744 -17,358 -17,390 -18,632 -17,461 -15,764 -17,328 -19,050 -18,305 -17,328 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 n.a. n.a. 0 n.a. n.a. n.a. 0 0 0 0 0 Coupon securities, by maturity 12 Five years or less 2,175 3,044 479 1,272 1,809 1,238 -528 -490 -1,120 -1,550 -1,158 13 More than five years -3,203 -427 3,629 2,424 3,644 4,679 2,076 3,835 6,800 6,173 6,978 14 Federal agency 0 0 0 0 0 0 0 0 0 0 0 15 Mortgage-backed 1,111 1,591 1,199 1,557 1,326 988 1,116 1,489 -9 -427 -752 Financing5 Reverse repurchase agreements 16 Overnight and continuing 219,028 228,244 249,011 242,740 248,826 259,558 232,402 258,111 235,317 247,871 243,019 17 Term 420,162 420,502 404,181 418,006 452,959 378,518 394,835 389,237 398,590 409,436 382,918 Securities borrowed 18 Overnight and continuing 164,552 162,865 152,800 162,158 152,704 156,442 148,923 151,708 153,410 152,319 149,905 19 Term 64,797 65,506 64,611 67,506 72,258 63,511 62,110 60,202 64,263 63,508 62,352 Securities received as pledge 20 Overnight and continuing 2,423r 2,377 2,005 2,006 1,895 1,888 1,808 2,191 3,683 4,118 3,988 21 Term 50r 43 56 37 52 112 22 34 89 88 21 Repurchase agreements 22 Overnight and continuing 496,262 509,729 522,501 534,796 545,731 558,030 460,497 521,740 538,239 537,813 546,540 23 Term 356,122 356,682 370,941 366,676 399,698 328,008 401,933 357,426 352,087 378,976 349,504 Securities loaned 24 Overnight and continuing 5,991r 5,715r 6,001 5,927r 6,058 6,984 4,871 6,141 5,726 5,607 5,175 25 Term 2,396r 2,710r 2,794 2,575r 2,644 2,833 2,980 2,784 2,572 2,610 1,560 Securities pledged 26 Overnight and continuing 33,247r 30,09 lr 28,087 29,280r 28,550 27,757 26,731 28,961 29,342 33,127 33,274 27 Term 3,687r 3,958r 4,577 3,995r 3,784 4,118 5,077 5,275 5,543 5,639 5,508 Collateralized loans 28 Overnight and continuing 14,676 16,631 17,639 15,692 17,533 20,719 15,199 17,442 17,223 15,213 10,960 29 Term 2,528 2,367 2,092 2,486 1,942 2,361 2,164 1,864 1,964 2,010 n.a. MEMO: Matched book6 Securities in 30 Overnight and continuing 225,455r 232,058 244,861 238,111 242,689 260,282 228,587 250,304 234,682 240,410 243,757 31 Term 407,025r 410,727 401,682 411,926 448,559 374,658 396,538 385,387 402,536 412,825 385,012 Securities out 32 Overnight and continuing 318,299 321,797 313,847 325,805 335,422 341,193 265,471 312,092 310,366 317,969 315,510 33 Term 299,735 302,123 318,594 315,781 340,912 281,757 343,859 309,663 308,691 330,882 303,412 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 futures Reserve Bank of New York by the U.S. government securities dealers on its published list of positions are included regardless of time to delivery. primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar 5. Overnight financing refers to agreements made on one business day that mature on the days of the report week are assumed to be constant. Monthly averages are based on the next business day; continuing contracts are agreements that remain in effect for more than one number of calendar days in the month. business day but have no specific maturity and can be terminated without advance notice by 2. Securities positions are reported at market value. either party; term agreements have a fixed maturity of more than one business day. Financing 3. Net outright positions include immediate and forward positions. Net immediate posi- data are reported in terms of actual funds paid or received, including accrued interest. tions include securities purchased or sold (other than mortgage-backed agency securities) that 6. Matched-book data reflect financial intermediation activity in which the borrowing and have been delivered or are scheduled to be delivered in five business days or less and lending transactions are matched. Matched-book data are included in the financing break- "when-issued" securities that settle on the issue date of offering. Net immediate positions for downs given above. The reverse repurchase and repurchase numbers are not always equal mortgage-backed agency securities include securities purchased or sold that have been because of the "matching" of securities of different values or different types of collateralizadelivered or are scheduled to be delivered in thirty business days or less. tion. Forward positions reflect agreements made in the over-the-counter market that specify NOTE, "n.a." indicates that data are not published because of insufficient activity. delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt Major changes in the report form filed by primary dealers induced a break in the dealer data securities are included when the time to delivery is more than five business days. Forward series as of the week ending July 6, 1994. contracts for mortgage-backed agency securities are included when the time to delivery is 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 1995 AAggeennccyy 11999911 11999922 11999933 11999944 June July Aug. Sept. Oct. 1 Federal and federally sponsored agencies 442,772 483,970 570,711 738,928 785,982 788,323 801,819 811,182 n.a. 2 Federal agencies 41,035 41,829 45,193 39,186 38,412 39,403 39,581 38,030 38,273 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 2,652 2,652 2,652 2,512 2,512 5 Federal Housing Administration4 397 374 255 116 81 84 83 87 88 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 7,615 8,615 8,615 7,265 7,265 8 Tennessee Valley Authority 22,401 23,580 29,885 27,536 28,058 28,046 28,225 28,160 28,366 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 401,737 442,141 523,452 699,742 747,570 748,920 762,238 773,152 n.a. 11 Federal Home Loan Banks 107,543 114,733 139,512 205,817 223,089 223,100 228,299 236,851 234,192 12 Federal Home Loan Mortgage Corporation 30,262 29,631 49,993 93,279 108,484 111,427 112,341 111,610 115,626 13 Federal National Mortgage Association 133,937 166,300 201,112 257,230 270,937 268,458 275,271 277,192 280,582 14 Farm Credit Banks8 52,199 51,910 53,123 53,175 53,915 54,635 54,979 55,800 56,529 15 Student Loan Marketing Association9 38,319 39,650 39,784 50,335 51,268 51,325 51,323 51,672 51,906 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 90,638 88,892 86,776 84,297 82,622 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 9,803 7,202 5,309 3,449 2,646 2,646 2,646 2,506 2,506 21 Postal Service6 8,201 10,440 9,732 8,073 7,615 8,615 8,615 7,265 7,265 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 30,004 28,419 27,384 26,845 26,210 26 Rural Electrification Administration 18,562 18,172 17,578 17,392 17,256 17,274 17,276 17,276 17,045 27 Other 84,931 64,436 45,864 37,984 29,917 28,738 27,655 27,205 26,396 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 insurance 12. The Resolution Funding Corporation, established by the Financial Institutions Reform, claims. Once issued, these securities may be sold privately on the securities market. Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989. 5. Certificates of participation issued before fiscal year 1969 by the Government National 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations Mortgage Association acting as trustee for the Farmers Home Administration, the Department issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the of Health, Education, and Welfare, the Department of Housing and Urban Development, the purpose of lending to other agencies, its debt is not included in the main portion of the table to Small Business Administration, and the Veterans Administration. 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. Includes guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally Federal Agricultural Mortgage Corporation; therefore details do not sum to total. Some data being small. The Farmers Home Administration entry consists exclusively of agency assets, are estimated. whereas the Rural Electrification Administration entry consists of both agency assets and 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is 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 DomesticN onfinancialS tatistics • March 1996 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1995 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999922 11999933 11999944 May June July Aug. Sept. Oct. Nov. Dec. 1 All issues, new and refunding' 226,818 279,945 153,950 12,323 17,230 11,575 12,450 9,698 13,336 16,580 17,220 By type of issue 2 General obligation 78,611 90,599 54,404 4,332 5,755 3,529 4,519 3,635 6,252 6,084 5,680 3 Revenue 136,580 189,346 99,546 7,472 12,201 6,248 7,789 6,129 7,322 10,496 11,540 By type of issuer 4 5 S S t p a e t c e i al district or statutory authority2 1 2 3 4 8 , , 8 3 7 2 4 7 1 2 7 7 8 , , 9 7 9 1 9 4 9 1 5 9 , , 8 1 9 8 6 6 8 1 , , 0 3 3 1 9 5 11 1 , , 3 3 8 2 2 9 7,3 6 9 4 9 5 7,4 6 9 1 1 7 5 1 , , 8 5 2 1 1 0 7 1 , , 8 8 3 2 1 5 10 1 , , 4 4 7 9 7 1 11, 9 9 5 2 1 0 6 Municipality, county, or township 63,617 73,232 38,868 2,450 5,245 1,733 4,200 2,433 3,918 4,612 4,349 7 Issues for new capital 101,865 91,434 105,972 8,830 13,083 8,740 6,685 6,339 7,828 11,439 11,929 By use of proceeds 8 Education 18,852 16,831 21,267 2,594 2,494 1,924 1,180 1,929 1,725 3,250 2,463 9 Transportation 14,357 9,167 10,836 606 3,127 1,926 869 446 631 1,452 1,174 10 Utilities and conservation 12,164 12,014 10,192 1,282 1,235 485 1,504 563 1,794 756 1,741 11 Social welfare 16,744 13,837 20,289 1,738 2,062 1,333 1,421 1,228 1,587 2,253 1,604 12 Industrial aid 6,188 6,862 8,161 416 411 500 201 627 203 404 1,269 13 Other purposes 33,560 32,723 35,227 1,770 4,467 2,216 1,967 2,050 2,114 3,324 3,678 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 1995 TTyyppee ooff oo rr ii ss ii ss ss uu ss ee uu ,, ee oo rr ffffeerriinngg,, 11999922 11999933rr 11999944 Apr. May June July Aug. Sept.r Oct/ Nov. 1 All issues' 567,559r 769,088 582,569 30,787 54,829r 56,346r 33,812r 47,629r 56,372 49,769 55,091 2 Bonds2 471,502 646,634 497,414 26,909 48,579 48,585 29,208 41,363 49,000 41,140 47,790 By type of offering 3 Public, domestic 378,058 487,029 365,115r 22,756 40,052 42,398 23,147 32,351 43,000 34,740 41,890 4 Private placement, domestic3 65,853 121,226 76,061 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 27,591 38,379 56,238 4,153 8,528 6,186 6,061 9,012 6,000 6,400 5,900 By industry group 6 Manufacturing 82,058 88,160 43,423r 2,876 2,139 6,330 4,456 3,982 3,580 3,634 5,125 7 Commercial and miscellaneous 43,111 58,559 40,652r 1,815 6,085 4,528 1,078 2,480 3,682 3,399 4,775 8 Transportation 9,979 10,816 6,867r 800 955 657 10 133 908 187 600 9 Public utility 48.055 56,330 13,298r 331 2,530 2,661 498 620 1,819 1,544 1,299 10 Communication 15,394 31,950 13,340r 336 1,767 1,745 1,520 1,089 2,787 2,374 3,283 11 Real estate and financial 272,904 400,820 379,834r 20,752 35,103 32,664 21,646 33,058 36,224 30,002 32,708 12 Stocks2 96,057r 122,454 85,155 3,878 6,250r 7,761r 4,604r 6,266r 7,372 8,629 7,301 By type of offering 13 Public preferred 21,339 18,897 12,527r 656 1,548r 742r 768r l,261r 1,035 836 2,163 14 Common 57,118 82,657 47,828r 3,222 4,702r 7,019r 3,836r 5,005 6,337 7,793 5,138 15 Private placement3 17,600r 20,900 24,800 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 16 Manufacturing 22,723 22,271 17,798 634 2,370 2,345 1,306 2,254 2,379 1,769 2,077 17 Commercial and miscellaneous 20,231 25,761 15,713 2,152 1,134 2,749r 1,969r l,541r 2,768 4,604 2,707 18 Transportation 2,595 2,237 2,203 48 101 0 0 87 99 39 62 19 Public utility 6,532 7,050 2,214 141 185 209 133 91 190 60 331 20 Communication 2,366 3,439 494 0 0 0 64 0 47 0 0 21 Real estate and financial 41,612r 61,004 46,733 903 2,363r 2,458r l,132r 2,287r 1,890 2,158 2,125 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data cover only public offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data are not available. exclude secondary offerings, employee stock plans, investment companies other than closed- SOURCES. Beginning July 1993, Securities Data Company and the Board of Governors of end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include the Federal Reserve System. ownership securities issued by limited partnerships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Market and Corporate Finance A3 5 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1995 IItteemm 11999933 11999944 Apr. May June July Aug. Sept. Oct.r Nov. 1 Sales of own shares2 851,885 841,286 68,294 70,798 74,749 76,081 72,113 68,694 72,730 70,499 2 Redemptions of own shares 567,881 699,823 59,957 57,033 61,932 56,344 57,610 54,473 56,174 52,727 3 Net sales3 284,004 141,463 8,337 13,765 12,817 19,736 14,503 14,221 16,556 17,772 4 Assets4 1,510,209 1,550,490 1,710,280 1,769,287 1,808,753 1,880,754 1,908,525 1,962,817 1,963,496 2,032,958 5 Cash5 100,209 121,296 124,092 128,375 122,461 126,340 127,173 127,446 133,653 141,489 6 Other 1,409,838 1,429,195 1,586,187 1,640,913 1,686,292 1,754,415 1,781,352 1,835,371 1,829,843 1,891,470 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 market 5. Includes all U.S. Treasury securities and other short-term debt securities. 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 gains comprises substantially all open-end investment companies registered with the Securities and distributions and share issue of conversions from one fund to another in the same group. Exchange Commission. Data reflect underwritings of newly formed companies after their 3. Excludes sales and redemptions resulting from transfers of shares into or out of money initial offering of securities. 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 1993r 1994r 1995r AAccccoouunntt mmii'' 11999933rr 11999944rr Q4 Q1 Q2 Q3 Q4 Ql Q2 Q3 1 Profits with inventory valuation and capital consumption adjustment 401.4 464.5 526.5 512.8 455.9 531.5 549.8 568.9 559.6 561.1 614.4 2 Profits before taxes 406.4 464.3 528.2 504.5 471.7 523.2 547.5 570.4 594.1 588.4 609.6 3 Profits-tax liability 143.0 163.8 195.3 181.7 171.4 192.8 203.4 213.5 217.3 214.2 224.5 4 Profits after taxes 263.4 300.5 332.9 322.7 300.3 330.4 344.1 356.8 376.8 374.1 385.1 5 Dividends 169.5 197.3 211.0 202.9 204.4 208.8 212.5 218.5 221.7 224.6 228.5 6 Undistributed profits 93.9 103.3 121.9 119.8 95.9 121.7 131.6 138.3 155.1 149.6 156.6 7 Inventory valuation -7.5 -6.6 -13.3 -4.0 -3.9 -9.8 -16.5 -22.8 -51.9 -42.3 -9.8 8 Capital consumption adjustment 2.5 6.7 11.6 12.3 -11.8 18.1 18.8 21.3 17.4 15.0 14.6 SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • March 1996 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1994 1995 AAccccoouunntt 11999922 11999933 11999944 Ql Q2 Q3 Q4 Ql Q2 Q3 ASSETS 1 Accounts receivable, gross2 491.8 482.8 551.0 494.5 511.3 524.1 551.0 568.5 586.9 594.7 2 Consumer 118.3 116.5 134.8 120.1 124.3 130.3 134.8 135.8 141.7 146.2 3 Business 301.3 294.6 337.6 302.3 313.2 317.2 337.6 351.9 361.8 362.4 4 Real estate 72.2 71.7 78.5 72.1 73.8 76.6 78.5 80.8 83.4 86.1 5 LESS; Reserves for unearned income 53.2 50.7 55.0 51.2 51.9 51.1 55.0 58.9 62.1 61.2 6 Reserves for losses 16.2 11.2 12.4 11.6 12.1 12.1 12.4 12.9 13.7 13.8 7 Accounts receivable, net 422.4 420.9 483.5 431.7 447.3 460.9 483.5 496.7 511.1 519.7 8 All other 142.5 170.9 183.4 171.2 174.6 177.2 183.4 194.6 198.1 198.1 9 Total assets 564.9 591.8 666.9 602.9 621.9 638.1 666.9 691.4 709.2 717.8 LIABILITIES AND CAPITAL 10 Bank loans 37.6 25.3 21.2 24.2 23.3 21.6 21.2 21.0 21.5 21.8 11 Commercial paper 156.4 159.2 184.6 165.9 171.2 171.0 184.6 181.3 181.3 178.0 Debt 12 Owed to parent 39.5 42.7 51.0 41.1 44.7 50.0 51.0 52.5 57.5 59.0 13 Not elsewhere classified 196.3 206.0 235.0 211.7 219.6 228.2 235.0 254.4 264.4 272.1 14 All other liabilities 68.0 87.1 99.5 90.5 89.9 95.0 99.5 102.5 102.1 101.7 15 Capital, surplus, and undivided profits 67.1 71.4 75.7 69.5 73.2 72.3 75.7 79.7 82.5 84.4 16 Total liabilities and capital 564.9 591.8 666.9 602.9 621.9 638.1 666.9 691.4 709.2 717.1 1. Includes finance company subsidiaries of bank holding companies but not of retailers 2. Before deduction for unearned income and losses, 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 TTyyppee ooff ccrreeddiitt 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Seasonally adjusted 1 Total 539,996 545,533 614,784 660,714 661,656 671,807 675,247r 682,627r 687,187 2 Consumer 157,579 160,349 176,198 188,666 189,898 191,806 193,555r 194,620r 197,303 3 Real estate2 72,473 71,965 78,770 84,198 84,886 85,756 86,121 87,266 87,699 4 Business 309,944 313,219 359,816 387,850 386,872 394,245 395,571 400,74 lr 402,185 Not seasonally adjusted 5 Total 544,691 550,751 620,975 661,910 658,140 665,535 672,653r 681,965r 687,944 6 Consumer 159,558 162,770 178,999 187,303 187,803 190,830 193,615r 194,93 lr 198,072 7 Motor vehicles 57,259 56,057 61,609 65,162 65,861 68,271 68,857 70,816 68,167 8 Other consumer3 61,020 60,396 73,221 76,581 76,302 77,251 77,345 77,865 78,926 9 Securitized motor vehicles4. 29,734 36,024 31,897 32,135 32,381 31,551 31,693 30,096 34,394 10 Securitized other consumer4 11,545 10,293 12,272 13,425 13,259 13,757 15,720r 16,154r 16,585 11 Real estate2 72,243 71,727 78,479 83,351 84,987 86,107 86,128 87,471 87,672 12 Business 312,890 316,254 363,497 391,256 385,350 388,598 392,910 399,563r 402,200 13 Motor vehicles 89,011 95,173 118,197 127,487 124,005 124,444 125,053 129,216r 129,708 14 Retail5 20,541 18,091 21,514 22,142 22,953 23,883 25,006 25,752r 24,564 15 Wholesale6 29,890 31,148 35,037 36,989 32,147 31,392 29,313 32,209 33,519 16 Leasing 38,580 45,934 61,646 68,356 68,905 69,169 70,734 71,255 71,625 17 Equipment 151,424 145,452 157,953 169,995 170,253 170,825 171,239 172,657 173,183 18 Retail 33,521 35,513 39,680 42,008 42,541 43,121 42,823 43,697 44,194 19 Wholesale6 8,680 8,001 9,678 11,725 12,111 12,278 12,210 11,581 10,889 20 Leasing 109,223 101,938 108,595 116,262 115,601 115,426 116,206 117,379 118,100 21 Other business7 60,856 53,997 61,495 64,365 63,869 64,941 66,111 66,238 66,678 22 Securitized business assets4 11,599 21,632 25,852 29,409 27,223 28,388 30,507 31,452 32,631 23 Retail 1,120 2,869 4,494 4,989 4,784 4,587 4,818 4,586 4,974 24 Wholesale 5,756 10,584 14,826 18,310 16,469 17,986 19,773 20,390 21,208 25 Leasing 4,723 8,179 6,532 6,110 5,970 5,815 5,916 6,476 6,449 1. Includes finance company subsidiaries of bank holding companies but not of retailers 4. Outstanding balances of pools upon which securities have been issued; these balances and banks. Data are before deductions for unearned income and losses. Data in this table also are no longer carried on the balance sheets of the loan originator. appear in the Board's G.20 (422) monthly statistical release. For ordering address, see inside 5. Passenger car fleets and commercial land vehicles for which licenses are required. front cover. 6. Credit arising from transactions between manufacturers and dealers, that is, floor plan 2. Includes all loans secured by liens on any type of real estate, for example, first and junior financing. mortgages and home equity loans. 7. Includes loans on commercial accounts receivable, factored commercial accounts, and 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of receivable dealer capital; small loans used primarily for business or farm purposes; and consumer goods such as appliances, apparel, general merchandise, and recreation vehicles. wholesale and lease paper for mobile homes, campers, and travel trailers. 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 11999933 11999944 11999955 June July Aug. Sept. Oct. Nov. Dec. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 163.1 170.4 175.8 181.7 169.4 170.4 174.8 174.3 178.6 181.7 2 Amount of loan (thousands of dollars) 123.0 130.8 134.5 137.7 130.4 130.6 131.8 133.0 136.4 140.9 3 Loan-to-price ratio (percent) 78.0 78.8 78.6 78.2 78.9 78.9 78.1 77.8 78.9 79.1 4 Maturity (years) 26.1 27.5 27.7 27.2 26.6 27.3 28.0 26.6 27.7 27.6 5 Fees and charges (percent of loan amount)2 1.30 1.29 1.21 1.18 1.18 1.12 1.20 1.11 1.22 1.21 Yield (percent per year) 6 Contract rate1 7.03 7.26 7.65 7.54 7.58 7.56 7.50 7.39 7.27 7.20 7 Effective rate1'3 7.24 7.47 7.85 7.73 7.78 7.75 7.69 7.58 7.46 7.40 8 Contract rate (HUD series)4 7.37 8.58 n.a. 7.80 7.98 7.91 7.78 7.62 7.46 n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 7.46 8.68 n.a. 88..0000 8.09 8.03 88..0033 7.61 7.51 n.a. 10 GNMA securities6 6.65 7.96 7.57 7.24 7.27 7.49 7.26 7.16 7.01 6.82 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 190,861 222,057 253,511 232,534 235,882 238,850 241,378 246,234 249,928 253,511 12 FHAA'A insured 23,857 28,377 28,210 28,886 28,761 28,640 28,515 28,442 28,424 28,210 13 Conventional 167,004 194,499 224,749 204,022 207,227 210,063 212,652 217,469 221,027 224,749 14 Mortgage transactions purchased (during period) 92,037 62,389 56,598 6,575 5,657 . 5,688 5,002 7,443 6,148 6,243 Mortgage commitments (during period) 15 Issued7 92,537 54,038 56,092 5,605 4,512 6,284 6,019 6,732 6,038 4,765 16 To sell8 5,097 1,820 360 9 26 53 9 0 10 0 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 55,012 72,693 107,424 85,532 88,874 91,544 94,989 99,758 102,997 107,424 18 FHAA'A insured 321 276 267 253 250 246 281 276 271 267 19 Conventional 54,691 72,416 107,157 85,278 88,624 91,298 94,708 99,482 102,726 107,157 Mortgage transactions (during period) ?0 Purchases 229,242 124,697 98,470 7,001 7,316 9,594 11,458 11,092 9,989 13,108 21 Sales 208,723 117,110 85,877 5,326 6,074 8,161 10,239 9,856 9,011 11,712 22 Mortgage commitments contracted (during period)9 274,599 136,067 118,659 6,198 8,106 10,578 12,469 10,388 11,339 14,609 1. Weighted averages based on sample surveys of mortgages originated by major institu- 6. Average net yields to investors on fully modified pass-through securities backed by tional lender groups for purchase of newly built homes; compiled by the Federal Housing mortgages and guaranteed by the Government National Mortgage Association (GNMA), 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 the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. 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 U.S. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Department of Housing and Urban Development (HUD). Based on transactions on the first Mortgage Corporation's mortgage commitments and mortgage transactions include activity day of the subsequent month. under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured exclude swap activity. 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 • March 1996 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1994 1995 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999911 11999922 11999933 Q3 Q4 Q1 Q2 Q3P 1 All holders 3,962,607r 4,094,067r 4,268,983r 4,419,367r 4,475,242r 4,517,245r 4,585,646 4,654,573 By type of property 2 One- to four-family residences 2,849,780r 3,037,408' 3,227,633' 3,375,955' 3,432,165' 3,466,120' 3,524,669 3,583,881 3 Multifamily residences 284,412' 274,234' 270,796' 275,956' 275,304' 276,445' 280,602 283,767 4 Commercial 749,110' 701,687' 689,360' 684,831' 684,803' 691,276' 696,526 702,506 3 79,305 80,738 81,194 82,625 82,971 83,404 83,850 84,419 By type of holder 6 Major financial institutions 1,846,726 1,769,187 1,767,835 1,786,074 1,815,810 1,841,815 1,868,175 1,895,299 / Commercial banks2 876,100 894,513 940,444 981,365 1,004,280 1,024,854 1,053,048 1,072,791 8 One- to four-family 483,623 507,780 556,538 592,021 611,697 625,378 648,705 663,307 9 Multifamily 36,935 38,024 38,635 38,004 38,916 39,746 40,593 42,537 10 Commercial 337,095 328,826 324,409 328,931 331,100 336,795 340,176 343,123 11 Farm 18,447 19,882 20,862 22,408 22,567 22,936 23,575 23,823 12 Savings institutions3 705,367 627,972 598,330 587,545 596,199' 601,777 599,745 604,616 13 One- to four-family 538,358 489,622 469,959 466,704 477,499 483,625 482,005 488,707 14 Multifamily 79,881 69,791 67,362 65,532 64,400 63,778 64,404 63,437 13 Commercial 86,741 68,235 60,704 55,017 54,011 54,085 53,054 52,182 16 Farm 388 324 305 291 289 288 282 291 1/ Life insurance companies 265,258 246,702 229,061 217,165 215,332 215,184 215,382 217,892 18 One- to four-family 11,547 11,441 9,458 7,984 7,910 7,892 7,911 8,006 19 Multifamily 29,562 27,770 25,814 24,534 24,306 24,250 24,310 24,601 20 Commercial 214,105 198,269 184,305 175,168 173,539 173,142 173,565 175,643 21 Farm 10,044 9,222 9,484 9,479 9,577 9,900 9,596 9,643 22 Federal and related agencies 266,146 286,263 328,598 329,304 332233,,449911 319,770 315,208 314,358 23 Government National Mortgage Association 19 30 22 12 66 15 7 2 24 One- to four-family 19 30 15 12 6 15 7 2 23 Multifamily 0 0 7 0 0 0 0 0 26 Farmers Home Administration4 41,713 41,695 41,386 41,587 41,781 41,857 41,917 41,858 2/ One- to four-family 18,496 16,912 15,303 14,084 13,826 13,507 13,217 12,914 28 Multifamily 10,141 10,575 10,940 11,243 11,319 11,418 11,512 11,557 29 Commercial 4,905 5,158 5,406 5,608 5,670 5,807 5,949 6,096 30 Farm 8,171 9,050 9,739 10,652 10,966 11,124 11,239 11,291 31 Federal Housing and Veterans' Administrations 10,733 12,581 12,215 10,533 10,964 10,890 10,098 9,535 32 One- to four-family 4,036 5,153 5,364 4,321 4,753 4,715 4,838 4,918 33 Multifamily 6,697 7,428 6,851 6,212 6,211 6,175 5,260 4,617 34 Resolution Trust Corporation 45,822 32,045 17,284 15,403 10,428 9,342 6,456 4,889 33 One- to four-family 14,535 12,960 7,203 6,998 5,200 4,755 2,870 2,299 36 Multifamily 15,018 9,621 5,327 4,569 2,859 2,494 1,940 1,420 H Commercial 16,269 9,464 4,754 3,836 2,369 2,092 1,645 1,170 38 Farm 0 0 0 0 0 0 0 0 39 Federal Deposit Insurance Corporation 0 0 14,112 9,169 7,821 6,730 6,039 5,015 40 One- to four-family 0 0 2,367 1,241 1,049 840 731 618 41 Multifamily 0 0 1,426 2,090 1,595 1,310 1,135 722 42 Commercial 0 0 10,319 5,838 5,177 4,580 4,173 3,674 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 112,283 137,584 166,642 177,200 178,059 177,615 178,462 182,229 43 One- to four-family 100,387 124,016 151,310 161,255 162,160 161,780 162,674 166,393 46 Multifamily 11,896 13,568 15,332 15,945 15,899 15,835 15,788 15,836 47 Federal Land Banks 28,767 28,664 28,460 28,538 28,555 28,065 28,005 28,151 4488 One- to four-family 1,693 1,687 1,675 1,679 1,671 1,651 1,648 1,656 4499 Farm 27,074 26,977 26,785 26,859 26,885 26,414 26,357 26,495 30 Federal Home Loan Mortgage Corporation 26,809 33,665 48,476 46,863 45,876 45,256 44,224 42,678 31 One- to four-family 24,125 31,032 45,929 44,208 43,046 42,122 40,963 39,244 32 Multifamily 2,684 2,633 2,547 2,655 2,830 3,134 3,261 3,434 53 Mortgage pools or trusts5 1,258,155' 1,434,264' 1,563,453' 1,693,908' 1,716,209' 1,731,272' 1,759,314 1,797,162 34 Government National Mortgage Association 425,295 419,516 414,066 444,976 450,934 454,401 457,101 463,654 33 One- to four-family 415,767 410,675 404,864 435,511 441,198 444,632 446,855 453,114 36 Multifamily 9,528 8,841 9,202 9,465 9,736 9,769 10,246 10,540 37 Federal Home Loan Mortgage Corporation 359,163 407,514 446,029 482,987 486,480 488,723 496,139 503,457 38 One- to four-family 351,906 401,525 441,494 479,539 483,354 485,643 493,105 500,504 39 Multifamily 7,257 5,989 4,535 3,448 3,126 3,080 3,034 2,953 60 Federal National Mortgage Association 371,984 444,979 495,525 523,512 530,343 533,262 543,669 559,585 61 One- to four-family 362,667 435,979 486,804 514,375 520,763 523,903 533,091 548,400 62 Multifamily 9,317 9,000 8,721 9,137 9,580 9,359 10,578 11,185 63 Farmers Home Administration4 47 38 28 20 19 14 13 12 64 One- to four-family 11 8 5 4 3 2 2 2 63 Multifamily 0 0 0 0 0 0 0 0 66 Commercial 19 17 13 9 9 7 6 5 67 Farm 17 13 10 7 7 5 5 5 68 Private mortgage conduits 101,665' 162,217' 207,806' 242,413' 248,433' 254,871' 262,393 270,454 69 One- to four-family 91,489' 140,718' 173,635' 193,787' 196,733' 201,314' 205,018 209,713 70 Multifamily 3,698 6,305 8,701 13,891 14,925 15,743 17,281 18,903 71 Commercial 6,479 15,194 25,469 34,735 36,774 37,814 40,094 41,838 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others6 591,580' 604,353' 609,097' 610,080' 619,732' 624,388' 642,949 647,754 74 One- to four-family 431,122' 447,871' 455,709' 452,232' 461,297' 464,346' 481,028 484,084 73 Multifamily 61,798' 64,688' 65,397' 69,230' 69,602' 70,352' 71,261 72,024 76 Commercial 83,496' 76,524' 73,982' 75,689' 76,153' 76,955' 77,864 78,774 77 Farm 15,164 15,270 14,009 12,929 12,681 12,736 12,796 12,871 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 local 2. Includes loans held by nondeposit trust companies but not loans held by bank trust credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and departments. finance companies. 3. Includes savings banks and savings and loan associations. SOURCE. Based on data from various institutional and government sources. Separation of 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from nonfarm mortgage debt by type of property, if not reported directly, and interpolations and FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. changes by the Farmers Home Administration. 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 A3 9 1.55 CONSUMER INSTALLMENT CREDIT1 Millions of dollars, amounts outstanding, end of period 1995 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999922 11999933 11999944 June July Aug. Sept. Oct. Nov. Seasonally adjusted 1 Total 730,847 790,351 902,853 970,608 979,375 989,695 993,843 1,005,178r 1,013,847 2 Automobile 257,436 280,566 317,237 330,709 337,127 339,770 341,155 344,67 lr 347,896 3 Revolving 258,081 286,588 334,511 372,350 375,272 379,669 382,094 387,180r 390,140 4 Other2 215,331 223,197 251,106 267,549 266,976 270,255 270,595 273,326r 275,811 Not seasonally adjusted 5 Total 748,057 809,440 925,000 964,256 971,965 990,428 996,525 l,005,423r 1,017,773 By major holder 6 Commercial banks 330,088 367,566 427,851 437,498 441,165 451,784 449,502 451,232 453,690 7 Finance companies 118,279 116,453 134,830 141,743 142,163 145,522 146,202 148,681 147,093 8 Credit unions 91,694 101,634 119,594 125,313 126,500 128,424 129,027 130,261r 130,972 9 Savings institutions 37,049 37,855 38,468 38,400 38,907 38,634 38,894 38,500 38,500 10 Nonfinancial business3 49,561 55,296 60,957 56,349 56,360 55,723 54,177 54,607 53,139 11 Pools of securitized assets4 121,386 130,636 143,300 164,953 166,870 170,341 178,723 182,142r 194,379 By major type of credit5 12 Automobile 258,226 281,458 318,213 330,739 336,154 341,716 344,401 347,513r 349,776 n Commercial banks 109,623 122,000 141,851 144,761 146,149 148,549 148,901 150,782 149,905 14 Finance companies 57,259 56,057 61,609 65,162 65,861 68,271 68,857 70,816 68,167 15 Pools of securitized assets4 33,888 39,481 34,918 36,690 37,071 36,681 37,476 36,453 42,050 16 Revolving 271,850 301,837 352,266 367,602 370,520 377,784 380,341 384,625r 392,706 17 Commercial banks 132,966 149,920 180,183 182,950 184,245 189,163 185,572 186,463 189,405 18 Nonfinancial business3 44,466 50,125 55,341 51,006 50,520 48,976 48,968 49,358 47,839 19 Pools of securitized assets4 74,921 79,878 94,376 112,609 114,338 117,729 123,749 126,739 132,978 ?.n Other 217,981 226,145 254,521 265,881 264,734 269,467 271,845 273,285r 275,291 21 Commercial banks 87,499 95,646 105,817 109,787 110,771 114,072 115,029 113,987 114,380 22 Finance companies 61,020 60,396 73,221 76,581 76,302 77,251 77,345 77,865 78,926 73 Nonfinancial business3 5,095 5,171 5,616 5,309 5,283 5,286 5,271 5,249 5,300 24 Pools of securitized assets4 12,577 11,277 14,006 15,654 15,461 15,931 17,498 18,950r 19,351 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 3. Includes retailers and gasoline companies. extended to individuals that is scheduled to be repaid (or has the option of repayment) in two 4. Outstanding balances of pools upon which securities have been issued; these balances or more installments. Data in this table also appear in the Board's G.19 (421) monthly are no longer carried on the balance sheets of the loan originator. 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 1995 IItteemm 11999922 11999933 11999944 May June July Aug. Sept. Oct. Nov. INTEREST RATES Commercial hanks2 1 48-month new car 9.29 8.09 8.12 9.78 n.a. n.a. 9.44 n.a. n.a. 9.36 2 24-month personal 14.04 13.47 13.19 14.03 n.a. n.a. 13.84 n.a. n.a. 13.80 Credit card plan 3 All accounts n.a. n.a. 15.69 16.15 n.a. n.a. 15.98 n.a. n.a. 15.81 4 Accounts assessed interest n.a. n.a. 15.77 16.23 n.a. n.a. 15.94 n.a. n.a. 15.71 Auto finance companies 5 New car 9.93 9.48 9.79 11.43 11.08 11.01 10.85 10.75 10.89 10.84 6 Used car 13.80 12.79 13.49 14.78 14.63 14.35 14.23 14.12 14.06 13.98 OTHER TERMS3 Maturity (months) 7 New car 54.0 54.5 54.0 54.4 53.9 54.1 53.5 53.4 54.6 54.5 8 Used car 47.9 48.8 50.2 52.2 52.3 52.4 52.3 52.3 52.3 52.2 Loan-to-value ratio 9 New car 89 91 92 92 92 92 92 92 92 92 10 Used car 97 98 99 99 99 100 99 100 99 99 Amount financed (dollars) 11 New car 13,584 14,332 15,375 16,155 16,083 16,086 16,056 16,402 16,430 16,583 12 Used car 9,119 9,875 10,709 11,396 11,518 11,637 11,662 11,725 11,883 12,012 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals that is scheduled to be repaid (or has the option of repayment) in two 3. At auto finance companies, or more installments. Data in this table also appear in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic NonfinancialS tatistics • March 1996 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1994r 1995r 11999900 11999911 11999922 11999933 11999944 Ql Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors.... 669.4r 480.6r 545.3r 625.9r 617.0r 652.5 581.2 580.0 654.3 831.0 877.5 513.1 By sector and instrument 2 US. government 246.9 278.2 304.0 256.1 155.9 206.4 131.3 135.6 150.1 266.8 202.8 65.8 3 Treasury securities 238.7 292.0 303.8 248.3 155.7 207.7 126.6 132.8 155.7 268.0 201.2 65.4 4 Budget agency issues and mortgages 8.2 -13.8 .2 7.8 .2 -1.3 4.7 2.9 -5.7 -1.2 1.6 .4 5 Private 422.5r 202.4r 241.3r 369.8r 461. lr 446.1 449.9 444.3 504.2 564.2 674.8 447.3 By instrument 6 Tax-exempt obligations 49.3r 87.8r 30.5r 74.8r -29.3r 15.7 -20.7 -58.4 -53.8 -53.3 -10.6 -115.8 7 Corporate bonds 47.1 78.8 67.6 75.2 22.0 35.4 35.9 14.2 2.7 41.4 119.5 60.7 8 Mortgages 232.4r 158.4r 130.9r 157.2r 196.5r 174.2 194.2 203.9 213.5 219.6 238.8 251.9 y Home mortgages 226.3r 173.6r 187.6r 187.9r 204.5r 203.3 186.2 208.8 219.8 192.5 204.2 215.3 10 Multifamily residential 1.5r -5.5r - 10.4r -6.0 1.3r -.3 4.0 5.6 -4.2 2.9 15.0 11.9 li Commercial 6.1r -10.0' —47.8r —25.0r -li.r -29.4 1.1 -12.7 -3.4 22.5 17.8 22.4 12 Farm — 1.6r .4 1.4r .5 1.8 .6 2.9 2.2 1.4 1.7 1.8 2.3 13 Consumer credit 15.6 -14.8 7.3 58.9 121.2 65.0 129.8 124.8 165.2 93.8 158.1 109.6 14 Bank loans n.e.c .4 -40.9 - 13.7r 3.8r 72.7r 57.7 58.7 97.1 77.1 143.5 94.4 99.4 15 Commercial paper 9.7 -18.4 8.6 10.0 21.4 26.1 9.7 26.4 23.5 23.1 37.5 16.0 16 Other loans 68.1r -48.5r 10.1' - 10.2r 55.4r 73.2 40.8 35.1 72.4 82.2 57.7 25.6 By borrowing sector 17 Household....'. 263.7r 182.7' 200.7r 246.5r 360.3r 292.3 349.9 379.7 419.1 301.8 388.9 380.3 18 Nonfinancial business 112.2r -61.9r 19.5r 61.0r 144.3r 154.1 139.4 130.0 153.6 314.5 302.8 187.0 19 Farm 1.0r 2.1 1.3r 2.0 2.8 3.1 7.8 2.4 -2.0 .9 3.6 4.3 20 Nonfarm noncorporate 1.1' — 11,0r -16.0r Iff 12.T 13.2 10.0 8.8 16.5 51.3 43.5 21.5 21 Corporate 110.0r -53.0r 34. r 52.0r 129.3r 137.7 121.7 118.8 139.1 262.3 255.7 161.1 22 State and local government 46.0 62.6 21.7 63,0 -44.0 -2.9 -47.2 -53.4 -72.6 -56.2 -27.5 -119.9 23 Foreign net borrowing in United States 23.9 14.8 22.6 68.8 -20.3 -100.3 -34.2 19.6 33.5 61.4 40.4 97.5 24 Bonds 21.4 15.0 15.7 81.3 7.1 -2.6 -17.4 20.8 27.7 13.5 49.9 55.0 25 Bank loans n.e.c -2.9 3.1 2.3 .7 1.4 6.0 -4.5 4.7 -.5 8.1 5.6 8.2 26 Commercial paper 12.3 6.4 5.2 -9.0 -27.3 -101.8 -5.2 -8.1 5.9 37.9 -11.1 30.9 27 U.S. government and other loans -7.0 -9.8 -.6 -4.2 -1.6 -1.8 -7.1 2.2 .4 1.9 -4.0 3.4 28 Total domestic plus foreign 693.2r 495.4r 568.01" 694.7r 596.6r 552.2 547.0 599.5 687.8 892.4 918.0 610.6 Financial sectors 29 Total net borrowing by financial sectors 210.9r 154.5r 240.1r 290.8r 459.4r 493.1 380.1 419.7 544.8 268.7 432.0 407.7 By instrument 30 U.S. government-related 167.4 145.7 155.8 164.2 284.3 309.4 264.5 245.7 317.5 93.0 197.7 230.1 31 Government-sponsored enterprises securities 17.1 9.2 40.3 80.6 176.9 160.0 146.6 152.1 249.0 62.9 127.2 101.5 32 Mortgage pool securities 150.3 136.6 115.6 83.6 112.1 168.5 117.9 93.6 68.5 30.0 70.5 128.6 33 Loans from U.S. government -.1 .0 .0 .0 -4.8 -19.2 .0 .0 .0 .0 .0 .0 34 43.6r 8.7r 84.3r 126.6r 175.2r 183.8 115.5 174.0 227.3 175.7 234.4 177.6 35 Corporate bonds 53.5r 68.8r 82.8r 119.8r 113.4r 161.1 96.4 99.5 96.5 156.5 170.2 133.0 36 Mortgages .6 .5 .6 3.6 9.8 9.8 12.4 12.0 4.9 5.1 4.8 2.3 37 Bank loans n.e.c 4.7 8.8 2.2 —13.0r -12.3 -12.0 -27.4 -11.7 1.9 1 24.1 -6.8 38 Open market paper 8.6 -32.0 -.7 -6.2 41.6 35.1 4.3 41.3 85.9 38.5 34.0 43.3 39 Loans from Federal Home Loan Banks -24.7 -38.0 .8 23.3 22.8 -10.8 32.3 30.7 38.8 -23.6 2.2 5.9 By borrowing sector 40 Government-sponsored enterprises 17.0 9.1 40.2 80.6 172.1 140.8 146.6 152.1 249.0 62.9 127.2 101.5 41 Federally related mortgage pools 150.3 136.6 115.6 83.6 112.1 168.5 117.9 93.6 68.5 30.0 70.5 128.6 42 43.6r 8.7r 84.3r 126.6r 175.2r 183.8 115.5 174.0 227.3 175.7 234.4 177.6 43 Commercial banks .9' -10.7r 7.7r 4.6r 9.9r .9 10.6 23.9 4.1 6.3 18.2 9.6 44 Bank holding companies -27.7 -2.5 2.3 8.8 10.3 3.5 10.1 11.5 16.0 13.3 23.8 25.2 45 Funding corporations 15.4 -6.5 13.2 2.9 24.2 48.8 -10.5 47.3 11.1 61.6 21.4 41.9 46 Savings institutions -30.9r -44.7r -Iff 11.3r 12.8 -5.5 5.8 14.8 36.1 -18.9 -6.8 4.9 47 Credit unions .0 .0 .0 .2 .2 .1 .2 .5 .2 -.3 -.1 .1 48 Life insurance companies .0 .0 .0 .2 .3 .0 .0 .0 1.3 .0 .1 -.1 49 Finance companies 23.8 17.7 -1.6 .2 50.2 63.7 63.6 16.3 57.3 83.1 57.2 6.5 50 Mortgage companies .0 -2.4 8.0 ,0r -11.5 -21.8 -18.2 -7.0 1.1 -7.4 14.8 -12.0 51 Real estate investment trusts (REITs) .8 1.2 .3 3.4 13.7 14.5 15.3 18.8 6.3 6.9 6.4 2.2 52 Brokers and dealers 1.5 3.7 2.7 12.0 .5 -9.9 .3 -7.6 19.3 -29.5 -.1 2.1 53 Issuers of asset-backed securities (ABSs) 59.8r 52.9r 58.6r 83.0r 64.5r 89.4 38.5 55.4 74.5 60.8 99.4 97.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1994' 1995' TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999900 11999911 11999922 11999933 11999944 Ql Q2 Q3 Q4 Ql Q2 Q3 All sectors 54 Total net borrowing, all sectors 904.1r 649.9r 808.0r 985.5r l,056.0r 1,045.3 927.0 1,019.2 1,232.6 1,161.1 1,350.0 1,018.3 55 U.S. government securities 414.4 424.0 459.8 420.3 444.9 534.9 395.8 381.3 467.5 359.8 400.5 295.9 56 Tax-exempt securities 49.3r 87.8r 30.5r 74.8r -29.3' 15.7 -20.7 -58.4 -53.8 -53.3 -10.6 -115.8 57 Corporate and foreign bonds 122.0r 162.5r 166.1r 276.3r 143.8' 192.7 116.4 135.7 130.4 225.3 319.1 248.7 58 Mortgages 233.0r 158.9r 131.5r 160.8r 206.3' 184.0 206.6 215.9 218.4 224.7 243.6 254.2 59 Consumer credit 15.6 -14.8 7.3 58.9 121.2 65.0 129.8 124.8 165.2 93.8 158.1 109.6 60 Bank loans n.e.c 2.2 -29.1 -9.3r -8.5 61.8' 51.8 26.8 90.1 78.5 151.7 124.1 100.7 61 Open market paper 30.7 -44.0 13.1 -5.1 35.7 -40.7 8.8 59.6 115.3 99.5 60.4 90.2 62 Other loans 37.11 -95.6' 8.9r 8.0' 71.7' 41.9 63.5 70.2 111.0 59.6 55.0 34.8 Funds raised through mutual funds and corporate equities 63 Total net share issues 18.4r 209.1r 293.5r 428.6r 140.71" 294.4 252.8 104.7 -89.1 5.2 161.2 193.9 64 Mutual funds 63.0r 146.9r 207.7r 310.2' 119.6' 187.2 190.2 121.8 -20.6 56.1 165.1 168.8 65 Corporate equities —44.6r 62.2r 85.8r 118.4' 21.1' 107.2 62.6 -17.1 -68.5 -50.9 -3.9 25.1 66 Nonfinancial corporations -63.0 18.3 27.0 21.3 -44.9 -9.6 -2.0 -50.0 -118.0 -68.4 -59.6 -84.8 67 Financial corporations 11.0r 13.3r 28. lr 36.6' 23.3' 48.3 18.6 9.8 16.3 4.8 18.7 27.9 68 Foreign shares purchased in United States 7.4 30.7 30.7 60.5 42.7 68.5 45.9 23.1 33.2 12.8 37.0 82.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Financial Statistics • March 1996 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 Q4 Ql Q2 Q3 Q4 Ql Q2 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 861.8 645.2 802.5 976.8 1,038.4 1,066.1 1,072.9 861.7 1,040.3 1,178.7 1,222.0 1,237.3 2 Private domestic nonfinancial sectors 189.9 -7.4 75.9 15.8 234.9 104.4 288.8 270.4 141.9 238.5 -33.8 -238.2 3 Households 157.0 -39.6 74.2 3.1 317.4 196.7 337.0 385.9 186.2 360.3 148.3 -157.1 4 Nonfarm noncorporate business -1.7 -3.7 -1.1 -3.2 -2.0 -3.5 -3.6 -1.8 -1.9 -.5 .9 .9 3 Nonfinancial corporate business -3.7 6.7 29.6 14.5 24.1 12.2 19.9 12.2 25.1 39.2 6.2 26.6 6 State and local governments 38.3 29.2 -26.8 1.5 -104.6 -101.0 -64.4 -125.9 -67.6 -160.5 -189.2 -108.6 / US. government 33.7 10.5 -11.9 —18.4 -24.2 -7.7 -46.5 -16.2 -9.3 -24.7 -13.0 -25.7 8 Foreign 85.5 26.6 101.2 121.7 132.1 204.2 123.9 64.3 132.2 208.1 260.1 340.8 y Financial sectors 552.7 615.4 637.3 857.7 695.6 765.2 706.7 543.2 775.6 756.8 1,008.8 1,160.5 10 Government sponsored enterprises 13.9 15.2 69.0 90.2 123.3 71.2 92.4 101.1 125.6 174.3 12.2 86.7 II Federally related mortgage pools 150.3 136.6 115.6 83.6 112.1 89.9 196.0 108.1 91.0 53.4 62.5 59.0 12 Monetary authority 8.1 31.1 27.9 36.2 31.5 38.5 48.8 17.9 24.0 35.4 24.8 12.6 13 Commercial banking 125.1 80.8 95.3 142.2 162.0 188.1 184.7 109.1 191.1 163.3 359.6 292.8 14 U.S. commercial banks 94.9 35.7 69.5 149.6 148.1 197.3 120.6 128.4 164.4 178.9 177.5 212.6 13 Foreign banking offices 28.4 48.5 16.5 -9.8 11.2 -6.5 59.0 -21.5 22.1 -15.0 182.3 75.4 lb Bank holding companies -2.8 -1.5 5.6 .0 .9 -4.8 3.1 .2 2.7 -2.4 -1.9 3.2 17 Banks in U.S. affiliated areas 4.5 -1.9 3.7 2.4 1.9 2.1 2.1 1.9 1.9 1.8 1.7 1.7 18 Funding corporations 16.1 15.8 23.5 18.1 13.8 42.6 19.5 33.5 25.1 -23.0 22.3 -36.6 iy Thrift institutions -154.0 -123.5 -61.3 -1.7 34.9 -13.3 13.6 42.6 52.8 30.5 29.4 5.4 20 Life insurance companies 94.4 83.2 79.1 105.1 58.1 86.4 47.6 6.4 80.5 98.1 109.9 91.1 21 Other insurance companies 26.5 32.6 12.8 33.3 21.1 32.1 27.9 20.8 16.0 19.7 13.0 14.9 22 Private pension funds 17.2 85.7 37.3 40.2 -42.4 -60.1 -97.7 -30.7 -17.6 -23.6 97.6 138.9 23 State and local government retirement funds 34.9 46.0 34.4 25.5 60.8 36.9 72.9 69.3 26.3 74.6 64.5 65.7 14 Finance companies 28.8 -9.8 5.0 -9.0 68.2 22.6 72.1 49.8 58.9 91.8 95.7 56.1 23 Mortgage companies .0 11.2 .1 .0 -22.9 -13.3 -43.5 -36.3 -14.0 2.1 16.5 2.3 26 Mutual funds 41.4 90.3 123.7 169.6 7.6 138.9 61.7 9.4 24.2 -64.8 --1100..11 2255..22 27 Closed-end funds .2 14.7 17.4 10.2 3.5 7.7 8.3 3.2 1.4 1.0 ..88 11..11 28 Money market funds 80.9 30.1 1.3 14.6 28.5 56.9 -45.0 32.2 50.0 76.7 25.5 138.2 29 Real estate investment trusts (REITs) -.7 -.7 1.1 .6 4.7 .2 6.6 6.6 5.5 .2 2.5 3.1 30 Brokers and dealers 2.8 17.5 -6.9 9.2 -34.0 -82.8 -55.7 -52.6 -19.3 -8.6 30.7 124.2 31 Asset-backed securities issuers (ABSs) 51.1 48.9 53.8 80.5 57.8 113.7 87.9 42.8 46.3 54.3 49.8 7788..33 32 Bank personal trusts 15.9 10.0 8.0 9.5 7.1 8.9 8.9 10.2 7.7 1.4 1.6 11..88 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Net flows through credit markets 861.8 645.2 802.5 976.8 1,038.4 1,066.1 1,072.9 861.7 1,040.3 1,178.7 1,222.0 1,237.3 Other financial sources 34 Official foreign exchange 2.0 -5.9 -1.6 .8 -5.8 2.2 -.2 -14.6 .2 -8.6 17.8 10.3 33 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 .7 .7 .6 .8 .7 .7 .7 3/ Life insurance reserves 25.7 25.7 27.3 35.2 20.1 35.5 20.0 10.6 23.8 26.2 25.4 25.3 38 Pension fund reserves 165.1 360.3 249.7 309.2 103.6 251.6 6.8 102.6 155.4 149.6 393.6 311.2 39 Interbank claims 35.0 -3.4 43.5 50.9 85.5 4.7 173.0 165.8 -55.0 58.0 27.4 119.4 40 Checkable deposits and currency 43.6 86.3 113.5 117.3 -10.1 81.9 173.1 -66.1 -89.6 -57.7 117.7 103.0 41 Small time and savings deposits 63.7 1.5 -57.2 -70.3 -40.5 -36.6 2.5 -62.4 -57.2 -44.9 52.9 134.3 42 Large time deposits -66.1 -58.5 -73.2 -23.5 19.0 13.7 -39.6 -4.4 81.2 39.0 95.1 44.0 43 Money market fund shares 70.3 41.2 3.9 19.2 45.4 61.1 -35.1 68.5 49.9 98.4 16.6 275.4 44 Security repurchase agreements -24.2 -16.5 35.5 65.5 84.3 -14.4 23.0 176.4 82.8 54.8 167.0 127.5 43 Foreign deposits 38.2 -16.7 -7.2 -11.7 30.1 32.8 16.0 16.9 23.2 64.3 5.0 10.0 46 Mutual fund shares 65.3 151.5 211.9 320.0 138.3 287.7 236.4 144.0 165.4 7.6 104.5 178.5 41 Corporate equities -45.6 64.0 84.1 120.1 23.7 141.8 107.3 63.9 -5.7 -70.5 -54.9 -31.9 4488 Security credit 3.5 51.4 4.2 61.9 -2.3 86.5 29.9 -17.7 -62.3 40.9 -15.1 12.6 4499 Trade debt 37.0 3.8 41.1 50.0 93.4 54.4 36.6 96.3 115.8 125.0 74.7 65.3 30 Taxes payable -4.8 -6.2 8.5 4.6 3.0 4.9 15.3 -14.4 8.2 3.0 20.9 -5.8 31 Noncorporate proprietors' equity -27.1 -4.2 18.3 -11.7 -30.0 -27.5 -49.5 -25.0 -17.2 -28.3 -40.8 -13.1 52 Investment in bank personal trusts 29.7 16.1 -7.1 1.6 18.8 17.6 15.0 24.7 23.6 11.9 21.0 22.3 33 Miscellaneous 139.0 203.4 270.2 315.6 269.6 389.9 386.7 223.1 320.1 148.7 534.7 298.8 54 Total financial sources 1,414.5 1,539.0 1,765.9 2,332.1 1,885.5 2,454.6 2,190.7 1,750.6 1,803.7 1,796.9 2,786.1 2,925.1 Floats not included in assets (—) 55 U.S. government checkable deposits 3.3 -13.1 .7 -1.5 -4.8 -15.5 -2.4 -1.4 15.2 -30.7 13.9 -19.0 36 Other checkable deposits 8.5 4.5 1.6 -1.3 -2.8 -6.2 .6 -1.1 -6.2 -4.3 -5.0 -5.4 37 Trade credit 9.1 9.7 4.5 14.2 5.6 10.5 -27.7 16.0 29.4 4.9 -18.0 -5.4 Liabilities not identified as assets (-) 58 Treasury currency .2 -.6 -.2 -.2 -.2 -.2 -.2 -.2 -.2 -.2 -.2 -.1 39 Interbank claims 1.6 26.2 -4.9 4.2 -2.7 24.0 -29.1 5.3 11.6 1.2 -3.9 9.7 60 Security repurchase agreements -24.0 6.2 27.9 82.5 48.6 22.8 13.5 117.0 66.8 -3.0 87.6 -32.8 61 Taxes payable .1 1.3 14.0 1.0 -2.0 -8.6 .8 1.4 1.0 -11.1 -16.3 30.6 62 Miscellaneous -32.2 -31.6 -51.8 -44.9 29.1 23.0 41.3 -170.0 149.4 95.6 -90.2 -122.3 63 Total identified to sectors as assets 1,447.9 1,536.4 1,774.2 2,278.1 1,814.7 2,404.6 2,194.1 1,783.4 1,536.9 1,744.5 2,818.2 3,069.9 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. 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 1994 1995' TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999922 11999933 11999944 Qi Q2 Q3 Q4 Ql Q2 Q3 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors ll,348.2r ll,896.7r 12,537.4r 13,160.6r 12,676.2r 12,808.0r 12,962.6r 13,160.6r 13,336.6 13,541.7 13,680.0 By sector and instrument 2 U.S. government 2,776.4 3,080.3 3,336.5 3,492.3 3,387.7 3,395.4 3,432.3 3,492.3 3,557.9 3,583.5 3,603.4 3 Treasury securities 2,757.8 3,061.6 3,309.9 3,465.6 3,361.4 3,368.0 3,404.1 3,465.6 3,531.5 3,556.7 3,576.5 4 Budget agency issues and mortgages 18.6 18.8 26.6 26.7 26.3 27.4 28.2 26.7 26.4 26.8 26.9 5 Private 8,571.8r 8,816.3' 9,200.9' 9,668.3' 9,288.5' 9,412.6' 9,530.3' 9,668.3' 9,778.6 9,958.2 10,076.6 By instrument 6 Tax-exempt obligations l,272.2r 1,302.8' 1,377.5' 1,348.2' 1,379.9' 1,372.2' 1,362.6' 1,348.2' 1,333.6 1,328.3 1,304.3 7 Corporate bonds 1,086.9 1,154.5 1,229.7 1,251.7 1,238.6 1,247.5 1,251.1 1,251.7 1,262.1 1,292.0 1,306.8 8 Mortgages 3,957.8r 4,088.7' 4,260.0' 4,456.5' 4,289.7' 4,345.8' 4,401.9' 4,456.5' 4,497.2 4,564.4 4,632.8 y Home mortgages 2,849.8r 3,037.4' 3,227.6' 3,432.2' 3,264.6' 3,318.7' 3,376.0' 3,432.2' 3,466.1 3,524.7 3,583.9 10 Multifamily residential 282.8' 272.5' 267.8' 269.1' 267.8' 268.8' 270.2' 269.1' 269.8 273.6 276.6 11 Commercial 745.9r 698.1' 683.4' 672.3' 676.0' 676.3' 673.1' 672.3' 677.9 682.3 687.9 12 Farm 79.3 80.7' 81.2 83.0 81.3 82.1 82.6 83.0 83.4 83.9 84.4 13 Consumer credit 797.2 804.6 863.5 984.7 859.6 891.6 929.4 984.7 987.9 1,026.5 1,060.8 14 Bank loans n.e.c 686.0 672.2' 676.0' 748.6' 686.5' 705.3' 724.7' 748.6' 781.0 808.8 828.0 15 Commercial paper 98.5 107.1 117.8 139.2 129.9 135.7 138.7 139.2 149.8 162.9 163.3 16 Other loans 673.2r 686.5' 676.3' 738.0' 704.5' 714.4' 721.6' 738.0' 762.3 775.8 780.8 By borrowing sector 17 Household 3,822.9r 4,023.6' 4,272.4' 4,632.3' 4,311.9' 4,407.5' 4,511.8' 4,632.3' 4,674.6 4,779.5 4,883.8 18 Nonfinancial business 3,674.2r 3,696.8' 3,770.3' 3,921.1' 3,819.9' 3,860.8' 3,885.6' 3,921.1' 4,003.6 4,085.1 4,124.2 19 Farm 135.0 136.3' 138.3 141.2 136.7 141.5 143.1 141.2 138.9 142.8 144.9 20 Nonfarm noncorporate l,137.3r 1,122.9' 1,129.9' 1,142.0' 1,132.9' 1,135.6' 1,137.4' 1,142.0' 1,154.5 1,165.6 1,170.6 21 Corporate 2,401.9r 2,437.6' 2,502.0' 2,637.9' 2,550.3' 2,583.7' 2,605.0' 2,637.9' 2,710.1 2,776.7 2,808.8 22 State and local government 911.1 932.8 995.9 951.8 994.3 981.9 971.1 951.8 937.1 929.6 1,068.5 23 Foreign credit market debt held in United States 299.7 313.1 381.9 361.6 356.5 348.7 352.4 361.6 376.8 387.6 410.7 24 Bonds 130.5 146.2 227.4 234.6 226.8 222.4 227.6 234.6 237.9 250.4 264.2 25 Bank loans n.e.c 21.6 23.9 24.6 26.1 26.2 25.1 26.3 26.1 28.2 29.6 31.6 26 Commercial paper 81.8 77.7 68.7 41.4 43.3 42.0 39.9 41.4 50.9 48.1 55.8 27 U.S. government and other loans 65.9 65.3 61.1 59.6 60.3 59.2 58.6 59.6 59.8 59.5 59.1 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign ll,647.9r 12,209.7r 12,919.3r 13,522.2' 13,032.7r 13,156.7r 13,315.0r 13,522.2r 13,713.4 13,929.3 14,090.7 Financial sectors 29 Total credit market debt owed by financial sectors 2,769.2r 3,024.9r 3,321.0r 3,785.7r 3,447.3r 3,545.3r 3,648. lr 3,785.7r 3,854.5 3,965.4 4,065.0 By instrument 30 U.S. government-related 1,564.2 1,720.0 1,884.1 2,168.4 1,961.5 2,030.5 2,089.8 2,168.4 2,192.7 2,245.0 2,300.2 31 Government-sponsored enterpnses securities 402.9 443.1 523.7 700.6 563.7 600.3 638.3 700.6 716.3 748.1 773.5 32 Mortgage pool securities 1,156.5 1,272.0 1,355.6 1,467.8 1,397.8 1,430.1 1,451.5 1,467.8 1,476.4 1,496.9 1,526.7 33 Loans from U.S. government 4.8 4.8 4.8 .0 .0 .0 .0 .0 .0 .0 .0 34 Private l,205.1r 1,304.9' 1,436.9' 1,617.3' 1,485.8' 1,514.9' 1,558.3' 1,617.3' 1,661.8 1,720.3 1,764.8 35 Corporate bonds 649. lr 738.2' 858.0' 969.0' 895.9' 920.0' 944.8' 969.0' 1,008.1 1,050.6 1,083.9 36 Mortgages 4.8 5.4 8.9 18.7 11.4 14.5 17.5 18.7 20.0 21.2 21.8 37 Bank loans n.e.c 78.4 80.5 67.6' 55.3' 63.4' 56.3' 53.4' 55.3' 54.2 59.9 58.3 38 Open market paper 385.7 394.3 393.5 442.8 408.8 410.3 420.5 442.8 454.1 462.8 473.6 39 Loans from Federal Home Loan Banks 79.1 79.9 103.1 125.9 100.4 108.5 116.2 125.9 120.0 120.5 127.2 By borrowing sector 40 Government-sponsored enterprises 407.7 447.9 528.5 700.6 563.7 600.3 638.3 700.6 716.3 748.1 773.5 41 Federally related mortgage pools 1,156.5 1,272.0 1,355.6 1,467.8 1,397.8 1,430.1 1,451.5 1,467.8 1,476.4 1,496.9 1,526.7 42 Private financial sectors 1,205.lr 1,304.9' 1,436.9' 1,617.3' 1,485.8' 1,514.9' 1,558.3' 1,617.3' 1,661.8 1,720.3 1,764.8 43 Commercial banks 72.3r 80.0' 84.6' 94.5' 83.7' 86.7' 92.6' 94.5' 95.0 99.9 102.2 44 Bank holding companies 112.3 114.6 123.4 133.6 124.2 126.8 129.6 133.6 136.9 142.9 149.2 45 Funding corporations 139.1 161.6 169.9 199.3 190.7 191.5 200.6 199.3 221.1 229.9 237.4 46 Savings institutions 95.4r 88.4r 99.6' 112.4' 98.3' 99.7' 103.4' 112.4' 107.7 106.0 107.2 47 Credit unions .0 .0 .2 .5 .3 .3 .4 .5 .4 .3 .4 48 Life insurance companies .0 .0 .2 .6 .3 .3 .3 .6 .6 .6 .6 49 Finance companies 391.9 390.4 390.5 440.7 401.9 414.2 420.9 440.7 456.7 467.2 471.9 50 Mortgage companies 22.2 30.2 30.2' 18.7' 24.8' 20.2' 18.5' 18.7' 16.9 20.6 17.6 51 Real estate investment trusts (REITs) 13.6 13.9 17.4 31.1 21.0 24.8 29.5 31.1 32.8 34.4 35.0 52 Brokers and dealers 19.0 21.7 33.7 34.3 31.3 31.3 29.4 34.3 26.9 26.8 27.4 53 Issuers of asset-backed securities (ABSs) 339.3' 404.2' 487.2' 551.6' 509.5' 519.2' 533.0' 551.6' 566.8 591.7 615.9 All sectors 54 Total credit market debt, domestic and foreign.. .. 14,417.1r 15,234.6r 16,240.3r 17,307.9r 16,480.0' 16,702.0r 16,963.1' 17,307.9r 17,567.8 17,894.6 18,155.7 55 U.S. government securities 4,335.7 4,795.5 5,215.8 5,660.7 5,349.2 5,425.9 5,522.1 5,660.7 5,750.6 5,828.5 5,903.6 56 Tax-exempt securities 1,272.2' 1,302.8' 1,377.5' 1,348.2' 1,379.9' 1,372.2' 1,362.6' 1,348.2' 1,333.6 1,328.3 1,304.3 57 Corporate and foreign bonds 1,866.5' 2,038.9' 2,315.2' 2,456.5' 2,360.9' 2,390.0' 2,423.9' 2,456.5' 2,512.9 2,592.6 2,654.8 58 Mortgages 3,962.6' 4,094.1' 4,269.0' 4,475.2' 4,301.1' 4,360.3' 4,419.4' 4,475.2' 4,517.2 4,585.6 4,654.6 59 Consumer credit 797.2 804.6 863.5 984.7 859.6 891.6 929.4 984.7 987.9 1,026.5 1,060.8 60 Bank loans n.e.c 785.9 776.6 768.2 830.0' 776.1' 786.7 804.3' 830.0' 863.3 898.2 917.9 61 Open market paper 565.9 579.0 580.0 623.5 582.0 587.9 599.2 623.5 654.7 673.8 692.7 62 Other loans 831.0' 843.1' 851.1' 929.1' 871.2' 887.4' 902.2' 929.1' 947.5 961.0 967.1 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • March 1996 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1993 1994 1995 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999911 11999922 11999933 11999944 Q4 Ql Q2 Q3 Q4 Ql Q2 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 14,234.8 15,046.7 16,050.7 17,094.3 16,050.7 16,273.8 16,495.2 16,756.0 17,094.3 17,351.5 17,666.7 2 Private domestic nonfinancial sectors 2,240.1 2,320.1 2,351.5 2,623.2 2,351.5 2,397.5 2,450.6 2,497.3 2,623.2 2,586.1 2,511.4 i Households 1,446.5 1,524.8 1,541.7 1,926.4 1,541.7 1,640.7 1,717.1 1,779.9 1,926.4 1,946.9 1,885.7 4 Nonfarm noncorporate business 44.1 42.9 39.7 37.7 39.7 38.8 38.4 37.9 37.7 38.0 38.2 3 Nonfinancial corporate business 196.2 225.8 244.9 269.0 244.9 240.0 245.9 249.7 269.0 259.8 269.3 6 State and local governments 553.3 526.5 525.2 390.0 525.2 478.0 449.2 429.8 390.0 341.5 318.1 1 U.S. government 246.9 235.0 230.7 206.5 230.7 219.0 215.4 212.6 206.5 203.2 197.1 8 Foreign 958.0 1,055.0 1,172.2 1,272.7 1,172.2 1,203.0 1,218.4 1,254.4 1,272.7 1,336.5 1,421.4 y Financial sectors 10,789.8 11,436.6 12,296.3 12,991.9 12,296.3 12,454.3 12,610.7 12,791.7 12,991.9 13,225.8 13,536.8 10 Government-sponsored enterprises 390.7 459.7 549.8 673.2 549.8 572.0 597.9 629.4 673.2 675.3 697.7 n Federally related mortgage pools 1,156.5 1,272.0 1,355.6 1,467.8 1,355.6 1,397.8 1,430.1 1,451.5 1,467.8 1,476.4 1,496.9 12 Monetary authority 272.5 300.4 336.7 368.2 336.7 341.5 351.6 356.8 368.2 367.1 375.7 13 Commercial banking 2,853.3 2,948.6 3,090.8 3,252.8 3,090.8 3,120.2 3,156.2 3,204.1 3,252.8 3,326.1 3,407.9 14 U.S. commercial banks 2,502.5 2,571.9 2,721.5 2,869.6 2,721.5 2,743.8 2,780.3 2,822.3 2,869.6 2,906.5 2,963.5 15 Foreign banking offices 319.2 335.8 326.0 337.1 326.0 331.8 330.8 335.5 337.1 373.6 397.2 16 Bank holding companies 11.9 17.5 17.5 18.4 17.5 18.2 18.3 19.0 18.4 17.9 18.7 17 Banks in U.S. affiliated areas 19.7 23.4 25.8 27.8 25.8 26.4 26.8 27.3 27.8 28.2 28.6 18 Funding corporations 51.5 75.0 93.1 106.9 93.1 97.9 106.3 112.6 106.9 112.4 103.3 19 Thrift institutions 1,192.6 1,134.5 1,132.7 1,167.6 1,132.7 1,134.2 1,146.1 1,160.3 1,167.6 1,173.1 1,175.7 20 Life insurance companies 1,199.6 1,278.8 1,383.9 1,442.1 1,383.9 1,402.7 1,407.6 1,428.1 1,442.1 1,476.8 1,503.0 21 Other insurance companies 376.6 389.4 422.7 443.8 422.7 429.6 434.8 438.8 443.8 447.0 450.8 22 Private pension funds 693.0 730.4 770.6 728.2 770.6 746.2 738.5 734.1 728.2 752.6 787.3 23 State and local government retirement funds 479.9 514.3 542.6 603.3 542.6 560.8 578.1 584.7 603.3 619.5 635.9 24 Finance companies 487.5 492.6 482.8 551.0 482.8 494.5 511.3 524.1 551.0 568.5 586.7 23 Mortgage companies 60.3 60.5 60.4 37.5 60.4 49.5 40.4 37.0 37.5 41.6 42.2 26 Mutual funds 450.5 574.2 743.8 751.4 743.8 759.2 761.5 767.6 751.4 748.9 755.2 27 Closed-end funds 50.3 67.7 77.9 81.4 77.9 80.0 80.8 81.1 81.4 81.6 81.9 28 Money market funds 402.7 404.1 418.7 447.1 418.7 422.0 421.4 423.4 447.1 467.9 494.0 29 Real estate investment trusts (REITs) 7.0 8.1 8.6 13.3 8.6 10.3 11.9 13.3 13.3 13.9 14.7 30 Brokers and dealers 124.0 117.1 126.3 92.3 126.3 112.4 99.3 94.5 92.3 100.0 131.0 31 Asset-backed securities issuers (ABSs) 317.8 377.9 458.4 516.1 458.4 480.3 491.0 502.6 516.1 528.6 548.2 32 Bank personal trusts 223.5 231.5 240.9 248.0 240.9 243.2 245.7 247.7 248.0 248.4 248.8 RELATION OF LIABILITIES TO FINANCIAL ASSETS 33 Total credit market debt 14,234.8 15,046.7 16,050.7 17,094.3 16,050.7 16,273.8 16,495.2 16,756.0 17,094.3 17,351.5 17,666.7 Other liabilities 34 Official foreign exchange 55.4 51.8 53.4 53.2 53.4 56.4 54.9 55.5 53.2 64.1 67.1 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 17.0 17.1 17.3 17.5 17.6 17.8 18.0 37 Life insurance reserves 405.7 433.0 468.2 488.4 468.2 473.2 475.9 481.8 488.4 494.7 501.0 38 Pension fund reserves 4,138.3 4,516.5 4,974.7 5,017.0 4,974.7 4,896.4 4,898.5 5,013.4 5,017.0 5,252.7 5,472.4 3Y Interbank claims 96.4 132.6 183.9 270.3 183.9 215.8 230.7 243.1 270.3 266.3 267.0 40 Deposits at financial institutions 5,045.1 5,059.1 5,155.5 5,283.8 5,155.5 5,163.7 5,186.2 5,211.8 5,283.8 5,369.1 5,531.6 41 Checkable deposits and currency 1,020.9 1,134.4 1,251.7 1,241.6 1,251.7 1,220.5 1,229.7 1,204.8 1,241.6 1,193.5 1,245.4 42 Small time and savings deposits 2,350.7 2,293.5 2,223.2 2,182.7 2,223.2 2,233.8 2,214.1 2,198.7 2,182.7 2,206.3 2,235.5 43 Large time deposits 488.4 415.2 391.7 410.7 391.7 382.6 379.0 402.2 410.7 435.2 444.0 44 Money market fund shares 539.6 543.6 562.7 608.2 562.7 579.7 573.9 583.5 608.2 638.9 684.1 45 Security repurchase agreements 355.8 392.3 457.8 542.1 457.8 474.9 512.9 540.2 542.1 595.4 620.5 46 Foreign deposits 289.6 280.1 268.4 298.5 268.4 272.4 276.6 282.4 298.5 299.7 302.2 41 Mutual fund shares 813.9 1,042.1 1,446.3 1,562.9 1,446.3 1,483.9 1,506.9 1,587.7 1,562.9 1,607.2 1,747.1 48 Security credit 188.9 217.3 279.3 277.0 279.3 282.8 278.0 263.2 277.0 268.8 271.6 49 Trade debt 936.1 977.4 1,027.4 1,120.8 1,027.4 1,024.9 1,049.2 1,086.0 1,120.8 1,127.6 1,144.4 50 Taxes payable 71.2 79.6 84.2 87.3 84.2 89.2 82.0 86.3 87.3 93.5 88.5 51 Investment in bank personal trusts 608.3 629.6 660.9 670.0 660.9 655.2 650.1 671.5 670.0 707.2 745.7 52 Miscellaneous 2,991.9 3,176.7 3,430.7 3,746.3 3,430.7 3,560.9 3,600.2 3,701.5 3,746.3 3,872.5 3,907.9 53 Total liabilities 29,612.4 31,386.8 33,840.1 35,696.9 33,840.1 34,201.4 34,533.1 35,183.2 35,696.9 36,501.1 37,437.3 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights 22.3 19.6 20.1 21.1 20.1 20.4 20.8 21.0 21.1 22.7 22.9 55 Corporate equities 4,863.6 5,462.9 6,278.5 6,293.4 6,278.5 6,142.6 5,965.8 6,228.7 6,293.4 6,835.8 7,393.0 56 Household equity in noncorporate business 2,448.7 2,413.7 2,425.4 2,512.8 2,425.4 2,474.2 2,502.7 2,526.6 2,512.8 2,525.7 2,528.5 Floats not included in assets (-) 57 U.S. government checkable deposits 3.8 6.8 5.6 3.4 5.6 .3 .9 1.2 3.4 4.2 2.0 58 Other checkable deposits 40.4 42.0 40.7 38.0 40.7 36.3 38.7 30.6 38.0 32.3 33.7 59 Trade credit -130.6 -125.9 -107.1 -101.4 -107.1 -127.1 -134.2 -126.9 -101.4 -120.3 -133.0 Liabilities not identified as assets ( —) 60 Treasury currency -4.7 -4.9 -5.1 -5.4 -5.1 -5.2 -5.2 -5.3 -5.4 -5.4 -5.4 61 Interbank claims -4.2 -9.3 -4.7 -6.5 -4.7 -7.7 -7.4 -3.4 -6.5 -2.7 -2.6 62 Security repurchase agreements 9.2 38.1 120.5 169.1 120.5 135.9 162.5 189.3 169.1 203.3 192.0 63 Taxes payable 17.8 25.2 26.2 24.2 26.2 15.5 21.3 22.0 24.2 6.6 21.2 64 Miscellaneous -320.7 -378.2 -457.3 -347.8 -457.3 -398.7 -387.1 -395.6 -347.8 -382.3 -390.3 65 Total identified to sectors as assets 37,336.0 39,689.2 42,945.3 44,750.6 42,945.3 43,189.2 43,332.9 44,247.7 44,750.6 46,149.7 47,664.3 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. 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 1995 MMeeaassuurree 11999922 11999933 11999944 Apr. May June July Aug. Sept. Oct.' Nov.' Dec. 1 Industrial production1 107.7 111.5 118.1 121.4 121.3 121.4 121.5 122.7 122.8r 122.3 122.7 122.8 Market groupings 2 Products, total 106.4 110.0 115.6 117.7 117.5 117.9 118.0 119.2 119.4 118.5 118.7 119.0 3 Final, total 108.7 112.7 118.3 120.9 120.6 121.1 121.2 122.4 122.6 121.5 121.8 122.1 4 Consumer goods 106.0 109.5 113.7 114.4 114.1 114.8 114.6 115.9 116.0' 115.2 115.5 115.4 5 Equipment 112.5 117.5 125.3 131.3 130.8 131.2 131.6 132.9 133.1' 131.5 131.8 132.7 6 Intermediate 99.3 101.8 107.3 108.2 108.2 108.2 108.5 109.4 109.5' 109.4 109.3 109.6 7 Materials 109.7 113.8 122.0 127.0 127.2 126.8 126.8 128.1 128.1' 128.2 128.7 128.6 Industry groupings 8 Manufacturing 108.2 112.3 119.7 123.5 123.2 123.3 123.3 124.2 124.9 124.4 124.7 124.8 9 Capacity utilization, manufacturing (percent)2.. 79.5 80.6 83.3 83.3 82.8 82.6 82.3 82.6 82.8 82.2 82.1 81.8 10 Construction contracts3 97.3' 105.1' 114.2 108.0 119.0' 122.0 118.0 123.0 119.0 116.0 114.0 107.0 11 Nonagricultural employment, total4 106.5 108.4 111.3 114.1 114.0 114.3 114.3 114.6 114.7 114.8 115.0 115.1 12 Goods-producing, total 94.2 94.3 95.6 98.6 98.2 98.2 97.9 97.9 97.9 97.9 97.8 98.0 13 Manufacturing, total 95.3 94.8 95.1 97.4 97.1 97.0 96.6 96.6 96.4 96.3 96.2 96.4 14 Manufacturing, production workers 94.9 94.9 96.1 99.0 98.6 98.3 97.8 97.9 97.7 97.5 97.4 97.7 15 Service-producing 110.5 112.9 116.3 119.0 119.1 119.4 119.6 119.9 120.1 120.1 120.4 120.6 16 Personal income, total 135.8' 141.3' 148.3' 156.1' 155.9' 157.0' 157.8' 157.9' 158.7' 159.9 160.2 n.a. 17 Wages and salary disbursements 131.4' 136.0' 142.6' 149.6' 148.5' 149.9' 151.2' 150.9' 151.9' 153.2 153.1 n.a. 18 Manufacturing 117.4' 119.3' 125.0' 129.1' 128.5' 128.8' 129.0' 129.3' 129.6' 129.5 129.6 n.a. 19 Disposable personal income5 137.2' 142.4' 149.2' 155.3' 156.5' 157.4' 158.2' 158.3' 159.0' 160.2 160.6 n.a. 20 Retail sales5 126.4 134.7 145.1 150.5 152.2 153.5 152.9 153.9 153.8 153.4 154.4 154.9 Prices6 21 Consumer (1982-84=100) 140.3 144.5 148.2 151.9 152.2 152.5 152.5 152.9 153.2 153.7 153.6 153.5 22 Producer finished goods (1982=100) 123.2 124.7 125.5 127.6 128.1 128.2 128.2 128.1 127.9 128.5 128.6 129.0 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For 5. Based on data from U.S. Department of Commerce, Survey of Current Business. the ordering address, see the inside front cover. The latest historical revision of the industrial 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price production index and the capacity utilization rates was released in November 1995. See "A indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve Monthly Labor Review. Bulletin, vol. 82 (January 1996), pp. 16-25. For a detailed description of the industrial NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series production index, see "Industrial Production: 1989 Developments and Historical Revision," mentioned in notes 3 and 6, can also be found in the Survey of Current Business. Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. Figures for industrial production for the latest month are preliminary, and many figures for 2. Ratio of index of production to index of capacity. Based on data from the Federal the three months preceding the latest month have been revised. See "Recent Developments in Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources. Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. 3. Index of dollar value of total construction contracts, including residential, nonresiden- 411-35. See also "Industrial Production Capacity and Capacity Utilization since 1987," tial, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605. 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 1995 CCaatteeggoorryy 11999922 11999933 11999944 May June July Aug. Sept. Oct.' Nov.' Dec. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 126,982 128,040 131,056 131,811 131,869 132,519 132,211 132,591 132,648 132,442 132,284 Employment 2 Nonagricultural industries3 114.391 116,232 119,651 120,962 121,034 121,550 121,417 121,867 121,944 121,734 121,598 3 Agriculture 3.207 3,074 3,409 3,357 3,451 3,409 3,362 3,273 3,455 3,276 3,306 Unemployment 4 Number 9.384 8,734 7,996 7,492 7,384 7,559 7,431 7,451 7,249 7,432 7,380 5 Rate (percent of civilian labor force) 7.4 6.8 6.1 5.7 5.6 5.7 5.6 5.6 5.5 5.6 5.6 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 108,604 110,525 113,423 116,248 116,547 116,575 116,838 116,932 117,000 117,212 117,373 7 Manufacturing 18,104 18,003 18,064 18,456 18,428 18,353 18,357 18,322 18,301 18,272 18,316 8 Mining 635 611 604 582 582 577 575 573 571 567 566 9 Contract construction 4,492 4,642 4,916 5,190 5,230 5,226 5,233 5,262 5,287 5,295 5,302 10 Transportation and public utilities 5.721 5,787 5,842 6,177 6,192 6,195 6,217 6,206 6,217 6,240 6,251 11 Trade 25,354 25,675 26,362 27,045 27,118 27,184 27,177 27,245 27,256 27,362 27,362 1? Finance 6,602 6,712 6,789 6,925 6,930 6,938 6,947 6,957 6,977 6,991 7,001 13 Service 29,052 30,278 31,805 32,630 32,784 32,820 32,986 33,047 33,076 33,185 33,250 14 Government 18,653 18,817 19,041 19,243 19,283 19,282 19,346 19,320 19,315 19,300 19,325 1. Beginning January 1994, reflects redesign of current population survey and population 4. Includes all full- and part-time employees who worked during, or received pay for, the controls from the 1990 census. pay period that includes the twelfth day of the month; excludes proprietors, self-employed 2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly persons, household and unpaid family workers, and members of the armed forces. Data are figures are based on sample data collected during the calendar week that contains the twelfth adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this day; annual data are averages of monthly figures. By definition, seasonality does not exist in time. 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 • March 1996 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1995 1995 1995 SSeerriieess Ql Q2 Q3r Q4 Ql Q2 Q3 Q4 Ql Q2 Q3r Q4 Output (1987=100) Capacity (percent of 1987 output) Capacity utilization rate (percent)2 1 Total industry 121.8 121.4 122.3 122.6 143.7 145.0 146.4 147.8 84.8 83.7 83.6 82.9 2 Manufacturing 124.0 123.3 124.1 124.6 147.2 148.7 150.3 152.0 84.3 82.9 82.6 82.0 3 Primary processing3 119.1 117.7 117.1 117.4 133.4 134.4 135.4 136.4 89.3 87.6 86.5 86.1 4 Advanced processing4 126.3 126.0 127.5 128.1 153.8 155.6 157.5 159.5 82.2 81.0 80.9 80.3 5 Durable goods 132.0 131.4 133.0 134.3 156.8 158.9 161.1 163.4 84.2 82.7 82.5 82.2 6 Lumber and products 105.3 102.9 104.6 105.4 117.4 118.0 118.6 119.2 89.7 87.2 88.2 88.5 7 Primary metals 121.2 119.1 118.2 119.1 126.9 127.5 128.0 128.6 95.6 93.4 92.3 92.6 8 Iron and steel 125.4 121.9 121.3 120.7 130.9 131.7 132.5 133.2 95.8 92.6 91.6 90.6 9 Nonferrous 115.6 115.1 113.9 116.6 121.5 121.9 122.2 122.5 95.2 94.5 93.2 95.1 10 Industrial machinery and equipment 171.9 174.4 178.9 186.0 194.8 199.6 204.5 209.7 88.2 87.4 87.5 88.7 11 Electrical machinery 167.9 171.2 178.4 183.3 191.6 197.6 203.9 210.4 87.7 86.7 87.5 87.1 12 Motor vehicles and parts 147.7 140.5 140.7 140.4 172.1 174.2 176.4 178.7 85.8 80.6 79.8 78.6 13 Aerospace and miscellaneous transportation equipment 89.6 88.7 86.9 78.9 132.2 132.2 132.1 132.1 67.8 67.1 65.8 59.7 14 Nondurable goods 115.2 114.4 114.3 114.0 136.6 137.5 138.4 139.4 84.3 83.2 82.6 81.8 15 Textile mill products 116.4 113.7 110.9 110.2 129.1 130.1 131.1 132.1 90.2 87.5 84.6 83.4 16 Paper and products 121.0 121.2 119.5 117.4 130.6 131.5 132.5 133.4 92.7 92.1 90.2 88.0 17 Chemicals and products 125.3 124.0 124.6 126.2 153.7 154.7 155.6 156.6 81.5 80.1 80.1 80.6 18 Plastics materials 127.5 122.9 118.3 132.1 133.8 135.4 96.5 91.9 87.3 19 Petroleum products 108.3 108.0 109.2 108.2 116.0 116.2 116.4 116.6 93.3 92.9 93.8 92.8 20 Mining 100.6 100.7 100.2 97.8 112.0 112.0 112.0 112.1 89.8 89.9 89.4 87.2 21 Utilities 118.4 120.7 124.7 124.6 134.4 134.8 135.2 135.6 88.0 89.5 92.3 91.9 22 Electric 118.9 120.4 125.0 124.5 131.7 132.1 132.5 133.0 90.3 91.1 94.3 93.6 1973 1975 Previous cycle5 Latest cycle6 1994 1995 High Low High Low High Low Dec. July Aug. Sept.r Oct.r Nov. Dec.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.8 84.9 78.0 85.1 83.3 83.8 83.6 83.0 83.0 82.8 2 Manufacturing 88.9 70.8 87.3 70.0 85.2 76.6 84.7 82.3 82.6 82.8 82.2 82.1 81.8 3 Primary processing3 92.2 68.9 89.7 66.8 89.0 77.9 90.2 86.6 86.1 86.8 86.1 86.3 86.0 4 Advanced processing4 87.5 72.0 86.3 71.4 83.5 76.1 82.4 80.5 81.2 81.1 80.5 80.3 80.1 5 Durable goods 88.8 68.5 86.9 65.0 84.0 73.7 84.4 82.0 82.6 83.0 82.0 82.3 82.2 6 Lumber and products 90.1 62.2 87.6 60.9 93.3 76.1 92.7 87.6 87.5 89.4 88.7 88.3 88.5 7 Primary metals 100.6 66.2 102.4 46.8 92.8 74.2 96.7 92.5 90.1 94.4 90.2 94.7 93.0 8 Iron and steel 105.8 66.6 110.4 38.3 95.7 72.0 97.0 90.2 88.9 95.7 86.9 93.8 91.1 9 Nonferrous 92.9 61.3 90.5 62.2 88.7 75.2 96.2 95.5 91.6 92.6 94.4 95.7 95.3 10 Industrial machinery and equipment 96.4 74.5 92.1 64.9 84.0 71.8 87.3 86.8 87.8 87.9 88.5 88.9 88.8 11 Electrical machinery 87.8 63.8 89.4 71.1 84.9 77.0 88.5 87.1 87.7 87.8 87.5 87.4 86.4 12 Motor vehicles and parts 93.4 51.1 93.0 44.5 85.1 56.6 85.6 77.8 80.6 80.9 78.5 78.7 78.6 13 Aerospace and miscellaneous transportation equipment 77.0 66.6 81.1 66.9 88.4 78.8 67.9 66.3 66.0 65.0 60.6 58.7 60.0 14 Nondurable goods 87.9 71.8 87.0 76.9 86.7 80.3 85.0 82.7 82.6 82.4 82.3 81.7 81.3 15 Textile mill products 92.0 60.4 91.7 73.8 92.1 78.8 90.8 84.0 85.7 84.1 84.4 83.4 82.4 16 Paper and products 96.9 69.0 94.2 82.0 94.8 86.7 94.2 91.8 89.6 89.2 89.9 86.9 87.2 17 Chemicals and products 87.9 69.9 85.1 70.1 85.9 79.0 81.5 79.8 80.0 80.4 81.2 80.4 80.3 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 100.1 87.9 85.4 88.7 89.4 19 Petroleum products 96.7 81.1 89.5 68.2 88.5 84.6 93.2 93.7 93.2 94.5 91.8 92.9 93.9 20 Mining 94.4 88.4 96.6 80.6 86.5 86.1 89.9 89.9 89.2 89.2 87.5 87.2 87.0 21 Utilities 95.6 82.5 88.3 76.2 92.6 83.1 86.8 90.8 95.3 90.7 91.0 92.3 92.5 22 Electric 99.0 82.7 88.3 78.7 94.8 86.7 89.3 92.3 98.1 92.5 93.1 93.9 93.9 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic the ordering address, see the inside front cover. The latest historical revision of the industrial materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; production index and the capacity utilization rates was released in November 1995. See "A primary metals; and fabricated metals. Revision to Industrial Production and Capacity Utilization, 1991-95," Federal Reserve 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing Bulletin, vol. 82 (January 1996), pp. 16—25. For a detailed description of the industrial and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather production index, see "Industrial Production: 1989 Developments and Historical Revision," and products; machinery; transportation equipment; instruments; and miscellaneous manufac- Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. tures. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted 5. Monthly highs, 1978-80; monthly lows, 1982. 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 GGrroouupp p p r o o r - - 1 a 9 v 9 g 5 . tion Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct.r Nov. Dec.p Index (1987 = 100) MAJOR MARKETS 1 Total index 100.0 121.9 121.5 121.8 121.7 121.9 121.4 121.3 121.4 121.5 122.7 122.8 122.3 122.7 122.8 2 Products 60.6 118.3 118.2 118.4 118.3 118.5 117.7 117.5 117.9 118.0 119.2 119.4 118.5 118.7 119.0 3 Final products 46.3 121.4 120.9 121.3 121.1 121.5 120.9 120.6 121.1 121.2 122.4 122.6 121.5 121.8 122.1 4 Consumer goods, total 28.6 115.0 115.5 115.5 114.9 115.3 114.4 114.1 114.8 114.6 115.9 116.0 115.2 115.5 115.4 5 Durable consumer goods 5.6 124.3 127.5 127.1 127.3 126.0 124.9 121.6 122.3 121.4 124.0 125.8 123.3 124.9 126.5 6 Automotive products 2.5 130.6 133.9 134.4 135.3 134.4 131.7 127.1 129.1 125.3 130.7 132.9 128.5 130.3 132.5 7 Autos and trucks 1.6 131.4 135.3 136.6 138.2 137.5 132.8 127.4 129.5 123.9 132.0 133.1 128.6 129.7 132.2 8 Autos, consumer .9 103.1 109.1 111.4 111.5 111.2 105.5 99.4 99.2 101.0 100.6 102.6 100.2 100.0 99.7 9 Trucks, consumer .7 181.7 181.4 180.6 185.2 183.6 180.9 177.1 183.6 163.9 188.2 187.7 179.1 182.8 190.6 10 Auto parts and allied goods .9 127.7 129.4 128.4 127.9 126.7 128.0 125.0 126.8 126.6 126.6 130.8 126.7 130.0 131.3 11 Other 3.0 118.7 121.8 120.8 120.4 118.6 119.0 116.7 116.3 118.1 118.1 119.6 118.9 120.3 121.2 12 Appliances, televisions, and air conditioners .7 135.3 139.5 137.9 135.0 132.2 131.6 131.2 131.4 132.2 135.8 139.4 139.5 143.7 141.8 13 Carpeting and furniture .8 106.0 110.4 106.4 108.3 106.1 109.1 103.0 101.8 107.9 104.4 106.9 105.9 105.5 107.6 14 Miscellaneous home goods 1.5 118.4 120.4 121.3 120.7 119.7 118.8 118.1 118.0 117.4 118.0 117.8 116.9 118.1 119.8 15 Nondurable consumer goods 23.0 112.8 112.6 112.7 111.9 112.7 111.8 112.4 113.1 113.0 113.9 113.7 113.2 113.3 112.7 16 Foods and tobacco 10.3 111.3 111.5 111.5 110.1 111.5 111.2 111.5 113.1 112.8 111.8 111.6 111.4 111.0 110.2 17 Clothing 2.4 95.0 100.3 99.6 98.3 98.7 96.9 96.7 94.6 93.6 93.9 93.4 92.7 91.8 90.9 18 Chemical products 4.5 131.1 130.0 131.3 129.2 129.7 126.9 127.3 128.6 128.6 132.6 134.0 135.9 134.2 134.3 19 Paper products 2.9 106.6 106.6 106.0 106.6 105.9 106.9 106.5 106.3 107.6 106.7 107.3 106.6 108.0 106.1 20 Energy 2.9 116.1 110.6 110.9 113.1 113.9 112.2 115.8 115.8 116.1 122.3 119.0 114.6 118.2 118.8 21 Fuels .9 108.8 107.2 107.6 108.7 110.4 108.8 108.2 108.8 108.2 108.4 111.4 107.3 108.5 108.5 22 Residential utilities 2.1 119.1 111.8 112.2 114.8 115.2 113.5 119.0 118.7 119.4 128.2 122.2 117.6 122.2 123.1 23 Equipment 17.7 131.5 129.3 130.4 131.0 131.4 131.3 130.8 131.2 131.6 132.9 133.1 131.5 131.8 132.7 24 Business equipment 13.7 155.8 151.5 153.2 154.3 155.1 155.0 154.3 155.1 155.7 157.5 158.2 156.5 157.4 158.8 25 Information processing and related 5.7 198.3 185.2 187.3 188.7 191.6 194.5 193.9 196.0 197.2 201.0 203.0 206.2 208.9 211.4 26 Computer and office equipment 1.4 372.9 313.8 324.2 334.9 343.6 356.4 362.1 363.2 371.7 379.6 390.0 402.9 416.5 425.7 27 Industrial 4.0 127.5 125.0 126.5 127.2 126.9 126.1 126.5 126.2 127.1 129.1 128.7 128.8 129.4 128.9 28 Transit 2.6 136.2 142.4 143.8 145.9 145.7 142.9 139.6 140.3 139.8 138.0 137.9 122.5 119.5 123.1 29 Autos and trucks 1.2 140.1 142.9 145.6 147.7 146.2 141.5 137.8 139.5 139.9 141.3 143.3 135.7 134.0 135.4 30 Other 1.4 123.4 125.9 127.2 127.2 126.3 123.2 122.7 122.6 122.6 122.2 123.3 121.0 122.4 123.1 31 Defense and space equipment 3.3 66.0 69.2 68.9 68.2 67.8 67.1 66.8 66.8 66.5 66.1 65.2 64.3 63.1 62.5 32 Oil and gas well drilling .6 87.1 87.3 87.7 88.8 87.2 89.3 90.5 86.8 88.4 89.5 88.3 83.5 83.1 83.8 33 Manufactured homes .2 150.2 153.1 144.6 145.8 146.6 148.3 149.6 148.6 155.9 158.0 158.9 161.8 34 Intermediate products, total 14.3 109.0 109.9 109.5 109.5 109.2 108.2 108.2 108.2 108.5 109.4 109.5 109.4 109.3 109.6 35 Construction supplies 5.3 108.1 110.5 109.7 109.5 109.2 108.0 106.6 107.2 107.3 107.0 108.4 108.0 108.7 109.6 36 Business supplies 9.0 109.6 109.7 109.5 109.6 109.3 108.5 109.4 109.1 109.5 111.0 110.3 110.4 109.9 109.8 37 Materials 39.4 127.5 126.6 127.1 127.1 127.2 127.0 127.2 126.8 126.8 128.1 128.1 128.2 128.7 128.6 38 Durable goods materials 20.8 141.5 139.2 140.0 140.2 140.3 139.8 139.8 139.7 140.2 142.3 144.1 143.9 145.4 145.0 39 Durable consumer parts 4.0 138.4 142.0 142.9 142.6 140.4 137.9 135.9 135.8 133.9 138.4 139.8 138.6 139.9 138.8 40 Equipment parts 7.5 163.1 152.1 154.0 155.4 157.3 158.9 160.3 161.7 164.4 167.1 169.1 169.4 170.9 171.4 41 Other 9.2 126.2 127.5 127.7 127.0 127.0 125.9 125.6 124.5 124.4 124.9 126.8 126.5 128.2 127.4 42 Basic metal materials 3.1 125.7 127.4 126.7 126.4 126.7 126.1 125.5 123.5 124.9 123.1 127.0 124.2 128.8 126.5 43 Nondurable goods materials 8.9 119.9 122.1 122.2 121.5 121.5 121.7 122.2 120.4 118.9 118.8 117.8 119.0 117.4 117.7 44 Textile materials 1.1 109.5 113.2 115.1 113.5 113.6 113.2 112.8 109.0 102.6 109.2 106.2 107.4 106.2 105.7 45 Paper materials 1.8 120.5 121.8 120.9 121.6 122.5 122.3 125.6 121.0 123.9 120.4 117.0 121.2 114.4 115.4 46 Chemical materials 3.9 124.8 124.7 126.4 125.7 125.6 125.6 126.2 125.2 124.4 123.1 123.3 123.8 124.0 124.4 47 Other 2.1 116.1 122.6 119.5 117.8 117.4 118.4 116.9 117.4 113.8 114.6 115.1 114.8 113.8 114.2 48 Energy materials 9.7 106.7 106.0 106.2 106.4 106.4 106.6 107.2 107.2 107.5 108.5 105.8 105.6 106.0 106.2 49 Primary energy 6.3 101.7 102.1 102.0 102.3 102.1 102.2 102.3 103.0 102.3 101.4 101.2 101.3 100.2 100.0 50 Converted fuel materials 3.3 116.5 113.5 114.3 114.5 114.9 115.5 116.9 115.5 118.1 122.8 115.0 114.3 117.9 118.8 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.2 121.5 121.0 121.3 121.1 121.3 120.9 121.0 121.1 121.2 122.3 122.4 122.0 122.4 122.4 52 Total excluding motor vehicles and parts 95.2 120.9 120.2 120.5 120.4 120.6 120.3 120.5 120.5 120.7 121.7 121.8 121.4 121.8 121.9 53 Total excluding computer and office equipment 98.2 118.2 118.4 118.6 118.4 118.5 117.9 117.8 117.8 117.8 118.9 118.9 118.3 118.5 118.5 54 Consumer goods excluding autos and trucks . 27.0 113.9 114.2 114.1 113.4 113.8 113.1 113.3 113.9 114.0 114.8 114.9 114.3 114.6 114.3 55 Consumer goods excluding energy 25.7 114.9 116.1 116.0 115.1 115.4 114.6 113.9 114.7 114.5 115.1 115.7 115.2 115.2 115.0 56 Business equipment excluding autos and trucks 12.5 157.1 152.1 153.7 154.7 155.8 156.2 155.8 156.5 157.2 158.9 159.5 158.4 159.5 161.0 57 Business equipment excluding computer and office equipment 12.2 133.1 133.3 134.3 134.6 134.8 133.7 132.5 133.2 133.2 134.4 134.3 131.6 131.4 132.2 58 Materials excluding energy 29.7 134.9 134.0 134.6 134.5 134.6 134.3 134.4 133.8 133.7 135.1 136.1 136.3 136.8 136.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • March 1996 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 Group SIC2 procode por- Dec. Apr. May July Aug. Sept.r Oct/ Dec.p Index (1987 = 100) MAJOR INDUSTRIES 59 Total index 100.0 121.9 121.5 121.8 121.7 121.9 121.4 121.3 121.4 121.5 122.7 122.8 122.3 122.7 122.8 60 Manufacturing 85.4 123.9 123.8 124.1 123.9 124.0 123.5 123.2 123.3 123.3 124.2 124.9 124.4 124.7 124.8 61 Primary processing 26.6 117.7 119.8 119.4 119.1 118.9 118.2 117.9 117.1 116.9 116.6 117.8 117.1 117.6 117.6 62 Advanced processing 58.9 126.8 125.7 126.4 126.2 126.5 126.0 125.7 126.3 126.3 127.8 128.2 127.9 128.1 128.2 63 Durable goods 45.0 132.5 131.2 131.8 132.1 132.2 131.6 131.1 131.5 131.5 133.2 134.4 133.4 134.5 134.9 64 Lumber and products " ' 24 2.0 104.5 108.6 107.1 105.0 103.9 103.9 101.7 103.0 103.7 103.7 106.2 105.5 105.2 105.6 65 Furniture and fixtures 25 1.4 112.0 114.0 113.8 114.9 113.4 111.4 110.8 111.3 111.1 110.9 112.0 111.2 111.4 112.2 66 Stone, clay, and glass products 32 2.1 104.2 105.7 105.5 104.7 104.7 103.4 104.1 103.8 103.2 103.0 103.8 104.7 105.4 105.4 67 Primary metals 33 3.1 119.3 122.8 121.5 120.8 121.3 120.2 119.5 117.5 118.3 115.4 121.0 115.8 121.8 119.8 68 Iron and steel 331,2 1.7 122.2 127.4 125.5 124.9 125.8 123.5 123.0 119.2 119.3 117.7 127.0 115.5 125.0 121.7 69 Raw steel 331PT .1 120.6 114.9 116.4 116.8 114.7 113.0 112.9 111.5 114.2 118.6 111.3 116.4 70 Nonferrous 333-6,9 1.4 I IS!I 116.7 116.2 115.3 115.4 115.7 114.8 114.9 116.5 111.9 113.2 115.6 117.2 116^9 71 Fabricated metal products. .. 34 5.0 114.0 114.8 114.3 115.0 114.3 112.3 113.7 113.7 112.4 114.3 115.1 114.1 114.8 111144..99 72 Industrial machinery and equipment 35 8.0 177.6 167.5 171.4 171.8 172.4 174.3 174.6 174.4 176.0 179.5 181.3 183.9 186.3 187.7 73 Computer and office equipment 357 1.8 372.9 313.8 324.2 334.9 343.6 356.4 362.1 363.2 371.7 379.6 390.0 402.9 416.5 425.7 74 Electrical machinery 36 7.2 175.0 166.3 166.7 167.7 169.4 169.6 171.1 173.0 175.7 178.7 180.8 182.3 183.8 183.7 75 Transportation equipment... 37 9.5 113.3 117.3 117.8 118.5 118.0 115.7 113.2 113.4 111.6 114.1 114.1 109.3 108.4 109.5 76 Motor vehicles and parts . 371 4.8 141.9 145.9 147.3 148.4 147.6 143.0 138.8 139.7 136.7 142.1 143.3 139.7 140.6 141.0 77 Autos and light trucks . 371PT 2.5 131.3 135.7 137.1 138.6 137.9 132.9 127.3 129.2 124.3 131.6 132.8 128.4 129.4 113311..77 ' 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.7 85.8 89.8 89.5 89.7 89.5 89.4 88.5 88.1 87.6 87.2 85.9 80.0 77.5 79.2 79 Instruments 38 5.4 110.9 110.4 110.8 110.5 110.9 111.2 109.6 110.9 110.2 111.4 111.3 111.2 112.1 112.1 80 Miscellaneous 39 1.3 122.7 122.1 123.5 124.1 123.3 122.7 122.3 123.1 121.4 122.4 122.9 122.2 123.1 124.1 81 Nondurable goods 40.5 114.4 115.5 115.6 114.8 115.1 114.6 114.4 114.3 114.3 114.3 114.4 114.5 113.8 113.6 82 Foods " ' 20 9.4 115.2 114.9 115.9 114.2 115.0 115.1 115.9 116.1 115.3 115.5 115.5 115.3 114.8 114.4 83 Tobacco products 21 1.6 90.3 93.0 88.6 88.1 92.3 92.0 89.3 96.4 99.1 91.3 90.2 90.4 89.3 86.9 84 Textile mill products 22 1.8 112.7 116.6 117.2 115.9 116.2 117.2 113.6 110.4 109.9 112.4 110.5 111.2 110.1 109.2 85 Apparel products 23 2.2 95.8 101.6 100.6 99.8 99.3 97.4 97.5 95.5 94.8 94.5 94.5 93.0 92.6 92.6 86 Paper and products 26 3.6 119.7 122.5 121.0 121.0 121.1 121.2 122.4 119.9 121.3 118.6 118.5 119.6 116.0 116.6 87 Printing and publishing 27 6.8 99.4 100.7 100.1 100.3 99.3 99.2 99.0 98.6 99.0 100.5 99.8 99.2 99.5 98.7 88 Chemicals and products .... 28 9.9 125.0 124.7 126.2 124.7 125.0 123.5 124.0 124.4 124.0 124.4 125.3 126.9 125.8 125.9 89 Petroleum products 29 1.4 108.5 108.1 107.7 108.0 109.1 107.8 107.4 108.6 109.0 108.5 110.0 107.0 108.3 109.5 90 Rubber and plastic products . 30 3.5 139.6 141.6 141.8 141.9 141.1 140.8 138.2 137.8 137.7 138.7 139.8 139.8 140.7 140.8 91 Leather and products 31 .3 81.3 85.8 85.4 85.1 85.8 82.7 83.0 81.2 78.7 80.8 80.5 79.3 78.0 76.5 92 Mining 6.9 99.8 100.7 100.6 100.8 100.3 100.6 100.5 101.0 100.7 100.0 100.0 98.0 97.7 97.6 93 Metal 10 .5 169.1 162.6 164.2 165.5 164.5 164.6 164.3 166.8 172.2 172.1 170.8 176.3 174.8 172.7 94 Coal 12 1.0 112.9 116.5 116.0 115.1 114.0 112.3 110.8 112.2 117.0 109.7 116.2 112.3 109.5 108.5 95 Oil and gas extraction 13 4.8 91.7 92.9 92.4 93.0 92.2 93.1 93.4 93.6 91.9 92.4 91.2 89.0 89.4 89.4 96 Stone and earth minerals 14 .6 112.2 109.9 113.1 111.3 114.2 112.7 111.1 111.9 113.5 111.6 113.1 112.4 111.1 111.8 97 Utilities 7.7 122.1 116.5 117.3 118.5 119.2 118.8 122.1 121.0 122.7 128.8 122.7 123.3 125.1 125.6 98 Electric 491.493PT 6.1 122.3 117.4 118.0 119.1 119.5 118.9 121.2 121.2 122.2 130.0 122.7 123.7 124.9 125.0 99 Gas 492.493PT 1.6 121.2 113.1 114.3 116.4 118.0 118.4 125.5 120.6 124.5 124.3 122.4 121.7 125.9 127.8 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.6 122.8 122.5 122.8 122.4 122.6 122.3 122.2 122.3 122.5 123.1 123.8 123.5 123.8 112233..88 101 Manufacturing excluding office and computing machines .. . 83.7 119.5 120.2 120.4 120.0 120.1 119.3 118.9 119.1 118.9 119.8 120.3 119.7 119.8 119.7 Gross value (billions of 1987 dollars, annual rates) MAJOR MARKETS 102 Products, total 2,002.9 2,245.1 2,244.6 2,247.3 2,246.9 2,252.0 2,236.5 2,231.5 2,239.1 2,238.8 2,257.8 2,268.1 2,243.9 2,254.0 2,258.7 103 Final 1,552.2 1,748.2 1,743.1 1,748.3 1,748.6 1,755.0 1.743.1 1,737.4 1,745.6 1,743.2 1,760.5 1,768.2 1,744.2 1,754.1 1,757.0 104 Consumer goods 1,033.4 1,129.7 1,135.6 1,134.6 1,131.1 1,135.5 1.125.2 1,122.3 1,128.4 1,124.0 1,135.7 1,141.1 1,127.5 1,135.1 1,133.8 105 Equipment 518.8 618.4 607.5 613.8 617.5 619.5 617.9 615.1 617.1 619.2 624.8 627.1 616.7 619.0 623.2 106 Intermediate 450.7 496.9 501.5 499.0 498.3 497.0 493.4 494.0 493.5 495.6 497.3 499.9 499.7 499.9 501.8 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For Bulletin, vol. 82 (January 1996), pp. 16-25. For a detailed description of the industrial the ordering address, see the inside front cover. The latest historical revision of the industrial production index, see "Industrial Production: 1989 Developments and Historical Revision," production index and the capacity utilization rates was released in November 1995. See "A Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204. Revision to Industrial Production and Capacity Utilization, 1991-95," 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 1995 IItteemm 11999922 11999933 11999944 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,095 1,199 1,372 1,282 1,235 1,243 1,243 1,275 1,355 1,368 1,405 l,384r 1,428 2 One-family 911 987 1,068 931 911 905 930 958 1,011 1,044 1,073 l,051r 1,068 3 Two-family or more 184 213 303 351 324 338 313 317 344 324 332 333r 360 4 Started 1,200 1,288 1,457 1,319 1,238 1,269 1,282 1,298 1,432 1,392 1,410r l,343r 1,420 5 One-family 1,030 1,126 1,198 1,048 987 1,009 988 1,034 1,107 1,126 l,139r l,102r 1,102 6 Two-family or more 170 162 259 271 251 260 294 264 325 266 27 lr 241r 318 7 Under construction at end of period1 612 680 762 797 769 763 755 756 761 773 78 lr 785r 795 8 One-family 473 543 558 579 552 544 536 534 538 548 553r 562r 566 9 Two-family or more 140 137 204 218 217 219 219 222 223 225 228r 223r 229 10 Completed 1,158 1,193 1,347 1,302 1,443 1,334 1,342 1,256 1,345 1,246 1,254r l,312r 1,337 11 One-family 964 1,040 1,160 1,080 1,222 1,089 1,072 1,053 1,037 1,012 998r l,032r 1,043 12 Two-family or more 194 153 187 222 221 245 270 203 308 234 256r 280r 294 13 Mobile homes shipped 210 254 304 335 333 318 329 329 319 335 346 359 n.a. Merchant builder activity in one-family units 14 Number sold 610 666 670 575 612 607 667 723 781 703r 682r 663r 649 15 Number for sale at end of period 265 293 338 347 347 348 347 347 344 349r 352r 362r 375 Price of units sold (thousands of dollars)2 16 Median 121.3 126.1 130.4 135.0 130.0 134.0 133.9 133.7 131.0 134.9r 130.0r 137.0r 113322..44 17 Average 144.9 147.6 153.7 160.2 153.3 157.8 158.0 160.2 154.2 162.0r 156.0r 155.3r 155.5 EXISTING UNITS (one-family) 18 Number sold 3,520 3,800 3,946 3,420 3,620 3,390 3,550 3,800 3,990 4,120 4,150 4,110 4,040 Price of units sold (thousands of dollars)2 19 Median 103.6 106.5 109.6 107.0 107.9 108.1 109.0 116.2 115.9 117.6 115.2 113.3 114.3 20 Average 130.8 133.1 136.4 133.4 134.5 134.2 135.4 143.3 142.2 144.4 140.5 138.7 139.7 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 435,022 464,504 506,904 521,429 523,467 522,094 514,515 518,934 528,185 526,535 532,278 546,869 22 Private 315,695 339,161 376,566 383,652 383,301 382,220 376,148 377,486 385,233 383,556 384,927 390,927 23 Residential 187,870 210,455 238,884 240,207 237,894 234,109 231,342 228,388 232,415 232,254 235,594 237,381 24 Nonresidential 127,825 128,706 137,682 143,445 145,407 148,111 144,806 149,098 152,818 151,302 149,333 153,546 25 Industrial buildings 20,720 19,533 21,121 23,370 23,911 24,707 24,760 24,416 24,424 24,178 24,073 25,315 26 Commercial buildings 41,523 42,627 48,552 53,687 55,439 55,011 51,779 55,420 56,906 55,709 55,179 57,523 27 Other buildings 21,494 23,626 23,912 24,039 23,062 23,948 24,319 23,447 24,463 24,021 24,020 24,780 n.a. 28 Public utilities and other 44,088 42,920 44,097 42,349 42,995 44,445 43,948 45,815 47,025 47,394 46,061 45,928 29 Public 119,322 125,342 130,337 137,777 140,166 139,874 138,367 141,447 142,952 142,979 147,351 155,942 30 Military 2,502 2,454 2,319 2,624 3,048 2,736 2,442 2,569 3,212 3,025 2,304 3,600 31 Highway 34,899 37,431 39,882 38,681 40,667 41,158 38,657 40,875 44,204 42,929 43,064 46,047 32 Conservation and development 6,021 5,978 6,228 7,128 7,139 6,273 5,531 6,117 5,326 6,773 6,499 7,341 33 Other 75,900 79,479 81,908 89,344 89,312 89,707 91,737 91,886 90,210 90,252 95,484 98,954 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • March 1996 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier months earlier (annual rate) Change from 1 month earlier IIInnndddeeexxx IIIttteeemmm llleeevvveeelll,,, 1995 1995 DDDeeeccc... 11999944 11999955 111999999555 111 DDeecc.. DDeecc.. Mar. June Sept. Dec. Aug. Sept. Oct. Nov. Dec. CONSUMER PRICES2 (1982-84=100) 1 All items 2.7 2.5 3.2 3.2 1.8 2.1 .1 .1 .3 .0 .2 153.5 2 2.9 2.1 .0 3.6 3.6 1.3 .2 .5 .3 -.1 .1 149.9 3 Energy items 2.2 -1.3 -1.1 5.4 -11.5 2.7 -.8 -1.4 .4 -.9 1.2 103.3 4 All items less food and energy 2.6 3.0 4.1 3.0 2.8 2.0 .2 .2 .3 .1 .1 162.7 5 Commodities 1.4 1.7 2.6 .6 2.3 1.4 .4 .1 .2 .0 .1 140.0 6 Services 3.2 3.6 4.8 4.3 3.0 2.3 .1 .3 .3 .2 .1 175.7 PRODUCER PRICES (1982=100) 7 Finished goods 1.7 2.2 3.2 .6 1.3 3.8 ,0R .2' -.1 .5 .5 129.0 8 Consumer foods 1.1 1.9 -1.2 -4.6 8.8 5.3 7R .9' .0 1.2 .1 131.0 9 Consumer energy 3.5 .9 11.3 1.5 -14.3 7.5 -,5r -,8r -.9 -.5 3.3 76.6 10 Other consumer goods 1.4 2.7 2.9 3.2 2.3 2.5 .1 .3 .1 .4 .1 143.8 11 Capital equipment 2.0 2.2 3.0 1.8 2.1 2.1 .R .1 -.1 .4 .1 138.1 Intermediate materials 12 Excluding foods and feeds 4.8 3.0 10.6 3.9 -.6 -1.6 .0 -.1 -.4 -.1 .1 125.2 13 Excluding energy 5.2 3.1 10.5 4.2 1.8 -3.5 ,I .1 -.3 -.2 -.4 135.0 Crude materials 14 Foods -9.4 12.9 -4.6 -.8 42.3 20.7 1.0r 3.9r 2.1 3.6 -.9 114.7 15 Energy -.1 .0 -4.5 14.6 -22.0 17.1 -3.8r 2.4r -.4 2.1 2.3 69.9 16 Other 17.3 -4.6 21.9 4.6 -18.2 -20.8 — 1.4r — 1.8r -2.6 -2.1 -1.1 160.7 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 rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A51 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1994r 1995r AAccccoouunntt 11999922rr 11999933rr 11999944rr Q3 Q4 Ql Q2 Q3 GROSS DOMESTIC PRODUCT 1 Total 6,244.4 6,550.2 6,931.4 6,987.6 7,080.0 7,147.8 7,196.5 7,297.2 By source 2 Personal consumption expenditures 4,219.8 4,454.1 4,698.7 4,734.4 4,796.0 4,836.3 4,908.7 4,965.1 3 Durable goods 488.5 530.7 580.9 585.3 602.7 593.0 604.0 616.0 4 Nondurable goods 1,321.8 1,368.9 1,429.7 1,443.5 1,459.0 1,471.6 1,486.9 1,491.3 5 Services 2,409.4 2,554.6 2,688.1 2,705.6 2,734.4 2,771.7 2,817.9 2,857.8 6 Gross private domestic investment 790.4 871.1 1,014.4 1,033.6 1,050.1 1,072.0 1,050.3 1,067.1 7 Fixed investment 783.4 850.5 954.9 968.9 991.4 1,013.9 1,016.3 1,036.5 8 Nonresidential 557.9 598.8 667.2 678.5 697.9 723.6 734.4 746.3 y Structures 169.2 171.8 180.2 181.0 188.8 194.5 197.6 202.3 10 Producers' durable equipment 388.7 427.0 487.0 497.5 509.1 529.0 536.8 544.0 N Residential structures 225.6 251.7 287.7 290.4 293.5 290.4 281.9 290.2 12 Change in business inventories 7.0 20.6 59.5 64.7 58.7 58.1 34.0 30.6 13 Nonfarm 2.0 -26.8 48.0 51.8 55.1 60.8 36.1 34.7 14 Net exports of goods and services -29.5 -64.9 -96.4 -108.4 -99.7 -106.6 -122.4 -100.6 li Exports 639.4 660.0 722.0 734.2 763.6 778.6 796.9 813.2 16 Imports 669.0 724.9 818.4 842.6 863.3 885.1 919.3 913.7 17 Government consumption expenditures and gross investment 1,263.8 1,289.9 1,314.7 1,328.0 1,333.5 1,346.0 1,359.9 1,365.5 18 Federal 528.0 522.1 516.3 523.6 520.9 519.9 522.6 517.3 19 State and local 735.8 767.8 798.4 804.4 812.6 826.1 837.3 848.2 By major type of product 20 Final sales, total 6,237.4 6,529.7 6,871.8 6,922.9 7,021.3 7,089.7 7,162.5 7,266.6 21 Goods 2,314.0 2,400.9 2,534.2 2,553.5 2,600.9 2,617.3 2,642.3 2,685.0 22 Durable 965.9 1,013.8 1,085.9 1,099.9 1,113.3 1,118.6 1,134.0 1,162.6 23 Nondurable 1,348.1 1,387.2 1,448.3 1,453.6 1,487.6 1,498.7 1,508.3 1,522.5 24 Services 3,411.1 3,581.7 3,742.4 3,769.0 3,806.3 3,852.6 3,904.5 3,949.1 2B Structures 512.3 547.0 595.3 600.5 614.1 619.8 615.7 632.4 26 Change in business inventories 7.0 20.6 59.5 64.7 58.7 58.1 34.0 30.6 27 Durable goods -10.9 15.7 31.9 34.2 33.1 54.4 28.5 25.5 28 Nondurable goods 17.9 4.9 27.7 30.5 25.6 3.7 5.4 5.1 MEMO 29 Total GDP in chained (1992) dollars 6,244.4 6,383.8 6,604.2 6,639.5 6,691.3 6,701.6 6,709.4 6,763.2 NATIONAL INCOME 30 Total 4,950.8 5,194.4 5,495.1 5,551.2 5,635.0 5,697.7 5,738.9 5,845.1 31 Compensation of employees 3,644.9 3,809.4 4,008.3 4,022.7 4,083.7 4,141.6 4,178.9 4,232.9 32 Wages and salaries 2,970.6 3,095.2 3,255.9 3,265.5 3,320.2 3,363.0 3,393.3 3,439.3 33 Government and government enterprises 567.8 584.2 602.5 603.7 608.3 616.3 619.6 624.1 34 Other 2,402.9 2,511.0 2,653.4 2,661.7 2,711.9 2,746.6 2,773.6 2,815.2 3b Supplement to wages and salaries 674.3 714.2 752.4 757.2 763.5 778.6 785.6 793.7 36 Employer contributions for social insurance 323.0 333.3 350.2 352.3 355.8 360.8 363.6 367.8 37 Other labor income 351.3 380.9 402.2 404.9 407.8 417.7 422.0 425.9 38 Proprietors' income1 409.5 420.0 450.9 458.7 469.4 472.0 474.7 479.7 3y Business and professional1 371.5 388.1 415.9 426.8 437.1 443.5 447.1 452.3 40 Farm1 38.0 32.0 35.0 31.9 32.3 28.5 27.6 27.4 41 Rental income of persons2 80.6 102.5 116.6 122.2 121.9 120.6 121.6 118.3 42 Corporate profits1 401.4 464.5 526.5 549.8 568.9 559.6 561.1 614.4 43 Profits before tax3 406.4 464.3 528.2 547.5 570.4 594.1 588.4 609.6 44 Inventory valuation adjustment -7.5 -6.6 -13.3 -16.5 -22.8 -51.9 -42.3 -9.8 45 Capital consumption adjustment 2.5 6.7 11.6 18.8 21.3 17.4 15.0 14.6 46 Net interest 414.3 398.1 392.8 397.8 391.1 403.9 402.6 399.8 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 • March 1996 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1994r 1995r AAccccoouunntt 11999922rr 11999933rr Q3 Q4 Ql Q2 Q3 PERSONAL INCOME AND SAVING 1 Total personal income 5,264.2 5,479.2 5,750.2 5,801.7 5,893.9 5,995.5 6,061.9 6,131.9 2 Wage and salary disbursements 2,986.4 3,090.6 3,241.1 3,262.4 3,318.5 3,361.6 3,393.3 3,439.3 3 Commodity-producing industries 765.7 781.3 825.0 832.0 846.0 856.2 855.0 859.9 4 Manufacturing 583.5 593.1 621.3 626.1 636.0 643.4 640.5 642.9 5 Distributive industries 680.3 698.4 739.3 741.5 762.7 768.8 778.6 792.4 6 Service industries 972.6 1,026.6 1,074.3 1,085.2 1,101.6 1,120.2 1,140.0 1,162.8 7 Government and government enterprises 567.8 584.2 602.5 603.7 608.3 616.3 619.6 624.1 8 Other labor income 351.3 380.9 402.2 404.9 407.8 417.7 422.0 425.9 9 Proprietors' income1 409.5 420.0 450.9 458.7 469.4 472.0 474.7 479.7 10 Business and professional1 371.5 388.1 415.9 426.8 437.1 443.5 447.1 452.3 11 Farm1 38.0 32.0 35.0 31.9 32.3 28.5 27.6 27.4 12 Rental income of persons2 80.6 102.5 116.6 122.2 121.9 120.6 121.6 118.3 N Dividends 159.4 186.8 199.6 201.0 206.7 209.5 212.2 215.8 14 Personal interest income 667.2 647.3 661.6 671.0 678.4 701.9 713.9 719.3 15 Transfer payments 858.2 910.7 956.3 961.4 974.7 1,002.4 1,016.8 1,029.9 16 Old-age survivors, disability, and health insurance benefits 414.0 444.4 472.9 475.6 482.1 497.6 505.1 510.7 17 LESS: Personal contributions for social insurance 248.4 259.6 278.1 279.9 283.5 290.2 292.7 296.2 18 EQUALS: Personal income 5,264.2 5,479.2 5,750.2 5,801.7 5,893.9 5,995.5 6,061.9 6,131.9 19 LESS: Personal tax and nontax payments 650.5 689.9 731.4 731.3 748.1 770.0 801.5 801.3 20 EQUALS: Disposable personal income 4,613.7 4,789.3 5,018.8 5,070.4 5,145.7 5,225.5 5,260.4 5,330.6 21 LESS: Personal outlays 4,341.0 4,572.9 4,826.5 4,863.0 4,927.9 4,972.2 5,049.0 5,109.7 22 EQUALS: Personal saving 272.6 216.4 192.3 207.4 217.8 253.3 211.4 220.9 MEMO Per capita (chained 1992 dollars) 23 Gross domestic product 24,449.5 24,724.2 25,332.6 25,438.7 25,568.6 25,559.1 25,540.2 2255,,667766..55 24 Personal consumption expenditures 16,522.3 16,807.5 17,150.4 17,187.0 17,280.5 17,280.3 17,391.7 17,468.1 25 Disposable personal income 18,062.0 18,075.0 18,320.0 18,407.0 18,544.0 18,672.0 18,634.0 18,754.0 26 Saving rate (percent) 5.9 4.5 3.8 4.1 4.2 4.8 4.0 4.1 GROSS SAVING 27 Gross saving 905.4 938.4 1,055.9 1,054.3 1,064.8 1,110.5 1,092.3 1,145.7 28 Gross private saving 971.9 964.5 1,006.0 1,001.1 1,012.8 1,039.9 1,007.3 1,064.0 7.9 Personal saving 272.6 216.4 192.3 207.4 217.8 253.3 211.4 220.9 30 Undistributed corporate profits' 88.9 103.4 120.2 133.9 136.8 120.6 122.3 161.4 31 Corporate inventory valuation adjustment -7.5 -6.6 -13.3 -16.5 -22.8 -51.9 -42.3 -9.8 Capital consumption allowances 32 Corporate 403.0 417.0 441.0 437.1 439.3 444.4 445511..33 445577..00 33 Noncorporate 223.1 223.1 237.7 219.6 217.3 220.2 222.4 224.8 34 Government surplus, or deficit ( —), national income and product accounts -194.6 -159.8 -90.2 -86.7 -91.1 -74.4 -61.5 -65.6 Federal -280.9 -254.7 -189.9 -186.3 -190.4 -173.3 -160.5 -158.4 36 State and local 86.3 94.9 99.7 99.6 99.3 99.0 99.0 92.8 37 Gross investment 949.1 993.5 1,087.2 1,101.1 1,104.5 1,146.7 1,113.9 1,143.3 38 Gross private domestic investment 790.4 871.1 1,014.4 1,033.6 1,050.1 1,072.0 1,050.3 1,067.1 39 Net foreign investment -50.5 -88.2 -139.6 -149.6 -161.9 -144.4 -160.1 -148.7 40 Statistical discrepancy 1 43.7 55.1 31.3 46.7 39.7 36.2 21.6 -2.3 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 Q3 Q4 Q1 Q2 Q3P 1 Balance on current account -61,548 -99,925 -151,245 -39,714 -43,277 -39,025 -43,267 -39,482 2 Merchandise trade balance2 -96,106 -132,618 -166,099 -44,627 -43,488 -45,050 -48,802 -43,433 3 Merchandise exports 440,352 456,823 502,485 127,384 133,926 138,061 142,850 145,315 4 Merchandise imports -536,458 -589,441 -668,584 -172,011 -177,414 -183,111 -191,652 -188,748 5 Military transactions, net -2,142 448 2,148 1,124 679 542 587 736 6 Other service transactions, net 58,767 57,328 57,739 14,696 15,342 15,068 14,782 15,178 7 Investment income, net 10,080 9,000 -9,272 -2,533 -4,571 -1,961 -2,614 -4,153 8 U.S. government grants -15,083 -16,311 -15,814 -3,488 -6,245 -2,867 -2,284 -2,834 y U.S. government pensions and other transfers -3,735 -3,785 -4,247 -1,064 -1,063 -782 -989 -987 10 Private remittances and other transfers -13,330 -13,988 -15,700 -3,822 -3,931 -3,975 -3,947 -3,989 n Change in U.S. government assets other than official reserve assets, net (increase, —) -1,661 -330 -322 -283 -931 -152 -180 136 12 Change in U.S. official reserve assets (increase, -) 3,901 -1,379 5,346 -165 2,033 -5,318 -2,722 -1,893 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) 2,316 -537 -441 -111 -121 -867 -156 362 15 Reserve position in International Monetary Fund -2,692 -44 494 273 -27 -526 -786 -991 16 Foreign currencies 4,277 -797 5,293 -327 2,181 -3,925 -1,780 -1,264 17 Change in U.S. private assets abroad (increase, -) -68,115 -182,880 -130,875 -27,492 -56,258 -69,873 -97,340 -41,095 18 Bank-reported claims3 20,895 29,947 915 1,590 -16,651 -29,284 -39,982 14,851 iy Nonbank-reported claims 45 1,581 -32,621 -8,051 -12,449 -11,518 -18,499 20 U.S. purchases of foreign securities, net -46,415 -141,807 -49,799 -10,976 -15,238 -6,567 -21,731 -34,251 21 U.S. direct investments abroad, net -42,640 -72,601 -49,370 -10,055 -11,920 -22,504 -17,128 -21,695 22 Change in foreign official assets in United States (increase, +) 40,466 72,146 39,409 19,691 -421 22,308 37,836 39,479 23 U.S. Treasury securities 18,454 48,952 30,723 16,477 7,470 10,131 25,169 20,597 24 Other U.S. government obligations 3,949 4,062 6,025 2,222 1,228 1,126 1,326 518 25 Other U.S. government liabilities4 2,180 1,706 2,211 494 692 -154 506 194 26 Other U.S. liabilities reported by U.S. banks3 16,571 14,841 2,923 1,298 -9,856 10,940 7,886 18,398 27 Other foreign official assets5 -688 2,585 -2,473 -800 45 265 2,949 -228 28 Change in foreign private assets in United States (increase, +) 113,357 176,382 251,956 60,045 85,136 72,533 86,495 66,185 29 U.S. bank-reported liabilities3 15,461 20,859 114,396 19,650 34,676 -531 12,239 -19,958 30 U.S. nonbank-reported liabilities 13,573 10,489 -4,324 487 -5,242 10,113 10,527 31 Foreign private purchases of U.S. Treasury securities, net 36,857 24,063 33,811 5,428 25,929 29,910 30,315 36,778 32 Foreign purchases of other U.S. securities, net 29,867 79,864 58,625 14,762 10,195 15,816 20,549 30,024 33 Foreign direct investments in United States, net 17,599 41,107 49,448 19,718 19,578 17,225 12,865 19,341 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy -26,399 35,985 -14,269 -12,082 13,718 19,527 19,178 -23,330 36 Due to seasonal adjustment -6,641 782 6,183 331 -7,086 37 Before seasonal adjustment -26,399 35,985 - i4,269 -5,441 12,936 13,344 18,847 -16,244 MEMO Changes in official assets 38 U.S. official reserve assets (increase, —) 3,901 -1,379 5,346 -165 2,033 -5,318 -2,722 -1,893 39 Foreign official assets in United States, excluding line 25 (increase, +) 38,286 70,440 37,198 19,197 -1,113 22,462 37,330 39,285 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 5,942 -3,717 -1,184 3,564 1,120 -322 -11 6,365 1. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38^t0. 4. Associated primarily with military sales contracts and other transactions arranged with 2. Data are on an international accounts basis. The data differ from the Census basis data, or through foreign official agencies. shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from 5. Consists of investments in U.S. corporate stocks and in debt securities of private merchandise trade data and are included in line 5. corporations and state and local governments. 3. Reporting banks include all types of depository institutions as well as some brokers and SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current dealers. Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • March 1996 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1995 IItteemm 11999922 11999933 11999944 Mayr Juner Julyr Aug.r Sept.' Oct.r Nov.p 1 Goods and services, balance -39,480 -74,842 -106,214 -10,836 -11,385 -11,070 -8,248 -8,245 8,160 -7,055 2 Merchandise -96,106 -132,618 -166,101 -15,975 -16,493 -16,226 -13,504 -13,746 -13,742 -12,476 3 Services 56,626 57,777 59,887 5,139 5,108 5,156 5,256 5,501 5,582 5,421 4 Goods and services, exports 618,969 644,579 701,200 65,576 64,681 63,645 66,410 67,460 66,738 67,356 5 Merchandise 440,352 456,824 502,484 48,308 47,381 46,372 49,084 49,779 48,982 49,408 6 Services 178,617 187,755 198,716 17,268 17,300 17,273 17,326 17,681 17,756 17,948 7 Goods and services, imports -658,449 -719,421 -807,414 -76,412 -76,066 -74,715 -74,658 -75,705 -74,898 -74,411 8 Merchandise -536,458 -589,442 -668,585 -64,283 -63,874 -62,598 -62,588 -63,525 -62,724 -61,884 9 Services -121,991 -129,979 -138,829 -12,129 -12,192 -12,117 -12,070 -12,180 -12,174 -12,527 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 1995 AAsssseett 11999922 11999933 11999944 May June July Aug. Sept. Oct. Nov. Dec.p 1 Total 71,323 73,442 74,335 90,549 90,063 91,534 86,648 87,152 86,224 85,755 85,832 2 Gold stock, including Exchange Stabilization Fund' 11,056 11,053 11,051 11,054 11,054 11,053 11,053 11,051 11,051 11,050 11,050 3 Special drawing rights2 3 8,503 9,039 10,039 11,923 11,869 11,487 11,146 11,035 10,949 11,034 11,037 4 Reserve position in International Monetary Fund2 11,759 11,818 12,030 14,278 14,276 14,761 14,470 14,681 14,700 14,572 14,649 5 Foreign currencies4 40,005 41,532 41,215 53,294 52,864 54,233 49,979 50,385 49,524 49,099 49,096 1. Gold held "under earmark" at Federal Reserve Banks for foreign and international SDR holdings and reserve positions in the IMF also have been valued on this basis since July accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold 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 year 2. Special drawing rights (SDRs) are valued according to a technique adopted by the indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979— International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of $1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs. exchange rates for the currencies of member countries. From July 1974 through December 4. Valued at current market exchange rates. 1980, sixteen currencies were used; since January 1981, five currencies have been used. US. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 1995 AAsssseett 11999922 11999933 11999944 May June July Aug. Sept. Oct. Nov. Dec.p 1 Deposits 205 386 250 227 167 190 165 201 275 194 386 Held in custody 2 U.S. Treasury securities2 314,481 379,394 441,866 474,181 482,506 505,613 502,737 506,572 507,075 522,950 522,170 3 Earmarked gold3 13,118 12,327 12,033 11,800 11,725 11,728 ll,728r 11,728 11,709 11,702 11,702 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; not organizations. 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 1995r IItteemm 11999933 11999944 May June July Aug. Sept. Oct. Nov.P 1 Total1 482,915r 520,578 560,461 580,151 604,548 612,972 619,517 618,417 630,909 By type 2 Liabilities reported by banks in the United States 69,72 lr 73,031 84,929 91,573 93,801 104,791 110,051 107,870 107,702 3 U.S. Treasury bills and certificates3 151,100 139,570 154,575 115544,,551177 159,654 115577,,551166 163,093 157,987 171,366 U.S. Treasury bonds and notes 4 Marketable 212,237 254,059 263,471 274,342 291,132 290,768 286,243 291,948 291,033 5 Nonmarketable4 5,652 6,109 6,209 6,245 6,288 6,329 6,366 6,407 6,442 6 U.S. securities other than U.S. Treasury securities5 44,205 47,809 51,277 53,474 53,673 53,568 53,764 54,205 54,366 By area 7 Europe1 207,034' 215,024 217,831 223,853 224,380 221,130 222,869 222,679 228,180 8 Canada 15,285 17,235 19,631 19,549 21,746 21,508 20,522 20,355 19,535 9 Latin America and Caribbean 55,898 41,492 44,806 50,327 58,126 63,383 63,424 61,335 61,323 10 197,702 236,819 270,519 278,767 290,878 297,343 303,809 305,053 310,838 11 Africa 4,052 4,179 4,281 4,427 4,309 4,433 4,684 4,761 6,086 12 Other countries 2,942 5,827 3,391 3,226 5,107 5,173 4,207 4,232 4,945 1. Includes the Bank for International Settlements. Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, 1993, 30-year maturity issue. negotiable time certificates of deposit, and borrowings under repurchase agreements. 5. Debt securities of U.S. government corporations and federally sponsored agencies, and 3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official U.S. corporate stocks and bonds. institutions of foreign countries. SOURCE. Based on U.S. Department of the Treasury data and on data reported to the 4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of department by banks (including Federal Reserve Banks) and securities dealers in the United zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning States, and on the 1989 benchmark survey of foreign portfolio investment in the United March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue; States. 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 Dec.r Mar. June' Sept. 1 Banks' liabilities 75,129 72,796 78,259 89,661 96,190 106,715 102,148 2 Banks' claims 73,195 62,799 61,425 60,279 72,694r 77,171 69,312 3 Deposits 26,192 24,240 20,401 19,670 24,440r 28,915 25,648 4 Other claims 47,003 38,559 41,024 40,609 48,254 48,256 43,664 5 Claims of banks' domestic customers2 3,398 4,432 9,103 15,020 11,637 13,070 9,685 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • March 1996 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1995 IItteemm 11999922 11999933 11999944rr Mayr Juner July' Aug. Sept.' Oct. Nov.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 810,259 926,672r 1,018,468 1,044,952 1,057,784 1,060,089 l,075,972r 1,073,697 1,098,510 1,103,881 2 Banks' own liabilities 606,444 626,919r 722,151 725,671 735,537 730,718 745,225' 734,810 762,248 753,878 3 Demand deposits 21,828 21,569r 23,385 23,569 22,251 24,103 21,778 23,752 23,451 23,095 4 Time deposits2 160,385 175,106r 186,509 185,781 195,113 191,709 196,910' 188,133 202,411 193,225 5 Other3 93,237 11 l,971r 116,699 129,487 123,142 141,304 139,068 136,327 145,932 153,787 6 Own foreign offices4 330,994 318,273' 395,558 386,834 395,031 373,602 387,469' 386,598 390,454 383,771 7 Banks' custodial liabilities5 203,815 299,753 296,317 319,281 322,247 329,371 330,747 338,887 336,262 350,003 8 U.S. Treasury bills and certificates6 112277,,664444 176,739 162,857 182,053 182,204 188,621 118877,,331188 193,070 189,248 204,391 9 Other negotiable and readily transferable instruments7 21,974 36,289 42,532 40,901 45,112 44,514 45,175 47,279 47,838 47,616 10 Other 54,197 86,725 90,928 96,327 94,931 96,236 98,254 98,538 99,176 97,996 11 Nonmonetary international and regional organizations8... 9,350 10,936 8,606 8,776 9,776 11,955 9,934 12,886 10,067 9,492 12 Banks' own liabilities 6,951 5,639 8,176 7,809 8,972 10,884 8,630 11,995 8,239 8,037 13 Demand deposits 46 15 29 34 114 43 40 64 383 33 14 Time deposits 3,214 2,780 3,298 3,516 4,459 4,977 4,457 4,315 3,801 3,564 15 Other3 3,691 2,844 4,849 4,259 4,399 5,864 4,133 7,616 4,055 4,440 16 Banks' custodial liabilities5 2,399 5,297 430 967 804 1,071 1,304 891 1,828 1,455 17 U.S. Treasury bills and certificates6 1,908 4,275 281 510 312 551 826 354 11,,334422 962 18 Other negotiable and readily transferable instruments7 486 1,022 149 456 492 520 478 537 486 493 19 Other 5 0 0 1 0 0 0 0 0 0 20 Official institutions9 159,563 220,82 lr 212,601 239,504 246,090 253,455 262,307' 273,144 265,857 279,068 21 Banks' own liabilities 51,202 64,144r 59,580 69,044 73,119 75,437 83,392' 85,998 83,588 83,747 22 Demand deposits 1,302 l,600r 1,564 1,575 1,398 1,429 1,547 1,362 1,646 1,690 23 Time deposits2 17,939 21,653r 23,511 27,243 27,253 29,411 31,600' 32,048 30,385 29,723 24 Other3 31,961 40,89 r 34,505 40,226 44,468 44,597 50,245 52,588 51,557 52,334 25 Banks' custodial liabilities5 108,361 156,677 153,021 170,460 172,971 178,018 178,915 187,146 182,269 195,321 26 US. Treasury bills and certificates6 110044,,559966 151,100 139,570 154,575 154,517 159,654 157,516 163,093 115577,,998877 171,366 27 Other negotiable and readily transferable instruments7 3,726 5,482 13,245 15,771 18,325 18,159 20,735 23,777 24,028 23,600 28 Other 39 95 206 114 129 205 664 276 254 355 29 Banks10 547,320 592,17 lr 681,301 679,993 685,826 665,993 684,269' 670,425 699,236 688,262 30 Banks' own liabilities 476,117 478,755r 566,411 560,163 566,355 545,391 562,829' 547,817 575,805 562,962 31 Unaffiliated foreign banks 145,123 160,482r 170,853 173,329 171,324 171,789 175,360' 161,219 185,351 179,191 32 Demand deposits 10,170 9,718r 10,633 11,406 10,554 12,121 10,061 11,817 11,339 11,232 33 Time deposits2 90,296 105,262r 111,171 102,889 111,435 104,477 108,855' 98,861 114,650 106,323 34 Other3 44,657 45,502 49,049 59,034 49,335 55,191 56,444 50,541 59,362 61,636 35 Own foreign offices4 330,994 318,273r 395,558 386,834 395,031 373,602 387,469' 386,598 390,454 383,771 36 Banks' custodial liabilities5 71,203 113,416 114,890 119,830 119,471 120,602 121,440 122,608 123,431 125,300 37 US. Treasury bills and certificates6 11,087 10,712 11,240 14,444 15,021 15,535 15,489 16,170 1166,,442299 19,224 38 Other negotiable and readily transferable instruments7 7,555 17,020 14,505 11,155 11,188 10,583 10,142 9,690 9,754 10,533 39 Other 52,561 85,684 89,145 94,231 93,262 94,484 95,809 96,748 97,248 95,543 40 Other foreigners 94,026 102,744r 115,960 116,679 116,092 128,686 119,462' 117,242 123,350 127,059 41 Banks' own liabilities 72,174 78,381r 87,984 88,655 87,091 99,006 90,374' 89,000 94,616 99,132 42 Demand deposits 10,310 10,236r 11,159 10,554 10,185 10,510 10,130 10,509 10,083 10,140 43 Time deposits .. 48,936 45,41 r 48,529 52,133 51,966 52,844 51,998' 52,909 53,575 53,615 44 Other3 12,928 22,734 28,296 25,968 24,940 35,652 28,246 25,582 30,958 35,377 45 Banks' custodial liabilities5 21,852 24,363 27,976 28,024 29,001 29,680 29,088 28,242 28,734 27,927 46 U.S. Treasury bills and certificates6 10,053 10,652 11,766 12,524 12,354 12,881 1133,,448877 1133,,445533 1133,,449900 12,839 47 Other negotiable and readily transferable instruments7 10,207 12,765 14,633 13,519 15,107 15,252 13,820 13,275 13,570 12,990 48 Other 1,592 946 1,577 1,981 1,540 1,547 1,781 1,514 1,674 2,098 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 9,111 17,567 17,895 11,993 12,157 10,179 10,409 9,938 10,242 10,016 1. Reporting banks include all types of depository institutions as well as some brokers and 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official dealers. Excludes bonds and notes of maturities longer than one year. institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in "Other negotia- 7. Principally bankers acceptances, commercial paper, and negotiable time certificates of ble and readily transferable instruments." 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 subsidiar- American Development Bank, and the Asian Development Bank. Excludes "holdings of ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory dollars" of the International Monetary Fund. agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists 9. Foreign central banks, foreign central governments, and the Bank for International principally of amounts owed to the head office or parent foreign bank, and to foreign Settlements. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. 5. Financial claims on residents of the United States, other than long-term securities, held 10. Excludes central banks, which are included in "Official institutions." by or through reporting banks for foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A57 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1995 IItteemm 11999922 11999933 11999944RR May' Juner Julyr Aug. Sept.r Oct. Nov.P AREA 50 Total, all foreigners 810,259 926,672r 1,018,468 1,044,952 1,057,784 1,060,089 l,075,972r 1,073,697 1,098,510 1,103,881 51 Foreign countries 800,909 915,736r 1,009,862 1,036,176 1,048,008 1,048,134 l,066,038r 1,060,811 1,088,443 1,094,389 52 Europe 307,670 377,91 LR 393,141 378,003 374,760 377,607 376,490R 362,027 376,952 384,042 53 Austria 1,611 1,917 3,653 3,963 3,855 3,923 3,869 5,221 4,887 4,755 54 Belgium and Luxembourg 20,567 28,670 21,978 25,738 21,079 24,794 24,591 24,036 25,187 28,351 55 Denmark 3,060 4,517 2,784 2,811 2,432 2,131 2,468 2,476 3,177 3,418 56 Finland 1,299 1,872 1,436 1,708 1,455 2,390 2,270 1,972 2,419 2,315 57 France 41,411 40,316 45,217 41,037 45,036 42,872 43,309 38,096 43,122 40,376 58 Germany 18,630 26,685 27,191 32,003 34,345 33,793 31,256 31,390 26,358 26,784 59 Greece 913 1,519 1,393 2,199 2,365 2,311 2,398 2,119 2,033 2,244 60 Italy 10,041 11,759 10,885 9,815 10,373 10,220 10,813 8,937 10,244 10,754 61 Netherlands 7,365 16,096 16,033 14,713 11,449 11,743 10,685 13,107 15,603 15,535 62 Norway 3,314 2,966 2,338 1,289 1,305 1,119 2,087 1,011 1,048 1,287 63 Portugal 2,465 3,366 2,846 2,860 2,675 3,165 2,933 3,033 2,901 2,717 64 Russia 577 2,511 2,714 7,042 7,177 6,313 7,265 6,367 7,338 8,978 65 Spain 9,793 20,496R 14,675 9,844 10,558 9,115 9,988R 10,100 13,464 10,805 66 Sweden 2,953 2,738 3,094 1,454 3,471 2,187 2,876 3,143 1,989 3,681 67 Switzerland 39,440 41,560R 41,956 40,033 47,243 42,192 41,644 41,406 42,574 41,164 68 Turkey 2,666 3,227 3,341 3,188 3,255 2,973 3,523 3,936 4,066 4,009 69 United Kingdom 111,805 133,993 163,793 151,288 141,118 151,341 150,781 141,577 147,391 148,331 70 Yugoslavia11 504 372R 245 220 220 214 146 215 210 171 71 Other Europe and other former U.S.S.R.12 29,256 33,331 27,769 26,798 25,349 24,811 23,588 23,885 22,941 28,367 72 Canada 22,420 20,235 24,727 27,736 29,458 28,898 28,296 28,872 35,356 27,722 73 Latin America and Caribbean 317,228 362,238R 423,797 431,535 444,989 436,258 447,523R 434,289 439,688 435,854 74 Argentina 9,477 14,477 17,203 10,370 10,873 12,404 1 L,539R 11,180 11,538 13,032 75 Bahamas 82,284 73,820R 103,936 92,708 97,320 88,654 95,938R 92,710 96,137 87,712 76 Bermuda 7,079 8,117 8,511 8,881 7,156 7,169 6,873 6,073 6,661 6,552 77 Brazil 5,584 5,301 9,145 15,616 18,250 21,232 26,743 27,591 27,366 27,503 78 British West Indies 153,033 193,699r 229,525 242,445 252,401 245,065 244,29 lr 234,629 235,997 240,158 79 Chile 3,035 3,183 3,126 2,959 3,320 2,677 2,890 2,698 2,574 2,695 80 Colombia 4,580 3,171 4,615 3,432 3,276 3,432 3,349 3,257 3,399 3,443 81 Cuba 3 33 13 5 5 5 3 4 13 8 82 Ecuador 993 880 875 1,050 1,179 1,118 1,160 1,130 1,311 1,307 83 Guatemala 1,377 1,207 1,121 1,072 1,129 1,100 1,122 1,197 1,068 1,209 84 Jamaica 371 410 529 542 449 426 444 484 430 447 85 Mexico 19,454 28,019r 12,250 18,270 19,201 21,006 22,120 22,069 20,892 20,886 86 Netherlands Antilles 5,205 4,686 5,217 6,374 4,628 6,068 4,778 5,016 5,328 5,172 87 Panama 4,177 3,582 4,551 5,004 4,314 4,641 4,998 4,683 4,478 4,204 88 Peru 1,080 929F 900 1,014 997 944 1,028 909 897 916 89 Uruguay 1,955 1,611 1,597 2,110 2,031 1,953 1,937 1,839 1,853 1,909 90 Venezuela 11,387 12,786 13,983 12,419 11,248 11,482 1 l,195r 11,971 12,641 11,620 91 Other 6,154 6,327r 6,700 7,264 7,212 6,882 7,115r 6,849 7,105 7,081 92 114433,,554400 144,527r 155,638 187,122 188,346 192,250 199,607 222,996 222,923 232,134 China 93 People's Republic of China 3,202 4,011 10,066 9,459 10,579 11,908 13,208 22,273 22,364 29,897 94 Republic of China (Taiwan) 8,408 10,627 9,844 9,199 9,751 9,165 9,838 10,253 10,729 11,365 95 Hong Kong 18,499 17,132 17,102 23,006 23,040 25,134 24,152 21,852 21,867 20,260 96 India 1,399 1,114 2,338 1,943 2,106 2,271 2,745 2,914 3,009 3,272 97 Indonesia 1,480 1,986 1,587 2,632 2,119 1,966 2,175 2,366 2,173 2,485 98 Israel 3,773 4,435 5,157 5,331 4,573 4,599 4,723 4,207 3,812 4,085 99 Japan 58,435 61,466 64,280 83,192 83,367 85,821 89,102 104,261 104,526 105,426 100 Korea (South) 3,337 4,913 5,124 5,046 4,987 5,066 4,881 5,458 5,365 5,589 101 Philippines 2,275 2,035 2,714 2,730 2,539 2,653 2,793 2,786 2,844 2,888 102 Thailand 5,582 6,137 6,466 11,596 11,502 11,244 11,177 11,803 10,458 12,144 103 Middle Eastern oil-exporting countries 21,437 15,822r 15,489 15,624 16,851 16,474 15,779 16,892 17,350 16,277 104 Other 15,713 14,849 15,471 17,364 16,932 15,949 19,034 17,931 18,426 18,446 105 5,884 6,633 6,523 6,737 6,784 6,966 6,989 7,033 7,209 7,784 106 Egypt 2,472 2,208 1,879 2,054 2,144 1,840 1,924 2,127 1,948 1,907 107 Morocco 76 99 97 73 90 94 87 79 66 60 108 South Africa 190 451 433 542 596 1,002 746 467 934 1,206 109 Zaire 19 12 9 10 18 13 15 9 4 9 110 Oil-exporting countries'4 1,346 1,303 1,343 1,302 1,418 1,364 1,667 1,792 1,544 1,822 111 Other 1,781 2,560 2,762 2,756 2,518 2,653 2,550 2,559 2,713 2,780 112 Other 4,167 4,192 6,036 5,043 3,671 6,155 7,133 5,594 6,315 6,853 113 Australia 3,043 3,308 5,142 4,258 2,944 5,473 5,459 4,777 5,007 5,758 114 Other 1,124 884 894 785 727 682 1,674 817 1,308 1,095 115 Nonmonetary international and regional organizations... 9,350 10,936 8,606 8,776 9,776 11,955 9,934 12,886 10,067 9,492 116 International" 7,434 6,851 7,537 6,797 8,124 10,266 7,918 11,154 8,231 8,168 117 Latin American regional16 1,415 3,218 613 1,067 804 834 1,010 876 552 371 118 Other regional17 501 867 456 912 848 855 1,006 856 1,284 953 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 15. Principally the International Bank for Reconstruction and Development. Excludes 12. Includes the Bank for International Settlements. Since December 1992, has "holdings of dollars" of the International Monetary Fund. included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 17. Asian, African, Middle Eastern, and European regional organizations, except the Bank Emirates (Trucial States). for International Settlements, which is included in "Other Europe." 14. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • March 1996 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 1995 AArreeaa oorr ccoouunnttrryy 11999922 11999933rr II999944rr Mayr Juner Julyr Aug.r Sept.r Oct. Nov.p 1 Total, all foreigners 499,437 487,791 486,082 487,304 521,177 508,369 520,538 514,307 521,835 533,176 2 Foreign countries 494,355 485,386 481,491 485,694 518,544 507,052 519,121 511,480 520,177 531,755 3 Europe 123,377 123,758 125,779 124,360 129,945 126,953 127,579 116,515 113311,,442200 131,515 4 Austria 331 412 692 756 581 616 685 670 888800 639 5 Belgium and Luxembourg 6,404 6,532 6,738 8,053 5,149 8,064 8,250 7,052 7,102 10,690 6 Denmark 707 382 1,030 508 599 443 428 410 634 602 7 Finland 1,418 594 691 431 394 967 1,001 1,221 1,916 1,097 8 France 14,723 11,822 12,768 14,085 15,363 15,435 15,195 13,941 14,805 15,227 9 Germany 4,222 7,724 7,608 7,520 8,862 7,148 8,730 8,691 8,081 8,425 10 Greece 717 691 604 407 442 445 386 385 404 378 11 Italy 9,047 8,834 6,043 6,221 6,736 6,067 5,747 5,911 5,645 5,386 12 Netherlands 2,468 3,063 2,957 5,998 4,356 4,478 4,354 4,696 4,469 4,907 13 Norway 355 396 504 1,382 1,019 1,206 1,047 11,,339922 1,456 1,375 14 Portugal 325 834 938 990 1,208 987 916 998866 1,036 862 lb Russia 3,147 2,310 949 511 508 495 506 421 696 949 lb Spain 2,755 3,717 3,530 2,139 3,566 3,627 3,482 3,520 3,162 3,191 17 Sweden 4,923 4,254 4,098 3,320 2,940 3,558 2,820 2,677 2,597 2,304 18 Switzerland 4,717 6,605 7,493 7,632 10,291 7,540 77,,336622 7,207 6,320 5,930 19 Turkey 962 1,301 874 722 713 725 776688 802 830 926 20 United Kingdom 63,430 62,030 66,830 62,388 65,918 63,853 64,560 54,511 68,988 66,865 21 Yugoslavia2 569 473 265 248 229 230 230 234 233 237 22 Other Europe and other former U.S.S.R.3 2,157 1,784 1,167 1,049 1,071 1,069 1,112 1,788 2,166 1,525 23 Canada 13,845 18,564 18,276 20,738 19,741 18,894 17,289 18,621 17,832 17,006 24 Latin America and Caribbean 218,078 224,568 223,928 225,738 243,779 238,331 249,752 249,688 250,679 266,205 2b Argentina 4,958 4,474 5,845 6,354 6,598 6,242 6,151 6,110 6,003 6,036 26 Bahamas 60,835 63,296 66,703 63,479 63,682 59,747 61,075 62,488 55,471 60,022 2/ Bermuda 5,935 8,901 8,481 10,884 8,549 6,373 8,944 6,295 5,537 8,119 28 Brazil 10,773 11,848 9,582 11,195 11,525 12,511 12,962 13,073 13,334 12,933 29 British West Indies 101,507 98,865 95,706 95,382 113,971 114,147 117,602 119,712 123,365 129,170 30 Chile 3,397 3,643 3,819 3,891 4,341 4,264 4,663 4,388 4,660 4,775 31 Colombia 2,750 3,181 4,004 4,035 4,033 4,183 4,270 4,358 4,593 4,516 32 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 884 681 681 664 768 768 725 805 846 847 34 Guatemala 262 288 366 353 344 340 350 361 385 424 35 Jamaica 162 195 258 264 264 277 290 287 289 285 36 Mexico 14,991 15,720 17,728 17,389 17,285 17,152 16,832 16,486 16,656 16,785 37 Netherlands Antilles 1,379 2,683 1,580 2,520 2,881 2,730 6,313 5,602 9,233 12,048 38 Panama 4,654 2,894 2,184 2,434 2,514 2,520 2,503 2,594 2,846 3,044 39 Peru 730 657 997 1,096 1,360 1,333 1,368 1,464 1,501 1,577 40 Uruguay 936 969 503 398 377 424 424 386 441 451 41 Venezuela 2,525 2,910 1,831 1,665 1,611 1,650 1,596 1,480 1,826 1,678 42 Other 1,400 3,363 3,660 3,735 3,676 3,670 3,684 3,799 3,693 3,495 43 Asia 131,789 111,775 107,350 108,817 118,799 117,203 118,221 120,178 114,497 111,292 44 People's Republic of China 906 2,271 836 879 1,143 1,206 1,163 1,316 1,241 1,069 4b Republic of China (Taiwan) 2,046 2,625 1,447 1,521 1,796 1,915 1,600 1,584 1,595 1,484 46 Hong Kong 9,642 10,828 9,162 12,072 14,934 14,756 14,520 15,677 12,539 10,710 4/ India 529 589 994 1,126 1,210 1,732 1,905 1,944 1,924 1,823 4488 Indonesia 1,189 1,527 1,470 1,427 1,443 1,516 1,620 1,596 11,,662233 1,580 4499 Israel 820 826 688 784 950 749 700 712 888866 728 SO Japan 79,172 60,032 59,428 58,478 61,042 61,271 63,288 63,059 61,817 60,457 bl Korea (South) 6,179 7,539 10,286 12,265 12,669 13,134 12,836 12,975 13,340 14,035 b2 Philippines 2,145 1,410 662 534 918 598 623 725 673 789 b3 Thailand 1,867 2,170 2,902 2,755 2,688 2,670 2,594 2,594 2,568 2,538 b4 Middle Eastern oil-exporting countries4 18,540 15,115 13,743 11,669 12,571 11,948 11,403 11,723 9,963 9,604 bb Other 8,754 6,843 5,732 5,307 7,435 5,708 5,969 6,273 6,328 6,475 56 4,279 3,861 3,028 2,751 2,919 2,907 2,826 2,705 2,783 2,732 b/ Egypt 186 196 225 237 204 193 194 202 224 268 b8 Morocco 441 481 429 454 686 645 653 647 457 433 b9 South Africa 1,041 633 671 579 563 531 544 454 660044 446622 60 Zaire 4 4 2 2 2 7 2 2 11 11 61 Oil-exporting countries5 1,002 1,129 842 658 657 659 614 615 586 578 62 Other 1,605 1,418 859 821 807 872 819 785 911 990 63 Other 2,987 2,860 3,130 3,290 3,361 2,764 3,454 3,773 2,966 3,005 64 Australia 2,243 2,037 2,186 1,877 1,999 2,072 2,072 2,632 2,095 1,969 6b Other 744 823 944 1,413 1,362 692 1,382 1,141 871 1,036 66 Nonmonetary international and regional organizations6 . . . 5,082 2,405 4,591 1,610 2,633 1,317 1,417 2,827 1,658 1,421 1. Reporting banks include all types of depository institutions as well as some brokers and 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 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 all 6. Excludes the Bank for International Settlements, which is included in "Other Europe." parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States' Payable in U.S. Dollars Millions of dollars, end of period 1995 TTyyppee ooff ccllaaiimm 11999922 11999933rr 11999944rr May' June' July' Aug.' Sept. Oct. Nov.p 1 Total 559,495 561,581 583,317 627,645 623,167 2 Banks' claims 499,437 487,791 486,082 487,304 521,177 508,369 520,538 514,307 521,835 533,176 3 Foreign public borrowers 31,367 29,013 23,388 18,979 23,781 19,725 21,432 22,300 20,886 19,135 4 Own foreign offices2 303,991 285,483 283,476 287,213 301,590 292,992 296,896 297,867 303,658 308,847 5 Unaffiliated foreign banks 109,342 100,355 111,594 104,026 112,161 113,378 111,694 106,987 103,541 99,094 6 Deposits 61,550 49,382 59,142 51,454 58,583 59,531 57,486 50,515 46,836 42,510 7 Other 47,792 50,973 52,452 52,572 53,578 53,847 54,208 56,472 56,705 56,584 8 All other foreigners 54,737 72,940 67,624 77,086 83,645 82,274 90,516 87,153 93,750 106,100 9 Claims of banks' domestic customers3 60,058 73,790 97,235 106,468 108,860 10 Deposits 15,452 34,291 56,649 58,526 51,960 11 Negotiable and readily transferable instruments4 3311,,447744 2255,,881199 2277,,229999 31,614 40,192 12 Outstanding collections and other claims 13,132 13,680 13,287 16,328 16,708 MEMO 13 Customer liability on acceptances 8,655 7,846 8,377 8,794 8,751 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 38,623 29,150 32,565 29,911 35,599 34,221 35,452 34,274 32,821 n.a. 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are principally of amounts due from the head office or parent foreign bank, and from foreign for quarter ending with month indicated. branches, agencies, or wholly owned subsidiaries of the head office or 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, bankers acceptances, and commercial 2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiar- paper. ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory 5. Includes demand and time deposits and negotiable and nonnegotiable certificates of agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists deposit denominated in U.S. dollars issued by banks abroad. 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in US. Dollars Millions of dollars, end of period 1994 1995 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999911 11999922 11999933'' Dec.' Mar.' June' Sept. 1 Total 195,302 195,119 201,928 202,595 199,735 219,301 216,115 By borrower 2 Maturity of one year or less 162,573 163,325 172,015 176,760 171,196 190,911 183,679 3 Foreign public borrowers 21,050 17,813 17,772 15,575 15,758 15,954 14,537 4 All other foreigners 141,523 145,512 154,243 161,185 155,438 174,957 169,142 5 Maturity of more than one year 32,729 31,794 29,913 25,835 28,539 28,390 32,436 6 Foreign public borrowers 15,859 13,266 10,880 7,670 7,689 7,726 7,721 7 All other foreigners 16,870 18,528 19,033 18,165 20,850 20,664 24,715 By area Maturity of one year or less 8 Europe 51,835 53,300 57,419 58,445 54,746 60,718 51,999 9 Canada 6,444 6,091 7,671 7,460 7,438 8,210 7,719 10 Latin America and Caribbean 43,597 50,376 59,893 62,417 64,023 71,539 73.690 11 Asia 51,059 45,709 41,419 40,696 38,227 44,365 44,087 12 Africa 2,549 1,784 1,820 1,376 1,227 1,447 1,261 13 All other3 7,089 6,065 3,793 6,366 5,535 4,632 4,923 Maturity of more than one year 14 Europe 3,878 5,367 5,310 3,901 4,533 3,704 4,371 15 Canada 3,595 3,287 2,581 2,521 3,622 3,110 2,815 16 Latin America and Caribbean 18,277 15,312 14,028 12,293 13,074 14,149 17,486 17 Asia 4,459 5,038 5,610 4,744 5,228 5,493 5,783 18 Africa 2,335 2,380 1,936 1,561 1,605 1,389 1,389 19 All other3 185 410 448 815 477 545 592 1. Reporting banks include all types of depository institutions as well as some brokers and 2. Maturity is time remaining until maturity. dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • March 1996 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks' Billions of dollars, end of period 1993 1994 1995 AArreeaa oorr ccoouunnttrryy 11999911 11999922 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. 1 Total 343.5 344.7 387.4 407.0r 478.4r 487.4r 486.8r 499.41" 539.6r 524.8r 520.9r 2 G-10 countries and Switzerland 137.5 131.3 152.0 161.8r 180.8r 175.3r 183.8r 193.0r 208.3r 200.2r 197.9r 3 Belgium and Luxembourg .0 5.6 7.1 7.4 8.0 8.6 9.6 7.0 8.3 7.3 8.5 4 France 11.3 15.3 12.3 12.0 16.6 19.1 21.2 19.7 20.1 19.3 17.4 5 Germany 8.3 9.1 12.2 12.6 29.9 25.0 24.2 24.T 31.31 29.9' 28.6' 6 Italy 5.6 6.5 8.7 1.1' 15.6 14.0 11.6 11.8 10.6 10.7 12.6 7 Netherlands .0 2.8 3.7 4.7 4.1 3.6 3.5 3.6 3.6 4.3 3.9 8 Sweden 1.9 2.3 2.5 2.7 2.9 3.0 2.6 2.7 3.1 3.0 2.7 9 Switzerland 3.4 4.8 5.6 5.9 6.3 6.5 6.2 6.9 6.2 6.1 6.0 10 United Kingdom 68.4 59.7 73.9 84.4r 70.0r 65.0' 78.4 85.7r 89.9r 86.6r 82.5r 11 Canada 5.8 6.3 9.7 6.8 7.8 9.7 10.01 9.8' 10.7' 10.8 11.7r 12 Japan 22.2 18.8 16.4 17.6 19.6 20.7 16.5 21.0 24.5 22.1 24.0 13 Other industrialized countries 22.8 24.0 26.0 25.6r 42.2r 42.6r 42.5r 45.3r 43.9 43.2 49.6 14 Austria .6 1.2 .6 .4 1.0 1.0 1.0 1.1 .9 .7 1.2 15 Denmark .9 .9 1.1 1.0 1.1 1.1 .9 1.2 1.6 1.1 1.6 16 Finland .7 .7 .6 .4 1.0 .8 .8 1.0 1.1 .5 .7 17 Greece 2.6 3.0 3.2 3.2 3.8 4.6 4.3 4.5 4.9 5.0 5.1 18 Norway 1.4 1.2 2.1 1.7 1.6 1.6 1.6 2.0 2.4 1.8 2.3 19 Portugal .6 .4 1.0 .8 1.2 1.1 1.0 1.2 1.0 1.2 1.7 20 Spain 8.3 8.9 9.3 9.9r 13.2r 12.6r 14.0r 13.6 14.1 13.3 13.3 21 Turkey 1.4 1.3 2.1 2.1 2.4 2.1 1.8 1.6 1.4 1.4 2.0 22 Other Western Europe 1.8 1.7 2.2 2.6 3.0 2.8 1.0 2.7 2.5 2.6 3.0 23 South Africa 1.9 1.7 1.2 1.1 1.2 1.2 1.2 1.0 1.4 1.4 1.3 24 Australia 2.7 2.9 2.8 2.3 12.7 13.7 15.0 15.4 12.6 14.3 17.4 25 OPEC2 14.5 15.8 14.8 17.4 22.9 21.6 21.6 23.9r 19.5 20.3 22.3 26 Ecuador .7 .6 .5 .5 .5 .5 .4 .5 .5 .7 .7 27 Venezuela 5.4 5.2 5.4 5.1 4.7 4.51 3.9 3.7 3.5 3.5 3.0 28 Indonesia 2.7 2.7 2.8 3.3 3.4 3.2 3.3 3.8 4.0 4.1 4.4 29 Middle East countries 4.2 6.2 4.9 7.4 13.2 12.4 13.0 15.0 10.7 11.4 13.5 30 African countries 1.5 1.1 1.1 1.2 1.1 1.1 1.0 .9 .7 .6 .6 31 Non-OPEC developing countries 64.3 72.6 77.4 83.0r 94.2r 94.5 93.0r 95.9 98.4 103.6r 103.5r Latin America 32 Argentina 4.8 6.6 7.2 7.7 8.7 9.9 10.5 11.2 11.4 12.3 10.9 33 Brazil 9.6 10.8 11.7 12.0 12.7 12.0 9.3 8.4 9.2 10.0 13.1r 34 Chile 3.6 4.4 4.7 4.7 5.1 5.1 5.5r 6.1 6.4r 7.f 6.4r 35 Colombia 1.7 1.8 2.0 2.1 2.2 2.4 2.4 2.6 2.6 2.6 2.9 36 Mexico 15.5 16.0 17.5 17.6 18.8 18.4 19.6 18.4 17.8 17.6 16.3 37 Peru .4 .5 .3 .4 .6 .6 .6 .5 .6 .8 .7 38 Other 2.1 2.6 2.7 3.1 2.8 2.7 2.8 2.7 2.4 2.6 2.6 Asia China 39 People's Republic of China .3 .7 .5 2.0 .8 .8 1.0 1.1 1.1 1.4 1.7 40 Republic of China (Taiwan) 4.1 5.2 6.4 7.3 7.6 7.1 6.9 9.2 8.5 9.0 9.0 41 India 3.0 3.2 2.9 3.2 3.4 3.7 3.9 4.2 3.8 4.0 4.4 42 Israel .5 .4 .4 .5 .4 .4 .4 .4 .6 .6 .5 43 Korea (South) 6.8 6.6 6.5 6.7 14.1 14.3 14.4 16.2 16.9 18.7 18.0 44 Malaysia 2.3 3.1 4.1 4.4 5.2 5.2 3.9 3.1 3.9 4.1 4.3 45 Philippines 3.7 3.6 2.6 3.1 3.4 3.2 2.9 3.3 3.0 3.6 3.3 46 Thailand 1.7 2.2 2.8 3.1 3.0 3.3 3.5 2.1 3.3 3.8 3.9 47 Other Asia 2.4 3.1 3.4 3.1 3.1 3.2 3.4 4.7 4.9 3.5 3.6 Africa 48 Egypt .4 .2 .2 .4 .4 .5 .3 .3 .4 .4 .4 49 Morocco .7 .6 .6 .7 .7 .7 .7 .6 .6 .9 .9 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .7 1.0 .8 .8 1.0 .9 .9 .8 .7 .6 .7 52 Eastern Europe 2.4 3.1 3.0 3.2r 3.4 3.0 3.0 2.7 2.3 1.8 3.4 53 Russia4 .9 1.9 1.7 1.6 1.5 1.2 1.1 .8 .6 .4 .6 54 Yugoslavia5 .9 .6 .6 .6 .5 .5 .5 .5 .4 .3 .4 55 Other .7 .6 .7 .9 1.4 1.4 1.5 1.4 1.2 1.0 2.3 56 Offshore banking centers 53.8 58.1 67.9 12.5' 78.7r 80.4r 76.8r 71.9r 85.0r 83.4r 84.3r 57 Bahamas 11.9 6.9 12.7 10.8 13.7r 13.3r 13.8r 10.6r 13.lr 8.1r 10.4 58 Bermuda 2.3 6.2 5.5 8.9r 8.9 6.5 6.0 8.4r 8.7 8.5 6.3 59 Cayman Islands and other British West Indies 15.5 21.5 15.1 17.6r 17.7r 23.6r 21.2r 19.91 19.4r 23.4r 23.5r 60 Netherlands Antilles 1.2 1.1 2.8 2.6 3.5 2.5 1.7 1.5r .9 2.5 5.5 61 Panama6 1.4 1.9 2.1 2.4 2.0 1.9 1.9 1.3 1.1 1.3 1.3 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 14.3 13.9 19.1 18.7 19.7 21.8 20.3 19.9 22.4 23.1r 23.7 64 Singapore 7.1 6.5 10.4 11.2 13.0 10.6 11.8 10.1 19.2 16.4 13.3 65 Other' .0 .0 .0 .1 .0 .0 .0 .1 .0 .0 .1 66 Miscellaneous and unallocated8 47.9 39.7 46.2 43.4 55.9 69.7 65.8 66.1' 82.0 72.1 59.6 1. The banking offices covered by these data include U.S. offices and foreign branches of 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 covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Soviet Union. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 5. As of December 1992, excludes Croatia, Bosnia and Hercegovinia, and Slovenia. 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 country 7. Foreign branch claims only. risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal 8. Includes New Zealand, Liberia, and international and regional organizations. 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 1994 1995 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999911 11999922 11999933rr June Sept. Dec. Mar/ June Sept.p 1 Total 44,708 45,511 50,597 57,193r 59,163r 55,656r 51,530 51,236 48,912 2 Payable in dollars 39,029 37,456 38,728 43,410r 43,412' 39,645' 37,246 35,530 35,147 3 Payable in foreign currencies 5,679 8,055 11,869 13,783r 15,751' 16,011' 14,284 15,706 13,765 By type 4 Financial liabilities 22,518 23,841 29,226 35,256r 37,973' 34,301' 31,118 30,545 27,476 5 Payable in dollars 18,104 16,960 18,545 23,461r 24,091' 20,165' 18,047 16,277 15,111 6 Payable in foreign currencies 4,414 6,881 10,681 11,795r 13,882' 14,136' 13,071 14,268 12,365 7 Commercial liabilities 22,190 21,670 21,371 21,937r 21,190' 21,355' 20,412 20,691 21,436 8 Trade payables 9,252 9,566 8,802 9,911 9,550 10,005 9,844 10,527 10,061 9 Advance receipts and other liabilities 12,938 12,104 12,569 12,026r 11,640' 11,350' 10,568 10,164 11,375 10 Payable in dollars 20,925 20,496 20,183 19,949r 19,321' 19,480' 19,199 19,253 20,036 11 Payable in foreign currencies 1,265 1,174 1,188 1,988 1,869 1,875 1,213 1,438 1,400 By area or country Financial liabilities 12 Europe 12,003 13,387 18,810 25,396' 25,614' 22,018' 17,880 18,571 16,735 13 Belgium and Luxembourg 216 414 175 524 661 495 612 778 347 14 France 2,106 1,623 2,539 1,590 2,241 1,727 2,046 1,101 1,354 15 Germany 682 889 975 939 1,467 1,961 1,755 1,589 1,670 16 Netherlands 1,056 606 534 533 648 552 633 530 474 17 Switzerland 408 569 634 631 633 688 883 1,056 948 18 United Kingdom 6,528 8,610 13,332 19,962r 18,649' 15,858' 11,103 12,486 10,876 19 Canada 292 544 859 698 618 629 1,817 893 797 20 Latin America and Caribbean 4,784 4,053 3,359 3,125 3,139 3,021 3,024 2,808 2,762 21 Bahamas 537 379 1,148 1,052 1,112 926 931 851 849 2.2 Bermuda 114 114 0 115 15 80 149 138 144 23 Brazil 6 19 18 18 7 207 58 58 111 24 British West Indies 3,524 2,850 1,533 1,297 1,344 1,160 1,231 1,118 1,018 25 Mexico 7 12 17 13 15 0 10 3 3 26 Venezuela 4 6 5 5 5 5 5 4 3 27 Asia 5,381 5,818 5,956 5,998r 8,450' 8,448' 8,201 8,080 6,994 28 Japan 4,116 4,750 4,887 5,064r 7,248' 7,314' 7,182 7,153 6,310 29 Middle Eastern oil-exporting countries' 13 19 23 24 31 35 27 25 25 30 Africa 6 6 133 9 133 135 156 151 149 31 Oil-exporting countries2 4 0 123 0 123 123 122 122 122 32 All other3 52 33 109 30 19 50 40 42 39 Commercial liabilities 33 Europe 8,701 7,398 6,827 6,887r 6,868' 6,773' 6,642 6,776 7,263 34 Belgium and Luxembourg 248 298 239 254 287 241 271 311 349 35 France 1,039 700 655 680r 744' 728' 642 504 528 36 Germany 1,052 729 684 670 552 604 482 556 660 37 Netherlands 710 535 688 649 674 722 536 448 566 38 Switzerland 575 350 375 473 391 327 327 432 255 39 United Kingdom 2,297 2,505 2,039 2,309 2,350 2,444 2,848 2,902 3,351 40 Canada 1,014 1,002 879 1,070 1,068 1,037 1,235 1,146 1,219 41 Latin America and Caribbean 1,355 1,533 1,658 2,000 1,783 1,857 1,368 1,836 1,607 42 Bahamas 3 3 21 2 6 19 8 3 1 43 Bermuda 310 307 350 418 200 345 260 397 219 44 Brazil 219 209 214 215 147 161 96 107 143 45 British West Indies 107 33 27 24 33 23 29 12 5 46 Mexico 307 457 481 703 672 574 356 420 357 47 Venezuela 94 142 123 192 189 276 273 204 175 48 Asia 9,334 10,594 10,980 10,832' 10,370' 10,741' 10,151 9,978 10,275 49 Japan 3,721 3,612 4,314 4,250' 4,128' 4,555' 4,110 3,531 3,475 50 Middle Eastern oil-exporting countries' 1,498 1,889 1,534 1,835' 1,663' 1,576' 1,787 1,790 1,647 51 Africa 715 568 453 510 468 428 463 481 589 52 Oil-exporting countries2 327 309 167 241 264 256 248 252 241 53 Other3 1,071 575 574 638 633 519 553 474 483 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 2. Comprises Algeria, Gabon, Libya, and Nigeria. Emirates (Trucial States). 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • March 1996 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1994r 1995 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999911 11999922 11999933rr June Sept. Dec. Mar.r June Sept.p 1 Total 45,262 45,073 49,159 52,510 54,833 57,888 52,218 58,030 53,616 2 Payable in dollars 42,564 42,281 45,161 48,003 50,460 53,805 48,425 54,145 49,935 3 Payable in foreign currencies 2,698 2,792 3,998 4,507 4,373 4,083 3,793 3,885 3,681 By type 4 Financial claims 27,882 26,509 27,771 30,234 32,236 33,897 29,606 34,567 29,802 3 Deposits 20,080 17,695 15,717 17,824 19,118 18,507 17,115 22,021 17,889 6 Payable in dollars 19,080 16,872 15,182 17,203 18,502 18,026 16,458 21,349 17,345 7 Payable in foreign currencies 1,000 823 535 621 616 481 657 672 544 8 Other financial claims 7,802 8,814 12,054 12,410 13,118 15,390 12,491 12,546 11,913 y Payable in dollars 6,910 7,890 10,862 11,057 11,903 14,306 11,275 11,388 10,690 10 Payable in foreign currencies 892 924 1,192 1,353 1,215 1,084 1,216 1,158 1,223 n Commercial claims 17,380 18,564 21,388 22,276 22,597 23,991 22,612 23,463 23,814 12 Trade receivables 14,468 16,007 18,425 19,475 19,825 21,158 20,415 21,312 21,687 13 Advance payments and other claims 2,912 2,557 2,963 2,801 2,772 2,833 2,197 2,151 2,127 14 Payable in dollars 16,574 17,519 19,117 19,743 20,055 21,473 20,692 21,408 21,900 13 Payable in foreign currencies 806 1,045 2,271 2,533 2,542 2,518 1,920 2,055 1,914 By area or country Financial claims 16 Europe 13,441 9,331 7,299 7,372 8,914 7,936 7,630 7,923 7,807 17 Belgium and Luxembourg 13 8 134 84 115 86 146 155 160 18 France 269 764 826 995 931 800 808 731 754 iy Germany 283 326 526 459 413 540 527 355 299 2 2 0 1 N Sw et i h tz e e r r la la n n d d s 5 3 8 3 1 4 4 5 9 1 0 5 5 53 0 0 2 4 5 7 3 2 9 51013 1 4 5 2 2 9 3 4 6 9 0 0 6 5 60 1 1 4 5 5 3 2 0 2 22 United Kingdom 11,534 6,252 3,585 3,673 5,023 4,649 4,040 4,787 4,895 23 Canada 2,642 1,833 2,032 3,470 3,812 3,581 3,848 3,705 3,525 24 Latin America and Caribbean 10,717 13,893 16,224 16,465 16,608 19,536 16,109 21,160 15,300 25 Bahamas 827 778 1,336 1,376 1,121 2,424 940 2,355 1,552 26 Bermuda 8 40 125 39 52 27 37 85 35 27 Brazil 351 686 654 466 411 520 528 502 851 28 British West Indies 9,056 11,747 12,699 13,390 13,694 15,228 13,531 17,013 11,769 29 Mexico 212 445 872 629 691 723 583 638 490 30 Venezuela 40 29 161 32 31 35 27 27 50 31 640 864 1,657 2,221 2,176 1,871 1,504 1,231 2,150 32 Japan 350 668 892 1,344 661 953 621 467 1,393 33 Middle Eastern oil-exporting countries' 5 3 3 1 19 141 4 3 4 34 Africa 57 83 99 185 197 373 141 138 188 35 Oil-exporting countries2 1 9 1 0 0 0 9 9 6 36 All other3 385 505 460 521 529 600 374 410 832 Commercial claims 37 Europe 8,193 8,451 9,105 8,976 8,810 9,540 8,947 9,190 8,884 38 Belgium and Luxembourg 194 189 184 189 178 213 199 218 226 39 France 1,585 1,537 1,947 1,788 1,766 1,881 1,790 1,669 1,706 40 Germany 955 933 1,018 940 883 1,027 977 1,023 996 41 Netherlands 645 552 423 294 331 311 324 341 337 42 Switzerland 295 362 432 686 538 557 556 612 437 43 United Kingdom 2,086 2,094 2,377 2,445 2,505 2,556 2,388 2,459 2,501 44 Canada 1,121 1,286 1,781 1,875 1,906 1,988 2,010 2,003 2,001 45 Latin America and Caribbean 2,655 3,043 3,274 3,904 3,963 4,117 4,140 4,368 4,582 46 Bahamas 13 28 11 18 34 9 17 21 101 4 4 7 8 B B r e a r z m il u da 4 2 2 6 7 4 2 35 5 7 5 4 1 6 8 0 2 5 2 0 9 0 5 4 2 7 4 1 6 6 2 1 3 2 4 2 69 0 5 8 21110 1 7 2 4 4 5 5 4y British West Indies 41 40 71 67 49 83 55 83 175 30 Mexico 842 924 990 1,048 1,137 1,243 1,106 1,108 1,023 31 Venezuela 203 345 293 304 388 348 295 319 335 52 4,591 4,866 6,014 6,330 6,679 6,982 6,200 6,514 6,830 3 3 3 4 J M ap id a d n l e Eastern oil-exporting countries' 1, 6 8 2 9 0 9 1, 6 9 9 0 3 3 2,2 7 7 0 5 4 2,4 6 9 4 8 2 2,5 6 9 1 1 7 2,6 7 5 0 5 8 11,, 66 99 88 11 99 11 2,0 io 10 n 1, 7 9 7 9 8 6 55 Africa 430 554 493 480 447 454 468 478 546 36 Oil-exporting countries2 95 78 72 83 61 67 71 60 74 57 Other3 390 364 721 711 792 910 847 910 971 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 2. Comprises Algeria, Gabon, Libya, and Nigeria. Emirates (Trucial States). 3. Includes nonmonetary international and regional organizations. 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 1995 Transaction, and area or country 1993 1994 Jan.- May Juner Julyr Aug.r Sept.r Oct. Nov.? Nov. U.S. corporate securities STOCKS 1 Foreign purchases 319,664 350,593R 416,405 38,78 LR 45,445 42,444 41,908 44,450 41,492 41,937 2 Foreign sales 298,086 348,716R 407,337 36,099R 43,218 40,009 39,366 44,218 42,860 39,071 3 Net purchases, or sales (—) 21,578 l,877r 9,068 2,682 2,227 2,435 2,542 232 -1,368 2,866 4 Foreign countries 21,306 l,867r 9,271 2,692 2,235 2,443 2,565 295 -1,328 2,877 5 Europe 10,658 6,714' 3,819 381 -47 2,045 1,836 -1,319 1,647 954 6 France -103 -201 -717 -66 -79 261 17 -126 -54 -58 7 Germany 1,642 2,110 -1,826 -528 -224 8 -104 -136 5 -131 8 Netherlands -602 2,251 3,134 174 70 364 431 197 528 230 9 Switzerland 2,986 -30 -2,474 -476 -201 -20 -847 9 449 227 10 United Kingdom 4,559 840 6,724 1,382 240 1,445 2,330 -1,114 878 543 11 Canada -3,213 -1,160 -1,342 75 -740 -425 -10 -197 -74 405 12 Latin America and Caribbean 5,719 -2,11 R 5,595 -26 1,651 881 1,811 752 -2,920 1,361 13 Middle East' -321 -1,142 -485 -87 -99 -24 -5 -77 -8 -63 14 Other Asia 8,198 -L,234R 1,620 2,013 1,358 107 -961 1,048 61 342 15 Japan 3,825 l,162R -3,956 86 -466 141 -1,076 -598 56 -406 16 Africa 63 29 3 41 15 -5 17 34 -17 -26 17 Other countries 202 771 61 295 97 -136 -123 54 -17 -96 18 Nonm re o g n io et n a a r l y o i r n g t a e n r i n z a a t t i i o o n n a s l and 111 10 -203 -10 -8 -8 —23 -63 -40 -11 BONDS2 19 Foreign purchases 283,824 289,586R 269,992 22,830 27,939 23,911 24,742 27,212 26,367 31,382 20 Foreign sales 217,824 229,665 185,834 16,631R 18,835 14,949 16,741 17,759 19,199 20,741 21 Net purchases, or sales (—) 66,000 59,921r 84,158 6,199r 9,104 8,962 8,001 9,453 7,168 10,641 22 Foreign countries 65,462 59,036r 84,640 6,287r 9,111 9,129 7,982 9,431 7,236 10,688 23 Europe 22,587 37,065R 67,166 4,922R 7,716 6,340 5,561 6,959 6,361 9,499 24 France 2,346 242 1,006 27 44 7 538 63 732 101 25 Germany 887 657 5,570 -17 667 51 1,163 916 113 894 26 Netherlands -290 3,322 1,362 191 -59 557 45 203 204 219 27 Switzerland -627 1,055 875 124 -130 317 -99 343 148 101 28 United Kingdom 19,686 31,642' 54,955 4,742R 7,006 5,063 3,775 4,511 4,542 6,739 29 Canada 1,668 2,958 2,388 277 159 169 415 349 139 20 30 Latin America and Caribbean 15,691 5,442 6,989 678 289 1,145 754 1,719 -61 11,,442266 31 Middle East' 3,248 771 1,682 -26 64 348 281 241 -246 118888 32 Other Asia 20,846 12,153 5,952 426 785 1,189 919 139 1,126 -705 33 Japan 11,569 5,486 3,154 871 293 1,026 1,008 -371 645 -899 34 Africa 1,149 -7 148 -5 47 -13 64 23 -223 240 35 Other countries 273 654 315 15 51 -49 -12 1 140 20 36 Nonmonetary international and regional organizations 538 885 -482 -88 -7 -167 19 22 -68 -47 Foreign securities 37 Stocks, net purchases, or sales (—) -62,691 -48,071R -45,385 -3,678R -4,409 -8,188 -5,904 -7,959 -5,496 -3,479 38 Foreign purchases 245,490 386,106R 313,126 29,236R 29,123 28,582 30,867 28,712 29,382 30,301 39 Foreign sales 308,181 434,177R 358,511 32,914R 33,532 36,770 36,771 36,671 34,878 33,780 40 Bonds, net purchases, or sales ( —) -80,377 -9,224R -40,766 -4,343R -7,378 -4,079 -3,755 -5,206 -6,993 -4,649 41 Foreign purchases 745,952 848,368R 805,030 75,209R 96,268 67,187 72,277 83,396 75,081 73,133 42 Foreign sales 826,329 857,592R 845,796 79,552R 103,646 71,266 76,032 88,602 82,074 77,782 43 Net purchases, or sales (—), of stocks and bonds .... -143,068 -57,295r -86,151 —8,021r -11,787 -12,267 -9,659 -13,165 -12,489 -8,128 44 Foreign countries -143,232 —57,815r -85,021 -8,025r -11,476 -12,048 -9,486 -13,220 —12,380 -7,784 45 Europe -100,872 -3,516R -42,872 —7,568R -5,788 -7,955 -2,539 -2,928 -6,984 -5,926 46 Canada -15,664 -7,475 -6,994 R -1,427 -1,301 -851 -3,471 1,311 369 47 Latin America and Caribbean -7,600 -18,334R -6,152 471 -513 -185 817 781 -3,883 -67 48 -15,159 —24,275R -28,532 -1,388 -2,942 -3,158 -7,250 -7,533 -2,115 -1,566 49 Africa -185 -467 -283 -68 -67 -45 34 -117 5 19 50 Other countries -3,752 -3,748R -188 527 -739 596 303 48 -714 -613 51 Nonmonetary international and regional organizations 164 520 -1,130 4 -311 -219 -173 55 -109 -344 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, 2. Includes state and local government securities and securities of U.S. government 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 • March 1996 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales (—) during period 1995 1995 AArreeaa oorr ccoouunnttrryy 11999933 11999944 J N a o n v .- . May June July Aug. Sept. Oct. Nov.p 1 Total estimated 23,552 78,801r 143,445 14,515r 22,63lr 31,871r 26,082 -11,072 4,819 15,307 2 Foreign countries 23,368 78,637r 142,568 14,568 22,432r 31,382 26,442 -11,002 4,650 14,936 3 Europe -2,373 38,542r 51,120 509 2,702r 13,336 9,170 6,377 -4,608 821 4 Belgium and Luxembourg 1,218 1,098 420 -512 -148 -53 580 143 -25 81 5 Germany -9,976 5,709 5,684 -4,129 -1,866 1,039 2,995 2,568 2,831 52 6 Netherlands -515 1,254 1,510 40 1,078 883 -1,468 -1,915 160 833 7 Sweden 1,421 794 643 211 63 124 100 61 92 -30 8 Switzerland -1,501 481 192 353 9 206 -515 818 174 -568 9 United Kingdom 6,197 23,365r 39,155 5,203 1,396r 7,315 7,950 5,570 -5,965 1,309 10 Other Europe and former U.S.S.R 783 5,84 lr 3,516 -657 2,170 3,822 -472 -868 -1,875 -856 11 Canada 10,309 3,491 44 201 433 720 -825 -2,284 -1,864 -43 12 Latin America and Caribbean -4,561 -10,383r 44,847 3,803 5,368 513 11,265 -5,299 17,453 13,496 13 Venezuela 390 -319 -63 -16 121 -114 -359 -524 -92 232 14 Other Latin America and Caribbean -5,795 -20,493 20,442 2,425 5,158 1,034 5,364 1,171 3,033 3,723 15 Netherlands Antilles 844 10,429r 24,468 1,394 89 -407 6,260 -5,946 14,512 9,541 16 20,582 47,317r 44,162 9,845 12,605 16,490 7,322 -10,055 -6,879 -107 17 Japan 17,070 29,793r 22,558 6,291 5,585 6,658 5,430 -4,021 -10,115 1,316 18 Africa 1,156 240 1,212 39 242 -1 -130 108 501 458 19 Other -1,745 -570 1,183 171 1,082 324 -360 151 47 311 20 Nonmonetary international and regional organizations 184 164 877 -53r 199r 489r -360 -70 169 371 21 International -330 526 356 356 -409 311 -140 -196 2 368 22 Latin American regional 653 -154 376 -532r 623r 105r -10 -6 185 -43 MEMO 23 Foreign countries 23,368 78,637r 142,568 14,568 22,432r 31,382 26,442 -11,002 4,650 14,936 24 Official institutions 1,306 41,822 36,926 -l,736r 10,861r 16,780 -364 -4,525 5,705 -914 25 Other foreign 22,062 36,815r 105,642 16,304' 1 l,571r 14,602 26,806 -6,477 -1,055 15,850 Oil-exporting countries 26 Middle East2 -8,836 -38 4,160 -1,063 815 3,582 1,890 -50 -624 -826 27 -5 0 2 0 1 0 0 0 0 0 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. 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 Dec. 31, 1995 Rate on Dec. 31, 1995 Country Country Month effective Austria.. 3.0 Dec. 1995 Germany .. . 3.0 Belgium. 3.0 Dec. 1995 Italy 9.0 Canada.. 5.79 Dec. 1995 Japan .5 Denmark 4.25 Dec. 1995 Netherlands . 2.75 France2 . 4.45 Dec. 1995 Switzerland . 1.5 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 banks or Treasury bills for seven to ten days. brokers. For countries with more than one rate applicable to such discounts or advances, the rate shown is the one at which it is understood that the central bank transacts the largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES1 Percent per year, averages of daily figures 1995 1996 TTyyppee oorr ccoouunnttrryy 11999933 11999944 11999955 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Eurodollars 3.18 4.63 5.93 5.79 5.79 5.74 5.81 5.75 5.64 5.40 2 United Kingdom 5.88 5.45 6.63 6.73 6.74 6.71 6.69 6.61 6.42 6.31 3 Canada 5.14 5.57 7.14 6.69 6.62 6.66 6.66 6.02 5.91 5.58 4 Germany 7.17 5.25 4.43 4.46 4.35 4.09 4.00 3.91 3.82 3.51 5 Switzerland 4.79 4.03 2.94 2.77 2.79 2.67 2.15 1.98 1.94 1.65 6 Netherlands 6.73 5.09 4.30 4.14 4.02 3.85 3.88 3.73 3.58 3.20 7 France 8.30 5.72 6.43 6.31 5.81 5.86 6.73 5.74 5.47 4.56 8 Italy 10.09 8.45 10.43 10.93 10.45 10.36 10.74 10.65 10.58 10.05 9 Belgium 8.10 5.65 4.73 4.52 4.41 4.20 4.14 3.87 3.74 3.47 10 Japan 2.96 2.24 1.20 .91 .82 .56 .51 .54 .52 .55 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 • March 1996 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1995 1996 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999933 11999944 11999955 Aug. Sept. Oct. Nov. Dec. Jan. 1 Australia/dollar2 67.993 73.161 74.073 74.137 75.371 75.699 74.534 74.053 74.171 2 Austria/schilling 11.639 11.409 10.076 10.168 10.270 9.955 9.974 10.142 10.296 3 Belgium/franc 34.581 33.426 29.472 29.735 30.044 29.105 29.154 29.615 30.081 4 Canada/dollar 1.2902 1.3664 1.3725 1.3552 1.3509 1.3458 1.3534 1.3693 1.3669 5 China, P.R./yuan 5.7795 8.6404 8.3700 8.3253 8.3374 8.3353 8.3334 8.3350 8.3384 6 Denmark/krone 6.4863 6.3561 5.5999 5.6060 5.6587 5.4912 5.4923 5.5791 5.6618 7 Finland/markka 5.7251 5.2340 4.3763 4.3170 4.3754 4.2781 4.2489 4.3361 4.4510 8 France/franc 5.6669 5.5459 4.9864 4.9727 5.0352 4.9374 4.8882 4.9565 5.0117 9 Germany/deutsche mark 1.6545 1.6216 1.4321 1.4456 1.4601 1.4143 1.4173 1.4406 1.4635 10 Greece/drachma 229.64 242.50 231.68 232.38 235.65 232.65 234.16 238.06 240.91 11 Hong Kong/dollar 7.7357 7.7290 7.7357 7.7416 7.7368 7.7317 7.7338 7.7345 7.7329 12 India/rupee 31.291 31.394 32.418 31.592 33.310 34.656 34.710 34.966 35.812 13 Ireland/pound2 146.47 149.69 160.35 160.25 159.05 161.32 160.54 159.18 158.18 14 Italy/lira 1,573.41 1,611.49 1,629.45 1,607.18 1,613.41 1,605.69 1,592.67 1,593.88 1,584.87 15 Japan/yen 111.08 102.18 93.96 94.74 100.55 100.84 101.94 101.85 105.75 16 Malaysia/ringgit 2.5738 2.6237 2.5073 2.4813 2.5124 2.5324 2.5389 2.5399 2.5563 17 Netherlands/guilder 1.8585 1.8190 1.6044 1.6195 1.6354 1.5846 1.5877 1.6127 1.6388 18 New Zealand/dollar2 54.127 59.358 65.625 65.687 65.607 65.899 65.224 64.996 66.195 19 Norway/krone 7.1009 7.0553 6.3355 6.3438 6.3943 6.2397 6.2536 6.3579 6.4275 20 Portugal/escudo 161.08 165.93 149.88 149.88 152.11 148.94 148.68 151.03 151.90 21 Singapore/dollar 1.6158 1.5275 1.4171 1.4116 1.4331 1.4231 1.4128 1.4148 1.4211 22 South Africa/rand 3.2729 3.5526 3.6286 3.6402 3.6616 3.6502 3.6499 3.6632 3.6413 23 South Korea/won 805.75 806.93 772.82 768.88 772.04 767.20 769.78 771.31 787.13 24 Spain/peseta 127.48 133.88 124.64 123.45 125.41 122.51 121.81 122.53 123.38 25 Sri Lanka/rupee 48.211 49.170 51.047 51.227 52.547 52.539 53.199 53.808 53.874 26 Sweden/krona 7.7956 7.7161 7.1406 7.2383 7.1227 6.8301 6.6088 6.6393 6.7405 27 Switzerland/franc 1.4781 1.3667 1.1812 1.1962 1.1868 1.1453 1.1437 1.1631 1.1818 28 Taiwan/dollar 26.416 26.465 26.495 27.234 27.432 26.925 27.257 27.315 27.406 29 Thailand/baht 25.333 25.161 24.921 24.960 25.129 25.115 25.166 25.164 25.298 30 United Kingdom/pound" 150.16 153.19 157.85 156.68 155.90 157.79 156.25 154.05 152.88 MEMO 31 United States/dollar3 93.18 91.32 84.25 84.59 85.69 84.10 84.14 85.07 86.23 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, industrial countries. The weight for each of the ten countries is the 1972-76 average world see inside front cover. trade of that country divided by the average world trade of all ten countries combined. Series 2. Value in U.S. cents. revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), p. 700). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 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 February 1995 May 1995 A68 May 1995 August 1995 A68 August 1995 November 1995 A68 November 1995 February 1996 A68 Assets and liabilities of U.S. branches and agencies of foreign banks December 31, 1994 May 1995 A72 March 31, 1995 October 1995 A68 June 30, 1995 November 1995 A72 September 30, 1995 February 1996 A72 Pro forma balance sheet and income statements for priced service operations June 30, 1992 October 1992 A70 March 31, 1995 August 1995 A76 June 30, 1995 October 1995 A72 September 30, 1995 January 1996 A68 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 Index to Statistical Tables References are to pages A3-A66 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Deposits—Continued Agricultural loans, commercial banks, 21, 22 Interest rates, 16 Assets and liabilities (See also Foreigners) Turnover, 17 Banks, by classes, 18-23 Discount rates at Reserve Banks and at foreign central banks and Domestic finance companies, 36 foreign countries (See Interest rates) Federal Reserve Banks, 11 Discounts and advances by Reserve Banks (See Loans) Financial institutions, 28 Dividends, corporate, 35 Foreign banks, U.S. branches and agencies, 23 Automobiles EMPLOYMENT, 45 Consumer installment credit, 39 Eurodollars, 26 Production, 47, 48 FARM mortgage loans, 38 BANKERS acceptances, 11, 12, 21-24, 26 Federal agency obligations, 5, 10, 11, 12, 31, 32 Bankers balances, 18-23. (See also Foreigners) Federal credit agencies, 33 Bonds (See also U.S. government securities) Federal finance New issues, 34 Debt subject to statutory limitation, and types and ownership Rates, 26 of gross debt, 30 Branch banks, 23 Receipts and outlays, 28, 29 Business activity, nonfinancial, 45 Treasury financing of surplus, or deficit, 28 Business loans (See Commercial and industrial loans) Treasury operating balance, 28 Federal Financing Bank, 33 CAPACITY utilization, 46 Federal funds, 7, 21, 22, 23, 26, 28 Capital accounts Federal Home Loan Banks, 33 Banks, by classes, 18 Federal Home Loan Mortgage Corporation, 33, 37, 38 Federal Reserve Banks, 11 Federal Housing Administration, 33, 37, 38 Central banks, discount rates, 65 Federal Land Banks, 38 Certificates of deposit, 26 Federal National Mortgage Association, 33, 37, 38 Commercial and industrial loans Federal Reserve Banks Commercial banks, 21, 22 Condition statement, 11 Weekly reporting banks, 21-23 Discount rates (See Interest rates) Commercial banks U.S. government securities held, 5, 11, 12, 30 Assets and liabilities, 18-23 Federal Reserve credit, 5, 6, 11, 12 Commercial and industrial loans, 18-23 Federal Reserve notes, 11 Consumer loans held, by type and terms, 39 Federally sponsored credit agencies, 33 Deposit interest rates of insured, 16 Finance companies Loans sold outright, 22 Assets and liabilities, 36 Real estate mortgages held, by holder and property, 38 Business credit, 36 Time and savings deposits, 4 Loans, 39 Commercial paper, 24, 26, 36 Paper, 24, 26 Condition statements (See Assets and liabilities) Financial institutions, loans to, 21, 22, 23 Construction, 45, 49 Float, 5 Consumer installment credit, 39 Flow of funds, 40-44 Consumer prices, 45 Foreign banks, assets and liabilities of U.S. branches and agencies, Consumption expenditures, 52, 53 22, 23 Corporations Foreign currency operations, 11 Profits and their distribution, 35 Foreign deposits in U.S. banks, 5, 22 Security issues, 34, 65 Foreign exchange rates, 66 Cost of living (See Consumer prices) Foreign trade, 54 Credit unions, 39 Foreigners Currency in circulation, 5, 14 Claims on, 55, 58, 59, 60, 62 Customer credit, stock market, 27 Liabilities to, 22, 54, 55, 56, 61, 63, 64 DEBITS to deposit accounts, 17 GOLD Debt (See specific types of debt or securities) Certificate account, 11 Demand deposits Stock, 5, 54 Banks, by classes, 18-23 Government National Mortgage Association, 33, 37, 38 Ownership by individuals, partnerships, and Gross domestic product, 51 corporations, 22, 23 Turnover, 17 HOUSING, new and existing units, 49 Depository institutions Reserve requirements, 9 Reserves and related items, 4, 5, 6, 13 INCOME, personal and national, 45, 51, 52 Deposits (See also specific types) Industrial production, 45, 47 Banks, by classes, 4, 18—23 Installment loans, 39 Federal Reserve Banks, 5, 11 Insurance companies, 30, 38 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Interest rates Reserves Bonds, 26 Commercial banks, 18 Consumer installment credit, 39 Depository institutions, 4, 5, 6, 13 Deposits, 16 Federal Reserve Banks, 11 Federal Reserve Banks, 8 U.S. reserve assets, 54 Foreign central banks and foreign countries, 65 Residential mortgage loans, 37 Money and capital markets, 26 Retail credit and retail sales, 39, 45 Mortgages, 37 Prime rate, 25 SAVING International capital transactions of United States, 53-65 Flow of funds, 40-44 International organizations, 55, 56, 58, 61, 62 National income accounts, 51 Inventories, 51 Savings institutions, 38, 39, 40 Investment companies, issues and assets, 35 Savings deposits (See Time and savings deposits) Investments (See also specific types) Securities (See also specific types) Banks, by classes, 18-23 Federal and federally sponsored credit agencies, 33 Commercial banks, 4, 18-23 Foreign transactions, 63 Federal Reserve Banks, 11, 12 New issues, 34 Financial institutions, 38 Prices, 27 Special drawing rights, 5, 11, 53, 54 LABOR force, 45 State and local governments Life insurance companies (See Insurance companies) Deposits, 21, 22 Loans (See also specific types) Holdings of U.S. government securities, 30 Banks, by classes, 18—23 New security issues, 34 Commercial banks, 18-23 Ownership of securities issued by, 21, 23 Federal Reserve Banks, 5, 6, 8, 11, 12 Rates on securities, 26 Financial institutions, 38 Stock market, selected statistics, 27 Insured or guaranteed by United States, 37, 38 Stocks (See also Securities) New issues, 34 MANUFACTURING Prices, 27 Capacity utilization, 46 Production, 46, 48 Student Loan Marketing Association, 33 Margin requirements, 27 Member banks (See also Depository institutions) Federal funds and repurchase agreements, 7 T Th A r X if t r i e n c s e t i i p t t u s t , i o f n ed s, e r 4 a . l(, S2e9e also Credit unions and Savings Reserve requirements, 9 institutions) Mining production, 48 Time and savings deposits, 4, 14, 16, 18-23 Mobile homes shipped, 49 Trade, foreign, 54 Monetary and credit aggregates, 4, 13 Treasury cash, Treasury currency, 5 Money and capital market rates, 26 Treasury deposits, 5, 11, 28 Money stock measures and components, 4, 14 Treasury operating balance, 28 Mortgages (See Real estate loans) Mutual funds, 35 UNEMPLOYMENT, 45 Mutual savings banks (See Thrift institutions) U.S. government balances Commercial bank holdings, 18-23 NATIONAL defense outlays, 29 Treasury deposits at Reserve Banks, 5, 11, 28 National income, 51 U.S. government securities Bank holdings, 18-23, 30 OPEN market transactions, 10 Dealer transactions, positions, and financing, 32 Federal Reserve Bank holdings, 5, 11, 12, 30 PERSONAL income, 52 Foreign and international holdings and Prices transactions, 11, 30, 64 Consumer and producer, 45, 50 Open market transactions, 10 Stock market, 27 Outstanding, by type and holder, 30, 31 Prime rate, 25 Rates, 26 Producer prices, 45, 50 U.S. international transactions, 53-66 Production, 45, 47 Utilities, production, 48 Profits, corporate, 35 VETERANS Administration, 37, 38 REAL estate loans Banks, by classes, 21, 22, 38 WEEKLY reporting banks, 18-23 Terms, yields, and activity, 37 Wholesale (producer) prices, 45, 50 Type of holder and property mortgaged, 38 Repurchase agreements, 7 Reserve requirements, 9 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman EDWARD W. KELLEY, JR. LAWRENCE B. LINDSEY OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE JOSEPH R. COYNE, Assistant to the Board EDWIN M. TRUMAN, Staff Director DONALD J. WINN, Assistant to the Board LARRY J. PROMISEL, Senior Associate Director THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Deputy Congressional Liaison DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board THOMAS A. CONNORS, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board PETER HOOPER III, Assistant Director PORTIA W. THOMPSON, Equal Employment Opportunity KAREN H. JOHNSON, Assistant Director Programs Adviser CATHERINE L. MANN, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel MICHAEL J. PRELL, Director SCOTT G. ALVAREZ, Associate General Counsel EDWARD C. ETTIN, Deputy Director RICHARD M. ASHTON, Associate General Counsel DAVID J. STOCKTON, Deputy Director OLIVER IRELAND, Associate General Counsel MARTHA BETHEA, Associate Director KATHLEEN M. O'DAY, Associate General Counsel WILLIAM R. JONES, Associate Director ROBERT DEV. FRIERSON, Assistant General Counsel MYRON L. KWAST, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel PATRICK M. PARKINSON, Associate Director THOMAS D. SIMPSON, Associate Director OFFICE OF THE SECRETARY LAWRENCE SLIFMAN, Associate Director MARTHA S. SCANLON, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Deputy Secretary FLINT BRAYTON, Assistant Director BARBARA R. LOWREY, Associate Secretary and Ombudsman 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 JOYCE K. ZICKLER, Assistant Director RICHARD SPILLENKOTHEN, Director JOHN J. MINGO, Senior Adviser STEPHEN C. SCHEMERING, Deputy Director GLENN B. CANNER, Adviser DON E. KLINE, Associate Director WILLIAM A. RYBACK, Associate Director DIVISION OF MONETARY AFFAIRS H RO ER G B E E R R T T . A C . O B L I E E , R D N e , p D u e ty p u A t s y s A oc ss ia o t c e i a D te ir D ec i t r o e r c tor DONALD L. KOHN, Director JAMES I. GARNER, Deputy Associate Director DAVID E. LINDSEY, Deputy Director HOWARD A. AMER, Assistant Director BRIAN F. MADIGAN, Associate Director GERALD A. EDWARDS, JR., Assistant Director RICHARD D. PORTER, Deputy Associate Director STEPHEN M. HOFFMAN, JR., Assistant Director VINCENT R. REINHART, Assistant Director LAURA M. HOMER, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board JAMES V. HOUPT, Assistant Director DIVISION OF CONSUMER JACK P. JENNINGS, Assistant Director MICHAEL G. MARTINSON, Assistant Director AND COMMUNITY AFFAIRS 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 SUSAN M. PHILLIPS JANET L. YELLEN OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PA YMENT SYSTEMS S. DAVID FROST, Staff Director CLYDE H. FARNSWORTH, JR., Director SHEILA CLARK, EEO Programs Director DAVID L. ROBINSON, Deputy Director (Finance and Control) LOUISE L. ROSEMAN, Associate Director DIVISION OF HUMAN RESOURCES CHARLES W. BENNETT, Assistant Director MANAGEMENT JACK DENNIS, JR., Assistant Director DAVID L. SHANNON, Director EARL G. HAMILTON, Assistant Director 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 Budgets) BARRY R. SNYDER, Assistant Inspector General DARRELL R. PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director DIVISION OF INFORMATION RESOURCES MANAGEMENT STEPHEN R. MALPHRUS, Director MARIANNE M. EMERSON, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director DAY W. RADABAUGH, JR., Assistant Director ELIZABETH B. RIGGS, Assistant Director RICHARD C. STEVENS, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

160 Federal Reserve Bulletin • March 1996 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman EDWARD G. BOEHNE LAWRENCE B. LINDSEY GARY H. STERN JERRY L. JORDAN ROBERT D. MCTEER, JR. JANET L. YELLEN EDWARD W. KELLEY, JR. SUSAN M. PHILLIPS ALTERNATE MEMBERS J. ALFRED BROADDUS, JR. MICHAEL H. MOSKOW ERNEST T. PATRIKIS JACK GUYNN ROBERT T. PARRY STAFF DONALD L. KOHN, Secretary and Economist DAVID E. LINDSEY, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary FREDERIC S. MISHKIN, Associate Economist JOSEPH R. COYNE, Assistant Secretary LARRY J. PROMISEL, Associate Economist GARY P. GILLUM, Assistant Secretary ARTHUR J. ROLNICK, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel HARVEY ROSENBLUM, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel CHARLES J. SIEGMAN, Associate Economist MICHAEL J. PRELL, Economist THOMAS D. SIMPSON, Associate Economist EDWIN M. TRUMAN, Economist MARK S. SNIDERMAN, Associate Economist RICHARD W. LANG, Associate Economist DAVID J. STOCKTON, Associate Economist PETER R. FISHER, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL RICHARD G. TILGHMAN, President FRANK V. CAHOUET, Vice President WILLIAM M. CROZIER, JR., First District ROGER L. FITZSIMONDS, Seventh District WALTER V. SHIPLEY, Second District THOMAS H. JACOBSEN, Eighth District WALTER E. DALLER, JR., Third District RICHARD M. KOVACEVICH, Ninth District FRANK V. CAHOUET, Fourth District CHARLES E. NELSON, Tenth District RICHARD G. TILGHMAN, Fifth District CHARLES T. DOYLE, Eleventh District CHARLES E. RICE, Sixth District WILLIAM E. B. SIART, Twelfth District HERBERT V. PROCHNOW, Secretary Emeritus JAMES ANNABLE, Co-Secretary WILLIAM J. KORSVIK, Co-Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 CONSUMER ADVISORY COUNCIL KATHARINE W. MCKEE, Durham, North Carolina, Chairman JULIA M. SEWARD, Richmond, Virginia, Vice Chairman RICHARD S. AMADOR, LOS Angeles, California ERROL T. LOUIS, Brooklyn, New York THOMAS R. BUTLER, Riverwoods, Illinois WILLIAM N. LUND, Falmouth, Maine ROBERT A. COOK, Baltimore, Maryland RONALD A. PRILL, Minneapolis, Minnesota ALVIN J. COWANS, Orlando, Florida LISA RICE-COLEMAN, Toledo, Ohio ELIZABETH G. FLORES, Laredo, Texas JOHN R. RINES, Detroit, Michigan HERIBERTO FLORES, Springfield, Massachusetts MARGOT SAUNDERS, Washington, D.C. EMANUEL FREEMAN, Philadelphia, Pennsylvania ANNE B. SHLAY, Philadelphia, Pennsylvania DAVID C. FYNN, Cleveland, Ohio REGINALD J. SMITH, Kansas City, Missouri ROBERT G. GREER, Houston, Texas GEORGE P. SURGEON, Arkadelphia, Arkansas KENNETH R. HARNEY, Chevy Chase, Maryland GREGORY D. SQUIRES, Milwaukee, Wisconsin GAIL K. HILLEBRAND, San Francisco, California JOHN E. TAYLOR, Washington, D.C. TERRY JORDE, Cando, North Dakota LORRAINE VANETTEN, Troy, Michigan FRANCINE JUSTA, New York, New York THEODORE J. WYSOCKI, JR., Chicago, Illinois EUGENE I. LEHRMANN, Madison, Wisconsin LILY K. YAO, Honolulu, Hawaii THRIFT INSTITUTIONS ADVISORY COUNCIL E. LEE BEARD, Hazleton, Pennsylvania, President DAVID F. HOLLAND, Burlington, Massachusetts, Vice President BARRY C. BURKHOLDER, Houston, Texas CHARLES R. RINEHART, Irwindale, California MICHAEL T. CROWLEY, JR., Milwaukee, Wisconsin JOSEPH C. SCULLY, Chicago, Illinois GEORGE L. ENGELKE, JR., Lake Success, New York RONALD W. STIMPSON, Memphis, Tennessee DOUGLAS A. FERRARO, Englewood, Colorado LARRY T. WILSON, Raleigh, North Carolina BEVERLY D. HARRIS, Livingston, Montana WILLIAM W. ZUPPE, Spokane, Washington Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated MS-127, Board of Governors of the Federal Reserve System, monthly. (Requests must be prepaid.) Washington, DC 20551 or telephone (202) 452-3244 or FAX Consumer and Community Affairs Handbook. $75.00 per year. (202) 728-5886. When a charge is indicated, payment should Monetary Policy and Reserve Requirements Handbook. $75.00 accompany request and be made payable to the Board of Gover- per year. nors of the Federal Reserve System or may be ordered via Securities Credit Transactions Handbook. $75.00 per year. Mastercard or Visa. Payment from foreign residents should be The Payment System Handbook. $75.00 per year. drawn on a U.S. bank. Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Rates for subscribers outside the United States are as follows THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. and include additional air mail costs: 1994. 157 pp. Federal Reserve Regulatory Service, $250.00 per year. ANNUAL REPORT. Each Handbook, $90.00 per year. ANNUAL REPORT: BUDGET REVIEW, 1994-95. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 COUNTRY MODEL, May 1984. 590 pp. $14.50 each. each in the United States, its possessions, Canada, and INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. Mexico. Elsewhere, $35.00 per year or $3.00 each. 440 pp. $9.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, num- FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. ber of pages, and price. December 1986. 264 pp. $10.00 each. 1981 October 1982 239 pp. $ 6.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1982 December 1983 266 pp. $ 7.50 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1983 October 1984 264 pp. $11.50 1984 October 1985 254 pp. $12.50 1985 October 1986 231 pp. $15.00 EDUCATION PAMPHLETS 1986 November 1987 288 pp. $15.00 Short pamphlets suitable for classroom use. Multiple copies are 1987 October 1988 272 pp. $15.00 available without charge. 1988 November 1989 256 pp. $25.00 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 1994 December 1995 190 pp. $25.00 Series on the Structure of the Federal Reserve System The Board of Governors of the Federal Reserve System The Federal Open Market Committee SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF Federal Reserve Bank Board of Directors CHARTS. Weekly. $30.00 per year or $.70 each in the United Federal Reserve Banks States, its possessions, Canada, and Mexico. Elsewhere, Organization and Advisory Committees $35.00 per year or $.80 each. A Consumer's Guide to Mortgage Lock-Ins A Consumer's Guide to Mortgage Settlement Costs THE FEDERAL RESERVE ACT and other statutory provisions affect- A Consumer's Guide to Mortgage Refinancings ing the Federal Reserve System, as amended through August Home Mortgages: Understanding the Process and Your Right 1990. 646 pp. $10.00. to Fair Lending REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL How to File a Consumer Complaint RESERVE SYSTEM. Making Deposits: When Will Your Money Be Available? ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Making Sense of Savings Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. SHOP: The Card You Pick Can Save You Money Vol. II (Irregular Transactions). 1969. 116 pp. Each volume Welcome to the Federal Reserve $2.25. When Your Home is on the Line: What You Should Know GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 each. About Home Equity Lines of Credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 STAFF STUDIES: Only Summaries Printed in the 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, BULLETIN Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary Studies and papers on economic and financial subjects that are of Ann Taylor. March 1992. 37 pp. general interest. Requests to obtain single copies of the full text or 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by to be added to the mailing list for the series may be sent to James T. Fergus and John L. Goodman, Jr. July 1993. Publications Services. 20 pp. 165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF Staff Studies 1-157 are out of print. MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- 1993. 18 pp. MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE 166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, by PRODUCTS, by Mark J. Warshawsky with the assistance of Mark Carey, Stephen Prowse, John Rea, and Gregory Udell. Dietrich Earnhart. September 1989. 23 pp. January 1994. Ill pp. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANK- ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING Donald Savage. February 1990. 12 pp. PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- by Stephen A. Rhoades. July 1994. 37 pp. VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by 168. THE ECONOMICS OF THE PRIVATE EQUITY MARKET, by Gregory E. Elliehausen and John D. Wolken. September George W. Fenn, Nellie Liang, and Stephen Prowse. Novem- 1990. 35 pp. ber 1995. 69 pp. 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 169. BANK MERGERS AND INDUSTRYWIDE STRUCTURE, 1980-94, 1980-90, by Margaret Hastings Pickering. May 1991. by Stephen A. Rhoades. February 1996. 32 pp. 21 pp. 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Maps of the Federal Reserve System 1 W W t e ^ ^ —. 2 BOSTON MINNEAPOLIS* 111 12 13 • • NEW YORK CCCHHHIIICCCAAAGGGOOO ••• ••• CCCLLLEEEVVVEEELLLAAANNNDDD PHILADELPHIA 111000 444 • SAN FRANCISCO KKKAAANNNSSSAAASSS CCCIIITTTYYY®®® GGG CLMUND SSSTTT... LLLOOOUUUIIISSS w 888 OO ''' 66 ii 1111 •• AATTLLAANNTTAA DDAALLLLAASS 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 by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in December 1991. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimore MD m f1 /CT >& / /NJ vt \ wv Buffalo •Cincinnati •Charlotte m " / NY m ^RI ic BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H •Nashville KY Birmingham * )m / m ' Lolisville -TN t* ' Jacksonville •Memphis New Orleans LiSle, Rock ( MS ATLANTA CHICAGO ST. LOUIS 9-1 MT N» MS MINNEAPOLIS 10-J 12-L M Omaha • rloJuRv^e r r SM Oklahoma City W 7 KANSAS CITY 11-K •Los Angeles m DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Jerome H. Grossman Cathy E. Minehan William C. Brainard Paul M. Connolly NEW YORK* 10045 John C. Whitehead William J. McDonough Thomas W. Jones Ernest T. Patrikis Buffalo 14240 Joseph J. Castiglia Carl W. Turnipseed1 PHILADELPHIA 19105 Donald J. Kennedy Edward G. Boehne Joan Carter 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 John T. Ryan III Harold J. Swart1 RICHMOND* 23219 Claudine B. Malone J. Alfred Broaddus, Jr. Robert L. Strickland 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 Hugh M. Brown Jack Guynn Daniel E. Sweat, Jr. Patrick K. Barron James M. Mckee1 Birmingham 35283 Donald E. Boomershine Fred R. Herr1 Jacksonville 32231 Joan D. Ruffier James D. Hawkins1 Miami 33152 R. KirkLandon James T. Curry III Nashville 37203 Paula Lovell Melvyn K. Purcell New Orleans 70161 Lucimarian Roberts Robert J. Musso CHICAGO* 60690 Robert M. Healey Michael H. Moskow Lester H. McKeever, Jr. William C. Conrad Detroit 48231 John D. Forsyth David R. Allardice1 ST. LOUIS 63166 John F. McDonnell Thomas C. Melzer Susan S. Elliott W. LeGrande Rives Little Rock 72203 Janet M.Jones Robert A. Hopkins Louisville 40232 John A. Williams Thomas A. Boone Memphis 38101 John V. Myers John P. Baumgartner MINNEAPOLIS 55480 Jean D. Kinsey Gary H. Stern David A. Koch Colleen K. Strand Helena 59601 Lane W. Basso John D. Johnson KANSAS CITY 64198 Herman Cain Thomas M. Hoenig A. Drue Jennings Richard K. Rasdall Denver 80217 Peter I. Wold Carl M. Gambs1 Oklahoma City 73125 Barry L. Eller Mark L. Mullinix Omaha 68102 LeRoy W. Thom Harold L. Shewmaker DALLAS 75201 Cece Smith Robert D. McTeer, Jr. Roger R. Hemminghaus Tony J. Salvaggio El Paso 79999 Patricia Z. Holland-Branch Sammie C.Clay Houston 77252 Issac 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 Temporarily vacant Los Angeles 90051 Anita E. Landecker John F. Moore3 Portland 97208 RossR. 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. 3. Executive Vice President. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis