Federal Reserve Bulletin, 1997-06

VOLUME 83 • NUMBER 6 • JUNE 1997 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 465 PROFITS AND BALANCE SHEET which were put in place in the 1920s and 1930s DEVELOPMENTS AT U.S. COMMERCIAL to regulate the trading on exchanges of grain BANKS IN 1996 futures by the general public, before the Subcommittee on Risk Management and Specialty U.S. commercial banks had another very good Crops of the House Committee on Agriculture, year in 1996. Profits posted strong growth, pre- April 15, 1997. serving the high levels of return on equity and return on assets that have prevailed over the past 501 ANNOUNCEMENTS four years. Helping to boost profits were continued strong growth of interest-earning assets, a Public hearings on 1994 provisions of the Truth slight widening of the net interest margin, sigin Lending Act. nificant gains in noninterest income, and continued containment of noninterest expenses. Return Steps taken by the Federal Reserve Board to on assets edged up despite a slight increase in help ease financial stress in areas affected by provisioning for loan and lease losses relative to flooding in Minnesota, North Dakota, and assets. Delinquency and charge-off rates stayed South Dakota. low for business loans but climbed throughout Publication of a new weekly list of applications the year for consumer loans. and notices filed under the Bank Holding Company Act or the Change in Bank Control Act. 490 U.S. TREASURY AND FEDERAL RESERVE Availability of revised lists of over-the-counter FOREIGN EXCHANGE OPERATIONS stocks and of foreign stocks subject to margin During the first quarter of 1997, the dollar appre- regulations. ciated 8.8 percent against the mark and 6.9 percent against the yen, at one point reaching thirty- Availability of a public access database from six-month and fifty-month highs of DM 1.7209 the 1993 National Survey of Small Business Finances. and ¥124.82 respectively. On a trade-weighted basis against other Group of Ten currencies, the dollar strengthened 7.5 percent. 503 LEGAL DEVELOPMENTS Various bank holding company, bank service 494 INDUSTRIAL PRODUCTION AND CAPACITY corporation, and bank merger orders; and pend- UTILIZATION FOR APRIL 1997 ing cases. Industrial production was unchanged in April, at 119.0 percent of its 1992 average, after a AI FINANCIAL AND BUSINESS STATISTICS downward-revised increase of 0.6 percent in These tables reflect data available as of March. The utilization of industrial capacity fell April 28, 1997. 0.3 percentage point in April, to 83.4 percent. 497 STATEMENT TO THE CONGRESS A3 GUIDE TO TABULAR PRESENTATION Susan M. Phillips, Member, Board of Governors A4 Domestic Financial Statistics of the Federal Reserve System, presents the A42 Domestic Nonfinancial Statistics Board's views on efforts to clarify and reform A50 International Statistics the regulation of derivatives contracts under the Commodity Exchange Act and says that the A63 GUIDE TO STATISTICAL RELEASES AND Board strongly endorses efforts by the Congress SPECIAL TABLES to carefully reexamine the existing regulatory framework for derivatives, key elements of A64 INDEX TO STATISTICAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

)6 BOARD OF GOVERNORS AND STAFF A72 SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES 38 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A74 MAPS OF THE FEDERAL RESERVE SYSTEM 70 FEDERAL RESERVE BOARD PUBLICATIONS A76 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 William R. Nelson and Ann L Owen, of the Board's of their net income as dividends in 1996, up from Division of Monetary Affairs, prepared this article. two-thirds in the previous two years. Even so, the Thomas C. Allard assisted in the preparation of ratio of capital to total assets increased slightly, and the data, and Amy M. Tucker provided research virtually all bank assets were at well-capitalized assistance. banks. U.S. commercial banks had another very good year in 1996. Profits posted strong growth, preserving the BALANCE SHEET DEVELOPMENTS high levels of return on equity and return on assets that have prevailed over the past four years (chart 1). Bank assets expanded further in 1996, though at a Helping to boost profits were continued strong somewhat slower pace than in 1995 (table 2).2 growth of interest-earning assets, a slight widening of Increases in loans and leases, particularly to busithe net interest margin, significant gains in noninter- nesses, accounted for most of the growth. On the est income, and continued containment of noninterest liability side of the balance sheet, core deposits grew expense (table 1). Return on assets edged up despite a more slowly than managed liabilities for the fourth slight increase in provisioning for loan and lease consecutive year, with large time deposits an increaslosses relative to assets. Delinquency and charge-off ingly important source of funds. rates stayed low for business loans but climbed throughout the year for consumer loans.1 Commercial banks generally were willing lenders 2. Since 1994, reported bank assets have included the market value of derivatives contracts. As required by Financial Accounting Stanlast year, helping to support the strong advance in dards Board Interpretation No. 39 (FIN 39), derivatives used for U.S. economic activity. In fact, increased loan trading purposes that have positive value are recorded as assets and volume was the main contributor to the increase in those that have negative value as liabilities. Before 1994, banks netted the values of derivatives across counterparties. Total assets excluding assets; banks' holdings of securities rose only the effects of FIN 39 can be approximately determined from the data slightly. Loan growth was funded primarily with reported in table A.2 by reducing assets by the revaluation losses on managed liabilities. off-balance-sheet items. For a discussion of this issue, see William B. English and Brian K. Reid, "Profits and Balance Sheet Developments Bank stock prices rose more rapidly than prices in at U.S. Commercial Banks in 1994," Federal Reserve Bulletin, vol. 81 the stock market as a whole, and many bank holding (June 1995), pp. 548-49. companies substantially increased their dividends and their stock repurchases. Banks paid out three-fourths 1. Measures of commercial bank profitability, 1970-96 1. Except where otherwise indicated, data in this article are from , Percent .' the quarterly Reports of Condition and Income (Call Reports) for insured domestic commercial banks. The data consolidate information from foreign and domestic offices and have been adjusted to take account of mergers. Size categories, based on assets at the start of each quarter, are as follows: the ten largest banks, large banks (those ranked 11 through 100 by size), medium-sized banks (those ranked 101 through 1,000 by size), and small banks (those not among the largest 1,000 banks). At the start of the fourth quarter of 1996, each of the ten largest banks had assets of more than approximately $50 billion, each large bank had assets between approximately $7 billion and $50 billion, each medium-sized bank had assets between approximately $300 million and $7 billion, and each small bank had assets of less than approximately $300 million. Many of the data series reported here begin in 1985 because the Call Report was significantly revised at the start of that year. Data shown may not match data published in earlier years because of revisions. In the tables, components may not 1970 197$ 1980 1985 sum to totals because of rounding. NOTE. The data are annual. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

466 Federal Reserve Bulletin • June 1997 Loans to Businesses Net percentage of selected commercial banks that experienced increased demand for commercial and industrial loans, by size of firms seeking loans, 1992-96 The value of commercial and industrial (C&I) loans on banks' balance sheets grew about 11A percent last Percent year—somewhat less than in the preceding two years but still a sizable increase. According to the Federal Medium-sized firms Reserve's quarterly Senior Loan Officer Opinion Sur- Small firms vey on Bank Lending Practices (LPS), the demand for C&I loans remained high throughout the year (chart 2).3 Banks attributed the strong demand in part to their customers' needs to finance inventories and plant and equipment. Demand was also boosted by heavy merger and acquisition activity, which in many cases resulted in a need to finance the retirement of — 20 the acquired firm's equity. Not only were banks willing to meet the strong 1992 1993 1994 1995 1996 demand for C&I loans, but they encouraged it by NOTE. The data are quarterly. Net percentage is the percentage of banks easing lending terms over the course of the year. reporting an increase less the percentage reporting a decrease. The definition for Respondents to the LPS reported having lowered firm size suggested for, and generally used by, survey respondents is that medium firms are those with sales between $50 million and $250 million. the cost of credit lines, narrowed spreads of rates SOURCE. Senior Loan Officer Opinion Survey on Bank Lending Practices. charged on business loans over base rates, and eased loan covenants, particularly for large firms. In contrast, respondents to a second survey, the Federal ever, spreads in this second survey were narrower last Reserve's quarterly Survey of Terms of Bank Lend- year than in 1995, particularly for large loans ing to Business, which involves a larger sample of (chart 3). banks, indicated that spreads on loans of all sizes More aggressive competition from other commerchanged very little during 1996.4 On average, how- cial bank and nonbank lenders was an important factor influencing the LPS respondents that eased standards or terms for C&I loans. The bond market 3. About sixty domestic commercial banks from the twelve Federal was one source of competition, as yields on corporate Reserve Districts are surveyed by the LPS. Most of them are large: As of December 31, 1996, their combined assets totaled $1.3 trillion, bonds, especially below-investment-grade borrowing about one-third of the combined assets of all domestic commercial instruments, were low by historical standards combanks. pared with rates on Treasury securities. Even so, by 4. The Survey of Terms of Bank Lending to Business collects data on lending rates from a sample of more than 300 commercial banks. pricing relatively aggressively, commercial banks These banks accounted for 64 percent of the dollar value of C&I loans were able to capture a larger share of the business outstanding at the end of 1996. Data are collected on the terms of C&I financing market. However, the share of total credit loans made by these banks during the first full week of the middle month of each quarter. market debt of nonfinancial businesses provided by 1. Selected income and expense items Percentage of average net consolidated assets Annual average Item 1991 1992 1993 1994 1995 1996 Change, 1985-92 1993-96 1985-92 to 1993-96 Net interest income 3.61 3.90 3.90 3.79 3.73 3.76 3.55 3.79 .24 Noninterest income 1.79 1.95 2.13 2.00 2.02 2,19 L56 2.08 .52 Noninterest expense 3.73 3.87 3.94 3.76 3.65 3.73 3.47 3.77 .30 Loss provisioning 1.03 Realized gains on investment account .78 .47 .28 .30 .38 .90 .36 -.54 securities .09 Income before taxes and extraordinary .11 .09 -.01 .01 .03 .06 .03 -.03 items .....,'..' .73 1.32 1,70 1.74 1.81 L86 .81 1.78 .97 Taxes and extraordinary items .22 .41 .50 .58 .63 .65 .25 .59 .34 .51 .91 1.20 1.15 1.18 1.21 .56 1.19 .63 Net income (return on assets) .45 .41 .62 .73 .75 .91 .40 .75 .35 Dividends .07 .50 .59 .42 .43 .29 .16 .43 .27 Retained income Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at US. Commercial Banks in 1996 467 banks remained well below levels of the early 1980s has decreased for large banks (from 11 lA percent in (chart 4). 1991 to 8V2 percent in 1996). The growth of commercial real estate loans picked up to 73/4 percent in 1996, the third consecutive year in which such lending expanded. Demand was Loans to Households likely stimulated by improving conditions in the commercial real estate market, as seen in declining The value of consumer loans on banks' balance vacancy rates and rising commercial real estate sheets increased about 5 percent last year, about half prices. Still, at the end of 1996, only about 9 percent as fast as in 1995. The slowing of growth was likely a of bank assets were in the form of commercial real result of several factors: an increase in the pace of estate loans, down from 11 Vi percent in 1991. The securitization of consumer loans, which removes change has not been uniform across banks of differ- loans originated by banks from their balance sheets; a ent sizes, however: The proportion of assets in com- slight weakening of the growth of demand for such mercial real estate loans has increased for small banks loans; and less aggressive pursuit of these loans by (from 11 percent in 1991 to WA percent in 1996) but banks. 2. Annual rates of growth of balance sheet items, 1987-96 Percent MEMO: Dec. 1996 Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 levels (billions of dollars) Assets 2 00 4.33 5.35 2.64 133 2.20 5.67 8.08 7.60 6.13 4,555 Interest-earning assets 3.08 4,04 5.61 2.23 1.98 2,55 6.54 531 7.75 5.70 3,935 Loans and leases (net) 3.00 5.93 6.24 2.37 -2.65 -L02 6.02 9.85 10.60 8.16 2,742 Commercial and industrial .... -1.95 1.84 2.97 -.67 -9,10 -4.10 •52 934 12.25 7.29 706 Real estate 16.56 12.43 12.69 8.79 2.73 1.94 6.13 7.94 8.28 5.55 L132 Booked in domestic offices ,. 17.11 11,99 13,02 8.55 2.90 2.57 6.17 7,68 8.43 5.61 1,104 Residential . 18.03 13.89 15.75 13.49 8.08 7.87 10.96 10.00 10.10 4.92 689 Nonresidential 16.26 10.22 10.39 3.57 -2.82 -3.95 -.45 4.12 5.71 6.77 415 Booked in foreign offices ... .84 27.03 3.00 16.65 -234 -17.80 4.66 1837 2.80 3.17 28 Consumer 4.55 7.64 6.18 38 -2-55 -1.53 8.92 16,02 9,98 4.88 558 Other loans and leases -5.33 -3.09 -.94 -5.68 -4.91 -4.25 9.97 5.30 14.23 22.24 404 Loan loss reserves and unearned income 44 36 -4.19 10,29 .35 -3.79 -4.79 -5.89 -2.20 .44 34 58 Securities .. 4.94 3.27 5.08 8.45 16,23 12.29 12,26 -4.13 .60 .84 924 Investment account 7.51 2.93 4.04 8.19 14.42 11.44 8.09 -1,71 -L54 -1.12 793 U S Treasury .00 -5,80 -13.79 3.50 32.01 23.96 7.21 -8.44 -19.20 -14.29 165 U.S. government agency and corporation obligations - 25.46 22.54 33.41 24.02 15.88 - 12.77 9.62 .87 6,44 3.62 438 Other 4.43 -2.46 -.87 -6.69 -2.57 -5.19 6.07 2.52 435 1.79 189 Trading account -23.88 8,58 20.62 11.87 38.88 21.01 51.94 -20.51 18.52 14.43 132 Other .24 -5.82 2.49 -11.69 .2.82 1.57 -7.89 3.25 7.65 -.89 269 Non-interest-earning assets -5.07 6,45 3.50 5.51 -3.10 -31 -.87 30.22 6.62 8.94 620 Liabilities . 2.18 4.05 5.43 2.37 LOt 136 5.10 833 7.22 5.99 4,180 Core deposits . * * - . -.76 5.48 5.75 7.58 5.25 5.09 1.49 -.15 3.95 4,12 2,386 Transaction deposits -6.04 2.65 .93 2.43 3.38 14.63 5.47 -.30 -3.10 -3.42 793 Savings and small time deposits .. 2.95 7.29 8.71 10.51 6.24 .18 -.85 -.05 835 8.33 L593 Managed liabilities' ... ... , 6.90 2.26 5,20 -6.16 -6.18 -6.03 12,28 17.64 10.62 9.71 1,514 Deposits booked in foreign offices . . . . .. 8,86 -7.77 -1.08 -5.88 3.82 -5.85 15.05 30.89 5.13 4.26 473 Larse time 12.16 9.22 5.00 -5.68 -19.73 -26.20 -9.21 8.73 19.60 21,18 315 Subordinated notes and debentures . 3.72 -4.26 16.98 20.99 4.69 34.89 10.82 9.24 6.61 17.77 51 Other managed liabilities ........ .78 5.45 10.12 -8.U -134 7.11 22.18 13.02 11.66 832 674 Other... 3.75 .08 2.59 4.36 -4,28 -1.05 14.93 77,82 2032 2.83 280 Equity capital -.66 8.77 4.18 6.68 5.98 13.78 12.56 5.24 12.08 7.54 375 MEMO Commercial real estate loans2 n.a. n.a. n.a. n.a. 10.68 -5.18 -133 3.74 5,82 7,78 414 NOTE. Data are from year-end to year-end. 2. Measured as the sum of construction and land development loans securei n.a. Not available. by real estate; real estate loans secured by nonfarm nonresidential properties 1. Measured as the sum of deposits in foreign offices, large time deposits in and loans to finance commercial real estate, construction, and land developmen domestic offices, federal funds purchased and securities sold under agreements activities not secured by real estate. to resell, demand notes issued to the U.S. Treasury, subordinated notes and debentures, and other borrowed money. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

468 Federal Reserve Bulletin • June 1997 The securitized share of bank-originated consumer 4. Outstanding bank loans as a share of total credit market debt of nonfmancial businesses, 1970-96 loans rose further last year, to almost 25 percent (chart 5). After adjustment for securitization, the slowing of growth of consumer loans on banks' balance sheets is much less pronounced—from a little more than 17 percent in 1995 to about 141A percent in 1996. LPS respondents indicated that the demand for consumer loans dropped off a bit at the end of the year (chart 6). The decline may have been a result of higher consumer debt burdens. On the supply side, banks reported that they had tightened standards for approving consumer loans, particularly credit card loans, as well as terms on new or existing credit card M M M M M M M M M M M M M 1 1970 1975 198Q 1985 1990 1995 3. Spread of C&I loan rate over intended federal funds rate, NOTE. The data are quarterly. by size of ban. 1987-96 SOURCE. Flow of funds accounts of the United States, table L. 101. Basis points loans, most often by reducing credit lines or widen- All loans Four-quarter moving average ing the spreads of loan rates over base rates. These reports of tightening are in sharp contrast to the picture at the beginning of 1995, when banks reported having eased standards for approving credit card applications as well as terms on credit card accounts, by narrowing spreads over base rates, raising credit limits, and reducing annual fees. Despite the reported tightening of standards in 1996, banks increased lines More than $1,000,000 of credit on credit cards faster than outstandings increased, resulting in a slight drop in utilization rates. Residential mortgages, which represent l4Vi percent of commercial bank assets, also grew more slowly in 1996—about 5 percent, a little less than half the average for the past three years. Although the LPS indicated that banks had slightly tightened $100,000 to $1,000,000 5. Securitized share of consumer loan outstandings originated by banks, 1988-96 Pfercent I I Less than $100,000 1987 1989 1991 1993 1995 NOTE. The data are quarterly. 1988 1990 1992 1994 1996 SOURCE. Survey of Terms of Bank Lending to Business, Federal Reserve Board statistical release E.2. NOTE. The data are quarterly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 469 6. Net percentage of selected commercial banks that of derivatives contracts of all types held by banks experienced increased demand for consumer loans, increased about \$>lA percent over 1995's year-end 1992-96 value; a large part of the increase occurred at the ten largest banks, which hold the vast majority of such Percent contracts.5 Most of the holdings were in the form of interest rate contracts. Of the year-end 1996 notional — 40 value, more than 92 percent was related to contracts held for trading purposes; these are used primarily to help customers hedge against the risk of changes in — 20 interest rates, exchange rates, equity prices, and commodity prices. The remainder was related to contracts held for nontrading purposes, primarily to hedge against risks to the banks themselves. 20 Liabilities 1992 1993 1994 1995 1996 NOTE. The data are quarterly. Net percentage is the percentage of banks Core deposits at banks advanced moderately in 1996, reporting increased demand less the percentage reporting decreased demand. SOURCE. Senior Loan Officer Opinion Survey on Bank Lending Practices. growing more slowly than bank assets. Growth was sluggish partly because banks set deposit rates low relative to the rates of return available on alternative lending standards for home mortgages, the slowing investments (chart 7). On average, rates on money of growth appears to reflect a heavy pace of securiti- market mutual funds were 2 percentage points higher zation rather than a reduced pace of originations: than rates on bank savings accounts, and the return Total residential mortgages originated by banks and on most stock mutual funds also significantly nonbanks, including mortgages held in pools of mort- exceeded bank deposit rates. gage securities, expanded 8% percent last year, the Within core deposits, transaction deposits fell for fastest rate since 1990. the third year in a row. The decline can be attributed Loans in one residential real estate category, home to the implementation of retail "sweep" accounts, equity loans, increased significantly over the year. whereby funds are automatically swept out of trans- Respondents to the LPS reported stronger demand for such loans. In addition, some banks increased their 5. The notional value of a derivative is the value of the underlying marketing efforts for home equity loans and targeted financial asset, index, or other investment used to calculate the payspecific customers in an effort to encourage a shift ments specified in the contract. Only the payments represent benefits from unsecured consumer loans to secured home or risks to the banks. equity lines. Because home equity lines are often used to pay down unsecured consumer debt, their 7. Selected interest rates, 1987-96 expansion likely explains a portion of the slowing of growth of consumer lending. Percent Motley market mutual funds Securities Banks' securities holdings grew less than 1 percent in 1996 and at year-end represented 21 percent of assets, the lowest proportion in five years. Banks used a portion of their investment account securities as a source of funds, but this decline was about offset by an increase in the value of securities held in trading accounts. Small banks held a greater proportion of Six-month Certificates of deposit their assets in securities than did large banks, nearly 30 percent compared with 17 percent. 1987 1989 1991 1993 1995 An off-balance-sheet item of note is banks' hold- NOTE. The data are monthly. Rates are at commercial banks. Savings accounts include money market deposit accounts. ings of derivatives. During 1996, the notional value SOURCES. Federal Reserve Board statistical releases H.6 and H.I5. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

470 Federal Reserve Bulletin • June 1997 action accounts, against which banks must hold Capital reserves, and into money market accounts, against which they need not hold reserves. This arrangement The share of their assets that banks funded with has no effect on the total amount of retail deposits, capital was about the same in 1996 as it was in 1995. but it does reduce the amount of non-interest-bearing As a result, the leverage ratio remained basically required reserves a bank must hold at the Federal unchanged last year, on net, although risk-based Reserve, freeing up these funds to be invested else- capital ratios (tier 1 and total) declined slightly where. In 1996 the volume of new retail sweep (chart 9).7 The risk-based capital measures have accounts tripled, bringing the cumulative amount fallen a bit over the past two years because of the swept out of retail transaction accounts to about relatively more rapid growth of loans, which carry $170 billion (chart 8). To fund the growth of bank assets in the presence 7. The tier 1 ratio is the ratio of tier 1 capital to risk-weighted of the relatively slow expansion of core deposits, assets, and the total ratio is the ratio of the sum of tier 1 and tier 2 banks relied heavily on managed liabilities, which capital to risk-weighted assets. Tier 1 capital consists mainly of grew faster than total bank assets for the fourth common equity (excluding capital gains and losses on investment account securities classified as available for sale) and certain perpetual consecutive year. Increases in large time deposits and preferred stock. Tier 2 capital consists primarily of subordinated debt, in subordinated notes and debentures fueled the non-tier 1 preferred stock, and loan-loss reserves. Risk-weighted growth in this category, while deposits booked in assets are calculated by multiplying the amount of assets and the credit equivalent amount of off-balance-sheet items by the risk weight foreign offices were a much less important source of for each category. The leverage ratio is the ratio of tier 1 capital to funds for domestic lending. The rates of growth for total assets. different categories of managed liabilities have varied For a summary of the evolution of risk-based capital standards, see Allan D. Brunner and William B. English, "Profits and Balance Sheet widely over the past few years, in part because of the Developments at U.S. Commercial Banks in 1992," Federal Reserve reduction of deposit insurance premiums in 1995 and Bulletin, vol. 79 (July 1993), pp. 661-62. the beginning of 1996, which increased the attractiveness of large time deposits as a source of funds.6 9. Regulatory capital ratios, and share of industry assets at well-capitalized banks, 1991-96 6. Over this period, deposit insurance premiums for wellcapitalized banks were reduced to zero. Although they are insured up Regulatory capital to only $100,000, large time deposits are included in the assessment ratios base used to determine insurance premiums, and therefore the cost of this source of funding varies with the insurance premiums. Deposit — 12 insurance premiums are not paid on foreign deposits. For further discussion, see William R. Nelson and Brian K. Reid, "Profits and Balance Sheet Developments at U.S. Commercial Banks in 1995," Federal Reserve Bulletin, vol. 82 (June 1996), pp. 483-505. 10 Cumulative amount transferred out of retail transaction accounts upon initiation of sweep accounts, 1994-96 Share of industry assets at well-capitalized banks — 100 HI — 80 — 60 — 40 1991 1992 1993 1994 1995 1996 §1111111 NOTE. The data are quarterly. For definitions of tier 1 and tier 2 capital and NOTE. The data are monthly. leverage ratio, see text footnote 7. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 All higher risk weights than do securities.8 Despite the 10. Stock price indexes, 1996-April 1997 decline in industry-average capital ratios, the fraction Index, January 3, 1996 = 100 of bank assets at well-capitalized banks—those with sound capital ratios and positive examiner ratings— Money center — 175 bank holding companies increased again last year, crowding still closer to 100 percent. Banks boosted their equity last year even though 150 they significantly increased the share of income they paid out as dividends. This high payout by banks contributed to generous distributions by bank holding — 125 companies. The top fifty bank holding companies increased their dividends about 20 percent. Further- Regional and money center more, net expenditures on stock repurchases by these bank holding companies __ S&P 500 companies grew more than 50 percent last year and approached four-fifths of the amount disbursed 1996 1997 through dividends. NOTE. The data are weekly. The bank indexes are for eight money center bank holding companies and forty-two regional bank holding companies as defined by Salomon Brothers. SOURCES. Salomon Brothers and Standard & Poor's. TRENDS IN PROFITABILITY The net income of U.S. commercial banks grew 8 per- the return on assets averaged 63 basis points more cent in 1996, the seventh consecutive annual increase. over the past four years than over the preceding seven The return on equity remained in the elevated range it years (table 1). The recent improvement is due in part has occupied since 1993, and the return on assets to a sharp drop in loss provisioning relative to assets, posted a new high. The increase in profitability was which has allowed some other longer-term trends widespread: The average return on assets rose for all boosting return on assets to show through. First, the four bank size groups, and net income was positive at ratio of net interest income to assets has been increas- 95 percent of all banks, accounting for 99 percent of ing because banks have been shifting their portfolios total bank assets. Profits were boosted a bit by growth toward riskier assets, which carry higher yields, and of net interest income but more by higher noninterest have been funding a larger share of assets with capiincome. Taken together, the gains in net interest and tal instead of interest-bearing liabilities. Also, ongononinterest income exceeded the increases in non- ing improvements in efficiency have helped banks interest expense and provisioning for loan and lease lower the ratio of noninterest expense to revenue. losses. Propelled in part by growth of profits, stocks Finally, noninterest income has accounted for a of large bank holding companies outperformed the steadily growing share of revenue, partly because broader market in 1996, as they had in 1995 of the increasing importance of off-balance-sheet (chart 10). activity.9 Last year was the fourth consecutive year in which measures of commercial bank profitability significantly exceeded the long-term norms. For example, Interest Income and Expense Both interest income and interest expense as a per- 8. Banks' capital situation was not materially affected by holding centage of assets fell slightly at commercial banks companies' explosive issuance of trust preferred securities last fall. These securities are created when a bank holding company establishes a trust that issues cumulative preferred stock and then loans the proceeds to the parent company. The resulting liability counts as tier 1 capital for the holding company, but the interest payments on the debt 9. The increasing importance of off-balance-sheet activity has also are tax deductible—a combination of features sufficiently attractive made return on assets as a measure of profitability less meaningful that holding companies issued $6 billion of these securities last year in over time. Nevertheless, a large fraction of banking is still tied to the public market and probably several times that amount in the traditional on-balance-sheet items, and in interpreting changes in net private market. Nevertheless, these transactions do not show up on income, assets remain a useful scaling factor for separating the effects banks' balance sheets except in the rare instance that the trust issuing of growth from those of improved profitability. The other common the securities is organized under the bank rather than the holding measure of profitability—return on equity—is, of course, not affected company, in which case the preferred stock is classified as tier 2 by changes in the relative importance of off-balance-sheet activity. capital for the bank. In 1996 banks issued about $1.2 billion in trust However, interpreting trends in this measure is complicated by the preferred securities, only lA of 1 percent of total (tier 1 plus tier 2) significant increases in capital-to-assets ratios in recent years in bank capital. response, in part, to regulatory changes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

472 Federal Reserve Bulletin • June 1997 last year, reflecting the moderately lower market rates a rebound in the share of assets in loans and a rising that prevailed, on average, in 1996 relative to 1995. volume of loans to households, a relatively high The decline in expense exceeded the decline in yielding category of loans. income, leaving net interest income as a percentage of assets (the net interest margin) 3 basis points higher than in 1995 and, despite declines in 1994 and Noninterest Income and Expense 1995, still elevated relative to the late 1980s. The net interest margin was held down in the late Noninterest income provided a hefty boost to return 1980s by competition among banks for loans and on assets last year, increasing 17 basis points as a funding sources. It surged in 1991 and 1992 as banks percentage of assets relative to 1995. Over the past widened spreads between loan and deposit rates in ten years, noninterest income has accounted for an effort to improve capital ratios by boosting earn- an expanding share of bank revenue (chart 12). A ings and curbing asset growth (chart 11). The rise small part of the increase has been from fiducioccurred even though loans, which tend to yield more ary activities and trading revenue, but most of the than securities, declined as a share of assets. growth has been in the broad category "other nonin- Since 1992, more aggressive loan pricing and terest income," which includes merchant credit card greater reliance on managed liabilities have squeezed fees, annual cardholder fees, fees for servicing mortthe net interest margin somewhat, but it remains high gages, and income from loans that have been securifor several reasons. First, compared with the early tized. Thus, the increase in the proportion of revenue 1990s, banks fund a significantly larger fraction of accounted for by noninterest income likely reflects assets with capital, and the returns on capital are not both the expansion of bank lending to households considered an interest expense. Also, rates paid on and the growing fraction of bank loans that are retail deposits have been low relative to market rates. securitized. Finally, the margin has been held up significantly by 12. Noninterest income and its components 11. Net interest income and the composition of assets, as ai percentage of total revenue, 1985-96 1985-96 liilliilii^Bi^^B^^^MiiWiili iii BliiliiiitililSIIIill §11 aHMHSHi IfiliiiiiiBiliiSiiiiliiillwmm^mmmmmmmmmmmmm iiiili •iiliiiiiiiiilillliiWll NOTE. The data are annual. NOTE. The data are annual. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at US. Commercial Banks in 1996 472 Noninterest expense as a percentage of assets noninterest expense was also boosted last year b> rose 8 basis points in 1996 even though occupancy higher merger restructuring charges, with the Chase and employee costs were about unchanged. The Manhattan Corporation-Chemical Banking Corpoincrease reflects a rise in "other noninterest expense" ration merger alone accounting for $13A billion ir accounted for by two recent adjustments in deposit expenses. (See the accompanying box for a briel insurance premiums. In 1995, banks received a rebate discussion of the continuing consolidation of the o( $ 1 Vi billion for overpayment of deposit insurance, banking industry.) while in 1996, banks that had acquired thrift deposits Over the past ten years, noninterest expense has paid a $11A billion one-time assessment to support been held in check in part by a decline in employ- (he Savings Association Insurance Fund. Other ment and occupancy costs as a percentage of revenue Consolidation of the Banking Industry The past decade has seen a marked consolidation of the U.S. purchase banks throughout the United States after Septemcommercial banking industry. In 1996, 359 banking organi- ber 1995. In June 1997, remaining legal restrictions on zations with combined assets totaling about $450 billion geographic expansion were removed, and all banks are now merged or were acquired, contributing to the continuing allowed to acquire established branches through interstate decline in the number of banks and bank holding companies mergers, provided that the state has not opted out of inter- (chart). As a result of this consolidation, the assets held state banking.1 (Only Texas and Montana have opted out.) by the fifty largest bank holding companies represent an Before completing a merger or acquisition, banks and increasing share of total banking assets (chart). bank holding companies still must obtain approval from the Regulatory changes have been an important factor in the appropriate regulatory agencies. Under the Bank Holding consolidation of the banking industry. For many years, legal Company Act and the Bank Merger Act, the Board of restrictions on the geographic expansion of banks generally Governors of the Federal Reserve System oversees the limited the size of any one bank or bank holding company; mergers and acquisitions of bank holding companies and of in many cases a banking organization was prohibited from state member banks. In considering these applications, the expanding within its home state as well as into other states. Board looks at the effect of the merger or acquisition on the Over the past fifteen years, these restrictions have been competitiveness of the relevant banking market, the finaneased. Most states now allow some, if not all, out-of-state cial and managerial resources of the firms involved, and the bank holding companies to own banks within their state. convenience and needs of the community. Many states have also lifted restrictions on intrastate branching of state-chartered banks, which in turn has resulted in broader branching powers being given to 1. Both the purchase of banks by out-of-state holding companies and the acquisition of established branches through interstate mergers are subject to national banks. deposit caps and certain state laws. Specifically, the combined organization The Riegle-Neal Interstate Banking and Branching Effi- may control no more than 10 percent of the insured deposits in the United ciency Act of 1994 went even further in removing geo- States and is subject to deposit limits of the relevant state. In addition, the acquired bank must have been in existence the minimum amount of time graphic restrictions by allowing bank holding companies to required by state law. Number of U.S. commercial banking organizations, Share of banking assets held by the fifty largest bank 1986-96 holding companies, 1986-96 — li { — 60 — io I — 40 — 20 ,r lUlL.iL.sm _L_J 1986 1988 1990 1992 1994 1996 1986 1988 1990 1992 1994 1996 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

474 Federal Reserve Bulletin • June 1997 13. Noninterest expense and its components Loss Provisioning and Loan Quality as a percentage of total revenue, 1985-96 Since 1992, the banking industry has been setting aside as a provision against losses on loans and Total noninterest expense leases amounts very close to their net charge-offs (chart 14). In keeping with this pattern, provisioning rose slightly last year, matching a small increase in net charge-offs. Although loan-loss provisioning relative to assets edged higher over the past two years, it was quite a bit lower at the end of 1996 than earlier in the 1990s and about the same as at the beginning of the 1980s. Banks were able to reduce provisioning 64 in 1992 because improvements in loan quality and a contraction in loans sharply reduced their need 1 i i ( 1 11 . 1 i for loan-loss reserves. In recent years, continued improvements in measured loan quality have allowed Components banks to equalize provisioning and net charge-offs, 35 Salaries and benefits leaving the level of reserves unchanged. Although 30 the ratio of reserves to loans fell in each of the past four years, the ratio of reserves to delinquent loans —**—* Other noninterest expenses 25 increased until 1995, fell only slightly last year, and was more than 80 percent at year-end (chart 15). _ — 20 However, net charge-offs grew faster than delinquen- -—.15 cies, and the ratio of reserves to charge-offs fell fairly Premises and fixed assets sharply in the past two years. Still, in 1996, loan-loss .— 10 reserves were 3Vi times as large as net charge-offs in 1 t i 1 1 i t i i 1 1 that year, a bit above average. 1985 1990 1995 Although the decline in provisioning relative to NOTE. The data are annual. the levels in the troubled late 1980s and early 1990s has helped boost measures of bank profitability, banks would still be solidly profitable even if provi- (chart 13). Employment levels in the industry fell sioning were much higher. For example, if provisionduring the late 1980s and early 1990s and have ing had been double its actual level last year, the ratio since remained about unchanged. Occupancy costs of provisioning to assets would have been about have likely benefited from the slow growth of the 50 percent higher than its average level since 1970. number of bank offices, which rose only 17 percent Nevertheless, net interest income less provisioning between 1986 and 1996, one-third the increase in revenue, adjusted for inflation, over that period. 14. Reserves for loan and lease losses, loss provisioning, and Furthermore, over the ten years, the inflation-adjusted net charge-offs as a percentage of loans, 1980-96 cost per office fell more than 10 percent. These costs may have been contained in part by the growing . Percent popularity of low-cost supermarket branches. By Reserves for loan and lease losses contrast, other noninterest expense, a broad category that accounts for nearly half of noninterest expense and includes deposit insurance premiums, losses on the sale of various assets, amortization of intangible assets, expenditures for information processing services provided by others, and merger restructuring charges, has risen a bit relative to revenue. Nevertheless, the ratio of total noninterest expense to revenue has fallen over the past ten years; thus, at least by this common measure of efficiency, 1 i 1 i 1 I 1 1 1 1 banks appear to have significantly streamlined their 1980 1985 1990 1995 operations. NOTE. The data are annual. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 475 >qyacv of ioai>!oss reserves, 1985-96 Delinquency and charge-off rates, all loans, 1985-96 NOTE. The data are annual. NOTE. The data are quarterly and are seasonally adjusted. Delinquent loans are loans that are not accruing interest and those that are accuring interest but are would have equaled 3 percent of assets, slightly more than thirty days past due. The delinquency rate is the end-of-period level of delinquent loans divided by the end-of-period level of outstanding loans. The above the average level for this ratio since 1970. The charge-off rate is the annualized amount of charge-offs over the quarter net of return on assets would drop to a bit under 1 percent, recoveries, divided by the average level of outstanding loans. but it would still be a bit above its average over the period, and the return on equity would fall to ll!/2 percent, about equal to its average over the rates for loans to businesses remained low even as the period. performance of loans to households deteriorated fur- Banks were able to keep provisioning low last year ther (chart 16). Within the business loan category, the because, overall, the performance of bank loans performance of commercial real estate loans has been remained quite good. Delinquency and charge-off improving dramatically (chart 17). Indeed, the net 17\ Delinquency ana charge-off rates, by tvpe of loan, 1991-96 ^•vs^^^^^iiK^^^SMWi^S^i^iffiS^W^^^^^^H DelinqiMiiey rates for loans to |iQiis0hell|| NOTE. The data are quarterly and are seasonally adjusted. See note on chart 16. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

476 Federal Reserve Bulletin • June 1997 Credit Card Banks Since the early 1980s, bank holding companies have been equity at these banks have fallen dramatically. Nearly onecreating subsidiary banks that specialize in credit card lend- fourth of credit card banks, accounting for about 10 percent ing. These institutions were initially established in states of the assets held by such banks, posted losses in 1996. that had a high interest rate ceiling, or no ceiling at all, to Still, the average return on equity at credit card banks last avoid the limitations imposed by usury laws in other states. year was well above the average for commercial banks as a Although interest rate ceilings no longer restrict desired whole (chart). lending rates in most states, bank holding companies con- Rising loan-loss rates lower the profits of credit card tinue to create subsidiaries that specialize in credit card banks in two ways. For loans on their balance sheets, lending, presumably because of the economies of scale that charge-offs deplete loan-loss reserves and lead to higher are obtained by concentrating this line of business at a provisioning. Indeed, provisioning as a percentage of assets single bank. In 1996, credit card banks, defined here as at these banks increased more than 1 percentage point in the banks among the top 1,000 by assets for which credit card past two years. Higher charge-off rates need not imply loans constitute more than half of assets, accounted for reduced profitability if interest margins are rising to offset more than 60 percent of credit card outstandings at all the losses. However, intense competition for credit card banks. By this definition, there were forty credit card banks balances has placed downward pressure on net interest at the end of 1996, up from eleven at the end of 1985. margins even as losses have mounted. In sum, net interest On average, 85 percent of the assets of these banks at the income less provisioning fell from 5 percent of assets in end of 1996 were credit card receivables (table). The banks 1993 to 3 percent last year. funded themselves largely with managed liabilities, and they had significantly higher capital ratios than the typical Selected balance sheetitems for credit card banks commercial bank. Credit card banks also fund a relatively and all banks, 1996 large fraction of the loans they originate through securitiza- Percentage of assets tions, which typically remove the affected loans from their books. At year-end 1996, about one-half of the outstanding Item Credit card All banks banks balances on credit card loans made by these banks were seeuritized, compared with about one-fourth for the rest of Loans .. 87.64 61.12 the industry. Consumer 85.01 12.26 Credit card . . .. 83.98 4.93 The profitability of credit card banks has been reduced by Securities 3.98 18,20 the erosion of consumer credit quality. Delinquency and Managed liabilities .. 79.15 32.73 charge-off rates for loans at credit card banks have risen Capital account 11.54 8.27. , sharply in the past two years, and returns on assets and on charge-off rate for these loans hovered near zero over by differences in financial stress experienced by the most of last year, as banks recovered amounts similar two sectors (chart 18). For businesses, the ratio of to the amounts they charged off. Both delinquency interest payments to revenue has been relatively low and charge-off rates for C&I loans remained near in recent years, whereas for households, the ratio of record lows in both 1995 and 1996. interest payments and required principal payments to By contrast, delinquency rates for loans to house- disposable income has risen steadily to about its holds have risen somewhat since 1994: Delinquency elevated level at the end of the 1980s. In recent years rates for credit card loans and for "other consumer banks have been aggressively marketing consumer loans" have reversed more than half of their declines credit to more-marginal borrowers. This expansion of from 1991 peaks, and the rate for residential real credit to households that would not have qualified estate loans has reversed about one-third of its previously is probably one of the reasons household decline. Charge-off rates for credit card loans and debt burden has gone up and also suggests that banks other consumer loans also are higher, with the may have anticipated some of the rise in the chargeloss rate for credit card loans in 1996 nearly reaching off rates on these loans. the peak levels of the early 1990s. Banks that special- Another factor influencing delinquency and ize in credit card lending have been particularly hurt charge-off rates may have been changes in the pace by the rising loss rates (see box "Credit Card of loan growth. An increase in the rate of growth of Banks"). a loan portfolio generally lowers its average age. Some of the disparity in the performances of Because loans are less likely to go bad soon after household and businesses loans can be accounted for they are made, a reduction in average age may tern- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 All Credit Card Banks—Continued Measures of profitability and components of revenue at For loans that have been removed from banks' balance credit card banks, 1985-% sheets through securitization, charge-offs result in lower fee income. The residual between the rates paid on securities backed by credit card loans and the rates earned on the Measures of profitability underlying loans accrues to the bank as fee income, but only after loan losses have been covered.1 Noninterest income, which includes fee income, has fallen 1V2 percent- 30 — age points as a share of assets since 1993. If the net Return on equity charge-off rate for securitized loans were the same as the rate reported for on-balance-sheet loans, nearly all the 25 ~~ decline in noninterest income could be accounted for by the increased losses. Even as loan quality at credit card banks has deteriorated, 20 increased provisioning has pushed up the level of loan-loss reserves relative to delinquent loans. Net charge-off rates have risen more quickly than delinquency rates, however, Percent of assets . Percentage of assets and the ratio of reserves to charge-offs has fallen over the Components of ne venue past two years. At the end of last year, reserves equaled Net iaterest income about nine months of losses, down from more than one year of losses at the end of 1994. Even if loss rates worsen, profit margins at these banks are, on average, wide enough to absorb additional increases in provisioning. Furthermore, the capital ratios at credit card banks, although having fallen slightly over the past few years, remain high. 3.5 1. For more information on the securitization of consumer loans by banks, see Nelson and Reid, "Profits and Balance Sheet Developments at U.S. 1990 1995 Commercial Banks in 1995," p. 488. porarily lower delinquency and charge-off rates. As u burden. i^'S- '•)(••, the loans in the portfolio mature, or "season," delinquency and charge-off rates tend to rise. The rapid growth of C&I loans in recent years may thus be depressing their delinquency and charge-off 17.5 — rates. 17.0 —- DEVELOPMENTS IN 1997 During the first quarter of 1997, bank asset growth at domestic offices continued at the robust pace posted in the preceding quarter. The value of C&I loans increased sharply, and the value of real estate loans, which had grown only slowly in 1996, 1985 1987 1989 1991 1993 1995 expanded solidly. By contrast, the value of consumer NOTE. The data are quarterly and are seasonally adjusted. loans on banks' books was little changed over the For businesses (nonrinancial corporations only), the debt burden is calculated as interest payments as a percentage of revenue; for households, it is an estimate quarter as moderate increases in outstanding amounts of interest payments and required principal payments as a percentage of dispos- Digitized for FRASER on loans originated by banks were about matched by able income. http://fraser.stlouisfed.org/ SOURCES. National income and product accounts and the Federal Reserve Federal Rseecsuerrvitei zBaatniok nosf .St. Louis System.

478 Federal Reserve Bulletin • June 1997 Despite some volatility perhaps resulting from ing company profits showed solid gains in net interest fears of rising interest rates, indexes of stock prices and noninterest income and reductions in mergerof bank holding companies climbed further in 1997, related costs. Nevertheless, the earnings of several rising 10 percent by the end of April and outpacing bank holding companies were again hurt by rising broader market indexes. Initial reports of bank hold- charge-offs of consumer loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 479 A.I. Report of income, all insured domestic commercial banks, 1987-96 Millions of dollars Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Gross interest income 245,089 274,144 317,072 320,186 289,884 257,038 244,934 257,365 302,791 315,552 Taxable equivalent 251,085 279,714 321,277 323,827 293,072 260,020 247,816 260,127 305,431 318,021 Loans ., 180,648 202,853 237,824 238,680 214,396 186,312 178,555 189,983 227,542 241,445 Securities .. — 39,485 42,199 46,724 50,987 52,618 52,052 48,732 48,374 51,116 50,853 Gross federal funds sold and reverse repurchase agreements . 9,033 10,639 13,061 12,547 9,128 5,926 4,798 6,422 9,752 9,293 Other ...... 15,923 18,453 19,463 17,970 13,745 12,748 12,848 12,588 14383 13,962 Gross interest expense 145,166 166,345 205,092 204,822 167,870 122,789 105,697 110,956 148,115 151,005 Deposits 115,807 130,310 157,481 161,365 138,930 99,038 79,575 79,205 105,427 107,951 Gross federal funds purchased and repurchase agreements 15,926 18,963 24,898 22,769 14,359 9,279 - 8,449 12,481 18,424 16,902 Other .... 13,432 17,073 22,712 20,686 14,581 14,471 17,674 19,269 24,263 26,152 Net interest income ..., 99,923 107,799 111,980 115,364 122,014 134,249 139,237 146,409 154,676 164,547 105,919 113,369 116,185 119,005 125,202 137,231 142,119 149,171 157,316 167,016 Taxable equivalent ..... 37,891 19,777 31,300 32,275 34,869 26,866 16,854 11,003 12,626 16,627 Loss provisioning1 41,913 45,720 51,598 55,675 60,650 67,163 75,871 77,271 83,887 95,733 Noninterest income ...,...'. 8,758 9,532 10,272 11,444 12,843 14,178 14,906 15,303 16,075 17,152 Service charges on deposits 7,145 7,526 8,314 8,881 9,456 10,472 11,203 12,127 12,889 14,230 Income from fiduciary activities ...... 3,559 3,691 4,051 4,854 5,960 6,274 9,238 6,249 6,337 7,540 Trading income 22,451 24,970 28,961 30,495 32,389 36,237 40,524 43,592 48,586 56,812 Other -.: Noninterest expense 97,857 103,062 108,993 116,559 126,061 133,143 140,608 145,074 151,260 163,364 Salaries, wages, and employee benefits 45,405 47,134 49,413 52,082 53,602 55,625 58,542 60,988 64,076 68,055 Expenses of premises and fixed assets 15,342 16,002 16,698 17,541 17,906 18,190 18,587 18,999 19,778 20,967 Other ..,/...,. 37,110 39,926 42,882 46,934 54,553 59,329 63,479 65,087 67,407 74,342 Net noninterest expense 55,944 57,342 57,395 60,884 65,411 65,980 64,737 67,803 67,373 67,631 Realized gains on investment account securities ,. 1,447 278 799 474 2,925 3,956 3,055 -573 480 1,125 Income before taxes and extraordinary items , 7,536 30,956 24,083 22,680 24,659 45,358 60,703 67,034 75,157 81,413 Taxes 5,410 9,996 9,551 7,740 8,284 14,476 19,852 22,450 26,287 28,645 Extraordinary items 200 811 313 649 993 404 2,087 -17 28 91 Net income .-. 2,327 21,771 14,846 15,589 17,371 31,285 42,937 44,566 48,899 52358 Cash dividends declared .............. 10,659 13,275 14,129 13,944 15,080 14,235 22,072 28,181 31,119 40,022 Retained income .; -8,332 8,496 716 1,645 2,291 17,050 20,865 16,385 17,779 12,836 1. Includes provisioning for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

480 Federal Reserve Bulletin • June 1997 A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks, 1987-96 A. All banks Item 1987 1988 1989 1990 1991 1992 1993 1994 I 1995 1996 , t Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 87.48 88.00 87.94 87.82 88.04 88,33 88.50 86.55 86.48 86.81 Loans and leases, net 59.12 59.80 60.64 60.53 59.55 57.30 56.25 56.06 58.39 59.91 Commercial and industrial 19.98 19.50 19.09 18.50 17.33 15.78 14.88 14.51 15.20 15.59 U.S. addressees 16.57 16.55 16.54 15.99 15.00 13.54 12.72 12.35 12.87 13.06 Foreign addressees 3.41 2.95 2.55 2.51 2.33 2.24 2.16 2.16 2.33 2.53 Consumer 11.42 11.72 11.89 11.77 11.45 11.02 11.00 11.43 12.11 12.26 Credit card 3.17 3.47 3.69 3.78 3.88 3.82 3.89 4.21 4.72 4.93 Installment and other 8.26 8.25 8.20 7.99 7.57 7.20 l.U 7.22 7.39 7.33 Real estate 19.00 20.86 22.50 23.86 24.87 24.87 24.80 24.43 25.00 25.04 In domestic offices . 18.40 20.18 21.78 23.10 24.11 24.18 24.18 23.81 24.36 24.42 Construction and land development 3.90 4.06 4.16 4.00 3.41 2.64 1.99 1.65 1.59 1.63 Farmland .47 .49 ,51 .51 .53 .56 .57 .56 .56 .56 One- to four-family residential 8.22 9.21 10.15 11.21 12.27 12.91 13.49 13.74 14.41 14.42 Home equity n.a. 1.14 1.42 1.67 1.95 2.09 2.07 1.91 1.88 1.85 Other n.a. 8.07 8.73 9.54 10.32 10.82 11.42 11.84 12.54 12.57 Multifamily residential .57 .59 .60 .62 .66 .75 .79 .79 .81 .85 Nonfarm nonresident! al 5.25 5.83 6.36 6.76 7.23 7.32 7.33 7.07 6.97 6.96 In foreign offices .60 .68 .72 .76 .76 .69 .62 .63 .65 .63 Depository institutions 2.28 2.04 1.76 1.60 1.42 1.24 1.08 1.42 1.88 2.29 Foreign governments 1.35 1.22 L03 .78 .75 .73 .67 .41 .30 .26 Agricultural production 1.04 .98 .96 .96 1.01 1.02 .99 1.00 .96 .92 Other loans 4.98 4.52 4.31 3.93 3.60 3.50 3.56 3.34 3.15 3.36 Lease-financing receivables .98 1.06 1.10 1.12 1.09 1.03 .99 1.03 1.19 1.51 LESS: Unearned income on loans -.52 -.50 -.48 -.42 -.36 -.28 -.21 -.16 -.14 -.12 LESS: LOSS reserves' -1.40 -1.61 -1.52 -1.57 -1,62 -1.60 -1.51 -1.36 -1.27 -1.21 Securities 18.34 18.45 18.39 19.09 20.70 23.52 25.37 24.27 21.94 21.00 Investment account 17.00 17.17 17.14 17.63 18.93 21.18 22.50 21.60 19.38 18.20 Debt 17.00 17.17 16.84 17.37 18.62 20.82 22.12 21.21 18.97 17.74 U.S. Treasury 6.02 5.60 4.98 4.57 5.06 6.49 7.07 6.77 5.25 4.19 U.S. government agency and corporation obligations 4.14 4.88 6.04 7.56 8.75 9.86 10.73 10:24 9.81 9.74 Government-backed mortgage pools .. 2.10 2.59 3.27 4,08 4.52 4.52 4.74 4.67 4.46 4.80 Collateralized mortgage obligations ... n.a. n.a. n.a. 1.28 2.07 3.12 3.72 3.24 2.67 2.11 Other 2.04 2.29 2.77 2.20 2.16 2.21 2.27 2.33 2.68 2.83 State and local government 4.40 3.69 3.15 2.64 2.28 2.08 2.06 2.02 1.80 1.68 Other 2.44 2.99 2.68 2.59 2.53 2.40 2.25 2.18 2.11 2.13 Equity2 n.a. n.a. .29 .27 .31 .37 .38 .39 .41 .45 Trading account L34 1.28 1.25 1.46 1.77 234 2.87 2.67 2.55 2.81 Gross federal funds sold and reverse RPs 4.57 4.55 4.33 4.46 4.58 4.54 4.27 3.82 3.93 3.82 Interest-bearing balances at depositories 5.45 5.21 4.58 3.75 3.21 2.97 2.62 2.40 2.23 2.08 Non-interest-earning assets 12.52 12,00 12.06 12.18 11.96 11.67 11.50 13.45 13.52 13.19 Revaluation gains on off-balance-sheet items3 .. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2.61 2.90 2.24 Other 12.52 12.00 12.06 12.18 11.96 11.67 11.50 10.84 10.62 10.95 Liabilities 93.83 93.84 93.64 93.60 93.33 92.82 92.15 92.12 91.99 91.73 Interest-bearing liabilities 74.03 75.40 76.02 76.53 76.58 75.32 73.92 71.86 71.87 71.63 Deposits 61.26 62.06 62.58 63.44 64.45 62.93 60.26 57.34 56.28 55.83 In foreign offices 11.02 10.41 9.68 9.26 8.55 8.37 8.32 9.39 10.27 10.01 In domestic offices 50.24 51.66 52.90 54.18 55,90 54.56 51.94 47.96 46.01 45.83 Other checkable deposits 6.04 6.25 6.12 6.19 6.72 7.65 8.24 7.80 6.63 4.76 Savings (including MMDAs) 18.28 17.60 16.28 16.59 18.00 20.28 20.90 19.60 17.47 18.69 Small-denomination time deposits 15.06 16.25 18.38 19.96 21.30 19.21 16.98 15.33 16.14 15.96 Large-denomjnation time deposits 10.86 11.55 12,13 11.44 9.89 7.42 5.81 5.23 5.77 6.41 Gross federal funds purchased and RPs 8.13 8.02 8.22 8.03 7.09 7.02 7.47 7.60 7.70 7.18 Other 4.64 5.31 5.22 5.07 5.03 5.37 6.19 6.92 7.88 8.62 Non-interest-bearing liabilities 19.80 18.45 17.62 17.07 16.75 17.50 18.23 20.26 20.12 20.10 Demand deposits in domestic offices 15.34 14.25 13.49 12.79 12.59 13.24 13.86 13.49 12.68 12.81 Revaluation losses on off-balance-sheet items3 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2.32 2.88 2.14 Other 4.46 4.20 4.13 4.27 4.16 4.27 4.37 4.45 4.57 5.14 Capital account 6.17 6.16 6.36 6.40 6.67 7.18 7.85 7.88 8.01 8.27 MEMO Commercial real estate loans n.a. n.a. n.a. n.a. 11.36 10.59 9.83 9.15 9.01 9.06 Other real estate owned .35 .39 .39 .50 .75 .82 .63 .36 .19 .14 Managed liabilities 35.13 35.74 35.69 34.24 30.99 28.65 28.23 29.57 32.06 32.73 Average net consolidated assets (billions of dollars) 2,922 3,048 3.187 3,338 3,379 3,442 3,566 3,863 4,149 4,379 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at US. Commercial Banks in 1996 481 A.2.—Continued A. All banks Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Effective interest rate (percent)4 Rates earned Interest-earning assets 9.43 10.06 11.13 10.66 9.55 8.29 7.62 7.62 834 8.20 Taxable equivalent 9.67 10.26 11.29 10.79 9.66 839 7.72 7.71 8.41 8.27 Loans and leases, gross 10.23 10.86 12.03 11.48 1037 9.21 8.69 8.63 9.27 9.10 Net of loss provisions 8.08 9.80 10.44 9.93 8.69 7.88 7.87 8.13 8.76 8.47 Securities 8,10 8.38 8.73 8.79 8.16 7.06 6.08 5.97 6.52 6.45 Taxable equivalent , 8.95 9.07 9.25 9.20 8.54 737 637 6.21 6.74 6.69 Investment account 7.95 8.07 8.56 8.66 8.23 7.14 6.07 5.80 6.36 638 U.S. government and other debt 8.19 8.25 8.80 8.92 8.40 7.21 6.08 5.81 6.43 6.50 State and local 7.27 7.39 7.45 7.37 7.25 6.83 6.26 5.88 5.82 5.57 Equity2 n.a. n.a. 7.74 7.34 6.19 532 4.79 4.79 5,51 5.25 Trading account . 10.01 12.63 11.11 10.15 7.53 6.40 6.16 7.41 7.73 6.87 Gross federal funds sold and reverse RPs 6.57 7.52 9.17 8.06 5.67 3.59 3.04 4.26 5.63 5.22 Interest-bearing balances at depositories . 7.55 8.71 10.59 9.96 8.44 7.32 6.61 5.70 6.84 6.22 Rates paid Interest-bearing liabilities 6.76 7.28 8.53 8.04 6.52 4.76 4.02 4.02 4.99 4.84 Interest-bearing deposits 5.80 6.23 7.18 6.90 5.73 4.04 3.22 3.12 4.00 4.02 In foreign offices 7.90 8.91 10.87 10.71 8.54 732 6.82 5.59 6.12 5.55 In domestic offices 5.38 5.75 6.57 630 534 3.59 2.72 2.71 3.60 3.71 Other checkable deposits 4.55 4.77 4.83 4.78 433 2.71 1.99 1.86 2.07 2.05 Savings (including MMDAs) 5.29 5.55 6.18 5.98 5.09 3.26 2.50 2.58 3.19 3.01 Large-denomination CDs 6.88 7.47 8.67 8.03 6.67 4.91 4.00 4.10 5.47 5.42 Other time deposits 6.99 734 8.29 7.96 6.89 5.17 4.20 4.18 5.45 5.43 Gross federal funds purchased and RPs . 6.52 7.43 9.20 7.96 5.72 3.65 3.07 4.19 5.65 5.16 Income and expense as a percentage of average net consolidated assets Gross interest income 8.39 9.00 9.95 9.59 8.58 7.47 6.87 6.66 730 7.21 Taxable equivalent 8.59 9.18 10.08 9.70 8.67 7.55 6.95 6.73 736 7.26 Loans 6.18 6.66 7.46 7.15 634 5.41 5.01 4.92 5.48 5.51 Securities 1.35 138 1.47 1.53 1.56 1.51 1.37 1.25 1.23 1.16 Gross federal funds sold and reverse RPs .31 35 .41 38 .27 .17 .13 .17 .24 .21 Other .54 .61 .61 .54 .41 37 36 33 35 32 Gross interest expense 4.97 5.46 6.44 6.14 4.97 3.57 2.96 2.87 3.57 3.45 Deposits 3.96 4.28 4.94 4.83 4.11 2.88 2.23 2.05 2.54 2.47 Gross federal funds purchased and RPs .55 .62 .78 .68 .42 .27 .24 .32 .44 39 Other .46 .56 .71 .62 .43 .42 .50 .50 .58 .60 Net interest income 3.42 3.54 3.51 3.46 3.61 3.90 3.90 3.79 3.73 3.76 Taxable equivalent 3.63 3.72 3.65 3.57 3.71 3.99 3.99 3.86 3.79 3.81 Loss provisioning5 1.30 .65 .98 .97 1.03 .78 .47 .28 30 38 1.43 1.50 1.62 1.67 1.79 1.95 2.13 2.00 2.02 2.19 Noninterest income 30 31 32 .34 .38 .41 .42 .40 39 39 Service charges on deposits .24 .25 .26 .27 .28 30 31 31 31 32 Income from fiduciary activities .12 .12 .13 .15 .18 .18 .26 .16 .15 .17 Trading income .77 .82 .91 .91 .96 1.05 1.14 1.13 1.17 1.30 Other , Noninterest expense 3.35 338 3.42 3.49 3.73 3.87 3.94 3.76 3.65 3.73 Salaries, wages, and employee benefits 1.55 1.55 1,55 1.56 1.59 1.62 1.64 1.58 1.54 1.55 Expenses of premises and fixed assets .53 .53 .52 .53 .53 .53 .52 .49 .48 .48 Other 1.27 131 135 1.41 1.61 1.72 1.78 1.68 1.62 1.70 Net noninterest expense 1.91 1.88 1.80 1.82 1.94 1.92 1.82 1.75 1.62 1.54 Realized gains on investment account securities , .05 .01 .03 .01 .09 .11 .09 -.01 .01 .03 Income before taxes and extraordinary items .26 1.02 .76 .68 .73 132 1.70 1.74 1.81 1.86 Taxes .39 33 30 .23 .25 .42 .56 .58 .63 .65 Extraordinary items .01 .03 .01 .02 .03 .01 .06 Net income (return on assets) .08 .71 .47 .47 .51 .91 1.20 1.15 1.18 1.21 Cash dividends declared .36 .44 .44 .42 .45 .41 .62 .73 .75 .91 Retained income -.29 .28 .02 .05 .07 .50 .59 .42 .43 .29 MEMO: Return on equity 1.29 11.61 7.33 7.29 7.71 12.66 1534 14.64 14.71 14.60 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes allocated transfer risk reserve. 2. As in the Call Report, equity securities are combined with "other debt securities" before 1989. 3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss 4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report. 5. Includes provisioning for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

482 Federal Reserve Bulletin • June 1997 A.2 B. Ten largest banks by assets I Item 1987 1988 I 1989 I 1990 1 1991 j 1992 1993 1994 1995 1996 Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 85.14 85.22 85.16 84.85 85.41 85.16 84.79 76.97 77.02 79.94 Loans and leases, net 59.36 58.69 59.66 61.69 62.14 58.34 55.57 49.91 50.05 53.51 Commercial and industrial 24.53 23.36 22.61 22.91 22.42 20.32 18.65 16.43 16.16 17.17 U.S. addressees 13.31 13.01 13.18 13.39 13.44 12.00 10.75 9.16 8.66 9.59 Foreign addressees 11.22 10.36 9.43 9.53 8.97 8.32 7.90 7,27 7.50 7.59 Consumer 6.41 6.19 6.21 6.87 7.20 7.31 7.33 6.59 6.60 6.22 Credit card 2.34 2.08 1.99 2.20 2.53 2.61 2.50 2.28 1.96 1.23 Installment and other 4.07 4.10 4.22 4.67 4.67 4.70 4.83 4.31 4.65 4.99 Real estate 13.97 15.46 18.02 20.56 21.68 19.93 18.54 16.21 15.82 16.53 In domestic offices 11.69 12.80 15.05 17.36 18.37 17.07 15.99 13.80 13.48 14.44 Construction and land development 3.21 3.48 3.60 3.79 3.42 2.48 1.59 .84 .58 .51 Farmland .06 .06 .08 .08 .08 .07 .07 .06 .06 .06 One- to four-family residential 5.17 5.83 7-45 9.31 10.34 10.08 10.29 9.69 9.62 10.43 Home equity n.a. .76 1.04 1.31 1.63 1.63 1.60 1.40 1.40 1.53 Other n.a. 5.07 6.41 8.00 8.71 8.46 8.68 8.29 8.22 8.90 Multifamily residential .61 .65 .68 .68 .57 .58 .53 .41 .38 .38 Nonfarm nonresidential 2.63 2.78 3.23 3.51 3.95 3.86 3.51 2.79 2.83 3.05 In foreign offices 2.28 2.66 2.97 3.20 3.32 2.85 2.55 2,41 2.35 2.09 Depository institutions 5.18 5.21 4.56 3.64 3.05 2.56 2.35 3.37 4.95 6.06 Foreign governments 3.64 3.63 3.34 2.76 2.88 2.75 2.46 1.27 .90 .69 Agricultural production .36 .33 .31 .31 .31 .28 .27 .25 .21 .23 Other loans 6.51 6.23 6.36 6.05 5.61 6.05 6.82 6.44 5.85 6.42 Lease-financing receivables 1.38 1.44 1.49 1.60 1.68 1.51 1.30 1.14 1.14 1.59 LESS: Unearned income on loans -.41 -.43 -.45 -.39 -.35 -.27 -.21 -.16 -.14 -.11 LESS: LOSS reserves1 -2.22 -2.74 -2.77 -2.63 -2.34 -2.08 -1.94 -1.63 -1.45 -1.31 Securities 12.59 12.96 13.13 14.03 15.58 19.13 22.74 20.43 19.53 19.83 Investment account 8.19 8.67 9.05 9,22 9.38 10.70 12.45 11.68 10.65 10.60 Debt 8.19 8.67 8.83 8.98 9.08 10.36 12.08 11.30 10.27 10.22 U.S. Treasury 1.47 1.41 1.29 1.09 1.35 2.30 2.39 2.17 2.03 1.93 U.S. government agency and corporation obligations 1.54 1.94 2.29 2.91 3.46 4.45 6.14 5.16 4.46 4.59 Government-backed mortgage pools .. 1.47 1.84 2.07 2.24 2.26 2.43 3.30 2.79 2.89 3.58 Collateralized mortgage obligations ... n.a. n.a. n.a. .55 1.12 1.97 2.76 2.31 1.50 .95 Other .07 .10 .22 .13 .08 .05 .08 .06 .08 .06 State and local government 1.93 1.80 1.58 1.08 .77 .66 .59 .60 .49 .39 Other 3.25 3.52 3.68 3.90 3.50 2.95 2.97 3.37 3.29 3.31 Equity2 n.a. n.a. .22 .24 .30 .33 .36 .38 .38 .38 Trading account 4.40 4.29 4.08 4.81 6.19 8.43 10.30 8.74 8.88 9.23 Gross federal funds sold and reverse RPs 3.91 4.61 4.12 2.88 2.96 3.23 2.71 2.68 3.20 3.10 Interest-bearing balances at depositories 9.28 8.97 8.26 6.25 4.74 4.45 3.76 3.95 4.25 3.50 Non-interest-earning assets 14.86 14.78 14.84 15.15 14.59 14.84 15.21 23.03 22.98 20.06 Revaluation gains on off-balance-sheet items3 .. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 9.89 10.77 7.63 Other 14.86 14.78 14.84 15.15 14.59 14.84 15.21 13.14 12.21 12.43 Liabilities 95.58 95.41 95.11 95.29 94.97 94.44 93.24 93.42 93.59 93.04 Interest-bearing liabilities 73.08 73.76 74.17 73.97 74.62 73.08 71.56 64.33 63.37 64.45 Deposits 57.46 57.67 57.56 57.95 57.67 55.73 52.91 48.20 47.49 47.87 In foreign offices 32.60 31.49 30.08 29.66 28.47 27.16 25.51 26.10 28.36 26.41 In domestic offices 24.86 26.18 27.49 28.28 29.19 28.56 27.41 22.10 19.12 21.46 Other checkable deposits 2.45 2.68 2.70 2.74 3.00 3.38 3.45 2.91 2.30 1.61 Savings (including MMDAs) 11.04 11.42 11.32 12.05 13.50 14.91 15.33 12.70 10.56 12.31 Small-denomination time deposits 4.55 5.03 5.64 6.16 6.55 5.72 5.09 3.98 4.04 4.68 Large-denomination time deposits 6.82 7.05 7.82 7.33 6.14 4.56 3.53 2.51 2.23 2.86 Gross federal funds purchased and RPs 6.89 6.40 6.72 6.90 6.80 6.19 6.70 5.83 6.17 5.88 Other 8.74 9.69 9.89 9.13 10.15 11.16 11.94 10.29 9.71 10.69 Non-interest-bearing liabilities 22.50 21.65 20.94 21.32 20.35 21.36 21.68 29.09 30.22 28.59 Demand deposits in domestic offices 12.64 11.93 11.60 10.93 10.36 11.05 11.27 10.15 8.88 9.73 Revaluation losses on off-balance-sheet items3 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8.75 10.68 7.27 Other 9.86 9.71 934 10.39 9.99 10.30 10.41 10.20 10.66 11.59 Capital account 4.42 4.59 4.89 4.71 5.03 5.56 6.76 6.58 6.41 6.96 MEMO Commercial real estate loans n.a. n.a. n.a. n.a. 8.48 7.43 5.92 4.24 4.02 4.28 Other real estate owned .21 .22 .23 .42 .78 1.13 1.02 .58 .27 .18 Managed liabilities 56.79 56.34 56.24 54.74 53.18 50.76 49.17 46.16 47.89 47.33 Average net consolidated assets (billions of dollars) 691 685 693 725 717 775 818 949 1,051 1,189 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 483 A. 2.---Continued B. Ten largest banks by assets Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Effective interest rate (percent)4 Rates earned Interest-earning assets 9.56 10.76 12.31 11.65 9.92 8.67 8.16 8.15 8.20 7.77 Taxable equivalent 9.59 10.88 12.31 11.70 9.95 8.72 8.20 8.18 8.22 7.79 Loans and leases, gross 10.13 11.35 13.19 12.29 10.46 9.36 9.07 8.89 8.84 8.38 Net of loss provisions 6.63 10.70 10.87 11.10 8.58 7.50 7.95 8.38 8.62 8.17 Securities 9.49 10.54 10.11 9.85 8.52 7.38 6.69 7.10 7.41 6.82 Taxable equivalent 9.65 11.06 10.08 10.00 8.63 7.54 6.77 7.19 7.47 6.87 Investment account 8.70 8.70 9.20 9.34 8.99 7.96 6.90 6.58 7.06 6.75 U.S. government and other debt 9.07 8.95 9.56 9.68 9.29 8.13 6.99 6.70 7.22 6.90 State and local 7.52 7.74 7.69 7.54 7.67 7.40 6.99 6.37 6.23 5.73 Equity2 n.a. n.a. 6.81 5.82 4.22 4.04 3.72 3.27 4.03 3.84 Trading account 10.96 14.33 12.13 10.75 7.84 6.69 6.45 7.79 7.83 6.91 Gross federal funds sold and reverse RPs 6.13 7.31 8.98 8.01 5.60 3.65 3.02 4.52 5.20 4.99 Interest-bearing balances at depositories . 7.68 9.13 10.88 11.06 10.05 9.29 8.34 7.27 7.15 6.71 Rates paid Interest-bearing liabilities 7.83 8.75 10.74 10.18 7.71 6.17 5.60 5.44 5.88 5.46 Interest-bearing deposits 6.62 7.43 8.79 8.64 6.75 5.05 4.23 4.07 4.76 4.46 In foreign offices 8.00 9.00 10.96 11.11 8.76 7.55 6.87 6.04 6.07 5.62 In domestic offices 5.02 5.71 6.64 6.22 4.98 2.92 2.11 2.08 3.06 3.16 Other checkable deposits 3.26 4.43 4.40 4.35 3.93 1.96 L28 1.11 1.29 1.39 Savings (including MMDAs) 5.13 5.55 6.49 6.21 5.09 2.95 2.14 2.35 3.11 2.80 Large-denomination CDs 7.29 7.75 8.87 7.96 6.50 4.66 3.55 3.14 3.73 4.65 Other time deposits 6.38 7.11 8.26 7.76 6.09 3.81 3.01 2.81 5.08 4.67 Gross federal funds purchased and RPs . 6.52 7.43 9.27 7.75 5.98 4.04 3.26 4.05 5.22 4.96 Income and expense as a percentage of average net consolidated assets Gross interest income 8.45 9.52 10.82 10.37 8.77 7.68 7.22 6.38 6.42 6.29 Taxable equivalent . 8.47 9.63 10.83 10.43 8.80 7.72 7.25 6.40 6.43 6.31 Loans , 6.23 6.93 8.23 7.96 6.77 5.65 5.22 4.49 4.44 4.52 Securities .71 .75 .83 .86 .84 .85 .86 .77 .75 .72 Gross federal funds sold and reverse RPs .29 .40 .37 .25 .17 .14 .11 .15 .21 .19 Other 1.22 1.44 1.39 1.30 .98 1.05 1.04 .97 1.00 .88 Gross interest expense 5.77 6.51 8.01 7.65 5.81 4.54 4.06 3.52 3.74 3.53 Deposits 4.18 4.56 5.37 5.41 4.23 3.09 2.48 2.15 2.43 2.27 Gross federal funds purchased and RPs .52 .58 .72 .64 .43 .28 .24 .24 .35 .31 Other 1.07 1.37 1.92 1.60 1.15 1.17 1.35 1.13 .95 .95 Net interest income 2.68 3.03 2.82 2.72 2.96 3.15 3.16 2.86 2.68 2.76 Taxable equivalent 2.71 3.12 2.82 2.77 2.99 3.18 3.19 2.88 2.70 2.78 Loss provisioning5 2.15 .40 1.45 .77 1.21 1.12 .64 .26 .11 .11 Noninterest income 1.94 2.07 2.19 2.27 2.40 2.59 2.99 2.33 2.16 2.35 Service charges on deposits — .16 .19 .22 .23 .26 .30 .30 .26 .25 .28 Income from fiduciary activities .23 .23 .27 .31 .33 .37 .39 .37 .30 .31 Trading income .40 .41 .42 .52 .64 .66 .91 .53 .46 .52 Other L16 1.24 1.29 1.21 1.16 1.27 1.38 1.18 1.15 1.23 Noninterest expense 3.20 3.29 3.43 3.55 3.83 3.86 4.13 3.56 3.32 3.60 Salaries, wages, and employee benefits . 1.60 1.63 1.66 1.74 1.79 1.78 1.88 1.65 1.58 1.58 Expenses of premises and fixed assets , .58 .60 .62 .65 .66 .65 .66 .55 .50 .50 Other 1.03 1.05 1.15 1.16 1.38 1.43 1.59 1.36 1.24 1.52 Net noninterest expense 1.26 1.21 1.24 1.28 1.44 1.27 1.14 1.23 1.16 1.24 Realized gains on investment account securities . .07 .03 .03 .02 .04 .11 .13 .02 .03 .05 Income before taxes and extraordinary items — -.66 1.43 .16 .69 .34 .87 1.50 1.39 1.44 1.45 T E a x x tr e a s ordinary items .14 . . 4 0 4 8 . . 0 3 3 8 . . 0 2 6 7 . . 1 0 7 3 .26 . . 5 1 3 6 .48 .55 * .53 Net income (return on assets) -.80 1.07 -19 .48 .21 .61 1.13 .91 .93 Cash dividends declared .28 .38 .37 .26 .21 .18 .28 .58 .57 .73 Retained income -1.08 .69 -.57 .21 .43 .85 .33 .31 .19 MEMO: Return on equity -18.11 23.30 -3.92 10.13 4.23 10.91 16.75 13.86 13.78 13.34 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes allocated transfer risk reserve. 2. As in the Call Report, equity securities are combined with "other debt securities'" before 1989. 3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a lo; 4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report. 5. Includes provisioning for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

484 Federal Reserve Bulletin • June 1997 A.2. Portfolir. composiiir-n, MUe;es! rales, and av 1987-06 C. Banks ranked 11th through 100th bv assets I I Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Balance sheet items as a percentage of average net consolidated assets interest-earning assets 86.20 87.23 86.91 86.81 86.88 87.97 88.36 88.16 88.31 87.75 Loans and leases, net 61.70 61.99 62.61 61.22 60.08 58.30 57.33 58.56 62.68 64.24 Commercial and industrial 23.72 23.45 22.75 21.76 20.53 18.83 18.03 18.03 19.26 18.95 U.S. addressees 21.22 21.43 21.23 20.44 19.30 17.78 17.05 16.99 18.10 17.71 Foreign addressees 2.50 2.02 1.53 1.33 1.24 1.05 .98 1.04 1.16 1.24 Consumer 11.73 12.20 12.97 12.25 11.66 11.72 11.47 12.62 14.23 15.66 Credit card 4.40 4.85 5.82 5,48 5.04 5.16 5.23 5.99 7.34 8.26 Installment and other 7.33 7.35 7.16 6.76 6.62 6.56 6.24 6.63 6.89 7.40 Real estate 16.05 17.94 19.09 20.21 21.51 21.89 22.11 22.26 23.25 23.27 In domestic offices 15.83 17.65 18.85 20.04 21.37 21.78 22.01 22.17 23.10 23.10 Construction and land development 5.24 5.27 5.25 4.91 4.00 3.02 2.08 1.63 1.50 1.55 Farmland .10 .11 .12 .12 ,12 .14 .13 .14 .13 .13 One- to four-family residential 5.88 6.85 7.54 8.53 10.17 11.36 12.30 12.98 14.16 14.16 Home equity n,a. 1.17 1.41 1.67 2.07 2.50 2.54 2.33 2.19 2.08 Other n.a. 5.68 6.13 6.86 8.10 8.85 9.76 10.65 11.97 12.08 Multifamily residential .39 .43 .45 .46 .54 .66 .71 .71 .77 .89 Nonfarm nonresidential 4.22 4.99 5.49 6.01 6.53 6.61 6.79 6.72 6.54 6.37 In foreign offices .22 .29 .24 .18 .14 .11 .10 .09 .15 .16 Depository institutions 2.51 1.84 1.55 1.57 1.58 1.43 1.30 1.49 1.59 1.50 Foreign governments 1.53 1.22 .88 .52 .39 .33 .30 .28 .20 .20 Agricultural production .30 .29 .29 .28 .31 .31 .29 .29 .26 .28 Other loans 6.25 5.54 5.17 4.82 4.55 4.28 4.05 3.47 3.32 3.30 Lease-financing receivables 1.52 1.69 1.73 1.67 1.53 1.49 1.47 1.60 1.96 2.41 LESS: Unearned income on loans -.40 -.37 -.34 -.26 -.22 -.17 -.11 -.07 -.07 -.06 LESS: LOSS reserves1 -1.51 -1.80 -1.48 -1.60 -1.76 -1.79 -1.60 -1.41 -1.32 -1.27 ; Securities 15.26 15,54 15.21 16.19 17.38 20.38 21.97 21.19 18.64 16.87 Investment account 14.45 14.73 14.38 15.32 16.25 19.24 20.60 19.82 17.88 16.06 Debt 14.45 14.73 14.16 15.14 16.02 18.99 20.34 19.50 17.51 15.62 U.S. Treasury 5.06 4.89 4.10 3.42 3.78 5.88 7.05 6.85 4.82 3.34 U.S. government agency and corporation obligations 3.13 3.58 5.01 7.42 8.43 9.26 9.55 9.28 9.40 9.12 Government-backed mortgage pools .. 2.36 2.96 4.03 5.32 5.38 5.22 5.21 5.30 5.06 5.42 Collateralized mortgage obligations ... n.a. n.a. n.a. 1.58 2.48 3.54 3.71 3.07 2.82 2.16 Other .77 .61 .98 .53 .57 .50 .63 .91 1.51 1.54 State and local government 4.07 3.32 2.70 2.03 1.63 1.46 1.31 1.21 1.11 .99 Other 2.18 2.94 2.35 2.27 2.19 2.39 2.43 2.15 2.17 2.17 Equity2 n.a. n.a. .22 .18 .22 .25 .26 .32 .37 .44 Trading account .81 .82 .83 .88 1.13 1.14 1.37 1.37 .76 .80 Gross federal funds sold and reverse RPs 3.07 3.68 3.71 4.41 4.90 4.78 4.98 5.11 4.52 4.26 Interest-bearing balances at depositories 6.16 6.01 5.38 4.98 4.51 4.52 4.08 3.30 2.47 2.38 Non-interest-earning assets 13.80 12.77 13.09 13.19 13.12 12.03 11.64 11.84 11.69 12.25 Revaluation gains on off-balance-sheet items3... n.a. n.a. n.a. n.a. n.a. n.a. n.a. .57 .50 .51 Other 13.80 12.77 13.09 13.19 13.12 12.03 11.64 11.28 11.19 11.74 Liabilities 94.56 94.77 94.45 94.35 93.93 93.13 92.56 92.47 92.23 92.02 Interest-bearing liabilities 73.01 75.34 76.23 77.02 76.07 74.66 73.38 72.86 74.05 73.14 Deposits 52.61 55.02 56.45 57.46 59.24 56.99 54.22 53.03 52.32 51.82 In foreign offices 10.14 9.68 8.63 7.84 6.69 6.20 6.78 8.05 8.12 7.52 In domestic offices 42.48 45.34 47.82 49.62 52.54 50.79 47.43 44.98 44.20 44.30 Other checkable deposits 4.42 4.68 4.67 4.75 5.36 6.26 7.21 6.91 5.63 3.09 Savings (including MMDAs) 16.02 15.67 14.58 15.50 17.62 20.21 20.60 20.13 18.78 20.73 Small-denomination time deposits 9.63 11.05 13.49 15.59 17.99 15.98 14.19 13.26 14.24 14.09 Large-denomination time deposits 12.40 13.95 15.08 13.78 11.56 8.34 5.44 4.68 5.55 6.39 Gross federal funds purchased and RPs 14.52 13.72 13.22 13.03 10.94 11.45 11.93 11.48 11.37 10.00 Other 5.87 6.59 6.57 6.53 5.89 6.22 7.23 8.34 10.36 11.32 Non-interest-bearing liabilities 21.55 19.44 18.22 17.33 17.87 18.47 19.18 19.62 18.18 18.89 Demand deposits in domestic offices 16.62 15.04 13.86 13.23 13.76 14.52 15.38 15.27 14.26 14.47 Revaluation losses on off-balance-sheet items3 n.a. n.a. n.a. n.a. n.a. n.a. n.a. .53 .49 .49 Other 4.93 4.40 4.36 4.10 4.10 3.95 3.80 3.82 3.43 3.93 Capital account 5.44 5.23 5.55 5.65 6.07 6.87 7.44 7.53 7.77 7.98 MEMO Commercial real estate loans ... n.a. n.a. n.a. n.a. 11.28 10.43 9.58 8.98 8.65 8.49 Other real estate owned .22 .31 .30 .46 .76 .70 .47 .25 .13 .08 Managed liabilities 43.29 44.27 43.81 41.50 35.42 32.53 31.69 32.83 35.64 35.56 Average net consolidated assets (billions of dollars) 802 870 940 995 1,006 1,003 1,082 1,204 1,338 1,450 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 485 A.2,—Continued C. Banks ranked 1 lth through 100th by assets Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Effective interest rate (percent)4 Rates earned Interest-earning assets 9.19 9.87 11,10 10.41 9.22 8.01 7.37 7.29 8.31 8.26 Taxable equivalent 9.40 10.07 11.27 10.50 9.32 8.11 7.46 7.37 8.37 8.33 Loans and leases, gross 9.78 10.48 11.74 11.04 9.87 8.77 8.26 8.22 9.11 9.04 Net of loss provisions 7.33 9.19 9.87 9.03 7.89 7.47 7.47 7.68 8.50 8.16 Securities 7.87 8.21 8.76 8.81 8.16 7.08 6.06 5.70 6.38 6.49 Taxable equivalent 8.67 8.92 9.36 9.12 8.49 7.38 6.34 5.92 6.57 6.73 Investment account 7.93 8.24 8.77 8.87 8.28 7.21 6.16 5.70 6.34 6.48 U.S. government and other debt 8.25 8.51 9.06 9.13 8.42 7.25 6.16 5.69 6.38 6.57 State and local 7.09 7.29 7.41 7.22 7.23 6.81 6.32 6.04 6.06 5.90 Equity2 n.a. n.a. 9.19 8.09 7.32 6.75 5.23 5.00 5.68 4.S6 Trading account .: 6.99 7.68 8.66 8.01 6.46 4.73 4.74 5.75 7.27 6.61 Gross federal funds sold and reverse RPs 6.59 7.61 9.35 8.11 5.76 3.71 3.11 4.31 5.91 5.31 Interest-bearing balances at depositories 7.68 8.87 11.35 9.72 8.15 6.77 6.50 4.69 6.78 5.86 Rates paid Interest-bearing liabilities 6.75 7.34 8.66 7.93 6.34 4.45 3.76 3.72 4.94 4.75 Interest-bearing deposits 5.91 6.44 7.51 6.95 5.69 3.90 3.11 2.88 3.93 3.95 In foreign offices 7.78 8.92 11.08 10.08 8.38 7.26 7.37 4.60 6.30 5.34 In domestic offices 5.51 5.97 6.93 6.50 5.39 3.56 2.61 2.64 3.57 3.73 Other checkable deposits 4.44 4.53 4.57 4.64 4.16 2.45 1.70 1.62 1.89 1.81 Savings (including MMDAs) 5.27 5.63 6.42 6.03 4.98 3.08 2.33 2.46 3.11 2.93 Large-denomination CDs 7.02 7.65 8.75 8.09 6.72 5.13 4.31 4.21 5.70 5.54 Other time deposits 7.07 7.56 8.72 8.02 6.81 5.11 4.07 4.18 5.35 5.30 Gross federal funds purchased and RPs 6.63 7.50 9.35 8.11 5.68 3.57 3.04 4.28 5.86 5.27 Income and expense as a percentage of average net consolidated assets Gross interest income 8.05 8.72 9.77 9.26 8.17 7.15 6.59 6.46 7.40 7.33 Taxable equivalent 8.23 8.90 9.91 9.34 8.24 7.22 6.65 6.51 7.46 7,37 Loans 6.19 6.69 7.51 6.97 6.09 5.24 4.85 4.91 5.79 5.88 Securities 1.14 1.21 1.26 1.36 1.35 1.39 1.27 1.13 1.13 1.04 Gross federal funds sold and reverse RPs .20 .25 .36 .37 .28 .19 .15 .21 .27 ,23 Other .51 .57 .65 .56 .45 .34 .32 .21 .21 .18 Gross interest expense 4.85 5.45 6.50 6.06 4.75 3.28 2.74 2.67 3.62 3.43 Deposits 3.41 3.86 4.59 4.34 3.70 2.49 1.94 1.73 2.29 2.20 Gross federal funds purchased and RPs .96 1,03 1.24 1.12 .67 .43 .38 .51 .67 .55 Other .48 .56 .66 .60 .38 .35 .43 .43 .66 .68 Net interest income 3.19 3.27 3.28 3.21 3.42 3.87 3.85 3.79 3.79 3.90 Taxable equivalent 3.38 3.45 3.41 3.29 3.49 3.94 3,91 3.85 3.84 3.94 Loss provisioning5 1.55 .82 1.20 1.27 1.23 .78 .47 .32 .39 .56 Noninterest income 1.53 1.62 1.86 1.84 2.01 2.25 2.29 2.25 2.38 2,63 Service charges on deposits ,29 .30 .31 .34 .40 .45 .46 .45 .44 .44 Income from fiduciary activities .36 .35 .35 .33 .35 .38 .38 .39 .40 .43 Trading income .07 .07 .08 .08 .10 .09 .14 .08 .09 .08 Other .81 .89 1.12 1.08 1.16 1.33 1.32 1.33 1.45 1.69 Noninterest expense 3.23 3.29 3.34 3.43 3.72 3.99 3.95 3.86 3.79 3.89 Salaries, wages, and employee benefits 1.48 1.48 1.47 1.46 1.51 1.54 1.52 1.50 1.47 1.52 Expenses of premises and fixed assets .49 .50 .50 .49 .50 ,50 .48 .47 .47 .48 Other 1.26 1.31 1.37 1.48 1.72 1.96 1.95 1.89 1.85 1.89 Net noninterest expense 1.70 1.67 1.47 1.59 1.71 1.74 1.66 1.61 1.41 1.26 Realized gains on investment account securities . .05 * .04 .03 .01 ,01 .14 .15 .09 -.01 Income before taxes and extraordinary items * .77 .65 .37 .62 1.51 1.82 1.85 2.01 2.U Taxes .09 .28 .18 .15 .19 .49 .56 .63 .70 .76 Extraordinary items * .02 * .01 .03 .03 * * * * Net income (return on assets) -.09 .51 .47 .23 .47 1.05 1.26 1.22 1.31 L35 Cash dividends declared .34 .41 .40 .37 .47 .46 ,76 .86 .85 L10 Retained income -.43 .09 .06 -.14 * .58 .49 ' .36 .46 2$ MEMO: Return on equity -1.70 9.72 8.41 4.07 7.71 15.21 16.91 16.27 16.85 16.93 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes allocated transfer risk reserve. 2. As in the Call Report, equity securities are combined with "other debt securities" before 1989. 3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss 4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report. 5. Includes provisioning for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

486 Federal Reserve Bulletin • June 1997 D. Banks ranked 101st through 1,000th by assets Item 1987 1988 1989 1990 1991 1992 1993 1994 I 1995 T 1996 Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 88.34 88.98 88.84 88.91 89.02 89.55 90.09 90.13 90.14 Loans and leases, net 61.60 63.03 63.62 63.09 61.03 58.51 57.94 59.74 62.23 62.69 Commercial and industrial 18.12 17.83 17.68 16.69 15.05 13.33 12.19 12.07 12.68 12.76 U.S. addressees 17.87 17.67 17.53 16.56 14.89 13.15 12.03 11.90 12.52 12.58 Foreign addressees .24 .16 .15 .13 .16 .18 .16 .16 .16 .18 Consumer 15.34 15.91 15.49 15.48 15.10 14.22 14.84 15.85 16.39 16.09 Credit card 4.65 5.21 4.83 5.22 5.71 5.42 5.65 6.06 6.45 6.90 Installment and other 10.69 10.70 10.66 10.26 9.40 8.80 9.19 9.79 9.94 9.19 Real estate 22,25 24.28 25.97 27.01 27.53 28.10 28.60 29.42 30.77 31.27 In domestic offices 22.25 24.27 25.95 26.99 27.49 28.06 28.58 29.40 30.75 31.24 Construction and land development 4.57 4.73 4.82 4.37 3.67 2.86 2.26 2.08 2.21 2.38 Farmland .26 .27 .27 .28 .28 .32 .34 .36 .40 .46 One- to four-family residential 9.48 10.64 11.56 12.49 13.23 14.25 15.17 16.25 17.47 17.28 Home equity n.a. 1.73 2.08 2.31 2.53 2,56 2.50 2.33 2.36 2.30 Other 1 n.a. 8.91 9.48 10.18 10.70 11.69 12.66 13.92 15.11 14.98 Multifamily residential .68 .67 .70 .73 .80 .95 1.07 1.13 1.21 1.28 Nonfarm nonresidential 7.26 7.97 8.61 9.11 9.50 9.68 9.74 9.57 9.47 9.84 In foreign offices .01 .01 .01 .03 .05 .04 .02 .03 .02 .02 Depository institutions 1.13 1.01 .92 1.05 .93 .80 .43 .39 .35 .48 Foreign governments .25 .20 .16 .09 .07 .05 .03 .02 .02 .02 Agricultural production .48 .47 .45 .47 .49 .54 .56 .62 .69 .70 Other loans 4.94 4,23 3.77 3.16 2.81 2.47 2.16 2,00 1.80 1.69 Lease-financing receivables .72 .78 .82 .83 .85 .78 .77 .82 .90 1.00 LESS: Unearned income on loans -61 -.60 -.56 -.50 -.40 -.30 -.21 -.15 -.12 -.10 LESS: LOSS reserves1 ,... -1.01 -1.07 -1.07 -1.20 -1.42 -1.49 -1.44 -1.30 -1.23 -1.23 Securities 18.72 18.52 18.75 19.34 21.28 24.12 25.92 25.71 23.06 22.64 Investment account 18.50 18.25 18.38 18.87 20.92 23/77 25.63 25.39 22.86 22.51 Debt 18.50 18.25 18.02 18.54 20.55 23.31 25.15 24.95 22.39 21.99 U.S. Treasury 7,14 6.52 5.91 5.44 6.16 7.75 8.63 8.26 6.47 5.59 U.S. government agency and corporation obligations 4.06 4.81 6.07 7.75 9.35 11.07 12.32 12.67 12.21 12.62 Government-backed mortgage pools ... 1.89 2.33 3.03 3.83 4.51 4.74 4.97 5.57 5.42 5.67 Collateralized mortgage obligations n.a. n.a. n.a, 1.74 2.74 3.95 4.82 4.39 3.55 3.11 Other 2.17 2.48 3.04 2.17 2.11 2.38 2,53 2.71 3.25 3.84 State and local government 5.03 4.10 3.50 3.11 2.65 2.27 2.26 2.29 2.13 2.23 Other 2.26 2.82 2.55 2.25 2.38 2.22 1.94 1.74 1.58 1.55 Equity2 n.a. n.a, .35 .32 .37 .46 .47 .44 .47 .52 Trading account .22 .28 .38 .48 .37 .35 .29 .32 .20 .13 Gross federal funds sold and reverse RPs 4.94 4.45 4.11 4.51 4.71 4.92 4.48 3.64 3.91 3.86 Interest-bearing balances at depositories 3.08 2.87 2.49 1.90 1.90 1.47 1.20 LOO .93 .96 Non-interest-earning assets 11.66 11.12 11.02 11.16 11.09 10.98 10.45 9.91 9.87 9.86 Revaluation gains on off-balance-sheet items3 ... n.a. n.a. n.a. n.a. n.a. n.a. n.a. .02 .05 .02 Other 11.66 11.12 11.02 11.16 11.09 10.98 10.45 9.90 9.83 9.83 Liabilities 93.28 93.34 93.28 93.07 92.89 92.47 91.85 91.62 91.36 91.06 Interest-bearing liabilities 73.92 75.59 76.42 77.04 77.25 75,98 74.42 74.77 75.02 75.09 Deposits 62.43 63.00 63.74 65.05 66.33 65.62 63.04 60.38 59.59 59.82 In foreign offices 1.96 2.04 2.09 1.65 1.76 1.56 1.43 1.69 1.71 1.33 In domestic offices 60.47 60.97 61.65 63.40 64.58 64.06 61.61 58.69 57.88 58.49 Other checkable deposits 7.27 7.39 7.14 7.31 7.83 9.14 9.94 9.70 8.53 6.20 Savings (including MMDAs) 22.83 21.27 19.52 19.69 20.79 23.33 24.05 22.92 20.72 22.43 Small-denomination time deposits 17.75 19.34 22.08 24.09 25.23 23.55 20.77 19.29 21.08 21.55 Large-denomination time deposits 12.62 12.96 12.91 12.31 10.73 8.06 6.84 6.78 7.54 8.31 Gross federal funds purchased and RPs 8.46 8.63 9.21 8.43 7.46 7.17 7.43 8.45 8.30 8.17 Other 3.03 3.96 3.47 3.56 3.45 3.19 3.94 5.94 7.14 7.10 Non-interest-bearing liabilities 19.36 17.74 16.85 16.03 15.64 16.49 17.43 16.85 16.34 15.97 Demand deposits in domestic offices 17.35 15.84 14.86 14.07 13.57 14.39 15.07 14.58 14.05 13.81 Revaluation losses on off-balance-sheet items3 . n.a. n.a. n.a. n.a. n.a. n.a. n.a. .02 .05 .02 Other 2.00 1.90 1.99 1.96 2.07 2.10 2.36 2.25 2.24 2.14 Capital account 6.72 6.66 6.72 6.93 7.11 7.53 8.15 8.38 8.64 8.94 MEMO Commercial real estate loans ... n.a. n.a. n.a. n.a. 13.84 12.95 12.30 11.92 11.97 12.51 Other real estate owned .37 .42 .43 .52 .77 .80 .57 .28 ,17 .13 Managed liabilities 26.00 27.51 27.62 25.93 23.40 19.97 19.65 22.86 24.69 24.92 Average net consolidated assets (billions of dollars) 771 839 892 937 961 968 977 1,032 1,094 1,078 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 487 D. Banks ranked 101st through 1,000th by assets Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Effective interest rate (percent)4 Rates earned Interest-earning assets 9.47 9.92 10.75 10.44 9.54 8.17 7.44 7.61 8.45 8.44 Taxable equivalent 9.82 10.16 10.96 10.60 9.68 8.29 7.56 7.70 8.54 8.53 Loans and leases, gross 10.33 10.77 11.62 11.24 10.41 9.15 8.58 8.67 9.49 9.47 Net of loss provisions 9.05 9.62 10.45 9.50 8.70 7.87 7.77 8.13 8.80 8.65 Securities 7.68 7.84 8.34 8.54 8.10 6.91 5.79 5.71 6.25 6.32 Taxable equivalent 8.76 8.58 8.98 9.02 8.53 7.22 6.11 5.96 6.51 6.60 Investment account 7.71 7.85 8.36 8.51 8.12 6.93 5.80 5.72 6.25 6.32 U.S. government and other debt 7.96 8.05 8.62 8.77 8.29 6.97 5.77 5.70 6.30 6.42 State and local 7.03 7.17 7.28 7.34 7.25 6.87 6.30 5.94 5.83 5.50 Equity2 n.a. n.a. 6.90 6.94 6.02 5.06 4.95 5.34 6.06 6.33 Trading account 5.80 6.96 7.61 9.92 6.86 5.62 4.82 5.29 5.55 5.69 Gross federal funds sold and reverse RPs 6.64 7.47 9.05 7.98 5.63 3.49 3.02 4.07 5.45 5.26 Interest-bearing balances at depositories 7.04 7.82 9.21 8.52 6.82 4.61 3.50 4.25 6.09 5.55 Rates paid Interest-bearing liabilities 6.31 6.72 7.73 7.28 6.09 4.21 3.33 3.58 4.65 4.59 Interest-bearing deposits 5.46 5.82 6.63 6.36 5.42 3.67 2.82 2.86 3.73 3.87 In foreign offices 6.77 7.65 8.98 8.12 6.38 4.25 3.35 4.31 5.93 5.42 In domestic offices 5.43 5.77 6.56 6.32 5.39 3.66 2.81 2.83 3.67 3.84 Other checkable deposits 4.65 4.77 4.88 4.77 4.28 2.68 2.02 1.87 2.03 1.97 Savings (including MMDAs) 5.29 5.54 6.13 5.99 5.13 3.35 2.58 2.65 3.24 3.12 Large-denomination CDs 6.83 7.42 8.70 8.05 6.62 4.77 3.89 4.24 5.62 5.49 Other time deposits 7.16 7.46 8.32 8.06 7.07 5.37 4.41 4.42 5.54 5.60 Gross federal funds purchased and RPs , 6.35 7.40 9.01 7.87 5.61 3.47 2.95 4.13 5.61 5.15 Income and expense as a percentage of average net consolidated assets Gross interest income 8.40 8.88 9.68 9.40 8.62 7.39 6.76 6.93 7.71 7.71 Taxable equivalent 8.72 9.10 9.86 9.53 8.74 7.49 6.85 7.01 7.79 7.79 Loans 6.45 6.89 7.52 7.23 6.50 5.48 5.08 5.27 6.01 6.02 Securities 1.43 1.43 1.54 1.61 1.70 1.65 1.49 1.45 1.43 1.42 Gross federal funds sold and reverse RPs 31 .32 .38 .36 .27 .17 .14 .14 .21 .20 Other .22 .24 .25 .20 .15 .08 .06 .06 .07 .06 Gross interest expense 4.59 5.03 5.84 5.55 4.67 3.17 2.47 2.66 3.47 3.42 Deposits 3.82 4.10 4.70 4.59 4.02 2.75 2.07 2.02 2.56 2.57 Gross federal funds purchased and RPs .53 .64 .83 .67 .42 .25 .22 .35 .46 .42 Other .23 .29 .31 .29 .23 .17 .17 .29 .45 .42 Net interest income 3.81 3.85 3,84 3.84 3.95 4.21 4.29 4.27 4.25 4.30 4.13 4.07 4.02 3.98 4.07 4.32 4.39 4.36 4.33 4.37 Taxable equivalent Loss provisioning5 .80 .74 .75 1.12 1.07 .77 .48 .33 .43 .52 1.36 1.36 1.38 1.50 1.64 1.70 1.84 1.86 1.84 1.87 Noninterest income .34 .35 .36 .37 .40 .44 .45 .42 .42 .41 Service charges on deposits .25 .25 .25 .26 .27 .28 .29 .28 .27 .28 Income from fiduciary activities .03 .03 .04 .02 .04 .02 .03 .02 .03 .02 Trading income .73 .74 .74 .84 .94 .95 L08 1.14 1.12 1.16 Other Noninterest expense 3.54 3.50 3.45 3.51 3.75 3.89 3.93 3.79 3.69 3.69 Salaries, wages, and employee benefits 1.54 1.49 1.48 1.47 1.48 1.51 1.52 1.49 1.44 1.44 Expenses of premises and fixed assets .52 .50 .49 .49 .49 .50 .48 .47 .45 .45 Other L47 1.51 1.49 1.55 1.79 1.88 1.93 1.83 1.79 1.80 Net noninterest expense 2.18 2.14 2.07 2.01 2.11 2.19 2.09 1.93 1.85 1.82 Realized gains on investment account securities . .04 .01 .01 .09 .10 .06 -.05 -.01 .02 Income before taxes and extraordinary items .88 .98 1.02 .72 .86 1.35 1.79 1.97 1.96 1.98 Taxes .27 .32 .32 .22 .29 .44 .61 .67 .68 .69 Extraordinary items .02 .01 * .03 .04 * * Net income (return on assets) .62 .67 .71 .51 .60 .92 1.22 1.29 1.28 1,29 Cash dividends declared .44 .48 .48 .53 .58 .48 .79 .81 .87 1.04 Retained income .18 .18 .23 -.02 .02 .43 .43 .48 .41 .25 MEMO: Return on equity 9.25 10.01 10.54 7.41 8.45 12.16 14.94 15.45 14.86 14.42 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes allocated transfer risk reserve. 2. As in the Call Report, equity securities are combined with "other debt securities" before 1989. 3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss 4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report. 5. Includes provisioning for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

488 Federal Reserve Bulletin • June 1997 A.2. Portfolio composition, interest rates, and income and expense, all insured domestic commercial banks, 1987-96 E. Banks not ranked among the 1,000 largest by assets Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 90.51 90.81 90.90 91.06 91.24 91.39 91.65 91.72 91.70 91.64 Loans and leases, net 52.82 53.88 54.84 54.74 54.05 53.03 52.94 54.64 56.60 5738 Commercial and industrial . 12.84 12.34 12.10 11.53 10.59 9.74 9.24 931 9.66 9.97 U.S. addressees 12.81 12.32 12.07 11.49 10.55 9.70 9.20 9.27 9.59 9.90 Foreign addressees .03 .02 .03 .04 .04 .04 .04 .05 .06 .07 Consumer 11.74 11.48 11.46 11.20 10.49 9.68 9.17 938 9.54 9.41 Credit card .80 .86 .93 1.00 1.08 1.00 .92 .96 1.01 1.03 Installment and other , 10.94 10.62 10.53 10.20 9.41 8.68 8.25 8.41 8.53 838 Real estate 24.07 26.02 27.36 2835 2931 30.15 31.10 32.19 33.55 34.11 In domestic offices 24.07 26.02 27.36 28.35 2931 30.15 31.09 32.18 33.54 34.10 Construction and land development 2.19 2.22 2.29 2.37 2.18 1.98 1.93 2.14 238 2.61 Farmland , 1.59 1.74 1.82 1.86 1.93 2.06 2.20 234 2.48 2.55 One- to four-family residential 12.80 14.06 14.81 15.37 15.99 16.44 16.82 16.94 17.45 17.48 Home equity , n.a. .73 .94 1.16 1.29 134 1.27 1.21 1.20 1.19 Other n.a. 13.32 13.86 14.21 14.69 15.10 15.55 15.73 16.25 16.29 Multifamily residential . .60 .61 .62 .66 .71 .77 .84 .93 .95 .92 Nonfarm nonresidential 6.90 7.40 7.82 8.09 8.49 8.91 930 9.83 10.27 10.54 In foreign offices * * * * * * * * Depository institutions . .30 .31 .26 .23 .20 .13 .12 .13 .16 .17 Foreign governments .01 .02 .01 .01 .01 .01 .02 .01 * Agricultural production 3.30 3.25 3.28 330 3.48 3.54 3.58 3.89 3.95 3.92 Other loans 1.90 1.75 1.67 1.41 1.24 .99 .87 .81 .76 .73 Lease-financing receivables .19 .19 .19 .18 .17 .17 .18 .20 .22 .23 LESS: Unearned income on loans -.67 -.61 -.60 -.58 -.51 -.43 -36 -.31 -30 -.27 LESS: LOSS reserves1 .. -.86 -,88 -.88 -.89 -.93 -.96 -.97 -.95 -.93 -.90 Securities 27.67 27.98 27.92 28.38 29.98 32.10 33.06 32.90 30.51 29.53 Investment account , 27.59 27.93 27.85 28.28 29.92 32.04 33.00 32.86 30.47 29.50 Debt 27.59 27.93 27.45 27.92 29.55 31.60 32.55 32.42 30.02 29.01 U.S. Treasury 10.64 9.75 8.84 8.77 9.24 10.25 10,48 10.81 9.19 7.85 U.S. government agency and corporation obligations 8.18 9.80 1L37 12.43 13.81 15.04 15.80 1535 15.13 15.67 Government-backed mortgage pools .. 2.66 3.22 3.76 4.58 5.59 5.52 538 4.81 4.19 4.21 Collateralized mortgage obligations n.a. n.a. n.a. .92 1.55 2.66 3.33 3.11 2.76 2.46 Other 5.52 6.58 7.61 6.94 6.67 6.85 7.09 7.43 8.18 9.00 State and local government 6.63 5.65 4.94 4.56 4.26 4.29 4.70 5.01 4.69 4.62 Other ., 2.13 2.72 2.30 2.15 2.23 2.03 1.57 1.25 1.01 .86 Equity2 ... n.a. n.a. .40 .36 38 .44 .45 .44 .45 .49 Trading account .08 .05 .07 .10 .06 .05 .07 .04 .03 .03 Gross federal funds sold and reverse RPs 6.66 5.76 5.74 6.13 5.64 5.10 4.68 3.42 3.92 4.04 Interest-bearing balances at depositories 3.36 3.19 2.40 1.81 1.57 1.16 .97 .76 .67 .69 Non-interest-earning assets 9.49 9.19 9.10 8.94 8.76 8.61 835 8.28 8.30 836 Revaluation gains on off-balance-sheet items3 .., n.a. n.a. n.a. n.a. n.a. n.a. n.a. * * Other 9.49 9.19 9.10 8.94 8.76 8.61 8.35 830 836 Liabilities 91.74 91.61 91.44 9L40 91.38 91,07 90.63 90.43 90.03 89.81 Interest-bearing liabilities 76.39 76.94 11 A3 77.83 78.40 77.83 76.88 76.19 75.74 75.58 Deposits 74.39 74.84 75.00 75.79 76.41 75.75 74.54 73.14 72.70 72.47 In foreign offices .04 .04 .06 .07 .08 .07 .08 .09 .11 .10 In domestic offices 74.35 74.81 74.93 75.72 76.34 75.68 74.45 73.05 72.59 7236 Other checkable deposits 10.33 10.64 10.38 10.45 10.98 12.33 13.15 1331 1237 11.75 Savings (including MMDAs) 23.30 21.92 19.51 18.73 19.35 22.10 23.55 23.23 20.41 19.56 Small-denomination time deposits 29.56 30.98 33.66 35.37 35.85 32.85 30.10 28.83 30.92 31.28 Large-denomination time deposits 11.16 11.27 1L38 11.17 10.15 8.40 7.65 7.68 8.89 9.77 Gross federal funds purchased and RPs 1.27 1.35 1.35 1.36 1.31 136 1.44 1.89 1.78 1.70 Other .73 .75 .78 .67 .68 .72 .91 1.16 1.25 1.41 Non-interest-bearing liabilities 15.34 14.67 14.31 13.57 12.98 13.24 • 13.75 14.24 14.30 14.23 Demand deposits in domestic offices 14.23 13.58 13.09 12.37 11.83 12.23 12.82 13.12 Revaluation losses on off-balance-sheet items3 n.a. n.a. n.a. * n.a. n.a. n.a. n.a. 1334 13.23 * Other 1.11 1.09 1.22 1.21 1.15 1.01 .93 1.10 .90 L07 Capital account 8.26 8.39 8.56 8.60 8.62 8.93 9.37 10.19 9.57 9.97 MEMO Commercial real estate loans ... n.a. n.a. n.a. n.a. 11.03 11.08 1138 12.10 12.77 13.26 Other real estate owned .63 .65 .63 .61 .66 .65 .52 35 .25 .20 Managed liabilities 13.14 13.34 13.53 13.24 12.18 10.53 10.06 10.81 12.04 12.99 Average net consolidated assets (billions of dollars) 659 654 662 681 695 697 688 679 667 661 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1996 489 A.2.—Continued E. Banks not ranked among the 1,000 largest by assets Item 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Effective interest rate (percent)4 Rates earned Interest-earning assets 9.54 9.76 10.50 10.32 9.64 8.43 7.62 7.58 8.39 8.35 Taxable equivalent 9.87 10.01 10.72 10.52 9.82 8.59 7.78 7.73 8.54 8.50 Loans and leases, gross 10.87 11.03 11.76 11.60 11.03 9.83 9.13 9.01 9.85 9.78 Net of loss provisions 9.60 9.99 10.86 10.65 10.09 9.05 8.62 8.66 9.44 9.35 Securities 7.93 7.93 8.37 8.42 8.03 6.99 5.92 5.61 6.10 6.10 Taxable equivalent 8.93 8.64 9.01 8.99 8.53 7.40 6.33 5.99 6.50 6.52 Investment account 7.92 7.92 8.36 8.41 8.03 6.99 5.93 5.61 6.10 6.10 U.S. government and other debt — 8.05 8.01 8.51 8.59 8.19 7.06 5.91 5.60 6.19 6.22 State and local 7.53 7.57 7.57 7.46 7.17 6.71 6.09 5.69 5.64 5.44 Equity2 n.a. n.a. 8.19 8.34 7.13 5.63 5.16 5.52 6.29 6.06 Trading account 9.04 14.88 14.84 12.13 8.52 7.12 4.83 6.03 6.09 6.49 Gross federal funds sold and reverse RPs 6.82 7.68 9.25 8.12 5.66 3.51 2.95 4.09 5.97 5.34 Interest-bearing balances at depositories . 7.38 8.07 9.12 8.55 7.36 5.60 4.53 4.64 5.89 6.12 Rates paid Interest-bearing liabilities 6.20 6.41 7.16 7.02 6.18 4.44 3.54 3.49 4.47 4.49 Interest-bearing deposits 5.38 5.57 6.24 6.13 5.39 3.82 3.00 2.91 3.76 3.82 In foreign offices 7.29 7.62 935 7.57 5.95 3.97 2.91 3.92 5.73 11.30 In domestic offices 5.38 5.57 6.24 6.13 5.38 3.82 3.00 2.91 3.76 3.82 Other checkable deposits 4.93 4.99 5.09 5.02 4.61 3.14 2.42 2.30 2.50 2.41 Savings (including MMDAs) 5.37 5.48 5.81 5.74 5.18 3.62 2.91 2.83 3.32 3.24 Large-denomination CDs 6.57 7.13 836 7.92 6.74 4.90 3.96 4.12 5.56 5.50 Other time deposits 6.97 7.17 8.03 7.88 6.98 5.36 4.39 4.28 5.52 5.60 Gross federal funds purchased and RPs . 6.26 6.79 8.51 8.03 5.71 3.74 3.17 4.12 5.61 5.08 Income and expense as apercentageof average net consolidated assets Gross interest income 8.72 8.95 9.65 9.51 8.92 7.79 7.05 7.02 7.79 7.75 Taxable equivalent 9.02 9.17 9.85 9.68 9.07 7.94 7.19 7.16 7.92 7.88 Loans 5.82 6.01 6.53 6.44 6.05 530 4.91 4.99 5.64 5.67 Securities 2.19 2.21 233 2.38 2.40 .2.24 1.96 1.84 1.86 1.80 Gross federal funds sold and reverse RPs .47 .47 .57 .53 34 .18 .14 .15 .25 .24 Other .25 .26 .23 .17 .12 .07 .05 .04 .04 .04 Gross interest expense 4.72 4.91 5.50 5.44 4.83 3.45 2,72 2.65 338 3.39 Deposits 4.58 4.76 532 5.28 4.71 336 2.63 2.52 3.20 3.22 Gross federal funds purchased and RPs .08 .10 .12 .11 .07 .05 .04 .07 .10 .08 Other .06 .06 .06 .05 .05 .04 .04 .06 .08 .08 Net interest income 4.01 4.04 4.15 4.07 4.09 434 433 4.36 4.41 437 Taxable equivalent 4.30 4.26 434 4.24 4.24 4.49 4.47 4.50 4.54 4.49 Loss provisioning5 .68 .56 .50 .53 .51 .42 .27 .19 .23 .25 Noninterest income .92 LOO 1.01 1.08 1.16 1.25 1.30 13$ 1.42 .41 .41 .41 .42 .44 .45 .45 .44 .44 .44 Service charges on deposits .11 .12 .14 .14 .14 .16 .16 .17 .22 .19 Income from fiduciary activities * .01 .01 .01 .01 .01 * .01 * Trading income .35 .39 .44 .44 .49 .55 .64 .69 .71 .78 Other Noninterest expense 3.43 3.44 3.48 3.49 3.60 3.67 3.73 3.78 3.80 3.69 Salaries, wages, and employee benefits . 1.62 1.62 1.65 1.64 1.65 1.69 1.72 1.75 L80 1.77 Expenses of premises and fixed assets . .52 .51 .51 .49 .49 .49 .48 .49 .50 .49 Other 1.30 132 133 136 1.47 1.49 1.53 1.55 1.51 L43 Net noninterest expense 2.56 2.53 2.49 2.48 2.53 2.51 2.48 2.48 2.42 2.27 Realized gains on investment account securities . .03 .01 .01 .06 .09 .07 -.03 .01 Income before taxes and extraordinary items .81 .95 1.18 1.06 1.10 1.50 1.64 1.66 1.76 1.85 Taxes .25 .29 37 .34 35 . .47 .51 .51 .55 ,59 Extraordinary items .02 .02 .02 .02 .01 .02 .05 * Net income (return on assets) .58 .68 .83 .74 .77 1.04 1.19 1.15 1.21 L26 Cash dividends declared .40 .46 .52 .49 .47 .51 .56 .57 .62 .64 Retained income .18 .21 .30 .24 30 .53 .63 .58 .58 .62 MEMO: Return on equity 6.99 8.09 9.66 8.60 8.95 11.64 12.66 12.03 12.12 12.38 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes allocated transfer risk reserve. 2. As in the Call Report, equity securities are combined with "other debt securities" before 1989. 3. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss. 4. Where possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Report. 5. Includes provisioning for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

490 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report describes Treasury and System month and fifty-month highs of DM 1.7209 and foreign exchange operations for the period from ¥124.82 respectively. On a trade-weighted basis January through March 1997. It was presented by against other Group of Ten currencies, the dollar Peter R. Fisher, Executive Vice President, Federal strengthened 7.5 percent.2 The dollar achieved most Reserve Bank of New York, and Manager for Foreign of its gains in January, rising 6.4 percent and 4.9 per- Operations, System Open Market Account. Grace cent against the mark and the yen, respectively, on Sone was primarily responsible for preparation of the growing market expectations for tighter monetary report.l policy in the United States and continued steady monetary policies in Germany and Japan. U.S. eco- During the first quarter of 1997, the dollar appreci- nomic data that were released early in the period ated 8.8 percent against the mark and 6.9 percent showed signs of stronger growth, contrary to earlier against the yen, at one point reaching thirty-six- expectations of moderating activity. Conversely, Ger- 1. The charts for the report are available on request from Publica- 2. The dollar's movements on a trade-weighted basis against ten tions Services, Mail Stop 127, Board of Governors of the Federal major currencies are measured using an index developed by members Reserve System, Washington, DC 20551. of the staff of the Board of Governors of the Federal Reserve System. 1. Foreign exchange holdings of U.S. monetary authorities based on current exchange rates, 1997:Q1 Millions of dollars Quarterly changes in balances by source Balance, Balance, Item Dec. 31, 1996 Net purchases Impact of Investment Currency Mar. 31, 1997 and sales• sales2 income ad v ju al s u tm ati e o n n ts3 FEDERAL RESERVE Deutsche marks 13,030.1 .0 93.3 -1,009.6 12,113.8 Japanese yen 6,152,7 .0 4.8 -396.0 5,761.5 Interest receivables4 81-7 76.4 Other cash flow from investments5 , -1.0 -1.6 Total 19,263.5 17,9504 VS. TREASURY EXCHANGE STABILIZATION FUND Deutsche marks 6,594.6 .0 47.6 -510.9 6,131.3 Japanese yen 9,023.6 .0 7.1 -585.3 8,445.4 Mexican pesos6 3,500.0 -3,511.9 11.9 .07 .0 Interest receivables4 49.6 40.0 Other cash flow from investments5 . -6.2 -3.8 Total 19,161.7 14,612.9 NOTE. Figures may not sum to totals because of rounding. 5. Cash flow differences from payment and collection of funds between 1. Purchases and sales include foreign currency sales and purchases related to quarters. official activity, swap drawings and repayments, and warehousing. 6. See table 4 for a breakdown of Mexican swap activities. Note that the 2. Calculated using marked-to-market exchange rates; represents the differ- investment income on Mexican swaps is sold back to the Bank of Mexico. ence between the sale exchange rate and the most recent revaluation exchange 7. Valuation adjustments on peso balances do not affect profit and loss rate. Realized profits and losses on sales of foreign currencies computed as the because the effect is offset by the unwinding of the forward contract at the difference between the historic cost-of-acquisition exchange rate and the sale repayment date. Although the ESF does not mark to market its peso holdings, exchange rate are shown in table 2. Mexico is obligated to maintain in dollar terms the value of ESF peso hold- 3. Foreign currency balances are marked to market monthly at month-end ings resulting from Mexican drawings under the Medium-Term Stabilization exchange rates. Agreement. 4. Interest receivables for the ESF are revalued at month-end exchange rates. Interest receivables for the Federal Reserve System are carried at average cost of acquisition and are not marked to market until interest is paid. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

491 man data showed rising unemployment, and market in the quarter as the dollar lost its upward momentum participants remained focused on weakness in and, on net, implied volatility ended the period Japan's financial sector. little changed. The probability distribution of future During February and March the dollar's apprecia- exchange rates implied by currency options prices tion slowed, with U.S. currency gaining 2.2 percent was little changed over the quarter for dollar-mark against the mark and 1.9 percent against the yen. but was slightly wider for dollar-yen. Comments by U.S. Treasury Secretary Rubin and the statement by the Group of Seven (G-7) countries, after their meeting in Berlin were interpreted by market participants as a shift to a more neutral stance in exchange markets, given the correction in exchange rates that had occurred since the April 1995 In January, the dollar's upward movement reflected G-7 statement.3 Moreover, demand for marks was market perceptions of stronger U.S. economic fundaencouraged by somewhat stronger-than-expected mentals relative to Germany and Japan. This dispar- German economic data releases and heightened ity in growth expectations was reflected in dollarprospects of a delayed start date for the European favorable yield differentials on ten-year bonds, which Monetary Union (EMU). Meanwhile, the dollar-yen widened to levels not seen since 1989. Upward reviexchange rate was constrained at times by market sions to fourth-quarter GDP in the United States, expectations of Japanese capital repatriation before coupled with continued reports of tightening labor the end of Japan's fiscal year on March 31, by con- markets and strong retail sales, prompted market cerns over the U.S. trade deficit and Japanese trade analysts to revise up growth forecasts for the first surplus, and by market caution about the possibility quarter and bring forward expectations for higher of intervention by the Japanese monetary authorities. U.S. interest rates. The U.S. monetary authorities did not undertake any Chairman Greenspan's Humphrey-Hawkins testiintervention operations in the foreign exchange mar- mony on February 26, in which he spoke of possible ket during the quarter. The U.S. Treasury's Exchange preemptive tightening by the Federal Reserve, height- Stabilization Fund (ESF) received final repay- ened anticipation for a near-term interest rate hike. ment from Mexico of the remaining $3.5 billion Implied yields on three-month forward rate agreebalance outstanding under the medium-term swap arrangement. Millions of dollars Although the dollar made significant gains during the U.S. Treasury Federal Exchange Period and item first quarter, market volatility remained relatively Reserve Stabilization Fund muted, with the average daily trading range for the dollar widening only slightly. On average, the dollar Valuation profits and losses on outstanding assets and liabilities, traded in a daily range of 0.9 percent against both the Dec. 31, 1996 Deutsche marks 1,965.9 586.1 mark and the yen, compared with daily ranges of Japanese yen 984.5 1,450.8 0.7 percent experienced in both the previous quarter Total 2,950.4 2,036.9 and the first quarter of 1996. Implied volatility on Realized profits and losses one-month options in dollar-mark and dollar-yen from foreign currency sales, Dec. 31, 1996-Mar. 31, 1997 increased early in the period as the dollar moved Deutsche marks X) .0 higher. However, implied volatility tapered off later Japanese yen .0 .0 Total Valuation profits and losses on 3. On February 7, Secretary Rubin stated, "As we have said many outstanding assets and liabilities, Man 31, 1997' times, a strong dollar is in the United States' interest. We have had a Deutsche marks 956.3 75.2 strong dollar for some time now." Following the G-7 meeting on Japanese yen 589.6 871.7 February 8, the G-7 press guidance stated, "We believe that major misalignments in exchange markets noted in our April 1995 commu- Total 1,545.9 946.9 nique have been corrected. We reaffirmed our views that exchange NOTE. Figures may not sum to totals because of rounding. rates should reflect economic fundamentals and that excess volatility 1. Valuation profits or losses are not affected by peso holdings, which ; is undesirable." canceled by forward contracts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

492 Federal Reserve Bulletin • June 1997 ments rose 15 basis points immediately after Chair- Drawings/rollovers and repayments (-) by Mexican man Greenspan's testimony. On March 25, the Fed- monetary authorities, 1997:Q1 eral Open Market Committee (FOMC) announced a Millions of dollars 25-basis-point hike in the federal funds target interest Out- put- Currency arrangements rate, to 5.50 percent. In contrast to the U.S. perfor- with the US. Treasury standing, Jan. Feb. Man standing, Dec. 31, Mar, 31, mance, fourth-quarter GDP growth for Germany was Exchange Stabilization Fund 1996 : 1997 softer than expected, and the level of unemployment Bank of Mexico reached a postwar high of 4.7 million in February. Regular ......;.....,.,. 0 0 0 0 0 Medium-term » 3,500 -3,500 0 0 0 These data releases underpinned market expectations NOTE. Data are on a value-date basis. that German monetary policy would remain steady and even elicited some discussion of a possible interest rate cut. Also, comments made by various Eurohike reinforced market expectations that Japan would pean officials were interpreted by market participants maintain an accommodative monetary policy, and as implying that currency depreciation would contrib- Japanese government bonds rallied. The benchmark ute to Europe's economic recovery. Meanwhile, marten-year bond yield fell to an intraperiod low of ket participants grew cautious about financial sector 2.20 percent. risks in Japan, most notably after Moody's moved the outlook of four major Japanese banks to negative from stable. Japanese equity markets weakened, with the Nikkei -225 stock index falling 7.0 percent and FIRMING OF THE MARK LATER IN PERIOD the Tokyo Price Index (Topix) ending the quarter down 6.6 percent. The decline in the Topix was led In February, reports of slightly stronger-thanby banking and brokerage shares that were down expected economic data in Germany—including sur- 17 percent and 19 percent respectively. Weakness in veys of business sentiment, M3 money supply Japan's financial sector and expectations of fiscal growth, and wholesale prices—encouraged demand contraction following the April 1 consumption tax for marks. Renewed doubt about a timely start for EMU also supported mark buying. Any lingering expectations for lower German interest rates dissi- 3. Currency arrangements, March 31, 1997 pated, and interest rates implied by three-month Millions of dollars forward rate agreements rose in the second half of Amount of Outstanding, the quarter. Meanwhile, prices of one-month risk Institution facility Mar. 31, 1997 reversals for dollar-mark continued to favor dollar Federal Reserve call options, reflecting a higher cost for insurance Reciprocal Currency Arrangements against a significant dollar appreciation against the mark.4 Austrian National Batik . ~, 250 C) National Bank of Belgium ..»...,... 1,000 I Bank of Canada ,.a..,."...'. 2,000 National Bank of Denmark ......... 250 Bank of England :,,,.. •' 3,000 Bank of France '..: „ —. 2,000 INFLUENCE OF JAPANESE CAPITAL Deutsche Bundesbank .....; ,.„,..,. 6,000 REPATRIATION AND CONCERNS OVER THE US. Bank ot Italy •....-, — 3,000 Bank of Japan «.,.*.........•.... 5,000 TRADE IMBALANCE ON DOLLAR-YEN Bank of Mexico «•.' \,. 3,000 Netherlands Bank 500 Bank of Norway :...,.-. »„..,, 250 In mid-February, expectations of Japanese capital r Bank of Sweden ,.,.,..., 300 Swiss National Bank . *.. 4,000 repatriation ahead of Japan's fiscal year ending on March 31 led to purchases of yen against a broad Batik for International Settlements Dollars against Swiss francs .'.....,,• 600 range of currencies. The dollar moved lower against Dollars against other authorized European currencies '. • 1,250 ' Total ...,..:, 32,400 0 US. Treasury 4. A risk reversal is an option position consisting of a written put Exchange Stabilization Fund Currency Arrangements and a purchased call that mature on the same date and are equally out of the money. The price of a risk reversal indicates whether the dollar Deutsche Bundesbank , *....... 1,000 0 call or the dollar put is more valuable. If the dollar call is at a Bank of Mexico ,..,..,. 3,000 0 premium, the market is willing to pay more to insure against the risk United Mexican States * 0 that the dollar will rise sharply. If the dollar put is at a premium, the market is willing to pay more to insure against the risk that the dollar Total '. . . . ' 0 will fall sharply. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 493 the yen, testing ¥120, and prices of one-month dollar- TREASURY AND FEDERAL RESERVE FOREIGN yen risk reversals shifted to favor dollar put options, EXCHANGE RESERVES indicating an increase in the cost for insurance against a significant dollar depreciation. Subsequently, The U.S. monetary authorities did not undertake any however, the dollar moved off its lows, and one- intervention operations this quarter. At the end of the month risk reversal prices moved closer to neutral as quarter, the current values of the German and Japamarket concerns over Japanese capital repatriation nese yen reserve holdings of the Federal Reserve moderated. System and the ESF were $17.9 billion and $14.6 bil- Toward the end of the quarter, the re-emergence of lion respectively. The U.S. monetary authorities a potential for U.S.-Japan trade tensions made market invest all their foreign currency balances in a variety participants reluctant to extend long dollar positions. of instruments that yield market-related rates of U.S. and Japanese trade data released after mid- return and have a high degree of liquidity and credit March showed a widening of the U.S. trade deficit quality. A significant portion of these balances is and a slowing in the rate of decline in the Japanese invested in German and Japanese government securitrade surplus. In addition, the performance of the ties held either directly or under repurchase agree- Japanese export sector and comments from Japanese ment. As of March 31, outright holdings of governofficials raised some expectations for a strong Tankan ment securities by U.S. monetary authorities totaled survey to be released in early April. $7.0 billion. Japanese and German government securities held under repurchase agreement are arranged either through transactions executed directly in the MEXICAN SWAP ACTIVITY market or through agreements with official institutions. Government securities held under repurchase On January 16, Mexico made a final repayment of agreements by the U.S. monetary authorities totaled $3.5 billion on its drawings on medium-term swap $11.1 billion at the end of the quarter. Foreign curarrangements with the ESF. With this repayment, the rency reserves are also invested in deposits at the medium-term swap arrangement terminated. Bank for International Settlements and in facilities at other official institutions. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

494 Industrial Production and Capacity Utilization for April 1997 Released for publication May 15 tures led utilities to increase the output of gas and electricity 2 percent. At 119.0 percent of its 1992 Industrial production was unchanged in April after a average, industrial production in April was 4.1 perdownward-revised increase of 0.6 percent in March. cent higher than it had been in April 1996. The The output of motor vehicles and parts dropped utilization of industrial capacity fell 0.3 percentage nearly 7 percent, with strikes causing more than half point in April, to 83.4 percent. of the drop. Excluding the decline in the production When analyzed by market group, the data show of motor vehicles and parts, the index of industrial that the output of durable consumer goods fell production rose 0.3 percent. Relatively cool tempera- 3.5 percent in April mainly because the production of Industrial production indexes Twelve-month percent change Twelve-month percent change Materials Durable 10 "~ manufacturing 10 Products Nondurable manufacturing J_ I _L _L J_ J_ _L J_ I _L 1991 1992 1993 1994 1995 1996 1997 1991 1992 1993 1994 1995 1996 1997 Capacity and industrial production Ratio scale, 1992 production = 100 Ratio scale,1992 production =100 ~ Total industry — Manufacturing 160 Capacity Capacity 140 ________ _ _ —" —' 120 ^ —^-—"^—— 100 80 Production : - 80 I I I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing Utilization 90 Utilization 90 80 80 70 70 I I I I 1 I I I I 1 1 1 I I I I I I I I I I I 1 I I I 1 1983 1985 1987 1989 1991 1993 1995 1997 1983 1985 1987 1989 1991 1993 1995 1997 All series are seasonally adjusted. Latest series, April. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial production and capacity utilization, April 1997 Industrial production, index, 1992=100 Percentage change Category 1997 19971 Apr. 1996 to Jan.r Feb.r Mar.r Apr.P Jan.r Feb.' Mar.r Apr.P Apr. 1997 Total 117.8 118.4 119.0 119.0 .5 .6 4.1 Previous estimate 117.8 118.5 119.6 .6 .9 Major market groups Products, total2 114.2 114.8 115.5 115.4 -.1 .5 -.1 3.9 Consumer goods 111.7 111.7 112.5 111.8 -.9 .0 -.6 1.8 Business equipment . 132.1 133.8 134.9 135.0 1.1 1.3 .1 7.9 Construction supplies 117.0 119.5 120.1 120.1 -.7 2.2 .0 5.1 Materials 123.4 124.0 124.6 124.7 .5 .1 4.4 Major industry groups Manufacturing 119.3 120.1 120.8 120.5 .1 .7 -.2 4.6 Durable 129.5 130.9 131.9 131.5 .5 1.1 -.3 5.6 Nondurable 108.5 108.7 108.9 108.8 -.3 .2 3.5 Mining 103.6 105.7 106.6 106.1 -.9 2.1 -.5 3.1 Utilities 112.7 109.8 110.8 113.0 .1 -2.6 2.0 -.5 (Capacity utilization, percent MEMO Capacity, percentage 1996 1997 change, Average, Low, High, Apr. 1996 1967-96 1982 1988-89 Apr. Jan.r Feb.r Mar.r Apr.P to Apr. 1997 Total 82.1 71.1 85.3 83.1 83.3 83.5 83.7 83.4 3.7 Previous estimate 83.4 83.6 84.1 Manufacturing 81.2 69.0 85.7 82.0 82.4 82.7 82.4 4.1 Advanced processing 80.6 70.4 84.2 80.4 80.7 80.8 81.0 80.4 5.0 Primary processing 82.3 66.2 85.6 86.2 86.9 87.0 86.8 2.3 Mining 87.5 80.3 86.8 90.4 91.1 92.9 93.7 93.2 .1 Utilities 87.2 75.9 92.6 91.3 89.3 87.5 89.1 2.0 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. automotive products dropped 6.4 percent. In addition, craft and parts were factors. In addition, the output o the production of other durable consumer goods industrial equipment advanced 0.8 percent after hav decreased 1.5 percent; declines in the output of appli- ing been flat in February and March. The output o ances and carpets followed gains in March. Although defense and space equipment edged up. recent movements in these latter two series have been The output of construction supplies held at th< volatile, their April levels remained well within the relatively high March level. The output of busines past year's range. The output of consumer nondura- supplies, which had registered a cumulative declin< ble goods advanced 0.2 percent, boosted by increases of 1 percent during February and March, rose 0.7 per in the production of consumer fuels and in resi- cent in April, led by a 1 percent increase in commer dential gas and electricity sales. The production of cial energy products. The production of industria non-energy consumer nondurables declined 0.3 per- materials edged up after two consecutive monthl; cent, reversing the gain in March; the output for this increases of 0.5 percent. The output of both durabL group has changed little, on balance, since late last and nondurable goods materials changed little i] year. April. The production of energy materials increasei Apart from the decline in the production of 0.6 percent, however, with the rebound in gas trans business autos and light trucks, which more than mission and the generation of electricity continuin accounted for the decline in the output of transit for a second month after the dip in February. Amon equipment, the production of business equipment durable materials, the output of parts used to mak continued to advance solidly in April. Continued motor vehicles fell, although the production of semi growth in the production of office and computing conductors and other computer parts continued t equipment, telephone apparatus, and commercial air- grow more than 2 percent per month. The output c Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

496 Federal Reserve Bulletin • June 1997 nondurable goods materials changed little in March The factory operating rate declined 0.4 percentage and April after a solid rise in February. point in April, to 82.4 percent. The utilization rate for When analyzed by industry group, the data show motor vehicles and parts—included in the advancedthat manufacturing output declined 0.2 percent after processing grouping—fell 5 percentage points, to an increase of 0.5 percent in March; excluding motor 67.8 percent, and accounted for much of the decline vehicles and parts, factory production rose 0.2 per- in utilization in manufacturing. Rates remain well cent in April. Outside the motor vehicle and parts above the historical averages for primary-processing industry, the output in most other durable manufac- industries such as primary metals, petroleum refining, turing industries rose moderately, while the produc- and rubber and plastics products. In mining, the utilition of computers and semiconductors continued to zation rate eased 0.5 percentage point, to 93.2 pergrow rapidly. The output of steel and miscellaneous cent. Unseasonally strong oil and gas well drilling manufactures eased, however. The output of nondu- has boosted utilization in mining in recent months to rables edged down; increases in petroleum refining, a relatively high level. The operating rate for utilities printing and publishing, and in chemicals and prod- rose 1.6 percentage points, to 89.1 percent, 1 percentucts largely offset declines in textiles, apparel, foods, age point below its 1996 average. and tobacco products. The production in mining This release and the history for all published series decreased 0.5 percent, although the output at utilities are available on the Internet at the Board's World gained 2 percent. Wide Web site, http://www.bog.frb.fed.us. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

497 Statement to the Congress Statement by Susan M. Phillips, Member, Board of In my remarks today I shall indicate the types of Governors of the Federal Reserve System, before the amendments to the CEA that the Board believes are Subcommittee on Risk Management and Specialty appropriate in light of these profound changes in the Crops of the Committee on Agriculture, US. House of derivatives markets. I shall begin by offering some Representatives, April 15, 1997 general observations about government regulation of financial markets. I shall then evaluate three sets of I am pleased to be here today to present the Federal issues in which the Board has a particular interest: Reserve Board's views on efforts to clarify and (1) the application of the CEA to privately negotiated reform the regulation of derivatives contracts under transactions between institutions; (2) the regulation the Commodity Exchange Act (CEA). The Board has of the marketing of off-exchange derivatives to retail been participating actively in discussions of deriva- investors; and (3) the regulation of so-called profestives regulation for the past ten years. In part, the sional markets, that is, organized exchanges not open Board's interest stems from its responsibilities for the to the general public. supervision of banking organizations. Many U.S. banking organizations, especially the largest, are very significant participants in derivatives markets. They GOVERNMENT REGULATION use exchange-traded derivatives to manage their OF FINANCIAL MARKETS interest rate, foreign exchange, and other market risks. Some operate subsidiaries that act as futures In evaluating the need for government regulation, the commission merchants. In addition, U.S. banking Board believes it essential that the public policy organizations are among the leading dealers in off- objectives be identified very clearly. It seems selfexchange, privately negotiated derivatives contracts. evident that if the goals of regulation are not clearly The Board also considers it important to address articulated, the regulations implemented are unlikely these issues because, as the nation's central bank, it to best serve the public interest. More likely, they will has a broad interest in the integrity and efficiency of prove unnecessary, burdensome, and perhaps have U.S. financial markets. unintended consequences, including results contrary The Board strongly endorses the Congress's efforts to the underlying objectives. In the case of the Comto carefully reexamine the existing regulatory frame- modity Exchange Act, the objectives seem quite work for derivatives. The key elements of the CEA clear. Most, perhaps all, would agree that the objecwere put in place in the 1920s and 1930s to regulate tives of public policy in this area are to ensure the the trading on exchanges of grain futures by the integrity of commodity markets, especially deterring general public, including retail investors. Since then, market manipulation, and to protect market particiderivatives markets in the United States have under- pants from losses resulting from fraud or the insolgone profound changes. On the futures exchanges vency of contract counterparties. themselves, financial futures, not agricultural futures, Where there is disagreement is on the need for now account for the great bulk of the activity, and government regulation to achieve these objectives retail participation in many of the financial futures and, where regulation is agreed to be appropriate, on contracts is negligible. Outside the futures exchanges, whether existing provisions of the CEA permit the enormous markets have developed in which banks, best regulatory framework. The Board believes that corporations, and other institutions privately negoti- before implementing government regulation of a marate customized derivatives contracts, the vast major- ket, policymakers should consider whether market ity of which are based on interest rates or exchange forces by themselves are sufficient to achieve the rates. The cash markets for such financial instruments relevant public policy objectives. Participants in were well developed long before the introduction of financial markets often are fully capable of protecting exchange-traded futures and options, and, for some their own interests and, in so doing, often serve the instruments, privately negotiated derivatives also pre- public interest equally well. To be sure, this is not dated exchange trading. always the case. Some market participants may lack Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

498 Federal Reserve Bulletin • June 1997 incentives or the ability to protect their interests, or exclusion of such transactions from coverage under their private interests may conflict with the public the CEA in the past and continues to do so. In these interest. In such circumstances, government regula- markets, private market discipline appears to quite tion may assist market mechanisms, especially if it is effectively and efficiently achieve the public policy designed to enhance the capabilities of market partici- objectives of the CEA. Counterparties to privately pants or to harmonize private incentives with the negotiated transactions have limited their activity to public interest. contracts that are very difficult to manipulate. The The Board believes that a particular market's char- vast majority of privately negotiated contracts are acteristics determine whether government regulation settled in cash rather than through delivery. Cash is necessary and, if so, what form of government settlement typically is based on a rate or price in a regulation is appropriate. Agricultural futures often highly liquid market with a very large or virtually tend to be susceptible to manipulation because physi- unlimited deliverable supply, for example, LIBOR cal delivery is required; because the deliverable sup- (London interbank offered rate) or the spot dollarply is relatively price inelastic; and because exchange yen exchange rate. Furthermore, the costs of default rules impose substantial costs on sellers who fail to or of failing to deliver typically are limited to actual deliver. By contrast, many financial derivatives are damages. Thus, attempts to corner a market, even if much more difficult if not impossible to manipulate, successful, could not induce sellers in privately negoeven when traded on exchanges, because they are tiated transactions to pay significantly higher prices settled in cash or, in any event, are based on under- to offset their contracts or to purchase the underlying lying assets whose supply is highly price elastic. assets. Most important, prices established in privately Similarly, the extent to which market participants are negotiated transactions are not used directly or indisvulnerable to losses from fraud or counterparty insol- criminately as the basis for pricing other transactions, vencies depends on the types of participants. Retail so any price distortions would not affect other buyers participants may lack the knowledge and sophistica- or sellers of the underlying asset. In these respects, tion to manage counterparty credit exposures or to privately negotiated contracts have different characprotect themselves effectively against uncompen- teristics from exchange-traded contracts generally sated losses from fraud. By contrast, institutions typi- and agricultural futures in particular. cally are quite adept at managing credit risks and are Institutional counterparties to privately negotiated more likely to base their investment decisions on contracts also have demonstrated their ability to proindependent judgments and, if defrauded, usually are tect themselves from losses from fraud and counterquite capable of gaining restitution through use of the party insolvencies. They have insisted that dealers legal system. have financial strength sufficient to warrant a credit Because the need for and appropriate form of gov- rating of A or higher. Consequently, dealers are estabernment regulation are market specific, the Board lished institutions with substantial assets and signifibelieves that a "one-size-fits-all" approach to finan- cant investments in their reputations. When such cial market regulation is inappropriate. Privately dealers have engaged in deceptive practices, institunegotiated transactions between principals should be tions that have been victimized have been able to regulated differently from transactions on organized obtain redress by going to court or directly negotiatexchanges, where trades often are executed on behalf ing a settlement with the dealer. The threat of legal of third parties. Institutional markets can and should damage awards provides dealers with incentives to be differently regulated from markets open to the avoid misconduct. A far more powerful incentive, retail public. Moreover, we believe counterparties however, is the fear of loss of the dealer's good should be free to choose whether to seek the protec- reputation, without which it cannot compete effection and accept the burdens of government regulation tively, regardless of its financial strength or financial or to opt out of those benefits and burdens and engineering capabilities. Institutional counterparties transact on their own terms. to privately negotiated transactions have demonstrated their ability to manage credit risks quite effectively through careful evaluation of counterparties, APPLICATION OF THE CEA the setting of internal credit limits, and the judicious TO PRIVATELY NEGOTIATED TRANSACTIONS use of netting agreements and collateral. Actual BETWEEN INSTITUTIONS losses to institutional counterparties in the United States from dealer defaults have been negligible. In the case of privately negotiated derivative transac- Recent cooperative international efforts to improve tions between institutions, the Board has supported the quality of public disclosure of financial informa- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 499 tion by banks and other dealers in privately negoti- and Exchange Commission respectively. Such an ated transactions should further enhance the effective- approach also would eliminate the undesirable result ness of private market discipline. of oversight by multiple government entities. In the future, counterparties to privately negotiated By way of background, in the case of banks, investransactions may seek to establish some type of cen- tigations by our staff and staff of the other banking tralized clearing facilities for such transactions. Such agencies indicate that currently there is very little, if facilities potentially could make management of any, marketing of derivative contracts to retail invescounterparty credit risks and liquidity risks even more tors. In any event, the Board and the other banking effective. At the same time, however, clearing facili- agencies already have issued supervisory guidance ties often concentrate and mutualize risk. For this on sales practices for securities, mutual funds, and reason, the Board believes that if counterparties were derivatives that would be broadly applicable to such to choose to develop such facilities, some type of transactions. If experience suggested that more spegovernment oversight generally would be appropriate cific or extensive guidance was needed to protect to supplement the private self-regulation that the retail investors and, thereby, also to protect the repucounterparties would provide. However, it is not tation of banks engaged in retail marketing, the Board obvious that in all cases regulation of such clearing would work with the other banking agencies to facilities under the CEA would be the best approach. develop and promulgate such guidance. For example, if a clearing facility were established for privately negotiated interest rate or exchange rate contracts between dealers, most of which were banks, REGULATION OF PROFESSIONAL MARKETS oversight by the federal banking agencies would seem more appropriate. Likewise, a clearing facility The Board believes that it is appropriate for regulafor privately negotiated derivatives on underlying tory purposes to differentiate between privately negoassets that are securities might best be regulated by tiated transactions and transactions on exchanges, the Securities and Exchange Commission (SEC). especially when transactions on exchanges are Thus, if an exclusion of privately negotiated trans- executed on behalf of third parties, rather than solely actions from the CEA were conditioned on govern- between principals. Nonetheless, the Board agrees on ment supervision or regulation of any centralized the need to reexamine the regulation of exchange clearing facility, the Board believes that supervision trading and to consider whether specific regulations of the clearing facility by one of the federal banking are still necessary in light of the profound changes in agencies, by the SEC, or by the Commodity Futures the contracts traded and the intense competitive pres- Trading Commission should be sufficient for sures that the exchanges are experiencing. In particuexclusion. lar, the Board is supportive of the development of an alternative, less intrusive regulatory regime for exchanges that limit participation to institutions and REGULATION OF THE MARKETING limit contracts traded to those that are not readily OF OFF-EXCHANGE DERIVATIVES susceptible to manipulation—for example, financial TO RETAIL INVESTORS contracts that are settled in cash or through physical delivery of assets whose supply is highly price elas- As I noted earlier, the Board believes it is appropriate tic. Some have expressed concerns about the potenfor regulatory purposes to distinguish transactions tial effects of introduction of professional markets on between institutions from transactions involving retail existing futures markets. In particular, some fear that investors. Because many retail investors may lack the if liquidity in existing contracts were transferred to ability to evaluate counterparties and transactions the professional markets, the general public could be effectively, some type of government regulation of disadvantaged. Although such concerns, if justified, off-exchange transactions may be necessary to pro- might argue against professional markets in instrutect them against unrecoverable losses from fraud or ments in which the general public currently particidealer insolvencies. But, even for such retail trans- pates significantly, they would seem to have no actions, it is not obvious that the CEA provides the bearing on the case for professional markets for those best regulatory framework. In particular, the Board contracts for which retail participation currently is believes that the marketing of off-exchange deriva- negligible. In addition, alternative regulated market tives to retail customers by banks and broker-dealers making systems could develop to facilitate retail is more appropriately regulated by the federal exchange trading as an adjunct to the professional banking regulatory agencies and the Securities trading, with the markets linked by arbitrage. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

500 Federal Reserve Bulletin • June 1997 The Board has not examined existing exchange currently available under the Commodity Futures regulations sufficiently carefully to offer comprehen- Trading Commission's pilot program for professional sive suggestions as to which regulations need or need markets is quite wide and would appear to offer not be applied to professional markets. We would ample room for a compromise that would address the observe, however, that the gap between what the exchanges' competitive concerns and still be consisexchanges are perceived to be seeking and what is tent with the public interest. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

501 Announcements PUBLIC HEARINGS ON 1994 PROVISIONS ing practices, to help new borrowers restore their OF THE TRUTH IN LENDING ACT financial strength and to restructure debt or extend repayment terms to existing borrowers. The Federal Reserve Board announced on April 24, The Board is also considering the need to waive 1997, that it would hold three public hearings in June its appraisal regulation for real-estate-related transto examine the effect of Truth in Lending Act provi- actions affected by the flooding to assist disastersions enacted in 1994 on the home equity loan affected regulated institutions encountering difficulmarket. ties in obtaining appraisals for transactions that The hearings were scheduled at the following times would aid reconstruction in the areas affected by the and locations: disaster. For additional information, contact the Federal • Tuesday, June 3, at the Los Angeles Branch of Reserve Bank of Minneapolis (612) 340-2279. the Federal Reserve Bank of San Francisco, 950 South Grand Avenue, Los Angeles, beginning at PUBLICATION OF A NEW WEEKLY LIST 8:15 a.m., PDT OF APPLICATIONS AND NOTICES FILED • Thursday, June 5, at the Federal Reserve Bank of UNDER THE BANK HOLDING COMPANY ACT Atlanta, 104 Marietta Street, Atlanta, beginning at OR THE CHANGE IN BANK CONTROL ACT 8:15 a.m., EDT • Tuesday, June 17, at the Federal Reserve Board's The Federal Reserve Board announced on April 30, Martin Building, 20th and C Streets, NW, Washing- 1997, the start of a new weekly publication that lists ton, D.C., beginning at 8:15 a.m., EDT. applications and notices, together with the deadline The Federal Reserve hosted these hearings as part for comment, that have been filed under the Bank of its directive under provisions of the Home Owner- Holding Company Act or the Change in Bank Conship Equity Protection Act. The Board will also use trol Act. the hearings to examine Truth in Lending issues, The new publication is available in three forms: primarily on how the finance charge could more accurately reflect the cost of consumer credit. In the • By a fax-on-demand call-in facility that is avail- Truth in Lending Act Amendments of 1995, the able twenty-four hours a day, seven days a week, and Congress asked the Board to study the finance charge will automatically fax a copy of the new publication issue. The Board submitted a preliminary analysis to to the caller. The call-in number is (202) 452-3655 the Congress last year, and the hearings will assist in • On the Board's Internet home page at further deliberations. http://www.bog.frb.fed.us • By mail by contacting the Board's Publications Services at (202) 452-3245 or by writing to Publica- STEPS TO EASE FINANCIAL STRESS IN AREAS tions Services, Mail Stop 127, Federal Reserve AFFECTED BY FLOODING Board, Washington, DC 20551. The Federal Reserve Board announced on April 24, In its recent revision of Regulation Y (Bank Hold- 1997, a series of steps designed to help ease financial ing Companies and Change in Bank Control) the stress in areas affected by the flooding in Minnesota, Board announced that it would take steps to improve North Dakota, and South Dakota. A supervisory the effectiveness and timeliness of public notices of statement adopted by the Board encourages financial merger and acquisition proposals. The new publicainstitutions to work constructively with borrowers tion, numbered the H.2A, lists applications and who are experiencing difficulty because of the notices alphabetically by applicant together with the flooding. appropriate Federal Reserve Bank where comments The statement says that banks may find it appropri- may be filed and whom to contact to receive the ate to ease credit terms, consistent with prudent bank- public portion of the application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

502 Federal Reserve Bulletin • June 1997 Posting of the publication on the Board's home broker-dealers. Effective July 1, 1996, foreign stocks page allows a user to search for a notice by the that have a "ready market" for purposes of the applicant's name, acquiree's name or activity, section Securities and Exchange Commission's (SEC) net of law, or by Reserve Bank. The information will be capital rule may be included on the foreign list. The updated at least every three business days. SEC effectively treats all stocks included on the Publication of the H.2, which lists actions taken by Financial Times/Standard & Poor's Actuaries World the Board on applications plus applications received Indices (FT/S&P-AW Indices) as having a "ready and Community Reinvestment Act activities, will market" for capital purposes. The Board is adding continue. twenty-three foreign stocks and deleting thirty-two, based on changes to the FT/S&P-AW Indices. The revised foreign list now contains 1,965 securities AVAILABILITY OF REVISED LISTS OF displayed in country order. OVER-THE-COUNTER STOCKS AND OF FOREIGN STOCKS SUBJECT TO MARGIN REGULATIONS PUBLIC ACCESS DATABASE FROM THE 1993 The Federal Reserve Board published on April 25, NATIONAL SURVEY OF SMALL BUSINESS 1997, a revised list of over-the-counter (OTC) stocks FINANCES NOW AVAILABLE that are subject to its margin regulations. It also published a revised list of foreign equity securities A public access data set of the 1993 National Survey that meet the margin criteria in Regulation T (Credit of Small Business Finances (NSSBF) is now availby Brokers and Dealers). able. The 1993 NSSBF is a survey of small business The lists were effective May 12, 1997, and super- enterprises that was conducted during 1994-95 for sede the previous lists that were effective Febru- the Board of Governors of the Federal Reserve Sysary 10, 1997. The next revision of these lists is tem and the U.S. Small Business Administration. scheduled to be effective August 1997. These lists are Price Waterhouse LLP conducted the interviewing published for the information of lenders and the for the survey. general public. The 1993 NSSBF covers a wide range of financial The changes that have been made to the revised characteristics of small (fewer than 500 employees), OTC list, which now contains 4,849 OTC stocks, are privately owned, nonagricultural and nonfinancial as follows: firms. The survey collected general information on firms' business activities and ownership; an inven- • One hundred sixty stocks have been included for tory of deposit and savings accounts, financing, and the first time, 136 under National Market System other financial service use; information on the finan- (NMS) designation cial institutions used by firms; use of trade credit; • Forty-one stocks previously on the list have been credit history data; and data from income and balance removed for substantially failing to meet the requiresheet statements. Most data are for calendar or fiscal ments for continued listing year 1993; data from the income and balance sheet • Eighty-four stocks have been removed for reastatements are for calendar or fiscal year-end 1992.1 sons such as listing on a national securities exchange The data set, survey codebook, and related docuor involvement in an acquisition. mentation are available on the Board's World Wide The OTC list is composed of OTC stocks that Web site at http://www.bog.frb.fed.us under Domeshave been determined by the Board to be subject to tic and International Research, Working papers, margin requirements in Regulations G (Securities Occasional Staff Studies. Credit by Persons other than Banks, Brokers, or Dealers), T, and U (Credit by Banks for Purchasing or Carrying Margin Stocks). It includes OTC stocks 1. Additional information on the 1993 NSSBF methods and content can be found in "National Survey of Small Business Finances qualifying under Board criteria and also includes all Survey Questionnaire," mimeo (Price Waterhouse LLP), July 7, 1994; OTC stocks designated as NMS securities. Addi- "National Survey of Small Business Finances: Methodology Report," tional NMS securities may be added in the interim mimeo (Price Waterhouse LLP), July 24, 1996; Rebel A. Cole and John D. Wolken, "Financial Services Used by Small Businesses: between quarterly Board publications; these securi- Evidence from the 1993 National Survey of Small Business ties are immediately marginable upon designation as Finances," Federal Reserve Bulletin, vol. 81 (July 1995), pp. 630-67; NMS securities. and Rebel A. Cole, John D. Wolken and R. Louise Woodburn, "Bank and Nonbank Competition for Small Business Credit: Evidence from The foreign list is composed of foreign equity the 1987 and 1993 National Surveys of Small Business Finances," securities that are eligible for margin treatment at Federal Reserve Bulletin, vol. 82 (November 1996), pp. 983-95. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

503 Legal Developments FINAL RULE—AMENDMENTS TO REGULATIONS G, T, U, Community First Bankshares, Inc.: Depositary Sahres ANDX Cytrogen Corporation: Warrants (expire 01-31-97) The Board of Governors is amending 12 C.F.R. Parts 207, Diagnostic Health Services, Inc.: Warrants (expire 06-22-98) 220, 221, and 224, its Regulation G, T, U, and X (Securi- Diamond Technology Partners, Inc.: Rights (expire 03-31-97) ties Credit Transactions, List of Marginable OTC Stocks; List of Foreign Margin Stocks). The List of Marginable Encore Computer Corporation: $.01 par common OTC Stocks (OTC List) is composed of stocks traded over-the-counter (OTC) in the United States that have been Excel Technology, Inc.: Class B, Warrants (expire 02-08-98) determined by the Board of Governors of the Federal Reserve System to be subject to the margin requirements Forest Oil Corporation: $.75 par convertible preferred under certain Federal Reserve regulations. The List of Foreign Margin Stocks (Foreign List) is composed of for- Hariston Corporation: No par common eign equity securities that have met the Board's eligibility Harvard Industries, Inc.: Class B, $.01 par common criteria under Regulation T. The OTC List and the Foreign Industrial Holdings, Inc.: Class A, Warrants (expire List are published four times a year by the Board. This 01-16-97) document sets forth additions to and deletions from the IWI Holding, Limited: No par common previous OTC List and the previous Foreign List. Effective May 12, 1997, 12 C.F.R. Parts 207, 220, 221, Kushner-Locke Company, The: Warrants (expire 03-20-97) and 224 are amended as follows. Accordingly, pursuant to the authority of sections 7 and 23 of the Securities Ex- L.A. T Sportswear, Inc.: No par common change Act of 1934, as amended (15 U.S.C. 78g and 78w), Lafayette Industries, Inc.: $.01 par common and in accordance with 12 C.F.R. 207.2(k) and 207.6 (Regulation G), 12 C.F.R. 220.2 and 220.17 Regulation T), and Manhattan Life Insurance Company: $2.00 par common 12 C.F.R. 221.2(j) and 221.7 (Regulation U), there is set Meris Laboratories, Inc.: No par common forth below a listing of deletions from and additions to the Microcap Fund, Inc., The: $.01 par common OTC List and the Foreign List. Microelectronic Packaging, Inc.: No par common Multimedia Concepts International, Inc.: 4.001 par common Deletions From The List Of Marginable OTC Stocks National Mercantile Bancorp (CA): No par common NationsBank Corporation: Depositary Shares Stocks Removed For Failing Continued Listing Requirements Quantum Corporation: 6-3/8% convertible subordinated debentures American Educational Products Inc.: $1.01 par common American Life Holding Company: $.01 par redeemable cumu- Salick Health Care, Inc.: $.001 par common lative preferred SMT Health Services, Inc.: Warrants (expire 03-04-97) Antares Resources Corporation: $.001 par common Specialty Teleconstructors, Inc.: Warrants (expire 11-02-99) ATS Medical, Inc.: Warrants (expire 03-09-97) Teletek, Inc.: $.0001 par common Bank of Los Angeles: Warrants (expire 12-01-98) Biomagnetic Technologies, Inc.: No par common United Home Life Insurance Co.: $1.00 par common Black Hawk Gaming & Development Company, Inc.: Urohealth Systems, Inc.: Warrants (expire 03-20-97) Warrants (expire 06-30-97) Stocks Removed for Listing on a National Calloway's Nursery, Inc.: $.01 par common Securities Exchange or Being Involved in an Cerplex Group, Inc., The: $.001 par common Acquisition Champion Road Machinery, Ltd.: No par common Chartwell Leisure, Inc.: Rights (expire 03-13-97) Affiliated Computer Services, Inc.: Class A, $.01 par common Cincinnati Microwave, Inc.: No par common; Warrants AHI Healthcare Systems, Inc.: $.01 par common (expire 12-31-98) Allied Bankshares, Inc. (Georgia): $1.00 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

504 Federal Reserve Bulletin • June 1997 American Radio Systems Corporation: Class A, $.01 par Midland Financial Group, Inc.: No par common common Milgray Electronics, Inc.: $.25 par common American Studios, Inc.: $.001 par common Argentbank: $2.50 par common New World Communications Group, Inc.: Class A, $.01 par Atlantic Tele-Network, Inc.: $.01 par common common Aztec Manufacturing Co.: $1.00 par common Norand Corporation: $.01 par common B.M.J. Financial Corp.: $1.00 par common Osborn Communications Corporation: $.01 par common Baby Superstore, Inc.: No par common Oxford Resources Corporation: Class A, $.01 par common Barefoot Inc.: $.01 par common Bridgeville Savings Bank, FSB (Pennsylvania): $.10 par corn- Panatech Research and Development Corporation: $.01 par common Providence and Worcester Railroad Company: $.50 par com- Cable Design Technologies Corporation: $.01 par common mon Cavco Industries, Inc.: $.10 par common Central Tractor Farm & Country Inc.: $.01 par common Quality Food Centers, Inc.: $.001 par common Chemfab Corporation: $.10 par common Chempower, Inc.: $.10 par common Research Medical, Inc.: $.50 par common Citi-Bancshares, Inc. (Florida): $.01 par common Riverside National Bank (California): $1.25 par common Cliffs Drilling Company: $.01 par common Consolidated Graphics, Inc.: $.01 par common SCI Systems, Inc.: $.10 par common SDNB Financial Corp.: No par common Dynatech Corporation: $.20 par common Security Bancorp (Montana): $1.00 par common Softdesk Inc.: $.01 par common Eastbay, Inc.: $.01 par common Southwest Banks, Inc.: $.10 par common Energy Research Corporation: $.0001 par common SQA Inc.: $.01 par common Epic Design Technology, Inc.: No par common Suare Industries, Inc.: $.01 par common EZ Communications, Inc.: Class A, $.01 par common Strober Organization, Inc.: $.01 par common Suiza Foods Corporation: $.01 par common FHP International Corporation: $.05 par common; Series A, Systemix, Inc.: $.01 par common $.05 par cumulative convertible preferred Fibermark, Inc.: $.001 par common Target Therapeutics, Inc.: $.0025 par common Fidelity Financial Bankshares Corporation: $1.00 par common Theratx, Incorporated: $.001 par common First Federal Bancshares of Eau Claire, Inc.: $.01 par common Tompkins County Trustco, Inc. (New York): $1.66-2/3 par First Federal Savings Bank of Brunswick, Georgia: $1.00 par common common First State Financial Services, Inc.: $.01 par common Tower Automotive, Inc.: $.01 par common Florida First Bancorp, Inc.: $1.00 par common TPI Enterprises, Inc.: $.01 par common Forasol-Former, N.V.: Common shares (par NLG 0.01) Triad Systems Corporation: $.01 par common Troy Hill Bancorp, Inc. (Pennsylvania): $.01 par common Great Bay Power Corporation: $.01 par common TSX Corporation: $.01 par common Grove Bank (Massachusetts): $.10 par common Tylan General Inc.: $.001 par common Homeland Bankshares Corporation: $12.50 par common United Air Specialists, Inc.: No par common Horizon Bancorp, Inc. (Texas): $.01 par common Vallicorp Holdings, Inc.: $.01 par common Independence Bancorp, Inc. (New Jersey): $1,667 par com- Ventura County National Bancorp: No par common mon Video Sentry Corporation: $.01 par common Innotech, Inc.: $.001 par common Vitalink Pharmacy Services, Inc.: $.01 par common IWC Resources Corporation: No par common Additions to the List of Marginable OTC Stocks Kindercare Learning Centers, Inc.: $.01 par common; Warrants (expire 04-01-97) 1st Source Corporation: Fixed rate cumulative trust preferred securities of 1st Source Capital Trust; Floating LaSalle re Holdings, Limited: $1.00 par common rate cumulative trust preferred securities of 1st Source Liberty Bancorp, Inc. (Illinois): $.01 par common Capital Trust Mastec, Inc.: $.10 par common Aastrom Biosciences, Inc.: No par common Medex, Inc.: $.01 par common Accelgraphics, Inc.: $.001 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 505 Agribiotechn, Inc.: $.001 par common First Banks, Inc. (Missouri): No par cumulative trust preferred AHL Services, Inc.: $.01 par common securities Alliance Imaging, Inc.: $.01 par common First Sterling Banks, Inc.: No par common American Business Financial Services, Inc.: $.001 par com- Firstfed Bancorp, Inc. (Alabama): $.01 par common mon Fonix Corporation: $.0001 par common Ameritrade Holding Corporation: Class A, $.01 par common Four Media Company: $.01 par common Amerus Life Holdings, Inc.: Class A, no par common Freepages Group PLC: American Depositary Receipts APEX PC Solutions, Inc.: No par common Fulton Bancorp, Inc.: $.01 par common ATL Products, Inc.: Class A, $.0001 par common Geographies, Inc.: Warrants (expire 06-01-99) Bank of Santa Clara: No par common GFSB Bancorp, Inc.: $.10 par common BEA Systems, Inc.: $.001 par common Greater Bank Bancorp (California): 9.75% cumulative trust Biora AB: American Depository Receipts preferred Biosite Diagnostic, Inc.: $.01 par common Green Mountain Coffee, Inc.: $.01 par common Birman Managed Care, Inc.: $.001 par common GS Financial Coproration: $.01 par common Brunswick Technologies, Inc.: No par common Guaranty Financial Corporation: $1.25 par common Guitar Center, Inc.: $.01 par common Capital City Bank Group (Florida): $.01 par common Gulf Island Fabrication, Inc.: No par common Cell Therapeutics, Inc.: No par common Cerus Corporation: $.001 par common Hamilton Bancorp, Inc. (Florida): $.01 par common Ciena Corporation: $.01 par common Hemlock Federal Financial Coproration: $.01 par common Citizens Financial Corporation: Class A, no par common High Point Financial Corporation: No par common Coast Bancorp (California): No par common Homeland Holding Corporation: $.01 par common Coast Dental Services, Inc.: $.001 par common Hospitality Worldwide Services, Inc.: $.01 par common Coldwater Creek, Inc.: $.01 par common Humascan, Inc.: $.01 par common Colonial Downs Holdings, Inc.: Class A. $.01 par common Community Care Services, Inc.: $.01 par common IAT Multimedia, Inc.: $.01 par common Community First Bankshares, Inc.: Cumulative capital securi- ICG Communications, Inc.: $.01 par common ties $25 liquidation ILEX Oncology, Inc.: $.01 par common Community Trust Bancorp, Inc.: No par preferred stock ILOG S.A.: American Depositary Receipts Coulter Pharmaceutical, Inc.: $.001 par common Image Guided Technologies, Inc.: No par common Cresud S.A.C.I.F.Y.A.: American Depositary Receipts Interstate National Dealer Services, Inc.: Warrants (expire Crystal Systems Solutions, Ltd.: Ordinary shares (NIS .01) 07-22-99) Iona Technologies, PLC: American Depositary Receipts Daou Systems, Inc.: $.001 par common Data Systems Network Corporation: $.01 par common Jacor Communications, Inc.: Warrants (expire 02-27-2002) Datamark Holding, Inc.: $.0001 par common Jakks Pacific, Inc.: $.001 par common Deltek Systems, Inc.: $.001 par common Jeffbanks, Inc.: 9.25% no par preferred securities Diamond Technology Partners, Inc.: Class A, $.001 par com- Jenna Lane, Inc.: $.01 par common; Class A, Warrants (expire mon 03-19-2000) Digital Lightwave, Inc.: $.0001 par common Judge Group, Inc., The: $.01 par common Earthlink Network, Inc.: $.01 par common Knightsbridge Tankers, Ltd.: $.01 par common Edge Petroleum Corporation: $.01 par common KOS Pharmaceuticals, Inc.: $.01 par common Eltek Ltd.: Ordinary Shares (NIS .6) Emcore Corporation: No par common Empire Federal Bancorp, Inc. (Montana): $.01 par common Logitech International S.A.: American Depositary Receipts Encore Medical Corporation: $.001 par common: Warrants (expire 03-08-2003) Macrovision Corporation: $.01 par common Endocardial Solutions, Inc.: $.01 par common Mansur Industries, Inc.: $.001 par common Enstar, Inc.: $.01 par common Meade Instruments Corporation: $.01 par common Environment/One Corporation: $.10 par common Medialink Worldwide Incorporated: $.01 par common EPIX Medical, Inc.: $.01 par common Medical Manager Corporation: $.01 par common Ergobilt, Inc.: $.01 par common Medirisk, Inc.: $.001 par common Esprit Telecom Group PLC: American Depositary Receipts Metro Information Services, Inc.: $.01 par common Euronet Services, Inc.: $.01 par common Micro Therapeutics, Inc.: $.001 par common Mississippi Valley Bancshares, Inc.: Floating rate cumulative Fieldworks, Incorporated: $.001 par common trust—preferred securities of MVBI Capital Trust First Aviation Services, Inc.: $.01 par common Multimedia Games, Inc.: $.01 par common Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

506 Federal Reserve Bulletin • June 1997 NACT Telecommunications, Inc.: $.01 par common VDI Media No par common Namibian Minerals Corporation: No par common Vistana, Inc.: $.01 par common National Auto Finance Company, Inc.: $.01 par common Vyrex Corporation: $.001 par common Neomagic Coproration: $.001 par common Netcom Systems, AB: American Depositary Receipts Walbro Corporation: Convertibletrust preferred securities Netsmart Technologies, Inc.: $.01 par common Wesley Jessen Visioncare, Inc.: $.01 par common Newsouth Bancorp, Inc. (North Carolina): $.01 par common Wintrust Financial Corporation: No par common Nexar Technologies, Inc.: $.01 par common Novatel, Inc.: No par common Yurie Systems, Inc.: $.01 par common Old Guard Group, Inc.: No par common Zindart Limited: American Depositary Receipts Omniquip International, Inc.: $.01 par common Ortec International, Inc.: $.001 par common Deletions from the Foreign Margin List Overland Data, Inc.: No par common Brazil Pacificare Health Systems, Inc.: Series A, $1.00 par cumulative convertible preferred Companhia Suzano de Papel Celulose PN: No par non-voting, Palex, Inc.: $.01 par common preferred Peoples Financial Corporation: No par common Lojas Americanas S.A.: No par common Peregrine Systems, Inc.: $.001 par common Perpetual Bank, A Federal Savings Bank (South Carolina): Hong Kong $ 1.00 par common Photoelectron Corporation: $.01 par common Winsor Industrial Corporation Ltd.: HK$.50 par ordinary Physicians' Speciality Coproration: $.001 par common shares Premire Research Worldwide, Inc.: $.01 par common Prime Capital Corporation: $.05 par common Japan Promedco Management Company: No par common AT&T Global Information Solutions Japan, Ltd.: ¥50 par Qualix Group, Inc.: $.001 par common common Radiant Systems, Inc.: No par common Central Finance Co., Ltd.: ¥50 par common Rail America, Inc.: $.001 par common Godo Steel, Ltd.: ¥50 par common Randgold & Exploration Company Ltd.: American Depositary Japan Digital Laboratory Co., Ltd.: ¥50 par common Receipts Keiyo Co., Ltd.: ¥50 par common Roy ale Energy, Inc.: No par common Mitsui Construction Co., Ltd.: ¥50 par common Nichiei Construction Co., Ltd.: ¥50 par common Savannah Bancorp, Inc., The: $1.00 par common Nihon Nosan Kogyo K.K.: ¥50 par common Search Capital Group, Inc.: $.01 par common; $.01 par pre- Nippon Densetsu Kogyo Co., Ltd.: ¥50 par common ferred stock Nissha Printing Co., Ltd.: ¥50 par common Semiconductor Laser International Corporation: $.01 par com- Raito Kogyo Co., Ltd. ¥50 par common mon Senshukai Co., Ltd.: ¥50 par common Signature Inns, Inc.: No par common; Series A, cumulative Shokusan Jutaku Sogo Co., Ltd.: ¥50 par common convertible preferred Sumitomo Construction Co., Ltd.: ¥50 par common Silgan Holdings, Inc.: $.01 par common Taihei Dangyo Kaisha, Ltd.: ¥50 par common Source Capital Corporation: No par common Takoaoka Electric Mfg. Co., Ltd.: ¥50 par common Southwest Bancorporation of Texas, Inc.: $1.00 par common TOA Steel Co., Ltd.: ¥50 par common Special Metals Corporation: $.01 par common Toenec Corporation: ¥50 par common Speciality Care Network, Inc.: $.001 par common Tokuyama Soda Co., Ltd.: ¥50 par common Spinnaker Industries, Inc.: No par common Tsumura & Co.: ¥50 par common Stocker & Yale, Inc.: $.001 par common Yaohan Japan Corporation: ¥50 par common Storage Dimensions, Inc.: $.005 par common Sun Bancorp, Inc. (New Jersey): 9.85% preferred stock South Africa Tangram Enterprise Solutions, Inc.: $.01 par common Template Software, Inc.: $.01 par common Middle Witwatersrang (Western Area) Ltd.: Ordinary Total Control Products, Inc.: No par common shares, par 0.01 South African rand Total World Telecommunications, Inc.: $.00001 par common Transcrypt International, Inc. $.01 par common Sweden Valley National Gases, Inc.: $.001 par common Stadshypotek AB: A Free Shares, par 10 Swedish krona Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 507 Thailand Thailand Finance One Public Co., Ltd.: Ordinary shares, par 10 ICC International Public Co., Ltd.: Ordinary shares, par Thai baht 10 Thai baht International Cosmetics Public Co., Ltd.: Ordinary shares, par lOThaibhat United Kingdom Univest Land Public Co., Ltd.: Common shares, par 10 Thai baht Amvesco PLC: Ordinary shares, par 25 p United Kingdom ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT Invesco PLC: Ordinary shares, par 25 p London Electricity PLC: Ordinary shares, par 50 p Orders Issued Under Section 3 of the Bank Holding Yorkshire Electricity Group PLC: Ordinary shares, par .568 p Company Act Additions to the Foreign Margin List Amboy Bancorporation Old Bridge, New Jersey Brazil Order Approving the Acquisition of Shares in a De Novo Centrais Eletricas Brasileiras S.A. (Eletrobras): No par com- Bank mon Companhia Siderurgia Nacional: No par common Amboy Bancorporation, Old Bridge, New Jersey, ('Am- Light Participacoes, S.A. (Light Par): No par common boy"), a bank holding company within the meaning of the Uniao De Bancos Brasileiras S.A.: No par non-voting, Bank Holding Company Act ("BHC Act"), has requested preferred the Board's approval under section 3 of the BHC Act (12U.S.C. § 1842) to acquire up to 9.9 percent of the Hong Kong shares of The Community Bank of New Jersey, Freehold, New Jersey ("CBNJ"), a de novo state-chartered bank.1 China Overseas Land & Investment, Ltd.: HK$.1O par ordi- Notice of this proposal, affording interested persons an nary shares opportunity to submit comments, has been published China Resources Enterprise, Ltd.: HK$1.00 par ordinary (62 Federal Register 4534 (1997)). The time for filing shares comments has expired, and the Board has considered the Cosco Pacific, Ltd.: HK$.5O par ordinary shares proposal and all comments received in light of the factors Guandong Investment, Ltd.: HK$.5O par ordinary shares set forth in section 3 of the BHC Act. Kerry Properties, Ltd.: HK$.1O par ordinary shares Amboy, with total consolidated assets of $1.1 billion, is Pearl Oriental Holdings, Ltd.: HK$.1O par ordinary shares a registered bank holding company that operates one sub- Tsim Sha Tsui Properties, Ltd.: HK$.2O par ordinary shares sidiary bank in New Jersey.2 Amboy is the 13th largest commercial banking organization in New Jersey, control- Italy ling approximately $871.8 million in deposits, representing 1 percent of all deposits in commercial banking organiza- H.P.I. SPA: Ordinary shares, par 5000 lira tions in the state ("state deposits").3 CBNJ, a de novo bank, would control a de minimis percentage of state Japan deposits during its first few years of operation.4 Amboy proposes to acquire less than 25 percent of the Acorn Co., Ltd.: ¥50 par common voting shares of CBNJ, which is not a normal acquisition DDI Corporation: YNichiei Co., Ltd.: ¥50 par common NTT Data Corporation: ¥50,000 par common 1. CBNJ would be capitalized through an initial public offering of Oriental Land Co., Ltd.: ¥50 par common voting stock, and Amboy proposes to purchase 9.9 percent of the Promise Co., Ltd.: ¥50 par common voting shares. Amboy would also obtain a non-transferrable ten-year West Japan Railway Co.: ¥50,000 par common option to purchase additional CBNJ shares in future public offerings in order to maintain shareholdings at 9.9 percent. The option by its terms may not be exercised if the result would cause Amboy to own, in the South Africa aggregate, more than 9.9 percent of CBNJ's voting shares. 2. Amboy owns Amboy National Bank, Old Bridge, New Jersey Avmin Limited: Ordinary shares, par .01 South African rand ("Amboy Bank"). Consolidated asset data are as of September 30, 1996. Switzerland 3. Banking asset data are as of December 31, 1996. State deposit data are as of June 30, 1996. 4. CBNJ projects that its average deposit balances will reach CIBA Specialty Chemicals Holdings AG: Registered shares, $6 million during its first year in operation, and will reach $85 million par 10 Swiss francs by its fifth year in operation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

508 Federal Reserve Bulletin • June 1997 for a bank holding company. Nonetheless, the requirement For example, an equity investor has both the means and the in section 3(a)(3) of the BHC Act that the Board's approval incentive to influence the lending policies of a company be obtained before a bank holding company acquires more that is a significant partner in lending transactions to insure than 5 percent of the voting shares of a bank suggests that a certain amount of loan participations in connection with Congress contemplated the acquisition by bank holding the bank's business plan. In addition, a company may be companies of between 5 and 25 percent of the voting less willing to reject loans originated by an investor in the shares of a bank or bank holding company (a "minority company or establish loan policies that conflict with the investment"). policies of a company that is a significant investor and Amboy contends that the proposed 9.9 percent minority source of business. investment would be passive and would not permit Amboy In this case, Amboy Bank proposes to underwrite and to control CBNJ. Amboy has provided a number of the originate real estate and construction loans in CBNJ's commitments previously relied on by the Board in deter- community with the expectation that CBNJ would particimining that minority investments would not permit the pate in these loans. CBNJ is a de novo bank with no record investing bank holding company to control another bank of independent operations. Amboy has not proposed any holding company or bank.5 Unlike other cases, however, limit to the amount of the assets of CBNJ that would Amboy proposes to engage in loan participation activities represent loans originated or underwritten by Amboy, and with CBNJ, and contends that this relationship should not the amount of such participation could therefore represent raise control issues. most or all of the loan portfolio of CBNJ during the next A company may control a bank or other company for several years. purposes of the BHC Act if the company is able to exercise The Board also has considered these proposed business a controlling influence over the management and policies relationships in light of the fact that Amboy would be the of the bank or other company.6 The Board previously has largest single shareholder of CBNJ and would be able to concluded that a minority investment could permit the vote 9.9 percent of the bank's outstanding shares. CBNJ's investing bank holding company to control another bank or shares are otherwise widely held, with no single sharebank holding company.7 Whether a minority investment holder owning in excess of five percent.10 could result in control necessarily requires a careful review Based on all the facts of record, and for the reasons of the proposal in light of all the facts of record. If control discussed above, the Board concludes that Amboy would exists, the Board's regulations require the bank holding have the ability to exercise a controlling influence over the company to provide financial and managerial support to management and policies of CBNJ as a result of the the bank or bank holding company it controls.8 proposal and, thereby, would control the bank for purposes The Board has in many prior cases noted its concern that of the BHC Act.11 Accordingly, the Board's action on the a proposed minority investment could permit an investing proposal is expressly conditioned on Amboy providing bank holding company to exercise a controlling influence financial and managerial support for CBNJ in accordance over the bank invested in when the investment is coupled with the Board's rules and policies. with significant business relationships, particularly rela- Amboy and CBNJ would compete in the Metropolitan tionships involving a core banking function like lending.9 New York/New Jersey banking market.12 Amboy is the 45th largest depository institution in the market, controlling approximately $871.8 million in deposits, representing 5. See e.g., Summit Bancorp, Inc., 77 Federal Reserve Bulletin 952 less than 1 percent of total deposits in depository institu- (1991); The Summit Bancorporation, 75 Federal Reserve Bulletin 712 tions in the market ("market deposits").13 The market is (1989); United Counties Bancorp oration, 75 Federal Reserve Bulletin 714 (1989). For example, Amboy has committed not to exercise a controlling influence over the management or policies of CBNJ; not to have director, officer, or employee interlocks with CBNJ; not to solicit the business relationships were limited. See BOK Financial Corporaor participate in soliciting proxies with respect to any matter presented tion, 81 Federal Reserve Bulletin 1052 (1995); Banco Santander, S.A., to the shareholders of CBNJ; and not to threaten to dispose of shares 81 Federal Reserve Bulletin 1139 (1995). of CBNJ in any manner as a condition of specific action or nonaction 10. Although the bank's organizers would own approximately by CBNJ. 46 percent of the bank's voting shares, the organizers consist of 31 6. 12U.S.C. § 1841(a)(2)(C). individuals and there is no evidence in the record that the organizers 7. See McLeod Bancshares, Inc., 73 Federal Reserve Bulletin 724 are bound together as a cohesive group of shareholders that could (1987); Hudson Financial Associates, 72 Federal Reserve Bulletin counterbalance Amboy's voting power. CBNJ's remaining voting 150(1986). shares would be owned by approximately 270 individual shareholders. 8. See, e.g., 12 C.F.R. 225.4(a); Flat head Holding Company of 11. See 12 C.F.R. 225, Subpart D. Bigfork, 82 Federal Reserve Bulletin 741 (1996); see also 12 U.S.C. 12. The Metropolitan New York-New Jersey banking market is § 1815(e) (cross-guaranty provision of the Federal Deposit Insurance approximated by Bergen, Essex, Hudson, Hunterdon, Middlesex, Act). Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union and 9. See, e.g., Proposed Investment by Sumitomo Bank, 73 Federal Warren Counties and parts of Mercer County in New Jersey; Bronx, Reserve Bulletin 24 (1987). In a small number of proposals, the Board Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richhas concluded that a minority investment in combination with busi- mond, Rockland, Suffolk, Sullivan, Ulster and Westchester Counties ness relationships would not, in the specific circumstances of that in New York; Pike County, Pennsylvania; and 24 municipalities in case, result in the investing bank holding company controlling the Fairfield and Litchfield Counties in Connecticut. second holding company. In those cases, each of the institutions 13. Market share data are as of June 30, 1995. Market share data are involved were large commercial banking organizations with substan- based on calculations in which the deposits of thrift institutions are tial assets and well-established records of independent operations, and included at 50 percent. The Board has indicated previously that thrift Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 509 unconcentrated, as measured by the Herfindahl-Hirschman G.B. Financial Services, Inc. Index ("HHI"),14 and numerous competitors would remain Greenbush, Minnesota in the market. Based on all the facts of record, the Board concludes that consummation of the proposal would not Order Approving the Merger of Bank Holding have a significantly adverse effect on competition or the Companies concentration of resources in the Metropolitan New York/ New Jersey banking market or any other relevant banking G.B. Financial Services, Inc., Greenbush ("G.B. Finanmarket. The Board also concludes in light of all the facts of cial"), a bank holding company within the meaning of the record that the financial and managerial resources and Bank Holding Company Act ("BHC Act"), has requested future prospects of the companies and banks involved and the Board's approval under section 3 of the BHC Act the convenience and needs of the community to be served (12 U.S.C. § 1842) to merge with Border Bancshares, Inc.. are consistent with approval as are other supervisory fac- Greenbush ("Border Bancshares"), and thereby acquire tors. Border State Bank, Roseau ("Border Bank"), all in Minne- Based on the foregoing and all the facts of record, the sota.1 Board has determined that the application should be, and Notice of the proposal, affording interested persons an hereby is, approved. The Board's approval is expressly opportunity to submit comments, has been published (62 conditioned on compliance by Amboy with all the commit- Federal Register 2368 (1997)). The time for filing comments made in connection with the proposal and with the ments has expired, and the Board has considered the appliconditions discussed in this order, including the condition cation and all comments received in light of the factors set that Amboy provide financial and managerial support to forth in section 3 of the BHC Act. CBNJ in accordance with the Board's policies. For pur- G.B. Financial, with total consolidated assets oi poses of this action, the commitments and conditions relied $38.2 million, operates one subsidiary bank, Border State on by the Board in reaching this decision are deemed to be Bank of Greenbush, Greenbush, Minnesota ("Greenbush conditions imposed in writing and, as such, may be en- Bank").2 G.B. Financial is the 204th largest commercial forced in proceedings under applicable law. banking organization in Minnesota, controlling deposits oi The acquisition of shares in CBNJ should not be con- approximately $30.2 million, representing less than 1 persummated before the fifteenth calendar day following the cent of total deposits in commercial banks in the state.' effective date of this order or later than three months Border Bancshares is the 238th largest depository institufollowing the effective date of this order, and CBNJ shall tion in Minnesota, controlling deposits of approximately be opened for business within six months, unless such $26.7 million, representing less than 1 percent of total periods are extended for good cause by the Board or by the deposits in commercial banking organizations in the state Federal Reserve Bank of New York, acting pursuant to On consummation of this proposal, G.B. Financial woulc delegated authority. become the 112th largest commercial banking organizatior By order of the Board of Governors, effective April 14, in Minnesota, controlling approximately $56.9 million ir 1997. deposits, representing less than 1 percent of total deposits in commercial banking organizations in the state. Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and G.B. Financial and Border Bancshares compete directl} Governors Kelley, Phillips, and Meyer. in the Roseau, Minnesota, banking market ("Roseau banking market").4 Greenbush Bank is the third largest of foui WILLIAM W. WILES commercial banks in the Roseau banking market, control- Secretary of the Board ling deposits of $30.2 million, representing 15.3 percent oi total deposits in commercial banking organizations in the market ("market deposits").5 Border Bank is the fourtl largest bank in the market, controlling deposits o] $26.7 million, representing 13.5 percent of market depos institutions have become, or have the potential to become, major its. On consummation, Greenbush Bank and Border Banl competitors of commercial banks. See WM Bancorp, 76 Federal would control total deposits of $56.9 million, representing Reserve Bulletin 788 (1990); National City Corporation, 70 Federal 28.8 percent of market deposits. Reserve Bulletin 743 (1984). 14. In light of the de novo formation of CBNJ, the HHI would remain unchanged at 748 after consummation of the proposal. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is less than 1000 is unconcentrated. 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 anticom- 1. After the merger, G.B. Financial will change its name to Borde petitive effects) unless the post-merger HHI is at least 1800 and the Bancshares, Inc. merger increases the HHI by more than 200 points. The Justice 2. Asset data are as of December 31, 1996. Department has stated that the higher than normal HHI thresholds for 3. State deposit data are as of June 30, 1996. screening bank mergers for anticompetitive effects implicitly recog- 4. The Roseau banking market is approximated by Roseau Count) nize the competitive effect of limited-purpose lenders and other non- Minnesota. No savings associations operate in the market. t rlata arp as nf Tnnf 1 QQfi Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

510 Federal Reserve Bulletin • June 1997 The market, as measured by the Herfindahl-Hirshman findings and decision, and, as such, may be enforced in Index ("HHI"), is and would remain highly concentrated.6 proceedings under applicable law. In accordance with the BHC Act, the Board sought com- The acquisition shall not be consummated before the ments from the Department of Justice on the competitive fifteenth calendar day following the effective date of this effects of the proposal in the relevant banking market. The order, or later than three months after the effective date of Department of Justice has advised the Board that consum- this order, unless such period is extended for good cause by mation of the proposal would not likely have any signifi- the Board or the Federal Reserve Bank of Minneapolis, cantly adverse effects on competition in the Roseau bank- acting pursuant to delegated authority. ing market or any relevant banking market. The FDIC also By order of the Board of Governors, effective April 21, has not objected to the proposal. 1997. G.B. Financial and Border Bancshares have a long history of affiliation through individual shareholders, and are Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and under the control of the same individual shareholders.7 Governors Kelley, Phillips, and Meyer. Based on all the facts of record, including the history of affiliation and the System's prior reviews, and the financial JENNIFER J. JOHNSON Deputy Secretary of the Board support provided by the common shareholders to the banks involved, the Board does not believe that the proposal is likely to have a significantly adverse effect on competition Orders Issued Under Section 4 of the Bank Holding or on the concentration of banking resources in the Roseau Company Act banking market, or any other relevant banking market. The BHC Act also requires the Board to consider the BOK Financial Corporation financial and managerial resources and future prospects of Tulsa, Oklahoma the companies and banks involved, the convenience and needs of the community to be served, and certain other Order Approving a Notice to Engage in Certain supervisory factors. The Board has carefully reviewed the Nonbanking Activities factors in light of all the facts of record, including relevant supervisory reports of examination. The Board concludes BOK Financial Corporation, Tulsa, Oklahoma ("Notifithat the financial and managerial resources and future cant"), a bank holding company within the meaning of the prospects of the institutions involved in this proposal, and Bank Holding Company Act ("BHC Act"), has requested considerations relating to the convenience and needs of the the Board's approval under section 4(c)(8) of the BHC Act communities to be served, are consistent with approval, as (12U.S.C. § 1843(c)(8)) and section 225.24 of Regulaare the other supervisory factors the Board must consider tion Y (12 C.F.R.225.24) to engage de novo in the followunder section 3 of the BHC Act. ing nonbanking activities through its wholly owned subsid- Based on the foregoing and all the facts of record, the iary, Alliance Securities Corporation, Tulsa, Oklahoma Board has determined that the application should be, and ("Company"): hereby is, approved. The Board's approval of the proposal (1) Underwriting and dealing in, to a limited extent, is conditioned on compliance by G.B. Financial with the certain municipal revenue bonds (including certain uncommitments made in connection with this application. rated revenue bonds), 1-4 family mortgage-related secu- The commitments and conditions relied on by the Board in rities, consumer receivable-related securities, and comreaching this decision shall be deemed to be conditions mercial paper ("bank-ineligible securities") ("Tier I imposed in writing by the Board in connection with its underwriting and dealing activities"); (2) Acting as agent in the private placement of all types of securities, pursuant to section 225.28(b)(7)(iii) of Regulation Y (see 12 C.F.R. 225.28(b)(7)(iii)); 6. The HHI would increase by 414 points to 3769. Under the revised (3) Providing investment advisory services, pursuant to Department of Justice Merger Guidelines, 49 Federal Register 26,823 section 225.28(b)(6) of Regulation Y (see 12 C.F.R. (1984), a market in which the post-merger HHI is above 1800 is 225.28(b)(6)); considered highly concentrated. The Department of Justice has in- (4) Underwriting and dealing in government obligations formed the Board that a bank merger or acquisition generally will not and money market instruments in which state member be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the banks may underwrite and deal under 12 U.S.C. §§335 merger increases the HHI by more than 200 points. The Justice and 24(7) ("bank-eligible securities"), pursuant to sec- Department has stated that the higher than normal HHI thresholds for tion 225.28(b)(8)(i) of Regulation Y (see 12 C.F.R. screening bank mergers for anticompetitive effects implicitly recog- 225.28(b)(8)(i)); and nize the competitive effects of limited-purpose lenders and other non-depository institutions. (5) Providing securities brokerage services, pursuant to 7. Common shareholders own a substantial majority in each section 225.25(b)(7)(i) of Regulation Y (see 12 C.F.R. organization—77.4 percent of G.B. Financial and 97.3 percent of 225.25(b)(7)(i)). Border Bancshares—and both organizations have had identical boards of directors since 1993. The directors comprise most of the common shareholders and own approximately 70 percent of G.B. Financial and Notice of the proposal, affording interested persons an approximately 93 percent of Border Bancshares. opportunity to submit comments, has been published Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 511 (62 Federal Register 3699 (1997)). The time for filing the BHC Act.4 Notificant has committed that Compan> comments has expired, and the Board has considered the will conduct these underwriting and dealing activities usnotice and all comments received in light of the factors set ing the same methods and procedures and subject to the forth in section 4(c)(8) of the BHC Act. same prudential limitations established by the Board in the Notificant, with total consolidated assets of approxi- Section 20 Orders. mately $4.5 billion, is the largest banking organization in Notificant proposes that Company would underwrite ano Oklahoma and the 94th largest banking organization in the deal in unrated municipal revenue bonds. The Board previ- United States.1 Notificant operates commercial bank sub- ously has authorized section 20 companies engaged in Tiei sidiaries in Oklahoma, Arkansas, and Texas, and engages, I underwriting and dealing activities to engage, to a limited through its subsidiaries, in various permissible nonbanking extent, in underwriting and dealing in unrated municipal activities. revenue bonds.5 In past cases, the Board approved compa- Prior to commencing the proposed activities, Company nies with Tier I underwriting powers to underwrite municiwill register as a broker-dealer with the Securities and pal revenue bonds in which a single issue of unrated bonds Exchange Commission ("SEC") under the Securities Ex- would not exceed $7.5 million.6 Notificant proposes thai change Act of 1934 (15 U.S.C. § 78a et seq.) and will Company be permitted to underwrite unrated municipal become a member of the National Association of Securi- revenue bonds with no single issue dollar limit. Bank ties Dealers, Inc. ("NASD"). Accordingly, Company will holding companies with broader debt and equity underwritbe subject to the recordkeeping and reporting obligations, ing powers may underwrite unrated municipal bond issues fiduciary standards, and other requirements of the Securi- of any size. Based on the Board's experience in supervisties Exchange Act of 1934, the SEC, and the NASD. ing unrated municipal revenue bond underwriting activities, and on the basis of the Board's assessment of the Activities Approved by Regulation credit evaluation process that Company would use to review the unrated municipal revenue bonds, the Board As noted above, Company proposes to engage in invest- concludes that Notificant's proposal to underwrite municiment advisory services, securities brokerage, bank-eligible pal revenue bonds without a single issue limit does noi securities underwriting and dealing, and private placement raise significant potential adverse effects. activities that have been determined by regulation to be The Board has determined that the conduct of the securiclosely related to banking for purposes of section 4(c)(8) of ties underwriting and dealing activities proposed by Notifithe BHC Act.2 Notificant has committed that Company cant is consistent with section 20 of the Glass-Steagall Aci will conduct the activities in accordance with the limita- (12 U.S.C. § 377), provided that Company engages only ir tions set forth in Regulation Y and the Board's orders limited bank-ineligible underwriting and dealing activirelating to these activities.3 ties.7 Effective March 6, 1997, the Board increased frorr 10 percent to 25 percent the amount of total revenue that c Underwriting and Dealing in Bank-Ineligible Securities section 20 subsidiary may derive from committed thai Company will conduct its bank-ineligible securities under- The Board has determined that—subject to the prudential writing and dealing activities subject to the Board's reveframework of limitations established in previous decisions nue test.8 to address the potential for conflicts of interests, unsound banking practices, or other adverse effects—the proposed activities of underwriting and dealing in bank-ineligible 4. See Citicorp, 73 Federal Reserve Bulletin 473 (1987) ("Citi securities are so closely related to banking as to be a proper corp"), aff'd sub nom. Securities Industry Ass n v. Board of Gover incident thereto within the meaning of section 4(c)(8) of nors of the Federal Reserve System, 839 F.2d 47 (2d Cir.), cert denied, 486 U.S. 1059 (1988), as modified by Order Approving Modifications to Section 20 Orders, 75 Federal Reserve Bulletin 75 (1989), as modified by Review of Restriction on Director, Officer am Employee Interlocks, Cross-Marketing Activities, and the Purchase and Sale of Financial Assets Between a Section 20 Subsidiary and ai 1. Asset and national ranking data are as of September 30, 1996. Affiliated Bank or Thrift, 61 Federal Register 57,679 (1996) (collec Oklahoma ranking data are as of June 30, 1996. tively, "Section 20 Orders"). 2. See 12 C.RR. 225.28(b)(6), (b)(7)(ii), (b)(7)(iii), and (b)(8)(i). 5. See Letter Interpreting Section 20 Orders, 81 Federal Reserv* 3. In order to address the potential conflicts of interests arising from Bulletin 198 (1995). Company's conduct of full-service brokerage activities along with 6. See id. underwriting and dealing in bank-ineligible securities, Notificant has 1. See Section 20 Orders. Compliance with the revenue limitatioi committed that Company will inform its brokerage customers at the shall be calculated in accordance with the method stated in the Sec commencement of the relationship that, as a general matter, Company tion 20 Orders, as modified by the Order Approving Modifications U may be a principal or may be engaged in underwriting with respect to, the Section 20 Orders, 79 Federal Reserve Bulletin 226 (1993) or may purchase from an affiliate, securities for which brokerage and and the Supplement to Order Approving Modifications to Sec advisory services are provided. In addition, at the time any brokerage tion 20 Orders, 79 Federal Reserve Bulletin 360 (1993). order is taken, Company will inform brokerage customers (usually 8. Company also may engage in activities that are necessary inci orally) whether Company is acting as agent or principal with respect dents to the proposed underwriting and dealing activities, providei to a security. Confirmations sent to customers also will state whether that they are treated as part of the bank-ineligible securities activities Company is acting as agent or principal. See PNC Financial Corpora- Unless Company receives specific approval under section 4(c)(8) c tion, 75 Federal Reserve Bulletin 396 (1989). the BHC Act to conduct the activities independently, any revenue Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

512 Federal Reserve Bulletin • June 1997 Other Considerations tion with the notice and the conditions referenced in this order and the above-cited Board regulations and orders. In order to approve this notice, the Board also must con- The Board's determination also is subject to all the terms sider whether the performance of the proposed activities is and conditions set forth in Regulation Y, including those in a proper incident to banking, that is, whether the activities sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and proposed "can reasonably be expected to produce benefits 225.25(c)), and to the Board's authority to require modifito the public . . . that outweigh possible adverse efiFects, cation or termination of the activities of a bank holding such as undue concentration of resources, decreased or company or any of its subsidiaries as the Board finds unfair competition, conflicts of interests, or unsound bank- necessary to assure compliance with, and to prevent evaing practices."9 As part of its evaluation of these factors, sion of, the provisions of the BHC Act and the Board's the Board considers the financial and managerial resources regulations and orders issued thereunder. In approving the of the notificant and its subsidiaries and the eifect the proposal, the Board has relied on all the facts of record and transaction would have on such resources.10 Based on all all the representations and commitments made by Notifithe facts of record, the Board concludes that financial and cant. The commitments and conditions shall be deemed to managerial considerations are consistent with approval of be conditions imposed in writing by the Board in connecthe notice. tion with its findings and decisions, and may be enforced in As noted above, Notificant has committed that Company proceedings under applicable law. will conduct its bank-ineligible securities underwriting and This transaction shall not be consummated later than dealing activities in accordance with the prudential frame- three months after the effective date of this order, unless work established by the Board's Section 20 Orders. Under such period is extended for good cause by the Board or the the framework and conditions established in this order and Federal Reserve Bank of Kansas City, acting pursuant to the Section 20 Orders, the Board concludes that Compa- delegated authority. ny's proposed conduct of limited bank-ineligible securities By order of the Board of Governors, effective April 28, underwriting and dealing activities is not likely to result in 1997. significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and interests, or unsound banking practices. Similarly, the Governors Kelley, Phillips, and Meyer. Board finds no evidence that Company's private placement and other activities would likely result in any significantly JENNIFER J. JOHNSON adverse effects. Deputy Secretary of the Board The Board expects, moreover, that the de novo entry of Company into the market for the proposed bank-ineligible Crestar Financial Corporation underwriting and dealing services would provide added Richmond, Virginia convenience to Notificant's customers, lead to improved methods of meeting customer financing needs, and in- Order Approving a Notice to Engage in Certain crease the level of competition among existing providers of Nonbanking Activities these services. The Board also expects that Company's performance of private placement, financial advisory, and Crestar Financial Corporation, Richmond, Virginia ("Apother activities, in which Notificant's banking subsidiaries plicant"), a bank holding company within the meaning of currently engage to a limited extent, will lead to greater the Bank Holding Company ("BHC") Act, has requested efficiencies within the Notificant's corporate system and the Board's approval under section 4(c)(8) of the BHC Act thereby permit Notificant to provide better services to its (12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board's customers. Accordingly, the Board has determined that the Regulation Y (12 C.F.R. 225.23) to engage de novo in the performance of the proposed activities by Company can following nonbanking activities through its wholly owned reasonably be expected to produce public benefits that subsidiary, Crestar Securities Corporation, Richmond, Viroutweigh possible adverse effects under the proper incident ginia ("Company"): to banking standard of section 4(c)(8) of the BHC Act. (1) Underwriting and dealing in, to a limited extent, Based on all the facts of record, and subject to the certain municipal revenue bonds (including certain uncommitments made by Notificant, as well as the terms and rated and "private ownership" municipal revenue conditions set forth in this order and in the Board orders bonds), 1-4 family mortgage-related securities, connoted above, the Board has determined that the notice sumer receivable-related securities, and commercial pashould be, and hereby is, approved. Approval of the pro- per (collectively, "bank-ineligible securities"); and posal is specifically conditioned on compliance by Notifi- (2) Acting as agent in the private placement of all types cant and Company with the commitments made in connec- of securities, and buying and selling all types of securities on the order of customers as a "riskless principal." from the incidental activities must be counted as ineligible revenues Notice of the proposal, affording interested persons an subject to the revenue limitation. 9. 12U.S.C. § 1843(c)(8). opportunity to submit comments, has been published 10. See 12 C.F.R. 225.26. (62 Federal Register 7784 (1997)). The time for filing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 513 comments has expired, and the Board has considered the The Board also has previously concluded that underwritnotice and all comments received in light of the factors set ing and dealing in "private ownership" industrial developforth in section 4(c)(8) of the BHC Act. ment bonds that qualify as "exempt facility bonds" under Applicant, with total consolidated assets of approxi- section 142 of the Internal Revenue Code ("Code")5 is a mately $18.8 billion, is the 43rd largest banking organiza- permissible activity under section 4(c)(8) of the BHC Act.6 tion in the United States.1 Applicant owns one commercial Company will conduct this activity according to the prubank subsidiary that operates in Virginia, Maryland, and dential limitations set forth in the Section 20 Orders.7 the District of Columbia and engages, through other sub- In addition, the Board has determined that the conduct of sidiaries, in various permissible nonbanking activities. the securities underwriting and dealing activities proposed Company is, and will continue to be, registered as a broker- by Applicant is consistent with section 20 of the Glassdealer with the Securities and Exchange Commission Steagall Act (12 U.S.C. § 377), provided that the company ("SEC") under the Securities Exchange Act of 1934 engaged in the underwriting and dealing activities derives (15 U.S.C. § 78a et seq.) and a member of the National no more than 25 percent of its total gross revenues from Association of Securities Dealers, Inc. ("NASD").2 Ac- underwriting and dealing in bank-ineligible securities over cordingly, Company is, and will continue to be, subject to any two-year period.8 Applicant has committed that Comthe recordkeeping and reporting obligations, fiduciary stan- pany will conduct its bank-ineligible securities underwritdards, and other requirements of the Securities Exchange Act of 1934, the SEC, and the NASD. Underwriting and Dealing in Bank-Ineligible Securities may be a principal or may be engaged in underwriting with respect to, or may purchase from an affiliate, those securities for which brokerage The Board previously has determined that, subject to the and advisory services are provided. In addition, at the time any prudential framework of limitations established in previous brokerage order is taken, the customer will be informed (usually decisions to address the potential for conflicts of interests, orally) whether Company is acting as agent or principal with respect unsound banking practices, or other adverse effects ("sec- to a security. Confirmations sent to customers also will state whether Company is acting as agent or principal. See PNC Financial Corp.. 75 tion 20 firewalls"), the proposed activities of underwriting Federal Reserve Bulletin 396 (1989). and dealing in bank-ineligible securities are so closely 5. See 26 U.S.C. § 142. related to banking as to be a proper incident thereto within 6. See The Bank of New York Company, Inc., 82 Federal Reserve the meaning of section 4(c)(8) of the BHC Act.3 Applicant Bulletin 748 (1996) ("Bank of New York"); Bank South Corporation, 81 Federal Reserve Bulletin 1116 (1995). In addition to the private has committed that Company will conduct these underwritownership bonds discussed in these previous orders, Applicant proing and dealing activities using the same methods and poses that Company be permitted to engage to a limited extent in procedures and subject to the same prudential limitations underwriting and dealing in private ownership bonds that are issued established by the Board in the Section 20 Orders.4 for the following traditional government services: qualified residential rental projects, qualified hazardous waste facilities, and environmental enhancements for existing hydroelectric generating facilities, all of which qualify as "exempt facility bonds" under the Code. Exempt 1. Asset and ranking data are as of December 31, 1996. facility bonds are issued to finance the acquisition or construction of 2. Company currently engages in a variety of permissible nonbank- facilities that provide certain types of traditional government services. ing activities including lending, advisory, leasing, and securities bro- 7. In connection with its proposal to underwrite and deal in unrated kerage activities and underwriting and dealing in obligations of the municipal revenue bonds, including unrated public ownership and United States, general obligations of states and their political subdivi- "private ownership" industrial development bonds, Applicant has sions, and other obligations that state member banks may underwrite committed that Company will not underwrite any unrated municipal and deal in under 12 U.S.C. §§ 335 and 24(7). See 12 C.F.R. revenue bonds until Company conducts an independent credit review 225.25(b)(l), (4), (5), (15), and (16). Company also engages in to determine that the securities are of investment grade quality and insurance agency activities pursuant to section 225.25(b)(8)(vii) of the that no single issue of unrated municipal revenue bonds, including Board's Regulation Y ("Exemption G"). Exemption G is one of unrated public ownership and "private ownership" industrial developseven specific exemptions enacted by Title VI of the Garn-St. Ger- ment bonds, underwritten by Company would exceed $7.5 million. main Depository Institutions Act of 1982 to that Act's general prohibi- Applicant also has provided other commitments previously relied tion on insurance activities by bank holding companies. The exemp- upon by the Board in authorizing a section 20 company to engage to a tion authorizes those bank holding companies that engaged in limited extent in underwriting and dealing in unrated municipal reveinsurance agency activities prior to 1971 with prior Board approval to nue bonds. engage or control a company engaged in insurance agency activities. 8. See Section 20 Orders. Effective March 6, 1997, the Board 3. See Citicorp et al., 73 Federal Reserve Bulletin 473 (1987), aff'd increased from 10 percent to 25 percent the proportion of total sub nom. Securities Industry Ass'n v. Board of Governors of the revenue that a section 20 subsidiary may derive from underwriting Federal Reserve System, 839 F.2d 47 (2d Cir.), cert, denied, 486 U.S. and dealing in bank-ineligible securities. See Revenue Limit on Bank- 1059 (1988), as modified by Review of Restrictions on Director, Ineligible Activities of Subsidiaries of Bank Holding Companies En- Officer and Employee Interlocks, Cross-Marketing Activities, and the gaged in Underwriting and Dealing in Securities, 61 Federal Register Purchase and Sale of Financial Assets Between a Section 20 Subsid- 68,750 (1996). Compliance with the revenue limitation shall be calcuiai"y and an Affiliated Bank or Thrift, 61 Federal Register 57,679 lated in accordance with the method stated in the Section 20 Orders, (1996) (collectively, "Section 20 Orders"). as modified by the Order Approving Modifications to Section 20 4. To address potential conflicts of interests arising from Company's Orders, 75 Federal Reserve Bulletin 751 (1989), and 10 Percent conduct of full-service brokerage activities together with underwriting Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank and dealing in bank-ineligible securities, Applicant has committed Holding Companies Engaged in Underwriting and Dealing in Securithat Company will inform its full-service brokerage customers at the ties, 61 Federal Register 48,953 (1996) (collectively, "Modification commencement of the relationship that, as a general matter, Company Orders"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

514 Federal Reserve Bulletin • June 1997 ing and dealing activities subject to the Board's revenue purposes of section 20 of the Glass-Steagall Act, and, test.9 therefore, that revenue derived from these activities is not subject to the revenue limitation on bank-ineligible securi- Private Placement and "Riskless Principal" Activities ties underwriting and dealing activities.12 Applicant has committed that Company will conduct its Private placement involves the placement of new issues of private placement activities using the same methods and securities with a limited number of sophisticated purchas- procedures and subject to the same prudential limitations ers in a nonpublic offering. A financial intermediary in a as those established by the Board in Bankers Trust and J.P. private placement transaction acts solely as an agent of the Morgan, including the comprehensive framework of reissuer in soliciting purchasers and does not purchase the strictions imposed by the Board in connection with undersecurities and attempt to resell them. Securities that are writing and dealing in bank-ineligible securities, which privately placed are not subject to the registration require- were designed to avoid potential conflicts of interests, ments of the Securities Act of 1933 and are offered only to unsound banking practices, and other adverse effects.13 financially sophisticated institutions and individuals and Applicant also has committed that Company will conduct not to the public. Company will not privately place regis- its riskless principal activities subject to the limitations tered securities and will only place securities with custom- previously established by the Board.14 Among the limitaers that qualify as accredited investors. tions discussed more fully in Bank of New York and the "Riskless principal" is the term used in the securities Riskless Principal Order, Applicant has committed that business to refer to a transaction in which a broker-dealer, Company will not act as riskless principal for registered after receiving an order to buy (or sell) a security for a investment company securities or for any securities of customer, purchases (or sells) the security for its own investment companies that are advised by Applicant or any account to offset a contemporaneous sale to (or purchase of its affiliates. Also, neither Company nor its affiliates will from) the customer.10 A broker-dealer acting as a riskless hold themselves out as making a market in the bankprincipal is not obligated to enter into a transaction with its ineligible securities that Company buys and sells as riskcustomer until after the broker-dealer executes the offset- less principal, or enter quotes for specific bank-ineligible ting transaction for its own account. Riskless principal securities in any dealer quotation system in connection transactions are understood in the industry to include only with Company's riskless principal transactions, except that transactions in the secondary market. Thus, Company Company and its affiliates may enter bid or ask quotations, would not act as a riskless principal in selling bank- or publish "offering wanted" or "bid wanted" notices on ineligible securities at the order of a customer that is the trading systems other than NASDAQ or an exchange, if issuer of the securities to be sold, or in any transaction Company or an affiliate does not enter price quotations on where Company has a contractual agreement to place the different sides of the market for a particular security for securities as agent of the issuer. Company also would not two business days.15 act as a riskless principal in any transaction involving a bank-ineligible security for which it or an affiliate makes a Other Considerations market. The Board has determined that, subject to the limitations In order to approve this notice, the Board also must deterestablished by the Board in prior orders, the proposed mine that the proposed activities are a proper incident to private placement and riskless principal activities are so banking, that is that the proposal "can reasonably be closely related to banking as to be a proper incident thereto expected to produce benefits to the public, such as greater within the meaning of section 4(c)(8) of the BHC Act.11 convenience, increased competition, or gains in efficiency, The Board also has determined that acting as agent in the that outweigh possible adverse effects, such as undue conprivate placement of securities, and purchasing and selling centration of resources, decreased or unfair competition, securities on the order of investors as a riskless principal, do not constitute underwriting and dealing in securities for 12. See Bankers Trust. 13. Among the prudential limitations discussed more fully in Bankers Trust and J.P. Morgan are that Company will not privately place 9. Company also may engage in activities that are necessary inci- open-end investment company securities or securities of investment dents to the proposed underwriting and dealing activities. Unless companies that are advised by Applicant or any of its affiliates. In Company receives specific approval under section 4(c)(8) of the BHC addition, Company will make no general solicitation or general adver- Act to conduct the activities independently, any revenues from the tising for securities it places. incidental activities must be counted as ineligible revenues subject to 14. See Bank of New York; Order Revising the Limitations Applicathe Board's revenue limitation. ble to Riskless Principal Activities, 82 Federal Reserve Bulletin 759 10. See SEC Rule 10b-10(a)(8)(i) (17 C.F.R. 240.10b-10(a)(8)(i)). (1996) {"Riskless Principal Order"). The Board notes that Company, as a registered broker-dealer, must 15. Effective April 21, 1997, the proposed private placement and conduct its riskless principal activities in accordance with the cus- riskless principal activities will be included in the "laundry list" of tomer disclosure and other requirements of federal securities laws and nonbanking activities permissible for bank holding companies that is regulations. set forth in Regulation Y. See 62 Federal Register 9290 (1997) (to be 11. See J.P. Morgan & Company Incorporated, 76 Federal Reserve codified at 12 C.F.R. 225.28(b)(7)(ii) and (hi)). Accordingly, from and Bulletin 26 (1990) ("7.P. Morgan"); Bankers Trust New York Corpo- after that date, Company may engage in such activities subject only to ration, 75 Federal Reserve Bulletin 829 (1989) {"Bankers Trust"). those conditions set forth in Regulation Y, as amended. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 515 conflicts of interests, or unsound banking practices."16 As ing the Board's reservation of authority to establish addipart of the Board's evaluation of these factors, the Board tional limitations to ensure that Company's activities are considers the financial and managerial resources of the consistent with safety and soundness, avoidance of connotificant and its subsidiaries and the effect the transaction flicts of interests, and other relevant considerations under would have on such resources.17 The Board has reviewed the BHC Act. Underwriting and dealing in any manner the capitalization of Applicant and Company in accordance other than as approved in this order and the Section 20 with the standards set forth in the Section 20 Orders and Orders, as modified by the Modification Orders, is not finds the capitalization of each to be consistent with ap- authorized for Company. proval. The determination of the capitalization of Com- The Board's determination also is subject to all the terms pany is based on all the facts of record, including Appli- and conditions set forth in Regulation Y, including those in cant's projections of the volume of Company's sections 225.7 and 225.23(g) of Regulation Y (12 C.F.R. underwriting and dealing activities in bank-ineligible secu- 225.7 and 225.23(g)), and to the Board's authority to rities. Based on all the facts of record, the Board has require such modification or termination of the activities of concluded that financial and managerial considerations are a bank holding company or any of its subsidiaries as the consistent with approval of the notice. Board finds necessary to ensure compliance with, and to As noted above, Applicant has committed that Company prevent evasion of, the provisions of the BHC Act and the will conduct its bank-ineligible securities underwriting and Board's regulations and orders issued thereunder. The dealing activities in accordance with the prudential frame- Board's decision is specifically conditioned on compliance work established by the Board's Section 20 Orders. The by Applicant and Company with all the commitments Board has concluded that, under the framework and condi- made in connection with the notice, including the committions established in this order and prior orders, Company's ments referenced in this order and the Board's regulations conduct of the proposed limited securities underwriting and orders noted above. These commitments and condiand dealing, private placement, and riskless principal activ- tions shall be deemed to be conditions imposed in writing ities is not likely to result in significantly adverse effects, by the Board in connection with its findings and decision, such as undue concentration of resources, decreased or and, as such, may be enforced in proceedings under appliunfair competition, conflicts of interests, or unsound bank- cable law. ing practices. The Board expects, moreover, that the This transaction shall not be consummated later than de novo entry of Company into the market for the proposed three months after the effective date of this order, unless services would provide added convenience to Applicant's such period is extended for good cause by the Board or the customers, would lead to improved methods of meeting Federal Reserve Bank of Richmond, acting pursuant to , customer financing needs, and would increase the level of delegated authority. competition among providers of these services. The Board By order of the Board of Governors, effective April 14, has determined, therefore, that the performance of the 1997. proposed activities by Company can reasonably be expected to produce public benefits that outweigh possible Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and adverse effects under the proper incident to banking stan- Governors Kelley, Phillips, and Meyer. dard of section 4(c)(8) of the BHC Act. JENNIFER J. JOHNSON Accordingly, and for the reasons set forth in this order Deputy Secretary of the Board and in the Section 20 Orders, the Board has concluded that Applicant's proposal to engage in the proposed activities is consistent with the Glass-Steagall Act, and that the pro- Shoreline Financial Corporation posed activities are so closely related to banking as to be Benton Harbor, Michigan proper incidents thereto within the meaning of section 4(c)(8) of the BHC Act, provided that Applicant limits Order Approving the Acquisition of a Savings Company's activities as specified in this order, the Sec- Association tion 20 Orders (as modified by the Modification Orders), and the other orders referenced herein. Shoreline Financial Corporation, Benton Harbor, Michigar Based on all the facts of record, and subject to the ("Shoreline"), a bank holding company within the meancommitments made by Applicant, as well as the terms and ing of the Bank Holding Company Act ("BHC Act"), ha* conditions set forth in this order and in the Board orders requested the Board's approval under section 4(c)(8) of the noted above, the Board has determined that the notice BHC Act (12U.S.C. § 1843(c)(8)) and section 225.24 o: should be, and hereby is, approved. The Board's approval the Board's Regulation Y (12 C.F.R. 225.24) to acquire: of the proposal extends only to the activities conducted (1) SJS Bancorp, Inc., St. Joseph, Michigan, and it: within the limitations of those orders and this order, includ- wholly owned subsidiary, SJS Federal Savings Banl ("SJS Bank"), and thereby engage in operating a sav ings association; and 16. 12U.S.C. § 1843(c)(8). (2) SJS Financial Corporation, a nonbanking subsidiary 17. See 12C.F.R. 225.24. See also The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, of SJS Bank, and thereby engage in the reinsurance o Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

516 Federal Reserve Bulletin • June 1997 the outstanding balance due on mortgages made by SJS Shoreline Bank is the largest depository institution in the Bank on the death of the mortgagor ("credit-related life Benton Harbor banking market, controlling deposits of insurance"). approximately $388.7 million, representing 30.5 percent of total deposits in depository institutions in the market Notice of the proposal, aifording interested persons an ("market deposits").5 SJS Bank is the fifth largest deposiopportunity to submit comments, has been published tory institution in the market, controlling deposits of ap- (62 Federal Register 8960 (1997)). The time for filing proximately $110.2 million, representing 4.3 percent of comments has expired, and the Board has considered the market deposits. On consummation of this proposal, Shoreproposal and all comments received in light of the factors line would control deposits of approximately $498.9 milset forth in section 4(c)(8) of the BHC Act. lion, representing 37.5 percent of market deposits. Market The Board previously has determined by regulation that concentration, as measured by the Herfindahl-Hirschman operating a savings association and acting as a principal for Index ("HHI"), would increase by 376 points to 2348. credit-related life insurance are activities closely related to The market indexes in this case exceed the levels sugbanking for purposes of section 4(c)(8) of the BHC Act.1 gested in the DOJ Guidelines for identifying cases that The Board requires savings associations acquired by bank ordinarily would not have a significantly adverse effect on holding companies to conform their direct and indirect competition.6 As the Board has previously indicated, HHI activities to those permissible for bank holding companies levels are only guidelines that are used by the Board, the under section 4 of the BHC Act and Regulation Y. Shore- Department of Justice, and other banking agencies to help line has indicated that SJS Bank does not engage in any identify cases in which a more detailed competitive analyactivities that are not permissible for bank holding compa- sis is appropriate to assure that the proposal would not nies under the BHC Act.2 have a significantly adverse effect on competition in any Shoreline is the 19th largest depository institution in relevant market. A proposal that fails to pass the HHI Michigan, controlling deposits of $605.9 million, repre- market screen may nonetheless be approved because other senting less than 1 percent of total deposits in depository information may indicate that the proposal would not have institutions in the state.3 SJS Bancorp is the 65th largest a significantly adverse effect on competition. depository institution in the state, controlling deposits of A number of considerations indicate that the market $110.2 million. On consummation of the proposal, Shore- concentration as measured by the HHI tends to overstate line would become the 15th largest depository institution the competitive effects of this proposal. After consummain Michigan, controlling total deposits of $716.1 million, tion of the proposal, for example, twelve depository institurepresenting less than 1 percent of the total deposits in tions would remain in the market. Six of these competitors depository institutions in the state. are multi-billion dollar banking organizations. In addition, Competitive Considerations Under section 4(c)(8) of the BHC Act, the Board is required to consider whether a proposal is likely to result in public benefits that outweigh any significantly adverse 5. Market share data are as of June 30, 1996, and take into account effects, such as undue concentration of resources, de- proposals approved by the Board through April 15, 1997. The data are creased or unfair competition, conflicts of interests, or based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift unsound banking practices. As part of this consideration, institutions have become, or have the potential to become, significant the Board weighs the effects of the proposal on competition competitors of commercial banks. See Midwest Financial Group, 75 in the relevant markets. Shoreline's bank subsidiary, Shore- Federal Reserve Bulletin 386 (1989); National City Corporation, 70 line Bank, Benton Harbor, Michigan ("Shoreline Bank"), Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50and SJS Bank compete directly in the Benton Harborpercent weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal St. Joseph banking market ("Benton Harbor banking mar- Reserve Bulletin 52 (1991). Because the deposits of SJS Bank would ket").4 be acquired by a commercial banking organization under the proposal, those deposits are included at 100 percent in the calculation of Shoreline's pro forma market share. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992). First Banks, Inc., Inc., 76 1. 12 C.F.R. 225.28(b)(4)(ii) and (b)(ll). Federal Reserve Bulletin 669, 670 n.9.(1990). 2. Shoreline would conduct thrift insurance activity in accordance 6. Under the revised Department of Justice Merger Guidelines, 49 with the Board's regulations. Federal Register 26,823 (June 29, 1984), a market in which the 3. Deposit data are as of June 30, 1996. In this context, the term post-merger HHI is greater than 1800 is considered highly concendepository institutions includes commercial banks, savings banks, and trated. The Justice Department has informed the Board that a bank savings associations. merger or acquisition generally will not be challenged (in the absence 4. The Benton Harbor banking market is approximated by Van of other factors indicating anticompetitive effects) unless the post- Buren County, Michigan, excluding the western townships of Bloom- merger HHI is at least 1800 and the merger increases the HHI by more ingdale, Pine Grove, Waverly, Almena, Paw Paw, Antwerp, Decatur, than 200 points. The Justice Department has stated that the higher and Porter; plus the northwestern portion of Berrien County, Michi- than normal threshold for an increase in the HHI when screening bank gan, including the townships of Watervliet, Coloma, Hagar, Bain- mergers and acquisitions for anticompetitive effects implicitly recogbridge, Benton, St. Joseph, Pipestone, Sodus, Royalton, Lincoln, nizes the competitive effects of limited-purpose lenders and other Baroda, Lake and Chikaming. non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 517 three of the remaining competitors would each control resources in the Benton Harbor banking market, or any significant percentages of market deposits.7 other relevant banking market.11 Several factors also indicate that the Benton Harbor banking market is attractive for entry. Five new entries into Other Considerations the market have occurred within the last 18 months. Three of the new entries (two by acquisition and one de novo) The Board also concludes that consummation of the prowere for the purpose of entering the market and were not posal would result in a broader financial network through incidental to an acquisition in another market. In addition, which Shoreline could serve its customers and SJS Bank the Benton Harbor banking market comprises parts of two customers. SJS Bank customers would have access to Michigan Metropolitan Statistical Areas ("MSA") that increased services, including trust services, basic checking have characteristics that make them attractive for entry to accounts for senior citizens, and extended banking hours. potential competitors.8 From 1990 to 1994, the population In addition, Shoreline's commercial lending services and in the Benton Harbor banking market increased at a higher higher lending limits would become available to customers rate than the statewide rate, and the percentage increase in of SJS Bank. The Board also concludes that the financial the amount of deposits in the Benton Harbor banking and managerial resources of Shoreline and SJS Bancorp market during the same period was substantially higher are consistent with approval of the proposal. than the percentage increase in market deposits for MSA In light of all the facts of record, the Board finds that and non-MSA banking markets in the state.9 Moreover, consummation of the proposal is not likely to result in any legal barriers to entry into banking markets are low in significantly adverse effects, such as undue concentration Michigan.10 of resources, decreased or unfair competition, conflicts of The Board also has considered the competitive effect of interests, or unsound banking practices that would outcredit unions operating in the Benton Harbor banking weigh the public benefits of the proposal. Accordingly, the market. Seven credit unions control approximately Board has determined that the Shoreline proposal can 14.3 percent of the market deposits and offer a full range of reasonably be expected to produce public benefits that retail banking products. The largest credit union, which outweigh possible adverse effects under the proper incident controls approximately $129 million in deposits, represent- to banking standard of section 4(c)(8) of the BHC Act. ing approximately 8 percent of market deposits, would be Based on the foregoing and all the facts of record, the the fourth largest depository institution in the market. Board has determined that the notice should be, and hereby The Department of Justice has reviewed the proposal is approved. The Board's approval of the notice is specifiand advised the Board that consummation of the proposal cally conditioned on compliance by Shoreline and SJS would not have a significantly adverse effect on competi- Bancorp with commitments made in connection with this tion in the Benton Harbor banking market or any other notice. The Board's determination also is subject to all the relevant banking market. Based on these and all the other terms and conditions set forth in Regulation Y, including facts of record, the Board concludes that consummation of those in sections 225.7 and 225.25(c) (12 C.RR. 225.7 and this proposal is not likely to have a significantly adverse 225.25(c)), and to the Board's authority to require such effect on competition or on the concentration of banking modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to. ensure compliance with, or to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders issued thereunder. For purposes of this transaction, the commitments and conditions relied on by the Board in reaching this decision are deemed to be 7. Three competitors would control 26.4 percent, 14.1 percent, and conditions imposed in writing by the Board in connection 9.6 percent of the market deposits. with its findings and decision, and as such may be enforced 8. These two MS As are the Berrien County MSA and the Van in proceedings under applicable law. Buren County MSA. The per capita income of residents in the Berrien County MSA has increased more than the average increase in other This proposal shall not be consummated later than three Michigan MS As. The Van Buren County MSA has experienced an months after the effective date of this order, unless such above average increase in deposits, population, and profitability for period is extended for good cause by the Board or by the banking organizations as compared to other Michigan MSAs. Federal Reserve Bank of Chicago, acting pursuant to dele- 9. The sources for the data on this banking market, all per capita income, and other Michigan information are as follows, respectively: gated authority. Department of Commerce, US Bureau of the Census, Press Release By order of the Board of Governors, effective April 21, CB95-179, Population Distribution and Population Estimates 1997. Branches (October 2, 1995); Bureau of Economic Analysis, Survey of Current Business, "Local Area Personal Income", April 1994 and June 1996; and Department of Commerce, US Bureau of the Census, Press Release CB96-224, Population Estimates Program, Population Division (December 30, 1996). 10. Michigan permits statewide de novo branching and permits the acquisition of both existing branches and de novo branches by out-of- 11. The Board notes that the market for mortgage life insurance is state banks on a reciprocal basis. Mich. Stat. Ann. § 23.710 (122), national in scope and that there are numerous competitors in the (171) (Law Co-op. Supp. May 1996). market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

518 Federal Reserve Bulletin • June 1997 Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and in Illinois and one commercial bank in New York. ABN Governors Kelley, Phillips, and Meyer. AMRO Bank N.V. operates branches in Boston, Massachusetts; Chicago, Illinois; New York, New York; Pittsburgh, JENNIFER J. JOHNSON Pennsylvania; and Seattle, Washington; and agencies in Deputy Secretary of the Board Atlanta, Georgia; Miami, Florida; Houston, Texas; and Los Angeles and San Francisco, California. Notificants also Stichting Prioriteit ABN AMRO Holding engage in a number of nonbanking activities in the United Amsterdam, The Netherlands States. Standard Federal is the fifth largest depository institution Stichting Administratiekantoor ABN AMRO in Michigan, controlling approximately $8.3 billion in de- Holding posits, representing 8.2 percent of total deposits in deposi- Amsterdam, The Netherlands tory institutions in the state.3 Notificants and Standard Federal compete directly in the Chicago, Illinois, banking ABN AMRO Holding N.V. market and consummation of the proposal would not ex- Amsterdam, The Netherlands ceed the Department of Justice's merger guidelines. Accordingly, the Board has determined that consummation of ABN AMRO Bank N.V. the proposal would not have a significantly adverse effect Amsterdam, The Netherlands on competition or the concentration of banking resources in any relevant banking market. ABN AMRO North America, Inc. The Board has determined that the operation of a savings Chicago, Illinois association by a bank holding company is closely related to banking for purposes of section 4(c)(8) of the BHC Act.4 Order Approving the Acquisition of a Thrift Holding In making this determination, the Board requires that sav- Company ings associations acquired by bank holding companies conform their direct and indirect activities to those permis- Stichting Prioriteit ABN AMRO Holding, Stichting Adsible for bank holding companies under section 4(c)(8) of ministratiekantoor ABN AMRO Holding, ABN AMRO the BHC Act. Notificants have committed to conform all Holding N.V., and ABN AMRO Bank N.V., all of Amsteractivities of Standard Federal and its subsidiaries to those dam, The Netherlands, and ABN AMRO North America, permissible for bank holding companies under sec- Inc., Chicago, Illinois (collectively, the "Notificants"), tion 4(c)(8) of the BHC Act and Regulation Y.5 The Board bank holding companies within the meaning of the Bank also has determined that the provision of securities broker- Holding Company Act ("BHC Act"), have requested the age services is closely related to banking for purposes of Board's approval under section 4(c)(8) of the BHC Act section 4(c)(8) of the BHC Act.6 (12 U.S.C. § 1843(c)(8)) and section 225.23 of the Board's In order to approve the proposal, the Board also must Regulation Y (12 C.F.R. 225.23) to acquire Standard Feddetermine that the proposed activities are a proper incident eral Bancorporation, Inc. ("Standard Federal"), and Stanto banking, that is, that the proposal "can reasonably be dard Federal's wholly owned subsidiaries, Standard Fedexpected to produce benefits to the public . . . that outeral Bank and Standard Brokerage Services, Inc., all of weigh possible adverse effects, such as undue concentra- Troy, Michigan, and thereby engage in operating a savings tion of resources, decreased or unfair competition, conflicts association and providing securities brokerage services of interests, or unsound banking practices."7 As part of its pursuant to sections 225.25(b)(9) and 225.25(b)(15) of the review of these factors, the Board considers the financial Board's Regulation Y (12 C.F.R. 225.25(b)(9) and 225.25(b)(15)).1 Notice of the proposal, affording interested persons an 3. Deposit data are as of June 30, 1996. In this context, depository opportunity to submit comments, has been published institutions include banks, savings and loan associations, and savings banks. (62 Federal Register 7231 (1997)). The time for filing 4. 12 C.F.R. 225.25(b)(9). comments has expired, and the Board has considered the 5. Notificants have committed that all impermissible real estate notice and all comments received in light of the factors set activities will be divested or terminated within two years of consumforth in section 4(c)(8) of the BHC Act. mation of the proposal, that no new impermissible projects or invest- Notificants, with total consolidated assets of $344.4 bil- ments will be undertaken during this period, and that capital adequacy guidelines will be met, excluding impermissible real estate investlion,2 is the largest commercial banking organization in ments. Notificants also have committed that all impermissible insur- The Netherlands, and controls seven depository institutions ance activities conducted by Standard Federal or its subsidiaries will cease within six months of consummation of the proposal, and Notificants have indicated that the activities will be divested to an unrelated third party or transferred to an affiliated national bank that is autho- 1. The Notificants also have acquired an option to purchase up to rized by the Office of the Comptroller of the Currency to engage in the 19.9 percent of the voting shares of Standard Federal under certain activities. In addition, Notificants have committed that all impermissicircumstances. This option would terminate on consummation of the ble securities activities will cease on or before consummation of the proposal. proposal. 2. Asset data are as of December 31, 1996, and use exchange rates 6. 12 C.F.R. 225.25(b)(15). then in effect. 7. 12 U.S.C. § 1843(c)(8). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 519 and managerial resources of the notificant and its subsidiar- discussed above, the Board concludes that financial and ies and the effect the proposal would have on such resourc- managerial considerations are consistent with approval. es.8 The Board has full supervisory authority to take appropri- The Board notes that Notificants' capital ratios satisfy ate action if a court determines or an examination finds that applicable risk-based capital standards under the Basle Notificants have engaged in illegal or improper activities. Accord and are considered equivalent to the capital levels Notificants indicate that the proposal would result in that would be required of a U.S. banking organization. The greater efficiencies, and, accordingly, would enable both Board also has considered recent financial statements and institutions to offer their customers more services, lower other available information, including pro forma financial costs, and added convenience. On the basis of the foregostatements and reports of examination, and determined that ing and all the facts of record, the Board has concluded that the proposed transaction would not have a significant effect the proposal can be expected to produce public benefits on the financial resources of Notificants and their subsidiar- that outweigh any possible adverse effects under the proper ies. incident to banking standard of section 4(c)(8) of the BHC In addition, the Board has considered the managerial Act.11 resources of Notificants in light of all the facts of record, Based on the foregoing and all other facts of record, the including information from several commenters who op- Board has determined that the notice should be, and hereby pose the proposal ("Protestants").9 Protestants allege that is, approved.12 Approval of the notice is specifically condicertain underwriting activities of the Foreign Parent out- tioned on compliance by Notificants with all the commitside the United States raise managerial concerns. These ments made in connection with this notice. The Board's activities relate to the involvement of the Foreign Parent determination also is subject to all the terms and conditions and an affiliate as underwriter for bonds issued by a truck- set forth in Regulation Y, including those in sections 225.7 ing company in The Netherlands (the "Netherlands bond and 225.23(g) (12 C.F.R. 225.7 and 225.23(g)), and to the underwriting") and as trustee for the bondholders. Protes- Board's authority to require such modification or terminatants also contend that the Foreign Parent and its affiliate tion of the activities of a bank holding company or any of were involved in conflicts of interests and self-dealing in its subsidiaries as the Board finds necessary to ensure The Netherlands in connection with the multiple roles they compliance with, and to prevent evasions of, the provisions played in the Netherlands bond underwriting and as senior of the BHC Act and the Board's regulations and orders creditor of the company issuing the bonds.10 Notificants have denied Protestants' allegations of 11. Protestants have requested that the Board hold a public hearing wrongdoing relating to the Netherlands bond underwriting. to receive additional evidence concerning the allegations about the The matter is before the courts in The Netherlands, where a Netherlands bond underwriting. Under the Board's rules, a hearing is lower court has ruled in favor of the Foreign Parent and an required on a proposed acquisition of a savings association under appeal is pending. The allegations relating to the Nether- section 4 of the BHC Act if there are disputed issues of material fact lands bond underwriting involve issues governed by the that cannot be resolved in some other manner. 12 C.F.R. 225.23(f)- Protestants have not raised a disputed issue concerning a fact that is securities and bankruptcy laws of a foreign country that material to the Board's consideration of this notice and that cannot can be adjudicated by the courts of that country. In accor- otherwise be resolved. dance with its standard procedures, the Board has con- The Board may also, in its discretion, hold a public hearing or tacted Notificants' home country supervisors regarding the meeting on a notice to clarify factual issues related to the notice and to provide an opportunity for testimony, if appropriate. 12 C.F.R. proposal. The Board has considered the extensive record of 262.3(e) and 262.25(d). In the Board's view, the Protestants have had examination of Notificants' U.S. subsidiaries by their priample opportunity to present their views, and have, in fact, provided mary federal supervisors. Based on all the facts of record, substantial written comments that have been considered by the Board including comments from Protestants, and for the reasons in acting on this proposal. The Protestants failed to demonstrate why the written submissions are not adequate to present their views on the notice. After a careful review of all the facts of record, including al] the comments on this proposal, the Board has determined that a public 8. See 12 C.F.R. 225.24; see also The Fuji Bank, Limited, 75 hearing or meeting is not necessary to clarify the factual record of the Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 proposal and is not otherwise warranted in this case. Accordingly, the Federal Reserve Bulletin 155 (1987). request for a public hearing on the notice is hereby denied. 9. One of the Protestants asserts that press accounts about the U.S. 12. One of the Protestants has requested that the Board investigate activities of ABN AMRO Bank N.V. (formally Algemene Bank Notificants and their management in light of the Protestant's allega Nederland, N.V.), the foreign parent holding company of ABN AMRO tions about illegal and unethical conduct by Notificants' employee: North America, Inc. (the "Foreign Parent"), raise adverse managerial and delay action on the proposal until the investigation is completec issues. The Board has considered these comments in light of Notifi- and the matter involving the Netherlands bond underwriting is re cants' extensive supervisory record in the United States, which in- solved. The Board is required under the BHC Act to act on applica cludes examination reports by appropriate supervisory authorities, and tions and notices within specified time periods. The Board notes actions taken by the Foreign Parent to enhance risk management at its moreover, that Protestant has had a reasonable opportunity to com U.S. trading operations. ment as provided in the Board's notice processing procedures and ha 10. Protestants also refer to other events that occurred outside the submitted substantial comments that have been carefully considers United States involving the Foreign Parent, including two additional by the Board. Based on all the facts of record, and for the reason foreign underwriting transactions in which the Foreign Parent is discussed above, the Board concludes that the record is sufficient t alleged to have made inadequate or inaccurate disclosures to inves- act on the proposal at this time, and that delay or denial of th tors, alleged fraudulent activity by employees, and circumstances proposal on the grounds of informational insufficiency is not wai surrounding the recent resignation of a senior official. ranted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

520 Federal Reserve Bulletin • June 1997 thereunder. For purposes of this transaction, the commit- ments received in light of the factors set forth in sections 3 ments and conditions relied on by the Board in reaching and 4 of the BHC Act.1 this decision are deemed to be conditions imposed in Bane One, with total consolidated assets of $98.5 billion, writing by the Board in connection with its findings and operates subsidiary banks in twelve states: Arizona, Colodecision and, as such, may be enforced in proceedings rado, Illinois, Indiana, Kentucky, Louisiana, Ohio, Oklaunder applicable law. homa, Texas, Utah, West Virginia, and Wisconsin. Bane The proposal shall not be consummated later than three One is the tenth largest commercial banking organization months after the effective date of this order, unless such in the United States, controlling deposits of $71.6 billion.2 period is extended for good cause by the Board or the BOC is the eighth largest commercial banking organization Federal Reserve Bank of Chicago, acting pursuant to dele- in Oklahoma, controlling deposits of $472.4 million, repregated authority. senting approximately 1.6 percent of the total deposits in By order of the Board of Governors, effective April 10, the state. Bane One also engages through various subsidiar- 1997. ies in a broad range of permissible nonbanking activities throughout the United States. This action was taken pursuant to the Board's Rules Regarding Liberty, with total consolidated assets of $2.9 billion, is Delegation of Authority (12C.F.R. 265.4(b)(l)) by a committee of the third largest commercial banking organization in Okla- Board members. Voting for this action: Chairman Greenspan, Vice homa, controlling $2.3 billion in deposits, representing Chair Rivlin, and Governor Kelley. approximately 7.7 percent of the total deposits in the state. After consummation of the proposal, Bane One would be JENNIFER J. JOHNSON the third largest commercial banking organization in Okla- Deputy Secretary of the Board homa, controlling deposits of $2.8 billion, representing approximately 9.3 percent of the total deposits in the state. Orders Issued Under Sections 3 and 4 of the Bank Holding Company Act Interstate Analysis Section 3(d) of the BHC Act, as amended by section 101 of Bane One Corporation the Riegle-Neal Interstate Banking and Branching Effi- Columbus, Ohio ciency Act of 1994, allows the Board to approve an application by a bank holding company to acquire control of a Bane One Oklahoma Corporation bank located in a state other than the home state of such Oklahoma City, Oklahoma bank holding company if certain conditions are met. For purposes of the BHC Act, the home state of Bane One is Ohio, and Bane One proposes to acquire banks in Oklaho- Order Approving the Acquisition of a Bank Holding ma.3 The conditions for an interstate acquisition enumer- Company ated in section 3(d) are met in this case,4 and the Board is Bane One Corporation, Columbus, Ohio ("Bane One"), and its wholly owned subsidiary, Bane One Oklahoma Corporation, Oklahoma City, Oklahoma ("BOC"), bank 1. Commenters to the proposal contend that the Board should not consider the substance of Bane One's submissions filed after time holding companies within the meaning of the Bank Holdperiods prescribed in the Board's Rules of Procedure for an appliing Company Act ("BHC Act"), have requested the cant's response to comments. See 12 C.F.R. 262.3(e). The Board has Board's approval under section 3 of the BHC Act the sole discretion under its Rules of Procedure to consider comments (12 U.S.C. § 1842) to acquire all the voting shares of Lib- and responses, including late submissions of information. In reviewing the proposal, the Board has considered all the submissions filed, erty Bancorp, Inc., Oklahoma City ("Liberty"), and its including submissions filed by commenters that responded to Bane wholly owned subsidiary banks, Liberty Bank & Trust One's submissions. Company of Oklahoma City, N.A., Oklahoma City ("Lib- 2. Asset data are as of September 30, 1996; ranking data are as of erty Bank"), and Liberty Bank & Trust Company of Tulsa, June 30, 1996. 3. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding N.A., Tulsa, all in Oklahoma. Bane One and BOC also company's home state is that state in which the operations of the bank have requested the Board's approval under section 4(c)(8) holding company's banking subsidiaries were principally conducted of the BHC Act (12 U.S.C. § 1843(c)(8)) and section on July 1, 1996, or the date on which the company became a bank 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to holding company, whichever is later. acquire the nonbanking subsidiaries of Liberty and thereby 4. 12 U.S.C. §§ 1842(d)(l)(A) and (B) and 1842(d)(2)(A) and (B). Bane One is adequately capitalized and adequately managed. On engage in certain trust, credit life insurance, lending, and consummation of the proposal, Bane One and its affiliates would leasing activities. control less than 10 percent of the total amount of deposits of insured Notice of the proposal, affording interested persons an depository institutions in the United States, and less than 30 percent of opportunity to submit comments, has been published in the total amount of deposits in Oklahoma. In addition. Liberty's two subsidiary banks have been in existence and have continuously operaccordance with the Board's rules (62 Federal Register ated for at least five years as required by Oklahoma law. All other 7231 (1997)). The time for filing comments has expired, requirements of section 3(d) of the BHC Act also would be met on and the Board has considered the proposal and all com- consummation of the proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 521 permitted to approve this proposal under section 3(d) of the effects on competition or the concentration of banking BHC Act. resources in any relevant banking market.8 Competitive Considerations Other Factors Under the BHC Act The BHC Act prohibits the Board from approving an The BHC Act also requires the Board to consider the application under section 3 of the BHC Act if the proposal financial and managerial resources of the companies and would result in a monopoly, or would substantially lessen banks involved, the convenience and needs of the commucompetition in any relevant banking market, unless the nities to be served, and certain other supervisory factors. Board finds that the anticompetitive effects of the proposal are clearly outweighed in the public interest by the proba- A. Supervisory Factors ble effect of the proposal in meeting the convenience and needs of the community to be served. The Board has carefully considered the financial and man- BOC and Liberty compete directly in the Oklahoma City agerial resources and future prospects of Bane One, Libbanking market.5 BOC's depository subsidiary, Bank One, erty, and each of their respective subsidiaries, as well as Oklahoma City, Oklahoma City, Oklahoma ("Bank One other supervisory factors, in light of all the facts of record. Oklahoma"), is the fourth largest depository institution in These facts include supervisory reports of examination the market, controlling deposits of $485.4 million and assessing the financial and managerial resources of the representing approximately 6.0 percent of the total deposits organizations and recent pro forma financial information in depository institutions in the market ("market depos- provided by Bane One. The Board notes that Bane One, its").6 Liberty Bank is the largest depository institution in Liberty, and each of their subsidiary banks meets or exthe market, controlling market deposits of $1.36 billion ceeds the "well capitalized" thresholds under applicable and representing approximately 16.8 percent of market law and is expected to continue to do so after consummadeposits. tion of the proposal. Based on all the facts of record, the On consummation of the proposal, BOC would become Board has concluded that the financial and managerial the largest depository institution in the market, controlling considerations, and all other supervisory factors that must deposits of $1.85 billion, representing approximately be considered under section 3 of the BHC Act, are consis- 22.8 percent of market deposits. The change in market tent with approval of the proposal.9 concentration, as measured by the Herfindahl-Hirschman Index ("HHI"), would not exceed the threshold levels in B. Convenience and Needs Factor the Department of Justice ("DOJ") Merger Guidelines.7 In addition, more than 55 competitors, including several of The Board also has considered the effect of the proposed the state's largest banking and thrift organizations, would acquisition on the convenience and needs of the commucontinue to operate in the market. Based on all the facts of nity to be served in light of all the facts of record. As part record, the Board has concluded that consummation of the proposal would not result in any significantly adverse 8. Comments from Inner City Press/Community on the Move, the Delaware Community Reinvestment Action Council ("DCRAC"), and the Black Citizens for Justice, Law & Order (collectively, "Protestants") contend that consummation of the proposal would have an 5. The Oklahoma City banking market consists of the Oklahoma adverse competitive effect because the largest depository institution in City Ranally Metro Area, plus the community of Blanchard in Mc- the Oklahoma City banking market would be acquired by an out-of- Clain County. state holding company and thereby become less responsive to the 6. Market data are as of June 30, 1995. Market share data are based credit needs of farmers and small businesses. The argument relies on on calculations that include the deposits of thrift institutions at subdividing the market in a manner that is inconsistent with Board 50 percent. The Board previously has indicated that thrift institutions precedent. The Board traditionally has recognized that the appropriate have become, or have the potential to become, significant competitors product market for evaluating the competitive effects of bank mergers of commercial banks. See, e.g., Midwest Financial Group, 75 Federal and acquisitions is the cluster of products (various kinds of credit) and Reserve Bulletin 386 (1989). Thus, the Board has regularly included services (such as checking accounts and trust administration) offered thrift deposits in the calculation of market share on a 50-percent by banking institutions. See Chemical Banking Corporation, 82 Fedweighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve eral Reserve Bulletin 239 (1997), and the discussion of relevant case Bulletin-52 (1991). law and economic studies therein. Protestants present no facts to 7. On consummation of the proposal, the HHI would increase by support an alternative product market defined by small business and 202 points to a level of 992. Under the revised DOJ Merger Guide- small farm loans. Based on all the facts of record, the Board concludes lines, 49 Federal Register 26,823 (1984), a market in which the that competitive considerations are consistent with approval for the post-merger HHI is less than 1000 is considered unconcentrated. The reasons discussed above. The effects of the proposal in meeting the DOJ has informed the Board that a bank merger or acquisition credit needs of the community, including small business and small generally will not be challenged (in the absence of other factors farm credit needs, are discussed later in the order. indicating anticompetitive effects) unless the post-merger HHI is at 9. Protestants maintain that their allegations relating to Bane One's least 1800 and the merger increases the HHI by more than 200 points. compliance with fair lending laws, branch closings, and lending The DOJ has stated that the higher than normal HHI thresholds for practices present adverse managerial considerations. In light of the screening bank mergers for anticompetitive effects implicitly recog- facts discussed above and the consideration given to the allegations nize the competitive effect of limited-purpose lenders and other non- later in the order, the Board concludes that managerial and other depository financial institutions. supervisory factors are consistent with approval of the proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

522 Federal Reserve Bulletin • June 1997 of its review, the Board has carefully considered comments Bane One also indicates that it would enhance Liberty's received from Protestants contending that the Home Mort- community reinvestment program by integrating it with the gage Disclosure Act (12 U.S.C. § 2801 et seq.) ("HMDA") Bane One program. In this light, the Board has given data for Bane One and its affiliates, Bane One's record of substantial consideration to the existing record of Bane consumer complaints and branch closings, and the market- One, as reflected in its programs and in the supervisory ing and lending practices at Bane One's bank and nonbank assessments of its performance, of helping to meet the subsidiaries warrant denial of the proposal.10 Protestants convenience and needs of all its communities, including also maintain that Bane One, as an out-of-state acquirer, low- and moderate-income ("LMI") communities. would reduce the amount of credit Liberty makes available to small businesses and farmers in Oklahoma. CRA Performance Examinations Protestants also allege that HMDA data from Bane One and Bane One Mortgage Corporation ("BOMC") show The Board has long held that consideration of the conveillegal discrimination against minority credit applicants in nience and needs factor includes a review of the records of violation of the Equal Credit Opportunity Act ("ECOA") the relevant depository institutions under the CRA and the Fair Housing Act (collectively, "fair lending (12 U.S.C. § 2901 et seq.). As provided in the CRA, the laws"), and that BOMC and Bane One's subsidiary banks Board evaluates the convenience and needs factor in light illegally "steer" minority applicants to Bane One's non- of examinations by the primary federal supervisor of the bank lending subsidiary, BOFS, which charges higher in- CRA performance records of the relevant institutions. An terest rates on its loans. In addition, Protestants allege that institution's most recent CRA performance evaluation is a there are disparities in the denial rates of credit applica- particularly important consideration in the applications protions, based on race or other prohibited factors, among the cess because it represents a detailed on-site evaluation of various Bane One subsidiaries.11 the institution's overall record of performance under the The Board notes that Bane One assists in meeting the CRA by its primary federal supervisor.13 credit needs of the communities it serves by providing a All of Bane One's existing thirty subsidiary banks have full range of financial services, including commercial and received "outstanding" or "satisfactory" ratings at the retail banking services, trust and investment management most recent examinations of their CRA performance.14 services, and corporate and international banking services, Fifteen of Bane One's subsidiary banks, representing a through various bank and nonbank subsidiaries. Bane One majority of the organization's banking assets, received has stated that services currently available from Liberty "outstanding" CRA ratings from their primary federal would be expanded and improved as a result of the pro- supervisors. Bane One's lead bank, Bank One, Columbus, posal. In particular, Bane One expects to expand the prod- N.A., Columbus, Ohio ("Lead Bank"), and Bane One's ucts and services offered to consumers and small businesses in the communities currently served by Liberty. Bane One proposes to provide small businesses in Okla- needs, including the small business and farm credit needs, of the communities served by its subsidiary banks. The Board also notes that homa with different types of assistance, including access to Bane One has represented that it will make its programs available to federally subsidized loans and guarantees through the customers of Liberty in connection with the proposal. The Board notes Small Business Administration ("SBA"). Bane One also that the CRA requires every bank, including banks owned by outnotes that its subsidiary bank in Oklahoma engages in a of-state bank holding companies, to be examined regularly and rated on its performance in helping meet the credit needs of its community. substantial amount of agricultural lending and that Bane In addition, the Board is required to review this performance in future One intends to continue to make small farm loans in applications by Bane One to acquire depository facilities under the communities served by Liberty.12 BHC Act. 13. DCRAC contends that CRA performance examinations conducted before 1995 relied too heavily on the banks' presentation of their performance and are therefore unreliable. The Board notes that 10. Protestants question the accuracy of Bane One's HMDA data the Statement of the Federal Financial Supervisory Agencies Regardbecause the data do not reflect the loans that Bane One states were ing the Community Reinvestment Act ("Agency CRA Statement") purchased by Bane One Financial Services ("BOFS") from Bane One provides that a CRA examination is an important and often controlling affiliates. The Board has concluded that the allegation is not correct factor in the consideration of an institution's CRA record and that with respect to the 1996 HMDA data, which show loan purchases. To reports of these examinations will be given great weight in the the extent that any loan purchases in previous years might not have applications process. See 54 Federal Register 13,742 and 13,745 been reported by BOFS under HMDA, the Board may address these (1989). issues under its supervisory authority. 14. Protestants maintain that Bane One's CRA performance record 11. Protestants cite litigation and consumer complaints filed against is incomplete because Bane One's nonbanking subsidiaries, and in Bane One as additional evidence of improper practices. particular BOFS, have not been examined for CRA performance. 12. The Board has considered Bane One's small business and farm Protestants, therefore, argue that the CRA examination record should lending in light of articles cited by Protestants in support of their not be accorded normal weight in analyzing the proposal. The CRA assertion that multi-state bank holding companies tend to make fewer requires federal financial supervisory agencies to assess the record of loans to small businesses and farms than small single-state bank CRA performance in connection with their examination of an insured holding companies. As a general matter, the articles cited reviewed depository institution, and to take such record into account in their only selected data from the Federal Reserve System's Tenth District evaluation of an application for a depository facility. See 12 U.S.C. and, as the author of the studies noted, the data used in the studies do § 2903. BOFS and other nonbank lending subsidiaries of Bane One not rule out alternative conclusions. The Board has carefully reviewed are not insured depository institutions and, therefore, are not subject to Bane One's record of ascertaining and helping to meet the credit evaluation under the CRA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 523 largest bank in terms of assets, Bank One, Texas, N.A., all segments of its community and that the bank's exten- Dallas, Texas ("Bank One Texas"), both received "out- sions of credit addressed a significant portion of the credit standing" performance ratings from their primary supervi- needs of its service community. Bank One Texas made a sor, the Office of the Comptroller of Currency ("OCC"). number of mortgage, home improvement, consumer, credit Bank One Oklahoma also received an "outstanding" rating card, and small business loans in 1994 and 1995. Examinfrom the Federal Reserve Bank of Kansas City in an ers commended Bank One Texas for its lending perforexamination completed in April 1996.15 Liberty's two sub- mance to LMI areas, noting that 32 percent of the bank's sidiary banks received "satisfactory" ratings for CRA per- lending was in LMI census tracts, while 30 percent of the formance from the OCC. population of the bank's delineated community resided in these LMI areas. Lending Record Examiners further noted that the management of Bank One Texas had focused on meeting the mortgage needs of The Board has carefully considered other aspects of Bane LMI segments of the bank's community. Bank One Texas One's CRA performance record, including the lending, offered a variety of affordable mortgage products, includmarketing, and investment activities of its subsidiary ing an "American Dream" mortgage product that is availbanks, in light of Protestants' comments relating to several able to LMI home buyers who do not meet the standards Bane One subsidiary banks.16 for Federal National Mortgage Association ("Fannie Lead Bank. According to the 1995 CRA performance Mae") and Federal Housing Administration ("FHA") examination conducted by the OCC, Bane One's Lead products. Bank One Texas originated 215 mortgages under Bank, which serves the Columbus, Ohio, Metropolitan the program for a total amount of $8.3 million in the first Statistical Area ("MSA"), developed a comprehensive pro- half of 1995. gram to identify the credit needs of its delineated commu- Examiners also noted that Bank One Texas offered a nity and effectively responded to those needs through a variety of small business credit products. The bank was a wide variety of credit products and banking services. Lead certified SBA lender and was the sixth largest originator of Bank had a significant volume of consumer, mortgage, and SB A loans in the country. small business loans in all segments of its community. For Bank One Oklahoma. Examiners found that Bank One example, in 1994, Lead Bank had more than 3,700 small Oklahoma offered a wide range of conventional and business credit relationships and made small business loans government-related loan programs that were responsive to totalling more than $243 million. the needs of the local community. Examiners noted that Lead Bank, working in conjunction with BOMC, also Bank One Oklahoma used an internal CRA committee to offered a range of loans for affordable housing and home develop products and services designed to address commuimprovements. In 1993, the bank introduced a new afford- nity needs. The bank was one of the largest home construcable mortgage product with lower payments and flexible tion originators in the Oklahoma City banking market and debt-to-income limits. In 1994, the Lead Bank originated participated in programs to provide home purchase and 182 of the affordable mortgages, totalling $8.9 million. The rehabilitation loans to LMI borrowers. examination further noted that the bank outperformed com- Examiners noted that Bank One Oklahoma was an active petitors in origination of home improvement loans, particu- small business lender and had originated small business larly in LMI and minority census tracts. loans throughout its service community. Examiners re- Examiners also noted that Lead Bank took a leadership ported, for example, that the bank originated 1,950 small role in local, state and federal government-insured guaran- business loans, totalling over $125 million, to address teed and subsidized loan programs for families, small identified small business capital needs. In November 1995, businesses, and small farms. In 1994, Lead Bank partici- the bank also made available a new Bank One Business pated in government-sponsored loans totalling more than Line of Credit ("BOBLOC") for small businesses seeking $24 million. loans of $5,000 to $100,000. Since its introduction, Bank Bank One Texas. The OCC also concluded that Bank One Oklahoma has made 39 BOBLOC loans, totalling One Texas effectively made its credit services available to more than $296,000. The 1996 CRA performance examination also indicates that Bank One Oklahoma participated in two public- private partnerships to help meet the credit 15. The CRA performance ratings for each of Bane One's subsid- needs of small businesses and LMI individuals interested iary banks is set forth in the Appendix. in starting their own businesses. 16. Protestants also contend that Bane One's subsidiary banks The bank participated in other loan programs to meet the charge excessive fees for cashing welfare and Social Security Adminneeds of small businesses, small farms, and LMI families. istration checks for individuals who do not have bank accounts with Bank One Oklahoma, for example, made SBA loans total- Bane One. Protestants allege that the fees discriminate against individuals who are minorities, elderly and poor. Protestants present no facts ling $215,000 and, working in conjunction with BOMC, to substantiate that the fees are illegally discriminatory, and there is no made FHA loans totalling $1.15 million. evidence in the record that the fees are based on any factor that would Other Banks. Bane One's subsidiary banks have been be prohibited by law. The Board has recognized that although banks found by their primary federal supervisors to be effective in help serve the needs of their community by offering basic services at nominal or no charge, the CRA does not impose any limitation on the identifying the credit needs of their communities and in fees or surcharges that can be assessed for services. meeting those needs. Additionally, all the banks partici- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

524 Federal Reserve Bulletin • June 1997 pated in various lending programs designed to make credit Branch Closings available for affordable housing and for small businesses.17 Examiners noted, for example, that Bank One, Arizona, Protestants have expressed concerns that branch closings N.A., Phoenix, Arizona, had made a number of mortgage resulting from the proposal would have a materially adloans and participated in a variety of public-private partner- verse effect on the community, particularly in LMI neighships to finance affordable housing, including a Depart- borhoods.19 Protestants also contend that Bane One's banks ment of Housing and Urban Development ("HUD") guar- have been systematically closing branches in LMI commuantee program to make home construction, purchase, and nities since their last CRA examinations, and that branches rehabilitation loans to Native Americans. Similarly, the sold by Bane One to other depository institutions often are CRA performance examinations for Liberty National Bank closed.20 and Trust Company of Kentucky, Louisville, Kentucky, a Bane One has indicated that it does not have final plans wholly owned subsidiary of Bane One Kentucky Corpora- for closing branches in Oklahoma after acquiring Liberty. tion,18 noted that a significant portion of the bank's mort- Bane One has identified, on a preliminary basis, six gage lending was to LMI individuals. Examiners also branches in Oklahoma City and Tulsa, Oklahoma, that noted that the bank had extended a significant volume of might be appropriate for closing or consolidation with small business loans. All of Bane One's banks offered other nearby branches. Only one of the branches that Bane community development lending, investment, and techni- One has indicated may be closed is located in a LMI cal assistance. census tract, and the operations of that branch would be Investments. In addition to the lending programs dis- combined with another branch located approximately one cussed above, Bane One helps meet the credit needs of the mile away.21 communities it serves through its community development The Board has carefully reviewed Bane One's branch corporation, Bane One Community Development Corpora- closing policy. The policy requires that, when a branch is tion ("CDC"). Examiners commended Bane One's partici- identified for closing, a discussion of the proposed closing pation in local development and redevelopment projects, be accompanied by an analysis of how the closing would and noted that CDC helps Bane One's bank subsidiaries to affect banking access for LMI consumers. If, based on that finance projects to promote community development. CDC analysis and other factors, a decision is made to close a has invested more than $120 million in community devel- branch, a retention plan must be developed that sets forth a opment projects and has supplemented such investment strategy for serving customers of the community affected activities with on-site community development technical by the closing, with particular attention given to serving assistance. LMI consumers. CRA personnel participate in the process Marketing and Ascertainment. Examiners noted that and review branch closing plans with neighborhood leaders Bane One's subsidiary banks have effectively identified the to ensure that the retention plan takes into account commucredit needs of their communities and adequately made nity suggestions. The Board expects that the policy would their credit services available to all segments of their be used for any branch closings that result from the procommunities. Officers of the Lead Bank, for example, posal. made hundreds of calls to churches, schools, neighborhood The primary federal supervisors of Bane One's subsidgroups, and local chambers of commerce to identify un- iary banks have considered the effect of branch closings met credit needs and to determine how the bank could under the policy on the communities served by Bane One's respond to those needs, provide other banking services, subsidiary banks. The OCC's CRA performance examinaand improve its marketing efforts. Examiners noted that tions concluded that Lead Bank and Bank One Texas have Bank One Texas undertook various marketing efforts tai- satisfactory records of opening and closing branches and lored to reach LMI communities, including direct mailings provided reasonable access to services for all segments of to LMI areas, Spanish or bilingual advertisements and the banks' communities. The most recent CRA perforbank brochures, and advertisements in ethnic and special mance examinations of Bane One's banks generally noted interest publications such as church newsletters. Bank One no materially adverse effects on LMI neighborhoods from Oklahoma also employed a call program to meet with a branch closings. variety of civic, religious, and neighborhood groups. The In examining the convenience and needs factor, the bank also placed advertisements on radio stations and in Board has taken into account Bane One's preliminary local newspapers aimed at African-American and Hispanic branch closing plans in Oklahoma, its record of closing populations. 19. Protestants also have expressed concerns about Bane One's reliance on alternative delivery mechanisms, such as automated teller machines, to serve LMI communities. 17. Protestants object that Bane One's subsidiary banks do not 20. The closing of a branch purchased by another banking organizaoriginate a significant volume of purchase money mortgages. The tion that is subsequently closed by that banking organization would be CRA does not require an institution to offer any specific credit evaluated by the primary federal supervisor of the purchasing organiproducts but allows an institution to help to serve the credit needs of zation. the institution's community by providing credit of the types consistent 21. The other five branches that Bane One has identified for possible with the institution's overall business strategy and expertise. action are located in upper- or middle-income census tracts or are 18. The bank is now named Bank One, Kentucky, N.A. located in a business district. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 525 branches as reviewed by the primary supervisors of Bane by Bane One with the fair lending laws. The examinations One's banks in the CRA examination process, and its of Bane One's subsidiary banks found no evidence of corporate branch closing policy. The Board notes that prohibited discrimination or other illegal credit practices at branch closings resulting from the proposal will be as- the institutions.23 Examiners also found no evidence of sessed by the Oklahoma banks' primary federal supervisor practices intended to discourage applications for the types for CRA performance in future CRA examinations. The of credit listed in the banks' CRA statements.26 Board also notes that Bane One is required to give at least Bane One also has implemented policies and programs 90 days written notice of all branch closings subject to the to ensure that its subsidiary banks engage in fair lending Joint Agency Policy Statement on Branch Closings ("Joint practices. For example, Bane One has a system of periodic Policy Statement").22 Additionally, the Board will review file reviews at its subsidiary banks to confirm the consisthe branch closures resulting from the proposal in its tency of loan decisions.27 Bane One's fair lending program analysis of future applications to expand the operations of is directed by the Fair Lending/CRA Steering Committee, Bane One's depository institutions. which is chaired by Bane One's General Counsel and includes senior management of each affected line of busi- Other Aspects of Bane One s Lending Activities ness, including BOMC and BOFS. Compliance with the program is monitored by compliance officers at each busi- The Board also has carefully reviewed Bane One's lending ness unit, who report to Bane One's national director of activities and its compliance with fair lending laws in light regulatory compliance. of all the facts of record. As part of this review, the Board Protestants have questioned Bane One's practice of rehas reviewed the 1994, 1995, and 1996 HMD A data re- ferring applicants for credit to its nonbank lending subsidported by Bane One, including the data for BOMC and iaries. Bane One maintains that applicants are referred to BOFS.23 The HMDA data reflect some disparities in the its nonbank lending subsidiaries like BOFS only after the rate of loan originations, denials, and applications by racial application has been denied by a Bane One bank and after group and income level. The Board is concerned when the the loan applicant has agreed to the referral. Bane One record of an institution indicates such disparities and be- views its referral program as an effort to permit a denied lieves that all banks and other lending institutions are applicant with an additional opportunity to qualify for a obligated to ensure that their lending practices are based on loan. Referrals made under the program are not compencriteria that assure not only safe and sound lending but also sated, and referral program guidelines prohibit illegal steerequal access to credit by creditworthy applicants regardless ing or prescreening and require that applicants be treated of race. The Board recognizes, however, that HMDA data uniformly. Under one recently introduced referral program, alone provide an incomplete measure of an institution's lending in its community because these data cover only a few categories of housing-related lending, and provide 25. The most recent CRA performance examination for Bank One, only limited information about the covered loans.24 HMDA Bloomington, N.A., Bloomington, Indiana, which represents less than 1 percent of Bane One's total consolidated assets, noted certain data, therefore, have limitations that make the data an violations of the ECOA. In considering the overall managerial record inadequate basis, absent other information, for concluding and convenience and needs factors in this case, the Board has carethat an institution has engaged in illegal lending discrimi- fully reviewed these violations in light of information regarding the nation. type and scope of the violations, the response of Bane One to the findings, and additional supervisory information from the OCC. The In light of the limitations of HMDA data, the Board has Board notes that the OCC determined that the violations were not carefully reviewed other information, particularly examina- widespread and that appropriate actions to correct the problems were tion reports that provide on-site evaluation of compliance taken by senior management of the bank. 26. Protestants refer to two class action lawsuits against Bane One as evidence of improper credit practices. The two class actions in- 22. See 58 Federal Register 49,083 (1993) (interpreting section 42 volved practices related to BOMC's escrow accounts and Bane One's of the Federal Deposit Insurance Act (12U.S.C. § 1831r-l)). Under private mortgage insurance ("PMI") activities. Both actions were these provisions, all insured depository institutions are required to settled and no conclusions of wrongdoing were made. DCRAC also submit a notice of any proposed branch closing to the appropriate cites an Ohio Supreme Court decision in a law suit against Bane One federal banking agency no later than 90 days before the date of closure and other defendants involving the forced purchase of collateral that contains: insurance if the collateral becomes uninsured. The decision found no (1) The identity of the branch to be closed and the proposed closing wrongdoing by the defendants but rather permitted the plaintiffs the date; opportunity to substantiate the allegations of wrongdoing at a trial on (2) A detailed statement of the reasons for the decision to close the the merits of the action. Protestants also cite several consumer combranch; and plaints against Bane One in Michigan and allege that there may be (3) Atatistical or other information supporting closure consistent similar complaints in other states in which Bane One does business. with the institution's written policy for branch closings. The Board has reviewed the complaints in Michigan in light of all the 23. Protestants object to consideration of 1996 HMDA data because facts of record, including confidential information from the state Protestants have not reviewed these data. The record indicates that authorities that reviewed these complaints, as part of the Board's Protestants only recently requested the data, which were required to be consideration of the managerial and convenience and needs factors in publicly available under HMDA by March 31, 1997. See section 203.5 this proposal. of the Board's Regulation C (12 C.RR. 203.5). 27. The most recent examination of Bane One's Lead Bank noted 24. HMDA data, for example, do not provide a basis for an favorably the bank's compliance monitoring and internal loan testing independent assessment of whether an applicant who was denied procedures. Protestants object that the file review program is only now credit was, in fact, creditworthy. being implemented at BOFS. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

526 Federal Reserve Bulletin • June 1997 existing borrowers of BOFS wishing to refinance their Nonbanking Activities loans are referred to BOMC to determine whether they qualify for a BOMC loan product. Bane One and BOC also have filed notice, pursuant to The Board also has considered certain preliminary infor- section 4(c)(8) of the BHC Act, to acquire the nonbanking mation developed in the course of its supervision of Bane subsidiaries of Liberty and thereby engage in lending activ- One that raises a question about fair lending oversight, ities, providing equipment leasing services, trust company procedures and practices at BOMC, one of its nonbank activities, and underwriting and brokering life insurance units. BOMC accounts for less than 1 percent of Bane directly related to extensions of credit by Bane One and its One's consolidated net income, and the information ap- affiliates.29 The Board has determined by regulation that pears to be limited in the context of Bane One's overall each of these activities is closely related to banking,30 and managerial and lending record. The Board is conducting a Bane One has committed to conduct the nonbanking activthorough examination of BOMC to resolve the question ities in accordance with Regulation Y. and to ensure compliance with law. In the event that the In order to approve the proposal under section 4(c)(8) of examination indicates a problem with fair lending over- the BHC Act, the Board also must determine that the sight, procedures, or practices, the Board has broad super- proposed activities are a proper incident to banking, that is, visory authority under the banking laws to require bank that the proposal "can reasonably be expected to produce holding companies and their nonbank subsidiaries to ad- benefits to the public, such as greater convenience, indress such deficiencies. creased competition, or gains in efficiency that outweigh In deciding to act on this case, the Board also has possible adverse effects, such as undue concentration of considered Bane One's record of addressing supervisory resources, decreased or unfair competition, conflicts of and other issues identified by its supervisor. In light of that interests, or unsound banking practices."31 As part of its record, the Board fully expects that Bane One will take all evaluation of these factors, the Board considers the finannecessary steps, including adopting and implementing cial condition and managerial resources of the notificant practices and procedures developed in consultation with and its subsidiaries, including the companies to be acthe Board, to ensure that any areas of weakness in its fair quired, and the effect of the proposed transaction on those lending policies and practices that may be identified resources.32 For the reasons noted above, and based on all through the Board's examination are adequately addressed, the facts of record, the Board has concluded that financial and the Board conditions its approval of this proposal on and managerial considerations are consistent with approval Bane One taking such actions. For these reasons, and based of the notice. on all the facts of record, the Board does not believe that The Board also has considered the competitive effects of denial of the proposal is appropriate, or that the Board's the proposed acquisition by Bane One of Liberty's nonaction on the proposal should be delayed for the period of banking businesses and, in doing so, has considered the time necessary to complete its examination.28 comments submitted by Protestants regarding the competi- The Board also has carefully considered all the facts of tive effects of the proposal.33 The Board notes the markets record, including the comments received from Protestants, for the nonbanking services are, in each case, unconcenthe responses to those comments, and the CRA perfor- trated and that there are numerous providers of the sermance records of the subsidiary banks of Bane One and vices. As a result, consummation of the proposal would Liberty, including relevant reports of examination from have a de minimis effect on competition. Based on all the their primary federal supervisors. Based on the facts of facts of record, the Board has concluded that the proposal record, and for the reasons discussed above, the Board would not have a significantly adverse effect on competiconcludes that convenience and needs considerations and tion in any relevant market. In addition, the Board expects related managerial considerations, including the CRA that the acquisition would provide added convenience to records of performance of both organizations' subsidiary Liberty's customers and the public. Bane One has stated banks, are consistent with approval of the proposal. The that consumers in the markets currently served by Liberty Board also concludes that this proposal satisfies the criteria would have access to a variety of services through Bane specified by statute to be applied by the Board in reviewing One that are not available through Liberty. Bane One also proposed acquisitions of this type, and that the record does notes that the proposed transaction would result in operanot provide a basis to deny this application under the statutory factors. 29. Bane One proposes to engage in these activities through the following non-banking subsidiaries of Liberty: Mid-America Credit Life Assurance Company, Mid-America Insurance Agency, Inc., Liberty Trust Company of Texas, and Liberty Financing Corporation. 30. See 12 C.F.R. 225.28(b)(l), (b)(3), (b)(5), and (b)(l l)(i). 31. 12U.S.C. § 1843(c)(8). 32. See 12 C.F.R. 225.26; see also The Fuji Bank, Limited, 75 28. Protestants also request that the proposal be denied or delayed Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 until the Board conducts an examination of BOFS for fair lending law Federal Reserve Bulletin 155 (1987). compliance. In light of all the facts of record, including a review of 33. Protestants also raise concerns about the acquisition by Bane the HMDA data, the Board concludes that the record in this case does One of a thrift subsidiary of Liberty. Liberty does not have a thrift not warrant granting Protestants' request. subsidiary. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 527 tional efficiencies that would allow Liberty to be a more pliance by Bane One with all the commitments made in effective competitor and thereby provide improved ser- connection with the proposal and with the conditions stated vices at a lower cost to its customers. Accordingly, based or referred to in this order. on all the facts of record, the Board has determined that the The Board's determination on the nonbanking activities balance of public benefits that the Board must consider also is subject to all the terms and conditions set forth in under the proper incident to banking standard of sec- Regulation Y, including those in sections 225.7 and tion 4(c)(8) of the BHC Act is favorable and consistent 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the with approval of the proposal. Board's authority to require such modification or termination of the activities of a bank holding company or any of Conclusion its subsidiaries as the Board finds necessary to ensure compliance with, and to prevent evasion of, the provisions Based on the foregoing, and in light of all the facts of of the BHC Act and the Board's regulations and orders record, including the comments submitted by Protestants,34 thereunder. For purposes of this transaction, the committhe Board has determined that the applications and notices ments and conditions referred to above shall be deemed to should be, and hereby are, approved.35 Approval of the be conditions imposed in writing by the Board in connecapplications and notices is specifically conditioned on com- tion with its findings and decision, and, as such, may be enforced in proceedings under applicable law.36 The acquisition of Liberty shall not be consummated before the fifteenth calendar day following the effective 34. The Black Citizens for Justice, Law & Order and DCRAC date of this order, and the proposal shall not be consumcontend that there are disproportionately low numbers of African mated later than three months after the effective date of this Americans in management and stafF positions at Bane One. The Board has carefully reviewed these comments in light of all the facts of order, unless such period is extended for good cause by the record, which include supervisory reports of examination assessing Board or by the Federal Reserve Bank of Cleveland, acting the financial and managerial resources of Bane One. The Board also pursuant to delegated authority. has previously stated that its limited jurisdiction to review applica- By order of the Board of Governors, effective April 29, tions under the BHC Act does not authorize the Board to adjudicate disputes raised by a commenter that arise under statutes exclusively 1997. administered and enforced by another federal regulatory agency other than banking laws. See, e.g., Norwest Corporation, 82 Federal Re- Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and serve Bulletin 580 (1996); see also Western Bane shares v. Board of Governors Kelley, Phillips, and Meyer. Governors, 40 F.2d 749 (10th Cir. 1973). Under the Department of Labor's regulations, Bane One is required to file an annual report with JENNIFER J. JOHNSON the Equal Employment Opportunity Commission ("EEOC") covering all employees in its corporate structure. See 41 C.F.R. 60-1.7(a) and Deputy Secretary of the Board 60-1.40. The Department of Labor, and the EEOC in particular, have sufficient statutory authority to address disputes regarding illegal discriminatory labor practices. 35. Protestants have requested a hearing on the proposal. Sec- Appendix tion 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 denial of the application. In this case, the Board has not received such Institution CRA Rating Date a recommendation from a state or federal supervisory agency. The Board's rules also provide for a hearing under section 4 of the BHC Bank One, Columbus, N.A. Outstanding 1/31/95 Act if there are disputed issues of material fact that cannot be resolved Bank One, Akron, N.A Outstanding 1/29/96 in some other manner regarding the acquisition of a savings association. See 12 C.F.R. 225.25(a)(2). As previously noted, Liberty does Bank One, Athens, N.A Satisfactory 11/30/96 not have a savings association subsidiary. Bank One, Louisiana, N.A. Satisfactory 9/19/96 Under its rules, the Board may also, in its discretion, hold a public Bank One, Bloomington, Satisfactory 4/30/03 hearing or meeting on an application or notice to clarify factual issues related to the notice and to provide an opportunity for testimony, if N.A.* appropriate. See 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully considered Protestants' request for a hearing in light of all the facts of record. In the Board's view, Protestants have had ample opportunity to present their views, and they have submitted substantial written comments that have been carefully considered by the Board in acting on the proposal. Protestants' request fails to demonstrate why their written presentations do not adequately present their evidence, allegations, and views. After a careful review of all the facts of record, the Board has concluded that Protestants dispute the weight that should be accorded to, and the conclusions that the Board should draw 36. Protestants have requested that consideration of the proposal be from, the facts of record but do not identify disputed issues of fact that consolidated with consideration of Bane One's proposal to acquire are material to the Board's decision. For these reasons, and based on First USA, Inc., Dallas, Texas. The Bane One/First USA proposal is a all the facts of record, the Board has determined that a public hearing separate proposal under the BHC Act, and the Board will review that or meeting is not required or warranted to clarify the factual record in proposal in light of all the facts of record in that case, including the proposal, or otherwise warranted in this case. Accordingly, the Protestants' comments, under the statutory factors required under request for a hearing on the proposal is hereby denied. section 4 of the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

528 Federal Reserve Bulletin • June 1997 ORDERS ISSUED UNDER BANK MERGER ACT Bank One, Cambridge, N.A. Satisfactory 4/21/93 Bank One, Cincinnati, N.A. Satisfactory 3/16/95 AmSouth Bank of Alabama One, Cleveland, N.A. Satisfactory 9/15/94 Birmingham, Alabama Bank One Trust Co., N.A. Not rated forCRA Bank One, Coshocton, N.A. Outstanding 6/30/94 Order Approving the Merger of Banks and Establishment Bank One, Crawfordsville, Outstanding 9/13/94 of Bank Branches N.A.* AmSouth Bank of Alabama, Birmingham, Alabama ("Am- Bank One, Texas, N.A. Outstanding 1/29/96 South Alabama"), a state member bank, has applied under Bank One, Dayton, N.A. Outstanding 4/30/95 section 18(c) of the Federal Deposit Insurance Act Bank One, Colorado, N.A. Outstanding 9/10/95 (12U.S.C. § 1828(c)) (the "Bank Merger Act") to merge Bank One, Dover, N.A. Outstanding 8/26/96 with AmSouth Bank of Florida, Tampa, Florida ("Am- South Florida"); AmSouth Bank of Georgia, Rome, Geor- Bank One, Fremont, N.A. Satisfactory 6/21/93 gia ("AmSouth Georgia"); AmSouth Bank of Tennessee, Bank One, Merrillville, Satisfactory 6/28/94 Chattanooga, Tennesssee ("AmSouth Tennessee"); and N.A.* AmSouth Bank of Walker County, Jasper, Alabama ("Am- Bank One, West Virginia, Satisfactory 6/16/95 South Walker") (collectively, the "Merging Banks"); with N.A. AmSouth Alabama as the survivor.1 AmSouth Alabama Bank One, Indiana, N.A. Outstanding 4/19/95 also has applied under section 9 of the Federal Reserve Act (12 U.S.C. § 321) to establish branches at the current loca- Bank One, Lafayette, N.A.* Satisfactory 12/13/94 tions of the main offices and branches of the Merging Bank One, Lima, N.A. Outstanding 6/8/93 Banks.2 Bank One, Kentucky, N.A. Outstanding 6/20/95 Notice of the application, affording interested persons an Bank One, Mansfield** Outstanding 4/29/95 opportunity to submit comments, has been given in accor- Bank One, Marietta, N.A. Outstanding 11/30/96 dance with the Bank Merger Act and the Board's Rules of Bank One, Marion Indiana, Satisfactory 6/5/96 Procedure (12 C.F.R. 262.3(b)). As required by the Bank N.A.* Merger Act, reports on the competitive effects of the merger were requested from the United States Attorney Bank One, Marion Satisfactory 1/29/96 General, the Office of the Comptroller of the Currency, and Bank One, Wisconsin Not rated forCRA the Federal Deposit Insurance Corporation. The time for Trust Co. filing comments has expired, and the Board has considered Bank One, Quad Cities, Satisfactory 2/15/95 the application and all the facts of record in light of the N.A. factors set forth in the Bank Merger Act and section 9 of Bank One, Oklahoma City Outstanding 4/22/96 the Federal Reserve Act. Bank One, Arizona, N.A. Satisfactory 9/30/96 AmSouth Alabama and the Merging Banks are wholly owned subsidiaries of AmSouth Bancorporation, Birming- Bank One, Portsmouth, Satisfactory 11/30/96 ham, Alabama ("AmSouth"). AmSouth is the third largest N.A. commercial banking organization in Alabama, controlling Bank One, Rensselaer, Outstanding 6/3/96 deposits of $6.8 billion, representing 15.7 percent of the N.A.* total deposits in commercial banking organizations in Ala- Bank One, Richmond, Outstanding 9/3/93 bama; the fifth largest commercial banking organization in N.A.* Florida, controlling deposits of $5.1 billion, representing Bank One, Utah, N.A. Outstanding 9/27/95 3.3 percent of the total deposits in commercial banking organizations in Florida; the twenty-first largest commer- Bank One, Sidney, N.A. Satisfactory 11/30/96 cial banking organization in Georgia, controlling deposits Bank One, Illinois, N.A. Satisfactory 5/10/95 of $275.6 million, representing less than 1 percent of the Bank One, Wheeling- Satisfactory 10/24/96 total deposits in commercial banking organizations in Steuben., N.A. Georgia; and the eighth largest commercial banking organi- Bank One, Youngstown, Outstanding 10/31/96 zation in Tennessee, controlling deposits of $827.5 million, N.A. representing 1.5 percent of the total deposits in commercial banking organizations in Tennessee.3 This proposal repre- Bank One, Wisconsin Satisfactory 1/17/95 1. On consummation of the merger, AmSouth Alabama would * Merged with Bank One, Indianapolis, N.A., on March 22, 1997. change its name to "AmSouth Bank." All the banks involved in the Bank One, Indianapolis, N.A., then changed its name to Bank One, proposal are state member banks. Indiana, N.A. 2. The locations of the branches that AmSouth Alabama proposes to ** Expected to be consolidated into Bank One Columbus. N.A. on establish are listed in the Appendix. May 17, 1997. 3. Deposit data are as of June 30, 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 529 sents a reorganization of AmSouth's existing banking oper- to be served in light of all the facts of record. The Board ations, and therefore, consummation of the proposal would has long held that consideration of the convenience and not have any significantly adverse effects on competition in needs factor includes a review of the records of the releany relevant banking market. vant depository institutions under the Community Reinvestment Act (12 U.S.C. §2901 %et seq.) ("CRA"). As Riegle-Neal Act Analysis provided in the CRA, the Board evaluates this factor in light of examinations by the primary federal supervisor of Section 102 of the Riegle-Neal Interstate Banking and the CRA performance records of the relevant institutions. Branching Efficiency Act of 1994 ("Riegle-Neal Act") An institution's most recent CRA performance evaluation (Pub. L. No. 103-328, 108 Stat. 2338 (1994)) authorizes is a particularly important consideration in the applications banks, beginning on June 1, 1997, to conduct interstate process because it represents a detailed on-site evaluation mergers unless, prior to June 1, 1997, the home State of of the institution's overall record of performance under the one of the banks involved in the transaction has adopted a CRA by its primary federal supervisor.7 AmSouth Alalaw expressly prohibiting merger transactions involving bama and all the banks involved in the proposal received out-of-state banks.4 The Riegle-Neal Act also authorizes "satisfactory" ratings at their most recent examination of the acquiring bank to retain and operate, as a main office or their CRA performance by the Federal Reserve Bank of branch, any bank offices of the acquired bank.5 Atlanta, as of October 7, 1996. Based on all the facts of All the states involved in this proposal, Alabama, Flor- record, including the results of the relevant CRA perforida, Georgia, and Tennessee, have enacted legislation al- mance examinations, the Board concludes that considerlowing interstate mergers between banks located in their ations relating to the convenience and needs of the commustates and out-of-state banks pursuant to the provisions of nities served are consistent with approval. the Riegle-Neal Act on or after June 1, 1997.6 Alabama The Board also concludes that all the factors that must Bank has notified the Alabama Superintendent of Banks, be considered under the Reigle-Neal Act and the Federal the Florida State Comptroller, the Georgia Commissioner, Reserve Act also are consistent with approval. and the Tennessee Commissioner regarding its proposal to consolidate its banking operations and provided a copy of Conclusion its Bank Merger Act application to all the relevant state agencies. Representatives from all the states involved in Based on the foregoing and all the facts of record, the the proposal have indicated that this transaction would be Board has determined that this application should be apin compliance with their state laws regarding interstate proved. Because the provisions of the Riegle-Neal Act bank mergers. In light of the foregoing, it appears that the relied on for this determination do not become effective proposal complies with the requirements of the Riegle- until June 1, 1997, the Board's action approving the pro- Neal Act provided that the proposal is not consummated posal shall not be effective until June 1, 1997. The Board's prior to June 1, 1997. approval of the proposal is conditioned on compliance by AmSouth Alabama with all the commitments made in Financial, Managerial and Other Supervisory Factors connection with this application. For purposes of this action, the commitments and conditions relied on in reaching The Bank Merger Act also requires the Board to consider this decision are both conditions imposed in writing by the the financial and managerial resources and future prospects Board and, as such, may be enforced in proceedings undei of the existing and proposed institutions, and the conve- applicable law. nience and needs of the communities to be served. The The merger of the Merging Banks with and into Am- Board has carefully considered the financial and manage- South Alabama may not be consummated before the fifrial resources and future prospects of AmSouth Alabama teenth day following the June 1, 1997, effective date of thi: and the Merging Banks in light of all the facts of record. order, or later than three months after the effective date o The facts of record include supervisory reports of examina- this order, unless such period is extended by the Board o tion assessing the financial and managerial resources of the by the Federal Reserve Bank of Atlanta, acting pursuant t( organizations and financial information provided by Am- delegated authority. South. Based on these and all other facts of record, the By order of the Board of Governors, this approval be Board concludes that all the supervisory factors under the comes effective June 1, 1997. Bank Merger Act are consistent with approval. The Board also has carefully considered the effect of the Voting for this action: Chairman Greenspan, Vice Chair Rivlin, an proposal on the convenience and needs of the communities Governors Kelley, Phillips, and Meyer. JENNIFER J. JOHNSOI Deputy Secretary of Boar 4. 12 U.S.C. § 1831u(a)(l) (1994). 5. 12 U.S.C. § 1831u(d)(l) (1994). 6. See Ala. Code §§ 5-13B-22, 23 (effective May 31, 1997); Fla. Stat. ch. 658.2953 (effective May 31, 1997); Ga. Code Ann., Fin. Inst. 1. See Statement of the Federal Financial Supervisory Agenck §7-1-628.3 (effective June 1, 1997); and Tenn. Code Ann. § 452- Regarding the Community Reinvestment Act. 54 Federal Registt 1402 et seq. (effective June 1, 1997). 13,742,-13,745 (1989) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

530 Federal Reserve Bulletin • June 1997 Appendix 52. 655 South Belcher Road, Clearwater, Florida 34624 53. 3463 22nd Avenue N., St. Petersburg, Florida 33713 Branch offices of AmSouth Florida to be established by 54. 3505 Fourth Street, N., St. Petersburg, Florida 33704 AmSouth Alabama: 55. 9398 Oakhurst Road, Seminole, Florida 34646 56. 4325 Park Boulevard, Pinellas Park, Florida 34665 1. 100 North Tampa Street, Tampa, Florida 33602 57. 601 Main Street, Safety Harbor, Florida 34695 2. 70 North Baylen Street, Pensacola, Florida 32501 58. 7800 113th Street N., Seminole, Florida 34642 3. 3300 North Pace Boulevard, Pensacola, Florida 32205 59. 6800 Gulfport Boulevard S., South Pasadena, Florida 4. 575 North Navy Boulevard, Pensacola, Florida 32507 33707 5. 5100 North 9th Avenue, Pensacola, Florida 32504 60. 2551 Sunset Point Road, Clearwater, Florida 34625 6. 8094 North Davis Highway, Pensacola, Florida 32514 61.905 Martin Luther King Jr. Drive, Tarpon Springs, 7. 420 Mary Esther Cutoff, Mary Esther, Florida 32569 Florida 34689 8. 400 Gulf Breeze Parkway, Gulf Breeze, Florida 32561 62. 5200 Est Bay Drive, Clearwater, Florida 34624 9. 4 East Nine Mile Road, Pensacola, Florida 32514 63. 2323 Curlew Road, Palm Harbor, Florida 34683 10. 1248 North Elgin Parkway, Shalimar, Florida 32579 64. 2353 Stickney Point Road, Sarasota, Florida 34231 11. 6499 Caroline Street, Milton, Florida 32570 65. 935 North Beneva Road, Sarasota, Florida 34232 12. 8022 Lillian Highway, Pensacola, Florida 32506 66. 4280 Bee Ridge Road, Sarasota, Florida 34233 13. 1200 John Sims Parkway, Niceville, Florida 32578 67. 1500 Pinehurst Drive, Spring Hill, Florida 34606 14. 7130 North 9th Avenue, Pensacola, Florida 32504 68. 13944 North Dale Mabry, Tampa, Florida 33618 15. 4505 Sauffey Field Road, Pensacola, Florida 32526 69. 3902 Henderson Boulevard, Tampa, Florida 33629 16. 6916 West Highway 98, Panama City, Florida 32407 70. 8655 College Parkway S.W., Fort Myers, Florida 33919 17. 12720 Middle Beach Road, Panama City, Florida 71. 13520 Cleveland Avenue N., N. Fort Myers, Florida 32407 33903 18. 100 Delwood Beach Road, Panama City, Florida 32411 72. 1507 Cape Coral Parkway E., Cape Coral, Florida 19. 100 Main Street, Destin, Florida 32541 33904 20. 25 Beal Parkway N.E., Ft. Walton, Florida 32548 73. 18621 North Tamaima Trail, N. Fort Myers, Florida 21. 469 West 23rd Street, Panama City, Florida 32405 33903 22. 5050 Highway 98 E., Destin, Florida 32541 74. 2250 Avenida Del Vera, N. Fort Myers, Florida 33917 23. 212 Racetrack Road, Ft. Walton, Florida 32547 75. 1821 Del Prado Boulevard, Cape Coral, Florida 33990 24. 3373 Gulf Breeze Parkway, Gulf Breeze, Florida 32566 76. 2100 Forrest Nelson Boulevard, Port Charlotte, Florida 25. 8094 North Davis Highway, Pensacola, Florida 32514 33952 26. 3102 Mahan Drive, Tallahassee, Florida 32308 77. 811 Anchor Rode Drive, Naples, Florida 33940 27. 3425 Thomasville Road, Tallahassee, Florida 32308 78. 1697 Pine Ridge Road, Naples, Florida 33942 28. 201 South Monroe Street, Tallahassee, Florida 32301 79. 1400 Gulfshore Boulevard N., Naples, Florida 33940 29. 400 Cleveland Street, Clearwater, Florida 34615 80. 5484 Rattlesnake Hammrock Road, Naples, Florida 30. 33805 Highway 19 N., Palm Harbor, Florida 34684 33962 31. 1350 West Bay Drive, Largo, Florida 34640 81. 606 Bald Eagle Drive, Marco Island, Florida 33937 32. 13501 ICOT Boulevard, Clearwater, Florida 34620 82. 5909 Pine Ridge Road, Naples, Florida 33999 33. 3021 Enterprise Road, E., Clearwater, Florida 34619 83. 2150 Goodlette Road, Naples, Florida 33940 34. 3132 Tampa Road, Oldsmar, Florida 34677 84. 405 8th Street S., Naples, Florida 34470 35. 2845 West Bay Drive, Belleair Bluffs, Florida 34640 85. 406 East Silver Springs Boulevard, Ocala, Florida 36. 604 East Druid Road, Clearwater, Florida 34617 34470 37. 3399 66th Street, N., St. Petersburg, Florida 33710 86.20381 East Pennsylvania Avenue, Dunnellon, Florida 38. 5728 Gulfport Boulevard, Gulfport, Florida 33707 34430 39. 5901 Sun Boulevard S., St. Petersburg, Florida 33715 87. 9351 Maricamp Road, Ocala, Florida 34472 40. 3522 Bell Shoals Road, Valrico, Florida 33594 88. 2800 East Silver Springs Boulevard, Ocala, Florida 41. 6424 Embassy Boulevard, Port Richey, Florida 34668 34470 42. 7512 State Road 52, Hudson, Florida 34667 89.451 South Highway 341-A, Silver Springs, Florida 43. 14212 U.S. Highway 19 N., Hudson, Florida 34667 34488 44. 4010 Little Road, New Port Richey, Florida 34655 90. 301 U.S. Highway 41 S., Inverness, Florida 34450 45. 9701 Starkey Road, Largo, Florida 34647 91. 1290 South Broad Street, Brooksville, Florida 34601 46. 1500 Belleair Road, Clearwater, Florida 34616 92. 1030 Southeast 17th Street, Ocala, Florida 34471 47. 2575 Countryside Boulevard, Clearwater, Florida 93. 3860 North Lecanto Highway, Beverly Hills, Florida 34621 34465 48.4811 Gulf Boulevard, St. Petersburg Beach, Florida 94. 3232 Southwest College Road, Ocala, Florida 34474 37706 95. 10715 Southeast Highway 441, Belleview, Florida 49. 260 First Avenue, S., St. Petersburg, Florida 33701 34420 50. 1042 Main Street, Dunedin, Florida 34698 96. 4556 South Suncoast Boulevard, Homosassa, Florida 51. 8250 Ninth Street, N., St. Petersburg, Florida 33702 34446 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 531 97. 2734 Northeast Jacksonville Road, Ocala, Florida Branch offices of AmSouth Tennessee to be established by 34470 AmSouth Alabama: 98. 8721 Southwest Highway 200, Ocala, Florida 34474 99. 802 North Main Street, Bushnell, Florida 33513 1. 2207 Crestmoor Road, Nashville, Tennessee 37215 100. 9356 San Jose Boulevard, Jacksonville, Florida 32257 2. 109 Walton Ferry Road, Henderson, Tennessee 37075 101. 233 East Bay Street, Jacksonville, Florida 32202 3. 150 West Main Street, Gallatin, Tennessee 37066 102. 6263 St. Augustine Road, Jacksonville, Florida 32217 4. 5323 Mt. View Road, Antioch, Tennessee 37013 103. 6524 Atlantic Boulevard, Jacksonville, Florida 32211 5. 330 Union Street, Nashville, Tennessee 37201 104. 9421 Baymeadows Road, Jacksonville, Florida 32256 6. 181 Belle Forrest Circle, Nashville, Tennessee 37221 105.4297 Roosevelt Boulevard, Jacksonville, Florida 7. 5029 Harpeth Drive, Brentwood, Tennessee 37027 32210 8. 2814 West End Avenue, Nashville, Tennessee 37203 106. 252 North Apopka Highway, Orlando, Florida 34761 9. 310 West College Street, Fayetteville, Tennessee 37334 107. 65 North Orange Avenue, Orlando, Florida 32801 10. Plaza Shopping Center Taft Highway, Signal Moun- 108. 220 West Fairbanks Avenue, Orlando, Florida 32789 tain, Tennessee 37377 109. 500 East Michigan Street, Orlando, Florida 32806 11.3303 Cummings Highway, Chattanooga, Tennessee 110. 5401 South Kirkman Road, Orlando, Florida 32819 37419 111. 2350 North U.S. Highway 1, Mims, Florida 32754 12. One Union Square, Chattanooga, Tennessee 37402 112. 2525 Garden Street, Titusville, Florida 32796 13. 4334 Ringgold Road, Chattanooga, Tennessee 37412 113. 905 Cheney Highway, Titusville, Florida 32780 14. 601 Market Center, Chattanooga, Tennessee 37402 114. 925 South Orlando Avenue, Orlando, Florida 32789 15. 5515 Brainerd Road, Chattanooga, Tennessee 37411 115.5495 West Irlo Bronson Highway, Orlando, Florida 16. 3894 Hixson Pike, Chattanooga, Tennessee 37415 34746 17. 4757 Highway 58, Chattanooga, Tennessee 37416 116. 14075 West Colonial Drive, Orlando, Florida 34787 18. 2120 Gunbarrel Road, Chattanooga, Tennessee 37421 117. 2338 U.S. Highway 19, Holiday, Florida 34691 19. 8535 Hixson Pike, Hixson, Tennessee 37343 20. 401 North Market Street, Dayton, Tennessee 37321 Branch offices of AmSouth Georgia to be established by 21. 178 Paul Huff Parkway, Cleveland, Tennessee 37312 AmSouth Alabama: 22. 1965 Northpoint Boulevard, Chattanooga, Tennessee 37343 1. 101 East Washington, Summerville, Georgia 30747 23. 400 Ocoee Street, Cleveland, Tennessee 37311 2. 2101 Shorter Avenue, Rome, Georgia 30165 3. 3040 Martha Berry Highway, Rome, Georgia 30165 4. 400 North 5th Avenue, Rome, Georgia 30162 Branch offices of AmSouth Walker to be established by 5. 1400 Turner McCall Boulevard, Rome, Georgia 30162 AmSouth Alabama: 6. 208 North Wall Street, Calhoun, Georgia 30701 7. 385 Battlefield Parkway, Fort Oglethorpe, Georgia 30742 1.110 20th Street, Jasper, Alabama 35501 8. 710 North Main Street, Lafayette, Georgia 30728 2. 310 Highway 78 W., Jasper, Alabama 35501 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretaij of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request tc 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 U.S. Bancorp, Business & Professional Bank, April 2, 1997 Portland, Oregon Woodland, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

532 Federal Reserve Bulletin • June 1997 Section 4 Applicant(s) Bank(s) Effective Date Barnett Banks, Inc., Card Alert Services, Inc April 3, 1997 v Jacksonville, Florida Arlington, Virginia Crestar Financial Corporation, Richmond, Virginia First Union Corporation, Charlotte, North Carolina NationsBank Corporation, Charlotte, North Carolina Southern National Corporation, Winston-Salem, North Carolina Wachovia Corporation, Winston-Salem, North Carolina HONOR Technologies, Inc., Maitland, Florida PNC Bank Corporation, PNC GPI, Inc., April 7, 1997 Pittsburgh, Pennsylvania Wilmington, Delaware 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 ABC Employee Stock Ownership Anchor Bancorporation, Inc., Chicago April 16, 1997 Plan, Anchor, Illinois Anchor, Illinois Anchor State Bank, Anchor, Illinois Armstrong Financial Co., Minden Exchange Company, Kansas City April 17, 1997 Minden, Nebraska Minden, Nebraska BanPonce Corporation, Seminole National Bank, New York March 28, 1997 Hato Rey, Puerto Rico Sanford, Florida Popular International Bank, Inc., Hato Rey, Puerto Rico BanPonce Financial Corp., Wilmington, Delaware Coal City Corporation, U.S. Bancorp, Inc., Chicago March 28, 1997 Chicago, Illinois Lansing, Illinois Manufacturers National Corporation, Chicago, Illinois The Colonial BancGroup, Inc., Fort Brooke Bancorporation, Atlanta April 4, 1997 Montgomery, Alabama Brandon, Florida Fort Brooke Bank, Brandon, Florida Commerce Bancshares, Inc., Shawnee Bank Shares, Inc., Kansas City March 31, 1997 Kansas City, Missouri Shawnee, Kansas CBI-Kansas, Inc., Kansas City, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 533 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Community Bankshares, Inc., First Western Bancorporation, Kansas City April 3, 1997 Denver, Colorado La Jara, Colorado Community Financial Corp., American Bancshares, Inc., St. Louis March 31, 1997 Olney, Illinois Highland, Illinois American Bank of Illinois in Highland, Highland, Illinois Community First Bankshares, Inc.. KeyBank National Association, Minneapolis April 15, 1997 Fargo, North Dakota Cheyenne, Wyoming Decatur First Bank Group, Inc., Decatur First Bank, Atlanta April 9, 1997 Decatur, Georgia Decatur, Georgia First Commercial Corporation, Southwest Bancshares, Inc., St. Louis March 31, 1997 Little Rock, Arkansas Jonesboro, Arkansas Guaranty Financial Corporation, Guaranty Bank, Richmond April 15, 1997 Charlottesville, Virginia Charlottesville, Virginia Guaranty Savings & Loan, F.A., Charlottesville, Virginia MAXLOU Bancshares, Inc., First State Bank, Kansas City April 17, 1997 Tahlequah, Oklahoma Tahlequah, Oklahoma Liberty Finance, Inc., Tahlequah, Oklahoma Southeast Arkansas Bank Jefferson County Bank of Fayette, St. Louis April 4, 1997 Corporation, Fayette, Mississippi Lake Village, Arkansas Texas Financial Bancorporation, Austin County Bankshares, Inc., Dallas April 9, 1997 Inc., Bellville, Texas Minneapolis, Minnesota Austin County Bankshares-Delaware, Delaware Financial, Inc., Inc., Wilmington, Delaware Wilmington, Delaware Austin County State Bank, Bellville, Texas USA BancShares, Inc., Regent Bancshares Corp., Philadelphia April 10, 1997 Philadelphia, Pennsylvania Philadelphia, Pennsylvania Wauneta Falls Bancorp, Inc., Ogallala National Bank, Kansas City April 7, 1997 Wauneta, Nebraska Ogallala, Nebraska Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Pocahontas Bankstock, Inc., SecurAmenca Holding Corporation, St. Louis April 3, 1997 Pocahontas, Arkansas Memphis, Tennessee United Community Banks, Inc.. United Family Finance Co., Atlanta April 1, 1997 Blairsville, Georgia Blue Ridge, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

534 Federal Reserve Bulletin U June 1997 Sections 3 and 4 Applicant(s) Nonbanking Activity /Company Reserve Bank Effective Date Illinois Community Bancorp, Inc., Illinois Guarantee Savings Bank, FSB St. Louis April 4, 1997 Effingham, Illinois Effingham, Illinois Illinois Community Bank, Effingham, Illinois Illinois Leasing Corporation, Inc., Effingham, Illinois Old Second Bancorp, Inc.. Maple Park Bankshares, Inc., Chicago April 16, 1997 Aurora, Illinois Maple Park, Illinois First State Bank of Maple Park, Maple Park, Illinois Maple Park Mortgage Company, Maple Park, Illinois 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 Guaranty Bank, Guaranty Savings & Loan, FA.. Richmond April 15, 1997 Charlottesville, Virginia Charlottesville, Virginia Pointe Bank, Pointe Federal Savings Bank, Atlanta March 28, 1997 Pembroke Pines, Florida Boca Raton, Florida Republic Security Bank, Family Bank, Atlanta April 2, 1997 West Palm Beach, Florida Hallandale, Florida PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the The New Mexico Alliance v. Board of Governors, No. 96- Federal Reserve Banks in which the Board of Governors is not 9552 (10th Cir., filed December 24, 1996). Petition for named a party. review of a Board order dated December 16, 1996, approving the acquisition by NationsBank Corporation and NB Holdings Corporation, both of Charlotte, North Carolina, of Cunningham v. Board of Governors, No. 97-1256 (D.C. Cir., Boatmen's Bancshares, Inc., St. Louis, Missouri. Also on filed April 11, 1997). Petition for review of a Board order December 24, 1996, petitioners moved for an emergency dated December 20, 1996, increasing the amount of revenue stay of the Board's order. The motion for a stay was denied that a section 20 subsidiary may derive from underwriting by the 10th Circuit on January 3, 1997; on January 6, 1997, and dealing in securities from 10 percent to 25 percent of its petitioners' application for emergency stay was denied by total revenue. the Supreme Court. Pharaon v. Board of Governors, No. 97-1114 (D.C. Cir., filed Artis v. Greenspan, No. l:96CV02619 (D.D.C., filed Novem- February 28, 1997). Petition for review of a Board order ber 19, 1996). Employment discrimination action. On Dedated January 31, 1997, imposing civil money penalties and cember 20, 1996, the Board moved to dismiss the action. an order of prohibition for violations of the Bank Holding Company Act. Snyder v. Board of Governors, No. 96-1403 (D.C. Cir., filed Research Triangle Institute v. Board of Governors, No. 97- October 23, 1996). Petition for review of Board order dated 1282 (4th Cir., filed February 24, 1997). Appeal of district September 11, 1996, prohibiting John K. Snyder and court's dismissal of contract claim. Donald E. Hedrick from further participation in the banking Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 535 industry. On November 21, 1996, the Board moved to stay of the Board's orders. The Board's brief was filed on dismiss the petition. April 16, 1996. Oral argument, consolidated with Inner City American Bankers Insurance Group, Inc. v. Board of Gover- PresslCommunity on the Move v. Board of Governors, took nors, No. 96-CV-2383-EGS (D.D.C., filed October 16, place on January 13, 1997. 1996). Action seeking declaratory and injunctive relief in- Beckman v. Greenspan, No. 95-35473 (9th Cir., filed May 4, validating a new regulation issued by the Board under the 1995). Appeal of dismissal of action against Board and Truth in Lending Act relating to treatment of fees for debt others seeking damages for alleged violations of constitucancellation agreements. On October 18, 1996, the district tional and common law rights. The appellants' brief was court denied plaintiffs' motion for a temporary restraining filed on June 23, 1995; the Board's brief was filed on order. On January 17, 1997, the parties filed cross-motions July 12, 1995. for summary judgment. In re Subpoena Duces Tecum, Misc. No. 95-06 (D.D.C., filed Clifford v. Board of Governors, No. 96-1342 (D.C. Cir., filed January 6, 1995). Action to enforce subpoena seeking pre- September 17, 1996). Petition for review of Board order decisional supervisory documents sought in connection with dated August 21, 1996, denying petitioners' motion to an action by Bank of New England Corporation's trustee in dismiss enforcement.action against them. On November 4, bankruptcy against the Federal Deposit Insurance Corpora- 1996, the Board filed a motion to dismiss the petition. tion. The Board filed its opposition on January 20, 1995. Artis v. Greenspan, No. 96-CV-02105 (D. D.C, filed Septem- Oral argument on the motion was held July 14, 1995. ber 11, 1996). Class complaint alleging race discrimination Board of Governors v. Pharaon, No. 91-CIV-6250 (S.D. New in employment. On December 20, 1996, the Board moved York, filed September 17, 1991). Action to freeze assets of to dismiss the action. individual pending administrative adjudication of civil Leuthe v. Board of Governors, No. 96-5725 (E.D. Pa., filed money penalty assessment by the Board. On September 17, August 16, 1996). Action against the Board and other 1991, the court issued an order temporarily restraining the Federal banking agencies challenging the constitutionality transfer or disposition of the individual's assets. of the Office of Financial Institution Adjudication. On January 24, 1997, the agencies filed a motion to dismiss the action. Long v. Board of Governors, No. 96-9526 (10th Cir., filed FINAL ENFORCEMENT DECISION ISSUED BY THE BOARD July 31, 1996). Petition for review of Board order dated OF GOVERNORS July 2, 1996, assessing a civil money penalty and cease and desist order for violations of the Bank Holding Company In the Matter of Act. Oral argument is scheduled for May 12, 1997. Interamericas Investments, Ltd. v. Board of Governors, No. Charles R. Vickery, Jr., 96-60326 (5th Cir., filed May 8, 1996). Petition for review Former Senior Chairman of the Board of order imposing civil money penalties and cease and desist order in enforcement case. On August 20, 1996, First National Bank of Bellaire petitioners' motion for a stay of the Board's orders pending Bellaire, Texas judicial review was denied by the Court of Appeals. On April 16, 1997, the court denied the petition for review. Inner City P res si Community on the Move v. Board of Gover- Docket No. nors, No. 96-4008 (2nd Cir., filed January 19, 1996). Peti- AA-OCC-EC-96-95 tion for review of a Board order dated January 5, 1996, approving the applications and notices by Chemical Bank- Final Decision ing Corporation to merge with The Chase Manhattan Corporation, both of New York, New York, and by Chemical This is an administrative proceeding pursuant to sec- Bank to merge with The Chase Manhattan Bank, N.A., both tion 8(e) of the Federal Deposit Insurance Act ("FDI of New York, New York. Petitioners' motion for an emer- Act"), 12U.S.C§1818(e), in which the Office of the gency stay of the transaction was denied following oral Comptroller of the Currency of the United States of Amerargument on March 26, 1996. The Board's brief on the ica ("OCC") seeks to prohibit Respondent Charles R. merits was filed July 8, 1996. The case was consolidated for Vickery from further participation in the affairs of any oral argument and decision with Lee v. Board of Governors, federally-supervised financial institution as a result of his No. 95-4134 (2d Cir.); oral argument was held on Janu- conduct during his former affiliation with First National ary 13, 1997. Bank of Bellaire, Bellaire, Texas (the "Bank"). As re- Lee v. Board of Governors, No. 95^-134 (2nd Cir., filed quired by statute, the OCC has referred the action to the August 22, 1995). Petition for review of Board orders dated Board of Governors of the Federal Reserve System (the July 24, 1995, approving certain steps of a corporate reorga- "Board") for final decision. nization of U.S. Trust Corporation, New York, New York, The proceeding comes before the Board in the form of a and the acquisition of U.S. Trust by Chase Manhattan 66-page Recommended Decision by Administrative Law Corporation, New York, New York. On September 12, Judge ("ALJ") Walter J. Alprin, issued following an ad- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

536 Federal Reserve Bulletin • June 1997 mended Decision, the ALJ found that Vickery had that the services were actually performed. Rule P-22(F), breached his fiduciary duty to the Bank by arranging to be OCC Ex. 8 at 9. The rule also requires that the title paid, as "referral fees," a portion of the title insurance insurance company verify in writing that "No portion of premium paid in connection with real estate loans that the charge for the services actually rendered shall be attrib- Vickery caused the Bank to make. Recommended Decision utable to, and no payment shall be made for the solicitation ("RD") 4. The ALJ concluded that this misconduct fulfilled of, or as an inducement for the referral or placement of the the requirements for prohibition from banking in that it title insurance business with the company." Id. resulted in financial gain to Vickery and reflected his personal dishonesty and continuing disregard for the safety B. Procedural History or soundness of the Bank. In Vickery's lengthy exceptions to these findings and conclusions, Vickery does not dispute his receipt of the payments, but denies that they reflected The OCC issued a Notice of Intention to Prohibit Further any impropriety. Participation against Vickery on January 26, 1996. RD 1. Based on a review of the record and the arguments Simultaneously, the OCC brought an action against Vickraised by Vickery, the Board rejects Vickery's exceptions ery seeking a civil money penalty of $250,000. Both acfor the reasons stated by the ALJ in the Recommended tions were addressed in a common hearing before the ALJ Decision, except as specifically noted in this Final Deci- and by the ALJ's Recommended Decision. Unlike this sion. The Board adopts OCC Enforcement Counsel's ex- prohibition decision, the final decision as to the civil money ceptions to the limited term of prohibition recommended penalty action is statutorily assigned to the Comptroller. by the ALJ and to the ALJ's recommended determination 12U.S.C§ 1818(h), (i). The Board takes official notice that Vickery's conduct did not reflect a willful disregard that, on March 31, 1997, the Comptroller issued a final for safety or soundness. Decision and Order assessing the full $250,000 amount against Vickery. /. Statement of the Case II. Findings of Fact A. Statutory and Regulatory Framework 1. Relevant Persons and Institutions 7. Standards for Prohibition Order First National Bank of Bellaire was at all times relevant to Under the FDI Act, the ALJ is responsible for conducting this proceeding a national bank subject to supervision by an administrative hearing on a notice of intent to prohibit. the OCC. RD 5. Vickery was the Senior Chairman of the 12U.S.C § 1818(e)(4). Following the hearing, the ALJ board of directors of the Bank from 1967 until he was issues a recommended decision that is referred to the terminated by the board of directors in 1994. RD 5. As Board, and the parties may file exceptions to the ALJ's Senior Chairman, Vickery was responsible for approving recommendations. The Board makes the final findings of and supervising all banking activities, including loans, fact, conclusions of law, and determination whether to investments, operations, and asset/liability management. issue an order of prohibition. Id.; 12 C.F.R. 263.40. RD 6. Vickery was also the principal shareholder of the To issue a prohibition order under the FDI Act, the Bank, owning or controlling about 40 percent of the Bank's Board must make each of three findings: outstanding shares in 1991. RD 5. He was also a principal (1) There must be a specified type of misconduct— shareholder of other banks, including Texas National Bank violation of law, unsafe or unsound practice, or breach of Baytown and Mayde Creek Bank, N.A. RD 6. During of fiduciary duty; the time central to this action, mid-1991 to early 1992, (2) The misconduct must have a prescribed effect— Vickery was also chairman of the Bank's executive comfinancial gain to the respondent or financial loss or other mittee and a member of the loan committee. RD 5. The damage to the institution; and other members of the loan committee were G. Warren (3) The misconduct must involve culpability of a certain Coles, Chairman and president of the Bank, and Craig degree—personal dishonesty or willful or continuing Wooten, the Bank's executive vice-president and chief disregard for the safety or soundness of the institution. operating officer. RD 7. Vickery was also an active member of the Texas State Bar from 1948 to September 1988, 2. Title Insurance Premium Splitting. when he requested inactive status. RD 6. During his banking career, Vickery's affiliated banks Applicable Texas Department of Insurance Rules provide engaged in repeated litigation with banking regulators. In that a title insurance company is permitted to make pay- one case, the OCC was upheld by both a district court and ments only to persons who have actually rendered services the Fifth Circuit Court of Appeals in its direction that the commensurate with the payment. Rule P-22, OCC Exhibit banks cease the practice of distributing credit life insurance ("Ex.") 8 at 9. The payee must submit an invoice stating in income to Vickery and other bank insiders in connection detail the services performed, and the payor must verify with loans that they had arranged for the Bank to make. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 537 First Nat'I Bank of LaMarque v. Smith, 436 F. Supp. 824 make the loans: The ALJ found that Coles "acceded" to (S.D. Tex. 1977), aff'd 610 F.2d 1258 (5th Cir. 1980).1 each loan and that Wooten had little involvement with the Vickery maintained a longstanding practice of collecting Moore loans. RD 7-8. Vickery assumed responsibility for commissions from title insurance companies in return for credit and final approval of each loan. Coles Tr. 1089. Each referring borrowers to them. OCC Ex. 45 at 5. Among of the loans was approved, booked, and funded before these companies was Sovereign, which would pay Vickery being presented to the Bank's board of directors for ratifia commission of 20 percent of the insurance premiums for cation. RD 22; Coles Tr. 1134; Olsen Tr. 783; Wooten Tr. issuing a title policy arising from real estate transactions 598. One of the directors resigned because of his concern financed by loans from Vickery-affiliated banks. RD 6; about the Moore loans. Levy Tr. 1073. The minutes of the Coles Tr. 1110; OCC Ex. 45 at 5. Sovereign's representa- Bank's board of directors meetings contain no evidence of tive in these transactions was P.B. Dover, a registered title any formal disclosure by Vickery of his arrangement with insurance agent and attorney, who began paying Vickery Sovereign or his receipt of payments in connection with the "referral fees" in 1982. Dover Tr. 428, 429. Dover the Moore loans. RD 22. testified that he entered into the arrangement because Vick- In choosing a title insurance company in connection ery had earlier maintained a similar arrangement with with the loans, Vickery's preference for Sovereign was another title insurance company and Dover understood that overridden by Moore's insistence on the use of Commonthis was the price of doing business. Dover Tr. 430. By wealth Land Title, a title insurance company with which 1991, the Texas Department of Insurance had issued rules, Moore had been doing business for 30 years. RD 8. In intended to prevent rebates and kickbacks that were driv- response, Coles advised Moore that any change in title ing up the cost of insurance, that prohibited title insurance companies would have to be approved by Vickery. RD 8; companies from making payments to induce referrals for Coles Tr. 1110; OCC Ex. 40. As part of the loan negotiaplacement of title insurance business and required that any tion process, Moore told Vickery that Commonwealth payments be justified by the performance of actual ser- would be closing the Moore loans, and that Vickery would vices. Rule P-22(H), (E); OCC Ex. 8 at 9; Hopson Tr. 687. have to accept that or work it out with Commonwealth. RD Dover stopped paying the referral fees after the insurance 8-9; Moore Tr. 78; Coles Tr. 1095. Vickery told Coles that regulations changed, but resumed them after Vickery de- Commonwealth could be used as the title insurer, but that manded to know where his referral fee was and advised "Commonwealth would have to honor the same kind of Dover that the regulations did not apply to referral fees agreement fVickery had] with Sovereign on the title poliamong lawyers. Dover Tr. 431.2 Dover continued to pay cies". RD 9; Coles Tr. 1111-1112, 1113, 1125. This re- Vickery referral fees until 1994. Dover Tr. 437. quirement was honored by Commonwealth, which in every case paid 20 percent of the gross insurance premium to 2. The Moore Loans Vickery or his proxy, Sovereign. In connection with the first Moore loan, Commonwealth Between June 1991 and February 1992, the Bank origi- paid the 20 percent cut directly to Vickery's defunct law nated a series of 23 loans to real estate developer Jerry J. firm, despite the fact that the Bank was represented by Moore and his wife, and to corporations owned by them. separate outside counsel who was paid directly from the The loans were secured by shopping center properties loan proceeds. For the remaining loans, the payments to owned by the Moores. RD 7. The total dollar volume of the Vickery were made more circuitously. Moore loans originated by the Bank was about $46 mil- Sometime before August 8, 1991, Vickery telephoned lion; the Bank retained about $24 million of that amount, Dover and told him that he would be receiving some selling participations in the remainder to its affiliates. checks that he had "to run through Sovereign Title Compa- RD7? ny," and that in return for handling the paperwork in- Vickery was the Bank's representative in negotiating the volved, Dover could keep the greater of five percent or terms of each of the Moore loans, RD 7, and was viewed $500 of the check proceeds and should send the remainder by the Bank's board of directors as the loan officer on the to Vickery. RD 13; Dover Tr. 437-38, 460. Following this Moore loans. RD 22; Olsen Tr. 784. The other members of conversation, Dover received a package of premiumthe loan committee had little influence on the decision to splitting certification forms from Commonwealth that called for Dover to certify that he had performed specified services on each of 12 Moore loans in return for Common- 1. In another case, the OCC was upheld in part and reversed in part wealth's payment to Sovereign of 20 percent of the title when it imposed a cease and desist order against the Bank. First Nat'I insurance premium. Dover called Commonwealth for fur- Bank of Bellaire v. Comptroller of the Currency, 697 F.2d 674 (5th ther instructions, signed the certification forms, and re- Cir. 1983). An aspect of the order that was upheld required that the turned them to Commonwealth. RD 14. Despite his certifi- Bank take action to prevent further violations of the restrictions on loans to bank insiders. 697 F.2d at 683-84. In a third case, the Fifth cation that he had performed services in return for the Circuit upheld the OCC's cease and desist order against the Bank and payments, Dover admitted that he did no work on the its affiliates for violations of lending limits in connection with the Moore loans, and was unaware of any work performed by loans involved in the present action. Texas National Bank v. Depart- Vickery. RD 21; Dover Tr. 453-54. ment of the Treasury, 50 F.3d 1033 (5th Cir. 1995) (table). 2. Vickery told Dover that if he were not willing to pay the fees he On or around August 16, 1991, Commonwealth sent would find someone else to do it. Dover Tr. 431-32. Dover two checks totalling $31,483 payable to Sovereign, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

538 Federal Reserve Bulletin • June 1997 representing 20 percent of the title insurance premiums loan. As a result, the officer may be induced to make a loan he Commonwealth earned on the 12 Moore loans between would not otherwise have considered sound. When loan officers are allowed to retain commissions, the prospect of finan- July 19 and August 6, 1991. RD 14. Dover deposited the cial gain is interjected into the lending decision. 610 F.2d proceeds of both checks into his personal account, and then 1265. used the funds to buy two cashier's checks, one for Vickery in the amount of $29,908, and the other which he kept Under this authority, it is clear that Vickery breached his himself in the amount of $1,574, or five percent of the total fiduciary duty of loyalty to the Bank.3 Receipt of the amount received from Commonwealth. RD 15. Dover used kickbacks of title insurance premiums, like the pocketed the same procedure for amounts received from Common- profits from the sale of credit life insurance premiums, wealth in connection with loans made on August 9, 1991 caused Vickery to have a personal financial stake in the ($4,208 before splitting), September 11 ($7,725), Octo- loans made by the Bank that could have influenced his ber 11 ($8,097), and January 3, 1992 ($2,113). RD 15-21. lending decisions and his recommendation of title insurers. In each case, Commonwealth sent Dover 20 percent of its As Bank lending officer, Vickery's duties to the Bank insurance premium, and Dover retained $500 or five per- included denying loan applications that were not in the cent of that amount and forwarded the remainder to Vick- Bank's interests. His personal interests, on the other hand, ery. were directly served by ensuring that loans were made in Vickery thus received personal payments in connection any case, the bigger the better, so that he would receive his with each of the Bank's 23 loans to the Moores, totalling referral fees from the title insurance company.4 Furtherabout $52,880. RD 10; OCC Ex. 33-38. more, Vickery's choice of title insurance companies was not made solely in the interests of the Bank, but was influenced by which company would be willing to pay his ///. Conclusions of Law referral fees. Thus, Vickery's responsibilities as loan officer of the Bank were compromised by the incentive to make loans and utilize title insurance companies for rea- A. Misconduct sons other than the best interests of the Bank. The Board adopts the ALJ's determination that the pay- 1. Breach of Fiduciary Duty ments to Vickery constituted "referral fees"—or, in the term used by a Texas title insurance regulator, The Board adopts the ALJ's recommended conclusion that, "kickbacks"—and rejects Vickery's alternative and mutuon the above facts, Vickery violated the duty of loyalty that ally contradictory explanations for the payments. These he owed the Bank to refrain from engaging in self-dealing explanations are either incredible on their face, would or conflicts of interest. RD 30. "The threshold inquiry in present similar conflicts even if true, or are unsupported by assessing whether a director violated his duty of loyalty is the record. First, contrary to his other characterizations and whether the director has a conflicting interest in the transacwithout business explanation, he states that he did not tion. Directors are considered to be 'interested' if they know what the payments were for, but that he thought they either "appear on both sides of a transaction [ ] or expect to were paid "out of the goodness of [Commonwealth's] derive any personal financial benefit from it in the sense of heart" (Vickery Tr. 119, 127). Next, he suggests that the self-dealing, as opposed to a benefit which devolves upon payments were fees for services performed for Commonthe corporation or all stockholders generally." In re Se'idwealth (Excep. 14). If that were so, that would only underman, 37 F.3d 911, 934 (3d Cir. 1994); quoting In re Bush, score, not alleviate, the conflict of interest. Vickery was the OTSAP 91-16 at 11, 15-16. Bank's fiduciary, and therefore had a duty not to provide Indeed, these principles have been applied to an analoservices to another party in a transaction in which the Bank gous situation involving Vickery, Coles, and the Bank. In was involved. Third, he claims that the payments were for 1976, the OCC issued policy directives requiring that Vickservices performed for the Bank. The record does not ery and the officers in his affiliated banks cease the practice of selling credit life insurance in conjunction with loans made by their banks in return for commissions paid by the insurance company to them personally, rather than the bank. First National Bank Of LaMarque v. Smith, 436 F. 3. Vickery excepts to the ALJ's determination that he was required to avoid even the appearance of a conflict of interest. RD 4. Because Supp. 824, 826-27. (S.D. Tex. 1977), aff'd in part, 610 the evidence clearly establishes that Vickery engaged in an actual F.2d 1258 (5th Cir. 1980). Upon a challenge by the banks conflict of interest, it is not necessary to reach this issue, and the to the policy directive, both the district court and the court Board, like the Comptroller, does not adopt the ALJ's conclusion on of appeals upheld the OCC's actions and condemned the the appearance issue. See OCC Decision and Order at 12 n.5. For the conflict of interest represented by insiders pocketing profits same reason, the Board need not reach the issue, raised in OCC Enforcement Counsel's exceptions, of whether Vickery's actions also from the credit life sales. The Fifth Circuit emphasized breached his duty of care. See OCC Decision and Order at 7. that: 4. In addition, the availability of kickbacks created an incentive for The payment to and retention by loan officers of commis- Vickery to prefer real estate-secured lending over other kinds of loans sions derived from the sale of credit life insurance involves an in order to assure the participation of a title insurer that would provide inherent conflict of interest: the loan officer's judgment may him fees. In certain market conditions, such a preference might well be influenced by his direct financial reward from making the be harmful to a bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 539 support a finding that Vickery performed any such ser- at which the interests of the bank and those of the insurer vices.5 certainly diverge. Furthermore, an overlap of institutional In short, Vickery is correct only when he characterizes interests does not as a general matter negate the conflict. In the payments as similar to the kind of commissions or LaMarque, the Fifth Circuit found self-dealing and an referral fees he had been paid by Sovereign for 20 years. unsafe and unsound practice where individual bank insid- Excep. 19, 21; OCC Ex. 45. That characterization, how- ers profited from the sale of credit life insurance, even ever, is no defense: these previous payments also repre- though the court found that that insurance benefitted banks, sented breaches of Vickery's fiduciary duty of loyalty. borrowers and insurers. The same is true here. Even assum- Nor is Vickery's precise role in the loan transactions ing that title insurance benefits the lender, the lending crucial to the determination that he had a conflict of inter- officer's personal stake in placing such insurance constiest. In his exceptions, Vickery denies that he had ultimate tutes a conflict of interest. See generally Pepper v. Litton, decisionmaking authority for the Moore loans (Excep. 5-6, 308 U.S. 295, 311 (1939) (fiduciary may not utilize his 18). But even if Vickery had merely recommended, rather strategic position for personal gain). than approved, the loans, his receipt of fees would have The Board therefore rejects Vickery's arguments that been a conflict of interest and a breach of fiduciary duty.6 these facts do not establish a proscribed conflict of interest Similarly, Vickery's argument that he did not give de- or breach of fiduciary duty.7 Excep. at 44-75. Vickery's tailed instructions to Dover as to the handling of the attempts to distinguish other conflict of interest cases as payments (Excep. 7, 13) is immaterial. Whatever his in- more heinous do not in any way redeem his conduct. structions, they were sufficient to cause Dover to forward Excep. 46-49. While Vickery may not have explicitly to him payments from Commonwealth. Moreover, the ALJ conditioned the making of the loans on the receipt of the had ample basis for resolving credibility issues against fees, he took active steps to ensure that he would receive Vickery and in favor of Dover's detailed recollection of funds directly in connection with those loans. In any event, Vickery's instructions. as discussed above, a bank officer has a duty to make a There is also no basis for Vickery's argument that his lending decision free from any personal financial stake in conflict of interest is benign because the interests of the the transaction. Bank and the title insurer are coincident. Even though the The Board also adopts the ALJ's recommendation that title insurer and the Bank have a common interest in Vickery violated his duty of candor by failing to inform the assuring that the borrower has good title to its security, officers and directors of his potential financial interest in their interests diverge in that the title insurer's interest is in the Moore loans. The general knowledge or inference of maximizing the volume of business, while a bank's interest Coles and Wooten that Vickery was receiving commissions includes rejecting dubious loans — and in complying with in connection with title insurance carries no weight in light regulatory limits on concentration of lending. The Bank's of Vickery's dominance of the bank and the absence of any interests also include, in approving the use of a title insur- record, such as a board of directors vote, that would have ance company, consideration of that company's record of brought the payments to the attention of regulators. See performance when a claim is made under a policy—a point Greenberg v. Board of Governors, 968 F.2d 164, 171 (2d Cir. 1992) (minutes of board of directors meetings silent as to conflict relationship). The Board finds, however, that the absence of disclosure bears more directly upon Vickery's 5. In transactions in which the Bank was represented by counsel its culpability than upon the existence of a conflict, in that it is counsel was not Vickery. According to Dover, Sovereign performed not clear that a conflict arising out of a bank officer's no services for the Bank in connection with the loans. Moreover, personal financial interest in a transaction could be cured Vickery was in the hospital during several of the closings. Even if Vickery had provided services to the Bank, he offers no explanation as by board of directors approval.8 Furthermore, the suggesto why his Bank salary—in excess of $149,000—did not sufficiently tion that Vickery should have removed himself from the compensate him for such services, or why Commonwealth would pay loan approval process because of the conflict, an action that him out of its insurance premium for services rendered to the Bank. 6. In any event, the record flatly contradicts Vickery's assertion. Vickery does not contest that he negotiated the loans with Moore or that Moore viewed him as the ultimate decisionmaker. Coles testified that Vickery had the ultimate say as to making the loans, that the third 7. The breach of fiduciary duty caused by Vickery's self-dealing is member of the loan committee was not consulted after the loans began not affected by the fact that it was not also a usurpation of corporate to be made, and that Vickery made a decision to keep making the opportunity—i.e., that Vickery's kickbacks did not properly belong to loans over Coles' objections. Coles Tr. 1089, 1099-1100, 1124. The the Bank. Excep. 49-51. In LaMarque, the Fifth Circuit affirmed the Board of directors only approved the loans after they had been made. district court's decision that the personal profit from the sale of credit See Levy Tr. 715 (by the time the Board approved the loans, "these life insurance constituted self-dealing even though it vacated the loans were done deals"); Edwards Tr. 897 (board discussion of the portion of the district court's decision that addressed usurpation of Moore-related loans consisted of: "The loans have been made. You all corporate opportunity. 610 F.2d at 1263. Accordingly, LaMarque need to approve them"); Vickery Tr. 304 (the board "never had makes clear that such self-dealing is a breach of fiduciary duty and an arguments or discussions of loans. They just have a list of loans, and unsafe and unsound practice even if it is not also a usurpation of the board approves them, and that is that"). Vickery's dominance of corporate opportunity. the board was such that if a director "crossed" Vickery, he would not 8. See LaMarque, 436 F. Supp. at 830 ("The illegality of selfbe renominated for the board the next year; when Vickery's brother dealing exists regardless of the financial strength of the plaintiff banks. was not renominated, Vickery had two policemen escort him out of 'Full disclosure' of the practice of all shareholders cannot legitimize the building. Edwards Tr. 902. this type of self-dealing."). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

540 Federal Reserve Bulletin • June 1997 is appropriate in many conflict situations, is circular in this intentionally misled the Texas Finance Commission when case. Had Vickery not been involved as the lending officer, he testified under oath on October 16, 1992, that he had no the title insurer would have had no reason to make pay- knowledge of the $2,432 fee paid to "Vickery Law Corpoments to him and the conflict would not have existed. ration" by Commonwealth on the first Moore loan. RD 44; Accordingly, while recusal or board of directors approval OCC Ex. 51. As the ALJ found, it "simply is not credible" may cure some conflicts, this is not such a case.9 that Vickery would have forgotten about the payment, in light of the controversy surrounding the Moore loans. RD B. Effects 44-45. That false answer under oath displays a disposition to falsehood that reflects personal dishonesty. RD 51; OCC There is no dispute that Vickery's breach of fiduciary duty Ex.51 at 38. did not cause financial loss to the Bank, but there is also no The Board also finds that Vickery's conduct reflected a dispute that Vickery received financial gain from the refer- willful disregard for safety or soundness. The Board has ral commissions. RD 46. His percentage, 20 percent of the previously found that a "willful disregard for safety or title insurance premiums less the five percent of that soundness" is established by intentional conduct that conamount or $500 for Dover, amounted to $52,881. RD 48. stitutes an unsafe or unsound banking practice. In re Ma- That financial gain is sufficient to establish the second gee, 78 Federal Reserve Bulletin 969, 974 (1992). There is category of prohibition requirements. no question that Vickery's arrangement of the referral fees was conduct intentionally engaged in—indeed that it had C. Culpability been consistently engaged in for decades, despite knowledge that similar payments had been found to constitute an The ALJ determined that Vickery's conduct reflected both unsafe or unsound practice and breach of fiduciary duty in personal dishonesty and a continuing disregard for safety LaMarque. Such deliberate conduct is unquestionably willor soundness, but did not find that it established a willful ful. disregard for safety or soundness. Vickery excepts to the Vickery's "disregard for safety or soundness" is estabfirst two findings and OCC Enforcement Counsel excepts lished because his self-dealing constituted an unsafe or to the third. unsound practice. As the Board has previously observed: The Board finds that ample evidence supports the con- The safety or soundness element addresses the nature, clusion that Vickery's conduct reflected personal dishon- rather than the degree, of the departure from ordinary esty and both willful and continuing disregard for the standards of prudent banking. Conduct departing from safety and soundness of the Bank. The standard for per- such standards represents an unsafe or unsound banking sonal dishonesty is clearly met by the evidence supporting practice when it is of a kind that, if continued, would the ALJ's findings that Vickery lacked integrity, fairness, present an abnormal risk—i.e., risks other than those straightforwardness, and trustworthiness, and displayed a inherent in doing business—of harm or loss to the bank. disposition to lie and misrepresent the facts. RD 49. The In re Van Dyke, No. AA-EC-87-88 (June 13, 1988), slip arrangement that Vickery worked out with Dover to "run op. at 26, afd, Van Dyke v. Board of Governors, 876 F.2d checks through" Sovereign displays an intent to shield the 1377, 1380 (8th Cir. 1989); see Greene County Bank v. transactions from regulatory scrutiny, and Vickery's indica- FDIC, 92 F.3d 633, 636 (8th Cir. 1996) (unsafe or unsound tion to Dover that it would involve some paperwork indi- practice is conduct deemed contrary to accepted standards cates a consciousness that Dover would be required to file of banking operation which might result in abnormal risk false certifications that he had performed services in con- or loss to a banking institution or shareholder). nection with the closing. RD 50—51. Further, the Board Here, the self-dealing practice is contrary to ordinary adopts the ALJ's credibility determination that Vickery standards of prudent banking because it creates incentives to make loans and deal with title insurers for reasons other than the bank's best interests. A lending officer whose judgment is skewed by personal interest has the potential 9. In his exceptions, Vickery objects to the ALJ's official notice of a to commit a bank to loans that would expose the Bank to prior OCC decision, affirmed by the Fifth Circuit, which held that the abnormal risk of harm or loss. Under the Board's stan- Bank and other Vickery-controlled banks had violated legal lending dards, therefore, Vickery's conduct reflected a willful dislimits with respect to the Moore loans. The ALJ limited his consideration of this proceeding with respect to the prohibition action to its regard for the Bank's safety and soundness. potential bearing on Vickery's culpability. RD 2 n.2. The only issue The ALJ's conclusion to the contrary used an overlydetermined in that proceeding—that the Moore loans violated the narrow standard that would require a finding that an indi- Bank's lending limits—is irrelevant to the existence of the breach of vidual deliberately exposed the Bank to abnormal risk of fiduciary duty found here. Vickery's conflict would have existed had loss or harm (RD 54), a standard that incorrectly appears to the Moore loans complied with the lending limits. Accordingly, because the two cases involve different claims, there is no res judicata require that an individual intend or be conscious of potenbar to considering the prior proceeding. Moreover, to the extent that tial harm to the Bank. Because the statute plainly contemthe fact that the Moore loans violated lending limits bears on Vick- plates prohibition of individuals who benefit from their ery 's culpability, the facts established in the prior proceeding may be practices even if the bank is as yet unharmed, the culpabilused collaterally against Vickery in this proceeding, as his ability to control the prior litigation establishes that he was in privity with the ity standard must be sufficiently broad to embrace schemes Bank. See Restatement (Second) of Judgments 39. designed solely to enrich the individual, if the practice is of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 541 a type that could cause harm to the bank. The practice of mental concepts of fiduciary responsibility and safe anc making lending decisions with a personal financial interest sound banking. This long history of recalcitrance does noi acting as a thumb on the decisional scales is clearly a suggest any reason for the Board to have confidence thai practice that exposed the Bank to abnormal risk of loss or Vickery would be suited to return to banking in three harm.10 years' time. While age and ill health are factors that ma) The Board also adopts the ALJ recommended conclu- warrant compassion, they do not bear upon the ultimate sion that Vickery engaged in "continuing disregard for the issue in the matter of prohibition, whether an individual's safety and soundness of the institution," a standard that character is consistent with his continued participation ir captures conduct reflecting recklessness or indifference banking. While Vickery of course retains the statutor} with respect to an institution's safety. See Brickner, 747 right to seek agency consent to return to banking, the F.2d at 1203 n.6.; Grubb v. FDIC, 34 F.3d 956, 962 (10th Board declines, to the extent it has such authority, to issue Cir. 1994). This series of loans was made over a period of such consent prospectively."11 some months, and Vickery's arrangement for personal fees was made against a backdrop of previous cases in which Conclusion the Comptroller and the courts had made clear that the collection of such fees was not only improper but poten- For the foregoing reasons, the Board orders that the attially hazardous to the institution. Both the district court tached Order of Prohibition issue. and the Fifth Circuit in the LaMarque case informed Vick- By Order of the Board of Governors, this 14th day o1 ery in no uncertain terms that the receipt of personal gain April, 1997. by a lending officer in connection with bank business constitutes self-dealing and an unsafe and unsound prac- Board of Governors of the tice. LaMarque, 610 F.2d at 1265. Vickery was quite aware Federal Reserve Systerr of those rulings. E.D. Vickery Tr. 853; Vickery Tr. 265. Vickery was also aware that fee-splitting among title insur- WILLIAM W. WILES ance companies for referrals had been prohibited by Texas regulation. Dover Tr. 431. Notwithstanding these bases for Secretary of the Boarc caution, Vickery nevertheless arranged the Dover scheme, creating a conflict of interest with his responsibilities as a Order of Prohibition lending officer. It is not a defense that the relatively small WHEREAS, pursuant to section 8(e) of the Federal De amount that Vickery received in referral fees may not have posit Insurance Act, as amended, (the "Act" been the primary reason why Vickery decided to make the (12 U.S.C § 1818(e)), the Board of Governors of the Fed loans, since a lending officer should not place himself in a eral Reserve System ("the Board") is of the opinion, fo: position where his personal financial interest plays any role the reasons set forth in the accompanying Final Decision in a lending decision. Accordingly, Vickery's repeated that a final Order of Prohibition should issue agains self-dealing in arranging referral fees for the Moore loans CHARLES R. VICKERY, JR.; satisfies the standard for continuing disregard for the safety NOW, THEREFORE, IT IS HEREBY ORDERED, pursu or soundness of the Bank. ant to sections 8(b)(3), 8(e), and 8(j) of the Federal Deposi Finally, the ALJ recommended that the Board order that Insurance Act, as amended (12 U.S.C. §§ 1818(b)(3) Vickery be prohibited for only a fixed term of three years, 1818(e)and 1818(j)), that: rather than indefinitely. The ALJ based this recommenda- 1. In the absence of prior written approval by the Board tion on Vickery's age, ill health, and the fact that his and by any other Federal financial institution regulator conduct did not harm the Bank directly. RD 56. The Board agency where necessary pursuant to section 8(e)(7)(B) o declines to adopt this recommendation. To the extent that the Act (12 U.S.C § 1818(e)(7)(B)), CHARLES R. VICK the Board has authority to issue a limited-term prohibition, ERY, JR. is hereby prohibited: it does not choose to exercise that authority in the circum- (a) From participating in the conduct of the affairs of an; stances of this case. The assumed absence of harm to the bank holding company, any insured depository institu bank carries little weight as a mitigating factor in that, as tion or any other institution specified in subsec noted above, the FDI Act plainly contemplates that a tion 8(e)(7)(A) of the Act (12 U.S.C § 1818(e)(7)(A)); prohibition order can be based solely on financial gain, (b) From soliciting, procuring, transferring, attemptin even if the bank is not harmed. Vickery's decades of to transfer, voting or attempting to vote any prox> self-dealing reflect an inveterate obliviousness to funda- consent, or authorization with respect to any votin rights in any institution described in subsectio 10. This distinguishes situations where individuals have acted passively or not acted at all. See, e.g., Brickner v. FDIC, 747 F.2d 1198 11. The Board denies Vickery's exceptions to the ALJ's evidential (8th Cir. 1984) (bank officers failed to take action to rein in lending rulings, which were within the scope of the wide discretion allocate officer despite explicit FDIC warnings). Even where such conduct to the ALJ in the conduct of a hearing. The Board also denies tr does not rise to the level of willful disregard for safety or soundness,it request for oral argument, to the extent that it is addressed to tr may still satisfy the standard for continuing disregard. See, e.g., Board, since the Board finds that the issues have been adequate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

542 Federal Reserve Bulletin • June 1997 8(e)(7)(A) of the Act (12 U.S.C § 1818(e)(7)(A)); (c) FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD from violating any voting agreement previously ap- OF GOVERNORS proved by the appropriate Federal banking agency; or (d) From voting for a director, or from serving or acting Juan Echeverri as an institution-affiliated party as defined in section 3(u) Bogota, Colombia of the Act (12 U.S.C § 1813(u)), such as an officer, director, or employee. The Federal Reserve Board announced on April 4, 1997, 2. This Order, and each provision hereof, is and shall the issuance of an Order of Prohibition against Juan Echevremain fully effective and enforceable until expressly erri, a former vice president and institution-affiliated party stayed, modified, terminated or suspended in writing by of the Miami agency of Banco Ganadero, S.A., Bogota, the Board. Colombia. This Order shall become effective upon the expiration of thirty days after service is made. Steven King By Order of the Board of Governors, this 14th day of Jakarta, Indonesia April, 1997. Board of Governors of the The Federal Reserve Board announced on April 18, 1997, Federal Reserve System the issuance of an Order of Prohibition against Steven King, a former loan administration officer and institution- WILLIAM W. WILES affiliated party of the New York agency of the PT Bank Secretaiy of the Board Negara Indonesia (persero), Jakarta, Indonesia. 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 A25 Federal fiscal and financing operations DOMESTIC FINANCIAL STATISTICS A26 U.S. budget receipts and outlays A27 Federal debt subject to statutory limitation Money Stock and Bank Credit A27 Gross public debt of U.S. Treasury— Types and ownership A4 Reserves, money stock, liquid assets, and debt A28 U.S. government securities measures dealers—Transaction s A5 Reserves of depository institutions, Reserve Bank A29 U.S. government securities dealers— credit Positions and financing A6 Reserves and borrowings—Depository A30 Federal and federally sponsored credit institutions agencies—Debt outstanding A6 Selected borrowings in immediately available funds—Large member banks Securities Markets and Corporate Finance A31 New security issues—Tax-exempt state and local Policy Instruments governments and corporations A7 Federal Reserve Bank interest rates A32 Open-end investment companies—Net sales A8 Reserve requirements of depository institutions and assets A9 Federal Reserve open market transactions A32 Corporate profits and their distribution A3 3 Domestic finance companies—Assets and Federal Reserve Banks liabilities, and consumer, real estate, and business credit A10 Condition and Federal Reserve note statements Al 1 Maturity distribution of loan and security Real Estate holdings A34 Mortgage markets A3 5 Mortgage debt outstanding Monetary and Credit Aggregates A12 Aggregate reserves of depository institutions Consumer Credit and monetary base A13 Money stock, liquid assets, and debt measures A36 Total outstanding A15 Deposit interest rates and amounts outstanding— A36 Terms commercial and BIF-insured banks Flow of Funds Commercial Banking Institutions— A37 Funds raised in U.S. credit markets Assets and Liabilities A39 Summary of financial transactions A40 Summary of credit market debt outstanding A16 All commercial banks A41 Summary of financial assets and liabilities A17 Domestically chartered commercial banks A18 Large domestically chartered commercial banks A19 Small domestically chartered commercial banks DOMESTIC NONFINANCIAL STATISTICS A20 Foreign-related institutions Selected Measures Financial Markets A42 Nonfinancial business activity— All Commercial paper and bankers dollar Selected measures acceptances outstanding A42 Labor force, employment, and unemployment A22 Prime rate charged by banks on short-term A43 Output, capacity, and capacity utilization business loans A44 Industrial production—Indexes and gross value A23 Interest rates—money and capital markets A46 Housing and construction A24 Stock market—Selected statistics A47 Consumer and producer prices Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin • June 1997 DOMESTIC NONFINANCIAL STATISTICS- A56 Banks' own claims on unaffiliated foreigners CONTINUED A57 Claims on foreign countries— Combined domestic offices and foreign branches Selected Measures—Continued A48 Gross domestic product and income Reported by Nonbanking Business A49 Personal income and saving Enterprises in the United States A58 Liabilities to unaffiliated foreigners INTERNATIONAL STATISTICS A59 Claims on unaffiliated foreigners Summary Statistics Securities Holdings and Transactions A50 U.S. international transactions—Summary A60 Foreign transactions in securities A51 U.S. foreign trade A61 Marketable U.S. Treasury bonds and A51 U.S. reserve assets notes—Foreign transactions A51 Foreign official assets held at Federal Reserve Banks Interest and Exchange Rates A52 Selected U.S. liabilities to foreign official A61 Discount rates of foreign central banks institutions A61 Foreign short-term interest rates A62 Foreign exchange rates Reported by Banks in the United States A52 Liabilities to and claims on foreigners A63 GUIDE TO STATISTICAL RELEASES AND A53 Liabilities to foreigners SPECIAL TABLES A55 Banks' own claims on foreigners A56 Banks' own and domestic customers' claims on foreigners A64 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 Financial Statistics • June 1997 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1996 1997 1996 1997 Monetary or credit aggregate Q2 Q3 Q4 Qi Nov.r Dec. Jan.v Feb.r Mar. Reserves of depository institutions' 1 Total ." -6.6r -16.4 -17.2r -8.3 -6.4 6.r -13.1 -12.3 -17.1 2 Required -5.9r -16.5r -18.5r -8.4 -7.5 -3.4r -8.5 -7.9 -20.7 3 Nonborrowed. ,. -7.9r -17.6 -16.2r -7.2 -4.6 7.5r -10.5 -12.3 -19.9 4 Monetary base' 3.0 5.3r 5.1 5.6 6.1 8.8r 3.9 5.7 3.5 Concepts of money, liquid assets, and debt 5 Ml ' -1.4 -6.5 -7.3 -.8 -.2 1.1 -1.6 .8 -6.1 6 M2 4.5 3.4 5.0 5.9 6.8 7.5 5.2 5.1 5.0 7 M3 6.4 5.4 7.9r 7.6 6.7 10.4r 5.2 8.9 6.8 8 L 6.3 5.5 6.5 n.a. 7.6 7.2r 2.9 10.2 n.a. 9 Debt 5.9r 5.3 4.9r n.a. 5.5 4.1r 3.4 4.9 n.a. Nontransaction components 10 In M25 7.0 7.7 10.2 8.5 9.6 10.0 7.9 6.8 9.3 11 In M3 only6 13.9 12.7 18.4r 13.5 6.5 20.9r 5.0 22.0 13.0 Time and savings deposits Commercial banks 12 Savings, including MMDAs 12.1 12.0 17.0 13.9 18.3 15.2 13.3 9.3 16.9 13 Small time7 . . . . 7 -1.0 3.8 4.8 3.0 5.3 3.9 1.4 2.4 4.6 14 Large time8'9 18.6 18.0 22.2r 12.5 5.7 24.2r -.3 16.7 24.8 Thrift institutions 15 Savings, including MMDAs 6.5 .2 .8 2.8 -2.6 2.6 4.9 2.6 2.6 16 Small time7 -3.0 -.3 2.1 -1.7 -.7 -2.7 .3 1.0 -11.9 17 Large time8 -3.0 9.0 9.1 12.8 9.1 -3.0 28.8 11.8 1.5 Money market mutual funds 18 Retail' 16.3 16.3 17.2 16.3 15.2 21.6 13.0 13.9 19.9 19 Institution-only 12.0 20.7 19.8 15.5 16.2 30.0 -12.0 36.9 25.1 Repurchase agreements and Eurodollars 20 Repurchase agreements10 16.2 -4.5r 1.4r 4.5 -6.1 -9.9r 13.1 19.1 -10.9 21 Eurodollars10 10.9 8.5 39.9r 28.5 4.5 56.9r 39.4 14.4 -12.2 Debt components4 22 Federal 4.7 3.8 3.2 n.a. 4.2 2.9 -.6 1.8 n.a. 23 Nonfederal 6.3r 5.8 5.5r n.a. 5.9 4.5 4.7 6.0 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- amounts held by depository institutions, the U.S. government, money market funds, and ing during preceding month or quarter. foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large 2. Figures incorporate adjustments for discontinuities, or '"breaks," associated with time deposits, institutional money fund balances, RP liabilities, and Eurodollars, each regulatory changes in reserve requirements. (See also table 1.20.) seasonally adjusted separately, and adding this result to seasonally adjusted M2. 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency securities, commercial paper, and bankers acceptances, net of money market fund holdings of component of the money stock, plus (3) (for all quarterly reporters on the "Report of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference separately, and then adding this result to M3. between current vault cash and the amount applied to satisfy current reserve requirements. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial 4. 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 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail OCDs, each seasonally adjusted separately. money fund balances, each seasonally adjusted separately. M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and money market mutual funds (money funds with minimum initial investments of less than term) of U.S. addressees, each seasonally adjusted separately. $50,000). Excludes individual retirement accounts (IRAs) and Keogh balances at depository 7. Small time deposits—including retail RPs—are those issued in amounts of less than institutions and money market funds. Seasonally adjusted M2 is calculated by summing $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions savings deposits, small-denomination time deposits, and retail money fund balances, each are subtracted from small time deposits. seasonally adjusted separately, and 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-denomination time deposits (in amounts of $100,000 or more), (2) booked at international banking facilities. balances in institutional money funds (money funds with minimum initial investments of 9. Large time deposits at commercial banks less those held by money market funds, $50,000 or more), (3) RP liabilities (overnight and term) issued by all depository institutions, depository institutions, the U.S. government, and foreign banks and official institutions. and (4) Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. 10. Includes both overnight and term. banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes 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 CREDITl Millions of dollars Average of daily figures Average of daily figures for week ending on dateindicated Factor 1997 1997 Jan. Feb. Mar. Feb. 12 Feb. 19 Feb. 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 437 954 433 961r 437 436 432 529 4^4 4441" 436,006r 435 162 437 313 438,267 438,421 U.S. government securities 2 Bought outright—System account3 391,762 392.105 395,970 391,666 391,882 392,966 392,115 395,326 397.082 397,707 3 Held under repurchase agreements 9.214 6,772 7,388 4,677 7,011 9,431 9,190 8,345 7,243 6,782 Federal agency obligations 4 Bought outright 2,098 2,034 2.008 2,038 2,038 2.030 2,011 2.011 2,011 2,006 5 Held under repurchase agreements 1,785 1.726 1,387 2.570 1,787 1.153 1,360 1.294 966 1.233 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 25 23 199 19 17 36 14 2 299 13 8 Seasonal credit 18 21 37 18 22 24 28 26 35 41 9 Extended credit o o o 0 0 0 0 0 0 0 10 Float 1.149 526r 413 285 458r 493r 904 443 510 454 11 Other Federal Reserve assets 31.903 30.753 30,034 31,255 31,229 29,872 29,540 29.866 30.122 30,184 12 Gold stock 11,048 11,050 11,051 11,049 11.051 11,051 11.051 11,051 11,051 11,051 13 Special drawing rights certificate account 9,636 9,400 9,226 9,400 9,400 9,400 9,371 9,200 9,200 9,200 14 Treasury currency outstanding 25,017 25.076 25,135 25,065 25,079 25,093 25,107 25,121 25,135 25,149 ABSORBING RESERVE FUNDS 15 Currency in circulation 443,^40 441,045 443,397 440,142 442,177 441,907 442.362 443.507 443,573 443,349 16 Treasury cash holdings 248 262 297 261 262 266 279 283 302 308 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,186 4,998 5 840 4,829 5,002 4 425 5.149 5,169 7,479 5,376 18 Foreign 185 'l82 "202 167 165 '210 208 'l76 166 167 19 Service-related balances and adjustments 7,173 7.137r 7,058 7,272 7,040 7,078 7,131 7.101 7,029 7.069 20 Other 331 360 394 391 357 329 371 408 419 373 21 Other Federal Reserve liabilities and capital 14,318 14,069 14,501 13.973 14,273 14,393 14,152 14.397 14,633 14,663 22 Reserve balances with Federal Reserve Banks4 . . . 11,875 ll,433r 11,157 11,009 10,698r 12,944r 11,039 11,645 10,051 12,515 End-of-month figures Wednesday figures Jan. Feb. Mar. Feb. 12 Feb. 19 Feb. 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 433,767 435,272r 442,401 437,112 435,327r 443,392r 433,855 443,607 442,025 444,123 U.S. government securities2 2 Bought outright—System account3 391,728 390,797 395.076 392,223 393,208 393,415 393,392 396,075 397,206 397,580 3 Held under repurchase agreements 7.720 10.778 10,485 8,365 8,390 14,816 7,024 12,809 9,889 10,948 Federal agency obligations 4 Bought outright 2,038 2,011 1,994 2,038 2,038 2,011 2.011 2,011 2,011 1,994 5 Held under repurchase agreements 1,285 1,626 1,096 3,099 564 2,328 635 2.179 1,205 2,471 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 16 8 3,943 13 8 6 2 3 1,154 9 8 Seasonal credit 14 29 ' 55 18 23 23 26 32 ' 40 52 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 29 684r -518 -278 l,528r 128r 1,288 60 212 644 11 Other Federal Reserve assets 30,937 29,339 30,270 31,635 29.569 30,665 29476 30,437 30,308 30,424 12 Gold stock 11,048 11,051 11,050 11.050 11,051 11,051 11,051 11.051 11,050 11,050 13 Special drawing rights certificate account 9,400 9,400 9,200 9,400 9,400 9,400 9.200 9,200 9,200 9,200 14 Treasury currency outstanding 25,051 25,107 25,163 25.065 25,079 25,093 25,107 25.121 25,135 25,149 ABSORBING RESERVE FUNDS 15 Currency in circulation 438,399 441,651 444,534 441,627 442,721 442,666 443,651 444,496 444.179 444,325 16 Treasury cash holdings 249 280 313 262 264 275 280 302 307 313 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,770 5 258 5,945 5.135 5,571 5,229 5,239 5 285 9,035 4 420 18 Foreign 167 '229 916 181 'l64 'l88 "l64 "222 163 'l62 19 Service-related balances and adjustments 7,172 7,131r 6,947 7,272 7,040 7,078 7,131 7,101 7,029 7,069 20 Other 359 345 350 383 329 336 418 409 412 362 21 Other Federal Reserve liabilities and capital 13.384 14,135 14,816 14,128 14,171 14,263 13.844 14,515 14,498 14,515 22 Reserve balances with Federal Reserve Banks4 . . 12,767 ll,801r 13,993 13,639 I0.598r 18,901r 8.486 16,649 11,787 18,356 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 3. Includes compensation that adjusts for the effects of inflation on the principal o 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged inflation-indexed securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 4. Excludes required clearing balances and adjustments to compensate for float. under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • June 1997 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages Reserve classification 1994 1995 1996 1996 1997 Dec. Dec. Dec. Sept. Oct. Nov. Dec. Jan. Feb.r Mar. 1Reserve balances with Reserve Banks2 24,658 20,440 13,395 13,688 12,800 12,895 13,395 11,710 11,455 11,514 2 Total vault cash3 40,378 42,094 44,426 43,652 42,925 42,745 44,426 47,172 43,375 42,116 3 Applied vault cash4 36,682 37,460 37,848 37,309 36,749 36.862 37,848 38,932 36,588 36,029 4 Surplus vault cash5 3,696 4,634 6,578 6,343 6,175 5,883 6,578 8,240 6,788 6,087 5Total reserves 61,340 57,900 51,243 50,997 49,550 49,756 51,243 50,642 48.043 47.543 6 Required reserves 60,172 56,622 49,819 49,959 48,556 48,721 49,819 49,419 47.012 46,383 7 Excess reserve balances at Reserve Banks' 1,168 1,278 1,424 1,038 994 1,035 1.424 1,223 1,031 1,160 8Total borrowings at Reserve Banks8 209 257 155 368 287 214 155 45 42 156 9 Seasonal borrowings 100 40 68 306 212 109 68 19 21 37 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 1996 1997 Dec. 4 Dec. 18 Jan. 1 Jan. 15 Jan. 29 Feb. 12 Feb. 26r Mar. 12r Mar. 26 Apr. 9 1Reserve balances with Reserve Banks" 13,182 12,837 14,063 13,060 10,285 11,052 11,817 11,341 11,269 12,617 2Total vault cash3 42,908 44,684 44,615 46,140 48,679 45,130 41.948 42,841 41.665 41,640 3 Applied vault cash 36 898 37 913 38 070 39 029 39 078 37 673 35 672 36 490 35 674 35 915 4 Surplus vault cash 6,010 6,771 6,545 7,112 9,601 7,458 6,276 6,351 5,991 5,725 5Total reserves6 50,080 50,750 52,132 52,089 49,363 48,724 47,489 47,831 46,943 48,532 6 Required reserves 48,983 49,338 50,595 50,859 48,142 47,688 46,493 46,593 45,872 47,312 7 Excess reserve balances at Reserve Banks7 1,097 1,411 1,537 1,230 1,221 1,036 996 1,238 1,071 1,220 8Total borrowings at Reserve Banks8 346 112 143 53 32 34 50 35 194 344 9 Seasonal borrowings 86 67 64 18 18 18 23 27 38 61 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. 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of daily figures 1997 Source and maturity Feb. 3 Feb. 10 Feb. 17 Feb. 24 Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 Federal funds purchased, repurchase agreements, and other selected borrowings From commercial banks in the United States 1 For one day or under continuing contract 78,507 79,164 77,348 77,260 79,923 86,313 81,310 80,216 84,271 2 For all other maturities 13,731 13,701 14,982 14,220 14,342 13,669 13,850 15,140 15,913 From other depository institutions, foreign banks and official institutions, and U.S. government agencies 3 For one day or under continuing contract 19,884 20,217 18,013 20.629 17,779 18,779 18,299 18,498 20.288 4 For all other maturities 20,299 19,010 18,861 18,902 19,713 19,461 20,268 18,569 18,487 Repurchase agreements on U.S. government and federal agency securities Brokers and nonbank dealers in securities 5 For one day or under continuing contract 12,326 11,504 11,148 11,569 14,968 12,846 13,816 15,093 13,938 6 For all other maturities 41,008 43,389 43,426 36,813 35,645 36,676 37,758 35,299 37,965 All other customers 7 For one day or under continuing contract 44.386 42,938 42,126 42,181 41,645 41,873 44,127 45,388 40,284 8 For all other maturities 13,601 13,673 13.914 14,237 13,916 14,125 14,055 14,068 19,462 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 71,516 70,211 69,859 69.893 73.259 70,653 73,056 71.008 76,622 10 To all other specified customers" 21,777 21,884 20,069 23,489 24,134 20,959 23,726 23,771 23,046 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

Policy Instruments A 7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit Extended credit3 leral Reserve Bank On Effective date On Previous rate On Effective date 5/9/97 5/9/97 5/9/97 Boston 5.00 2/1/96 5/8/97 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. 1/31/96 5/8/97 Range of rates for adjustment credit in recent years4 Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank Effective date level)—All of Effective date level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1977 6 6 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 Mav 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 Mav 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 26 9 9 Nov. 6 4.5-5 4.5 1979—July 20 10 10 Dec. 14 8.5-9 9 7 4.5 4.5 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 21 11 11 1984—Apr. 9 8.5-9 9 1992—Julv 2 3-3.5 3 Oct. 8 11-12 12 13 9 9 7 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 8 8 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 16 11 11 1986—Mar. 7 7-7.5 7 July 28 10-11 10 10 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 May 9, 1997 5.00 5.00 8 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

A8 Domestic Financial Statistics • June 1997 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Type of deposit Net transaction accounts2 1 $0 million-$49.3 million3 . . 1/2/97 2 More than $49.3 million4 . . 1/2/97 3 Nonpersonal time deposits5. . 12/27/90 4 Eurocurrency liabilities 12/27/90 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. The exemption applies only to previous reserve requirements, see earlier editions of the Annual Report or the Federal accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions maintenance period beginning January 2, 1997, for depository institutions that report weekly, include commercial banks, mutual savings banks, savings and loan associations, credit and with the period beginning January 16, 1997, for institutions that report quarterly, the unions, agencies and branches of foreign banks, and Edge Act corporations. exemption was raised from $4.3 million to $4.4 million. 2. Transaction accounts include all deposits against which the account holder is permitted 4. The reserve requirement was reduced from 12 percent to 10 percent on to make withdrawals by negotiable or transferable instruments, payment orders of with- Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that drawal, or telephone or preauthorized transfers for the purpose of making payments to third report quarterly. persons or others. However, accounts subject to the rules that permit no more than six 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits preauthorized, automatic, or other transfers per month (of which no more than three may be with an original maturity of less than 1 xfi years was reduced from 3 percent to 1 x/i percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1 x/l years was reduced from 3 against which the 3 percent reserve requirement applies be modified annually by 80 percent of percent to zero on Jan. 17, 1991. the percentage change in transaction accounts held by all depository institutions, determined The reserve requirement on nonpersonal time deposits with an original maturity of 1 x/i as of June 30 of each year. Effective with the reserve maintenance period beginning January 2, years or more has been zero since Oct. 6, 1983. 1997, for depository institutions that report weekly, and with the period beginning January 16, 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero 1997, for institutions that report quarterly, the amount was decreased from $52.0 million to in the same manner and on the same dates as the reserve requirement on nonpersonal time $49.3 million. deposits with an original maturity of less than 1 x/l years (see note 5). 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

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1996 1997 Type of transaction 1994 1995 1996 and maturity Aug. Sept. Oct. Nov. Dec. Jan. Feb. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 17,484 10.932 9,901 0 0 0 6,502 0 0 0 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 376.277 398,487 400,152 34.271 32,791 38.661 29.037 27,247 40,346 33,997 4 For new bills 376,277 398,487 400.152 34,271 32 791 38,661 29,037 27.247 40,346 33,647 5 Redemptions 0 900 0 0 0 0 0 0 0 0 Others within one year 6 Gross purchases 1,238 390 1,275 1,240 0 0 0 0 () 818 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts o o 29.070 2,780 2,371 1,623 3,818 2.259 2.481 5.086 9 Exchanges -21.444 0 -4U94 -3,580 -2.890 -1J70 -5,'655 -U950 -550 -Z864 10 Redemptions 0 0 2,015 0 0 0 0 0 607 0 One to five years 11 Gross purchases 9,168 4,966 3,177 1.279 0 0 0 0 0 1,125 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -6,004 0 -24,087 -1.409 -2.371 -1,623 -2,102 -2.259 -2.481 -4.926 14 Exchanges 17,801 0 31,458 1,780 2,890 1.395 2,715 1,950 550 1,874 Five to ten years 15 Gross purchases 3,818 1,239 776 297 0 0 0 0 0 0 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturitv shifts -3 145 o -1,531 -1,371 o o 1.716 o o 1.236 18 Exchanges 2^903 0 6,666 900 0 375 1.470 0 0 890 More than ten years 19 Gross purchases 3,606 3,122 1,965 900 0 0 () 0 0 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -918 0 -20 0 0 0 0 0 0 -1.396 ?2 Exchanges 775 o 3,270 900 o (J 1,470 o o 450 All maturities 23 Gross purchases 35,314 20,649 17,094 3,716 0 0 6.502 0 0 1,943 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 2,337 2,376 787 0 0 0 0 0 607 0 Matched transactions 26 Gross purchases 1,700,836 2,197,736 3.083.315 265.397 234,992 268,304 227,577 272,117 285,667 250.867 27 Gross sales 1,701,309 2,202.030 3,085,685 264,536 238,036 267.128 226.505 273,872 283,240 254,741 Repurchase agreements 28 Gross purchases 309,276 331,694 457,568 45,202 36,014 33,836 36,383 85,924 74,422 48,805 79 Gross sales 311,898 328,497 450,359 56,286 33.374 33.020 36,665 73,501 86,673 45.747 30 Net change in U.S. Treasury securities 29,882 17,175 21.147 -6,508 -404 1,993 7,293 10,669 -10,430 1,127 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 0 0 0 32 Gross sales 0 0 0 0 0 0 0 0 0 0 33 Redemptions 1,002 1,303 1,637 0 27 63 10 12 187 27 Repurchase agreements 34 Gross purchases 52,696 36,851 75.354 8,500 4,536 12,683 9,264 7,796 17,668 9,795 35 Gross sales 52,696 36,776 74,842 7,544 4,436 11,051 9,471 8,947 17,995 9,454 36 Net change in federal agency obligations -1,002 -1,228 -1,125 956 73 1,569 -217 -1,163 -514 314 37 Total net change in System Open Market Account. . . 28,880 15,948 20,021 -5,552 -331 3,562 7,076 9,506 -10,944 1,441 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 2. Transactions exclude changes in compensation for the effects of inflation on the principal Account; all other figures increase such holdings. of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • June 1997 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1997 1997 Feb. 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26 Jan. 31 Feb. 28 Mar. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,051 11,051 11,051 11.050 11,050 11,048 11,051 11,050 2 Special drawing rights certificate account 9.400 9,200 9.200 9.200 9,200 9.400 9,400 9,200 3 Coin 720 716 701 690 676 703 740 673 Loans 4 To depository institutions 30 28 35 1,193 61 30 36 3,998 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 1 Bought outright 2,011 2,011 2,011 2.011 1,994 2,038 2,011 1.994 8 Held under repurchase agreements 2,328 635 2,179 1,205 2,471 1,285 1.626 1,096 9 Total U.S. Treasury securities 408,231 400,416 408,884 407,095 408,528 399,448 401,575 405,561 10 Bought outright2 393,415 393,392 396.075 397.206 397,580 391.728 390,797 395,076 11 Bills 191,468 191,445 191.573 191,280 191,654 192,074 188,850 189.149 12 Notes 151.665 151,665 153,103 154,526 154,527 150,315 151.665 154,527 13 Bonds 50,282 50.282 51,399 51,399 51,399 49.339 50,282 51,399 14 Held under repurchase agreements 14,816 7,024 12.809 9,889 10,948 7,720 10.778 10.485 15 Total loans and securities 412,600 403,091 413,110 411,505 413,054 402,801 405,249 412,649 16 Items in process of collection 6,272 8,281 6,575 6,379 6,020 4,343 4,404 1,955 17 Bank premises 1.245 1,245 1,248 1,249 1,249 1.235 1,244 1,249 Other assets 18 Denominated in foreign currencies3 18.266 17,922 17,929 17,936 17,943 18,241 17.917 17.950 19 All other4 11,187 10,348 11.337 11,212 11,324 11,494 10,203 11,076 20 Total assets 470,742 461,853 471,150 469,221 470,517 459,267 460,209 465,803 LIABILITIES 21 Federal Reserve notes 418,569 419,539 420,378 420,040 420,165 414,299 417,564 420,357 22 Total deposits 32,428 21,584 30,225 28,854 30,337 27,603 24,707 29,056 23 Depository institutions 26,675 15.764 24,309 19,245 25.392 20.307 18,876 21,845 24 U.S. Treasury—General account 5,229 5,239 5.285 9,035 4,420 6,770 5,258 5,945 25 Foreign—Official accounts 188 164 222 163 162 167 229 916 26 Other 336 418 409 412 362 359 345 350 27 Deferred credit items 5.483 6.885 6,032 5,828 5,500 3.981 3.803 1.574 28 Other liabilities and accrued dividends3 4.576 4,473 4,792 4,696 4,672 4,618 4,691 4,661 29 Total liabilities 461,055 452,482 461,427 459,418 460,674 450,501 450,765 455,648 CAPITAL ACCOUNTS 30 Capital paid in 4,721 4,732 4,755 4,757 4,754 4,676 4,725 4,762 31 Surplus 4,474 4,440 4.476 4,514 4,496 4,083 4.414 4,496 32 Other capital accounts 492 200 492 531 593 8 305 898 33 Total liabilities and capital accounts 470,742 461,853 471,150 469,221 470,517 459,267 460,209 465,803 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 632,992 643.314 644,657 649,667 647,296 625,260 644,307 653,897 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 524.600 524.717 524,727 525,325 526,015 523.455 525,220 525,843 36 LESS: Held by Federal Reserve Banks 106,032 105,178 104.350 105,285 105,850 109,156 107,657 105.486 37 Federal Reserve notes, net 418,569 419,539 420.378 420,040 420,165 414,299 417.564 420.357 Collateral held against notes, net 38 Gold certificate account 11,051 11,051 11,051 11,050 11,050 11,048 11,051 11,050 39 Special drawing rights certificate account 9,400 9,200 9,200 9.200 9,200 9,400 9,400 9.200 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 398.118 399.288 400.127 399,790 399,915 393,851 397,112 400,107 42 Total collateral 418,569 419,539 420,378 420,040 420,165 414,299 417,564 420,357 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, »oe 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 includes compensation that adjusts for the effects of inflation on 5. Includes exchange-translation account reflecting the monthly revaluation at market the principal of inflation-indexed securities. Excludes securities sold and scheduled to be exchange rates of foreign exchange commitments. bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks A11 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month Type of holding and maturity 1997 1997 Feb. 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26 Jan. 31 Feb. 28 Mar. 31 1 Total loans 30 28 35 1,193 61 30 36 3,998 2 Within fifteen days' 29 10 15 1.192 52 25 25 3,977 3. Sixteen days to ninety days 1 18 20 1 ~9 5 11 21 4 Total U.S. Treasury securities" 408,231 400,416 408,884 407,095 408,528 399,448 390,797 405,561 5 Within fifteen days' 28,428 19,290 20.033 22.495 24,608 16,270 5.442 23,476 6 Sixteen days to ninety days 88,836 95,624 95.994 90,603 90,153 96.790 98.725 92,382 7 Ninety-one days to one year 121.942 116,765 121.565 121.282 121.051 117,103 117,893 118,849 8 One year to five years 91.419 91.130 92,568 93,991 93,991 93,677 91.130 92,381 9 Five years to ten years 36.607 36.607 36.607 36.607 36.607 33.782 36.607 36.608 10 More than ten years 41,000 41.000 42.117 42.117 42,117 41.826 41,000 42,117 11 Total federal agency obligations 4,339 2,646 4,190 3,216 4,465 3,323 2,011 3,090 12 Within fifteen days' 2.648 635 2.196 1.494 2,753 1.446 320 1,378 13 Sixteen days to ninety davs 455 762 782 510 500 • 679 455 500 14 Ninety-one days to one year 245 258 281 281 281 197 245 281 15 One year to five years 510 510 460 460 460 520 510 460 16 Five years to ten years 457 457 447 447 447 457 457 447 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. 2. Includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • June 1997 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1996r 1997r 1993 1994 1995 1996'" Item Dec. Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS' 1 Total reserves3 60.55r 59.40r 56.39r 50.06 52.18 51.28 50.08 49.81 50.06 49.52 49.01 48.31 2 Nonborrowed reserves4 60.46r 59.20r 56.13r 49.91 51.85 50.91 49.79 49.60 49.91 49.47 48.97 48.16 3 Nonborrowed reserves plus extended credit" 60.46r 59.20" 56.13r 49.91 51.85 50.91 49.79 49.60 49.91 49.47 48.97 48.16 4 Required reserves 59.48r 58.24r 55.ir 48.64 51.22 50.24 49.08 48.78 48.64 48.29 47.98 47.15 5 Monetary base6 386.88r 418.48r 434.52r 452.67 444.00 445.81 447.08 449.37 452.67 454.14 456.29 457.62 Not seasonally adjusted 6 Total reserves' 62.37 61.13 58.02 51.52 51.83 51.21 49.78 50.01 51.52 50.67 48.12 47.69 7 Nonborrowed reserves 62.29 60.92 57.76 51.37 5L49 50*84 49.49 A9.19 5137 50~62 48^08 47.53 8 Nonborrowed reserves plus extended credit 62.29 60.92 57.76 51.37 51.49 50.84 49.49 49.79 51.37 50.62 48.08 47.53 9 Required reserves8 61.31 59.96 56.74 50.10 50.87 50.17 48.78 48.97 50.10 49.44 47.09 46.53 10 Monetary base9 390.59 422.51 439.03 456.72 444.53 445.49 445.38 449.20 456.72 455.55 452.56 455.25 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 62.86 61.34 57.90 51.24 51.64 51.00 49.55 49.76 51.24 50.64 48.04 47.54 12 Nonborrowed reserves , 62.78 61.13 57.64 51.09 51.31 50.63 49.26 49.54 51.09 50.60 48.00 47.39 13 Nonborrowed reserves plus extended credit"' 62.78 61.13 57.64 51.09 51.31 50.63 49.26 49.54 51.09 50.60 48.00 47.39 14 Required reserves 61.80 60.17 56.62 49.82 50.68 49.96 48.56 48.72 49.82 49.42 47.01 46.38 15 Monetary base1" 397.62 427.25 444.45 463.49 450.77 451.72 451.91 455.90 463.49 462.71 459.64 462.21 16 Excess reserves13 1.06 1.17 1.28 1.42 .96 1.04 .99 1.04 1.42 1.22 1.03 1.16 17 Borrowings from the Federal Reserve .08 .21 .26 .16 .33 .37 .29 .21 .16 .05 .04 .16 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 eifect 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

Monetary and Credit Aggregates A13 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1996 1997 1993 1994 1995 1996 Dec. Dec. Dec. Dec. Dec. Jan. Feb.' Mar. Seasonally adjusted Measures2 1 Ml 1,129.8 1,150.7 1.129.0 1.081.0 1.081.0 1,079.6' 1.080.3 1,074.8 2 M2 3 486 6 3,502.1 3,655.0 3.833.1 3,833.1 3,849.8 3,866.2 3,882.4 3 M3 4,254.4 4,328.7 4,594.8 4,927.3' 4,927.3' 4,948.6' 4,985.1 5,013.4 5,167.8 5,309.8 5,700.3 6,057.3' 6.057.3' 6,071.7' 6.123.3 n.a. 5 Debt ....... 12,514.6 13,156.4 13,875.3 14,624.4' 14,624.4' 14.665.5' 14.725.8 n.a. Ml components 6 Currency 322.2 354.4 372.6 395.2 395.2 397.0 400.5 402.4 7 Travelers checks 7.9 8.5 8.9 8.6 8.6 8.6 8.6 8.5 8 Demand deposits 385.2 384.1 391.1 402.4' 402.4r 401.7 404.2 402.8 9 Other checkable deposits6 414 5 403 8 356 5 274 8 274 8 272 4 :>67 o 261 1 Nontransaction components 10 In M27 2,356.8 2,351.4 2.526.0 2,752.1 2,752.1 2.770.2 2,785.9 2,807.6 11 In M3 only8 767 8 826 6 939 8 1 094 2' 1 094 2' 1 098 8r i 118 9 1 131 0 Commercial banks 12 Savings deposits, including MMDAs 785.2 752.4 776.0 904.0' 904.0' 914.0 921.1 934.1 13 Small time deposits 468.3 503.2 576.0 592.0 592.0 592.7 593.9 596.2 14 Large time deposits10- '' 271.9 298.4 344.7 410.4' 410.4' 410.3' 416.0 424.6 Thrift institutions 15 Savings deposits, including MMDAs 434.0 397.2 361.1 367.1 367.1 368.6 369.4 370.2 16 Small time deposits9 314.3 314.3 357.7 352.4 352.4 352.5 352.8 349.3 17 Large time deposits10 61.5 64.7 75.1 79.2 79.2 81.1 81.9 82.0 Monex market mutual funds 18 Retail 354.9 384.3 455.2 536.6 536.6 542.4 548.7 557.8 19 Institution-only 209.5 198.5 246.9 299.3 299.3 296.3 305.4 311.8 Repurchase agreements and Eurodollars 20 Repurchase agreements12 158.6 182.9 182.1 192.7' 192.7' 194.8r 197.9 196.1 21 Eurodollars12 66.4 82.1 91.0 112.6' 112.6' 116.3' 117.7 116.5 Debt components 22 Federal debt 3,323.3 3,492.2 3,638.8 3.780.4 3,780.4 3.778.6 3.784.2 n.a. 23 Nonfederal debt 9,191.2 9,664.2 10,236.6 10,844.1' 10,844.1' 10,887.0' 10,941.6 n.a. Not seasonally adjusted Measures^ 24 Ml 1,153.7 1,174.4 1,152.8 1.103.0 1,103.0 1,085.8' 1,066.1 1,066.7 25 M2 3,506.6 3.522.5 3,675.3 3.851.5 3.851.5 3.851.5 3.850.5 3,887.2 26 M3 4,274.8 4,348.8 4,614.3 4.944.3' 4.944.3' 4,954.2' 4.976.3 5,020.2 27 L 5,197.7 5,340.2 5,732.2 6.085.6' 6.085.6' 6,084.6' 6,118.4 n.a. 28 Debt 12,516.6 13,158.0 13,875.8 14,623.7' 14,623.7' 14,645.4' 14,686.3 n.a. Ml components 29 Currency3 324.8 357.5 376.2 397.9 397.9 395.6 397.7 401.0 30 Travelers checks4. 7.6 8.1 8.5 8.3 8.3 8.2 8.3 8.2 31 Demand deposits^1 401.8 400.3 407.3 418.8 418.8 405.6 394.6 396.0 32 Other checkable deposits6 419.4 408.6 360.8 278.0 278.0 276.4 265.5 261.5 Nontransaction components 33 In M27 2,352.9 2,348.1 2,522.6 2,748.6' 2.748.6' 2,765.6 2,784.4 2,820.5 34 In M3 only8 768.2 826.3 939.0 1,092.8' 1,092.8' 1,102.8' 1.125.8 1.133.0 Commercial banks 35 Savings deposits, including MMDAs 784.3 751.7 775.3 902.9 902.9 908.9 915.4 935.1 36 Small time deposits9 466.8 501.5 573.8 589.8 589.8 592.0 594.3 597.7 37 LarCTe time deposits 279 o 298 9 345 7 4119' 4119' 406 7' 414 4 423 8 Thrift institutions 38 Savings deposits including MMDAs 433.4 396.8 360.8 366.7 366.7 366.5 367.1 370.5 39 Small time deposits9 313.3 313.2 356.3 351.1 351.1 352.1 353.0 350.2 40 Large time deposits10 61.5 64.8 75.4 79.5 79.5 80.4 81.6 81.8 Money market mutual funds 41 Retaif 355.0 385.0 456.3 538.1 538.1 546.2 554.6 567.1 42 Institution-only 210.6 199.8 248.2 300.5 300.5 304.8 315.5 316.4 Repurchase agreements and Eurodollars 43 Repurchase agreements12 156.6 179.6 178.0 187.5' 187.5' 192.8' 195.3 193.4 44 Eurodollars'^ 67 6 83 2 91 8 113 5' 113 5' 118 0' 119 0 117 6 Debt components 45 Federal debt 3,329.5 3,499.0 3.645.9 3,787.9 3.787.9 3,773.4 3,783.0 n.a. 46 Nonfederal debt 9,187.1 9,659.0 10,229.8 10,835.8r 10,835.8' 10,872.1' 10,903.3 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • June 1997 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) savings deposits (including MMDAs), (2) small-denomination time 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) Travelers checks issued by depository institutions are included in demand deposits. balances in retail money market mutual funds (money funds with minimum initial invest- 5. Demand deposits at commercial banks and foreign-related institutions other than those ments of less than $50,000). Excludes individual retirement accounts (IRAs) and Keogh owed to depository institutions, the U.S. government, and foreign banks and official institubalances at depository institutions and money market funds. Seasonally adjusted M2 is tions, less cash items in the process of collection and Federal Reserve float. calculated by summing savings deposits, small-denomination time deposits, and retail money 6. Consists of NOW and ATS account balances at all depository institutions, credit union fund balances, each seasonally adjusted separately, and adding this result to seasonally share draft account balances, and demand deposits at thrift institutions. adjusted Ml. 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) money fund balances. issued by all depository institutions, (2) balances in institutional money funds (money funds 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities with minimum initial investments of $50,000 or more), (3) RP liabilities (overnight and term) (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and issued by all depository institutions, and (4) Eurodollars (overnight and term) held by U.S. term) of U.S. addressees. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United 9. Small time deposits—including retail RPs—are those issued in amounts of less than Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. govern- $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are ment, money market funds, and foreign banks and official institutions. Seasonally adjusted subtracted from small time deposits. M3 is calculated by summing large time deposits, institutional money fund balances, RP 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those liabilities, and Eurodollars, each seasonally adjusted separately, and adding this result to booked at international banking facilities. seasonally adjusted M2. 11. Large time deposits at commercial banks less those held by money market funds, L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury depository institutions, the U.S. government, and foreign banks and official institutions. securities, commercial paper, and bankers acceptances, net of money market fund holdings of 12. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A15 ! .22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks1 1997r 1995 1996r Dec. Dec. July Aug. Sept. Interest rates (annual effective yields) INSURED COMMERCIAL BANKS 1 Negotiable order of withdrawal accounts2 1.91 n.a. 1.90 1.91 1.90 1.91 1.98 n.a. n.a. n.a. n.a. 2 Savings deposits2'3 3.10 n.a. 2.88 2.86 2.84 2.85 2.85 n.a. n.a. n.a. n.a. Interest-bearing time deposits with balances of less than $100,000, by maturity 3 7 to 91 days 4.10 4.03 4.13 4.17 4.11 4.11 4.08 4.03 4.03 4.05 4.13 4 92 to 182 days 4.68 4.63 4.59 4.60 4.61 4.60 4.60 4.63 4.63 4.62 4.67 5 183 days to 1 year 5.02 5.00 5.00 5.00 5.04 5.02 4.99 5.00 5.01 5.02 5.08 6 More than 1 year to 2'/2 years 5.17 5.22 5.25 5.25 5.29 5.27 5.23 5.22 5.25 5.27 5.36 7 More than 2x/i years 5.40 5.46 5.50 5.50 5.54 5.52 5.48 5.46 5.49 5.51 5.61 BIF-INSURED SAVINGS BANKS4 8 Negotiable order of withdrawal accounts2 1.91 n.a. 1.81 1.81 1.84 1.90 1.92 n.a. n.a. n.a. n.a. 9 Savings deposits2'3 2.98 n.a. 2.88 2.86 2.84 2.80 2.82 n.a. n.a. n.a. n.a. Interest-bearing time deposits with balances of less than $100,000, by maturity 10 7 to 91 days 4.43 4.66 4.64 4.64 4.59 4.64 4.67 4.66 4.75 4.73 4.78 11 92 to 182 days 4.95 5.02 5.01 5.06 5.11 5.08 5.03 5.02 5.05 5.04 5.05 12 183 days to 1 year 5.18 5.28 5.09 5.26 5.33 5.32 5.29 5.28 5.31 5.31 5.34 13 More than 1 year to 2x/i years 5.33 5.53 5.41 5.59 5.61 5.60 5.56 5.53 5.58 5.59 5.66 14 More than iSfi years 5.46 5.72 5.60 5.80 5.82 5.79 5.76 5.72 5.77 5.78 5.81 Amounts outstanding (millions of dollars) INSURED COMMERCIAL BANKS 15 Negotiable order of withdrawal accounts2 248,417 n.a. 204,980 190,696 190,033 188,803 167,503 n.a. 16 Savings deposits2'3 776,466 n.a. 835,033 860,719 852,336 859,524 896,820 n.a. n.a. n.a. 17 Personal 615,113 n.a. 662,465 683,081 675,576 680,596 713,672 n.a. n.a. n.a. 18 Nonpersonal 161,353 n.a. 172,568 177,638 176,759 178,928 183,148 n.a. n.a. n.a. Interest-bearing time deposits with balances of less than $100,000, by maturity 19 7 to 91 days 32,170 32,931 31,690 32,907 32,695 32,428 32,044 32,931 32,799 32,796 32,441 20 92 to 182 days 93,941 92,301 93,941 91,235 91,167 91,195 92,503 92,301 94,955 95,235 94,005 21 183 days to 1 year 183,834 201,449 197,108 200,038 200,008 199,397 201,281 201,449 201,491 202,329 202,796 22 More than 1 year to 2x/i years 208,601 213,198 208,906 209,618 211,234 213,012 214,405 213,198 213,875 212,970 213.913 23 More than 2x/i years 199,002 199,906 198,224 199,755 198,324 199,126 198,539 199,906 198,077 197,958 197,055 24 IRA and Keogh plan deposits 150,067 151,275 150,873 151,048 151,309 151,276 151,389 151,275 150,442 150,356 150,460 BIF-INSURED SAVINGS BANKS4 25 Negotiable order of withdrawal accounts2 11,918 10,889 10,682 9,838 9,938 9,710 n.a. n.a. 26 Savings deposits2'3 68,643 n.a. 66,854 67,431 67,980 67,975 68,102 n.a. n.a. 27 Personal 65,366 n.a. 63,557 63,927 64,425 64,326 64,369 n.a. n.a. n.a. 28 Nonpersonal 3,277 n.a. 3,296 3,504 3,555 3,649 3,733 n.a. n.a. n.a. Interest-bearing time deposits with balances of less than $100,000, by maturity 29 7 to 91 days 2,001 2,428 2,368 2,316 2,540 2,503 2,405 2,428 2,542 2,535 2,560 30 92 to 182 days 12,140 13,013 13,587 13,440 13,474 13,300 13,074 13,013 13,112 13,099 12,748 31 183 days to 1 year 25,686 28,792 28,506 29,339 29,383 29,659 29,329 28,792 29,503 29,510 29,569 32 More than 1 year to 2xfi years 27,482 29,095 26,132 26,199 27,192 28,063 28,573 29,095 29,163 29,699 30,162 33 More than 2Vi years 22,866 22,254 22,563 22,477 22,348 22,156 21,823 22,254 21,828 21,877 21,975 34 IRA and Keogh plan accounts 21,408 21,365 21,051 21,052 21,002 20,983 20,627 21,365 20,405 20,423 20,386 1. BIF, Bank Insurance Fund. Data in this table also appear in the Board's H.6 (508) 2. Owing to statistical difficulties associated in part with the implementation of sweep Special Supplementary Table monthly statistical release. For ordering address, see inside accounts, estimates for NOW and savings accounts are not available beginning December front cover. Estimates are based on data collected by the Federal Reserve System from a 1996. stratified random sample of about 425 commercial banks and 75 savings banks on the last day 3. Includes personal and nonpersonal money market deposits. of each month. Data are not seasonally adjusted and include IRA and Keogh deposits and 4. Includes both mutual and federal savings banks. 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

A16 Domestic Financial Statistics • June 1997 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1 A. All commercial banks Billions of dollars Monthly averages Wednesday figures 1996r Sept. Oct. Dec. Jan. Feb. Seasonally adjusted Assets 1 Bank credit 3,643.5 3,692.9 3,718.1 3,744.3 3,772.4 3,807.5 3,846.4 3,867.9 3,861.5 3,862.1 3,858.8 2 Securities in bank credit 988.5 968.8 969.3 980.1 989.5 1,004.8 1,020.5 1,014.1 1,014.2 1,012.8 1,006.4 3 U.S. government securities .. 703.3 703.2 703.2 707.0 706.2 706.3 703.4 707.3 704.4 702.2 704.8 4 Other securities 285.2 265.6 266.1 273.1 283.2 298.5 317.2 306.9 309.7 310.7 301.6 5 Loans and leases in bank credit" 2,655.0 2,724.0 2,748.8 2,764.2 2,782.9 2,802.7 2,825.9 2,853.8 2,847.3 2,849.2 2,852.5 6 Commercial and industrial . . 724.9 761.1 770.6 774.7 784.0 787.3 797.0 802.6 802.0 801.7 801.9 7 Real estate 1,096.1 1,112.0 1,115.5 1,121.5 1,127.8 1,134.3 1,140.2 1,153.6 1,150.3 1,152.6 1,153.2 8 Revolving home equity. . . 79.7 81.2 83.3 84.3 85.4 85.8 86.6 87.9 87.4 87.6 87.9 9 Other 1,016.4 1,030.8 1,032.2 1,037.2 1,042.4 1,048.5 1,053.6 1,065.7 1,062.9 1,065.0 1,065.3 10 Consumer 500.8 515.9 519.4 521.5 522.6 523.1 522.8 521.5 521.3 522.2 521.5 11 Security3 85.3 73.8 76.9 77.9 79.7 83.4 84.7 88.8 88.9 87.2 89.4 12 Other loans and leases 247.9 261.3 266.4 268.6 268.8 274.7 281.2 287.3 284.8 285.6 286.4 13 Interbank loans 206.1 205.4 204.6 212.2 204.0 197.7 203.8 219.5 211.3 219.0 217.4 14 Cash assets4 216.8 224.2 226.1 232.7 230.9 231.1 231.0 236.3 235.1 240.3 229.9 15 Other assets5 236.6 260.0 253.4 259.8 269.4 263.5 275.3 285.1 285.4 283.9 286.6 16 Total assets6 4,246.2 4,325.1 4345.4 43923 4,420.1 4,443.7 4^00.6 4352.8 43373 4349.4 4336.9 Liabilities 17 Deposits 2,697.6 2,771.9 2,774.2 2,804.8 2,832.0 2,846.4 2,872.1 2,906.4 2,918.9 2,900.6 2,884.3 18 Transaction 765.5 725.2 712.7 715.1 712.9 709.7 701.0 698.5 699.7 694.1 689.4 19 Nontransaction 1,932.1 2,046.7 2,061.5 2,089.7 2,119.1 2,136.7 2,171.0 2,207.9 2,219.2 2,206.6 2,194.9 20 Large time 430.0 471.7 479.6 489.4 507.7 518.7 535.2 541.8 542.7 539.6 540.3 21 Other 1,502.1 1,575.0 1,581.9 1,600.3 1,611.4 1,618.0 1,635.8 1,666.0 1,676.5 1,667.0 1,654.6 22 Borrowings 695.9" 706.8 690.0 709.8 707.8 728.7 744.4 760.7 749.7 761.9 769.3 23 From banks in the US 297.6 296.1 292.7 304.1 307.9 303.4 308.8 317.1 323.6 324.3 317.8 24 From others 398.3 410.8 397.3 405.7 399.9 425.3 435.6 443.6 426.1 437.7 451.5 25 Net due to related foreign offices. .. . 256.7 251.0 244.2 238.1 231.4 222.9 218.7 210.4 205.5 211.0 219.7 26 Other liabilities 227.6 221.4 242.7 253.7 262.7 272.0 289.8 280.4 293.0 290.5 277.6 27 Total liabilities 3,877.7 3,951.1 3,951.1 4,006.4 4,033.9 4,070.0 4,124.9 4,157.9 4,167.1 4,164.1 4,150.9 28 Residual (assets less liabilities)7.. 368.5 374.0 394.3 385.9 386.1 373.7 375.6 394.9 370.2 385.3 386.0 Not seasonally adjusted Assets 29 Bank credit 3,633.6 3,695.3 3,719.8 3,748.6 3,771.3 3,805.8 3,839.3 3,858.5 3,862.7 3,852.4 3,851.9 30 Securities in bank credit 990.2 969.5 969.2 978.8 975.5 995.9 1,017.1 1,016.9 1,020.3 1,017.3 1,011.3 31 U.S. government securities 707.0 704.3 703.8 707.4 702.1 700.3 702.1 711.9 707.2 706.9 711.5 32 Other securities 283.2 265.2 265.4 271.4 273.5 295.6 315.0 305.1 313.1 310.3 299.8 33 Loans and leases in bank credit2 . . 2,643.5 2,725.8 2,750.6 2,769.8 2,795.8 2,809.9 2,822.1 2,841.6 2,842.4 2,835.2 2,840.6 34 Commercial and industrial 727.3 756.0 767.0 772.8 781.0 785.0 796.6 805.2 803.9 801.8 806.0 35 Real estate 1,090.5 1,115.1 1,118.7 1,125.8 1,132.6 1,136.3 1,137.2 1,147.7 1,145.1 1,147.4 1,146.4 36 Revolving home equity 79.0 81.8 83.9 84.7 85.5 85.8 86.2 87.1 86.9 87.0 87.1 37 Other 1,011.5 1,033.2 1,034.8 1,041.0 1,047.1 1,050.5 1,050.9 1,060.6 1,058.3 1,060.4 1,059.3 38 Consumer 496.5 518.0 519.6 522.0 527.4 528.7 523.5 516.9 518.0 517.5 516.7 39 Security3 85.0 73.0 76.7 79.3 81.0 82.6 85.8 88.4 91.4 87.2 89.8 40 Other loans and leases 244.1 263.6 268.6 270.0 273.9 277.3 279.1 283.4 284.0 281.2 281.6 41 Interbank loans 203.2 199.7 199.4 216.5 213.3 207.5 208.2 216.0 217.4 218.1 212.6 42 Cash assets4 208.7 221.5 227.1 239.7 246.9 241.5 232.2 227.3 229.9 230.0 222.5 43 Other assets5 232.7 262.5 250.8 258.6 269.4 264.1 275.1 280.3 285.0 278.1 279.5 44 Total assets6 4,221.5 43213 4340.4 4,406.6 4,444.2 4,462.9 4,498.8 4326.1 4338.9 4322.8 4310.6 Liabilities 45 Deposits 2,685.3 2,772.4 2,779.0 2,821.8 2,863.9 2,850.3 2,857.2 2,895.2 2,916.4 2,892.6 2,872.2 46 Transaction 752.4 723.7 710.4 725.2 745.8 721.0 694.1 686.3 698.0 682.4 675.4 47 Nontransaction 1,932.9 2,048.8 2,068.6 2,096.5 2,118.1 2,129.3 2,163.1 2,208.8 2,218.4 2,210.2 2,196.8 48 Large time 429.9 469.7 485.0 493.9 507.8 515.4 533.1 541.3 541.5 539.9 540.6 49 Other 1,503.0 1,579.0 1,583.6 1,602.6 1,610.3 1,613.9 1,630.0 1,667.5 1,677.0 1,670.2 1,656.2 50 Borrowings 679.3 711.1 682.4 699.5 700.1 723.0 728.5 740.5 727.4 728.0 744.3 51 From banks in the U.S 289.5 298.5 286.1 297.9 302.6 297.6 296.8 305.1 305.2 302.5 297.0 52 From others 389.8 412.6 396.3 401.7 397.5 425.4 431.7 435.4 422.2 425.5 447.3 53 Net due to related foreign offices .... 262.3 245.2 245.8 235.2 230.1 233.3 229.4 219.3 206.9 219.3 223.8 54 Other liabilities 226.3 222.0 241.8 257.5 258.6 269.3 291.8 278.6 295.2 290.7 273.2 55 Total liabilities 3,8533r 3,950.6 3,949.0 4,013.9 4,052.7 4,075.9 4,106.9 4,133.5 4,145.9 4,130.6 4,113.5 56 Residual (assets less liabilities)7 368.2 370.6 391.4 392.7 391.5 387.1 391.9 392.6 393.1 392.2 397.1 MEMO 57 Revaluation gains on off-balance-sheet items8 n.a. n.a. 62.4 65.5 69.6 89.1 102.8 92.0 100.4 95.1 89.3 58 Revaluation losses on off-balancesheet items8 n.a. n.a. 58.3 60.4 64.3 84.8 98.1 86.3 96.0 90.3 83.7 Footnotes appear on page A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures 1996r Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted Assets 1 Bank credit 3,198.3 3,225.4 3,237.6 3,250.5 3,267.3 3,290.5 3,313.7 3,339.7 3,331.3 3,331.5 3,334.3 3,350.7 2 Securities in bank credit 845.0 822.3 820.7 822.3 825.1 834.6 843.9 841.9 843.7 841.6 838.3 842.2 3 U.S. government securities . 634.1 620.3 620.6 619.9 618.7 624.6 618.2 624.0 620.0 620.5 623.9 627.4 4 Other securities 210.9 202.0 200.1 202.4 206.4 210.0 225.7 217.9 223.7 221.1 214.4 214.8 5 Loans and leases in bank credit2 . 2,353.3 2,403.0 2,416.9 2,428.2 2,442.2 2,455.9 2,469.9 2.497.8 2,487.6 2,489.9 2,496.0 2,508.6 6 Commercial and industrial . 541.2 560.5 564.8 566.6 571.0 572.3 578.8 584.9 582.9 582.5 584.0 588.3 7 Real estate 1,062.6 1,079.2 1,082.8 1,089.1 1,095.7 1,102.3 1,107.9 1,121.6 1,118.0 1,120.5 1,121.2 1,122.6 8 Revolving home equity . . 79.7 81.2 83.3 84.3 85.4 85.8 86.6 87.9 87.4 87.6 87.9 88.1 9 Other 982.9 998.0 999.5 1,004.8 1,010.4 1,016.5 1,021.3 1,033.7 1,030.5 1,032.9 1.033.3 1,034.6 10 Consumer 500.8 515.9 519.4 521.5 522.6 523.1 522.8 521.5 521.3 522.2 521.5 522.9 11 Security3 51.8 44.7 44.0 42.9 43.6 45.3 45.1 49.3 46.8 47.2 50.3 51.6 12 Other loans and leases 196.9 202.8 206.0 208.2 209.4 212.9 215.4 220.6 218.6 217.5 219.1 223.1 13 Interbank loans 185.9 185.1 184.0 192.0 182.3 174.4 181.5 194.6 192.8 194.0 192.1 199.3 14 Cash assets4 189.2 194.7 196.4 201.8 199.8 199.9 197.8 203.5 199.6 206.3 198.4 208.0 15 Other assets5 189.3 219.0 219.6 223.6 232.4 224.8 233.2 242.9 239.4 240.5 245.2 244.3 16 Total assets0 3,706.0 3,766.9 3,781.1 3,811.5 3,825.4 3,833.7 3,870.5 3,924.9 3,907.3 3,916.6 3,914.4 3,946.8 Liabilities 17 Deposits 2,527.4 2,585.9 2,576.8 2,600.9 2,612.5 2,619.5 2,631.2 2,659.3 2,668.0 2,654.2 2,639.9 2,664.1 18 Transaction 755.6 715.5 702.3 704.9 702.7 699.3 691.1 687.7 689.4 683.5 678.3 703.9 19 Nontransaction 1,771.8 1,870.4 1,874.5 1,896.0 1,909.8 1,920.2 1,940.1 1,971.5 1,978.6 1,970.7 1,961.7 1,960.2 20 Large time 272.9 298.9 295.2 299.4 302.6 302.3 306.6 308.5 308.2 307.6 308.5 308.8 21 Other 1,498.9 1,571.6 1,579.3 1,596.6 1,607.2 1,617.9 1,633.5 1,663.0 1,670.4 1,663.0 1,653.2 1,651.4 22 Borrowings 578.6 584.1 572.5 584.1 586.0 597.7 599.9 618.8 602.9 622.4 631.2 620.0 23 From banks in the U.S 265.4 262.1 260.3 270.8 274.9 275.2 274.4 281.7 283.0 292.6 284.7 274.6 24 From others 313.2 321.9 312.2 313.3 311.1 322.5 325.5 337.1 320.0 329.9 346.5 345.4 25 Net due to related foreign offices 81.1 74.7 76.5 71.0 69.1 72.0 78.2 68.2 67.1 65.4 73.4 69.8 26 Other liabilities 153.0 152.7 168.1 173.8 179.8 182.1 190.3 187.1 195.0 193.3 186.1 181.6 27 Total liabilities 3,340.1 3,397.4 3,393.9 3,429.7 3,447.5 3,471.3 3,499.6 3,533.4 3,533.0 3,535.3 3,530.6 3,535.5 28 Residual (assets less liabilities)7. 365.8 369.4 387.1 381.7 377.8 362.5 370.8 391.5 374.3 381.4 383.8 411.3 Not seasonally adjusted Assets 29 Bank credit 3,189.8r 3,229.1 3,240.6 3,255.2 3,270.3 3,291.8 3,306.0 3,330.3 3,327.7 3,320.8 3,325.2 3,335.2 30 Securities in bank credit ... 847.3 824.1 820.7 821.3 817.5 829.9 839.5 843.9 844.8 843.2 840.4 844.0 31 U.S. government securities 636.1 622.5 621.6 620.4 617.0 617.6 615.1 625.6 619.5 621.8 626.0 629.3 32 Other securities 211.2 201.7 199.1 200.9 200.6 212.3 224.4 218.2 225.3 221.5 214.4 214.7 33 Loans and leases in bank credit2 2,342.5 2,405.0 2,419.9 2,434.0 2,452.8 2,462.0 2,466.5 2,486.5 2,482.9 2,477.6 2,484.8 2,491.2 34 Commercial and industrial 543.9 556.6 562.4 564.9 567.5 570.2 578.4 587.9 585.4 583.8 587.9 590.9 35 Real estate 1,057. lr 1,082.2 1,085.7 1,092.9 1,100.4 1,104.3 1,104.8 1,115.7 1,112.7 1,115.1 1,114.2 1,116.0 36 Revolving home equity . 79.0 81.8 83.9 84.7 85.5 85.8 86.2 87.1 86.9 87.0 87.1 87.1 37 Other 978.1 1,000.3 1,001.9 1,008.2 1,015.0 1,018.5 1,018.6 1,028.6 1,025.8 1,028.2 1,027.0 1,028.8 38 Consumer 496.5 518.0 519.6 522.0 527.4 528.7 523.5 516.9 518.0 517.5 516.7 517.8 39 Security3 51.5 43.9 43.8 44.3 44.8 44.5 46.2 48.9 49.3 47.3 50.7 49.6 40 Other loans and leases.. .. 193.5 204.2 208.4 209.9 212.7 214.2 213.6 217.1 217.7 213.9 215.3 217.0 41 Interbank loans 183.0 179.4 178.7 196.3 191.5 184.1 185.8 191.1 198.8 193.0 187.3 184.6 42 Cash assets4 181.6 192.6 197.0 208.5 214.7 209.9 199.8 195.1 195.4 196.8 191.6 191.2 43 Other assets5 186.0 221.0 217.3 222.1 231.6 .226.1 232.1 238.7 238.1 234.1 239.5 238.1 44 Total assets*5 3,683.6 3,764.6 3,777.3 3,825.7 3,851.7 3,856.3 3,868.0 3,899.5 3,904.3 3,889.1 3,887.9 3,893.5 Liabilities 45 Deposits 2,515.2 2,586.9 2,576.3 2,615.3 2,641.7 2,623.3 2,619.5 2,648.2 2,668.6 2,646.4 2,626.5 2,626.0 46 Transaction 742.7 713.5 700.0 715.1 734.9 710.6 684.0 675.8 687.9 672.2 664.7 670.6 47 Nontransaction 1,772.5 1,873.4 1,876.3 1,900.2 1,906.8 1,912.7 1,935.6 1,972.5 1,980.8 1,974.2 1,961.8 1,955.4 48 Large time 273.1 296.6 295.0 300.0 299.3 301.0 309.4 308.5 310.3 308.4 308.0 307.6 49 Other 1,499.4 1,576.8 1,581.3 1,600.2 1,607.5 1,611.7 1,626.1 1,664.0 1,670.4 1,665.8 1,653.8 1.647.8 50 Borrowings 566.6 587.2 568.2 577.3 579.5 595.2 590.6 604.5 583.9 594.1 609.4 615.0 51 From banks in the U.S 258.5 265.2 256.1 264.6 269.0 268.3 264.6 271.3 266.4 272.3 264.3 272.9 52 From others 308.1 322.0 312.0 312.8 310.5 326.9 326.0 333.3 317.4 321.8 345.1 342.1 53 Net due to related foreign offices 84.8 70.9 78.2 68.4 66.2 73.6 79.9 72.5 69.3 69.0 75.1 80.5 54 Other liabilities 151.9 153.3 168.8 176.9 177.1 180.2 189.7 185.4 194.5 191.9 182.8 178.8 55 Total liabilities 3,318.5 3,398.3 3,391.4 3,437.9 3,464.5 3,472.3 3,479.8 3,510.8 3,516.3 3,501.3 3,493.8 3,500.3 56 Residual (assets less liabilities)7 365.1 366.3 385.9 387.8 387.2 384.0 388.2 388.7 388.0 387.8 394.1 393.2 MEMO 57 Revaluation gains on off-balance-sheet items8 n.a. 55.8 48.9 50.6 46.5 58 Revaluation losses on off-balancesheet items8 n.a. 28.9 28.9 31.8 44.0 50.9 43.2 50.7 45.8 40.8 40.2 59 Mortgage-backed securities9 236.5 238.1 241.2 244.3 243.2 245.1 244.0 244.1 244.1 246.3 Footnotes appear on page A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • June 1997 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1996r 1996r 1997r 1997 Mar. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Mar. 5 Mar. 12 Mar. 19 Mar. 26 Seasonallv adjusted Assets 1 Bank credit 1,824.2 1,803.8 1,811.5 1,815.8 1.824.5 1.838.5 1.857.1 1,867.8 1,864.3 1,863.9 1,859.9 1,876.4 2 Securities in bank credit 435.3 406.9 407.0 410.1 412.7 418.3 428.6 422.2 425.2 423.7 417.8 422.3 3 U.S. government securities 304.0 285.1 287.2 287.9 286.4 289.2 283.7 286.6 283.3 284.7 285.6 289.5 4 Trading account 22.1 20.9 21.2 21.5 19.4 17.2 16.1 17.7 16.2 17.3 17.3 18.7 5 Investment account 281.9 264.2 265.9 266.4 266.9 272.1 267.5 268.9 267.0 267.4 268.3 270.8 6 Other securities 131.3 121.8 119.9 122.2 126.4 129.0 144.9 135.6 141.9 139.0 132.2 132.7 7 Trading account 60.1 56.4 55.1 57.8 60.9 64.6 79.9 69.8 76.3 73.9 66.1 65.9 8 Investment account 71.2 65.5 64.8 64.4 65.5 64.4 65.0 65.8 65.6 65.1 66.1 66.8 9 State and local government. . 21.3 20.3 20.2 20.2 20.3 20.5 21.0 20.6 20.8 20.6 20.6 20.5 10 Other 49.9 45.1 44.6 44.2 45.2 44.0 44.0 45.3 44.8 44.5 45.5 46.3 11 Loans and leases in bank credit2 . . . 1.388.9 1,396.9 1,404.5 1.405.7 1,411.8 1.420.2 1.428.5 1.445.6 1.439.2 1,440.2 1.442.1 1.454.1 12 Commercial and industrial 369.0 379.7 383.1 383.2 385.6 386.2 390.4 394.7 393.1 392.8 393.8 397.8 13 Real estate 567.3 558.1 559.3 560.6 562.9 563.0 563.8 569.2 568.1 569.7 567.7 569.2 14 Revolving home equity 53.6 53.9 54.2 54.7 55.3 55.4 55.8 56.4 56.1 56.3 56.4 56.5 15 Other 513.8 504.2 505.0 505.9 507.5 507.6 508.0 512.8 512.0 513.4 511.3 512.7 16 Consumer 273.5 281.7 281.4 281.1 281.3 284.4 286.2 285.1 285.6 285.7 284.3 286.3 17 Security3 45.9 39.5 39.1 37.8 38.5 40.4 39.9 43.9 41.3 41.9 44.9 46.2 18 State and local government 11.4 10.9 10.9 11.2 11.3 11.1 11.1 11.0 11.0 11.0 10.9 11.0 19 All other 121.8 127.0 130.6 131.8 132.2 135.1 137.1 141.6 140.1 139.1 140.4 143.6 20 Interbank loans 122.3 134.2 133.1 138.5 127.1 120.1 124.1 132.9 130.1 132.1 131.1 136.7 21 Cash assets4 124.4 128.7 128.9 133.1 131.1 130.9 128.0 133.4 129.9 135.5 130.8 136.8 22 Other assets5 139.5 161.9 163.3 166.7 173.8 167.6 174.0 177.0 172.8 174.5 180.6 177.6 23 Total assets6 2,173.8 2,192.2 2,200.9 2,218.2 2,220.9 2,221.9 2,248.1 2,276.0 2,261.8 2,270.8 2,2673 2,292.4 Liabilities 24 Deposits 1.323.0 1.350.8 1,359.9 1,371.3 1,378.6 1,371.2 1.369.3 1,376.9 1.381.5 1,371.9 1,365.6 1.384.1 25 Transaction 420.3 394.3 387.8 388.3 387.0 384.0 374.7 368.3 369.7 365.7 361.2 379.2 26 Nontransaction 902.8 956.5 972.1 983.0 991.5 987.2 994.6 1.008.6 1,011.8 1,006.1 1,004.4 1,004.9 27 Large time 126.0 146.8 152.0 153.7 155.4 153.7 156.5 157.3 156.7 155.5 156.9 158.3 28 Other 776.7 809.7 820.1 829.3 836.1 833.5 838.1 851.3 855.0 850.6 847.5 846.5 29 Borrowings 436.8 422.2 407.2 416.3 416.9 427.3 427.9 441.6 427.8 443.6 447.8 443 7 30 From banks in the U.S 187.9 178.3 173.4 183.2 189.2 188.1 187.2 193.2 193.6 201.8 191.5 188.0 31 From others 248.9 244.0 233.8 233.1 227.7 239.2 240.7 248.4 234 2 241.8 256.4 255.7 32 Net due to related foreign offices 75.3 68.9 73.2 68.8 66.4 68.0 74.3 64.3 63.5 61.7 69.8 65.6 33 Other liabilities 122.0 126.1 139.4 144.8 150.6 154.1 162.3 159.3 167.2 165.4 157.5 153.5 34 Total liabilities 1,957.1 1,958.0 1,979.7 2,001.2 2,012.5 2,020.6 2,033.8 2,042.1 2,040.0 2,042.6 2,040.8 2,046.8 35 Residual (assets less liabilities)7 216.6 224.1 221.2 217.1 208.4 201.3 214.3 233.9 221.8 228.2 226.5 245.6 Not season ally adjusted Assets 36 Bank credit 1.820.1 1,803.6 1,812.0 1,818.9 1.824.8 1.841.7 1.854.9 1.863.0 1,867.2 1,859.0 1,855.9 1,864.1 37 Securities in bank credit 436.1 408.3 408.1 410.7 405.6 415.0 425.9 422.9 428.0 425.1 418.4 420.4 38 U.S. government securities 304.7 286.7 289.3 290.0 285.1 283.5 282.0 287.2 284.5 285.7 286.5 288.3 39 Trading account 23.3 21.0 22.0 22.7 18.1 16.3 16.3 18.8 17.8 19.0 19.3 18.5 40 Investment account 281.4 265.7 267.3 267.3 267.0 267.3 265.6 268.3 266.7 266.7 267.2 269.8 41 Other securities 131.3 121.6 118.8 120.6 120.5 131.4 143.9 135.7 143.5 139.3 131.9 132.1 42 Trading account 60.4 56.1 53.5 55.4 54.4 66.5 78.8 70.2 78.0 74.4 66.4 65.8 43 Investment account 70.9 65.5 65.3 65.2 66.1 64.9 65.1 65.5 65.6 65.0 65.5 66.3 44 State and local government. . 21.4 20.3 20.2 20.3 20.4 20.5 21.0 20.6 20.8 20.6 20.6 20.6 45 Other 49.6 45.2 45.1 45.0 45.7 44.4 44.1 44.9 44.8 44.4 44.9 45.7 46 Loans and leases in bank credit2 . . . 1,384.1 1,395.2 1,403.8 1,408.2 1.419.1 1,426.7 1.429.0 1.440.1 1,439.2 1,433.9 1,437.5 1,443.6 47 Commercial and industrial 371.2 376.8 381.3 382.2 382.6 384.0 390.4 397.2 395.5 393.9 396.9 399.5 48 Real estate 564.7 558.9 560.0 562.2 565.6 565.4 563.3 566.3 566.0 567.6 564.4 565.2 49 Revolving home equitv 53.1 54.2 54.5 55.0 55.4 55.5 55.6 55.9 55.8 55.8 55.9 55.9 50 Other ' 511.6 504.7 505.4 507.2 510 2 509.9 507.7 510.4 510.2 511.8 508.5 509.3 51 Consumer 271.2 282.9 281.0 280.8 285.2 289.0 286.0 282.4 283.4 282.9 281.6 283.3 52 Security3 45.6 38.9 39.0 39.0 39.5 39.5 40.9 43.5 43.5 41.8 45.5 44.5 53 State and local government 11.3 11.0 11.0 11.2 11.3 11.0 11.0 10.9 10.9 11.0 10.9 11.0 54 All other ." 120.0 126.8 131.6 132.8 134.9 137.9 137.4 139.8 139.9 136.8 138.3 140.0 55 Interbank loans 119.5 130.2 127.6 137.9 133.3 128.6 126.4 129.5 130.8 128.7 128.6 127.9 56 Cash assets4 118.9 128.1 128.4 137.1 142.4 138.8 130.7 127.0 126.6 128.2 126.2 124.0 57 Other assets5 137.1 163.5 161.2 164.7 172.4 168.0 171.6 173.8 170.9 169.8 177.1 173.5 58 Total assets6 2,158.9 2,188.5 2,193.5 2,222.8 2,237.2 2,241.9 2,248.5 2,258.1 2260.1 2,250.6 2,252.6 2,254.4 Liabilities 59 Deposits 1,316.1 1,349.7 1,357.1 1,378.2 1,394.6 1.377.4 1.367.3 1.370.8 1.384.1 1.368.5 1.360.4 1,358.5 60 Transaction 412.1 393.1 384.9 394.9 408.3 391.6 371.3 360.6 367.8 357.2 354.2 357.3 61 Nontransaction 904.0 956.6 972.2 983.3 986.4 985.8 995.9 1.010.2 1.016.4 1.011.3 1,006.2 1,001.2 62 Large time 125.4 144.7 151.4 153.9 153.0 153.6 158.7 156.5 158.3 155.6 155.7 156.0 63 Other 778.6 811.8 820.7 829.3 833.4 832.2 837.3 853.7 858.1 855.7 850.5 845.3 64 Borrowings 429.3 425.8 402.8 411.0 410.9 423.1 420.1 433.1 416.3 425.2 437.4 440.5 65 From banks in the U.S 183.8 180.6 169.8 178.7 183.9 181.5 179.4 186.7 183.7 188.7 179.5 186.9 66 From nonbanks in the U.S 245.6 245.2 232.9 232.3 227.0 241.6 240.6 246.4 232.6 236.4 257.9 253.6 67 Net due to related foreign offices 79.0 65.0 74.8 66.2 63.4 69.7 76.0 68.6 65.7 65.3 71.6 76.3 68 Other liabilities 120.5 127.0 140.1 148.0 148.4 151.9 161.3 157.2 166.4 163.6 154.0 149.9 69 Total liabilities 1,944.9 1,967.5 1,974.7 2,003.5 2,017.3 2,022.1 2,024.6 2,029.7 2,032.5 2,022.6 2,0233 2,0253 70 Residual (assets less liabilities)7 214.0 221.1 218.7 219.3 219.8 219.8 223.9 228.4 227.5 228.0 229.3 229.1 MEMO 71 Revaluation gains on off-balance-sheet items8 n.a. n.a. 32.5 33.1 36.2 47.5 55.8 48.9 55.4 50.6 46.5 47.6 72 Revaluation losses on off-balance- Digitized for FsRheeAt SiteEmRs8 n.a. n.a. 28.9 28.9 31.8 44.0 50.9 43.2 50.7 45.8 40.8 40.2 73 Mortgage-backed securities9 n.a. n.a. 188.2 189.5 192.0 193.6 192.9 193.3 192.8 192.9 192.3 194.2 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Footnotes appear on page A21.

Commercial Banking Institutions—Assets and Liabilities A IS 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1996r 1996r 1997r 1997 Mar. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Mar. 5 Mar. 12 Mar. 19 Mar. 26 Seasonally adjusted Assets 1 Bank credit 1,374.2 1,421.5 1,426.1 1,434.8 1,442.8 1,452.1 1,456.6 1,471.8 1,467.0 1,467.6 1,474.4 1,474.4 2 Securities in bank credit 409.7 415.4 413.6 412.2 412.3 416.3 415.3 419.6 418.5 417.9 420.6 419.9 3 U.S. government securities 330.1 335.2 333.4 332.1 332.3 335.3 334.5 337.4 336.7 335.8 338.3 337.8 4 Other securities 79.6 80.2 80.2 80.2 80.0 81.0 80.8 82.3 81.8 82.1 82.2 82.0 5 Loans and leases in bank credit2 964.4 1,006.1 1,012.4 1,022.5 1,030.5 1,035.7 1,041.4 1,052.2 1,048.5 1,049.7 1,053.9 1,054.5 6 Commercial and industrial 172.2 180.8 181.6 183.4 185.4 186.2 188.3 190.2 189.8 189.7 190.2 190.5 7 Real estate 495.3 521.1 523.5 528.5 532.9 539 3 544.0 552.4 549.9 550.8 553.4 553.4 8 Revolving home equity 26.2 27.3 29.1 29.6 30.0 30.4 30.8 31.5 31.3 31.4 31.5 31.6 9 Other 469.1 493.8 494.4 498.9 502.9 508.9 513.2 520.9 518.6 519.4 521.9 521.9 10 Consumer 227.3 234.1 237.9 240.4 241.2 238.7 236.6 236.4 235.7 236.5 237.2 236.7 11 Security3 5.9 5.2 4.9 5.0 5.1 5.0 5.2 5.4 5.5 5.4 5.3 5.5 12 Other loans and leases 63.7 64.9 64.4 65.2 65.9 66.6 67.2 67.9 67.6 67.4 67.8 68.5 13 Interbank loans 63.6 50.9 50.8 53.6 55.2 54.3 57.4 61.7 62.6 61.9 61.0 62.6 14 Cash assets4 64.8 66.0 67.5 68.7 68.6 69.0 69.8 70.1 69.6 70.9 67.6 71.2 15 Other assets5 49.8 57.1 56.3 56.9 58.6 57.2 59.2 65.8 66.6 66.0 64.6 66.7 16 Total assets6 1332.2 1374.7 1380.1 1393.2 1,604.4 1,611.8 1,622.4 1,648.9 1,645.4 1,645.8 1,647.1 1,654.4 Liabilities 17 Deposits 1,204.4 1,235.1 1,216.9 1,229.6 1,233.9 1,248.3 1,261.9 1,282.4 1,286.5 1,282.3 1,274.3 1,280.0 18 Transaction 335.4 321.1 314.5 316.6 315.7 315.3 316.4 319.4 319.7 317.8 317.0 324.7 19 Nontransaction 869.0 913.9 902.4 913.0 918.3 933.0 945.5 962.9 966.8 964.5 957.3 955.3 20 Large time 146.9 152.1 143.2 145.7 147.2 148.7 150.1 151.2 151.4 152.1 151.6 150.5 21 Other 722.1 761.9 759.2 767.3 771.1 784.4 795.3 811.8 815.4 812.4 805.7 804.8 22 Borrowings 141.8 161.9 165.3 167.8 169.1 170.4 172.0 177.2 175.1 178.8 183.4 176.3 23 From banks in the U.S 77.6 83.9 86.9 87.7 85.7 87.1 87.2 88.5 89.3 90.7 93.2 86.6 24 From others 64.3 78.0 78.4 80.2 83.4 83.4 84.8 88.7 85.7 88.1 90.1 89.7 25 Net due to related foreign offices 5.8 5.9 3.4 2 2 2.7 4.0 4.0 3.9 3.6 3.6 3.5 4.2 26 Other liabilities 31.0 26.6 28.7 29.0 29.2 28.0 28.0 27.8 27.8 27.9 28.6 28.1 27 Total liabilities 1383.0 1,429.4 1,414.2 1,428.6 1,435.0 1,450.7 1,465.8 1,491.4 1,493.0 1,492.7 1,489.8 1,488.6 28 Residual (assets less liabilities)7 149.2 145.3 165.9 164.6 169.4 161.2 156.5 157.6 152.4 153.2 157.3 165.7 Not seasonally adjusted Assets 29 Bank credit 1,369.6 1,425.5 1,428.6 1.436.3 1,445.5 1,450.2 1,451.1 1,467.3 1,460.5 1,461.8 1,469.2 1,471.1 30 Securities in bank credit 411.2 415.8 412.6 410.6 411.9 414.9 413.6 421.0 416.7 418.2 4220 423.5 31 U.S. government securities 331.4 335.7 332.3 330.4 331.8 334.1 333.1 338.5 335.0 336.0 339.5 340.9 32 Other securities 79.9 80.0 80.2 80.2 80.0 80.8 80.5 82.5 81.8 82.1 82.5 82.6 33 Loans and leases in bank credit2 958.4 1,009.8 1,016.0 1,025.7 1,033.6 1,035.3 1,037.5 1,046.3 1,043.8 1,043.7 1,047.3 1,047.6 34 Commercial and industrial 172.7 179.8 181.0 182.7 184.9 186.2 188.0 190.7 189.9 1899 191 1 191.3 35 Real estate 492.3 523.3 525.8 530.7 534.8 538.9 541.5 549.4 546.7 5473 549^8 550.7 36 Revolving home equity 25.9 27.7 29.3 29.7 30.1 30.3 30.6 31.2 31.1 31.2 31.3 31.2 37 Other 466.4 495.6 496.5 501.0 504.7 508.6 510.8 518.1 515.6 516.3 518.6 519.5 38 Consumer 225.3 235.1 238.6 241.1 242.1 239.7 237.5 234.5 234.6 234.6 235.1 234.5 39 Security3 5.9 5.1 4.8 5.3 5.3 5.1 5.3 5.4 5.8 5.5 5.2 5.1 40 Other loans and leases 62.2 66.4 65.8 66.0 66.5 65.4 65.3 66.4 66.9 66.2 66.1 66.0 41 Interbank loans 63.5 49.2 51.1 58.4 58.2 55.5 59.4 61.6 68.0 643 58 7 567 42 Cash assets4 62.7 64.5 68.6 71.4 72.3 71.1 69.1 68.1 68.9 68.6 65.4 67.2 43 Other assets-" 49.0 57.6 56.1 57.4 59.2 58.1 60.5 64.9 67.2 64.3 62.4 64.6 44 Total assets6 1324.7 1376.0 1383.8 1,602.9 1,6143 1,614.4 1,619.6 1,641.4 1,6443 1,638.6 1,6353 1,639.2 Liabilities 45 Deposits 1,199.1 1,237.2 1,219.2 1,237.1 1,247.1 1,245.9 1,252.3 1,277.5 1,284.5 1,277.8 1,266.1 1 267 5 46 Transaction 330.6 320.4 315.0 320.2 326.6 319.0 312.6 315.2 320.1 315.0 3133 47 Nontransaction 868.5 916.8 904.1 916.9 920.4 926.9 939.6 962.3 964.4 962.9 955^6 954.2 48 Large time 147.7 151.9 143.6 146.1 146.3 147.4 150.8 152.0 152.0 152.8 152.2 151.6 49 Other 720.8 764.9 760.5 770.9 774.2 779.5 788.8 810.3 8124 8 KM 8033 802^6 50 Borrowings 137.3 161.5 165.4 166.3 168.6 172.1 170.5 171.4 167.6 168.9 172.0 174.5 51 From banks in the U.S 74.8 84.6 86.3 85.8 85.1 86.8 85.2 84.6 82.7 83.6 84.8 86.0 52 From others 62.5 76.8 79.1 80.5 83.5 85.3 85.3 86.9 84.9 85.3 87.2 88.5 53 Net due to related foreign offices 5.8 5.9 3.4 2.2 2.7 4.0 4.0 39 3.6 3.6 3.5 4.2 54 Other liabilities 31.4 26.3 28.7 28.9 28.8 28.2 28.4 28.2 28.1 2S.3 28.8 28.9 55 Total liabilities 1373.6 1,430.8 1,416.6 1,434.4 1,447.1 1,450.2 1,455.2 1,481.0 1,483.8 1,478.7 1,4703 1,475.1 56 Residual (assets less liabilities)7 151.1 145.2 167.2 168.4 167.4 164.2 164.4 160.3 160.5 159.8 164.8 164.1 MEMO 57 Mortgage-backed securities9 n.a. n.a. 48.4 48.5 49.2 50.7 50.3 51.8 51.2 51.2 51.8 52.1 Footnotes appear on page A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • June 1997 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued E. Foreign-related institutions Billions of dollars Monthly averages Wednesday figures Account 1996 1996r 1997r 1997 Mar. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Mar. 5 Mar. 12 Mar. 19 Mar. 26 Seasonally adjusted Assets 1 Bank credit 445.2 467.5 480.5 493.8 505.1 516.9 532.7 528.3 530.2 530.6 524.5 535.2 2 Securities in bank credit 143.5 146.5 148.6 157.8 164.4 170.2 176.7 172.3 170.5 171.3 168.0 177.8 3 U.S. government securities 69.2 82.9 82.6 87.0 87.6 81.7 85.2 83.3 84.4 81.6 80.9 84.0 4 Other securities 74.3 63.6 65.9 70.8 76.9 88.4 91.5 89.0 86.0 89.6 87.1 93.8 5 Loans and leases in bank credit2 .. . 301.7 321.0 331.9 336.0 340.7 346.8 356.0 356.0 359.7 359.3 356.5 357.3 6 Commercial and industrial 183.7 200.6 205.9 208.1 213.1 214.9 218.2 217.7 219.1 219.1 217.9 218.0 7 Real estate 33.5 32.8 32.7 32.4 32.0 32.0 32.3 32.0 32.3 32.1 32.1 32.0 8 Security3 33.5 29.1 329 35.0 36 2 38.0 39 6 39.5 42.1 40.0 39.2 40.6 9 Other loans and leases 51.0 58.5 60.4 60.4 59.4 61.8 65.8 66.7 66.2 68.1 67.3 66.7 10 Interbank loans 20.2 20.3 20.6 20.2 21.8 23.4 22.3 24.9 18.5 25.0 25.3 26.1 11 Cash assets4 27.6 29.5 29.7 30.9 31.1 31.2 33.1 32.8 35.5 34.0 31.5 32.3 12 Other assets5 47.3 41.0 33.7 36.2 37.0 38.8 42.2 42.2 46.0 43.4 41.4 40.4 13 Total assets6 5403 558.2 564.4 580.9 594.7 610.0 630.1 627.9 630.0 632.8 622.5 633.7 Liabilities 14 Deposits 170.2 186.0 197.4 203.9 219.5 226.9 240.9 247.1 251.0 246.5 244.3 245.6 15 Transaction 9.9 9.7 10.4 10.2 10.2 10.4 9.9 10.8 10.3 10.6 11.1 10.8 16 Nontransaction 160.3 176.2 187.0 193.7 209.3 216.5 230.9 236.3 240.6 235.9 233.2 234.8 17 Large time 157.1 172.8 184.4 190.0 205.1 216.4 228.6 233.3 234.6 232.0 231.8 233.4 18 Other 3.2 3.4 2.6 3.7 4.2 0.1 2.3 3.0 6.1 3.9 1.4 1.4 19 Borrowings 117.2 122.8 117.5 125.7 121.7 131.0 144.5 141.9 146.8 139.5 138.1 150.6 20 From banks in the US 32.2 34.0 32.4 33.2 32.9 28.3 34.4 35.4 40.6 31.7 33.1 39.5 21 From others 85.1 88.8 85.1 92.4 88.8 102.7 110.1 106.5 106.1 107.8 105.0 111.1 22 Net due to related foreign offices 175.6 176.3 167.7 167.1 162.3 150.9 140.4 142.2 138.4 145.7 146.4 132.5 23 Other liabilities 74.5 68.7 74.6 80.0 82.8 89.9 99.6 93.3 98.0 97.2 91.5 91.6 24 Total liabilities 537.6 553.7 557.2 576.7 586.4 598.8 6253 624.5 634.1 628.9 6203 620.2 25 Residual (assets less liabilities)7 2.7 4.5 7.2 4.2 8.3 11.3 4.8 3.5 -4.0 3.9 2.2 13.5 Not seasonally adjusted Assets 26 Bank credit 443.9 466.2 479.2 493.4 501.1 513.9 533.3 528.2 534.9 531.6 526.7 527.1 27 Securities in bank credit 142.9 145.4 148.5 157.5 158.0 166.0 177.6 173.1 175.5 174.0 170.9 171.5 28 U.S. government securities 70.9 81.8 82.1 87.0 85.1 82.7 87.0 86.2 87.7 85.2 85.5 85.8 29 Trading account 6.1 8.4 18.7 21.8 19.9 17.0 21.4 19.9 21.1 20.2 19.0 18.8 30 Investment account 64.8 73.4 63.4 65.2 65.3 65.7 65.6 66.3 66.6 65.0 66.4 67.0 31 Other securities 72.0 63.5 66.3 70.5 72.9 83.3 90.7 86.8 87.8 88.9 85.4 85.8 32 Trading account 38.0 37.6 47.9 51.6 54.0 61.4 67.9 63.1 64.9 65.5 62.3 62.1 33 Investment account 34.0 25.9 18.4 18.9 18.9 22.0 22.7 23.7 22.9 23.4 23.1 23.6 34 Loans and leases in bank credit2 ... 301.0 320.8 330.7 335.9 343.0 347.9 355.7 355.1 359.5 357.6 355.8 355.5 35 Commercial and industrial 183.4 199.4 204.7 207.9 213.5 214.8 218.2 217.3 218.6 218.1 218.0 217.0 36 Real estate 33.5 32.9 32.9 32.9 32 2 32.0 32.4 32 0 32.5 32.3 32.3 31.8 37 Security3 33.5 29.1 32.9 35.0 36.2 38.0 39.6 39.5 42.1 40.0 39.2 40.6 38 Other loans and leases 50.6 59.4 60.2 60.1 61.2 63.1 65.5 66.2 66.4 67.3 66.3 66.3 39 Interbank loans 20.2 20.3 20.6 20.2 21.8 23.4 22.3 24.9 18.5 25.0 25.3 26.1 40 Cash assets4 27.2 28.8 30.1 31.1 32.2 31.6 32.4 32.2 34.5 33.2 31.0 32.1 41 Other assets5 46.6 41.5 33.4 36.5 37.7 38.0 43.0 41.6 46.9 44.0 40.0 39.4 42 Total assets6 537.8 556.7 563.1 581.0 592.6 606.7 630.8 626.7 634.6 633.6 622.7 624.4 Liabilities 43 Deposits 170.1 185.5 202.7 206.5 222.2 227.1 237.7 246.9 247.8 246.2 245.7 247.6 44 Transaction 9.6 10.1 10.4 10.2 10.9 10.4 10.1 10.6 10.1 10.3 10.7 10.8 45 Nontransaction 160.4 175.4 192.3 196.3 211.3 216.6 227.5 236.4 237.7 236.0 235.0 236.8 46 Large time 156.8 173.1 190.0 193.9 208.5 214.4 223.7 232.8 231.2 231.5 232.6 234.4 47 Other 3.6 2.3 2.3 2.4 2.8 22 3.8 3.5 6.5 4.4 2.4 2.4 48 Borrowings 112.7 123.9 114.2 122.2 120.6 127.8 137.9 135.9 143.5 133.9 134.9 137.6 49 From banks in the US 31.0 33.3 29.9 33.3 33.6 29.3 32.2 33.8 38.7 30.2 32.7 34.8 50 From others 81.7 90.6 84.3 88.9 87.0 98.5 105.7 102.1 104.8 103.7 102.2 102.8 51 Net due to related foreign offices 177.5 174.3 167.6 166.8 163.9 159.6 149.5 146.8 137.5 150.3 148.7 146.4 52 Other liabilities 74.4 68.6 73.1 80.6 81.5 89.1 102.0 93.1 100.7 98.8 90.4 89.3 53 Total liabilities 534.7 5523 557.6 576.0 588.2 603.6 627.1 622.8 629.6 629.2 619.7 620.9 54 Residual (assets less liabilities)7 3.1 4.4 5.5 4.9 4.3 3.1 3.7 3.9 5.0 4.4 3.0 3.5 MEMO 55 Revaluation gains on off-balance-sheet items'* n.a. n.a. 29.9 32.4 33.4 41.6 47.0 43.0 45.0 44.5 42.7 42.0 56 Revaluation losses on off-balancesheet items8 n.a. n.a. 29.3 31.5 32.5 40.8 47.2 43.0 45.3 44.5 42.9 42.0 Footnotes appear on page A21. 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Commercial Banking Institutions—Assets and Liabilities All NOTKS TO TABLE 1.26 NoTK. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 quantities of balance sheet items acquired in mergers are removed from past data for the bank statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table group that contained the acquired bank and put into past data for the group containing the 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer ratio procedure is used to adjust past levels. being published in the Bulletin. Instead, abbreviated balance sheets for both large and small 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks domestically chartered banks have been included in table 1.26, parts C and D. Data are both in the United States, all of which are included in "Interbank loans." merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry branches and agencies of foreign banks have been replaced by balance sheet estimates of all securities. foreign-related institutions and are included in table 1.26, part E. These data are break- 4. Includes vault cash, cash items in process of collection, balances due from depository adjusted. institutions, and balances due from Federal Reserve Banks. The not-seasonally-adjusted data for all tables now contain additional balance sheet items, 5. Excludes the due-from position with related foreign offices, which is included in "Net which were available as of October 2, 1996. due to related foreign offices." 1. Covers the follow ing types of institutions in the fifty states and the District of 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for Columbia: domestically chartered commercial banks that submit a weekly report of condition transfer risk. Loans are reported gross of these items. (large domestic); other domestically chartered commercial banks (small domestic); branches 7. This balancing item is not intended as a measure of equity capital for use in capital and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the institutions). Excludes International Banking Facilities. Data are Wednesday values or pro seasonal patterns estimated for total assets and total liabilities. mla averages of Wednesday values. Large domestic banks constitute a universe; data for 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity .small domestic banks and foreign-related institutions are estimates based on weekly samples and equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications 9. Includes mortgage-backed securities issued by U.S. government agencies, U.S. of assets and liabilities. government-sponsored enterprises, and private entities. The data for large and small domestic banks presented on pp. A18 and A19 are adjusted to remove the estimated effects of mergers between these two groups. The adjustment for mergers changes past levels to make them comparable with current levels. Estimated Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Financial Statistics • June 1997 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December D 19 e 9 c 2 . D 19 e 9 c 3 . D 19 e 9 c 4 . D 19 e 9 c 5 . D 19 e 9 c 6 . Sept. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 545,619 555,075 595,382 674,904 775,371 757,155 757,718 766,556 775,371 804,644 813,168 Financial companies' 2 Dealer-placed paper2, total 226,456 218,947 223,038 275,815 361,147 336,833 349,288 354,400 361,147 376,908 387,164 3 Directly placed paper3, total 171,605 180,389 207,701 210,829 229,662 226,599 225,977 228,553 229,662 238,133 239,509 4 Nonfinancial companies4. . 147,558 155,739 164,643 188,260 184,563 193,724 182,454 183,603 189,602 186,495 Bankers dollar acceptances (not seasonally adjusted)5 5 Total 38,194 32,348 29,835 29,242 25,754 By holder 6 Accepting banks 10,555 12,421 11,783 7 Own bills 9,097 10,707 10,462 8 Bills bought from other banks 1,458 1,714 1,321 Federal Reserve Banks6 9 Foreign correspondents 1,276 725 410 10 Others 26,364 19,202 17,642 By basis 11 Imports into United States 12,209 10,217 10,062 12 Exports from United States 8,096 7,293 6,355 13 All other 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 are 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. 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 t a e ge 1994_Mar. 24 6.25 1994 7.15 1995—Jan 8.50 1996—Jan 8.50 Apr. 19 6.75 1995 8.83 Feb 9.00 Feb 8.25 May 17 7.25 1996 8.27 Mar 9.00 Mar. 8.25 Aug. 16 7.75 Apr 9.00 Apr 8.25 Nov. 15 8.50 1994—jan 6.00 May 9.00 May 8.25 Feb 6.00 June 9.00 June 8.25 1995—Feb. 1 9.00 Mar. 6.06 July 8.80 July 8.25 July 7 8.75 Apr. 6.45 Aug 8.75 Aug 8.25 Dec. 20 8.50 May 6.99 Sept 8.75 Sept 8.25 June 7.25 Oct 8.75 Oct 8.25 1996—Feb. 1 8.25 July 7.25 Nov 8.75 Nov 8.25 Aug 7.51 Dec 8.65 Dec 8.25 1997—Mar. 26 8.50 Sept 7.75 Oct 7.75 1997—Jan 8.25 Nov 8.15 Feb 8.25 Dec 8.50 Mar 8.30 Apr 8.50 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

Financial Markets A23 1.35 INTEREST RATES Money and Capital Markets Percent per year; figures are averages of business day data unless otherwise noted 1996 1997 1997, week ending Item 1994 1995 1996 Dec. Jan. Feb. Mar. Feb. 28 Mar. 7 Mar. 14 Mar. 21 Mar. 28 MONEY MARKET INSTRUMENTS 1 Federal funds12'3 4.21 5.83 5.30 5.29 5.25 5.19 5.39 5.16 5.36 5.19 5.26 5.40 2 Discount window borrowing2'4 3.60 5.21 5.02 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Commercial paper' ' 3 1-month 4.43 5.93 5.43 5.70 5.43 5.39 5.51 5.38 5.43 5.41 5.50 5.66 4 3-month 4.66 5.93 5.41 5.51 5.45 5.40 5.56 5.40 5.46 5.46 5.55 5.70 5 6-month 4 93 5 93 5 42 5 44 5 48 5 42 5 61 5 43 5 51 5 52 5 61 5 75 Finance paper, directly placed ' ' 6 1-month 4.33 5.81 5.31 5.41 5.31 5.27 5.39 5.25 5.30 5.31 5.38 5.54 7 3-month 4.53 5.78 5.29 5.33 5.32 5.28 5.42 5.28 5.33 5.34 5.40 5.55 8 6-month 4 56 5 68 5 21 5 25 5 30 5 27 541 5 26 5 33 5 34 541 5 52 Bankers acceptances ' ' 9 3-month 4.56 5.81 5.31 5.35 5.34 5.29 5.44 5.28 5.35 5.35 5.44 5.58 10 6-month 4.83 5.80 5.31 5.33 5.35 5.30 5.50 5.30 5.39 5.42 5.52 5.65 Certificates of deposit, secondary market • 11 1-month 4.38 5.87 5.35 5.50 5.35 5.31 5.44 5.31 5.33 5.34 5.43 5.61 12 3-month 4.63 5.92 5.39 5.44 5.43 5.37 5.53 5.37 5.44 5.46 5.54 5.65 13 6-month 4 96 5 98 5 47 5 47 5 54 5 47 5 69 5 49 5 60 5 62 5 70 5 81 14 Eurodollar deposits, 3-month3'10 4.63 5.93 5.38 5.43 5.44 5.36 5.50 5.34 5.44 5.44 5.50 5.61 U.S. Treasury bills Secondary market3'5 15 3-month 4.25 5.49 5.01 4.91 5.03 5.01 5.14 5.05 5.09 5.08 5.17 5.25 16 6-month 4.64 5.56 5.08 5.04 5.10 5.06 5.26 5.10 5.19 5.20 5.29 5.36 17 1-year 5.02 5.60 5.22 5.18 5.30 5.23 5.47 5.29 5.39 5.40 5.48 5.59 Auction average l5" 18 3 month 4.29 5.51 5.02 4.87 5.05 5.00 5.14 5.01 5.10 5.06 5.13 5.26 19 6-month 4.66 5.59 5.09 5.02 5.11 5.05 5.24 5.03 5.19 5.18 5.26 5.33 20 1-year 5.02 5.69 5.23 5.16 5.31 5.34 5.36 n.a. 5.36 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities12 21 1-year 5.32 5.94 5.52 5.47 5.61 5.53 5.80 5.60 5.70 5.72 5.81 5.94 22 2-year 5.94 6.15 5.84 5.78 6.01 5.90 6.22 6.01 6.12 6.14 6.25 6.36 23 3-year 6.27 6.25 5.99 5.91 6.16 6.03 6.38 6.15 6.27 6.30 6.42 6.52 24 5-year 6.69 6.38 6.18 6.07 6.33 6.20 6.54 6.31 6.42 6.46 6.58 6.66 25 7-year 6.91 6.50 6.34 6.20 6.47 6.32 6.65 6.42 6.55 6.59 6.69 6.76 26 10-vear 7.09 6.57 6.44 6.30 6.58 6.42 6.69 6.50 6.59 6.63 6.73 6.79 27 20-year 7.49 6.95 6.83 6.65 6.91 6.77 7.05 6.85 6.96 7.01 7.09 7.11 28 30-year 7 37 6 88 671 6 55 6 83 6 69 6 93 6 75 6 85 6 89 6 97 7 00 Composite 29 More than 10 years (long-term) 7.41 6.93 6.80 6.63 6.89 6.76 7.03 6.84 6.95 6.99 7.07 7.09 STATE AND LOCAL NOTES AND BONDS Moody's series13 30 Aaa 5.77 5.80 5.52 5.38 5.40 5.36 5.55 5.40 5.48 5.54 5.59 5.59 31 Baa 6.17 6.10 5.79 5.63 5.71 5.60 5.75 5.63 5.71 5.76 5.76 5.76 32 Bond Buyer series14 6.18 5.95 5.76 5.64 5.72 5.63 5.76 5.65 5.70 5.75 5.78 5.81 CORPORATE BONDS 33 Seasoned issues, all industries15 8 26 7 83 7 66 7 50 7 71 7 59 7 83 7 66 7 75 7 80 7 88 7 90 Rating group 34 Aaa 7.97 7.59 7.37 7.20 7.42 7.31 7.55 7.38 7.47 7.52 7.61 7.63 35 Aa 8.15 7.72 7.55 7.41 7.63 7.54 7.77 7.61 7.69 7.74 7.82 7.84 36 A 8.28 7.83 7.69 7.51 7.71 7.59 7.82 7.65 7.74 7.78 7.86 7.88 37 Baa 8.63 8.20 8.05 7.89 8.09 7.94 8.18 8.01 8.10 8.15 8.22 8.24 38 A-rated, recently offered utility bonds 8.29 7.86 7.77 7.63 7.93 7.81 8.08 7.94 7.97 8.09 8.11 8.22 MEMO Dividend-price ratio'7 39 Common stocks 2.82 2.56 2.19 2.01 1.95 1.91 1.91 1.88 1.91 1.89 1.93 1.92 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. Al 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 approximately 11:00 a.m. London time. Data are the price index. for indication 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

A24 Domestic Financial Statistics • June 1997 1.36 STOCK MARKET Selected Statistics 1996 1997 Indicator 1994 1995 1996 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Prices and trading volume (averages of daily figures)1 Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 254.16 291.18 357.98 345.06 354.59 360.96 373.54 388.75 391.61 403.58 418.57 416.72 2 Industrial 315.32 367.40 453.57 438.58 444.91 459.69 473.98 490.60 494.38 509.18 524.30 523.08 3 Transportation 247.17 270.14 327.30 316.57 321.61 323.12 332.80 348.32 352.28 359.40 364.15 372.37 4 Utility 104.96 110.64 126.36 122.66 122.37 121.12 130.04 135.88 128.55 131.95 142.88 132.38 5 Finance 209.75 238.48 303.94 287.89 302.95 308.16 324.42 345.30 350.01 361.45 388.75 387.19 6 Standard & Poor's Corporation (1941-43 = 10)2 460.42 541.72 670.49 644.06 662.68 674.88 701.46 735.67 743.25 766.22 798.39 792.16 7 American Stock Exchange (Aug. 31, 1973 = 50)3 449.49 498.13 570.86 550.16 554.88 564.87 574.46 583.21 582.96 585.09 593.29 593.64 Volume of trading (thousands of shares) 8 New York Stock Exchange 290,652 345,729 409.740 398.245 333,343 400,951 420,835 443,521 431.538 526,631 508,199 496,241 9 American Stock Exchange 17,951 20,387 22,567 21,281 17,916 19,449 18,780 22,151 23,648 24,019 21,250 19,232 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers4 61,160 76,680 97,400 79,860 82,980 89,300 88,740 91,680 97,400 99,460 100,000 100,160 Free credit balances at brokers5 11 Margin accounts6 14.095 16,250 22.540 17,700 17,520 17,940 19,890 20,020 22.540 22.870 22,200 22,960 12 Cash accounts 28,870 34,340 40,430 32,935 32,680 35,360 36,610 36,650 40,430 41,280 40,090 41,050 Margin requirements (percent of market value and effective date)7 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. Daily data on prices are available upon request to the Board of Governors. For ordering 6. Series initiated in June 1984. address, see inside front cover. 7. Margin requirements, stated in regulations adopted by the Board of Governors pursuant 2. In July 1976 a financial group, composed of banks and insurance companies, was added to the Securities Exchange Act of 1934, limit the amount of credit that can be used to to the group of stocks on which the index is based. The index is now based on 400 industrial purchase and carry "margin securities" (as defined in the regulations) when such credit is stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and collateralized by securities. Margin requirements on securities are the difference between the 40 financial. market value (100 percent) and the maximum loan value of collateral as prescribed by the 3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1. previous readings in half. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971. 4. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the included credit extended against stocks, convertible bonds, stocks acquired through the initial margin required for writing options on securities, setting it at 30 percent of the current exercise of subscription rights, corporate bonds, and government securities. Separate report- market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the ing of data for margin stocks, convertible bonds, and subscription issues w as discontinued in required initial margin, allowing it to be the same as the option maintenance margin required April 1984. by the appropriate exchange or self-regulatory organization; such maintenance margin rules 5. Free credit balances are amounts in accounts with no unfulfilled commitments to must be approved by the Securities and Exchange Commission. brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A25 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year Type of account or operation 1996 1995 U.S. budget1 1 Receipts, total 1,258,627 1,351,830 1,453,062 99,656 97,849 148,489 150,718 90,293 108.099 2 On-budget 923,601 1,000,751 1,085.570 73,644 70,018 119,528 113,841 59,673 73,869 3 Off-budget 335.026 351,079 367,492 26,012 27,831 28,961 36,877 30,620 34,230 4 Outlays, total 1.461,731 1,515,729 1.560,330 139,915 135,727 129,666 137,354 134,304 129,422 5 On-budget 1,181,469 1,227,065 1,259.872 113,290 106,327 120,429 110.552 104,964 100,427 6 Off-budget 279,372 288,664 300,458 26,625 29,400 9,237 26,802 29,339 28,996 7 Surplus or deficit (-), total -203,104 -163,899 - 107,268 -40,259 -37,878 18,823 13,364 -44,010 -21,323 8 On-budget -258,758 -226,314 -174,302 -39,646 -36,309 -901 3,289 -45,291 -26,558 9 Off-budget 55,654 62,415 67,034 -613 -1,569 19,724 10,075 1,281 5,234 Source offinancing (total) 10 Borrowing from the public 185,344 171,288 129,712 15,588 45,459 -12,321 -16,776 35,968 28,833 11 Operating cash (decrease, or increase (-))... 16,564 -2,007 -6,276 18,592 -673 -6,488 -3,785 21,357 -18.274 12 Other2 1,196 -5,382 -16,168 6,079 -6,908 -14 7,197 -13,315 10,764 MEMO 13 Treasury operating balance (level, end of period) 35,942 37,949 44.225 25,633 26,306 32,794 36,579 15,222 33,496 14 Federal Reserve Banks 6,848 8,620 7,700 5,897 4,857 7,742 6,770 5,258 5,945 15 Tax and loan accounts 29,094 29,329 36.525 19,736 21,449 25,052 29,809 9,965 27,551 1. Since 1990, off-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. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous and Budget, Budget of the 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

A26 Domestic Financial Statistics • June 1997 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year Source or type 1995 1996 1997 1995 1996 HI H2 HI H2 Jan. Feb. Mar. RECEIPTS 1 AH sources 1,351,830 1,453,062 711,003 656,865 767,099 707,551 150,718 90,293 108,099 2 Individual income taxes, net 590,244 656,417 307.498 292,393 347,285 323,884 87,239 37,400 36,434 3 Withheld 499,927 533,080 251 398 256,916 264,177 279,988 55.426 48.351 49,994 4 Nonwithheld 175,855 212,168 132,001 45,521 162,782 53,491 33,576 2.948 6,380 5 Refunds 85,538 88,897 75,959 10,058 79,735 9,604 1,763 13,906 19,955 Corporation income taxes 6 Gross receipts 174,422 189,055 92,132 88,302 96,480 95,364 6,285 4,014 21,059 7 Refunds 17,418 17,231 10,399 7.518 9,704 10,053 1,477 1,777 2,335 8 Social insurance taxes and contributions, net ... 484,473 509,414 261.837 224.269 277,767 240,326 48,794 41,784 44,197 9 Employment taxes and contributions2 451,045 476.361 241,557 211.323 257,446 227,777 47,302 38,969 43.547 10 Unemployment insurance 28,878 28,584 18,001 10,702 18,068 10,302 1,137 2,423 311 11 Other net receipts3 4,550 4,469 2,279 2,247 2,254 2,245 355 391 339 12 Excise taxes 57,484 54,014 27.452 30,014 25,682 27,016 4,219 5.106 3,998 13 Customs deposits 19,301 18.670 8,848 9,849 8,731 9,294 1,468 1,379 1.315 14 Estate and gift taxes 14,763 17,189 7,425 7.718 8,775 8,835 1,615 1,180 1,468 15 Miscellaneous receipts4 28,561 25,534 16,211 11,839 12,087 12,888 2,574 1,208 1,962 OUTLAYS 16 AH types 1,515,729 1,560,330 761,289 752,856 785,368 799,851 137,354 134,304 129,422 17 National defense 272,066 265,748 135,648 132,887 132,598 138,350 22,137 20,897 19,854 18 International affairs 16,434 13.496 4,797 6,908 8,074 8,895 1,405 898 1,094 19 General science, space, and technology 16,724 16,709 8,611 7,970 8,897 9,498 1,429 1.417 1,478 20 Energy 4,936 2,836 2,358 1,992 1,356 806 -52 211 490 21 Natural resources and environment 22,078 21,614 10,273 11,392 10.254 11,642 1,884 1,508 1,410 22 Agriculture 9,778 9,159 4.039 3,065 72 10,699 2,169 -96 26 23 Commerce and housing credit -17,808 -10.646 -13,471 -3,947 -6.885 -6,198 -1,532 -1,460 -2,986 24 Transportation 39,350 39,565 18,193 20.725 18,290 21,205 2.895 2,842 2,810 25 Community and regional development 10,641 10,685 5,073 5,569 5,245 6,192 1,014 608 920 26 Education, training, employment, and social services 54,263 52,001 25,893 26,212 25,979 26,032 4,660 5.100 3,843 27 Health 115,418 119.378 59.057 57,128 59,989 61,466 10,753 9,169 10,478 28 Social security and Medicare 495,701 523,901 251,975 251.388 264,647 269,409 46.641 44,973 43,935 29 Income security 220,493 225,989 117,190 104,847 121,187 107,181 19,610 26,346 23,639 30 Veterans benefits and services 37,890 36,985 19,269 18,678 18,140 21,107 3,283 3.384 1,772 31 Administration of justice 16,216 17,548 8.051 8,091 9,015 9,595 1,745 2,074 1.612 32 General government 13,835 11,892 5,796 7,601 4,641 6,544 1,108 119 1,447 33 Net interest5 232,169 241,090 116,169 119,348 120,576 122,568 21,092 19,362 20,410 34 Undistributed offsetting receipts6 -44,455 -37.620 -17,631 -26,995 -16,716 -25,140 -2,888 -3.049 -2,810 1. Functional details do not sum to total outlays for calendar year data because revisions to 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. monthly totals have not been distributed among functions. Fiscal year total for receipts and 5. Includes interest received by trust funds. outlays do not correspond to calendar year data because revisions from the Budget have not 6. Rents and royalties for the outer continental shelf, U.S. government contributions for been fully distributed across months. employee retirement, and certain asset sales. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the U.S. 3. Federal employee retirement contributions and civil service retirement and Government, Fiscal Year 1998: monthly and half-year totals: U.S. Department of the Treadisability fund. sury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1995 1996 1997 Item Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 4,891 4,978 5,001 5,017 5,153 5,197 5,260 5,357 5,415 2 Public debt securities 4.864 4.951 4.974 4.989 5,118 5.161 5,225 5.323 5,381 3 Held by public 3,610 3,635 3.653 3,684 3,764 3.739 3,778 3,826 n.a. 4 Held by agencies 1,255 1.317 1,321 1.305 1,354 1,422 1,447 1,497 n.a. 5 Agency securities 27 27 27 28 36 36 35 34 34 6 Held by public 26 27 27 28 28 28 27 27 n.a. 7 Held by agencies 0 0 0 0 8 8 8 8 n.a. 8 Debt subject to statutory limit 4,775 4,861 4,885 4,900 5,030 5,073 5,137 5,237 5,294 9 Public debt securities 4,774 4,861 4,885 4.900 5.030 5,073 5,137 5,237 5,294 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 5,500 5,500 5,500 5,500 5,500 1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified SOURCE. 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 1996 1997 Type and holder 1993 1994 1995 1996 Q2 Q3 Q4 Ql 1 Total gross public debt 4,535.7 4,800.2 4,988.7 5,323.2 5,161.1 5,224.8 5,323.2 5,380.9 By type 2 Interest-bearing 4,52.3 4,769.2 4,964.4 5,317.2 5.126.8 5,220.8 5,317.2 5,375.1 3 Marketable 2,989.5 3.126.0 3.307.2 3,459.7 3,348.4 3,418.4 3,459.7 3,504.4 4 oills 714.6 733.8 760.7 777.4 773.6 761.2 777.4 785.6 5 Notes 1,764.0 1.867.0 2,010.3 2,112.3 2,025.8 2,098.7 2,112.3 2,131.0 6 Bonds 495.9 510.3 521.2 555.0 534.1 543.5 555.0 565.4 7 Inflation-indexed notes' 0 0 0 0 0 0 0 7.4 8 Nonmarketable" 1,542.9 1,643.1 1.657.2 1,857.5 1,778.3 1,802.4 1,857.5 1,870.8 9 State and local government series 149.5 132.6 104.5 101.3 97.8 95.7 101.3 104.8 10 Foreign issues3 43.5 42.5 40.8 37.4 37.8 37.5 37.4 36.8 11 Government 43.5 42.5 40.8 47.4 37.8 37.5 47.4 36.8 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 169.4 177.8 181.9 182.4 183.8 184.2 182.4 182.6 14 Government account series4 1,150.0 1.259.8 1,299.6 1,505.9 1,428.5 1,454.7 1,505.9 1,516.6 15 Non-interest-bearing 3.4 31.0 24.3 6.0 34.3 4.0 6.0 5.8 By holder5 16 U.S. Treasury and other federal agencies and trust funds 1,153.5 1,257.1 1,304.5 1,497.2 1,422.4 1,447.0 1,497.2 i 17 Federal Reserve Banks 334.2 374.1 391.0 410.9 391 0 390 9 410.9 18 Private investors 3,047.4 3.168.0 3,294.9 3,411.2 3.3473 3,386'2 3,41L2 19 Commercial banks 322.2 290.4 278.7 272.0 280.2 274.8 272.0 20 Money market funds 80.8 67.6 71.3 92.1 82.1 85.2 92.1 21 Insurance companies 234.5 240.1 241.5 234.0 234.4 234.5 234.0 22 Other companies 213.0 226.5 228.8 258.5 230.9 249.1 258.5 23 State and local treasuries6'7 590.8 468.3 344.1 290.0 316.8 298.5 290.0 Individuals 24 Savings bonds 171.9 180.5 185.0 187.0 186.5 186.8 187.0 25 Other securities 137.9 150.7 162.7 169.6 161.1 167.0 169.6 26 Foreign and international8 623.0 688.6 862.2 1,131.5 959.8 1,030.9 1,131.5 27 Other miscellaneous investors7'9 673.3 855.3 920.6 776.5 895.5 859.4 776.5 1. The U.S. Treasury first issued inflation-indexed notes during the first quarter of 1997. 8. Consists of investments of foreign balances and international accounts in the United 2. Includes (not shown separately) securities issued to the Rural Electrification Administra- States. tion, depository bonds, retirement plan bonds, and individual retirement bonds. 9. Includes savings and loan associations, nonprofit institutions, credit unions, mutual 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur- savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury rency held by foreigners. deposit accounts, and federally sponsored agencies. 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual Public Debt of the United States; data by holder, Treasury Bulletin. holdings; data for other groups are Treasury estimates. 6. Includes state and local pension funds. 7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable federal securities was removed from "Other miscellaneous investors'" and added to "State and local treasuries." The data shown here have been revised accordingly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • June 1997 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1996 1997 1997, week ending Feb. 5 Feb. 12 Feb. 19 Feb. 26 Mar. 5 Mar. 12 Mar. 19 Mar. 26 OUTRIGHT TRANSACTION By type of security 1 U.S.'Treasury bills 48,957 45,941 43,025 41,075 49,615 35,699 39,097 43,780 57,425 46,179 45,170 57,182 Coupon securities, by maturity 2 Five years or less 89,775 110,875 108,283 113,315 105,201 91,500 98,004 128,324 125,323 104,384 108,231 132,151 3 More than five years 50,436 55,797 66,967 58,845 70,722 66,001 70,685 62,384 67,771 53,631 53,512 55,090 4 Federal agency 34,571 35,624 36,070 34,473 36,519 33,237 41,200 34,222 36,842 33,366 36,004 36,538 5 Mortgage-backed 33,754 45,018 45,373 33,766 44,544 59,466 39,497 36,767 44,647 54,640 35,581 31,773 By type of counterparty With interdealer broker 6 U.S. Treasury 104,432 122,621 122,673 124,947 128,922 108,018 114,938 133,367 138,676 116,349 118.810 141,227 7 Federal agency 584 1,141 1,338 1,147 1,266 1,037 2,049 1,136 1,283 1,406 849 1,123 8 Mortgage-backed 11,606 14,419 15,872 10,394 15,036 21,133 14,718 11,695 16,722 18,741 13,083 12,382 With other 9 U.S. Treasury 84,737 89,993 95,602 88,289 96,616 85,182 92,848 101,121 111,843 87,846 88,104 103,195 10 Federal agency 33,987 34,483 34,732 33,325 35,252 32,200 39,151 33,086 35,559 31,960 35.155 35,414 11 Mortgage-backed 22,148 30,598 29,501 23,371 29,508 38,332 24,779 25,072 27,925 35,898 22,498 19,390 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 300 206 296 176 237 165 513 297 272 272 427 740 Coupon securities, by maturity 13 Five years or less 1,814 1,489 1,797 1,408 1,359 1,035 1,338 2,583 3,316 1,845 2,059 1,681 14 More than five years 13,178 14,518 13,442 14,992 13,645 11,887 13,216 14,086 15,867 14,100 15,972 13,807 15 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 16 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 0 OPTIONS TRANSACTIONS4 By type of underlying security 17 U.S. Treasury bills 0 0 0 0 0 0 0 n.a. n.a. n.a. Coupon securities, by maturity 18 Five years or less 1,626 3,288 3,770 2,767 3,879 2,913 2,756 5,084 4,496 2,588 3,618 4,056 19 More than five years 3,559 5,045 5,196 6,008 5,332 4,334 5,920 5,444 5,079 4,568 4,658 4,118 20 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 21 Mortgage-backed 494 455 734 316 640 1,074 527 799 274 469 626 786 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

Federal Finance A29 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1996 1997 1997, week ending Feb. Jan. 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 Mar. 5 Mar. 12 Mar. 19 NET OUTRIGHT POSITIONS3 By type of security 1 U.S.'Treasury bills 14,525 5,582 5,047 826 4,658 6,689 7,306 -1,553 15,465 14,794 8,298 Coupon securities, by maturity 2 Five years or less -7,743 -8.518 -8,602 -12,981 -10,030 -2,756 -9,091 -9,897 -19,249 -13,783 -26,300 3 More than five years -22,372 -24,851 -20,818 -26,379 -25,827 -21,064 -17,434 -19,544 -23,742 -26,745 -28,827 4 Federal agency 23,348 25,134 22,896 25,057 23,794 23,320 21,075 24,595 19,595 25,946 24,816 5 Mortgage-backed 43,300 37,786 39,289 37,389 39,019 38,710 40,043 38,582 41,819 38,726 43,914 NET FUTURES POSITIONS By type of deliverable security 6 U.S. Treasury bills -2,418 -2,074 -3,437 -2,207 -2,772 -3,318 -3,868 -2,920 -2,186 Coupon securities, by maturity 7 Five years or less -75 388 851 866 301 18 1,636 2,406 2,403 3,893 8 More than five years -7,784 -11,153 -7,179 -6,917 -11,766 -15,501 -9,987 -8,454 -5,803 -4,903 9 Federal agency 0 0 0 0 0 0 0 0 0 0 10 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 NET OPTIONS POSITIONS By type of deliverable security 11 U.S." Treasury bills 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 12 Five years or less -3,036 -3,148 -2.518 -2,483 -2,338 -3,262 -3,309 -1,241 -2,063 -2,078 -2,184 13 More than five years 1,526 -5 382 -1,098 2 1,245 1,204 -852 -242 -327 -517 14 Federal agency 0 0 0 0 0 0 0 0 0 0 0 15 Mortgage-backed 1.054 1,123 1,383 1,110 1,652 1,447 1,433 1,271 701 656 1,420 Financing5 Reverse repurchase agreements 16 Overnight and continuing 255,137 276,107 298,371 267,689 290,542 297,347 315,435 289,915 291,399 292,233 276,570 17 Term 437,241 486,628 487,843 519,291 511,244 540,915 436,436 472,030 478,859 503,643 524,732 Securities borrowed 18 Overnight and continuing 194,674 199,784 205,656 200,137 206,242 203,285 209,732 203,289 206,506 218,683 213,561 19 Term 73,195 80,149 83,514 85,576 83,844 86,297 82,724 82,110 80,628 79,553 79,443 Securities received as pledge 20 Overnight and continuing ... 5,484 5,298 3,204 3,145 3,206 3,139 3,280 3,088 4,267 7,316 21 Term 5 45 43 112 95 5 n.a. n.a. n.a. Repurchase agreements 22 Overnight and continuing . 564,075 578,791 604,841 558,786 587,584 602,531 632,316 590,837 608,923 611,677 590,616 23 Term 393,364 443,233 453,814 479,169 463,182 496,351 408,317 455,901 433,452 458,238 481,060 Securities loaned 24 Overnight and continuing . 3,419 4,481 6,881 6,482 6,301 7,083 7,058 7,149 6,071 4,699 5,045 25 Term 4,117 4,864 6,746 6,570 6,444 6,826 6,792 6,720 7,155 7,174 7,201 Securities pledged 26 Overnight and continuing . 58,532 58,140 57,526 58,592 55,285 55,325 60,841 57,956 57,720 60,739 62,787 27 Term 1,682 2,391 2,245 2,675 2,729 2,771 1,832 1,940 1,702 1,809 2,297 Collateralized loans 28 Overnight and continuing . n.a. n.a. n.a. n.a. n.a. n.a. 29 Term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 30 Total 10,025 9,386 13,457 9,038 12,037 16,808 12,611 12,451 11,763 13,223 12,553 MEMO: Matched book6 Securities in 31 Overnight and continuing . 254,678 279,556 294,190 270,867 293,236 301,239 304,851 282,091 276,941 291,987 32 Term 434,522 485,466 487,344 513,311 508,892 542,375 444,381 464,952 469,602 491,281 507,351 Securities out 33 Overnight and continuing . 334,841 351,842 367,612 337,780 370,367 383,443 376,680 344,020 356,156 370,533 34 Term 341,796 392,408 400,188 428,627 413,073 447,702 359,655 391,887 372,589 395,991 414,850 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. Major changes in the report form filed by primary dealers induced a break in the dealer data series as of the week ending July 6, 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics D June 1997 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period Agency 1993 Sept. Oct. 1 Federal and federally sponsored agencies. 570,711 738,928 844,611 925,823 896,670 901,089 912,100 925,823 2 Federal agencies. . . 45,193 39,186 37,347 29,380 30,599 30,800 29,909 29,380 Defense Department^ 6 6 6 6 6 6 6 6 Export-Import Bank22,'3" 5,315 3.455 2,050 1,447 1,828 1,828 1,828 1,447 Federal Housing Administration4 255 116 97 84 82 82 84 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Postal Service6 9,732 8,073 5,765 n.a. n.a. n.a. n.a. n.a. Tennessee Valley Authority 29,885 27,536 29,429 27,853 28,683 28,884 27,991 27,853 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federallyy spp onsored aggencies7 523.452 699,742 807,264 896,443 866,071 870,289 882,191 896,443 1111 FFeddel ralH H omeL L oan BBkanks 139,512 205,817 243,194 263,404 254,920 253,836 252,868 263,404 257,055 12 Federal Home Loan Mortgage Corporation 49,993 93,279 119,961 156,980 146,954 148,435 158,158 156,980 163,171 13 Federal National Mortgage Association 201,112 257,230 299,174 331,270 319,153 321,110 324,378 331,270 333,302 14 Farm Credit Banks8 53,123 53.175 57,379 60,053 60,126 59,712 59,797 60,053 67,610 15 Student Loan Marketing Association9 39,784 50,335 47,529 44,763 44,962 47,225 46,991 44,763 n.a. 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 debt13 128,187 103,817 78,681 58,172 62,846 61,051 58,921 58,172 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 5,309 3,449 2,044 1,822 1,822 1,822 1,433 21 Postal Service6 9,732 8,073 5,765 n.a. n.a. n.a. 22 Student Loan Marketing Association 4,760 n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority 6,325 3,200 3,200 n.a. n.a. n.a. 24 United States Railway Association6 n.a. n.a. Other lending14 25 Farmers Home Administration 38,619 33,719 21,015 18,325 18,700 18,700 18,325 18,325 26 Rural Electrification Administration 17,578 17,392 17,144 16,702 16,751 16,753 16,772 16,702 27 Other 45,864 37,984 29,513 21,714 25,573 23,776 22,002 21,714 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

Securities Markets and Corporate Finance A31 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1996 1997r Type of o is r s u u e s e or issuer, 1994 1995 1996 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 All issues, new and refunding1 153,950 145,657 171,222 12,493 11,693 16,750 14,520 17,431 10,340 11,924 13,478 By type of issue 2 General obligation 54,404 56,980 60,409 4,074 3,024 5,467 5,134 4,755 4,161 4,285 5,464 3 Revenue 99,546 88,677 110,813 8,419 8,669 11,283 9,386 12,676 6,179 7,639 8,014 By type of issuer 4 State 19,186 14,665 13,651 376 874 1,769 1,351 663 728 713 4,037 5 Special district or statutory authority 95,896 93,500 113,228 8,433 8,137 10,923 9,091 12,315 6,307 8,216 7,086 6 Municipality, county, or township 38,868 37,492 44,343 3,684 2,682 4,058 4,078 4,453 3,305 2,995 2,355 7 Issues for new capital 105,972 102,390 112,298 7,093 7,837 12,113 8,656 12,311 6,106 8,342 9,010 By use of proceeds 8 Education 21,267 23,964 26,851 2,337 1,522 2,693 1,530 2,306 1,945 1,931 2,374 9 Transportation 10,836 11,890 12,324 622 850 2,907 1,164 736 808 634 479 10 Utilities and conservation 10,192 9,618 9,791 417 720 1,441 1,102 1,006 751 895 954 11 Social welfare 20,289 19,566 24,583 2,348 2,100 1,573 1,974 3,294 1,265 1,284 2,639 12 Industrial aid 8,161 6,581 6,287 274 439 556 460 1,081 231 954 309 13 Other purposes 35,227 30,771 32,462 1,095 2,206 2,943 2,426 3,888 1,106 2,644 2,255 1. Par amounts of long-term issues based on date of sale. SOURCE. Securities Data Company beginning January 1990; Investment Dealer's 2. Includes school districts. Digest before then. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1996 Type of o r i s i s s u s e u , e r offering, 1995 July Aug. Sept. Oct. Nov. Dec/ Jan.r Feb. 1 All issues1 583,240 n.a. 41,023 44,447 60,579 60,387 57,937 48,747 56,610 46,724 2 Bonds2 498,039 573,206 n.a. 33,255 38,685 53,875 47,498r 44,569r 39,585 43,644 38,597 By type of offering 3 Public, domestic 365,222 408,804 386,280 27,368 32,605 44,658 39,855r 38,948r 37,108 35,286 32,699 4 Private placement, domestic3 . 76,065 87,492 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 56,755 76,910 74,793 5,887 6,081 9,218 7,643r 5,62lr 2,477 8,357 5,899 By industry group 6 Manufacturing 43,423 61,070 41,959 4,166 3,092 4,045 5,969 2,720 5,096 4,088 4,791 7 Commercial and miscellaneous 40,735 50,689 34,076 2,712 2,661 3,195 5,010 4,282 1,727 4,706 1,829 8 Transportation 6,867 8,430 5,111 535 293 620 436 270 341 366 100 9 Public utility 13,322 13,751 8,161 1,046 174 279 1,067 773r 680 858 1,477 10 Communication 13,340 22,999 13,320 647 1,450 829 802 475 628 1,210 565 11 Real estate and financial 380,352 416,269 358,446 24,149 31,016 44,908 34,215r 36,049r 31,113 32,415 29,836 12 Stocks2 85,155 100,573 n.a. 7,768r 5,762 6,703r 12,889r 13,368r 9,162 12,967 8,127 By type of offering 13 Public preferred 12,570 10,918 33,208r 1,794 1,168 1,890 3,855 5,656 5,452 7,883 1,431 14 Common 47,828 57,555 83,052r 5,974r 4,594 4,813r 9,034r 7,712r 3,710 5,084 6,696 15 Private placement3 24,800 32,100 n.a. n.a. n.a. By industry group 16 Manufacturing 17,798 1,759 l,050r 787 l,588r 1,530 899 608 2,008 17 Commercial and miscellaneous 15,713 2,630r 2,143 3,080 5,752r 3,974 2,922 1,827 3,041 18 Transportation 2,203 104 143 0 42 367 54 250 258 19 Public utility 2,214 300 306 212 100 210 103 1,847 96 20 Communication 494 1,097 51 0 480 42 23 0 28 21 Real estate and financial 46,733 l,878r 2,070r 2,624r 4,928r 7,219 5,161 8,436 2,686 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- SOURCE. 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

A32 Domestic Financial Statistics • June 1997 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1996 1997 Item 1995 1996 Aug. Sept. Oct. Nov. Dec. Jan.r Feb. Mar. 1 Sales of own shares 871,415 1,149,918 86,225 84,171 92,730 87,958 122,792 134,460 102,169 101,311 2 Redemptions of own shares 699,497 853,460 64,993 65,601 72,537 65,949 87,949 96,243 73,871 80,085 3 Net sales3 171,918 296,458 21,232 18,570 20,193 22,009 34,843 38,218 28,298 21,226 4 Assets4 2,067,337 2,637,398 2,366,030 2,474,339 2,517,049 2,652,884 2,637,398 2,752,273 2,772,715 2,700,084 5 Cash5 142,572 139,396 155,129 156,689 149,937 146,044 137,973 152,297 153,525 159,086 6 Other 1,924,765 2,498,002 2,210,901 2,317,651 2.367,112 2,506,840 2,499,425 2,599,976 2,619,189 2,540,998 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 1995 1996 Account 1994 1995 1996 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 1 Profits with inventory valuation and capital consumption adjustment 529.5 586.6 654.0 560.0 562.3 612.5 611.8 645.1 655.8 661.2 654.1 2 Profits before taxes 531.2 598.9 639.9 594.5 589.6 607.2 604.2 642.2 644.6 635.6 637.1 3 Profits-tax liability 195.3 218.7 233.0 217.3 214.2 224.5 218.7 233.4 236.4 233.4 228.9 4 Profits after taxes 335.9 380.2 406.8 377.2 375.3 382.8 385.5 408.8 408.1 402.2 408.2 5 Dividends 211.0 227.4 244.2 221.7 224.6 228.5 234.7 239.9 243.1 245.2 248.7 6 Undistributed profits 124.8 152.8 162.6 155.5 150.8 154.3 150.8 168.9 165.1 156.9 159.5 7 Inventory valuation -13.3 -28.1 -8.9r -51.9 -42.3 -9.3 _o o -17.4 -11.0 2.0 -9.2r 8 Capital consumption adjustment 11.6 15.9 23.1 17.4 15.0 14.6 16J 20.4 22.3 23.6 26.2r SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A3 3 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1995 1996 Account Q2 Q3 Q4 Ql Q2 Q3 Q4 ASSETS 1 Accounts receivable, gross 551.0 614.6 657.8 586.9 594.7 614.6 621.8 631.4 642.0 657.8 2 Consumer 134.8 152.0 154.2 141.7 146.2 152.0 151.9 154.6 154.8 154.2 3 Business 337.6 375.9 397.9 361.8 362.4 375.9 380.9 383.7 387.0 397.9 4 Real estate 78 5 86 6 105 7 83 4 86 1 86 6 89 1 93 1 100 2 105 7 5 LESS: Reserves for unearned income 55.0 63.2 59.1 62.1 61.2 63.2 61.5 59.6 58.9 59.1 6 Reserves for losses 12.4 14.1 14.8 13.7 13.8 14.1 14.2 14.1 14.7 14.8 7 Accounts receivable, net 483.5 537.3 583.9 511.1 519.7 537.3 546.1 557.7 568.4 583.9 8 All other 183.4 210.7 242.5 198.1 198.1 210.7 212.8 216.1 226.8 242.5 9 Total assets 666.9 748.0 826.4 709.2 717.8 748.0 758.9 773.8 795.2 826.4 LIABILITIES AND CAPITAL 10 Bank loans 21.2 23.1 27.8 21.5 21.8 23.1 23.5 26.2 27.5 27.8 11 Commercial paper 184.6 184.5 192.9 181.3 178.0 184.5 184.8 186.9 189.4 192.9 Debt 12 Owed to parent 51.0 62.3 79.2 57.5 59.0 62.3 62.3 68.4 71.9 79.2 13 Not elsewhere classified 235.0 284.7 320.0 264.4 272.1 284.7 291.4 301.3 311.5 320.0 14 All other liabilities 99.5 106.2 108.6 102.1 102.4 106.2 105.7 100.1 102.8 108.6 15 Capital, surplus, and undivided profits 75.7 87.2 97.9 82.5 84.4 87.2 91.1 90.9 92.1 97.9 16 Total liabilities and capital 666.9 748.0 826.4 709.2 717.8 748.0 758.9 773.8 795.2 826.4 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 1996 1997 Type of credit 1994 1995 1996 Sept. Oct. Nov. Dec. Jan.' Feb. Seasonally adjusted 1 Total 615,618 691,616 755,419r 739,183 749,165 757,064r 755,419r 761,103 763,677 2 Consumer 176,085 198,861 213,150' 212,979 212,511 212,775 213,150' 213,110 213,053 3 Real estate2 78,910 87,077 106,300 100,317 102,933 104,776 106,300 108,596 111,082 4 Business 360,624 405,678 435,969' 425,887 433,720 439,514' 435,969r 439,398 439,542 Not seasonally adjusted 5 Total 620,975 697,340 761,342r 735,269 747,970 757,079r 761,342r 762,511 764,872 6 Consumer 178,999 202,101 216,517' 213,827 213,026 214,227 216,517' 214,725 212,683 7 Motor vehicles 61,609 70,061 73,116' 76,333 75,917 75,304 73,116' 73,525 73,940 8 Other consumer 73.221 81,988 80,984 78,451 77,527 77,868 80,984 80,927 79,798 9 Securitized motor vehicles4 31,897 33,633 35,644 34,846 34,603 34,177 35,644 33,976 33,069 10 Securitized other consumer4 12,272 16,419 26,773' 24,197 24,979 26,878 26.773' 26,297 25,876 11 Real estate2 78,479 86,606 105,728 100,182 103,184 104,943 105,728 109,100 111,507 12 Business 363,497 408,633 439,097' 421,260 431.760 437.909' 439.097' 438,686 440.682 13 Motor vehicles 118.197 133,277 141,964' 138,615 139,966 142,210 141,964' 144,008 147,821 14 Retail loans5 21,514 25,304 27,823' 28,875 29.088 28,825 27,823' 27,730 28,883 15 Wholesale loans6 35,037 36,427 32,337 30,294 30,515 32,262 32,337 33,764 36,164 16 Leases 61,646 71,546 81,804 79,446 80,363 81,123 81,804 82,514 82,774 17 Equipment 157.953 177,297 184,942 181,111 179,997 182,229' 184,942 182,908 182,796 18 Loans7 49,358 59,109 60,991 56,132 58.735 60,167' 60,991 58,276 57,383 19 Leases 108,595 118,188 123,951 124,979 121,262 122,062' 123,951 124,632 125.413 20 Other business8 61,495 65,363 71,110 67.290 74,055 73,999' 71,110 71,755 72,661 21 Securitized business assets4 25,852 32,696 41,081 34,244 37,742 39,471 41,081 40,015 37,404 22 Retail loans 4,494 4,723 5,250 4,600 4,650 5,402 5,250 5,086 4,778 23 Wholesale loans 14,826 21,327 24,732 23,170 23,183 23,391 24,732 24,143 21,699 24 Leases 6,532 6,646 11,099 6,474 9,909 10,678 11,099 10,786 10,927 1. Includes finance company subsidiaries of bank holding companies but not of retailers 5. Passenger car fleets and commercial land vehicles for which licenses are required. and banks. Data are before deductions for unearned income and losses. Data in this table also 6. Credit arising from transactions between manufacturers and dealers, that is, floor pi appear in the Board's G.20 (422) monthly statistical release. For ordering address, see inside financing. front cover. 7. Beginning with the June 1996 data, retail and wholesale business equipment loans ha 2. Includes all loans secured by liens on any type of real estate, for example, first and junior been combined and are no longer separately available. mortgages and home equity loans. 8. Includes loans on commercial accounts receivable, factored commercial accounts, a 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; a consumer goods such as appliances, apparel, general merchandise, and recreation vehicles. wholesale and lease paper for mobile homes, campers, and travel trailers. 4. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originator. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Financial Statistics • June 1997 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1996 1997 hem 1994 1995 1996 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 170.4 175.8 182.4 187.1 183.9 188.1 170.8 172.4 166.6 169.2 2 Amount of loan (thousands of dollars) 130.8 134.5 139.2 141.7 139.0 143.3 129.9 133.6 130.9 132.1 3 Loan-to-price ratio (percent) 78.8 78.6 78.2 77.2 77.7 78.0 79.3 79.7 80.9 80.8 4 Maturity (years) ^ 27.5 27.7 27.2 27.7 27.4 27.4 27.5 27.9 28.2 28.0 5 Fees and charges (percent of loan amount)' 1.29 1.21 1.21 1.28 1.11 1.19 1.01 1.02 1.03 0.99 Yield (percent per year) 6 Contract rate' 7.26 7.65 7.56 7.77 7.76 7.60 7.63 7.65 7.61 7.72 7 Effective rate13 7.47 7.85 7.77 7.98 7.95 7.80 7.79 7.81 7.78 7.88 8 Contract rate (HUD series)4 8.58 8.05 8.03 8.23 8.01 7.73 7.91 7.94 7.94 8.25 SECONDARY MARKETS Yield (percent per vear) 9 FHA mortgages (Section 203)3 8.68 8.18 8.19 8.56 8.00 8.14 8.06 8.06 8.08 8.55 10 GNMA securities6 7.96 7.57 7.48 7.85 7.53 7.19 7.33 7.51 7.37 7.69 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 222.057 253,511 287.052 278,003 279,544 283.835 287,052 288,504 288,951 292,115 12 FHA/VA insured 27.558 28.762 30.592 30,840 30,815 30,744 30,592 30,352 30,119 30,100 13 Conventional 194,499 224,749 256.460 247,163 248,729 253,091 256,460 258,152 258,832 262,015 14 Mortgage transactions purchased (during period) 62,389 56.598 68.618 5,353 4,235 6,805 6,178 4,128 3,029 5,839 Mortgage commitments (during period) 15 Issued7 .' 54,038 56,092 65.859 4,264 5.199 6.533 3,991 4.384 4,407 8,299 16 To sell8 1,820 360 130 53 0 4 28 71 0 1 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)" 17 Total ' 72.693 107,424 137,755 129.426 132,259 135.270 137,755 138,935 139.925 144,558 18 FHA/VA insured 276 267 220 197 227 223 220 216 215 215 19 Conventional 72,416 107,157 137,535 129,229 132.032 135,047 137,535 138,719 139,710 144,343 Mortgage transactions (during period) 20 Purchases 124.697 98.470 128,566 8.687 9,538 9,198 9,943 9.507 8,204 7,403 21 Sales 117,110 85,877 119,702 8,167 8,797 8,456 9,220 9,204 10.271 6,796 22 Mortgage commitments contracted (during period)9 136,067 1 18.659 128.995 9.315 8,214 9,032 9,905 9,021 7,537 7,595 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 ihe 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 o\ ion vears. 8. Includes participation loans as well as whole loans. 4. Average contract rale on new commitments for conventional tirst 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, mimmum-downpayment first mortgages insured exclude swap activity. by the Federal Housing Administration (FHAI 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

Real Estate A35 1.54 MORTGAGE DEBT OUTSTANDING' Millions of dollars, end of period Type of holder and property Q4 Ql Q2 Q3 Q4P 1 AH holders 4,275,217 4,481,075 4,714,346 4,714,346 4,792,478 4,889,980 4,975,730 5,054,447 By type of property 2 One- to four-famiiy residences . 3,233,830 3,437.781 3,634,060 3,634,060 3,699,671 3.778.471 3,853,772 3,912.079 3 Multifamily residences 270,824 275,705 287.993 287,993 291,893 297.223 301,635 309,266 4 Nonfarm, nonresidential 689,365 684,618 707,673 707,673 715,696 727,743 732,905 744,994 5 Farm 81,198 82,971 84,620 84,620 85,217 86,544 87,418 88,108 By type of holder 6 Major financial institutions 1,768,093 1,815.845 1,888.970 1,888,970 1,901,524 1,925.056 1.953,214 1.977,208 7 Commercial banks2 940,595 1,004,322 1.080,366 1,080.366 1,087,207 1,099,643 1,112,961 1,136,139 8 One- to four-family 556,660 611,391 663,614 663.614 665,935 670,756 679.254 696,340 9 Multifamily 38,657 39,360 43,842 43,842 44.700 45,368 46,530 47,026 10 Nonfarm, nonresidential 324,413 331,004 349,081 349,081 352.641 358,956 362,362 367,893 11 Farm 20,866 22,567 23,829 23.829 23.931 24,563 24.815 24,880 12 Savings institutions3 598,437 596,191 596.789 596,789 602.631 612.849 628,037 628,719 13 One- to four-family 470,000 477,626 482.351 482,351 489,634 499,021 513,291 513,644 14 Multifamily 67,367 64,343 61,988 61,988 60,540 60,820 61,434 61.670 15 Nonfarm, nonresidential 60,765 53,933 52.162 52.162 52,155 52.688 52,991 53,073 16 Farm 305 289 288 288 302 320 320 331 17 Life insurance companies 229,061 215,332 211.815 211,815 211,686 212.565 212.216 212,351 18 One- to four-family 9.458 7,910 7,476 7,476 7,472 7,503 7,488 7,493 19 Multifamily 25,814 24,306 23,920 23,920 23.906 24,007 23,959 23,972 20 Nonfarm. nonresidential 184,305 173.539 170,783 170.783 170,681 171,402 171,059 171,152 21 Farm 9,484 9,577 9,636 9,636 9,627 9,653 9.710 9,735 22 Federal and related agencies 327,014 319,327 313,760 313,760 312,950 314.694 311,697 308,708 23 Government National Mortgage Association . . . 6 2 2 2 24 One- to four-family 15 6 2 2 2 2 2 25 Multifamily 7 0 0 0 0 0 0 0 26 Farmers Home Administration4 41,386 41,781 41.791 41,791 41,594 41,547 41,575 41,596 27 One- to four-family 15,303 13,826 12,643 12,643 12,327 11,982 11,630 11,319 28 Multifamily 10,940 11,319 11,617 11,617 11,636 11,645 11,652 11,685 29 Nonfarm, nonresidential 5,406 5,670 6,248 6,248 6,365 6.552 6,681 6,841 30 Farm 9,739 10,966 11.282 11,282 11,266 11,369 11,613 11,752 31 Federal Housing and Veterans' Administrations 12,215 10,964 9,809 9.809 8,439 8.052 6,627 5,977 32 One- to four-family 5,364 4,753 5,180 5,180 4,228 3,861 3,190 3,258 33 Multifamily 6,851 6.211 4,629 4,629 4,211 4.191 3,438 2.719 34 Resolution Trust Corporation 17,284 10.428 1.864 1,864 0 0 0 0 35 One- to four-family 7,203 5,200 691 691 0 0 0 0 36 Multifamily 5327 2,859 647 647 0 0 0 0 37 Nonfarm. nonresidential 4,754 2,369 525 525 0 0 0 0 38 Farm 0 0 0 0 0 0 0 0 39 Federal Deposit Insurance Corporation 14,112 7,821 4,303 4,303 5,553 5,016 4,025 1,277 40 One- to four-family 2,367 1,049 492 492 839 840 675 231 41 Multifamily .' 1,426 1,595 428 428 1,099 955 766 194 42 Nonfarm, nonresidential 10,319 5.177 3,383 3,383 3,616 3.221 2,584 853 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 166,642 178,059 183,782 183,782 183,531 186,041 185,221 184,445 45 One- to four-family 151,310 162,160 168,122 168,122 167,895 170.572 170,083 169,765 46 Multifamily 15,332 15,899 15,660 15,660 15,636 15,469 15,138 14,680 47 Federal Land Banks 28,460 28,555 28,428 28.428 28,891 29,362 29,579 29,973 48 One- to four-family 1,675 1,671 1,673 1.673 1,700 1.728 1,740 1,764 49 Farm 26,785 26.885 26.755 26.755 27,191 27,634 27,839 28,210 50 Federal Home Loan Mortgage Corporation .... 46,892 41,712 43,781 43,781 44.939 44,674 44.668 45,437 51 One- to four-family 44,345 38,882 39,929 39,929 40,877 40.477 40,304 40,691 52 Multifamily .' 2,547 2,830 3,852 3,852 4,062 4.197 4,364 4.746 53 Mortgage pools or trusts5 1,570,666 1,726,833 1,861.864 1,861,864 1,905,515 1,963.909 2,008,229 2,055,077 54 Government National Mortgage Association . . . 414,066 450,934 472,292 472,292 475,829 485,441 497,248 505,977 55 One- to four-family 404,864 441,198 461,447 461,447 464,650 473,950 485,303 493,795 56 Multifamily 9,202 9,736 10,845 10,845 11,179 11,491 11,945 12.182 57 Federal Home Loan Mortgage Corporation .... 447.147 490,851 515,051 515.051 524,327 536,671 545,608 554.260 58 One- to four-family 442,612 487,725 512,238 512,238 521,722 534.238 543,341 551,513 59 Multifamily 4,535 3,126 2,813 2,813 2,605 2,433 2,267 2,747 60 Federal National Mortgage Association 495,525 530,343 582,959 582,959 599,546 621,285 636,362 650,780 61 One- to four-family 486,804 520,763 569,724 569,724 585,527 606,271 619,869 633,210 62 Multifamily 8.721 9,580 13,235 13,235 14,019 15,014 16.493 17,570 63 Farmers Home Administration4 28 19 11 11 10 9 7 3 64 One- to four-family 5 3 2 2 1 1 0 0 65 Multifamily 0 0 0 0 0 0 0 0 66 Nonfarm, nonresidential 13 9 5 5 5 4 4 0 67 Farm 10 7 4 4 4 4 3 3 68 Private mortgage conduits 213,901 254,686 291,551 291,551 305,803 320,502 329,003 344,057 69 One- to four-family6 179,730 202,987 222,892 222,892 230,221 239,153 244,527 246,904 70 Multifamily 8,701 14,925 21,279 21,279 24,477 26,809 28,141 33,689 71 Nonfarm, nonresidential 25,469 36,774 47,380 47,380 51.104 54,541 56,336 63,464 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 609,444 619,069 649,752 649,752 672,488 686,321 702,590 713,454 74 One- to four-family 456,115 460,632 485,584 485.584 506,641 518,116 533,074 542,151 75 Multifamily ' 65,398 69,615 73,239 73,239 73,823 74,824 75,510 76,387 76 Nonfarm, nonresidential 73,922 76.142 78,105 78,105 79,129 80,379 81,718 77 Farm 14,009 12,681 12,824 12,824 12,896 13,002 13,118 13,198 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics • June 1997 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1996r 1997 Holder and type of credit 1994 1995 1996r Sept. Oct. Nov. Dec. Jan.r Feb. Seasonally adjusted 1 Total 966,457 1,103,296 1,195,069 1,178,600 1,186,719 1,191,969 1,195,069 1,205,289 1,212,022 2 Automobile 317,182 350.848 377,181 374,476 376.713 376,539 377,181 378,153 378,234 3 Revolving 339,337 413,894 467,327 453,722 458,103 463,839 467,327 475.723 480,758 4 Other2 309,939 338,554 350,561 350,402 351,904 351,591 350,561 351,414 353,029 Not seasonally adjusted 5 Total... 990,247 1,131,881 1,226,961 1,182,632 1,188,477 1,199,875 1,226,961 1,216,479 1,208,710 By major holder 6 Commercial banks 462.923 507,753 530,081 517,145 521,258 522,973 530,081 527.210 521,232 7 Finance companies 134,830 152,624 154,176 154,784 153,444 153,172 154,176 154,526 153,814 8 Credit unions 119,594 131,939 146,314 141,968 144,423 145,075 146,314 146,599 145,969 9 Savings institutions 38,468 40,106 44,711 44,934 44,860 44,786 44,711 44,636 44,563 10 Nonfinancial business3 86.621 85,061 79,731 68,513 67,945 69.797 79,731 75,617 72,626 11 Pools of securitized assets4 147,811 214,398 271,948 255,288 256,547 264,072 271.948 267,891 270,506 By major type of credit 12 Automobile 319,715 354,055 380,809 377,898 381.013 380,713 380,809 377,742 375,867 13 Commercial banks 141,895 149,094 153,983 153,143 154,841 154,837 153,983 153.256 152,219 14 Finance companies 61.609 70,626 73,192 76.333 75,917 75,304 73,192 73,599 74,016 15 Pools of securitized assets 36,376 44,411 51,171 48,135 48,020 48,242 51,171 48,473 47,070 16 Revolving 357,307 435,674 491,813 453,656 457,589 467,527 491.813 483,419 479,407 17 Commercial banks. . v 182,021 210,298 228,615 211,185 214,995 217,924 228,615 224,153 217,702 18 Nonfinancial business' 56,790 53.525 46,901 38,816 38,105 39,275 46,901 43,900 41,813 19 Pools of securitized assets4 96,130 147,934 188,712 177,958 178,590 183,987 188,712 187,865 192,332 20 Other 313,225 342,152 354,339 351.078 349,875 351,635 354,339 355,318 353,436 21 Commercial banks 139,007 148.361 147,483 152,817 151,422 150,212 147,483 149,801 151,311 22 Finance companies 73,221 81,998 80,984 78,451 77.527 77,868 80.984 80.927 79.798 23 Nonfinancial business3 29,831 31,536 32,830 29,697 29,840 30,522 32,830 31,717 30,813 24 Pools of securitized assets4 15,305 22.053 32,065 29,195 29,937 31,843 32,065 31,553 31,104 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. Data in this table also appear in the Board's G.19 (421) monthly 4. Outstanding balances of pools upon which securities have been issued; these balances statistical release. For ordering address, see inside front cover. are no longer carried on the balance sheets of the loan originator. 2. Comprises mobile home loans and all other loans that are not included in automobile or 5. Totals include estimates for certain holders for which only consumer credit totals are revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be available. secured or unsecured. 1.56 TERMS OF CONSUMER CREDIT1 Percent per year except as noted 1996 1997 Item 1994 1995 1996 Aug. Sept. Oct. Nov. Dec. Jan. Feb. INTEREST RATES Commercial banks1 1 48-month new car 8.12 9.57 9.05 9.11 n.a. n.a. 9.03 n.a. n.a. 8.92 2 24-month personal 13.19 13.94 13.54 13.37 n.a. n.a. 13.62 n.a. n.a. 13.46 Credit card plan 3 All accounts 15.69 16.02 15.63 15.65 n.a. n.a. 15.62 n.a. n.a. 15.88 4 Accounts assessed interest 15.77 15.79 15.50 15.64 n.a. n.a. 15.52 n.a. n.a. 15.13 Auto finance companies 5 New car 9.79 11.19 9.84r 10.49 10.52 10.40 10.31 8.60r 7.17 7.44 6 Used car 13.49 14.48 13.53 13.92 13.87 13.75 13.56 13.42 12.93 13.08 OTHER TERMS3 Maturity (months) 1 New car 54.0 54.1 51.6 51.4 51.9 52.5 52.3 52.3 55.1 54.6 8 Used car 50.2 52.2 51.4 51.3 51.0 51.1 50.3 49.9 51.5 51.1 Loan-to-value ratio 9 New car 92 92 91 92 91 89 90 90 92 92 10 Used car 99 99 100 100 100 101 102 99r 99 99 Amount financed (dollars) 11 New car 15,375 16,210 16,987 16,927 17,182 17,435 17,719 17,670 17,090 16.837 12 Used car 10,709 11,590 12,182r 12,132 12,108 12,326 12,393 12,492r 12,362 12,202 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. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies. statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A37 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates Transaction category or sector Q2 Q3 Q4 Ql Q2 Q3 Q4 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors. 544.5 629.5 621.3 719.8 868.6 570.0 591.3 883.3 734.3 725.0 647.0 By sector and instrument 2 Federal government 304.0 256.1 155.9 144.4 145.0 184.7 86.0 59.3 239.9 62.4 161.3 116.5 3 Treasury securities 303.8 248.3 155.7 142.9 146.6 183.1 85.6 54.1 242.2 60.2 164.4 119.8 4 Budget agency securities and mortgages .2 7.8 1.5 -1.6 1.6 .4 5.1 -2.3 2.2 -3.1 -3.3 5 Nonfederal 240.5 602.4 683.9 484.0 532.0 643.4 671.9 563.7 530.6 By instrument 6 Commercial paper 8.6 10.0 21.4 18.1 -.9 34.3 18.1 14.1 30.3 11.0 -16.1 -29.0 7 Municipal securities 30.5 74.8 -29.3 -44.2 1.9 -2.2 -107.2 -12.6 -18.9 37.7 -76.2 65.2 8 Corporate bonds 67.6 75.2 23.3 73.3 72.5 98.4 59.8 82.0 60.9 71.5 67.8 89.9 9 Bank loans n.e.c -13.7 3.6 73.2 99.6 65.5 99.1 75.3 78.5 41.2 74.9 118.6 27.3 10 Other loans and advances 10.1 -9.4 54.4 59.0 34.7 57.3 35.2 61.0 32.9 26.8 79.4 -.4 11 Mortgages 132.4 157.7 196.1 228.0 334.3 242.1 246.4 191.5 374.6 359.1 292.3 311.3 12 Home mortgages 189.4 187.2 204.0 196.3 278.0 193.5 219.2 159.0 330.1 290.0 256.3 235.7 13 Multifamily residential -10.4 -6.0 1.7 10.5 19.4 10.9 11.3 13.3 13.8 19.4 15.7 28.6 14 Commercial -48.1 -24.0 -11.3 19.5 33.5 36.1 13.7 18.2 28.4 44.3 16.8 44.3 15 Farm 1.4 .5 1.8 1.6 3.5 1.7 2.2 1.1 2.4 5.3 3.5 2.7 16 Consumer credit 5.0 61.5 126.3 141.6 94.4 155.0 156.4 117.5 122.4 90.9 98.0 66.2 By borrowing sector 17 Household 200.2 257.3 372.4 381.1 395.3 391.5 414.0 332.5 470.2 434.0 375.7 301.1 18 Nonfinancial business 19.2 53.7 132.8 233.8 193.9 292.4 171.4 211.4 176.8 193.5 249.5 155.5 19 Corporate 33.9 47.6 118.1 197.5 147.3 260.3 133.5 175.3 130.5 149.2 214.5 95.2 20 Nonfarm noncorporate -16.0 4.2 11.9 34.8 43.4 29.1 34.4 37.1 46.3 37.2 36.2 54.0 21 Farm 1.3 2.0 2.8 1.6 3.1 3.0 3.5 -1.0 .1 7.2 -1.2 6.3 22 State and local government 21.1 62.3 -39.8 -39.6 13.3 .0 -101.3 -11.9 -3.6 44.4 -61.6 73.9 23 Foreign net borrowing in United States 23.7 70.4 -15.3 69.5 67.4 45.5 88.3 76.9 49.1 36.6 106.0 77.8 24 Open market paper 5.2 -9.0 -27.3 13.6 10.9 -8.7 23.7 -3.9 -8.5 9.5 38.6 3.8 25 Bonds 16.8 82.9 12.2 48.3 46.8 51.2 55.2 72.7 47.9 11.1 59.7 68.4 26 Bank loans n.e.c 2.3 .7 1.4 8.5 9.1 5.6 8.2 11.9 8.7 15.1 4.7 7.8 27 Other loans and advances -.6 -4.2 -1.6 -.8 .7 -2.6 1.3 -3.9 1.1 .7 3.1 -2.2 28 Total domestic plus foreign 568.2 699.9 606.0 789.3 814.8 914.1 658.4 668.2 932.4 770.9 831.0 724.9 Financial sectors 29 Total net borrowing by financial sectors 291.3 467.7 446.6 531.0 440.0 507.0 572.0 328.6 687.2 503.1 605.0 By instrument 30 U.S. government-related 155.8 165.3 287.5 204.1 231.1 196.5 227.7 305.5 137.8 296.0 240.4 250.0 31 Government-sponsored enterprise securities . 40.3 80.6 176.9 105.9 90.4 127.2 101.5 132.1 31.4 126.9 80.0 123.3 32 Mortgage pool securities 115.6 84.7 115.4 98.2 140.7 69.3 126.2 173.4 106.5 169.1 160.4 126.8 33 Loans from U.S. government .0 .0 -4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 84.2 126.0 180.2 242.5 299.9 243.5 279.3 266.5 190.8 391.2 262.6 354.9 35 Open market paper -.7 -6.2 41.6 42.6 92.7 33.9 43.7 55.1 17.8 105.7 85.2 162.0 36 Corporate bonds 82.7 119.2 118.4 185.7 153.2 182.3 217.6 175.6 148.1 207.5 118.1 138.9 37 Bank loans n.e.c 2.2 -13.0 -12.3 5.5 21.1 20.7 7.9 -1.8 24.9 23.6 19.6 16.4 38 Other loans and advances -.6 22.4 22.6 3.4 27.2 1.3 4.9 32.0 -5.5 48.6 33.9 31.8 39 Mortgages .6 3.6 9.8 5.3 5.8 5.2 5.2 5.6 5.5 5.8 5.8 6.0 By borrowing sector 40 Commercial banking 10.0 13.4 20.1 22.5 11.6 39.0 38.9 -9.7 -32.5 40.1 15.7 23.3 41 Savings institutions -7.0 11.3 12.8 2.6 26.0 -7.2 5.1 31.5 11.0 42.1 26.4 24.6 42 Credit unions .0 .2 .2 -.1 .1 -.1 .1 .0 -.1 — .2 .3 .3 43 Life insurance companies .0 .2 .3 -.1 1.1 .1 -.1 -.4 2.5 .3 -.4 2.0 44 Government-sponsored enterprises 40.2 80.6 172.1 105.9 90.4 127.2 101.5 132.1 31.4 126.9 80.0 123.3 45 Federally related mortgage pools 115.6 84.7 115.4 98.2 140.7 69.3 126.2 173.4 106.5 169.1 160.4 126.8 46 Issuers of asset-backed securities (ABSs) 58.5 82.4 69.5 133.2 129.3 113.3 164.8 187.5 137.1 133.9 99.7 146.6 47 Finance companies -1.6 2 50.2 51.6 48.0 52.0 19.8 54.3 47.1 68.4 56.9 19.5 48 Mortgage companies 8.0 .0 -11.5 .4 17.1 14.8 4.0 -10.0 20.0 16.0 16.6 15.8 49 Real estate investment trusts (REITs) .3 3.4 13.7 5.4 6.6 5.2 5.2 6.0 5.9 6.5 6.7 7.1 50 Brokers and dealers 2.7 12.0 .5 -5.0 -2.0 -.1 2.1 7.7 -31.8 13.2 5.7 4.8 51 Funding corporations 13.2 2.9 24.2 32.0 62.1 26.4 39.4 -.4 31.6 70.9 35.0 110.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics • June 1997 1.57 FUNDS RAISED IN US. CREDIT MARKETS1—Continued Transaction category or sector Q2 Q3 Q4 Ql Q2 Q3 Q4 52 Total net borrowing, all sectors 808.2 991.2 1,073.7 1,235.9 1,345.8 1,354.1 1,165.4 1,240.2 1,261.0 1,458.1 1,334.1 1,329.9 53 Open market paper 13.1 -5.1 35.7 74.3 102.6 59.5 85.5 65.3 39.6 126.3 107.6 136.8 54 U.S. government securities 459.8 All A 448.1 348.5 376.1 381.1 313.7 364.8 377.7 358.4 401.7 366.5 55 Municipal securities 30.5 74.8 -29.3 -44.2 1.9 -2.2 -107.2 -12.6 -18.9 37.7 -76.2 65.2 56 Corporate and foreign bonds. . . . 167.1 277.3 153.9 307.3 272.5 332.0 332.5 330.3 256.9 290.2 245.6 297.2 57 Bank loans n.e.c -9.3 -8.6 62.3 113.5 95.6 125.4 91.4 88.6 74.7 113.6 142.8 51.4 58 Other loans and advances 8.9 8.7 70.7 61.6 62.6 56.0 41.3 89.1 28.6 76.1 116.5 29.2 59 Mortgages 133.0 161.3 205.9 233.3 340.1 247.3 251.6 197.1 380.2 364.8 298.1 317.3 60 Consumer credit 5.0 61.5 126.3 141.6 94.4 155.0 156.4 117.5 122.4 90.9 98.0 66.2 Funds raised through mutualfunds andcorporate equities 61 Total net issues 312.5 453.6 152.2 154.9 253.6 147.2 196.3 226.1 289.1 402.8 85.0 237.6 62 Corporate equities 103.4 129.9 23.3 -19.0 -21.6 -17.9 -5.7 -18.4 1.4 51.6 -108.1 -31.2 63 Nonfinancial corporations 27.0 21.3 -44.9 -74.2 -82.6 -71.3 -92.8 -72.8 -92.4 -27.2 -138.8 -72.0 64 Foreign shares purchased by U.S. residents . 32.4 63.4 48.1 50.7 57.8 40.8 88.2 57.4 89.8 69.7 32.1 39.5 65 Financial corporations 44.0 45.2 20.1 4.5 3.3 12.6 -1.1 -3.1 4.0 9.1 -1.4 1.3 66 Mutual funds 209.1 323.7 128.9 173.9 275.2 165.0 202.0 244.5 287.6 351.2 193.1 268.7 1. Data in this table also appear in the Board's Z.I (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

Flow of Funds A39 1.58 SUMMARY OF FINANCIAL TRANSACTIONSl Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates Transaction category or sector 1992 1993 1994 1996 Q2 Q3 Q4 Ql Q2 Q3 NET LENDING IN CREDIT MARKETS 1 Total net lending in credit markets 808.2 991.2 1,073.7 1,235.9 1,345.8 1,354.1 1,165.4 1,240.2 1,261.0 1,458.1 1,334.1 2 Domestic nonfederal nonfinancial sectors 112.0 83.3 254.1 -97.0 .5 -149.2 -70.6 -187.3 -64.5 308.1 -175.7 3 Households 82.6 42.7 259.4 -13.9 28.3 -128.3 110.7 -136.9 -65.2 270.7 -55.4 4 Nonfarm noncorporate business 27.8 9.1 49.6 -6.0 25.5 37.7 -53.1 33.0 -2.1 57.8 11.6 5 Nonfinancial corporate business -.1 -1.1 .2 .3 .4 .3 .3 .3 .4 .4 .4 6 State and local governments 1.7 32.6 -55.0 -77.4 -53.7 -58.8 -128.5 -83.7 2.4 -20.8 -132.4 7 Federal government -11.9 -18.4 -24.2 -21.5 -23.3 -24.2 -24.3 -24.4 -20.7 -15.2 -26.4 8 Rest of the world 98.4 129.3 132.3 272.7 404.8 322.2 361.0 157.6 341.1 268.2 484.4 9 Financial sectors 609.7 797.0 711.5 1,081.7 963.7 1,205.2 899.3 1,294.2 1,005.1 896.9 1,051.9 10 Monetary authority 27.9 36.2 31.5 12.7 12.3 16.7 -4.1 19.7 16.9 9.4 19.3 11 Commercial banking 95.3 142.2 163.4 265.9 187.9 319.4 244.8 166.2 121.7 190.2 202.0 12 U.S. chartered banks 69.5 149.6 148.1 186.5 119.7 222.4 227.0 118.1 80.5 125.5 123.6 13 Foreign banking offices in United States 16.5 -9.8 11.2 75.4 63.3 86.6 25.6 36.1 44.2 57.5 72.9 14 Bank holding companies 5.6 .0 .9 -.3 3.9 5.3 -9.6 4.6 -5.1 5.4 4.8 15 Banks in U.S. affiliated areas 3.7 2.4 3.3 4.2 1.0 5.2 1.8 7.4 2.1 1.7 .7 16 Savings institutions -79.0 -23.3 6.7 -7.5 23.3 -11.7 32.2 -68.4 34.1 45.0 49.1 17 Credit unions 17.7 21.7 28.1 16.2 22.1 22.8 11.0 19.5 22.1 34.8 14.2 18 Bank personal trusts and estates 8.0 9.5 7.1 -18.8 -13.6 -20.6 -23.7 -20.2 -18.1 -12.3 -12.5 19 Life insurance companies 78.5 100.9 66.4 99.1 55.2 135.5 72.9 53.2 48.7 2.4 135.1 20 Other insurance companies 6.7 27.7 24.9 21.5 24.4 20.9 21.9 22.3 23.6 23.7 24.9 21 Private pension funds 41.1 45.9 46.8 61.3 62.9 57.2 50.5 78.5 82.6 94.0 46.8 22 State and local government retirement funds .. . 5.9 21.1 30.7 22.7 34.2 4.9 2.6 20.2 58.7 50.0 22.0 23 Money market mutual funds 4.7 20.4 30.0 86.5 88.8 134.4 30.0 125.1 175.0 18.4 88.5 24 Mutual funds 126.2 159.5 -7.1 52.5 57.9 23.4 58.0 141.9 67.5 63.7 35.6 25 Closed-end funds 18.2 14.4 -3.3 13.3 9.3 15.1 16.7 13.2 10.9 9.8 9.0 26 Government sponsored enterprises 68.8 88.6 120.6 87.9 89.2 93.0 50.0 186.5 33.4 121.8 81.9 27 Federally related mortgage pools 115.6 84.7 115.4 98.2 140.7 69.3 126.2 173.4 106.5 169.1 160.4 28 Asset-backed securities issuers (ABSs) 53.7 79.9 62.8 113.0 104.4 101.0 154.4 141.4 117.3 123.8 73.0 29 Finance companies 7.5 -9.0 68.2 64.2 38.7 67.2 50.8 53.7 40.9 41.3 55.9 30 Mortgage companies .1 .0 -24.0 -3.4 14.7 29.9 7.3 -36.4 47.9 -17.3 16.6 31 Real estate investment trusts (REITs) 1.1 .6 4.7 1.8 2.0 1.8 1.8 1.9 1.9 1.7 2.4 32 Brokers and dealers -1.3 14.8 -44.2 90.1 -17.3 145.2 -5.2 189.3 -109.0 -72.0 35.5 33 Funding corporations 13.0 -38.7 -17.2 4.6 26.5 -20.2 1.1 13.2 122.4 -.7 -7.8 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 808.2 991.2 1,073.7 1,235.9 1,345.8 1,354.1 1,165.4 1,240.2 1,261.0 1,458.1 1,334.1 Other financial sources 35 Official foreign exchange -1.6 -5.8 -6.3 10.3 9.0 -1.9 -.9 1.6 -26.6 36 Special drawing rights certificates -2.0 .0 .0 2.2 -.5 .0 8.6 .0 .0 .0 -1.8 37 Treasury currency .2 .4 .7 .6 .0 .7 .8 .0 .0 .0 2.3 38 Foreign deposits -3.5 -18.5 54.0 33.5 47.7 110.8 -29.5 18.2 85.0 .9 113.2 39 Net interbank transactions 49.4 50.5 89.8 9.8 -53.8 -4.9 -13.1 80.3 -88.5 -51.5 -118.6 40 Checkable deposits and currency 113.5 117.3 -9.7 -12.8 19.2 100.2 -113.1 -69.3 43.3 4.5 110.9 41 Small time and savings deposits -57.2 -70.3 -40.0 96.5 91.6 95.6 145.6 114.9 212.5 -4.6 76.7 42 Large time deposits -73.2 -23.5 19.6 65.6 113.5 74.4 80.2 -.9 55.1 83.5 181.0 43 Money market fund shares 4.5 20.2 43.3 142.3 145.8 221.1 122.9 151.1 244.0 4.1 147.4 44 Security repurchase agreements 43.1 71.2 78.3 110.7 37.6 115.4 92.8 62.3 -19.1 117.7 -29.8 45 Corporate equities 103.4 129.9 23.3 -19.0 -21.6 -17.9 -5.7 -18.4 1.4 51.6 -108.1 46 Mutual fund shares 209.1 323.7 128.9 173.9 275.2 165.0 202.0 244.5 287.6 351.2 193.1 47 Trade payables 46.6 52.4 114.0 96.3 76.3 80.6 129.3 90.1 62.7 126.8 55.6 48 Security credit 4.6 61.4 -.1 26.7 46.4 25.9 32.1 50.1 120.6 -37.7 -4.3 49 Life insurance reserves 28.0 36.0 34.5 44.9 35.0 57.6 33.1 38.3 19.0 32.2 56.8 50 Pension fund reserves 241.9 250.5 251.8 240.3 252.1 290.4 211.2 187.8 256.1 236.3 269.8 51 Taxes payable 9.7 5.2 3.2 1.3 2.6 .8 3.4 -10.2 5.6 6.6 -1.2 52 Investment in bank personal trusts .... -7.1 .9 17.8 -49.7 -25.0 -47.6 -65.8 -39.2 -49.2 -22.1 -15.3 53 Noncorporate proprietors' equity 16.7 19.7 25.9 41.3 35.8 39.9 45.3 38.4 37.9 24.1 52.5 54 Miscellaneous 260.1 348.6 266.3 504.6 480.2 421.3 430.4 842.6 584.3 268.7 487.3 55 Total financial sources 1,794.2 2,367.6 2,169.6 2,753.7 2,897.5 3,093.8 2,484.8 3,018.9 3,118.6 2,651.7 2,774.9 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.2 -.2 -.5 -1.0 -.4 -.3 -1.0 -1.1 -1.0 1.3 57 Foreign deposits -2.8 -7.0 44.9 27.2 38.1 101.5 -55.7 21.5 61.4 23.6 122.5 58 Net interbank liabilities -4.9 4.2 -2.7 -3.1 -3.5 -.9 12.3 -23.6 10.9 -26.9 -9.2 59 Security repurchase agreements 4.4 40.2 59.4 55.4 14.2 -2.4 73.2 31.1 21.7 112.5 -100.8 60 Taxes payable 11.9 11.1 8.6 8.7 3.0 30.8 10.3 2.2 -23.2 24.9 9.9 61 Miscellaneous -40.6 -149.9 -107.7 -4.7 -86.6 18.4 -30.8 244.1 -185.5 -243.6 -59.0 Floats not included in assets (-) 62 Federal government checkable deposits .7 -1.5 -4.8 -6.0 .5 -18.6 3.8 -13.8 -10.5 28.0 63 Other checkable deposits 1.6 -1.3 -2.8 -3.8 -4.0 -3.8 -3.2 -4.7 -4.2 -4.0 64 Trade credit 11.3 -4.0 -3.1 -23.3 -7.9 29.9 -46.7 -125.5 45.4 29.5 -64.1 65 Total identified to sectors as assets ... 1,812.9 2,476.0 2,178.1 2,703.8 2,944.8 2,939.2 2,521.9 2,888.6 3,184.1 2,747.5 2,850.3 1. Data in this table also appear in the Board's Z.I (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

A40 Domestic Financial Statistics • June 1997 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period Transaction category or sector 1993 1994 Q2 Q3 Q4 Ql Q2 Q3 Q4 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 12,544.7 13,172.2 13,892.0 14,639.4 13,557.6 13,708.3 13,892.0 14,089.7 14,247.2 14,437.5 14,639.4 By sector and instrument 2 Federal government 3,336.5 3,492.3 3,636.7 3.781.8 3,583.5 3,603.4 3,636.7 3,717.2 3,693.8 3,733.1 3,781.8 3 Treasury securities 3,309.9 3,465.6 3,608.5 3,755.1 3,556.7 3,576.5 3,608.5 3,689.6 3.665.5 3,705.7 3,755.1 4 Budget agency securities and mortgages .. 26.6 26.7 28.2 26.6 26.8 26.9 28.2 27.6 28.2 27.4 26.6 5 Nonfederal 9,679.9 10,857.6 9.974.1 10,104.8 10,255.2 10,372.5 10,553.4 10,704.4 10,857.6 By instrument 6 Commercial paper 117.8 139.2 157.4 156.4 162.9 163.3 157.4 174.2 181.7 173.0 156.4 7 Municipal securities and loans 1,377.5 1,348.2 1,304.0 1,306.0 1,331.7 1,308.2 1,304.0 1,300.8 1,306.8 1,290.6 1.306.0 8 Corporate bonds 1,229.7 1,253.0 1,326.3 1.398.8 1.290.9 1,305.8 1,326.3 1,341.5 1,359.4 1,376.4 1,398.8 9 Bank loans n.e.c 675.9 749.0 848.6 914.0 810.7 824.3 848.6 856.7 878.7 902.6 914.0 10 Other loans and advances 677.1 737.8 796.8 831.5 776.9 782.1 796.8 809.3 815.7 831.8 831.5 11 Mortgages 4.266.3 4,462.3 4,690.3 5,024.6 4,570.2 4,643.0 4,690.3 4,767.1 4,863.1 4,947.4 5,024.6 12 Home mortgages 3,233.8 3,437.8 3,634.1 3,912.1 3,528.9 3.594.9 3,634.1 3,699.7 3,778.5 3,853.7 3,912.1 13 Multifamily residential 267.9 269.5 280.1 299.4 273.9 276.7 280.1 283.5 288.4 292.3 299.4 14 Commercial 683.4 672.1 691.6 725.0 683.6 687.0 691.6 698.7 709.8 713.9 725.0 15 Farm 81.2 83.0 84.6 88.1 83.8 84.4 84.6 85.2 86.5 87.4 88.1 16 Consumer credit 863.9 990.2 1.131.9 1.226.3 1.030.8 1,078.2 1,131.9 1,123.0 1,147.9 1,182.6 1,226.3 By borrowing sector 17 Households 4.288.0 4.660.1 5,041.2 5,436.5 4.811.2 4,933.0 5,041.2 5,102.9 5,219.3 5,333.2 5,436.5 18 Nonfinancial business 3,761.9 3,901.3 4,135.2 4,329.0 4,058.0 4,089.1 4.135.2 4,190.2 4,247.0 4,296.8 4,329.0 19 Corporate 2,496.5 2,621.2 2,818.7 2,966.0 2,759.3 2,780.2 2,818.7 2,864.7 2,907.0 2.947.4 2,966.0 20 Nonfarm noncorporate 1,127.1 1.139.0 1.173.8 1,217.2 1,155.9 1,164.0 1,173.8 1,185.2 1,194.7 1,203.1 1,217.2 21 Farm 138.3 141.2 142.7 145.8 142.8 144.8 142.7 140.3 145.3 146.2 145.8 22 State and local government 1,158.2 1,118.4 1,078.8 1,092.1 1.104.9 1,082.7 1,078.8 1,079.4 1,087.1 1.074.5 1,092.1 23 Foreign credit market debt held in United States 385.6 370.4 439.9 507.2 396.8 419.8 439.9 450.8 459.6 487.1 507.2 24 Commercial paper 68.7 41.4 55.0 65.8 48.1 55.8 55.0 51.5 53.4 64.8 65.8 25 Bonds 230.1 242.3 290.6 337.3 258.6 272.4 290.6 302.5 305.3 320.2 337.3 26 Bank loans n.e.c 24.6 26.1 34.6 43.7 29.6 31.6 34.6 36.8 40.5 41.7 43.7 27 Other loans and advances 62.1 60.6 59.7 60.4 60.5 60.0 59.7 60.0 60.4 60.4 60.4 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 12,930.2 13,542.6 14,331.8 15,146.6 13,954.4 14,128.1 14,331.8 14,540.5 14,706.8 14,924.6 15,146.6 Financial sectors 29 Total credit market debt owed by financial sectors 3,321.7 3,794.6 4,243.9 4,774.8 3,971.9 4,096.3 4,243.9 4,324.3 4,496.1 4,619.5 4,774.8 By instrument 30 Federal government-related 1.885.2 2,172.7 2,376.8 2,607.9 2.247.1 2,300.1 2,376.8 2,414.1 2,489.5 2,545.3 2,607.9 31 Government-sponsored enterprises securities 523.7 700.6 806.5 896.9 748.1 773.5 806.5 814.4 846.1 866.1 896.9 32 Mortgage pool securities 1.356.8 1,472.1 1,570.3 1,711.0 1.499.0 1,526.6 1,570.3 1,599.7 1,643.4 1,679.2 1,711.0 33 Loans from U.S. government 4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 1,436.4 1,621.9 1,867.0 2.166.9 1.724.8 1,796.2 1,867.0 1,910.2 2,006.6 2,074.2 2,166.9 35 Open market paper 393.5 442.8 488.0 580.7 462.8 473.6 488.0 491.9 518.5 539.6 580.7 36 Corporate bonds 857.6 973.5 1,159.2 1.312.4 1,056.4 1,112.6 1,159.2 1,192.9 1,243.4 1,275.1 1,312.4 37 Bank loans n.e.c 67.6 55.3 60.8 81.8 58.4 60.3 60.8 66.4 72.2 76.9 81.8 38 Other loans and advances 108.9 131.6 135.0 162.2 125.7 127.0 135.0 133.6 145.8 154.2 162.2 39 Mortgages 8.9 18.7 24.0 29.8 21.3 22.6 24.0 25.4 26.9 28.3 29.8 By borrowing sector 40 Commercial banks 84.6 94.5 102.6 112.2 99.9 102.0 102.6 100.5 103.6 106.7 112.2 41 Bank holding companies 123.4 133.6 148.0 150.0 142.9 150.3 148.0 141.4 148.4 149.1 150.0 42 Savings institutions 99.6 112.4 115.0 141.1 105.9 107.2 115.0 117.8 128.3 134.9 141.1 43 Credit unions .5 .4 .4 .3 .4 .4 .4 .3 .4 4 44 Life insurance companies .6 .5 1.6 .6 .6 .5 1.1 1.2 1.1 1.6 45 Government-sponsored enterprises 528.5 700.6 806.5 896.9 748.1 773.5 806.5 814.4 846.1 866.1 896.9 46 Federally related mortgage pools 1,356.8 1,472.1 1,570.3 1,711.0 1,499.0 1,526.6 1,570.3 1,599.7 1,643.4 1,679.2 1,711.0 47 Issuers of asset-backed securities (ABSs) .... 486.7 556.2 689.4 818.8 596.8 639.8 689.4 720.3 752.4 779.5 818.8 48 Brokers and dealers 33.7 34.3 29.3 27.3 26.8 27.4 29.3 21.4 24.6 26.1 27.3 49 Finance companies 390.5 440.7 492.3 540.3 467.2 471.9 492.3 499.8 514.4 528.4 540.3 50 Mortgage companies 30.2 18.7 19.1 36.2 20.6 21.6 19.1 24.1 28.1 32.3 36.2 51 Real estate investment trusts (RElTs) 17.4 31.1 36.5 43.1 33.7 35.0 36.5 38.0 39.6 41.3 43.1 52 Funding corporations 169.9 199.3 233.9 296.0 230.0 239.9 233.9 245.6 265.6 274.5 296.0 53 Total credit market debt, domestic and foreign 16,251.9 17,337.2 18,575.7 19,921.5 17,926.3 18,224.4 18,575.7 18,864.8 19,202.9 19,544.1 19,921.5 54 Open market paper 580.0 623.5 700.4 803.0 673.8 692.7 700.4 717.6 753.6 777.4 803.0 55 U.S. government securities 5.216.9 5,665.0 6,013.6 6,389.7 5,830.6 5,903.5 6,013.6 6,131.3 6,183.2 6.278.4 6,389.7 56 Municipal securities 1,377.5 1,348.2 1,304.0 1,306.0 1,331.7 1.308.2 1,304.0 1,300.8 1,306.8 1.290.6 1,306.0 57 Corporate and foreign bonds 2.317.4 2,468.8 2,776.1 3,048.6 2,605.9 2,690.8 2,776.1 2,837.0 2.908.1 2,971.7 3,048.6 58 Bank loans n.e.c 768.0 830.4 943.9 1,039.5 898.7 916.2 943.9 959.9 991.4 1.021.3 1.039.5 59 Other loans and advances 852.9 929.9 991.5 1,054.1 963.2 969.1 991.5 1,002.9 1,021.8 1,046.5 1,054.1 60 Mortgages 4,275.2 4,481.1 4,714.3 5.054.4 4,591.6 4,665.7 4,714.3 4,792.5 4.890.0 4,975.7 5,054.4 61 Consumer credit 863.9 990.2 1.131.9 1.226.3 1,030.8 1,078.2 1,131.9 1,123.0 1,147.9 1,182.6 1,226.3 1. Data in this table also appear in the Board's Z.I (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

Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period Transaction category or sector 1993 Q2 Q3 Q4 Ql Q2 Q3 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 16,251.9 17,337.2 18,575.7 19,921.5 17,926.3 18,224.4 18,575.7 18,864.8 19,202.9 19,544.1 2 Domestic nonfederal nonfinancial sectors 2,784.9 3,069.3 2,937.1 2,938.0 2,988.3 2,990.2 2,937.1 2,895.7 2,945.4 2,923.2 3 Households 1,691.4 1,981.1 1,932.0 1,960.7 1,940.8 1,989.3 1.932.0 1,915.1 1,950.6 1,957.9 4 Nonfinancial corporate business 271.5 321.1 315.1 340.6 303.5 290.6 315.1 291.3 307.9 313.1 5 Nonfarm noncorporate business 37.0 37.2 37.5 37.9 37.3 37.4 37.5 37.6 37.7 37.8 6 State and local governments 784.9 729.9 652.5 598.8 706.7 672.9 652.5 651.8 649.1 614.4 7 Federal government 231.7 207.5 186.1 162.8 198.2 192.2 186.1 180.8 177.0 170.5 8 Rest of the world 1,147.8 1,254.7 1,561.8 1,966.6 1,402.1 1,493.4 1,561.8 1,653.6 1,718.2 1,840.6 9 Financial sectors 12,087.5 12.805.6 13,890.7 14,854.0 13,337.7 13,548.6 13,890.7 14,134.7 14,362.2 14,609.8 10 Monetary authority 336.7 368.2 380.8 393.1 375.7 370.6 380.8 379.6 386.3 386.2 11 Commercial banking 3,090.8 3,254.3 3,520.1 3,708.0 3.410.1 3,473.2 3,520.1 3.541.6 3,590.8 3,643.3 12 U.S. chartered banks 2,721.5 2.869.6 3,056.1 3,175.9 2,963.7 3,023.7 3.056.1 3,068.8 3,101.3 3,135.3 13 Foreign banking offices in United States . . . 326.0 337.1 412.6 475.8 396.0 401.1 412.6 422.2 437.1 454.2 14 Bank holding companies 17.5 18.4 18.0 22.0 19.3 16.9 18.0 16.8 18.1 19.3 15 Banks in U.S. affiliated areas 25.8 29.2 33.4 34.4 31.1 31.5 33.4 33.9 34.3 34.5 16 Savings institutions 914.1 920.8 913.3 936.6 922.4 930.4 913.3 921.8 933.1 945.3 17 Credit unions 218.7 246.8 263.0 285.1 255.0 258.5 263.0 267.0 276.9 281.0 18 Bank personal trusts and estates 240.9 248.0 229.2 215.6 240.2 234.2 229.2 224.7 221.6 218.5 19 Life insurance companies 1,420.6 1,487.1 1,586.2 1,641.4 1,557.1 1,575.5 1,586.2 1,600.5 1,601.0 1,635.1 20 Other insurance companies 422.7 446.4 468.7 492.8 457.3 463.0 468.7 474.5 480.2 486.4 21 Private pension funds 617.6 664.3 725.6 788.5 693.4 706.0 725.6 746.3 769.8 781.5 22 State and local government retirement funds 423.4 454.1 476.8 511.0 470.9 470.6 476.8 491.1 504.0 508.8 23 Money market mutual funds 429.0 459.0 545.5 634.3 508.0 505.7 545.5 595.6 594.7 606.6 24 Mutual funds 725.9 718.8 771.3 829.2 724.8 739.2 771.3 792.4 807.9 816.5 25 Closed-end funds 82.0 78.7 92.0 101.3 84.6 88.7 92.0 94.8 97.2 99.5 26 Government-sponsored enterprises 546.4 667.0 755.0 844.1 695.9 708.4 755.0 762.7 793.8 814.3 27 Federally related mortgage pools 1,356.8 1,472.1 1,570.3 1.711.0 1,499.0 1,526.6 1.570.3 1,599.7 1,643.4 1,679.2 28 Asset-backed securities issuers (ABSs) 457.9 520.7 633.7 738.1 555.2 595.7 633.7 659.7 689.2 709.7 29 Finance companies 482.8 551.0 615.2 653.9 586.9 594.7 615.2 621.7 633.2 642.0 30 Mortgage companies 60.4 36.5 33.0 47.8 40.3 42.2 33.0 45.0 40.7 44.9 31 Real estate investment trusts (REITs) 8.6 13.3 15.1 17.2 14.2 14.7 15.1 15.6 16.1 16.6 32 Brokers and dealers 137.5 93.3 183.4 166.1 137.4 136.1 183.4 156.2 138.2 147.1 33 Funding corporations 114.6 105.2 112.4 138.9 109.3 114.6 112.4 144.4 144.1 147.4 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 16,251.9 17,337.2 18,575.7 19,921.5 17,926.3 18,224.4 18,575.7 18,864.8 19,202.9 19,544.1 Other liabilities 35 Official foreign exchange 53.4 53.2 63.7 53.7 67.1 65.1 63.7 62.1 61.4 54.3 36 Special drawing rights certificates 8.0 8.0 10.2 9.7 8.0 10.2 10.2 10.2 10.2 9.7 37 Treasury currency 17.0 17.6 18.2 18.2 18.0 18.2 18.2 18.2 18.2 18.8 38 Foreign deposits 271.8 324.6 361.4 409.1 361.0 353.6 361.4 382.7 382.9 411.2 39 Net interbank liabilities 189.3 280.1 290.6 238.4 265.8 267.2 290.6 266.3 250.1 223.3 40 Checkable deposits and currency 1,251.7 1,242.0 1,229.3 1,248.4 1,246.2 1,200.3 1,229.3 1.183.3 1,212.3 1,221.8 41 Small time and savings deposits 2,223.2 2,183.3 2,279.7 2,371.3 2,222.6 2,255.8 2,279.7 2,342.3 2,340.1 2,355.5 42 Large time deposits 391.7 411.2 476.9 590.3 456.3 477.5 476.9 493.6 511.1 557.2 43 Money market fund shares 559.6 602.9 745.3 891.1 678.5 702.7 745.3 816.9 809.5 838.1 44 Security repurchase agreements 471.1 549.4 660.1 697.7 629.3 654.8 660.1 666.2 692.1 687.6 45 Mutual fund shares 1,375.4 1,477.3 1,852.8 2,348.8 1,661.0 1,782.0 1,852.8 1,994.3 2,130.6 2,212.7 46 Security credit 279.0 279.0 305.7 352.1 277.8 286.1 305.7 326.9 318.6 317.8 47 Life insurance reserves 470.8 505.3 550.2 585.2 532.4 540.6 550.2 555.0 563.0 577.2 48 Pension fund reserves 4,638.8 4.846.8 5,567.7 6,318.5 5,224.1 5,440.1 5,567.7 5,751.6 5,899.9 6,046.1 49 Trade payables 1.048.2 1,162.2 1.258.5 1,334.8 1,177.5 1,211.1 1,258.5 1,246.0 1,278.6 1,293.9 50 Taxes payable 84.9 88.0 89.3 91.9 88.9 91.9 89.3 94.3 90.3 92.1 51 Investment in bank personal trusts 691.3 699.4 767.4 833.7 739.7 758.6 767.4 781.6 790.9 799.5 52 Miscellaneous 5,155.1 5,417.3 5,823.2 6,146.7 5,555.1 5,666.4 5,823.2 5,959.8 5,966.7 6,089.6 53 Total liabilities 35,432.1 37,485.1 40,925.7 44,461.1 39,135.6 40,006.7 40,925.7 41,816.0 42,529.6 43,350.3 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights 20.1 21.1 22.1 21.4 22.9 22.1 22.1 22.1 22.0 21.2 55 Corporate equities 6,280.0 6,263.3 8,389.9 10,090.0 7,348.4 7,972.4 8,389.9 8,875.8 9,170.9 9,387.4 56 Household equity in noncorporate business 2,495.5 2,587.5 2,699.6 2,733.6 2.641.1 2,655.0 2.699.6 2,736.6 2,759.1 2,782.8 Liabilities not identified as assets ( —) 57 Treasury currency -5.1 -5.4 -5.8 -5.5 -5.6 -5.8 -6.1 -6.3 -6.0 58 Foreign deposits 232.6 278.7 309.0 347.1 314.5 300.6 309.0 324.4 330.3 360.9 59 Net interbank transactions -4.7 -6.5 -9.0 -10.9 -2.9 .1 -9.0 -2.6 -8.0 -11.6 60 Security repurchase agreements -7.7 51.8 107.2 121.4 78.8 111.4 107.2 116.7 135.7 126.7 61 Taxes payable 26.8 35.4 44.1 45.1 35.6 39.1 44.1 23.9 38.0 41.9 62 Miscellaneous -855.0 -916.1 -949.4 -1,202.4 -869.7 -832.3 -949.4 -1,016.8 -1,094.0 -1,100.7 Floats not included in assets (-) 63 Federal government checkable deposits 5.6 3.4 3.1 -1.6 2.0 .6 3.1 .0 -3.4 -1.7 64 Other checkable deposits 40.7 38.0 34.2 30.1 35.7 27.3 34.2 29.6 31.8 23.1 65 Trade credit -248.0 -252.0 -275.4 -283.3 -306.2 -330.0 -275.4 -326.5 -336.2 -363.3 66 Total identified to sectors as assets 45,042.5 47,129.6 52,779.3 58,267.3 49,865.7 51,345.1 52,779.3 54,308.0 55,393.8 56,472.4 1. Data in this table also appear in the Board's Z.I (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

A42 Domestic Nonfinancial Statistics U June 1997 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1996 1997 Measure 1994 1995 1996 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Industrial production' 108 6 112 1 115 2 115 5 115 8 116 0 116 2 117 2 117 7 117 8 118 5 119 6 Market groupings 2 Products, total 106.8 109.3 112.0 112.3 112.2 112.7 112.8 114.1 114.3 114.3 114.9 115.9 3 Final total 107.1 109.9 112.8 113.4 113.0 113.3 113.6 114.8 115.3 115.2 115.8 117.0 4 Consumer goods 107.4 108.9 110.5 110.7 110.1 110.5 110.8 112.3 112.7 112.0 111.8 112.6 5 Equipment 106.6 111.6 116.8 118.1 117.9 118.1 118.4 119.0 119.6 120.8 122.5 124.4 6 Intermediate 106.1 107.5 109.4 108.9 110.0 110.6 110.2 111.9 111.3 111.7 112.1 112.8 7 Materials 1113 116 6 120 3 120 5 121 5 PI 2 121 7 122 2 123 1 123 3 124 4 125 4 Industry groupings 8 Manufacturing 109.4 113.2 116.3 117.0 117.2 117.4 117.6 118.5 119.2 119.3 120.4 121.4 9 Capacity utilization, manufacturing (percent)2. . 83.1 83.1 82.1 82.4 82.3 82.1 82.0 82.4 82.5 82.3 82.8 83.3 10 Construction contracts3 117.3 121.7 130.1 135.0 138.0 133.0 126.0 131.0 127.0 126.0 127.0 127.0 11 Nonagricultural employment, total4 112.0 115.0 117.3 117.5 117.8 117.8 118.0 118.2 118.4 118.7 119.0 119.1 12 Goods-producing, total 96.9 98.1 98.3 98.3 98.5 98.3 98.4 98.6 98.7 98.9 99.4 99.3 13 Manufacturing, total 96.4 97.2 96.2 96.2 96.3 96.0 96.1 96.1 96.2 96.3 96.3 96.4 14 Manufacturing, production workers 97.5 98.7 97.5 97.4 97.5 97.2 97.3 97.4 97.4 97.6 97.6 97.6 15 Service-producing 116.8 120.3 123.3 123.6 123.9 124.0 124.3 124.4 124.7 125.0 125.2 125.5 16 Personal income total 148.4 157.7 166.4 166.7 167.7 168.6 168.8 169.8 171.0 171.6 173.1 n.a. 17 Wages and salary disbursements 142.6 150.9 159.7 159.8 161.1 162.2 162.0 163.4 165.1 165.1 167.3 n.a. 18 Manufacturing 124.9 130.4 135.3 135.8 136.9 136.7 136.7 137.4 139.2 138.6 139.1 n.a. 19 Disposable personal income5 149.3 158.2 166.2 166.5 167.4 168.2 168.4 169.5 170.6 171.8 173.2 n.a. 20 Retail sales5 144.8 152.3 159.7 159.6 159.6 160.7 161.8 161.7 162.5 165.3 167.8 168.1 Prices6 21 Consumer (1982-84= 100) 148.2 152.4 156.9 157.0 157.3 157.8 158.3 158.6 158.6 159.1 159.6 160.0 22 Producer finished goods (1982=100) 125.5 127.9 131.3 131.5 131.9 131.8 132.7 132.6 132.7 132.6 132.2 132.2 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For 4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers the ordering address, see the inside front cover. The latest historical revision of the industrial employees only, excluding personnel in the armed forces. production index and the capacity utilization rates was released in January 1997. See 5. Based on data from U.S. Department of Commerce, Survey of Current Business. "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. The article contains a indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, description of the new aggregation system for industrial production and capacity utilization. Monthly Labor Review. For a detailed description of the industrial production index, see "'Industrial Production: 1989 NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series Developments and Historical Revision," Federal Resen>e Bulletin, vol. 76 (April 1990), pp. mentioned in notes 3 and 6, can also be found in the Survey of Current Business. 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. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 1996 1997r Category 1994 1995 1996 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 131,056 132.304 133,943 133,898 134,291 134,636 134,831 135,022 135,848 135,634 136,319 Employment 2 Nonagricultural industries3 119,651 121,460 123,264 123,570 123.768 124,167 124,290 124,429 125,112 125,138 125,789 3 Agriculture 3,409 3,440 3,443 3,418 3.480 3,450 3,354 3,426 3,468 3,292 3,386 Unemployment 4 Number 7,996 7,404 7,236 6.910 7,043 7,019 7,187 7.167 7.268 7,205 7,144 5 Rate (percent of civilian labor force) 6.1 5.6 5.4 5.2 5.2 5.2 5.3 5.3 5.4 5.3 5.2 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 114,172 117,203 119,549 120,052 120,050 120,311 120,492 120,723 120,982 121,275 121,450 7 Manufacturing 18,321 18,468 18,282 18,291 18,241 18,254 18,262 18,270 18,296 18,299 18,315 8 Mining 601 580 570 570 567 566 566 566 568 571 570 9 Contract construction 4,986 5,158 5,405 5,437 5,449 5,464 5,491 5,520 5,535 5,643 5,616 10 Transportation and public utilities 5,993 6,165 6,318 6,342 6,337 6,338 6,350 6,340 6,378 6.404 6,415 11 Trade 26,670 27,585 28,178 28,275 28,321 28,446 28,508 28,586 28,584 28,617 28,679 12 Finance 6,896 6,830 6,977 6,999 7,009 7,026 7,038 7.052 7,062 7,072 7.094 13 Service 31,579 33,107 34,360 34,532 34,607 34,709 34,780 34,865 35,015 35,082 35,193 14 Government 19,128 19.310 19,459 19.606 19.519 19,508 19,497 19.524 19,544 19,587 19,568 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

Selected Measures A43 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1996 1997 1996 1997 1996 1997 Series Q2 Q3 Q4r Ql Q2 Q3 Q4 Ql Q2 Q3 Q4r Ql Output (1992=100) Capacity (percent of 1992 oltput) Capatity utilization rate (percent)2 1 Total industry 114.8 115.8 117.0 118.7 137.9 139.2 140,5 141.8 83.3 83.2 83.3 83.7 2 Manufacturing 115.8 117.2 118.4 120.3 141.0 142.5 143.9 145.3 82.1 82.3 82.3 82.8 3 Primary processing3 111.7 113.2 113.9 114.5 129.9 130.7 131.5 132.2 86.0 86.6 86.6 86.7 4 Advanced processing4 117.8 119.1 120.7 123.2 146.5 148.2 150.0 151.9 80.4 8(1.4 80.4 81.1 5 Durable goods 125.4 127.2 128.1 131.3 152 2 154.5 156.9 159.2 82.4 82.3 81.7 82.4 6 Lumber and products 111.0 110.5 no. i 110.5 1282 129.1 130.0 131.0 86.6 85.6 84.7 84.4 7 Primary metals 116.5 118.6 119.8 ] 19.4 128.7 129.8 131.0 132.1 90.5 91.4 91.5 90.4 8 Iron and steel 115*8 117.9 118.6 119.4 130.3 131.9 133.5 134.9 88.8 89.4 88.9 88.5 9 Nonferrous 117.2 119.4 121.1 119.4 126.5 127.1 127.8 128.6 92.7 93.9 94.8 92.8 10 Industrial machinery and equipment 154.6 158.9 161.5 167.1 171.6 176.3 181.3 186.5 90.1 90.1 89.1 89.6 11 Electrical machinery 162.3 164.5 167.2 172.9 193.2 200.6 208.5 216.4 84.0 82.0 80.2 79.9 12 Motor vehicles and parts 130.4 131.3 126.0 133.3 174.9 176.1 177.3 178.2 74.6 74.5 71.0 74.8 13 Aerospace and miscellaneous transportation equipment 83.8 86.7 90.4 93.3 120.6 120.2 119.8 119.6 69.5 72.2 75.5 78.0 14 Nondurable goods 105.5 106.5 108.1 108.7 1 29.0 129.6 130.1 130.6 81.8 82.2 83.0 83.3 15 Textile mill products 106.5 107.9 107.4 106.9 129.4 130.1 130,8 131.3 82.3 82.9 82.1 81.5 16 Paper and products 107.9 109.0 109.8 110.8 122.4 122.9 123.3 123.6 88.2 8S.7 89.0 89.7 17 Chemicals and products 107.3 109.2 II 2.4 113.3 137.9 139.2 140.3 141.5 77.8 78.4 80.1 80.1 18 Plastics materials 122.1 125.3 125.3 129.5 131.8 134.0 94.3 95.1 93.5 19 Petroleum products 106.0 106.7 107.7 108.5 113.5 113.7 113.8 113^9 93.4 93.9 94.6 95.3 20 Mining 103.5 103.7 103.8 105.5 113.7 113.7 113.7 113.7 91.0 91.2 91.3 92.8 21 Utilities 114.0 110.5 113.0 111.3 124.5 125.2 125.9 126.5 91.6 88.2 89.8 88.0 22 Electric 114.0 110.8 112.4 111.4 122.8 123.6 124.4 125.1 92.8 89.6 90.4 89.1 1973 1975 Previous cycle5 Latest cycle6 1996 1996 1997 High Low High Low High Low Mar. Oct. Nov. Dec/ Jan.r Feb. Mar.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.3 78.1 82.6 83.0 83.4 83.5 83.4 83.6 84.1 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 81.3 82.0 82.4 82.5 82.3 82.8 83.3 3 Primary processing" 91.2 68.2 88.1 66.2 88.9 77.8 85.6 86.7 86.5 86.6 86.1 86.7 87.2 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.4 79.9 80.5 80.8 80.7 81.1 81.6 5 Durable goods 89.2 68.9 87.7 63.9 84.5 73.2 80.9 81.5 81.9 81.7 81.7 82.5 83.1 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 7S.s 86.0 84.2 87.0 82.9 83.3 84.7 85.3 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 90.4 93.5 90.5 90.4 89.0 90.2 91.9 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 88.0 92.6 86.8 87.1 87.1 88.2 90.1 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 93.3 94.7 95.1 94.7 91.6 92.7 94.1 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.4 90.5 89.1 89.2 89.0 89.1 89.6 90.1 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.1 85.1 80.5 80.2 80.0 79.0 80.1 80.7 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 . 61.3 68.5 72.7 71.9 74.1 74.6 75.7 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 68.5 74.6 75.4 76.4 77.1 78.0 79.0 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 81.9 82.7 82.9. 83.5 83.1 83.2 83.4 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 83.0 82.4 82.7 81.1 81.2 80.9 82.2 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 86.6 87.4 89.3 90.4 89.3 90.0 89.7 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79,3 77.7 79.5 79.6 81.0 80.6 80.0 79.7 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 92.9 94.0 92.4 94.0 93.5 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 93.1 95.3 94.4 94.2 94.4 95.6 96.0 20 Mining 94.3 88.2 96.0 80.3 86.8 86.1 90.3 91.0 91.1 91.9 91.6 92.9 93.7 21 Utilities 96 2 82 9 89.1 75.9 92.6 83.4 97 2 89.0 91.0 89.3 89.9 86.7 87.3 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 93.2 90.2 90.6 90.3 90.7 88.0 88.6 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 January 1997. See primary metals: and fabricated metals. "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- 4. Advanced processing includes foods: tobacco; apparel: furniture and fixtures; printing ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. The article contains a and publishing; chemical products such as drugs and toiletries: agricultural chemicals; leather description of the new aggregation system for industrial production and capacity utilization. and products; machinery: transportation equipment: instruments; and miscellaneous manufac- For a detailed description of the industrial production index, see "Industrial Production: 1989 tures. Developments and Historical Revision,'" Federal Reserve Bulletin, vol. 76 (April 1990). pp. 5. Monthly highs, 1978-80; monthly lows. 1982. 187-204. 6. Monthly highs. 1988-89: monthly lows, 1990-91. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted index of industrial production to the corresponding index of capacity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • June 1997 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 pro- 1996 Group por- avg. tion Apr. July Aug. Sept. Dec/ Jan.r Feb. Mar. Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 115.2 113.2 114.3 114.8 115.5 115.5 115.8 116.0 116.2 117.2 117.7 117.8 118.5 119.6 2 Products 60.5 112.0 110.4 111.0 111.4 112.3 112.3 112.2 112.7 112.8 114.1 114.3 114.3 114.9 115.9 3 Final products 46.3 112.8 111.1 112.1 112.2 113.1 113.4 113.0 113.3 113.6 114.8 115.3 115.2 115.8 117.0 4 Consumer goods, total 29.1 110.5 109.4 109.8 110.0 110.8 110.7 110.1 110.5 110.8 112.3 112.7 112.0 111.8 112.6 5 Durable consumer goods 6.1 126.2 120.8 125.7 126.9 129.9 129.7 128.0 127.1 124.5 127.1 128.4 127.5 129.4 131.3 6 Automotive products 2.6 125.8 115.1 126.0 126.9 130.0 132.1 128.7 127.7 122.0 127.4 127.2 129.9 131.0 132.0 7 Autos and trucks 1.7 132.6 111.2 135.0 135.0 137.7 145.7 138.7 134.6 125.7 133.8 135.5 138.7 139.2 141.2 8 Autos, consumer .9 120.2 93.5 126.1 129.0 133.3 137.8 132.5 129.9 112.3 123.5 115.9 120.1 122.8 125.3 9 Trucks, consumer .7 147.2 135.4 150.3 147.3 148.7 161.3 152.3 146.6 147.4 152.4 164.9 167.0 165.0 166.6 10 Auto parts and allied goods .... .9 114.5 117.7 111.9 114.0 117.4 112.4 113.5 116.2 114.4 116.4 114.0 116.1 117.8 117.6 11 Other 3.5 126.3 124.7 125.3 126.7 129.7 128.0 127.5 126.6 126.2 126.8 129.1 125.7 128.2 130.7 12 Appliances, televisions, and air conditioners 1.0 173.0 165.8 170.2 172.0 180.1 181.1 175.9 174.2 176.5 176.9 181.1 171.6 179.0 185.1 13 Carpeting and furniture .8 109.9 110.8 109.1 112.4 114.6 107.0 111.1 110.5 108.6 110.7 109.3 106.3 107.9 110.3 14 Miscellaneous home goods 1.6 107.9 108.0 108.0 108.1 108.7 108.5 108.0 107.6 106.5 106.4 109.6 109.2 109.7 110.4 15 Nondurable consumer goods 23.0 106.5 106.6 105.9 105.8 106.0 106.0 105.6 106.3 107.3 108.5 108.7 108.0 107.5 108.0 16 Foods and tobacco 10.3 106.1 106.8 105.7 105.3 105.8 105.9 105.4 106.1 106.6 107.2 108.2 107.8 108.0 108.6 17 Clothing 2.4 95.5 95.8 96.1 95.9 95.6 95.4 95.4 95.1 95.5 95.0 94.9 94.3 93.7 93.8 18 Chemical products 4.5 112.7 110.5 110.0 110.5 110.6 112.6 111.3 113.5 115.5 117.3 118.8 118.1 117.5 117.3 19 Paper products 2.9 101.1 99.7 100.0 100.7 100.2 101.4 101.8 101.9 102.9 102.9 103.0 101.1 101.5 102.7 20 Energy 2.9 112.0 114.1 112.8 112.8 113.2 109.1 109.4 109.4 110.7 115.3 111.8 111.3 107.8 108.7 21 Fuels .8 106.6 106.9 106.4 106.8 106.7 106.7 107.7 105.4 108.1 107.8 106.0 105.1 106.6 107.3 22 Residential utilities 2.1 114.3 117.1 115.5 115.4 116.0 109.9 110.0 110.9 111.7 118.5 114.2 113.9 108.0 109.0 23 Equipment 17.2 116.8 113.9 115.9 116.0 117.1 118.1 117.9 118.1 118.4 119.0 119.6 120.8 122.5 124.4 24 Business equipment 13.2 126.6 122.6 125.1 125.0 126.6 128.1 127.7 128.3 128.8 129.8 130.7 132.1 133.8 135.6 25 Information processing and related 5.4 143.2 139.8 140.5 140.8 143.9 144.1 144.6 146.3 147.4 147.1 148.5 149.5 152.5 154.3 26 Computer and office equipment 1.1 292.0 265.4 272.2 279.7 289.4 301.7 306.2 314.3 318.8 323.5 327.1 335.9 345.0 354.3 27 Industrial 4.0 126.9 127.1 127.5 126.5 126.3 127.2 126.7 126.3 127.0 127.1 127.3 127.9 128.0 129.2 28 Transit 2.5 100.0 87.4 97.5 97.5 100.6 104.1 103.0 103.8 101.9 106.6 107.2 109.8 111.9 114.7 29 Autos and trucks 1.2 115.3 95.2 118.5 118.0 120.8 126.5 120.9 117.7 109.4 115.9 113.7 117.2 119.1 122.2 30 Other 1.3 116.4 114.7 114.7 115.3 114.3 118.0 116.1 115.5 118.7 119.9 121.4 123.4 124.8 126.8 31 Defense and space equipment 3.3 77.0 77.6 77.4 77.9 77.0 77.7 77.9 77.7 77.0 76.1 76.2 74.9 75.2 75.2 32 Oil and gas well drilling .6 120.5 119.8 123.7 127.0 127.8 122 A 122.6 117.5 120.2 120.7 123.6 130.8 140.7 153.9 33 Manufactured homes .2 162.0 162.5 164.8 165.7 167.9 163.0 167.4 165.6 165.3 159.8 156.3 163.5 34 Intermediate products, total 14.2 109.4 108.4 107.7 108.9 109.7 108.9 110.0 110.6 110.2 111.9 111.3 111.7 112.1 112.8 35 Construction supplies 5.3 116.8 115.5 114.2 116.1 118.3 117.5 119.2 119.8 117.7 120.7 117.8 117.6 119.8 120.6 36 Business supplies 8.9 105.1 104.3 103.9 104.6 104.6 103.9 104.6 105.3 105.8 106.8 107.4 108.2 107.5 108.2 37 Materials 39.5 120.3 117.7 119.5 120.1 120.5 120.5 121.5 121.2 121.7 122.2 123.1 123.3 124.4 125.4 38 Durable goods materials 20.8 134.0 129.5 132.6 133.5 134.0 134.5 136.2 135.5 135.8 136.5 137.8 138.2 140.4 142.4 39 Durable consumer parts 4.0 128.8 117.0 130.1 130.6 130.4 131.1 133.9 128.3 126.6 129.7 130.3 131.7 133.8 135.2 40 Equipment parts 7.6 159.2 154.6 155.7 157.2 158.9 159.6 161.7 162.6 163.4 165.3 167.9 169.4 173.1 177.0 41 Other 9.2 118.2 116.8 117.2 117.8 117.9 118.2 119.2 119.2 120.0 119.1 119.9 119.2 120.4 121.5 42 Basic metal materials 3.1 113.1 112.0 112.1 112.2 112.6 112.9 113.6 114.7 117.2 114.4 115.7 114.5 115.6 117.8 43 Nondurable goods materials 8.9 106.4 104.4 105.5 105.9 106.2 107.4 106.5 106.9 108.0 108.4 109.5 109.3 109.8 109.7 44 Textile materials 1.1 106.3 104.6 105.6 106.1 106.3 109.9 107.4 107.1 108.4 108.5 105.9 107.0 106.6 108.1 45 Paper materials 1.8 107.4 104.4 106.9 106.4 105.2 109.1 108.2 107.0 108.0 110.9 112.5 111.5 113.5 112.7 46 Chemical materials 3.9 105.9 103.5 104.1 104.7 105.3 106.1 106.2 106.8 109.3 107.7 110.2 110.5 109.9 109.6 47 Other 2.1 106.1 105.4 106.5 107.1 108.0 107.1 104.7 106.2 103.9 106.8 106.3 105.3 107.5 107.3 48 Energy materials 9.7 103.9 104.5 104.2 104.6 104.8 102.4 104.0 103.9 103.9 104.0 103.9 104.1 103.2 103.2 49 Primary energy 6.3 102.6 103.9 104.0 103.5 103.5 101.7 103.2 102.2 102.0 101.6 102.6 101.9 101.4 101.2 50 Converted fuel materials 3.3 106.2 105.7 104.6 106.7 107.2 103.9 105.4 107.0 107.5 108.5 106.3 108.3 106.6 107.0 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 114.9 113.4 113.9 114.4 115.0 114.9 115.4 115.7 116.1 116.9 117.4 117.5 118.2 119.2 52 Total excluding motor vehicles and parts 95.1 114.6 113.5 113.5 114.0 114.7 114.6 115.0 115.4 115.9 116.6 117.2 117.1 117.8 118.8 53 Total excluding computer and office equipment 98.2 112.9 111.2 112.2 112.6 113.2 113.1 113.4 113.5 113.7 114.6 115.1 115.1 115.8 116.7 54 Consumer goods excluding autos and trucks 27.4 109.2 109.2 108.4 108.7 109.3 108.9 108.6 109.2 109.9 111.0 111.4 110.5 110.4 111.1 55 Consumer goods excluding energy 26.2 110.2 108.8 109.4 109.6 110.4 110.9 110.2 110.6 110.8 111.8 112.8 112.0 112.4 113.2 56 Business equipment excluding autos and trucks 125.3 125.8 125.7 127.2 128.2 128.3 129.3 130.7 131.2 132.4 133.6 135.2 57 Business equipment excluding computer and office equipment 12.1 115.8 113.1 115.3 114.7 115.8 116.8 116.1 116.3 116.6 117.5 118.2 119.1 120.4 121.8 58 Materials excluding energy 29.8 125.4 121.7 124.2 124.9 125.4 126.1 127.0 126.6 127.1 127.8 129.0 129.2 130.9 132.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 SIC2 pro- 1996 Group code por- avg. tion Apr. May July Sept. Jan.r Feb. Mar.p Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 114.3 114.8 115.5 115.5 115.8 116.0 116.2 117.2 117.7 117.8 118.5 60 Manufacturing 85.4 116.3 113.9 115.2 115.7 116.4 117.0 117.2 117.4 117.6 118.5 119.2 119.3 120.4 121.4 61 Primary processing 26.5 112.2 110.8 111.0 111.7 112.6 113.0 113.1 113.5 113.8 113.8 114.0 113.6 114.6 115.4 62 Advanced processing 58.9 118.4 115.4 117.3 117.6 118.3 118.9 119.2 119.3 119.5 120.8 121.7 122.0 123.2 124.4 63 Durable goods 45.0 125.7 121.8 124.6 125.2 126.3 126.9 127.5 127.2 127.1 128.4 128.8 129.4 131.3 133.1 64 Lumber and products 24 2.0 109.7 109.7 110.3 110.4 112.4 109.3 111.4 110.7 109.2 113.1 108.0 108.8 110.9 111.9 65 Furniture and fixtures 25 1.4 108.9 105.8 108.1 110.3 109.5 108.1 108.8 108.8 110.4 110.5 110.5 109.9 110.2 112.1 66 Stone, clay, and glass products 32 2.1 111.0 108.7 108.5 109.8 111.3 114.1 111.8 113.1 111.7 111.8 111.3 112.4 112.7 112.6 67 Primary metals 33 3.1 117.2 115.6 116.1 116.3 117.0 118.0 118.3 119.5 122.1 118.5 118.8 117.3 119.2 121.7 68 Iron and steel 331,2 1.7 116.4 113.8 114.6 115.7 117.1 118.0 118.2 117.4 123.2 115.9 116.7 117.1 119.0 121.9 69 Raw steel 331PT .1 112.2 112.7 112 1 112.9 114.9 113.3 113.6 112.6 111.5 108.7 112.5 111.7 112.3 115.4 70 Nonferrous 333-6,9 1.4 118.0 117.6 117.9 116.9 116.8 117.9 118.5 121.8 120.7 121.4 121.2 117.5 119.3 121.3 71 Fabricated metal products. . 34 5.0 118.6 117.6 117.8 118.4 118.9 119.1 119.4 119.3 119.3 119.1 119.5 119.1 120.7 121.9 72 Industrial machinery and equipment 35 156.4 152.5 153.3 154.3 156.1 157.7 159.6 159.4 159.9 161.7 162.9 164.6 167.1 169.6 Computer and office equipment 357 1.8 296.9 270.8 277.3 284.7 294.3 306.5 310.8 319.0 323.6 328.3 332.5 340.5 349.7 359.2 74 Electrical machinery 36 7.3 163.3 160.3 161.1 161.8 164.0 163.8 164.6 165.2 165.6 167.2 168.8 168.8 173.3 176.7 75 Transportation equipment. . 37 9.5 106.1 94.9 106.4 106.8 107.1 109.5 109.3 107.3 105.3 109.5 109.6 112.0 113.0 114.6 76 Motor vehicles and parts 371 4.9 126.9 106.8 130.3 130.5 130.4 134.1 132.8 127.0 121.2 128.9 127.9 132.0 133.0 135.1 77 Autos and light trucks 371PT 2.6 124.6 103.0 127.1 127.6 130.4 137.3 131.0 127.4 117.3 125.7 125.6 128.8 129.7 131.7 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 85.6 82.8 83.2 83.8 84.3 85.7 86.5 87.9 89.4 90.3 91.5 92.2 93.3 94.5 79 Instruments 38 5.4 102.8 102.9 102.3 102.4 103.3 102.3 103.0 103.0 103.4 103.0 104.1 103.3 104.1 104.6 80 Miscellaneous 39 1.3 112.9 112.5 112.0 112.2 113.1 113.0 112.9 113.0 113.0 114.1 116.6 116.3 117.5 118.0 81 Nondurable goods 40.4 106.3 105.4 105.2 105.5 105.9 106.4 106.2 106.9 107.4 107.9 108.8 108.4 108.7 109.1 82 Foods 9.4 106.3 106.2 105.9 105.6 106.1 106.5 105.5 106.2 107.1 107.6 108.2 108.2 108.4 108.7 83 Tobacco products 1.6 105.6 111.3 106.3 103.7 105.1 102.5 104.1 104.9 104.0 105.4 108.9 105.8 105.2 108.0 84 Textile mill products 1.8 106.6 107.0 105.3 106.1 108.0 108.7 107.7 107.2 107.6 108.2 106.3 106.6 106.3 108.0 85 Apparel products 2.2 98.2 98.1 99.0 99.0 99.0 98.3 98.5 98.2 97.8 97.3 97.2 96.5 96.2 96.4 86 Paper and products 3.6 108.0 105.8 107.5 107.8 108.5 110.2 108.1 108.8 107.6 110.1 111.6 110.3 111.2 111.0 87 Printing and publishing.. . . 6.7 98.4 97.6 96.9 97.9 97.1 97.6 97.9 99.1 99.7 100.0 99.8 99.9 100.5 101.2 88 Chemicals and products ... 9.9 108.9 106.6 106.9 107.2 107.9 109.0 108.7 109.7 111.3 111.8 114.0 113.7 113.2 113.0 89 Petroleum products 1.4 106.5 105.7 105.5 106.2 106.3 105.3 107.8 106.9 108.4 107.4 107.3 107.5 108.9 109.3 90 Rubber and plastic products 3.5 120.5 119.3 118.0 119.8 120.9 120.7 122.0 122.8 121.4 121.7 122.6 121.2 123.1 123.9 91 Leather and products .3 80.0 81.2 81.1 80.7 81.0 80.0 79.5 79.4 78.4 77.3 80.1 78.2 77.7 78.5 92 Mining 6.9 102.9 102.8 102.9 103.2 104.4 103.1 104.5 103.4 103.4 103.5 104.5 104.2 105.7 106.7 93 Metal .5 102.0 101.7 99.4 100.9 101.7 103.1 104.0 105.3 105.6 102.5 106.3 105.7 105.7 106.2 94 Coal 1.0 105.9 105.9 105.3 108.0 108.9 102.7 109.6 106.2 107.5 108.8 109.5 106.4 109.6 105.5 95 Oil and gas extraction 4.8 100.3 100.2 100.9 100.5 101.5 100.9 101.1 100.5 100.0 100.2 100.7 101.3 102.5 104.8 96 Stone and earth minerals .... .6 118.7 117.9 116.3 117.4 120.6 120.6 121.7 118.5 120.0 120.2 122.9 120.6 123.3 122.8 97 Utilities 7.7 112.8 114.4 113.5 114.6 114.0 109.4 110.8 111.1 111.9 114.5 112.6 113.5 109.7 110.6 98 Electric 491,493PT 6.2 112.7 114.0 113.1 114.8 114.2 110.1 111.5 110.9 112.0 112.7 112.6 113.2 110.0 110.9 99 Gas 492.493PT 1.6 113.2 115.8 115.0 113.6 113.6 107.1 108.5 111.8 111.3 120.9 112.7 114.4 108.5 109.5 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 115.7 114.3 114.3 114.8 115.6 116.0 116.3 116.8 117.3 117.9 118.6 118.5 119.6 120.6 101 Manufacturing excluding office and computing machines .. 83.6 113.7 111.6 112.8 113.2 113.8 114.3 114.4 114.5 114.7 115.5 116.1 116.1 117.1 118.1 Gross value (billions of 1992 dollars, annual rates) MAJOR MARKETS 102 Products, total 2,001.9 2,258.7 2,220.1 2,249.1 2,255.7 2,274.2 2,276.1 2,272.9 2,273.4 2,270.7 2,303.5 2,301.1 2^06.2 2,318.2 2,340.5 103 Final 1,552.1 1,760.9 1.727.8 1,760.0 1,761.9 1,775.7 1,782.8 1,773.6 1,771.6 1,771.8 1,795.1 1,796.8 1,800.8 1,811.1 1,829.7 104 Consumer goods .... 1,049.6 1,162.2 1,150.9 1,164.3 1,165.5 1,172.5 1,171.6 1,165.5 1,163.0 1,164.7 1,182.2 1,182.3 1,178.6 1,179.9 1,188.5 105 Equipment 502.5 598.0 576.3 595.0 595.7 602.4 610.5 607.4 607.8 606.3 612.1 613.7 621.5 630.5 640.5 106 Intermediate 449.9 498.2 492.3 489.9 494.4 499.0 494.3 499.7 502.1 499.3 508.6 504.9 506.0 507.8 511.5 1. Data in this table also appear in the Board's G.I7 (419) monthly statistical release. For ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For a detailed the ordering address, see the inside front cover. The latest historical revision of the industrial description of the industrial production index, see "Industrial Production: 1989 Developproduction index and the capacity utilization rates was released in January 1997. See ments and Historical Revision," Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204. "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- 2. Standard industrial classification. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • June 1997 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1994r 1995r 1996r May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,372 1,333 1,434 1,452 1,415 1,457 1,423 1,399 1,362 1,418 1,422 1,400 1,444 2 One-family 1,069 997 1,073 1,098 1,085 1,073 1,078 1,040 1,011 1,025 1,015 1,051 1,077 3 Two-family or more 303 335 360 354 330 384 345 359 351 393 407 349 367 4 Started 1,457 1,354 1,477 1,476 1,488 1,492 1,515 1,470 1,407 1,486 1,353 1,375 1,522 5 One-family 1,198 1,076 1,161 1,142 1,214 1,164 1,222 1,148 1,104 1,133 1,024 1,125 1,218 6 Two-family or more 259 278 316 334 274 328 293 322 303 353 329 250 304 7 Under construction at end of period1 755 775 819 826 826 825 820 825 825 828 815 818 825 8 One-family 584 554 584 590 594 593 593 592 588 584 571 573 578 9 Two-family or more 171 221 235 236 232 232 227 233 237 244 244 245 247 10 Completed 1,346 1,319 1,407 1,409 1,426 1,463 1,449 1,356 1,375 1,431 1,484 1,362 1,563 11 One-family 1,161 1,073 1,124 1,124 1,137 1,161 1,153 1,097 1,129 1,151 1,177 1,109 1,258 12 Two-family or more 185 246 283 285 289 302 296 259 246 280 307 253 305 13 Mobile homes shipped 305 341 362 366 372 366 369 372 364 354 338 339 355 Merchant builder activity in one-family units 14 Number sold 670 667 757 732 732 782 814 768 706 788 794 825 834 15 Number for sale at end of period1. 340 374 326 362 355 352 343 331 330 327 322 314 307 Price of units sold (thousands of dollars)2 16 Median 130.0 133.9 140.0 136.4 140.0 144.2 137.0 139.0 143.8 143.5 144.9 145.0 141.0 17 Average 154.5 158.7 166.4 163.3 166.5 168.4 159.7 167.4 168.4 172.0 171.8 171.1 169.9 EXISTING UNITS (one-family) 18 Number sold 3,967 3,812 4,087 4,280 4,160 4,150 4,100 4,020 4,000 4,060 3,950 3,910 4,230 Price of units sold (thousands of dollars)^ 19 Median 109.9 113.1 118.2 117.6 122.9 121.5 122.3 117.8 116.6 117.4 118.8 120.6 117.5 20 Average 136.8 139.1 145.5 144.4 150.2 149.6 149.9 144.7 143.6 144.1 147.1 149.6 144.7 Value of new construction (millions of dollars) CONSTRUCTION 21 Total put in place 525,968 547,105 567,313 558,481 563,122 559,312 564,715 572,262 582,537 594,043 588,146 588,889 601,447 22 Private 399,427 410,643 426,518 418,120 423,106 419,293 426,703 428,361 437,034 446,059 445,439 446,646 454,528 23 Residential 238,531 236,916 246,090 247,486 246,909 244,931 246,019 246,407 246,935 249,167 250,297 250,126 254,141 24 Nonresidential 160,896 173,727 180,428 170,634 176,197 174,362 180,684 181,954 190,099 196,892 195,142 196,520 200,387 25 Industrial buildings 28,908 32,317 29,981 27,310 28,755 28,770 27,082 29,656 33,043 31,583 29,413 30,395 30,142 26 Commercial buildings ... 59,506 67,513 70,011 65,834 69,280 68,262 72,146 70,672 74,530 77,669 75,735 77,996 79,931 27 Other buildings 27,025 26,902 29,235 27,723 28,533 28,514 29,764 29,812 30,469 32,636 32,452 33,362 34,483 28 Public utilities and other. 45,457 46,994 51,201 49,767 49,629 48,816 51,692 51,814 52,057 55,004 57,542 54,767 55,831 29 Public 126,541 136,462 140,795 140,361 140,016 140,020 138,012 143,901 145,503 147,983 142,707 142,244 146,919 30 Military 2,314 2,977 2,906 3,020 3,140 2,439 2,307 2,583 2,774 2,350 2,423 2,524 2,618 31 Highway 37,127 37,820 39,399 37,715 38,308 39,194 36,507 40,485 39,326 40,160 41,711 41,320 42,022 32 Conservation and development. 6,378 6,412 5,753 5,756 6,004 5,793 5,660 5,473 6,095 5,974 5,708 5,838 5,558 33 Other 80,723 89,253 92,737 93,870 92,564 92,594 93,538 95,360 97,308 99,499 92,865 92,562 96,721 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 (G-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

Selected Measures A47 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 Index level, Mar. 1996 1997 1997 ' Mar. Mar. June Sept. Dec. Nov. Dec. Jan. Feb. CONSUMER PRICES2 (1982-84=100) 1 AH items 2.8 2.8 2.9 3.3 1.8 .1 160.0 2 Food 3.3 4.3 5.3 3.4 .3 .4 .0 -.3 .0 156.6 3 Energy items 2.8 4.8 4.9 1.1 16.2 -2.8 1.2 1.5 -1.7 111.2 4 All items less food and energy.. 2.8 2.5 2.5 2.7 2.4 2.4 .2 .2 169.0 5 Commodities 1.8 .8 .0 1.1 .9 1.1 .1 .1 143.0 6 Services 3.3 3.2 3.4 3.4 3.1 2.7 .3 .3 183.8 PRODUCER PRICES (1982=100) 7 Finished goods 2.4 1.6 2.5 2.5 4.3 -3.0 .5 -.3 -.4 -.1 132.2 8 Consumer foods 2.6 2.5 5.3 4.6 2.4 -1.8 -.2 -1.0 -.3 .9 135.3 9 Consumer energy 4.3 3.5 2.5 7.0 27.3 -18.0 3.5 -.2 -1.2 -3.4 82.9 10 Other consumer goods.. . 2.1 .9 2.2 .6 .3 .1 .0 .3 145.3 11 Capital equipment 1.5 .7 .6 1.2 -.3 .1 .0 .3 139.2 Intermediate materials 12 Excluding foods and feeds . 1.0 2.2 -2.2 -.6 125.5 13 Excluding energy .0 .0 .3 .0 134.2 Crude materials 14 Foods 12.6 -1.9 47.4 -9.4 -28.2 -3.4 -2.5 -2.6 -1.0 -1.9 2.1 114.0 15 Energy 16.6 3.0 -14.1 18.7 169.7 -59.1 11.1 12.9 12.9 -12.4 -19.2 83.0 16 Other -11.1 .1 -9.3 -2.6 -1.6 15.5 -.2 -.1 2.0 1.0 .6 159.3 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

A48 Domestic Nonfinancial Statistics • June 1997 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1995 1996 1996r Q4 Ql Q2 Q3 Q4r GROSS DOMESTIC PRODUCT 1 Total . 6,935.7 7,253.8 7,576.1 7,350.6 7,426.8 7,545.1 7,616.3 7,716.1 By source Personal consumption expenditures 4,700.9 4,924.9 5,151.4 4,990.5 5,060.5 5,139.4 5,165.4 5,240.3 3 Durable goods 580.9 606.4 632.1 612.8 625.2 637.6 630.5 635.2 4 Nondurable goods 1,429.7 1,485.9 1,545.1 1,494.2 1,522.1 1,544.7 1,546.5 1,566.8 5 Services 2,690.3 2,832.6 2,974.3 2,883.5 2,913.2 2,957.1 2,988.5 3,038.3 6Gross private domestic investment 1,014.4 1,065.3 1,117.0 1,064.0 1,068.9 1,096.0 1,156.2 1,146.6 7 Fixed investment 954.9 1,028.2 1,101.5 1,046.2 1,070.7 1,088.0 1,119.6 1,127.8 8 Nonresidential 667.2 738.5 791.1 749.7 769.0 773.8 807.0 814.5 9 Structures 180.2 199.7 214.3 204.0 208.4 207.4 213.5 227.8 10 Producers' durable equipment 487.0 538.8 576.8 545.7 560.6 566.3 593.5 586.7 11 Residential structures 287.7 289.8 310.5 296.5 301.7 314.2 312.6 313.3 12 Change in business inventories . . . 59.5 37.0 15.4 17.8 -1.7 8.0 36.6 18.8 13 Nonfarm 48.0 39.6 17.3 19.9 2.7 11.3 35.4 19.7 14Net exports of goods and services .. -94.4 -94.7 -98.7 -67.2 -86.3 -99.2 -120.2 -89.1 15 Exports 719.1 807.4 855.2 837.0 839.5 850.0 844.3 887.0 16 Imports 813.5 902.0 953.9 904.2 925.8 949.2 964.5 976.0 17Government consumption expenditures and gross investment. 1,314.7 1,358.3 1,406.4 1,363.4 1,383.7 1,408.8 1,414.8 1,418.3 18 Federal 516.4 516.6 523.1 507.7 518.6 529.6 525.5 518.5 19 State and local 798.4 841.7 883.3 855.7 865.1 879.2 889.3 899.8 By major type of product 20 Final sales, total 6,876.2 7,216.7 7,560.7 7,332.8 7,428.6 7,537.1 7,579.6 7,697.4 21 Goods 2,534.4 2,662.2 2,784.4 2,698.0 2,749.3 2,782.0 2,785.0 2,821.1 22 Durable 1,086.2 1,147.3 1,219.6 1,166.4 1,192.1 1,219.1 1,225.5 1,241.7 23 Nondurable 1,448.3 1,515.0 1,564.8 1,531.7 1,557.1 1,562.9 1,559.5 1,579.5 24 Services 3,746.5 3,926.9 4,105.2 3,992.4 4,027.9 4,087.0 4,122.0 4,183.8 25 Structures 595.3 627.6 671.1 642.3 651.4 668.0 672.6 692.5 26 Change in business inventories 59.5 37.0 15.4 17.8 -1.7 8.0 36.6 18.8 27 Durable goods 31.9 34.9 12.7 27.3 12.3 9.9 34.7 -6.0 28 Nondurable goods 27.7 2.7 -9.4 -14.0 -1.9 2.0 24.8 MEMO • Total GDP in chained 1992 dollars 6,608.7 6,742.9 6,907.2 6,780.7 6,814.3 6,892.6 6,928.4 6,993.6 NATIONAL INCOME 5,501.6 5,813.5 6,150.9 5,927.4 6,015.3 6,118.7 6,203.0 6,266.7 Compensation of employees 4,009.8 4,222.7 4,448.5 4,301.1 4,344.3 4,420.9 4,482.9 4,546.0 Wages and salaries 3,257.3 3,433.2 3,630.1 3,501.1 3,540.2 3,606.5 3,659.6 3,714.2 Government and government enterprises 602.5 621.7 641.2 626.9 634.0 638.9 644.6 647.2 Other 2,654.8 2,811.5 2,988.9 2,874.2 2,906.1 2,967.5 3,015.1 3,067.0 Supplement to wages and salaries 752.4 789.5 818.4 800.1 804.1 814.4 823.3 831.8 Employer contributions for social insurance 350.2 365.5 382.2 369.8 375.0 380.4 384.6 388.8 Other labor income 402.2 424.0 436.2 430.2 429 A 434.0 438.6 442.9 Proprietors' income1 450.9 478.3 518.3 486.7 499.5 515.2 526.3 532.1 Business and professional1 415.9 449.3 471.9 454.9 461.1 469.4 474.6 482.4 Farm1 35.0 29.0 46.4 31.8 38.4 45.8 51.8 49.7 41 Rental income of persons 116.6 122.2 126.8 126.9 124.5 127.0 128.9 42 Corporate profits' 529.5 586.6 654.0 611.8 645.1 655.8 661.2 654.1 43 Profits before tax3 531.2 598.9 639.9 604.2 642.2 644.6 635.6 637.1 44 Inventory valuation adjustment .. -13.3 -28.1 -8.9 -17.4 -11.0 2.0 -9.2 45 Capital consumption adjustment . 11.6 15.9 23.1 16.5 20.4 22.3 23.6 26.2 46 Net interest . 394.9 403.6 403.3 401.9 399.5 402.3 405.6 405.7 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, Sun'ey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A4S 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1995 1996 Account 1994 1995 1996 Q4 Qi Q2 Q3 Q4r PERSONAL INCOME AND SAVING 1 Total personal income 5,753.1 6,115.1 6,452,3r 6,234.5 6,308.5 6,412.4 6,501.4 6,587.0 2 Wage and salary disbursements 3,241.8 3.430.6 3,630.1r 3,500.2 3,538.2 3,606.5 3,659.6 3,716.1 3 Commodity-producing industries 824.9 863.5 902.7r 873.9 878.7 900.3 911.0 920.9 4 Manufacturing 621.1 648.4 672.5r 654.7 654.8 671.8 678.5 685.0 5 Distributive industries 739.2 783.7 827.9r 800.7 810.5 822.3 832.4 846.5 6 Service industries 1,075.2 1,161.6 l,258.3r 1,198.6 1,215.1 1,244.9 1,271.6 1,301.5 7 Government and government enterprises 602.5 621.7 641.2 626.9 634.0 638.9 644.6 647.2 8 Other labor income 402.2 424.0 436.2 430.2 429.1 434.0 438.6 442 9 9 Proprietors' income1 450.9 478.3 518.3 486.7 499.5 515.2 526.3 532.1 10 Business and professional1 415.9 449.3 471.9 454.9 461.1 469.4 474.6 482.4 11 Farm1 35.0 29.0 46.4 31.8 38.4 45.8 51.8 49.7 12 Rental income of persons 116.6 122.2 126.8 125.8 126.9 124,5 127.0 128.9 13 Dividends . . 199.6 214.8 230.6 221.7 226.6 229.3 231.5 234.8 14 Personal interest income 663.7 717.1 738.2r 727.2 726.1 733.1 742.9 750.5 15 Transfer payments 956.3 1,022.6 l,079.7r 1,041.4 1,063.0 1,075.6 1,085.1 1.095.0 16 Old-age survivors, disability, and health insurance benefits 472.9 507.4 539.1 516.1 529.9 536.3 541.7 548.2 17 LESS: Personal contributions for social insurance 278.1 294.5 307.5 298.8 301.0 305.8 309.7 313.4 18 EQUALS: Personal income 5,753.1 6,115.1 6,452.3r 6,234.5 6,308.5 6,412.4 6,501.4 6,587.0 19 LESS: Personal tax and nontax payments 731.4 794.3 863.8r 807.2 824.9 870.6 872.5 887.2 20 EQUALS: Disposable personal income 5,021.7 5,320.8 5,588.5 5,427.3 5,483.5 5,541.8 5,628.9 5,699.7 21 LESS: Personal outlays 4,832.3 5,071.5 5,314.0r 5,144.7 5,218.1 5,300.7 5,329.8 5,407.5 22 EQUALS: Personal saving 189.4 249.3 274.4r 282.6 265.4 241.1 299.1 292.2 MEMO Per capita (chained 1992 dollars) 23 Gross domestic product 25,349.8 25,628.8 26,015.9r 25,684.5 25,753.3 25,990.0 26,066.2 26,252.2 24 Personal consumption expenditures 17,158.2 17,399.6 17,667.3r 17,459.9 17,570.2 17,675.7 17,657.9 17,764.8 25 Disposable personal income 18,330.0 18,799.0 19,167.0r 18,986.0 19,041.0 19,063.0 19,242.0 19,322.0 26 Saving rate (percent) 3.8 4.7 4.9 5.2 4.8 4.3 5.3 5.1 GROSS SAVING 27 Gross saving 1,056.3 1,151.8 1,275.4 1,220.6 1,217.9 1,244.5 1,314.0 1,325.3 28 Gross private saving 1,006.7 1,071.8 1,160.4 1,138.9 1,133.8 1,121.6 1,196.1 1,190.2 29 Personal saving 189.4 249.3 274.4r 282.6 265.4 241.1 299.1 292.2 30 Undistributed corporate profits 123.2 140.6 176.8 158.4 171.8 176.3 182.5 176.5 31 Corporate inventory valuation adjustment -13.3 -28.1 -8.9r -8.8 -17.4 -11.0 2.0 -9.2 Capital consumption allowances 32 Corporate 441.0 454.0 474.0r 463.6 465.6 471.0 477.2 482.1 33 Noncorporate 237.7 225.2 235.2r 233.4 229.1 233.2 237.4 241.3 34 Gross government saving 49.6 80.0 115.0 81.7 84.1 122.9 117.8 135.0 35 Federal -119.6 -87.9 -54.6 -80.7 -82.0 -54.1 -48.4 -34.0 36 Consumption of fixed capital 70.6 73.8 72.5 73.8 73.2 72.6 72.3 71.9 37 Current surplus or deficit (-), national accounts -190.2 -161.7 -127.1 -154.5 -155.2 -126.7 -120.8 -105.9 38 State and local 169.2 167.9 169.6 162.4 166.1 177.0 166.3 169.0 39 Consumption of fixed capital 69.4 72.9 76.6 74.3 75.1 76.0 77.1 78.1 40 Current surplus or deficit ( —), national accounts 99.7 95.0 93.0 88.1 91.0 101.0 89.2 90.9 41 Gross investment 1,090.4 1,150.9 1,200.8 1,173.9 1,167.9 1,187.0 1,215.9 1,232.5 42 Gross private domestic investment 1,014.4 1,065.3 l,117.0r 1,064.0 1,068.9 1.096.0 1,156.2 1,146.6 43 Gross government investment 212.3 221.9 233.4r 220.1 228.8 235.1 234.2 235.3 44 Net foreign investment -136.4 -136.3 -149.5 -110.2 -129.9 -144.2 -174.6 -149.4 45 Statistical discrepancy 34.1 -.9 -74.6 -46.7 -50.0 -57.5 -98.1 -92.8 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Sun'ey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • June 1997 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1995 1996 Item credits or debits 1994 1995 1996 Q4 Qi Q2 Q3 Q4P 1 Balance on current account -148,405 -148,154 -165,095 -30,435 -35,274 -40,593 -47,853 -41.380 2 Merchandise trade balance^ -166,121 -173,424 -187,674 -38,026 -43,127 -47.370 -51,869 -45,308 3 Merchandise exports 502,463 575,940 611,669 149,422 150,032 153,120 150,144 158,373 4 Merchandise imports -668,584 -749,364 -799,343 -187,448 -193,159 -200,490 -202,013 -203,681 5 Military transactions, net 1,963 3,585 2,809 978 489 725 515 1,080 6 Other service transactions, net 59,779 64,776 70,658 17,657 18,008 17,687 17,075 17,883 7 Investment income, net -4.159 -8.016 -8,416 -1,890 311 -2,215 -4,098 -2,414 8 U.S. government grants -15,816 -10,959 -14,634 -2,799 -4,259 -2,364 -2,580 -5,431 9 U.S. government pensions and other transfers -4,544 -3,420 -4,233 -731 -1,012 -1,081 -1,064 -1,076 10 Private remittances and other transfers -19,506 -20,696 -23,605 -5,624 -5,684 -5,975 -5,832 -6,114 11 Change in U.S. government assets other than official reserve assets, net (increase, -) -341 -280 -665 -199 -152 -353 166 -326 12 Change in U.S. official reserve assets (increase, —) 5,346 -9,742 6,668 191 17 -523 7,489 -315 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -441 -808 370 -147 -199 -133 848 -146 15 Reserve position in International Monetary Fund 494 -2,466 -1,280 -163 -849 -220 -183 -28 16 Foreign currencies 5,293 -6,468 7,578 501 1,065 -170 6,824 -141 17 Change in U.S. private assets abroad (increase, —) -155,700 -297,834 -312,833 -98,206 -68,588 -49,823 -80,968 -113,454 18 Bank-reported claims -8,161 -69,146 -88,219 -7,272 1,714 -74 -33,196 -56,663 19 Nonbank-reported claims -32.804 -34.219 -14,278 -12,707 -3,374 -15,696 20 U.S. purchases of foreign securities, net -60.270 -98,960 -104,533 -32,539 -34,420 -20,200 -22,933 -26,980 21 US direct investments abroad net -54 465 -95 509 -88 304 —44 117 -23 175 -26 175 -9 143 -29 811 22 Chan°e in foreign official assets in United States (increase +) 40,253 109,757 122,778 11,369 52,021 13,566 24,235 32,956 23 U.S. Treasury securities 30,745 68,813 111,151 12,984 55,600 -3,384 25,472 33,463 24 Other U S government obligations 6,077 3,734 4,331 764 52 1.258 1,217 1,804 25 Other U.S. government liabilities4 2,344 1,082 1,404 1,249 -156 220 1,061 279 26 Other U.S. liabilities reported bv U.S. banks3 3,560 32,862 4,614 -3,908 -3,264 14,187 -1,930 -4,379 27 Other foreign official assets5 -2,473 3,266 1,278 280 -211 1,285 -1,585 1,789 28 Change in foreign private assets in United States (increase, +) 245,123 314.705 402.268 87,860 47,454 86,987 118,735 149.092 29 U S bank-reported liabilities 111,842 25,283 -1,558 32,765 -35.571 1,925 -1,151 33,239 30 U.S. nonbank-reported liabilities -7.710 34,578 11,272 6,506 7,296 20,608 31 Foreign private purchases of U.S. Treasury securities, net 34,225 99,340 153,784 1,734 11.832 31.212 43,402 67,338 32 Foreign purchases of other U.S. securities, net 57,006 95.268 131,682 27,321 35,993 29,122 34,820 31,747 33 Foreign direct investments in United States, net 49,760 60,236 83,950 14,768 28,694 17,432 21,056 16,768 34 Allocation of special drawing ri°hts 0 0 0 0 0 0 0 0 35 Discrepancy 13,724 31,548 -53,122 29,420 4,522 -9,261 -21,804 -26,573 36 Due to seasonal adjustment 1,153 6,653 -449 -8,318 2,119 37 Before seasonal adjustment i 3,724 31,548 -53.121 28,267 -2,131 -8,812 -13,486 -28,692 MEMO Changes in official assets 38 U.S. official reserve assets (increase, —) 5,346 -9,742 6,668 191 17 -523 7,489 -315 39 Foreign official assets in United States, excluding line 25 (increase, +) 37,909 108,675 121,374 10,120 52,177 13,346 23,174 32,677 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -1,529 3,959 13,573 -1,435 -992 5,555 5,479 3,531 1. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38-40. 4. Associated primarily with military sales contracts and other transactions arranged 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

Summary Statistics A51 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1996 1997 Item 1994 1995 1996 Aug. Sept. Oct. Nov. Dec. Jan. Feb.p 1 Goods and services, balance -104,381 -105,064 -114,299 -10,628 -11,616 -8,066 -7,968 -10,489 -12,334 -10,419 2 Merchandise -166,123 -173,424 -187,766 -16,546 -17,639 -14,211 -14,404 -16,871 -18,614 -16,898 3 Services 61,742 68,360 73,467 5,918 6,023 6,145 6,436 6,382 6,280 6,479 4 Goods and services, exports 698,301 786,529 835,414 69,705 68,816 71,758 72,566 71,210 70.645 73,464 5 Merchandise 502,462 575,939 611,507 51,106 50,317 52,893 53,302 51,924 51,358 54,058 6 Services 195,839 210,590 223,907 18,599 18,499 18,865 19,264 19,286 19,287 19,406 7 Goods and services, imports -802,682 -891,593 -949,714 -80,333 -80,432 -79,824 -80,534 -81.699 -82,979 -83,883 8 Merchandise -668,585 -749,363 -799,274 -67,652 -67,956 -67,104 -67,706 -68,795 -69.972 -70,956 9 Services -134,097 -142,230 -150,440 -12,681 -12,476 -12.720 -12,828 -12,904 -13,007 -12,927 1. Data show monthly values consistent with quarterly figures in the U.S. 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 1996 1997 Asset 1993 1994 1995 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.P 1 Total 73,442 74,335 85,832 76,781 75,509 75,558 75,444 75,090 68,200 67,482 67,222 2 Gold stock, including Exchange Stabilization Fund1 11,053 11,051 11,050 11,050 11,050 11.049 11,049 11,049 11,048 11,051 11,050 3 Special drawing rights2-3 9,039 10,039 11,037 10,307 10,177 10,226 10,386 10,312 9,793 9,866 9,879 4 Reserve position in International Monetary Fund2 11,818 12,030 14,649 15,597 15,421 15,517 15,516 15,435 14,372 14,037 13,846 5 Foreign currencies4 41,532 41,215 49.096 39,827 38,861 38,765 38,493 38,294 32,987 32,528 32,447 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. U.S. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 1996 1997 Asset 1993 1994 1995 Aug. Sept. Oct. Nov. Dec. Jan. Feb.c Mar. 1 Deposits 386 250 386 171 265 176 170 167 167 229 916 Held in custody 2 U.S. Treasury securities" 379,394 441,866 522,170 590,367 609,801 619,987 634,165 638,049 646,130 662,375 672,059 3 Earmarked gold3 12,327 12,033 11,702 11,217 11,210 11,204 11,198 11,197 11,197 11,175 11,034 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

A52 International Statistics U June 1997 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1996r 1997 Item 1994 1995 Aug. Sept. Oct. Nov. Dec. Jan. Feb.p 1 Total1 520,934 630,918 703,933 719,615 722,759 737,523 752,551 763,068 771,275 By Type 2 Liabilities reported by banks in the United States 73,386 107,394 111,092 116,386 109,995 107.071 112,116 119,681 115,973 3 U.S. Treasury bills and certificates3 139,571 168,534 189,726 182,122 186,180 197,692 193,435 188,076 191,090 U.S. Treasury bonds and notes 4 Marketable 254,059 293,690 341,037 358,225 363,063 366,903 380,565 388,587 398,640 5 Nonmarketable4 6,109 6,491 6,018 6.057 5,890 5,928 5.967 6,007 6,043 6 U.S. securities other than U.S. Treasury securities5 47,809 54,809 56,060 56,825 57,631 59,929 60,468 60,717 59,529 By area 7 Europe1 215,374 222,406 246,760 246,342 246,542 250,872 253.099 262,145 260,984 8 Canada 17,235 19,473 21,662 21,351 21,764 21,360 21,343 21,151 21,237 9 Latin America and Caribbean 41,492 66,721 69,076 69,338 70,479 76.976 81,740 77,557 78,817 10 Asia 236,824 311.016 354,324 369,529 371,268 375,311 383.062 390,671 399,060 11 Africa 4,180 6,296 6,722 6,944 6,587 7,034 7.379 6,717 7,411 12 Other countries 5,827 5,004 5,387 6,109 6.117 5,968 5.926 4,825 3.764 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 1996r Item 1993 1994r 1995r Mar. June Sept. Dec. 1 Banks' liabilities 78,259 89,258 109.713 107,454 111,651 111,140 103,820 2 Banks' claims 62,017 60,711 74,016 69,164 65.825 68,120 66,455 3 Deposits 20,993 19,661 22,696 22,213 20,890 24,026 22,904 4 Other claims ^ 41,024 41,050 51,320 46,951 44,935 44.094 43,551 5 Claims of banks' domestic customers" 12,854 10,878 6,145 6,384 7,554 7.390 14,613 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

Bank-Reported Data A53 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1996 1997 Item 1995 Aug. Sept. Oct. Nov. Dec.1 Jan. Feb.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,014,996 l,099,549r 1,137,736 l,075,882r l,091,897r l,124,315r l,116,775r 1,137,736 1,135,373 1,157,306 2 Banks' own liabilities 718,591 753,461r 759,011 7O3,552r 724,792r 757,645r 740,998r 759,011 764,861 781,345 3 Demand deposits 23,386 24,448 27,033 23,147 25,504 23.858r 27,637r 27,033 26,209 25,066 4 Time deposits" 186,512 192,558r 188,717 196,563r 192,525r 197,388r 192,543r 188,717 186,392 189,422 5 Other3 113.215 l40,165r 141,733 130,689r 15O,23Or 150,302r 143,690r 141,733 158,868 161,501 6 Own foreign offices4 395,478 396,290r 401,528 353,153r 356,533r 386,097r 377,128r 401,528 393,392 405,356 7 Banks' custodial liabilities5 296,405 346,088 378,725 372,330 367,105r 366,670 375,777 378,725 370,512 375,961 8 U.S. Treasury bills and certificates6 162,938 197,355 220,575 219,949 212,478 214,609 225,046 220,575 214,727 217,817 9 Other negotiable and readily transferable instruments7 42,539 52,200 64,040 55,552 57,702 54,045 54,568 64,040 62,971 59,663 10 Other 90,928 96,533 94,110 96,829 96.925r 98,016 96,163 94,110 92,814 98,481 11 Nonmonetary international and regional organizations 8,606 11,039 13,864 12,680r 14,443 16,666r 14,772r 13,864 14,849 14,626 12 Banks' own liabilities 8,176 10,347 13,355 12,089r 13.843 15,835r 13,434r 13,355 14,170 14,297 13 Demand deposits 29 21 29 49 26 67 46 29 55 51 14 Time deposits2 3,298 4,656 5,785 4,738 5,441 6,005 4,906 5,785 5,792 5,035 15 Other3 4,849 5,670 7,541 7,302r 8,376 9,763r 8,482r 7,541 8,323 9,211 16 Banks' custodial liabilities5 430 692 509 591 600 831 1,338 509 679 329 17 U.S. Treasury bills and certificates6 281 350 244 345 399 600 1,088 244 494 219 18 Other negotiable and readily transferable instruments7 149 341 265 246 201 231 226 265 185 110 19 Other 0 1 0 0 0 0 24 0 0 0 20 Official institutions .... 212,957 275,928r 305,551 300,818r 298,508r 296,175r 304,763r 305,551 307,757 307,063 21 Banks' own liabilities. 59,935 83,447r 79,340 81,520r 86,027r 83,706r 82,714r 79,340 88,230 86,623 22 Demand deposits... 1,564 2,098 1,511 1,459 2,049 1,316 2,180r 1,511 1,290 1,378 23 Time deposits2 23,511 30,717r 33,664 37,708 34,902 35,551 35,292 33,664 32,727 34,472 24 Other3 34,860 50,632r 44,165 42,353r 49,076r 46,839r 45,242r 44,165 54,213 50,773 25 Banks' custodial liabilities 153,022 192,481 226,211 219,298 212.481 212,469 222,049 226,211 219,527 220,440 26 U.S. Treasury bills and certificates6 139,571 168,534 193,435 189,726 182,122 186,180 197,692 193,435 188,076 191,090 27 Other negotiable and readily transferable instruments7 13,245 23,603 32,350 29,281 30,051 25,085 24,000 32,350 31,291 29,003 28 Other 206 344 426 291 308 1,204 357 426 160 347 29 Banks10 . . 678,532 691,412r 681,006 634,948r 649.649r 678,993r 667,700r 681,006 669,269 682,347 30 Banks' own liabilities 563,617 567,834r 562,995 510,215r 524,845r 554,577r 547,106r 562,995 553,694 562,111 31 Unaffiliated foreign banks. .. 168,139 171,544r 161,467 157.062 168.312r 168,480r 169,978 161,467 160,302 156,755 32 Demand deposits 10,633 11,758 13,691 11,116 12,764 11,156 13,304 13,691 12,898 11,642 33 Time deposits2 111,171 103,471r 91,200 94,867 91,906 96,223 94,345 91,200 89,557 89,253 34 Other3 46,335 56,315 56,576 51,079 63,642r 61,101r 62,329 56,576 57,847 55,860 35 Own foreign offices4 395,478 396,290r 401,528 353,153r 356,533r 386,097r 377,128r 401,528 393,392 405,356 36 Banks' custodial liabilities5 114,915 123,578 118,011 124,733 124.804r 124,416 120,594r 118,011 115,575 120,236 37 U.S. Treasury bills and certificates6 11,264 15,872 13,886 18,670 18,556 16,865 14,227 13,886 13,969 13,289 38 Other negotiable and readily transferable instruments7 14,506 13,035 12,321 10,864 11,298 12,455 13,295 12,321 11,142 11,210 39 Other 89,145 94,671 91,804 95,199 94,950r 95,096 93,072r 91,804 90,464 95,737 40 Other foreigners 114,901 121,170r 137,315 127,436r 129,297r 132,481r 129,540r 137,315 143,498 153,270 41 Banks'own liabilities. 86,863 91,833r 103,321 99,728r 100,077r 103,527r 97,744r 103,321 108,767 118,314 42 Demand deposits.. . 11,160 10,571 11,802 10,523 10,665 ll,319r 12,107 11,802 11,966 11,995 43 Time deposits" .... 48,532 53,714r 58,068 59,250r 60,276r 59,609r 58,OOOr 58,068 58,316 60,662 44 Other3 27,171 27,548 33,451 29,955r 29,136r 32,599r 27,637r 33,451 38,485 45,657 45 Banks' custodial liabilities" 28,038 29,337 33,994 27,708 29,220 28,954 31,796r 33,994 34,731 34,956 46 U.S. Treasury bills and certificates6 11,822 12,599 13,010 11,208 11,401 10,964 12,039 13,010 12,188 13,219 47 Other negotiable and readily transferable instruments7 14,639 15,221 19,104 15,161 16,152 16.274 17,047 19,104 20,353 19,340 Other 1,577 1,517 1,880 1,339 1,667 1,716 2,710r 1,880 2,190 2,397 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 17,895 9,103 9,934 8,276 10,466 11,657 10,540 9,934 9,035 8,740 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. 10. Excludes central banks, which are included in "Official institutions." 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks for foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • June 1997 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1996 Aug. Sept. Oct. Nov. Dec Feb.p 50 Total, all foreigners 1,014,996 l,099,549r 1,137,736 l,075,882r l,091,897r l,124,315r l,116,775r 1,137,736 1,135,373 1,157,306 51 Foreign countries 1,006,390 l,088,510r 1,123,872 l,063,202r l,077,454r l,107,649r l,102,003r 1,123,872 1,120,524 1,142,680 52 Europe 390,869 362,819 368,352 356,967r 352,049r 374,418r 381,204r 368,352 379,591 379,205 53 Austria 3,588 3,537 5,101 4,683 6,017 6,816 6,250 5,101 4,794 4,010 54 Belgium and Luxembourg 21,877 24,792 23,576 25,155 22,482 23,232 21,006r 23,576 22,841 23,536 55 Denmark 2,884 2,921 2.450 2,501 2,652 i,8or 2,790 2.450 2,213 1,594 5 5 5 6 8 7 F G F i r e n a r l n m a c n a e d ny 4 2 4 7 1 , , , 3 1 43 6 0 6 5 9 2 3 4 2 9 , , , 8 0 2 3 3 1 1 5 8 2 3 4 4 1 , , , 5 3 46 5 6 3 4 5 2 3 3 8 1 , , , 1 1 2 1 2 7 3 8 0r 3 23 7 , , 5 6 8 9 1 3 9 2 7r 4 2 2 3 1 , , , 5 3 50 2 4 9 2 6r 4 2 0 1 1 , , ,5 0 6 5 2 5 7 1 0 r r 2 3 4 4 1 , , , 5 3 46 5 6 3 4 5 2 3 4 4 1 , , , 8 5 58 5 5 3 7 6 2 3 4 5 1 , , , 1 3 4 3 2 8 8 8 0 5 6 6 9 0 1 G I N ta r e l e t y h ec e e rlands 1 1 6 0 1 , , .4 8 0 0 8 3 0 5 3 1 1 2 0 3 , , , 0 8 7 1 6 4 4 8 5 1 1 0 0 1 , , ,8 9 7 1 9 0 0 5 1 1 1 1 2 1 , , , 7 4 5 2 5 6 2 2 0 1 9 2 1 , , , 6 8 5 5 2 0 4 9 6 1 12 2 1 , , ,6 0 7 6 1 9 6 7 3 1 ll 2 0 , , 1 , 2 2 3 2 6 2 2 2 r r 1 1 0 0 1 , , , 8 7 9 1 0 9 0 1 5 1 9 2 0 , , , 0 7 3 8 5 6 0 9 3 1 1 0 0 1 , , ,9 6 9 3 0 4 0 7 5 62 Norway 2,338 1,394 1,288 1,556 1,622 1,552 1,882 1,288 1,860 1,538 63 Portugal 2,846 2,761 1,865 1,328 1,473 1,388 1,723 1,865 1,740 1,660 64 Russia 2,726 7,948 7,571 4,988 4,761 5,602 8,215 7,571 7,160 6,819 65 Spain 14,675 10,011 16,922 17,505 20,359 17,665 18,228 16,922 20,399 17,951 66 Sweden 3,094 3,246 1,291 1,591 1,814 1,424 1,656 1,291 2,269 1,527 67 Switzerland 40,724 43,625 44,215 39,074 42,226 32,541 37,981 44,215 43,265 46,680 68 Turkey 3,341 4,124 6,723 7,272 7,992 8,019 7,311 6,723 7,051 6,749 69 United Kingdom 163,733 139,183 151.385 136,922r 133,614r I59,878r 165,814r 151,385 157,353 157,261 70 Yugoslavia1' 245 177 206 207 214 216 232 206 212 239 71 Other Europe and other former U.S.S.R.1 27,770 26,389 21,871 25,940 20,786 20,431 21,272 21,871 25,236 25,213 72 Canada 24,768 30,468 38,111 30,727 33,199 35,147r 33,035 38,111 34,827 33,957 73 Latin America and Caribbean 423,847 440,213r 465,702 424.119r 433,796r 444,847r 438,574r 465,702 455,155 471,581 74 Argentina 17,203 12,235 13,794 13,320 11,989 11,701 13,860 13,794 16,446 16,989 75 Bahamas 104,014 94.991 88,299 87,994 86,880r 101,414r 91,494r 88,299 90,451 97,407 76 Bermuda 8,424 4,897 5,299 4,150 4,880 4,910 6,443 5,299 5,103 8,803 77 Brazil 9,145 23,797 27,663 24,518 23,817 24,083 26,920r 27,663 22,445 23,836 78 British West Indies 229,599 239,083 250,761 227,047r 233,818r 229,493 226,502r 250,761 244,582 246,420 79 Chile 3,127 2,826 2,915 2,462 3,205 2,767 2,728 2,915 2,974 5,546 80 Colombia 4,615 3.659 3,256 3,263 2,889 2,968 2.838 3,256 2,760 2,814 81 Cuba 13 8 21 14 33 17 18 21 19 19 82 Ecuador 875 1,314 1,767 1,433 1,449 1,383 1,574 1,767 1,611 1,627 83 Guatemala 1,121 l,276r 1,282 1.176 1,181 1,207 1,235 1,282 1,339 1,401 84 Jamaica 529 481 628 625 623 580 564 628 576 577 85 Mexico 12,227 24,560 31,230 24,399 26,808 27,673 27,981 31,230 27,129 27,432 86 Netherlands Antilles 5,217 4,673 5,977 3,615 5,290 5,076 4,437 5,977 6,397 6,081 87 Panama 4,551 4,264r 4,077 3,994 3,950 4,056 4,002 4,077 3,828 4,113 88 Peru 900 974 834 1,077 936 1,024 942 834 965 915 89 Uruguay 1,597 1,836 1,888 1,799 1,751 1,841 1,753 1,888 1,912 1,854 90 Venezuela 13,986 11,808 17,361 15,029 15,596 16,369 17,377 17,361 18.063 18,039 91 Other 6,704 7,531r 8,650 8,204r 8,701r 8,285 7,906 8,650 8,555 7,708 92 Asia 154,346 240,595 236,716 237,626r 243,210r 239,416 233,804r 236,716 236,408 244,507 China 93 Mainland 10,066 33,750 30,441 34,224 32,068 26,998 29,411 30,441 27,907 31,634 94 Taiwan 9,844 11,714 15,990 14,775 15,721 15,449r 16,613 15,990 16,682 15,621 95 Hong Kong 17,104 20,197 18,742 18,609 17,485 17,052r 18,712r 18,742 19,873 20,065 96 India 2,338 3,373 3,936 4,012 3,793 3,709 3,832 3,936 4,329 4,752 97 Indonesia 1,587 2,708 2,297 2,161 2,204 2,436 2,401 2,297 2.159 2,473 98 Israel 5,157 4,041 6,042 4,364 4,134 7,162 5,723 6,042 6,597 6,197 99 Japan 62,981 109,193 107,014 109,264r 112,539r 112,602r 103,680r 107,014 106,421 108,705 100 Korea (South) 5,124 5,749 5,973 5,406 5,908 5,545 5,897 5,973 6,048 6,276 101 Philippines 2,714 3,092 3,378 2,539 3,429 3,191 3,264 3,378 2,340 2,437 102 Thailand 6,466 12,279 10,912 10,691 11.759 11,972 12,729 10,912 9,873 10,752 103 Middle Eastern oil-exporting countries13 15,494 15,582 14,303 13,891 14,715 13,032 13,145 14,303 12,924 12,767 104 Other 15,471 18,917 17,688 17,690 19,455 20,268 18,397 17,688 21,255 22,828 105 Africa 6,524 7,641 8,063 7,259 7,440 7,058 7,671 8,063 8,443 8,110 106 Egypt 1,879 2,136 2,012 1,920 1,894 1,904 1,901 2,012 1,933 2,033 107 Morocco 97 104 112 121 78 74 66 112 111 97 108 South Africa 433 739 458 632 482 435 641 458 610 720 109 Zaire 9 10 10 6 6 11 10 10 5 7 110 Oil-exporting countries14 1.343 1.797 2,608 2,075 2,051 1,940 2,384 2,608 3,095 2,467 111 Other 2,763 2,855 2,863 2.505 2,929 2,694 2,669 2,863 2,689 2,786 112 Other 6,036 6,774 6,928 6,504 7.760 6,763 7,715 6,928 6,100 5,320 113 Australia 5,142 5,647 5,468 5,465 5.522 4,786 6.196 5,468 4,866 4,072 114 Other 894 1,127 1,460 1,039 2,238 1,977 1,519 1,460 1,234 1,248 115 Nonmonetary international and regional organizations 8,606 11,039 13,864 12,680r 14,443 16,666r 14,772r 13,864 14,849 14,626 116 International15 7,537 9,300 11,991 10,993r 12,761 14,887r 12,974r 11,991 13,230 13,100 117 Latin American regional16 613 893 1,339 1.024 1,193 1,304 1,172 1,339 1,103 1,120 118 Other regional17 456 846 534 663 489 475 626 534 516 406 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

Bank-Reported Data A55 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 Area or country Aug. Sept. Oct. Feb.p 1 TotaJ, all foreigners 485,432r 532,444r 600,691r 546,532r 544,646r 563,454r 574,920 600,691 608,478 634,668 2 Foreign countries 480,841r 530,513r 598,087r 544,500r 542,948r 560,325r 573,447 598,087 606,706 632,413 3 Europe . 124,124r 132,150 166,501r 150,054 155,277 165,634 168.794 166,501 179,490 194,231 4 Austria 692 565 1,662 849 988 1,197 1,097 1,662 1,643 1.284 5 Belgium and Luxembourg 6,923r 7,624 6.727 7,018 6,903 6.828 6,403 6,727 7,611 6,855 6 Denmark 1,129 403 492 230 408 480 651 492 678 571 7 Finland 512 1,055 971 1,296 1,350 1,068 1,228 971 1,144 976 8 France 12.149r 15,033 15,246 11,570 12,078 12,792 12,198 15,246 18,111 20,576 9 Germany 7,623r 9,263 8,472r 7,559 8,670 8.546 7,195 8.472 9.657 9,075 10 Greece 604 469 568 433 397 426 571 568 636 530 11 Italy 6,044r 5,370 6.457 6,625 5,870 5,007 5,957 6.457 5.419 5,587 12 Netherlands 2,960r 5,346 7,080 6,565 6,956 7,386 7,350 7,080 8.119 8,658 13 Norway 504 665 808 1.342 1,199 1,617 1,894 808 1,058 766 14 Portugal 938 888 418 548 484 517 341 418 420 310 15 Russia 973 660 1,669 794 1,135 1,413 1,533 1.669 1,673 1,704 16 Spain 3,536r 2,166 3,211 3,073 4,152 3,885 4,181 3.211 6,506 5,406 17 Sweden 4,098 2,080 2,673 2,726 2,976 2.919 2,882 2.673 3.028 3,323 18 Switzerland 5.747r 7,474 19,798 9,266 10,930 16,110 18.071 19,798 21,456 25,257 19 Turkey 878 803 1,109 1,044 1,083 962 1,131 1.109 1.029 1,221 20 United Kingdom 66,863r 67,784 85,057 85.355 85,732 89,961 92.143 85,057 86,710 96.987 21 Yugoslavia2 265 147 115 87 87 118 112 115 108 107 22 Other Europe and other former U.S.S.R.3 . l,686r 4,355 3,968r 3,674 3,879 4,402 3,856 3.968 4,484 5,038 23 Canada 18,490 20,874 26,436 25,132 25,343 23,066 22,013 26.436 26,344 27,877 24 Latin America and Caribbean 224,229r 256,944 274,127r 249,743r 240,683" 243,634 253,761 274,127 271,638 275,239 25 Argentina 5,854r 6,439 7,400 7,062 7.101 7,057 7,212 7,400 6,987 6,952 26 Bahamas 66,410 58,818 71,871 62,297 61,830 61,991 64,911 71,871 62,679 66,771 27 Bermuda 8,533r 5,741 4,103 3,091r 3,680r 4,438 5,019 4,103 4,444 5.980 28 Brazil 9,583 13,297 17,259 15,155 15,261 15,417 16,141 17.259 17,620 17,758 29 British West Indies 96,373r 124,037 105,510r 99.365r 102,157 105,891 105,234 105.510 108.641 110,141 30 Chile 3,820 4,864 5,136 4,183r 4,397r 4,288 4.554 5,136 5,508 5,601 31 Colombia 4,004 4,550 6,247 4,725 4,723 4,811 4,960 6.247 6,166 6,033 32 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 682 825 1,031 932 965 957 952 1.031 1,076 1,131 34 Guatemala 366 457 620 476 507 546 568 620 612 634 35 Jamaica 258 323 345 335 339 362 365 345 336 336 36 Mexico 17.749 18,024 18,425 17,540 17,715 17,742 17,993 18,425 18,319 18,293 37 Netherlands Antilles l,404r 9.229 25,209 23,713 11,207 9,406 15,074 25.209 27,675 24,250 38 Panama 2.198 3,008 2,786 2,211 2,257 2,354 2,621 2.786 2,794 2,909 39 Peru 997 1,829 2,720 2,463 2,541 2,563 2.629 2.720 2,867 2,944 40 Uruguay 503 466 589 562 530 547 551 589 623 766 41 Venezuela l,832r 1,661 1,702 1,728 1,513 1,636 1,626 1,702 1,598 1,451 42 Other 3,663r 3,376 3,174r 3,905 3,960 3,628 3,351 3,174 3,693 3,289 43 Asia 107,800r 115,336r 122,536r 113,787r 113,582r 120,007r 120,285 122,536 121,359 127,102 China 44 Mainland 836 1,023 1,401 2,033 1,700 1,420 1,292 1,401 2,035 1,766 45 Taiwan 1,448 1,713 1,894 1,023 1,700 1,305 1,413 1,894 1,249 1,201 46 Hong Kong 9,222r 12,821 12,802 12,464 13,882 12,984r 13,550 12,802 11,764 11,880 47 India 994 1,846 1,946 2,118 1,975 2,181r 2,027 1,946 1,824 1,957 48 Indonesia l,472r 1,696 l,759r 1,572 1,653 1,577 1,636 1,759 1,746 1,893 49 Israel 688 739 633 667 576 1,017 624 633 692 617 50 Japan 59,569r 61,468 59,967 54,583 52,326 59,343 59.886 59,967 59,843 64,175 51 Korea (South) 10,286 13,975r 18,961 17,519r 17,488r 16,947r 18,080 18,961 20,214 20.077 52 Philippines 663r 1,318 1,697 1,205 1,255 1,335 1.519 1,697 1,492 1,794 53 Thailand 2,902 2,612 2,680 2,864 2,705 2,699 2,820 2,680 3,003 3,092 54 Middle Eastern oil-exporting countries4 . . 13,982r 9,639 10,424 9,489 10,111 11,372 10,311 10.424 8,582 8,889 55 Other 5,738r 6,486 8,372 8,250 8,211 7,827 7,127 8.372 8,915 9,761 56 Africa 3,053r 2,742 2,777r 2,735 2,757 2,638 2,557 2,777 2,731 2,772 57 Egypt 225 210 247 221 241 204 212 247 246 245 58 Morocco 429 514 524 577 565 543 587 524 489 522 59 South Africa 674r 465 584 512 572 614 551 584 572 564 60 Zaire 2 1 0 11 1 1 0 0 0 0 61 Oil-exporting countries5 856 552 420 462 429 414 427 420 408 474 62 Other 867 1,000 l,002r 952 949 862 780 1,002 1,016 967 63 Other 3,145r 2,467 5,710r 3,049 5,306 5,346 6,037 5,710 5,144 5,192 64 Australia 2,192r 1,622 4,577 2,439 3,641 3,798 4,336 4,577 3,743 3,176 65 Other 953r 845 l,133r 610 1,665 1,548 1,701 1.133 1,401 2,016 66 Nonmonetary international and regional organizations6. . . 4,591 1,931 2,604 2,032 1,698 3,129r 1,473 2,604 1,772 2,255 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

A56 International Statistics O June 1997 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1996r 1997 Type of claim 1994r 1995 1996r Aug. Sept. Oct. Nov. Dec. Jan. Feb.p 1 Total 601,814 655,211r 744,135 688,239 744,135 2 Banks' claims 485,432 532,444r 600,691 546,532 544,646 563,454 574,920 600,691 608.478 634,668 3 Foreign public borrowers 23,416 22,518 22,220 19,095 22,924 25,185 20,420 22,220 26,039 24,758 4 Own foreign offices2 283,015 307,427 342,511 299,830 311,588 330,377 335,089 342,511 331,276 361,490 5 Unaffiliated foreign banks 110,410 101,595 113,521 111,780 109,546 108,701 107,928 113,521 121,200 118,055 6 Deposits 59,368 37,771r 33,863 39,461 35,377 36,267 32,427 33,863 39,268 38,132 7 Other 51,042 63,824r 79,658 72,319 74,169 72,434 75,501 79,658 81,932 79,923 8 All other foreigners 68,591 100,904r 122,439 115,827 100,588 99,191 111,483 122,439 129,963 130,365 9 Claims of banks' domestic customers3 116,382 122,767 143,444 143,593 143,444 10 Deposits 64,829 58,519 77,650 80,695 77,650 11 Negotiable and readily transferable instruments 36,111 44,161 50,659 46,491 50,659 12 Outstanding collections and other claims 15,442 20,087 15,135 16,407 15,135 MEMO 13 Customer liability on acceptances 8,427 8,410 9,624 9,396 9,624 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 32,796 30,717 42,679 33,527 34,125 40,326 41,581 42,679 43,452 47,185 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 U.S. Dollars Millions of dollars, end of period Maturity, by borrower and area' Sept.r 1 Total 202,566 202,282 224,932 233,435r 232,997 257,939 By borrower 2 Maturity of one year or less 172,662 170,411 178,857 193,870 185,881 189,047 211,721 3 Foreign public borrowers 17,828 15,435 14,995 19,645r 14,982r 16,003 15,390 4 All other foreigners 154,834 154,976 163,862 174,225r 170,899r 173,044 196,331 5 Maturity of more than one year 29,904 31.871 46,075 39,565r 42,653r 43,950 46,218 6 Foreign public borrowers 10,874 7,838 7,522 8,131 8,126 6,922 6,815 7 All other foreigners 19,030 24,033 38.553 31,434r 34,527r 37,028 39,403 By area Maturity of one year or less 8 Europe 57,413 56,381 55,622 57,979 57,138 58,545 55,499 9 Canada 7.727 6,690 6,751 5,470 6,806 8,811 8,339 10 Latin America and Caribbean 60,490 59,583 72,504 84,385 78,622 79,622 103,253 11 Asia 41,418 40,567 40,296 40,312 38,078 37,199 38,131 12 Africa 1,820 1.379 1,295 1,326 1,279 1,320 1,316 13 All other3 3,794 5,811 2,389 4,398 3,958 3,550 5,183 Maturity of more than one year 14 Europe 5,310 4,358 4,995 6,835 8,193 7,117 6,963 15 Canada 2,581 3,505 2,751 2,563 3,689 3,533 2,645 16 Latin America and Caribbean 14,025 15,717 27,681 19,416r 19,564r 21,382 24,917 17 Asia 5,606 5,323 7,941 8,371r 9,201r 9,808 9,391 18 Africa 1,935 1,583 1,421 1,449 1,410 1,349 1,361 19 All other3 447 1,385 1,286 931 596 761 941 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

Bank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period Area or country Sept. Sept. 1 Total 344.7 409.5r 499.5r 545.01" 531.9r 535.3r 551.9 574.6 609.2 586.0 2 G-10 countries and Switzerland 131.3 161.9r 191.2r 212.1r 206.5r 203 Dr 206.0 203.4 223.3 220.0 3 Belgium and Luxembourg 5.6 7.4 7.2r 10.4r 9.7r 11.0r 13.6 11.0 7.9 11.3 4 France 15.3 12.0 19.1 19.9 19.9 18.0 19.4 17.9 18.0 17.4 5 Germany 9.1 12.6 24.7 31.2 30.0 27.5 27.3 31.5 31.4 33.9 6 Italy 6.5 7.7 11.8 10.6 10.7 12.6 11.5 13.2 14.9 15.2 7 Netherlands 2.8 4.7 3.6 3.5 4.3 4.5r 3.7 3.0 4.7 5.9 8 Sweden 2.3 2.7 2.7 3.1 3.1 2.9 2.7 3.3 2.7 3.0 9 Switzerland 4.8 5.9 5.1 5.7 6.2 6.6 6.7 5.2 6.3 6.2 10 United Kingdom 59.7 84.4r 85.8r 90.1 87.1 80.4r 82.4 84.7 101.6 90.5 11 Canada 6.3 6.9 10.0 10.8 11.3 12.9r 10.3 10.8 12.2 14.8 12 Japan 18.8 17.6 21. r 26.7r 24.4r 26.6r 28.5 22.7 23.6 21.7 13 Other industrialized countries 24.0 26.5r 45.7r 44 4r 43.3 5O.5r 50.2 61.3 55.5 62.1 14 Austria 1.2 .7 1.1 .9 .7 1.2 .9 1.3 1.2 1.0 15 Denmark .9 1.0 1.3 1.7 1.1 1.8 2.6 3.4 3.3 1.7 16 Finland .7 .4 .9 1.1 .5 .7 .8 .7 .6 .6 17 Greece 3.0 3.2 4.5 4.9 5.0 5.1 5.7 5.6 5.6 6.1 18 Norway 1.2 1.7 2.0 2.4 1.8 2.3 3.2 2.1 2.3 3.0 19 Portugal .4 .8 1.2 1.0 1.2 1.9 1.3 1.6 1.6 1.4 20 Spain 8.9 9.9 13.6 14.1 13.0r 13.3 11.6 17.5 13.6 16.1 21 Turkey 1.3 2.1 1.6 1.4 1.4 2.0 1.9 2.0 2.3 2.8 22 Other Western Europe 1.7 3.2r 3.2r 2.8r 2.9r 3.3r 4.7 3.8 3.4 4.8 23 South Africa 1.7 1.1 1.0 1.5 1.4 1.3 1.2 1.7 2.0 1.7 24 Australia 2.9 2.3 15.4 12.6 14.3 17.4 16.4 21.7 19.6 22.8 25 OPEC2 15.8 17.6r 24. lr 19.5 20.3 22.7r 22.1 21.2 20.1 19.2 26 Ecuador .6 .5 .5 .5 .7 .7 .7 .8 .9 .9 27 Venezuela 5.2 5.1 3.7 3.5 3.5 3.0 2.7 2.9 2.3 2.3 28 Indonesia 2.7 3.3 3.8 4.0 4.1 4.4 4.8 4.7 4.9 5.4 29 Middle East countries 6.2 7.6r 15.3r 10.8r 11.5r 13.9r 13.3 12.3 11.5 10.1 30 African countries 1.1 1.2 .9 .7 .6 .6 .6 .6 .5 .4 31 Non-OPEC developing countries 83.2r 96.0 103.7r 104. lr 118.6 126.4 124.1 Latin America 32 Argentina 6.6 7.7 11.2 11.4 12.3 10.9 12.9 12.7 14.1 15.0 33 Brazil 10.8 12.0 8.4 9.2 10.0 13.6 13.7 18.3 21.7 17.8 34 Chile 4.4 4.7 6.1 6.4 7.1 6.4 6.8 6.4 6.7 6.6 35 Colombia 1.8 2.1 2.6 2.6 2.6 2.9 2.9 2.9 2.8 3.1 36 Mexico 16.0 17.9r 18.4 17.9 17.6 16.3 17.3 16.1 15.4 16.1 37 Peru .5 .4 .6 .8 .7 .8 .9 1.2 1.3 38 Other 2.6 3.1 2.4 2.6 2.6 2.8 3.1 3.0 3.0 Asia China 39 Mainland .7 2.0 1.1 1.1 1.4 1.7 1.8 3.3 2.9 2.6 40 Taiwan 5.2 7.3 9.2 8.5 9.0 9.0 9.4 9.7 9.8 10.3 41 India 3.2 3.2 4.2 3.8 4.0 4.4 44 4.7 4.2 3.8 42 Israel .4 .5 .4 .6 .7 .5 .5 .5 .6 .5 43 Korea (South) 6.6 6.7 16.2 16.9 18.7 18.0 19.1 19.3 21.7 21.9 44 Malaysia 3.1 4.4 3.1 3.9 4.1 4.3 4.4 5 2 5.3 5.5 45 Philippines 3.6 3.1 3.3 3.0 3.6 3.3 4.1 3^9 4.7 5.4 46 Thailand 2.2 3.1 2.1 3.3 3.8 3.9 49 5.2 5.4 4.8 47 Other Asia 3.1 3.1 4.7 4.9 3.5 3.7 4.5 4.3 4.8 4.1 Africa 48 Egypt .2 .4 .4 .4 .4 .4 .6 49 Morocco .6 .7 .6 .9 .9 .7 .7 50 Zaire .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 1.0 .8 .7 .6 .8 .9 1.0 52 Eastern Europe 3.1 3.2 2.3 1.8 3.4 4.2 6.2 5.0 5.2 53 Russia4 1.9 1.6 .7 .4 .6 1.0 1.4 1.0 1.8 54 Yugoslavia5 .6 .6 .5 .4 .3 .4 .3 .3 .3 .3 55 Other .6 .9 1.4 1.2 LO 2.3 2.8 4.5 3.7 3.1 56 Offshore banking centers 58.1 73.5r 72.9r 85.7r 83.8r 87.5r 99.2 101.3 106.2 105.3 57 Bahamas 6.9 10.9 10.2 12.5 8.4 12.6 11.0 13.9 17.3 14.2 58 Bermuda 6.2 8.9 8.4 8.7 8.4 6.1 6.3 5.3 4.1 4.0 59 Cayman Islands and other British West Indies 21.5 18.4r 21.4r 20.7r 25.3r 25.r 32.4 28.8 26.1 32.0 60 Netherlands Antilles 1.1 2.6 1.3 .9 2.4 5.3r 9.9 10.7 13.0 11.5 61 Panama6 1.9 2.4 1.3 1.1 1.2r 1.3 1.4 1.6 1.7 1.7 62 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 63 Hong Kong 13.9 18.8r 20.0r 22.5 23.1 23.7r 25.0 25.3 27.8 26.2 64 Singapore 6.5 11.2 10.1 19.2 14.8 13.3 13.1 15.4 15.9 15.4 65 Other^ .0 .1 .1 .0 .0 .1 .1 .1 .1 .1 66 Miscellaneous and unallocated8 39.7 43.6r 66.7 82.3r 72.3 63.9r 57.3 62.2 72.3 49.6 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-jiata 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 8. Includes New Zealand, Liberia, and international and regional organizations. are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • June 1997 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period Type of liability, and area or country Sept. Sept. Dec? 1 Total 50,597 54,309 46,448 47,673 46,448 49,907 48,990 51,105 53,658 2 Payable in dollars 38,728 38,298 33,903 33,908 33,903 36,273 35,385 36,402 38,372 3 Payable in foreign currencies . . 11,869 16,011 12,545 13,765 12,545 13,634 13,605 14,703 15,286 By type 4 Financial liabilities 29,226 32,954 24,241 26,237 24,241 26,570 24,844 25,107 25,568 5 Payable in dollars 18,545 18,818 12,903 13,872 12,903 13,831 12,212 11,256 11,162 6 Payable in foreign currencies 10,681 14,136 11,338 12,365 11,338 12,739 12,632 13,851 14,406 7Commercial liabilities 21,371 21,355 22,207 21,436 22,207 23,337 24,146 25,998 28,090 8 Trade payables L. '.) 8,802 10,005 11,013 10,061 11,013 10,815 11.081 11,605 12,519 9 Advance receipts and other liabilities 12,569 11,350 11,194 11,375 11,194 12,522 13,065 14,393 15,571 10 Payable in dollars 20,183 19,480 21,000 20,036 21,000 22,442 23,173 25,146 27,210 11 Payable in foreign currencies 1,188 1,875 1,207 1,400 1,207 895 973 852 By area or country Financial liabilities 12 Europe 18,810 21,703 15,622 16,401 15,622 16,950 16,434 16,054 16,200 13 Belgium and Luxembourg 175 495 369 347 369 483 498 547 632 14 France 2,539 1,727 999 1,365 999 1,679 1,011 1,220 1,091 15 Germany 975 1,961 1,974 1,670 1,974 2,161 1,850 2,276 1,834 16 Netherlands 534 552 466 474 466 479 444 519 556 17 Switzerland 634 688 895 948 895 1,260 1,156 830 699 18 United Kingdom 13,332 15,543 10,138 10,518 10,138 10,246 10,790 9,821 10,202 859 629 632 797 632 1,166 951 881 1,353 20 Latin America and Caribbean . . 3,359 2,034 1,783 1,904 1,783 1,876 969 1,018 1,299 21 Bahamas 1,148 101 59 79 59 78 31 50 46 22 Bermuda 0 80 147 144 147 126 28 25 50 23 Brazil 18 207 57 111 57 57 8 9 14 24 British West Indies 1,533 998 866 930 866 946 826 764 1,030 25 Mexico 17 0 12 3 12 16 11 4 9 26 Venezuela 5 5 3 2 2 1 0 0 27 Asia 5,956 8,403 5,988 6,947 5,988 6,390 6,351 6,927 6,354 28 Japan 4,887 7,314 5,436 6,308 5,436 5.980 6,051 6,602 5,846 29 Middle Eastern oil-exporting countries1 . 23 35 27 25 27 26 26 25 25 30 Africa 133 135 150 149 150 131 72 132 22 31 Oil-exporting countries2 123 123 122 122 122 122 61 121 0 32 All other3 67 95 340 Commercial liabilities 33 Europe 6,827 6,773 7,700 7,263 7,700 8,425 7,916 8,654 9,584 34 Belgium and Luxembourg 239 241 331 349 331 370 326 427 479 35 France 655 728 481 528 481 648 678 657 679 36 Germany 684 604 767 660 767 867 839 959 972 37 Netherlands 688 722 500 566 500 659 617 668 736 38 Switzerland 375 327 413 255 413 428 516 409 571 39 United Kingdom 2,039 2,444 3,568 3,351 3,568 3,525 3,266 3,664 4,293 40 Canada 879 1,037 1,040 1,219 1,040 959 998 1,094 1,001 41 Latin America and Caribbean 1,658 1,857 1,740 1,607 1,740 2,110 2,301 2,306 2,440 42 Bahamas 21 19 1 1 1 28 35 33 46 43 Bermuda 350 345 205 219 205 570 509 355 296 44 Brazil 214 161 98 143 98 128 119 159 162 45 British West Indies 27 23 56 5 56 10 10 15 14 46 Mexico 481 574 416 357 416 468 475 441 639 47 Venezuela 123 276 221 175 221 243 283 332 318 48 Asia 10,980 10,741 10,421 10,275 10,421 10,474 11,389 12,229 13,199 49 Japan 4,314 4,555 3,315 3,475 3,315 3,725 3,943 4,150 4,551 50 Middle Eastern oil-exporting countries' 1,534 1,576 1,912 1,647 1,912 1,747 1,784 1,951 2,165 51 Africa ^ 453 428 619 589 619 708 924 1,013 1,027 52 Oil-exporting countries2 167 256 254 241 254 254 462 490 532 53 Other3 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

Nonbank-Reported Data A5( 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1995 1996 Sept. Dec. Mar. June Sept. Dec.p 1Total 49,159 57,888 52,509 53,424 52,509 55,406 58,845 57,230 61,432 2Payable in dollars 45.161 53,805 48,711 49,696 48,711 51.007 54,000 52,555 56,908 3Payable in foreign currencies 3,998 4,083 3,798 3,728 3,798 4,399 4,845 4,675 4,524 By type 4 Financial claims 27,771 33,897 27,398 29.891 27,398 30,772 33,994 32,857 33,647 5 Deposits 15.717 18.507 15,133 17,974 15,133 17,595 18,364 18,941 20,223 6 Payable in dollars 15,182 18,026 14,654 17,393 14.654 17,044 17,926 18,317 19.533 7 Payable in foreign currencies 535 481 479 581 479 551 438 624 690 8 Other financial claims 12,054 15.390 12,265 11.917 12,265 13,177 15,630 13,916 13,424 9 Payable in dollars 10,862 14,306 10,976 10,689 10.976 11,290 13,233 11,827 11,629 10 Payable in foreign currencies 1,192 1,084 1,289 1,228 1,289 1.887 2,397 2,089 1,795 11Commercial claims 21,388 23,991 25,111 23,533 25,111 24,634 24,851 24,373 27,785 12 Trade receivables 18.425 21.158 22,998 21,409 22,998 22.123 22,276 22,010 25 225 13 Advance payments and other claims 2,963 2,833 2,113 2,124 2.113 2,511 2,575 2.363 2,560 14 Payable in dollars 19,117 21.473 23,081 21,614 23,081 22.673 22,841 22.411 25,746 15 Payable in foreign currencies 2 271 2518 2 030 1 919 1 961 2010 1 962 2 039 By area or country Financial claims 16 Europe 7,299 7,936 7,609 7.840 7,609 8,929 9,241 8,500 7,746 17 Belgium and Luxembourg 134 86 193 160 193 159 151 126 185 18 France 826 800 803 753 803 1,015 679 733 694 19 Germany 526 540 436 301 436 320 296 272 276 20 Netherlands 502 429 517 522 517 486 488 520 493 21 Switzerland 530 523 498 530 498 470 461 431 473 22 United Kingdom 3,585 4,649 4,303 4,924 4,303 5,568 6,169 5,333 4,600 23 Canada 2,032 3,581 2,851 3,526 2,851 5,269 4,773 4,502 3,445 24 Latin America and Caribbean 16.224 19,536 14,500 15,345 14,500 13,827 17,644 17,184 19,501 25 Bahamas 1,336 2,424 1,965 1.552 1,965 1,538 2,168 1,746 1,452 26 Bermuda 125 27 81 35 81 77 84 113 140 27 Brazil 654 520 830 851 830 1,019 1,242 1,417 1,453 28 British West Indies 12,699 15,228 10,393 11,816 10.393 10,100 13,024 12,809 15,182 29 Mexico 872 723 554 487 554 461 392 411 455 30 Venezuela 161 35 32 50 32 40 17 23 31 Asia 1,657 1,871 1,579 2,160 1,579 1,890 1,571 1,826 2,213 32 Japan 892 953 871 1,404 871 1.171 852 1,001 1,035 33 Middle Eastern oil-exporting countries1 3 141 3 4 3 13 9 13 22 34 Africa 99 373 276 188 276 277 197 176 173 35 Oil-exporting countries2 1 0 5 6 5 5 5 13 14 36 All other3 460 600 583 832 583 580 568 669 569 Commercial claims f~^ 37 Europe 9.105 9,540 9,824 8,862 9,824 9,776 9.812 9,162 10,208 38 Belgium and Luxembourg 184 213 231 224 231 247 239 213 221 39 France 1,947 1.881 1,830 1,706 1,830 1.803 1,658 1,525 1,641 40 Germany 1,018 1,027 1,070 997 1.070 1.410 1,335 1,239 1,301 41 Netherlands 423 311 452 338 452 442 481 420 539 42 Switzerland 432 557 520 438 520 579 602 588 620 43 United Kingdom 2 377 2 556 2 656 2 479 2 656 2 607 2 651 2514 2 907 44 Canada 1,781 1,988 1,951 1,971 1,951 2,045 2,074 2,032 2,147 45 Latin America and Caribbean 3,274 4,117 4,364 4,359 4,364 4,151 4,340 4,156 4,985 46 Bahamas 11 9 30 26 30 30 28 14 35 47 Bermuda 182 234 272 245 272 273 264 290 264 48 Brazil 460 612 898 745 898 809 837 857 1,160 49 British West Indies 71 83 79 66 79 106 103 119 190 50 Mexico 990 1,243 993 1,026 993 870 1,021 901 1,094 51 Venezuela 293 348 285 325 285 308 313 302 341 52 6,014 6,982 7,312 6,826 7,312 7,100 6,883 7,216 8,364 53 Japan 2,275 2,655 1,870 1,998 1,870 2,010 1,877 1,918 2,065 54 Middle Eastern oil-exporting countries' 704 708 974 775 974 1,024 879 930 955 55 Africa 493 454 654 544 654 667 688 716 719 56 Oil-exporting countries2 72 67 87 74 87 107 83 142 165 57 Other 721 910 1,006 971 1,006 895 1,054 1,091 1,362 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

A60 International Statistics • June 1997 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1996r Transaction, and area or country 1995 Ja F n e . b — . Aug. Sept. Oct. Nov. Feb.p U.S. corporate securities STOCKS 1 Foreign purchases 462,950 623,760 146,055 46,136 42,599 57,758 65,571 57,051 73,003 73,052 451,710 610,332 139,330 44,071 42,550 56,751 63,436 56,629 70,132 69,198 2 Foreign sales 11,240 13,428 6,725 2,065 1,007 2,135 2,871 3,854 3 Net purchases, or sales (—) .... 11,445 13,502 6,726 2,051 75 1,013 2,138 451 2,872 3,854 4 Foreign countries 4,912 6,546 8,716 3,310 200 447 270 -229 3,238 5,478 5 Europe -1,099 -2,354 959 -209 -109 -219 -248 -1,064 532 427 6 France -1,837 1,104 2,045 83 -85 116 -5 -18 959 1,086 7 Germany 3,507 1,389 -12 219 -13 -132 163 -160 322 -334 8 Netherlands -2,283 2,710 1,068 538 -123 144 686 -470 289 779 9 Switzerland 8,066 4,119 2,783 2,551 475 909 658 1,487 -167 2,950 10 United Kingdom -1,517 2,221 730 -250 191 742 704 -9 422 308 11 Canada 5,814 5,563 1,770 1,046 252 -653 964 994 1,364 406 1 1 2 3 M La i t d in d le A m Ea e s r t i 1 ca and Caribbean ... 2 -3 ,5 3 0 7 3 -1, 9 5 0 9 6 8 -4,72 24 3 -1 - , 1 6 7 4 9 2 - - 1 5 5 7 3 5 51 1 1 5 - 2 5 6 3 7 -232 -2,1 - 7 1 5 -2,5 2 4 5 8 14 Other Asia -2,725 -372 -2,059 -791 104 313 -579 -343 -1,559 -500 15 Japan 2 -81 50 -33 -6 5 -23 10 -8 58 16 Africa 68 -55 159 -201 166 -54 9 -76 32 127 17 Other countries 18 Nonmonetary international and -74 regional organizations .... BONDS2 293,533 421,474 96,054 32,333 37,424 40,668 46,440 43,054 48,955 47,099 19 Foreign purchases 206,951 294,536 20,911 23,858 34,235 32,825 36,603 36,618 73,221 30,277 20 Foreign sales 86,582 126,938 11,422 13,566 12,205 10,229 12,352 10,481 22,833 10,391 21 Net purchases, or sales (-) .... 87,036 126,767 11,443 13,568 12,215 10,229 12,356 10,468 22,824 10,406 22 Foreign countries 70,318 74,997 6,174 8,367 5,578 4,770 6,620 8,411 23 Europe 5 1 , , 9 14 3 3 8 5 5 , , 1 1 6 7 4 4 15, 1 0 7 3 6 1 6 1 2 6 6 9 5 38 6 1 5 6, 7 2 1 7 3 9 23 7 7 2 - 2 2 5 7 2 -27 7 4 3 1 1 0 8 3 4 24 France 1,463 2,440 -90 146 244 -260 533 148 337 125 25 Germany 494 882 462 125 403 93 -132 -30 -58 -189 26 Netherlands 57,591 54,644 -247 4,295 6,248 59 4,232 4,498 6,443 8,216 27 Switzerland 2,569 4,197 14,659 474 122 5,316 402 391 379 1,055 28 United Kingdom 6,141 22,901 1,434 1,272 1,144 181 2,201 2,940 3,189 -623 29 Canada 1,869 1,637 2,566 201 65 2,954 513 412 480 388 3 3 0 1 L M a i t d in d le A m Ea e s r t i 1 ca and Caribbean . .. 5 2 , ,2 6 5 5 0 9 2 1 2 3 , , 7 6 6 9 5 4 2, 8 4 6 7 8 9 2 3 , , 5 2 8 4 3 3 3 1 , , 6 9 8 6 1 3 2 7 1 8 1 7 2 3 , , 2 3 4 8 5 4 1 1, , 3 6 9 4 5 4 1 1 , , 6 5 6 9 1 7 8 1 1 2 8 2 32 Other Asia 234 600 1,719 17 109 1,037 132 79 89 243 33 Japan 246 -330 332 62 45 5 -7 -62 176 34 Africa 114 -51 35 Other countries 36 Nonmonetary international and -454 -21 -2 -15 regional organizations .... Foreign securities 37 Stocks, net purchases, or sales (-) -50,291 -58,606 -7,982 -1,223 -1,825 -2,473 -2,161 -5,902 -3,643 -4,339 38 Foreign purchases 345,540 456,826 96,998 34,016 31,227 40,185 46,838 41,850 47,013 49,985 39 Foreign sales 395,831 515,432 104,980 35,239 33,052 42,658 48,999 47,752 50,656 54,324 40 Bonds, net purchases, or sales (—) -48,405 -48,793 -2,192 -5,339 -5,419 -5,948 -2,973 -10,947 -822 -1,370 41 Foreign purchases 889,541 1,118,678 219,646 84,386 113,089 117,032 104,662 99,095 109,329 110,317 42 Foreign sales 937,946 221,838 89,725 118,508 122,980 107,635 110,042 110,151 111,687 1,167,471 43 Net purchases, or sales (-), of stocks and bonds -98,696 -10,174 -6,562 -7,244 -8,421 -5,134 -16,849 -4,465 -5,709 -107,399 44 Foreign countries -97,891 -10,304 -6,420 -6,718 -8,443 -5,166 -16,838 -4,513 -5,791 -106,528 45 Europe -48,125 -57,432 -1,131 -5,324 -5,518 -6,318 -3,174 -10,740 641 -1,772 46 Canada -7,812 -6,279 2,311 882 210 -642 -667 -2,269 516 1,795 47 Latin America and Caribbean -7,634 -9,503 -5,567 -1,620 -2,264 886 3,571 -2,020 -2,267 -3,300 48 Asia -34,056 -27,745 -5,164 -1,016 902 -796 -4,135 -773 -2,829 -2,335 49 Japan -25,072 -5,888 -2,583 486 2,457 696 -633 2,218 -332 -2,251 50 Africa -327 -1,529 27 -25 -49 -468 -115 36 34 -7 51 Other countries 63 -4,040 -780 683 1 -1,105 -646 -1.072 -172 52 Nonmonetary international and regional organizations -805 -871 130 -142 -526 22 32 -11 48 82 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

Securities Holdings and Transactions/Interest and Exchange Rates A 61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales ( —) during period 1996 Area or country 1996r J F a e n b . . - Aug. Sept. Oct. Nov.r Dec/ Jan. Feb.p 1 Total estimated 134,115 244,725 47,791 12,340 14,738 24,321 21,283 47,662 22,225 25,566 2 Foreign countries 133,676 246,567 47,339 12,304 14,895 23,784 22,475 46,519 22,691 24,648 3 Europe 49,976 118,345 15,774 7,103 13,104 12,992 9,312 14,778 4,410 11,364 4 Belgium and Luxembourg 591 1,486 697 73 489 -320 335 370 38 659 5 Germany 6,136 17,647 -671 467 -264 2,813 3,024 1,499 556 -1,227 6 Netherlands 1,891 -582 -125 -237 116 -423 676 855 -671 546 7 Sweden 358 2,343 -601 -282 431 169 -52 26 -255 -346 8 Switzerland -472 327 1,233 -730 718 -599 -207 -517 241 992 9 United Kingdom 34,754 65.381 10,742 7,623 7,977 10,121 801 7,265 2,914 7,828 10 Other Europe and former U.S.S.R 6,718 31,743 4,499 189 3,637 1,231 4,735 5,280 1,587 2,912 11 Canada 252 2,389 571 -215 -1,744 -23 -780 667 -96 12 Latin America and Caribbean 48,609 25,379 9,728 -491 -19,359 1,479 12,745 15,228 10,243 -515 13 Venezuela -2 -69 56 146 -45 -29 -68 212 -3 59 14 Other Latin America and Caribbean 25,152 13,026 8,295 3,088 -1,547 926 2,715 5,292 6,461 1,834 15 Netherlands Antilles 23,459 12,422 1,377 -3,725 -17,767 582 10,098 9,724 3,785 -2,408 16 Asia 32,467 98,001 22,898 6,327 20,713 9,889 1,337 16,744 8,540 14,358 17 Japan 16,979 41,390 10,792 2,924 4,875 6,629 1,219 7,593 4,264 6,528 18 Africa 1,464 1,085 86 163 30 -13 -12 -2 29 57 19 Other 908 1,368 -1,718 190 622 1,181 551 -1,198 -520 20 Nonmonetary international and regional organizations 439 -1,842 452 36 -157 537 -1,192 1,143 -466 918 21 International 9 -1,390 46 -287 -52 338 -1,146 773 -484 530 22 Latin American regional 261 -779 361 347 -90 -4 -2 252 -1 362 MEMO 23 Foreign countries 133,676 246,567 47,339 12,304 14,895 23,784 22,475 46,519 22,691 24,648 24 Official institutions 39,631 86,875 18,075 3,587 17,188 4,838 3,840 13,662 8,022 10,053 25 Other foreign 94,045 159,692 29,264 8,717 -2,293 18,946 18,635 32,857 14,669 14,595 Oil-exporting countries 26 Middle East2 3,075 10,227 3,761 323 4,969 -1,876 332 2,279 1,242 2,519 27 Africa3 2 1 -1 1 0 0 0 0 -1 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1 Percent per year, averages of daily figures Rate on Apr. 30, 1997 Rate on Apr. 30, 1997 Country Country Percent e M ffe o c n ti t v h e Percent e M ffe o c n ti t v h e Austria 2.5 Apr. 1996 Germany 2.5 Apr. 1996 Belgium 2.5 Apr. 1995 Italy 6.75 Jan. 1997 Canada 3.25 Nov. 1996 Japan .5 Sept. 1995 Denmark 3.25 Nov. 1996 Netherlands 2.5 Apr. 1996 France2 3.10 Jan. 1997 Switzerland 1.0 Sept. 1996 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 1996 1997 Type or country 1994 1995 1996 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Eurodollars 4.63 5.93 5.38 5.41 5.38 5.43 5.44 5.36 5.50 5.70 2 United Kingdom 5.45 6.63 5.99 5.93 6.27 6.31 6.28 6.16 6.17 6.35 3 Canada 5.57 7.14 4.49 3.54 3.05 3.16 3.18 3.16 3.25 3.49 4 Germany 5.25 4.43 3.21 3.04 3.09 3.13 3.03 3.08 3.16 3.14 5 Switzerland 4.03 2.94 1.92 1.56 1.80 1.99 1.72 1.61 1.77 1.76 6 Netherlands 5.09 4.30 2.91 2.82 2.92 2.99 2.94 2.95 3.12 3.15 7 France 5.72 6.43 3.81 3.39 3.35 3.33 3.23 3.22 3.26 3.28 8 Italy 8.45 10.43 8.79 7.99 7.40 7.22 7.21 7.33 7.40 7.09 9 Belgium 5.65 4.73 3.19 3.02 3.03 3.01 3.00 3.10 3.40 3.22 10 Japan 2.24 1.20 .58 .52 .51 .51 .53 .54 .55 .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

A62 International Statistics D June 1997 3.28 FOREIGN EXCHANGE RATES' Currency units per dollar except as noted Country/currency unit Apr. 1 Australia/dollar2 73.161 74.073 78.283 79.684 79.661 77.756 76.768 78.747 77.868 2 Austria/schilling 11.409 10.076 10.589 10.640 10.923 11.289 11.785 11.932 12.050 3 Belgium/franc 33.426 29.472 30.970 31.153 31.992 33.087 34.556 34.961 35.328 4 Canada/dollar 1.3664 1.3725 1.3638 1.3381 1.3622 1.3494 1.3556 1.3725 1.3942 5 China, P.R./yuan 8.6397 8.3700 8.3389 8.3294 8.3290 8.3260 8.3227 8.3258 8.3257 6 Denmark/krone 6.3561 5.5999 5.8003 5.8053 5.9428 6.1199 6.3867 6.4628 6.5226 7 Finland/markka 5.2340 4.3763 4.5948 4.5512 4.6388 4.7766 4.9792 5.0632 5.1375 8 France/franc 5.5459 4.9864 5.1158 5.1156 5.2427 5.4145 5.6536 5.7154 5.7672 9 Germany/deutsche mark . 1.6216 1.4321 1.5049 1.5118 1.5525 1.6047 1.6747 1.6946 1.7119 10 Greece/drachma 242.50 231.68 240.82 238.38 245.70 251.54 262.42 266.86 270.58 11 Hong Kong/dollar 7.7290 7.7357 7.7345 7.7323 7.7355 7.7397 7.7474 7.7460 7.7483 12 India/rupee.. 31.394 32.418 35.506 35.839 35.882 35.904 35.891 35.885 35.828 13 Ireland/pound2 149.69 160.35 159.95 166.45 165.93 163.11 158.60 156.57 155.05 14 Italy/lira 1,611.49 1.629.45 1,542.76 1,513.66 1,528.44 1,567.91 1,655.00 1,691.21 1,694.52 15 Japan/yen 102.18 93.96 108.78 112.30 113.98 117.91 122.96 122.77 125.64 16 Malaysia/ringgit 2.6237 2.5073 2.5154 2.5234 2.5251 2.4900 2.4866 2.4773 2.5028 17 Netherlands/guilder... 1.8190 1.6044 1.6863 1.6958 1.7420 1.8023 1.8812 1.9071 1.9256 18 New Zealand/dollar2. . 59.358 65.625 68.765 70.975 70.501 70.088 69.084 69.789 69.220 19 Norway/krone 7.0553 6.3355 6.4594 6.3554 6.4716 6.4589 6.6323 6.7915 6.9932 20 Portugal/escudo 165.93 149.88 154.28 152.83 156.54 160.53 168.24 170.35 171.77 21 Singapore/dollar 1.5275 1.4171 1.4100 1.4025 1.3999 1.4061 1.4193 1.4378 1.4417 22 South Africa/rand 3.5526 3.6284 4.3011 4.6577 4.6873 4.6402 4.4557 4.4319 4.4417 23 South Korea/won 806.93 772.69 805.00 830.56 841.92 854.07 868.39 882.62 895.57 24 Spain/peseta 133.88 124.64 126.68 127.28 130.69 134.79 141.85 143.72 144.48 25 Sri Lanka/rupee 49.170 51.047 55.289 56.987 56.730 57.278 57.772 57.873 58.826 26 Sweden/krona 7.7161 7.1406 6.7082 6.6269 6.8283 7.0692 7.4069 7.6502 7.6942) 27 Switzerland/franc 1.3667 1.1812 1.2361 1.2752 1.3290 1.3913 1.4541 1.4634 i.46re 28 Taiwan/dollar 26.465 26.495 27.468 27.522 27.516 27.477 27.554 27.551 27.629 2 3 9 0 T U h n a it i e la d n d K /b in a g h d t om/pound2v . 1 2 5 5 3 . . 1 1 6 9 1 1 2 5 4 7 . . 9 8 2 5 1 1 2 5 5 6 . .0 35 7 9 1 2 6 5 6 . .2 45 3 9 1 2 6 5 6. . 3 60 9 0 1 2 6 5 5 . .8 72 5 6 1 2 6 5 2 . . 9 5 5 6 7 1 2 6 5 0 . .9 95 6 9 1 2 6 6 2 . . 0 9 6 3 4 MEMO 31 United States/dollar3 86.97 88.71 91.01 94.52 95.60 96.39 1. Averages of certified noon buying rates in New York for cable transfers. Data in this table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, . 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

A63 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 1997 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks March 31, 1996 November 1996 A96 June 30, 1996 November 1996 A100 September 30, 1996 February 1997 A64 December 31, 1996 May 1997 A64 Terms of lending at commercial banks May 1996 August 1996 A64 August 1996 November 1996 A104 November 1996 February 1997 A68 February 1997 May 1997 A68 Assets and liabilities of U.S. branches and agencies of foreign banks March 31, 1996 September 1996 A64 June 30, 1996 November 1996 A108 September 30, 1996 February 1997 A72 December 31, 1996 May 1997 A72 Pro forma balance sheet and income statements for priced service operations September 30, 1995 January 1996 A68 March 31, 1996 July 1996 A64 June 30, 1996 October 1996 A64 September 30, 1996 January 1997 A64 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 1995 September 1996 A68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Index to Statistical Tables References are to pages A3-A62 although the prefix "A" is omitted in this index ACCEPTANCES, bankers {See Bankers acceptances) FARM mortgage loans, 35 Assets and liabilities {See also Foreigners) Federal agency obligations, 5, 9, 10, 11, 28, 29 Commercial banks, 16-21 Federal credit agencies, 30 Domestic finance companies, 33 Federal finance Federal Reserve Banks, 10 Debt subject to statutory limitation, and types and ownership Foreign-related institutions, 20 of gross debt, 27 Automobiles Receipts and outlays, 25, 26 Consumer credit, 36 Treasury financing of surplus, or deficit, 25 Production, 44, 45 Treasury operating balance, 25 Federal Financing Bank, 30 Federal funds, 6, 23, 25 BANKERS acceptances, 5, 10, 22, 23 Federal Home Loan Banks, 30 Bankers balances, 16-21. {See also Foreigners) Federal Home Loan Mortgage Corporation, 30, 34, 35 Bonds {See also U.S. government securities) Federal Housing Administration, 30, 34, 35 New issues, 31 Federal Land Banks, 35 Rates, 23 Federal National Mortgage Association, 30, 34, 35 Business activity, nonfinancial, 42 Federal Reserve Banks Business loans {See Commercial and industrial loans) Condition statement, 10 Discount rates {See Interest rates) CAPACITY utilization, 43 U.S. government securities held, 5, 10, 11, 27 Capital accounts Federal Reserve credit, 5, 6, 10, 11 Commercial banks, 16-21 Federal Reserve notes, 10 Federal Reserve Banks, 10 Federally sponsored credit agencies, 30 Central banks, discount rates, 61 Finance companies Certificates of deposit, 23 Assets and liabilities, 33 Commercial and industrial loans Business credit, 33 Commercial banks, 16-21 Loans, 36 Weekly reporting banks, 18 Paper, 22, 23 Commercial banks Float, 5 Assets and liabilities, 16-21 Flow of funds, 37^1 Commercial and industrial loans, 16-21 Foreign currency operations, 10 Consumer loans held, by type and terms, 36 Foreign deposits in U.S. banks, 5 Deposit interest rates of insured, 15 Foreign exchange rates, 62 Real estate mortgages held, by holder and property, 35 Foreign-related institutions, 20 Time and savings deposits, 4 Foreign trade, 51 Commercial paper, 22, 23, 33 Foreigners Condition statements {See Assets and liabilities) Claims on, 52, 55, 56, 57, 59 Construction, 42, 46 Liabilities to, 51, 52, 53, 58, 60, 61 Consumer credit, 36 Consumer prices, 42 GOLD Consumption expenditures, 48, 49 Certificate account, 10 Corporations Stock, 5, 51 Profits and their distribution, 32 Government National Mortgage Association, 30, 34, 35 Security issues, 31, 61 Gross domestic product, 48, 49 Cost of living {See Consumer prices) Credit unions, 36 HOUSING, new and existing units, 46 Currency in circulation, 5, 13 Customer credit, stock market, 24 INCOME, personal and national, 42, 48, 49 Industrial production, 42, 44 DEBT {See specific types of debt or securities) Insurance companies, 27, 35 Demand deposits, 16—21 Interest rates Depository institutions Bonds, 23 Reserve requirements, 8 Consumer credit, 36 Reserves and related items, 4, 5, 6, 12 Deposits, 15 Deposits {See also specific types) Federal Reserve Banks, 7 Commercial banks, 4, 16—21 Foreign central banks and foreign countries, 61 Federal Reserve Banks, 5, 10 Money and capital markets, 23 Interest rates, 15 Mortgages, 34 Discount rates at Reserve Banks and at foreign central banks and Prime rate, 22 foreign countries {See Interest rates) International capital transactions of United States, 50-61 Discounts and advances by Reserve Banks {See Loans) International organizations, 52, 53, 55, 58, 59 Dividends, corporate, 32 Inventories, 48 Investment companies, issues and assets, 32 EMPLOYMENT, 42 Investments {See also specific types) Eurodollars, 23, 61 Commercial banks, 4, 16—21 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

hi Investments—Continued SAVING Federal Reserve Banks, 10, 11 Flow of funds, 37^1 Financial institutions, 35 National income accounts, 48 Savings institutions, 35, 36, 37-41 LABOR force, 42 Savings deposits (See Time and savings deposits) Life insurance companies (See Insurance companies) Securities (See also specific types) Loans (See also specific types) Federal and federally sponsored credit agencies, 30 Commercial banks, 16-21 Foreign transactions, 60 Federal Reserve Banks, 5, 6, 7, 10, 11 New issues, 31 Financial institutions, 35 Prices, 24 Insured or guaranteed by United States, 34, 35 Special drawing rights, 5, 10, 50, 51 State and local governments MANUFACTURING Holdings of U.S. government securities, 27 Capacity utilization, 43 New security issues, 31 Production, 43, 45 Rates on securities, 23 Margin requirements, 24 Stock market, selected statistics, 24 Member banks (See also Depository institutions) Stocks (See also Securities) Federal funds and repurchase agreements, 6 New issues, 31 Reserve requirements, 8 Prices, 24 Mining production, 45 Student Loan Marketing Association, 30 Mobile homes shipped, 46 Monetary and credit aggregates, 4, 12 TAX receipts, federal, 26 Money and capital market rates, 23 Thrift institutions, 4. (See also Credit unions and Savings Money stock measures and components, 4, 13 institutions) Mortgages (See Real estate loans) Time and savings deposits, 4, 13, 15, 16-21 Mutual funds, 13,32 Trade, foreign, 51 Mutual savings banks (See Thrift institutions) Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 NATIONAL defense outlays, 26 Treasury operating balance, 25 National income, 48 OPEN market transactions, 9 UNEMPLOYMENT, 42 U.S. government balances PERSONAL income, 49 Commercial bank holdings, 16-21 Prices Treasury deposits at Reserve Banks, 5, 10, 25 Consumer and producer, 42, 47 U.S. government securities Stock market, 24 Bank holdings, 16-21,27 Prime rate, 22 Dealer transactions, positions, and financing, 29 Producer prices, 42, 47 Federal Reserve Bank holdings, 5, 10, 11, 27 Production, 42, 44 Foreign and international holdings and Profits, corporate, 32 transactions, 10, 27, 61 Open market transactions, 9 REAL estate loans Outstanding, by type and holder, 27, 28 Banks, 16-21, 35 Rates, 23 Terms, yields, and activity, 34 U.S. international transactions, 50-62 Type of holder and property mortgaged, 35 Utilities, production, 45 Repurchase agreements, 6 Reserve requirements, 8 Reserves VETERANS Administration, 34, 35 Commercial banks, 16-21 Depository institutions, 4, 5, 6, 12 WEEKLY reporting banks, 18 Federal Reserve Banks, 10 Wholesale (producer) prices, 42, 47 U.S. reserve assets, 51 Residential mortgage loans, 34, 35 Retail credit and retail sales, 36, 42 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman EDWARD W. KELLEY, JR. ALICE M. RIVLIN, Vice Chair SUSAN M. PHILLIPS 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 LAWRENCE SLIFMAN, Associate Director OFFICE OF THE SECRETARY MARTHA S. SCANLON, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Deputy Secretary DAVID S. JONES, Assistant Director BARBARA R. LOWREY, Associate Secretary and Ombudsman STEPHEN A. RHOADES, Assistant Director CHARLES S. STRUCKMEYER, Assistant Director DIVISION OF BANKING ALICE PATRICIA WHITE, Assistant Director JOYCE K. ZICKLER, Assistant Director SUPERVISION AND REGULATION GLENN B. CANNER, Senior Adviser RICHARD SPILLENKOTHEN, Director JOHN J. MINGO, Senior Adviser STEPHEN C. SCHEMERING, Deputy Director WILLIAM A. RYBACK, Associate Director DIVISION OF MONETARY AFFAIRS HERBERT A. BIERN, Deputy Associate Director ROGER T. COLE, Deputy Associate Director DONALD L. KOHN, Director JAMES I. GARNER, Deputy Associate Director DAVID E. LINDSEY, Deputy Director BRIAN F. MADIGAN, Associate Director HOWARD A. AMER, Assistant Director RICHARD D. PORTER, Deputy Associate Director GERALD A. EDWARDS, JR., Assistant Director VINCENT R. REINHART, Assistant Director STEPHEN M. HOFFMAN, JR., Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board JAMES V. HOUPT, Assistant Director JACK P. JENNINGS, Assistant Director DIVISION OF CONSUMER MICHAEL G. MARTINSON, Assistant Director RHOGER H PUGH, Assistant Director AND COMMUNITY AFFAIRS SIDNEY M. SUSSAN, Assistant Director GRIFFITH L. GARWOOD, Director MOLLY S. WASSOM, Assistant Director GLENN E. LONEY, Associate Director WILLIAM SCHNEIDER, Project Director, DOLORES S. SMITH, Associate Director National Information Center MAUREEN P. ENGLISH, Assistant Director IRENE SHAWN MCNULTY, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A61 LAURENCE H. MEYER OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS S. DAVID FROST, Staff Director CLYDE H. FARNSWORTH, JR., Director SHEILA CLARK, EEO Programs Director DAVID L. ROBINSON, Deputy Director (Finance and Control) LOUISE L. ROSEMAN, Associate Director DIVISION OF HUMAN RESOURCES JACK DENNIS, JR., Assistant Director MANAGEMENT EARL G. HAMILTON, Assistant Director JEFFREY C. MARQUARDT, Assistant Director DAVID L. SHANNON, Director FLORENCE M. YOUNG, Assistant Director JOHN R. WEIS, Associate Director JOSEPH H. HAYES, JR., Assistant Director OFFICE OF THE INSPECTOR GENERAL FRED HOROWITZ, Assistant Director BRENT L. BOWEN, Inspector General OFFICE OF THE CONTROLLER DONALD L. ROBINSON, Assistant Inspector General BARRY R. SNYDER, Assistant Inspector General GEORGE E. LIVINGSTON, Controller STEPHEN J. CLARK, Assistant Controller (Programs and Budgets) DARRELL R. PAULEY, Assistant Controller (Finance) DIVISION OF SUPPORT SERVICES ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director DIVISION OF INFORMATION RESOURCES MANAGEMENT STEPHEN R. MALPHRUS, Director MARIANNE M. EMERSON, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director DAY W. RADEBAUGH, 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

A68 Federal Reserve Bulletin • June 1997 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman J. ALFRED BROADDUS, JR. LAURENCE H. MEYER SUSAN M. PHILLIPS JACK GUYNN MICHAEL H. MOSKOW ALICE M. RIVLIN EDWARD W. KELLEY, JR. ROBERT T. PARRY ALTERNATE MEMBERS THOMAS M. HOENIG THOMAS C. MELZER ERNEST T. PATRIKIS JERRY L. JORDAN CATHY E. MINEHAN STAFF DONALD L. KOHN, Secretary and Economist ROBERT A. EISENBEIS, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary MARVIN S. GOODFRIEND, Associate Economist JOSEPH R. COYNE, Assistant Secretary WILLIAM C. HUNTER, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID E. LINDSEY, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel FREDERIC S. MISHKIN, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel LARRY J. PROMISEL, Associate Economist MICHAEL J. PRELL, Economist CHARLES J. SIEGMAN, Associate Economist EDWIN M. TRUMAN, Economist LAWRENCE SLIFMAN, Associate Economist JACK BEEBE, Associate Economist DAVID J. STOCKTON, Associate Economist PETER R. FISHER, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL WALTER V. SHIPLEY, President CHARLES E. NELSON, 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 ROBERT W. GILLESPIE, Fourth District CHARLES E. NELSON, Tenth District KENNETH D. LEWIS, Fifth District CHARLES T. DOYLE, Eleventh District STEPHEN A. HANSEL, Sixth District WILLIAM F. ZUENDT, 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

A6S CONSUMER ADVISORY COUNCIL JULIA W. SEWARD, Richmond, Virginia WILLIAM N. LUND, Augusta, Maine RICHARD S. AMADOR, LOS Angeles, California ERROL T. LOUIS, Brooklyn, New York WAYNE-KENT A. BRADSHAW, LOS Angeles, California PAUL E. MULLINGS, McLean, Virginia THOMAS R. BUTLER, Riverwoods, Illinois CAROL PARRY, New York, New York ROBERT A. COOK, Crofton, Maryland PHILIP PRICE, JR., Philadelphia, Pennsylvania HERIBERTO FLORES, Springfield, Massachusetts RONALD A. PRILL, Minneapolis, Minnesota EMANUEL FREEMAN, Philadelphia, Pennsylvania LISA RICE, Toledo, Ohio DAVID C. FYNN, Cleveland, Ohio JOHN R. RINES, Detroit, Michigan ROBERT G. GREER, Houston, Texas SISTER MARILYN ROSS, Omaha, Nebraska KENNETH R. HARNEY, Chevy Chase, Maryland MARGOT SAUNDERS, Washington, D.C. GAIL K. HILLEBRAND, San Francisco, California GAIL SMALL, Lame Deer, Montana TERRY JORDE, Cando, North Dakota YVONNE S. SPARKS, St. Louis, Missouri FRANCINE C. JUSTA, New York, New York GREGORY D. SQUIRES, Milwaukee, Wisconsin JANET C. KOEHLER, Jacksonville, Florida GEORGE P. SURGEON, Chicago, Illinois EUGENE I. LEHRMANN, Madison, Wisconsin THEODORE J. WYSOCKI, JR., Chicago, Illinois THRIFT INSTITUTIONS ADVISORY COUNCIL DAVID F. HOLLAND, Burlington, Massachusetts, President CHARLES R. RINEHART, Irwindale, California, Vice President BARRY C. BURKHOLDER, Houston, Texas STEPHEN D. HAILER, Akron, Ohio DAVID E. A. CARSON, Bridgeport, Connecticut EDWARD J. MOLNAR, Harleysville, Pennsylvania MICHAEL T. CROWLEY, JR., Milwaukee, Wisconsin GUY C. PINKERTON, Seattle, Washington DOUGLAS A. FERRARO, Englewood, Colorado TERRY R. WEST, Jacksonville, Florida WILLIAM A. FITZGERALD, Omaha, Nebraska FREDERICK WILLETTS, III, Wilmington, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, The Payment System Handbook. $75.00 per year. MS-127, Board of Governors of the Federal Reserve System, Federal Reserve Regulatory Service. Four vols. (Contains all Washington, DC 20551 or telephone (202) 452-3244 or FAX four Handbooks plus substantial additional material.) $200.00 (202) 728-5886. You may also use the publications order per year. form available on the Boards World Wide Web site Rates for subscribers outside the United States are as follows (http://www.bog.frb.fed.us). When a charge is indicated, payment and include additional air mail costs: should accompany request and be made payable to the Board of Federal Reserve Regulatory Service, $250.00 per year. Governors of the Federal Reserve System or may be ordered via Each Handbook, $90.00 per year. Mastercard or Visa. Payment from foreign residents should be FEDERAL RESERVE REGULATORY SERVICE FOR PERSONAL drawn on a U.S. bank. COMPUTERS. Diskettes; updated monthly. Standalone PC. $300 per year. Network, maximum 1 concurrent user. $300 per year. Network, maximum 10 concurrent users. $750 per year. BOOKS AND MISCELLANEOUS PUBLICATIONS Network, maximum 50 concurrent users. $2,000 per year. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. Network, maximum 100 concurrent users. $3,000 per year. 1994. 157 pp. Subscribers outside the United States should add $50 to cover ANNUAL REPORT. additional airmail costs. ANNUAL REPORT: BUDGET REVIEW, 1995-96. 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 RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A 1984 October 1985 254 pp. $12.50 JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996. 1985 October 1986 231 pp. $15.00 578 pp. $25.00 each. 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 EDUCATION PAMPHLETS 1980-89 March 1991 712 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1990 November 1991 185 pp. $25.00 available without charge. 1991 November 1992 215 pp. $25.00 1992 December 1993 215 pp. $25.00 1993 December 1994 281 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1994 December 1995 190 pp. $25.00 Consumer Handbook to Credit Protection Laws 1990-95 November 1996 404 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small Businesses Series on the Structure of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF CHARTS. Weekly. $30.00 per year or $.70 each in the United The Board of Governors of the Federal Reserve System States, its possessions, Canada, and Mexico. Elsewhere, The Federal Open Market Committee Federal Reserve Bank Board of Directors $35.00 per year or $.80 each. Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Organization and Advisory Committees RESERVE SYSTEM. A Consumer's Guide to Mortgage Lock-Ins ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Settlement Costs Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. A Consumer's Guide to Mortgage Refinancings Vol. II (Irregular Transactions). 1969. 116 pp. Each volume Home Mortgages: Understanding the Process and Your Right $5.00. to Fair Lending How to File a Consumer Complaint GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 each. Making Deposits: When Will Your Money Be Available? FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated monthly. (Requests must be prepaid.) Making Sense of Savings Consumer and Community Affairs Handbook. $75.00 per year. SHOP: The Card You Pick Can Save You Money Monetary Policy and Reserve Requirements Handbook. $75.00 Welcome to the Federal Reserve per year. When Your Home is on the Line: What You Should Know Securities Credit Transactions Handbook. $75.00 per year. About Home Equity Lines of Credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 STAFF STUDIES: Only Summaries Printed in the 165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF BULLETIN MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September Studies and papers on economic and financial subjects that are of 1993. 18 pp. general interest. Requests to obtain single copies of the full text or to be added to the mailing list for the series may be sent to 166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, by Mark Carey, Stephen Prowse, John Rea, and Gregory Udell. Publications Services. January 1994. Ill pp. 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANK- Staff Studies 1-157 are out of print. ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- by Stephen A. Rhoades. July 1994. 37 pp. MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE 168. THE ECONOMICS OF THE PRIVATE EQUITY MARKET, by PRODUCTS, by Mark J. Warshawsky with the assistance of George W. Fenn, Nellie Liang, and Stephen Prowse. Novem- Dietrich Earnhart. September 1989. 23 pp. ber 1995. 69 pp. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- 169. BANK MERGERS AND INDUSTRYWIDE STRUCTURE, 1980-94, ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and by Stephen A. Rhoades. February 1996. 32 pp. Donald Savage. February 1990. 12 pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September REPRINTS OF SELECTED Bulletin ARTICLES 1990. 35 pp. Some Bulletin articles are reprinted. The articles listed below are 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, those for which reprints are available. Beginning with the Janu- 1980-90, by Margaret Hastings Pickering. May 1991. ary 1997 issue, articles are available on the Boards World Wide 21pp. Web site (http://www.bog.frb.fed.us) under Publications, Federal 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- Reserve Bulletin articles. GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. Limit of ten copies 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, FAMILY FINANCES IN THE U.S.: RECENT EVIDENCE FROM THE Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary SURVEY OF CONSUMER FINANCES. January 1997. Ann Taylor. March 1992. 37 pp. 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (PAYMENT MUST ACCOMPANY REQUESTS) Annual Annual Approximate Corresponding Release number and title USPS fax release Period or date to Bulletin rate rate days1 table numbers2 Weekly Releases H.2. Actions of the Board: $55.00 n.a. Friday Week ended Applications and Reports previous Received Saturday H.3. Aggregate Reserves of $20.00 n.a. Thursday Week ended 1.20 Depository Institutions and previous the Monetary Base3 Wednesday H.4.1. Factors Affecting Reserve Balances $20.00 n.a. Thursday Week ended 1.11, 1.18 of Depository Institutions and previous Condition Statement of Wednesday Federal Reserve Banks3 H.6. Money Stock, Liquid Assets, $35.00 n.a. Thursday Week ended 1.21 and Debt Measures3 Monday of previous week H.8. Assets and Liabilities of $30.00 n.a. Friday Week ended 1.26 Commercial Banks in the previous United States3 Wednesday H.IO. Foreign Exchange Rates3 $20.00 $20.00 Monday Week ended 3.28 previous Friday H.15. Selected Interest Rates3 $20.00 $20.00 Monday Week ended 1.35 previous Friday Monthly Releases G.5. Foreign Exchange Rates3 $ 5.00 $ 5.00 First of month Previous month 3.28 G.13. Selected Interest Rates $ 5.00 $ 5.00 First Tuesday of Previous month 1.35 month G.15. Research Library—Recent No charge n.a. First of month Previous month Acquisitions G.17. Industrial Production and $15.00 n.a. Midmonth Previous month 2.12,2.13 Capacity Utilization3 G.19. Consumer Credit3 $ 5.00 $ 5.00 Fifth working day Second month 1.55, 1.56 of month previous G.20. Finance Companies $ 5.00 $ 5.00 Fifth working day Second month 1.51, 1.52 of month previous Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 Annual Annual Approximate Corresponding Period or date to Release number and title USPS fax release Bulletin rate rate days1 which data refer table numbers2 Quarterly Releases E.2. Survey of Terms of Bank $ 5.00 n.a. Midmonth of February, May, 4.23 Lending to Business March, June, August, and September, and November December E.7. List of OTC Margin Stocks No charge n.a. January, April, February, May, July, and August, and October November E.11. Geographical Distribution of $ 5.00 n.a. 15th of March, Previous quarter Assets and Liabilities of June, Major Foreign Branches of September, and U.S. Banks December E.15. Agricultural Finance Databook $ 5.00 n.a. End of March, January, April, June, July, and September, and October December E.16. Country Exposure Lending $ 5.00 n.a. January, April, Previous quarter Survey July, and October Z.I. Flow of Funds Accounts $25.00 n.a. Second week of Previous quarter 1.57, 1.58, of the United States: March, June, 1.59, 1.60 Flows and Outstandings3 September, and December Annual Release C.2. Aggregate Summaries of Annual $ 5.00 n.a. February End of previous Surveys of Securities Credit June Extension 1. Please note that for some releases there is normally a certain variability in the release date because of reporting or processing procedures. Moreover, for all series unusual circumstances may, from time to time, result in a release date being later than anticipated. 2. The data in some releases are also reported in the Bulletin statistical appendix. 3. These releases are also available on the Board's World Wide Web site (http://www.bog.frb.fed.us) under Domestic and International Research, Statistical releases. n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Maps of the Federal Reserve System 1 9 m ~ BOSTON MINNEAPOLIS 7 12 _ <2 • NEW YORK CHICAGO • ™ 0 • CLEVILAND PHILADELPHIA 10 4 5 • SAN FRANCISCO • • KANSAS CITY I RICHMOND ST. LOUIS 5 ATLANTA 1 1 WM XX m DALLAS ALASKA HAWAII LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city H 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 February 1996. 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

A75 1-A 2-B 3-C 4-D 5-E Baltimore /N Buffalo •Cincinnati BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H Birmingham Detroit # Louisville ! TN LA •Memphis New Orleans Little Rock ATLANTA CHICAGO ST. LOUIS 9-1 • Helena MINNEAPOLIS 10-J 12-L NE Omaha • IDS Denver i— Oklahoma City KANSAS CITY 11-K Salt Lake City #Los Angeles San Antonio* DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 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 William C. Brainard Cathy E. Minehan Frederick J. Mancheski Paul M. Connolly NEW YORK* 10045 John C. Whitehead William J. McDonough Thomas W. Jones Ernest T. Patrikis Buffalo 14240 Bal Dixit CarlW. Turnipseed1 PHILADELPHIA 19105 Donald J. Kennedy Edward G. Boehne Joan Carter William H. Stone, Jr. CLEVELAND* 44101 G. Watts Humphrey, Jr. Jerry L. Jordan David H. Hoag Sandra Pianalto Cincinnati 45201 George C. Juilfs 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 Rebecca Hahn Windsor William J. Tignanelli1 Charlotte 28230 Dennis D. Lowery DanM. Bechter1 ATLANTA 30303 Hugh M. Brown Jack Guynn David R. Jones Patrick K. Barron James M. Mckee Birmingham 35283 D. Bruce Can- Fred R. Herr1 Jacksonville 32231 Patrick C. Kelly James D. Hawkins1 Miami 33152 Kaaren Johnson-Street James T Curry III Nashville 37203 James E. Dalton, Jr. Melvyn K. Purcell New Orleans 70161 Jo Ann Slaydon Robert J. Musso CHICAGO* 60690 Lester H. McKeever, Jr. Michael H. Moskow Arthur C. Martinez William C. Conrad Detroit 48231 Florine Mark David R. Allardice] ST. LOUIS 63166 John F. McDonnell Thomas C. Melzer Susan S. Elliott W. LeGrande Rives Little Rock 72203 Robert D. Nabholz, Jr. Robert A. Hopkins Louisville 40232 John A. Williams Thomas A. Boone Memphis 38101 John V. Myers Martha L. Perine MINNEAPOLIS 55480 Jean D. Kinsey Gary H. Stern David A. Koch Colleen K. Strand Helena 59601 Matthew J. Quinn John D. Johnson KANSAS CITY 64198 A. Drue Jennings Thomas M. Hoenig Jo Marie Dancik Richard K. Rasdall Denver 80217 Peter I. Wold Carl M. Gambsl Oklahoma City 73125 Barry L. Eller Kelly J. Dubbert Omaha 68102 Arthur L. Shoener Bradley C. Cloverdyke DALLAS 75201 Roger R. Hemminghaus Robert D. McTeer, Jr. Cece Smith Helen E. Holcomb El Paso 79999 Alvin T. Johnson Sammie C. Clay Houston 77252 I. H. Kempner, III Robert Smith, IIIl San Antonio 78295 H. B. Zachry, Jr. James L. Stulll SAN FRANCISCO 94120 Judith M. Runstad Robert T. Parry Gary G. Michael John F. Moore Los Angeles 90051 Anne L. Evans Mark L. Mullinixl Portland 97208 Carol A. Whipple Raymond H. Laurence1 Salt Lake City 84125 Gerald R. Sherratt Andrea P. Wolcott Seattle 98124 Richard R. Sonstelie Gordon R. G. Werkema2 * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; 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. Digitized f2o. r EFxRecAutSivEe RV ice President http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis