Federal Reserve Bulletin, 1997-08

VOLUME 83 • NUMBER 8 • AUGUST 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 641 MONETARY POLICY REPORT TO THE Proposal for the Federal Reserve Banks to offer CONGRESS an enhanced net settlement service to depository institutions. The economy continued to perform exceptionally well in the first half of 1997. Real output Publication of the June 1997 update of the Bank grew briskly, while inflation ebbed. Sizable fur- Holding Company Supervision Manual. ther increases in payrolls pushed the unemployment rate below 5 percent for the first time 665 LEGAL DEVELOPMENTS in nearly twenty-five years. Although growth Various bank holding company, bank service in real gross domestic product appears to have corporation, and bank merger orders; and pendslowed in the spring, this slackening came on ing cases. the heels of a dramatic surge in the opening months of the year; all indications are that the Al FINANCIAL AND BUSINESS STATISTICS expansion remains well intact. The members of the Board of Governors and the Reserve Bank These tables reflect data available as of presidents anticipate that the economy will grow June 26, 1997. at a moderate pace in the second half of this year and in 1998 and that inflation will remain low. A3 GUIDE TO TABUIAR PRESENTATION Conditions in financial markets are supportive A4 Domestic Financial Statistics of continued growth: Longer-term interest rates A42 Domestic Nonfinancial Statistics are in the lower portion of the range observed in A50 International Statistics this decade, the stock market has registered alltime highs, and credit remains readily available A63 GUIDE TO STATISTICAL RELEASES AND to private borrowers. SPECIAL TABLES 659 INDUSTRIAL PRODUCTION AND CAPACITY A68 INDEX TO STATISTICAL TABLES UTILIZATION FOR JUNE 1997 Industrial production increased 0.3 percent in A70 BOARD OF GOVERNORS AND STAFF June, about the same pace as in the previous three months, to 119.9 percent of its 1992 aver- A72 FEDERAL OPEN MARKET COMMITTEE AND age. The rate of industrial capacity utilization STAFF; ADVISORY COUNCILS was unchanged, at 83.5 percent. A74 FEDERAL RESERVE BOARD PUBLICATIONS 662 ANNOUNCEMENTS A76 MAPS OF THE FEDERAL RESERVE SYSTEM Nominations sought for appointments to the Consumer Advisory Council. A78 FEDERAL RESERVE BANKS, BRANCHES, Amendments to Regulations D and I. AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress Report submitted to the Congress on July 22, 1997, To the extent that aggregate supply is expanding pursuant to the Full Employment and Balanced more rapidly, monetary policy can accommodate Growth Act of 1978 extra growth in demand without fostering increased inflationary pressures. In tate March, however, the Federal Open Market Committee (FOMC) concluded MONETARY POLICY AND THE that there was a significant risk that aggregate ECONOMIC OUTLOOK demand would grow faster in the coming quarters than available supply, which, with utilization already The economy continued to perform exceptionally at a very high level, would place the economy's well in the first half of 1997. Real output grew resources under increasing strain. If such unsustainbriskly, while inflation ebbed. Sizable further able growth persisted, the resulting inflationary increases in payrolls pushed the unemployment rate imbalances would eventually undermine the health of below 5 percent for the first time in nearly twentythe expansion—the all too frequent pattern of past five years. Although growth in real gross domestic business cycles. To protect against the possibility of product appears to have slowed in the spring, this such an outcome, the Committee tightened policy slackening came on the heels of a dramatic surge in slightly. With the softening of demand in the spring, the opening months of the year; all indications are the Committee was able to maintain a steady posthat the expansion remains well intact. The members ture in the money market while closely monitoring of the Board of Governors and the Reserve Bank economic developments. The ongoing objective of presidents anticipate that the economy will grow at a monetary policy is to help the nation achieve maximoderate pace in the second half of this year and in mum sustainable economic growth and the highest 1998 and that inflation will remain low. Conditions in financial markets are supportive of continued growth: average living standards. The Federal Reserve recog- Longer-term interest rates are in the lower portion of nizes that it can best accomplish this objective by the range observed in this decade, the stock market keeping inflation in check, because an environment has registered all-time highs, and credit remains of price stability is most conducive to sound, longreadily available to private borrowers. term planning by households and businesses. Since the February report on monetary policy, Federal Reserve policymakers have revised upward their Monetary Policy, Financial Markets, and the expectations for growth of real activity in 1997 and Economy over the First Half of 1997 trimmed their forecasts of inflation. This combination of revisions highlights the extraordinarily positive The rapid economic growth observed in the closing conditions still prevailing more than six years into the months of 1996 continued in the first quarter of this current economic expansion. In part, the recent conyear, with real gross domestic product advancing fluence of higher-than-expected output and lower almost 6 percent at an annual rate. Consumer spendinflation has reflected the favorable influences on ing surged, fueled by a significant increase in income, prices of retreating oil prices and a strong dollar. But upbeat consumer attitudes, and the effects of the huge it may also be attributable to more durable changes run-up in equity prices over the past couple of years in our economy, notably a greater flexibility and on household net worth. Business fixed investment competitiveness in labor and product markets and was strong, and companies restocked inventories that more rapid, technology-driven gains in efficiency. In had become thin as sales soared. The advance in real essence, the economy may be experiencing an output provided support for considerable new hiring; upward shift in its longer-range output potential. rising pay and greater job availability drew additional people into the workforce, lifting the labor force NOTE. The charts for the report are available on request from participation rate to a new high during the first Publications Services, Mail Stop 127, Board of Governors of the quarter of the year. The underlying trend in consumer Federal Reserve System, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin • August 1997 price inflation was still subdued. Inflation pressures Continued favorable price movements and the were held in check by smaller food price increases, slowing of economic growth suggested to financial declining prices for non-oil imports, the marked market participants that inflation might remain expansion of industrial capacity in recent years, and damped without a further tightening of financial concontinuing efforts by businesses to boost efficiency. ditions, and this belief prompted a substantial drop in At their meeting in late March, FOMC members interest rates from late April to mid-July, reversing expected that the growth of economic activity would the earlier advance. With resource utilization still at ease in the coming months, but they were uncertain very high levels, and with economic and financial about the likely extent of that slowing. Although the conditions conducive to robust increases in spending, first-quarter burst in production had owed impor- the FOMC at its May meeting continued to view tantly to a number of temporary factors, many of the risks as skewed toward the re-emergence of the fundamentals underlying consumer and business inflationary pressures. But the moderation in aggredemand remained quite positive. The Committee was gate demand and uncertainty about the relationship concerned about the risk that if outsized gains in real between utilization rates and inflation led the Comoutput continued, pressures on costs and prices would mittee to leave reserve conditions unchanged in May emerge that could eventually undermine the expan- and again in July. The drop in market interest rates in sion. Therefore, to help foster more sustainable trends the second quarter may also have been encouraged by in output and guard against potential inflationary favorable news about this year's federal budget defiimbalances, the Committee firmed policy slightly by cit and by the agreement between the President and raising the expected federal funds rate from around the Congress to balance the budget in fiscal year 5VA percent to around 5Vi percent. 2002. Spurred by lower rates and greater optimism about the long-term outlook for earnings, the stock The unsustainably strong pace of economic growth market surged in the second quarter and into July. in the first quarter weighed on financial markets. The value of the dollar rose somewhat further in Interest rates rose substantially, even before the Sysforeign exchange markets, on balance, an increase tem's action, despite favorable news on inflation. more than accounted for by an appreciation against Because the policy tightening was widely anticipated, continental European currencies. rates were little affected by the announcement, but they moved up a little more in the following weeks as During the first half of the year, credit remained incoming data suggested persistent strength in eco- available on favorable terms to most households and nomic activity. Equity prices rose early in the first businesses. High delinquency rates for consumer quarter and then declined, changing relatively little loans encouraged many banks to tighten standards, on net. The trade-weighted value of the dollar in but consumer loan rates generally stayed fairly low terms of the other G-10 currencies increased about relative to benchmark Treasury rates, and consumer 7 percent in the first quarter, reflecting the unexpect- credit continued to grow faster than income and only edly strong economic growth in the United States and a little below the pace of 1996. Home mortgage debt market uncertainty about economic performance advanced at a moderate rate, with home equity loans abroad. expanding especially rapidly in the spring. Busi- As the second quarter progressed, it became in- nesses continued to have access to ample external creasingly evident that economic activity had indeed funding both directly in capital markets and through decelerated. The expansion of consumer spending financial intermediaries. The spreads between yields eased considerably, while business fixed investment on corporate bonds and Treasury securities stayed remained strong. Employment continued to climb low or fell further, and, relative to market rates, bank rapidly, pushing the unemployment rate down below business loan rates held near the lower end of the 5 percent on average in the second quarter—the range seen in the current expansion. lowest level since the early 1970s. Despite high Total domestic nonfinancial debt expanded more levels of employment and production through the slowly in the first half of 1997 than in 1996, mainly first half of the year, there were few signs that infla- because of a reduced pace of federal borrowing. tion was deviating significantly from recent trends. Trends in the monetary aggregates during the first Although overall consumer price inflation dipped in half of 1997 were similar to those in 1996, with M2 the second quarter as energy prices declined, con- near the upper end of the range set by the FOMC and sumer prices excluding food and energy increased at M3 somewhat above its range. This outcome was in about the same pace in the first half of the year as in line with FOMC expectations, because the ranges 1996. had been set to be consistent with conditions of price Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 643 stability, and inflation, while damped, remained the future is quite high. These factors seem likely to above this level. The behavior of M2 in the first part outweigh any drag on consumer demand that might of the year was again reasonably well explained by be associated with the debt-servicing problems that changes in nominal GDP and interest rates. some households have experienced. Lower mortgage rates are buttressing demand for homes. In the business sector, healthy balance sheets and profits and a Economic Projections for 1997 and 199S moderate cost of external funds, along with a continuing desire to install new technology, are providing After growing swiftly on balance over the first half of support and impetus for investment in equipment. the year, economic activity is expected to expand Meanwhile, investment in structures should follow more moderately in the second half of 1997 and in last year's strong performance with further increases, 1998. For this year, the central tendency of the GDP because of declining vacancy rates in some sectors growth forecasts put forth by members of the Board and ready access to financing. of Governors and the Reserve Bank presidents is Notwithstanding the economy's positive momen- 3 percent to 3lA percent, measured as the change in tum, growth is expected to be more moderate in the real output between the final quarter of 1996 and the next year and a half than in the first half of 1997. In final quarter of 1997. For 1998, most of the forecasts part, this deceleration is likely to reflect the influence anticipate growth of real GDP within a range of on demand of the substantial buildup of stocks of 2 percent to 2Vi percent. With this pace of continued household durables and business plant and equipment economic expansion over the next six quarters, the thus far in the expansion. As well, the pace of invencentral tendency of forecasts for the civilian unem- tory investment will need to slacken considerably ployment rate remains a little under 5 percent through relative to that observed in the first part of this year, 1998, about the average for the second quarter of this lest stock-to-sales ratios become uncomfortably high. year. In the external sector, the strength of the dollar on Economic activity appears to have entered the exchange markets since last year could damp export second half with considerable positive momentum. sales and encourage U.S. firms and households to Households have experienced hefty gains in employ- purchase foreign-produced goods and services. ment, income, and wealth, and their optimism about Federal Reserve policymakers believe that this year's rise in the CPI will be smaller than that of 1996, mostly because of favorable developments in the food and, especially, energy sectors. After last 1. Economic projections for 1997 and 19C>8 year's run-up, crude oil prices have dropped back Percent significantly, pulling down the prices of petroleum Federal Reserve governors products. Food price increases also have been suband Reserve Bank presidents Indicator dued this year, as the decline in grain prices that Central Range tendency began in the middle of last year has been working its 1997 way through to the retail level. Looking ahead to next year, the governors and Reserve Bank presidents Change, fourth quarter to fourth quarter1 expect larger increases in the CPI, with a central Nominal GDP 5-6 5-5 W tendency from 2Vi percent to 3 percent. Food and Real GDP 3-3'/i 3-3V4 Consumer price index2 2-2% 214-214 energy prices are not expected to repeat this year's Average level salutary performance, and non-oil import prices may in the fourth quarter Civilian unemployment rate VA-SV* 4%-5 be less of a restraining influence than in 1997, absent a continued uptrend in the dollar. Moreover, there is 1998 a risk that high levels of resource utilization could Change, fourth quarter begin putting upward pressure on business costs. to fourth quarter1 Nominal GDP 4V4-5% 414-5 As noted in past monetary policy reports, the Real GDP 2-3 2-2'/> Consumer price index2 2'/4-3 214-3 CPI forecasts of Federal Reserve policymakers incorporate the technical improvements that the Bureau of Average level in the fourth quarter Labor Statistics is making to the CPI in 1997 and Civilian unemployment rate VA-5XA 4'/.-5 1998. A series of technical changes is estimated to 1. Change from average for fourth quarter of previous year to average for have trimmed reported rates of CPI inflation slightly fourth quarter of year indicated. 2. All urban consumers. in recent years, and the additional changes will affect Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin • August 1997 the index this year and next. In light of the challenges out of lower-yielding deposits into higher-yielding of accurately measuring price changes in a complex stock and bond mutual funds, and as banks and thrift and dynamic economy, the governors and Reserve institutions sharply curtailed their lending to focus Bank presidents will continue placing substantial on rebuilding capital. Since mid-1994, the velocities weight on other price indexes, along with the CPI, in have been moving more nearly in line with their gauging progress toward the long-run goal of price historical patterns with respect to changes in opportustability. nity costs—albeit at higher levels. This recent period The Administration has not yet released an update of renewed stability is still brief, however, and has of the economic projections contained in the Feb- occurred at a time of relatively stable financial and ruary Economic Report of the President. The earlier economic conditions, leaving open the important Administration forecasts were broadly similar to question of whether the stability would be sustained those in the Federal Reserve's February report, with in the future under a wider variety of circumstances. Administration forecasts for growth and inflation In light of this uncertainty, the Committee again within or near the range anticipated by Federal decided to view the ranges as benchmarks for mone- Reserve policymakers in February. Because of devel- tary growth rates that would be consistent with opments in the economy since that time, the central approximate price stability and historical velocity tendency of forecasts for real GDP growth put forth relationships. If velocities change little over the next by the members of the Board of Governors and the year and a half, Committee members' expectations of Reserve Bank presidents has moved higher, while nominal GDP growth in 1997 and 1998 imply that their forecasts for the CPI have moved down. M2 and M3 will likely finish around the upper boundaries of their respective ranges each year. The debt of the domestic nonfinancial sectors is expected to Money and Debt Ranges for 1997 and 1998 remain near the middle of its range this year and next. The Committee will continue to monitor the behavior At its meeting earlier this month, the Committee of the monetary aggregates and domestic nonfinanreaffirmed the ranges for 1997 growth of money and cial debt—as well as a wide range of other data— debt that it had established in February: 1 percent to for information about economic and financial 5 percent for M2, 2 percent to 6 percent for M3, and developments. 3 percent to 7 percent for the debt of the domestic nonfinancial sectors. The Committee also set provisional ranges for 1998 at the same levels as for 1997. ECONOMIC AND FINANCIAL DEVELOPMENTS In choosing the ranges for M2 and M3, the Com- IN 1997 mittee recognized the continuing uncertainty about the future behavior of the velocities of the two aggre- The economy has continued to perform exceptionally gates. For several decades until the 1990s, these well this year. Real gross domestic product surged aggregates exhibited fairly stable trends relative to almost 6 percent at an annual rate in the first quarter nominal spending, and variations in M2 growth of 1997, and available data point to a healthy, though around its trend were reasonably closely related to smaller, increase in the second quarter. Financial changes in the spread between market rates and yields conditions remained supportive of spending. Despite on the assets in M2. These relationships were disa modest tightening of money market conditions by rupted in the first part of this decade. Between 1991 the System, most interest rates were little changed or and early 1994, the velocities of M2 and M3 climbed declined a bit on net during the first half of the year, well above the levels that were predicted by past and equity prices surged ahead. With relatively few experience, as households shifted substantial amounts exceptions, credit remained readily available from both intermediaries and financial markets on generally favorable terms. The rapid increases in output Ranges for growth ol' monetary and debt aggregates led to a further tightening of labor markets in the first Percent six months of 1997, and labor costs accelerated a Provisional for little from the pace of a year earlier. Price inflation Aggregate 1996 1997 1998 has been subdued, held down in part by declines in M2 1-5 1-5 1-5 energy prices, smaller increases in food prices, and M3 2-6 2-6 2-6 lower prices for non-oil imports that have followed in Debt 3-7 3-7 3-7 the wake of the appreciation of the dollar. In addition, NOTE. Change from average for fourth quarter of preceding year to averaj for fourth quarter of year indicated. intense competition, adequate plant capacity, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 645 ongoing efficiency gains have helped to restrain infla- Growth of real spending for nondurables also tion pressures in the face of rising wages. appears to have slowed considerably from a strong first-quarter pace. Within services, weather condi- The Household Sector tions held down growth of real outlays for energy services in the first quarter and boosted them in the Spending, Income, and Saving second. Growth of real outlays for other services— typically the steadiest component of consumption— After posting a sizable increase in 1996, real personal picked up at the end of 1996 and appears to have consumption expenditures jumped 5l/2 percent at an stayed ahead of last year's 2'/2 percent pace in the annual rate in the first quarter of 1997. Although first half of 1997. the advance in spending slowed thereafter—partly Consumer spending continued to draw support because of unusually cool weather in late spring— from healthy advances in income this year, as gains underlying fundamentals for the household sector in wages and salaries boosted personal disposable remain favorable to further solid gains; notably, real income. These gains translated into a 4 percent incomes have continued to rise, and many consumers annual rate advance in real disposable income in the have benefited from sizable gains in wealth. With this first quarter, after a significant 23A percent advance good news in hand, consumers have become extraor- last year. Although month-to-month movements were dinarily upbeat about the economy's prospects. affected by unevenness in the timing of tax payments, Indexes of consumer sentiment—such as those com- the underlying trend in real disposable income piled by the Survey Research Center at the University remained strong into the second quarter. of Michigan and the Conference Board—have soared On top of rising incomes, further increases in to some of the highest readings since the 1960s. net worth—primarily related to the soaring stock Despite this generally healthy picture, some house- market—have given many households the financial holds still face difficulties meeting debt obligations, wherewithal to spend. In light of the very large gains and delinquency rates for consumer loans have in wealth, the impetus to consumption appears to remained at high levels. have been smaller than might have been anticipated Real outlays for consumer durables surged on the basis of historical relationships, suggesting 18% percent (annual rate) in the first quarter of this that other factors may be offsetting the effect of year but apparently slowed considerably in the sec- higher net worth. One such factor could be a greater ond quarter. After changing little, on net, last year, focus on retirement savings, particularly among the consumer purchases of motor vehicles increased rap- large cohort of the population reaching middle age. idly early in the year, a result of sound fundamentals, Concerns about the adequacy of saving for retirement a bounceback from the strike-depressed fourth quar- have likely been heightened by increased public dister, and enlarged incentives offered by automakers. cussion of the financial problems of social secu- In the second quarter, sales were once again held rity and federal health programs. In addition, debt down noticeably by strike-related supply constraints, problems may be restraining the spending of some as well as by some payback from the elevated first- households. quarter pace. Smoothing through the ups and downs, the underlying pace of demand in the first half of the year likely remained reasonably close to the 15 mil- Residential Investment lion unit rate that has prevailed since the second half of 1995. Purchases of durable goods other than motor The underlying pace of housing activity has remained vehicles also took off in the first quarter; computers at a high level this year, even though some indicators and other electronic equipment were an area of suggest that activity has edged off a bit from last notable strength, as households took advantage of year's pace. In the single-family sector, housing starts rapidly falling prices to acquire the latest technology. through June averaged 1.14 million units at an annual According to available monthly data, purchases of rate, a shade below the pace of starts in 1996. durables other than motor vehicles and electronic Although starts dipped in the second quarter, the equipment moderated in the second quarter. Although decline was from a first-quarter level that, doubtless, a pause in the growth of spending is not surprising was boosted by mild weather. Mortgage rates have after the strong first quarter, unusually cool spring zigzagged moderately this year; the average level weather, leading to the postponement of purchases of has differed little from that in 1996. With mortgage some seasonal items, may also have contributed to rates low and income growth strong, a relatively the moderation. large proportion of families has been able to afford Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin • August 1997 the monthly cost of purchasing a home. Home sales remained high in the first quarter, after climbing have remained strong, helping to keep inventories of rapidly between early 1994 and early 1996 and rising unsold new units relatively lean—a favorable factor more slowly in the second half of last year. This for prospective building activity. Other indicators of measure of the debt-service burden of households has demand remain quite positive. According to the latest nearly returned to the peak reached toward the end of survey by the National Association of Homebuilders, the last business cycle expansion. Adding estimated builders' ratings of new home sales strengthened in payments on auto leases to households' scheduled recent months to the highest level since last August. monthly debt payments boosts the ratio a little more Moreover, consumers' assessments of conditions for than 1 percentage point and places it just above its homebuying, as reported by the Survey Research previous peak. Center at the University of Michigan, remained very Indicators of households' ability to service their favorable into July. In addition, the volume of appli- debt have been mixed. The delinquency rate for cations for mortgages to purchase homes has moved mortgage loans past due sixty days or more is at its up recently to a high level. lowest level in two decades, but delinquency rates for The pace of multifamily starts has been well main- consumer loans are relatively high. According to data tained. These starts averaged close to 320,000 units at from the Report of Condition and Income filed by an annual rate from January to June, a little above last banks (the Call Report), the delinquency rate for year's figure for starts. Even so, the pace of multifam- credit card loans was roughly unchanged in the first ily construction remains well below peaks in the quarter of 1997, remaining at its highest value since 1970s and 1980s, partly because of changes in the late 1992, when the economy was in the midst of a nation's demographic composition as the bulge of sluggish recovery and the unemployment rate was renters in the 1980s has moved on to home owner- more than 2 percentage points higher than today. For ship. Another factor that has restrained multifamily auto loans at the finance companies affiliated with the construction is the growing popularity of manufac- major manufacturers, the delinquency rate rose again tured housing ("mobile homes"), which provides an in the first quarter, continuing the steady run-up in alternative to rental housing for some households. In this measure over the past three years. particular, the price of a typical manufactured unit is Anecdotal evidence suggests that the recent considerably less than that of a new single-family increases in consumer credit delinquency rates had house, making manufactured homes especially attrac- been partly anticipated by lenders, reflecting the nortive to first-time buyers and to people purchasing mal seasoning of loans as well as banks' efforts to second houses or retirement homes. Shipments of stimulate borrowing by making credit more broadly these homes trended up through last fall and then available and automakers' attempts to stimulate sales flattened out at a relatively high level. using the same approach. During the past several years, lenders have aggressively sought business from people who might not have been granted credit pre- 1 louse-hold Finance viously, in part because of lenders' confidence in new "credit scoring" models that statistically evaluate Household balance sheets strengthened in the aggre- an individual's creditworthiness. Despite these new gate during the first half of 1997, but debt-payment tools, banks evidently have been surprised by the problems continued at a high level in several market extent of the deterioration of their consumer loans segments. Indebtedness grew less rapidly than it and have tightened lending standards as a result. had in 1996, and further gains in equity markets Nearly half the banks responding to the Federal pushed up the ratio of household net worth to dispos- Reserve's May survey on bank lending practices had able personal income to its highest mark in recent imposed more stringent standards for new credit card decades. Consumer credit increased at a 6]A percent accounts over the preceding three months, with a annual rate between December 1996 and May 1997, smaller fraction reining in other consumer loans. compared with 814 percent in 1996. The growth of About one-third more of the responding banks mortgage debt was somewhat slower in the first quar- expected charge-off rates on consumer loans to ter than in 1996 and, according to available indica- increase further over the remainder of the year than tors, probably stayed at roughly the same rate during expected charge-off rates to decrease; many of those the second quarter. expecting an increase cited consumers' growing will- The estimated ratio of required payments of loan ingness to declare bankruptcy. Rising delinquency principal and interest to disposable personal income rates have also put pressure on firms specializing in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 647 subprime auto loans, with some reporting reduced April and May imply that healthy increases in equipprofits and acute liquidity problems. ment investment have continued. According to the most recently available data, per- Real business spending for nonresidential strucsonal bankruptcies surged again in the first quarter of tures posted another sizable increase in the first the year after rising 30 percent in 1996. The rapid quarter after advancing a hefty 9 percent in 1996. increases of late are partly related to the same Although the latest data suggest a slowing of the pace increase in financial stress evident in the delinquency of advance in the second quarter, the economic statistics, but they may also be tied to more wide- factors underlying this sector point to continued spread use of bankruptcy as a means of dealing with increases. Vacancy rates have been falling and rents such stress. Changes in federal bankruptcy law effec- have been improving. Financing for commercial contive at the start of 1995 increased the value of assets struction reportedly is in abundant supply, especially that may be protected from liquidation, and there with substantial amounts of capital flowing to real may also be a secular trend toward less stigma being estate investment trusts (REITs). associated with declaring bankruptcy. Trends in construction continue to differ among sectors. Increases in office construction were especially robust in recent quarters, as vacancy rates fell for both downtown and suburban properties. With The Business Sector office-based employment expanding, this sector has continued to recover from the severe slump of the Investment Expenditures late 1980s and early 1990s; even so, the level of construction activity is barely more than half that of the Following a fifth year of sizable increases in 1996, mid-1980s. Construction of other commercial buildreal business fixed investment rose at an annual rate ings has increased steadily during the past five years, of 11 percent in the first quarter. The underlying and the gain in the first quarter of this year was determinants of investment spending remain solid: sizable. Since the current expansion began, the nonstrong business sales, sizable increases in cash flow, office commercial sector has provided a large contriand a favorable cost of capital, especially for high- bution to overall construction spending. Industrial contech equipment. To be sure, a significant portion of struction dropped back in the first quarter after jumpthis investment has been required to update and ing at the end of last year; the trend for this sector has replace depreciated plant and equipment; neverthe- been relatively flat on balance in recent years. less, the current pace of investment implies an appre- During 1996, investment in real nonfarm business ciable expansion of the capital stock. inventories was modest compared with the growth of Real outlays for producers' durable equipment sales, and the year ended with lean inventories in jumped at an annual rate of 12% percent in the first many sectors. In the first quarter of this year, busiquarter of this year after rising 93A percent last year. nesses moved to rebuild stocks, and inventory invest- As in recent years, purchases of computers and other ment picked up substantially. Outside of motor vehiinformation processing equipment contributed impor- cles, stocks rose in the first quarter, with particularly tantly to this gain. The computer sector has been sizable increases coming from a continued ramp-up propelled by declining prices of new and more pow- in production of aircraft and from a restocking of erful products and by a drive in the business sector to petroleum products during a period when prices improve efficiency with these latest technological eased. Nevertheless, with extraordinarily strong sales, developments. Real purchases of communications inventory-sales ratios still moved down further in the equipment also have been robust, boosted by rapidly major sectors. Available monthly data suggest that growing demand for wireless phone services and vigorous inventory investment outside of motor Internet connections as well as by upgrades to tele- vehicles continued through mid-spring, as firms phone switching and transmission equipment in responded to strength in current and prospective anticipation of eventual deregulation of local phone sales. For motor vehicles, inventories moved up some markets. In addition, purchases of aircraft by domes- in the first quarter of this year, after strike-related tic airlines moved higher on net in 1995 and 1996 reductions in the fourth quarter. In the second quarter, and—on the basis of orders and production plans of the monthly pattern of motor vehicles stocks was aircraft makers—are expected to rise considerably bounced around somewhat by strikes; cutting through further this year. For the second quarter, data on the noise, inventories of light vehicles still appear to orders and shipments of nondefense capital goods in be in balance. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin • August 1997 Corporate Profits and Business Finance The increase in the pace of business borrowing in the first half of 1997 was widespread across sources The continued rapid advance of business investment of finance. Nonfinancial corporations stepped up their this year has been financed through both strong cash borrowing from banks. The outstanding commercial flow and substantial borrowing at relatively favorable paper of these corporations also increased on net terms. Economic profits (book profits after inventory from December through June, after declining a little valuation and capital consumption adjustments) in in 1996. Meanwhile, these businesses' net issuance the first quarter were 73/4 percent higher than a year of long-term bonds in the first half of the year earlier. For the nonfinancial sector, domestic profits exceeded last year's pace, with speculative-grade were more than 9 percent higher, reaching their high- offerings accounting for the highest share of gross est share of those firms' domestic output in the cur- issuance on record. rent expansion. Despite abundant profits, the financ- At the same time, the pace of gross equity issuance ing gap for these companies—the excess of capital by nonfinancial corporations dropped considerably in expenditures (including inventory investment) over the first half of this year. In particular, the market for internally generated funds—has widened somewhat initial public offerings has been cooler than in 1996, since the middle of 1996. To fund that gap, and the despite some pickup of late; new issues have been ongoing net retirement of equity shares, nonfinancial priced below the intended range more often than corporations increased their debt 6'/2 percent at an above it, and first-day trading returns have been annual rate in the first quarter, compared with relatively low. Net equity issuance has been deeply 51/4 percent during 1996. negative again this year, as gross issuance has been External funding has remained readily available to more than offset by retirements through share repurbusinesses on favorable terms. The spreads between chases and mergers. The bulk of merger activity yields on investment-grade bonds and yields on Trea- in the 1980s involved share retirements financed sury securities have stayed low since the beginning by borrowing, but the recent surge—which largely of the year, while the spreads on high-yield bonds involves friendly intra-industry mergers—has been have declined further to historically narrow levels. financed about equally through borrowing and stock Price-earnings ratios are high, implying a low cost of swaps. Structuring deals as stock swaps can reduce equity financing. Further, banks remain accommoda- shareholders' tax liabilities and enable the combined tive lenders to businesses. According to the Federal firm to use a more advantageous method of financial Reserve's most recent survey of business lending, the accounting. The dollar value of nonfinancial mergers spreads between loan rates and market rates have in which the target firm was worth more than a held about steady for borrowers of all sizes, with rate billion dollars set a record in 1996, and merger activspreads for large loans near the lower end of the ity appears to be on a very strong track this year as range seen over the past decade. Moreover, surveys well. by the National Federation of Independent Business indicate that small businesses have not had difficulty obtaining credit. The Government Sector The plentiful supply of credit probably stems from several factors. Most banks are well positioned to Federal lend: Their profits are strong, rates of return on equity and on assets are high, and capital is ample. In The federal budget deficit has come down consideraddition, continued substantial inflows into stock and ably in recent years and should register another subhigh-yield bond mutual funds suggest that investors stantial decline this fiscal year. Over the first eight may now perceive less risk in these areas or may be months of fiscal year 1997—the period October more willing to accept risk. In fact, businesses gener- through May—the deficit in the unified budget was ally are in very good financial condition, with the $65 billion, down $43 billion from the comparable estimated ratio of operating cash flow to interest period of fiscal 1996. The recent reduction in the expense for the median nonfinancial corporation deficit primarily reflected extremely rapid growth of remaining quite high in the first part of the year. receipts for the second year in a row, although a Moreover, delinquency rates for business loans at continuation of subdued growth in outlays also conbanks have stayed extremely low, as has the default tributed to the improvement. Given recent developrate on speculative-grade debt. ments, the budget deficit as a share of nominal GDP Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 649 this fiscal year is likely to be at its lowest level since eral debt management this year. The Treasury sold 1974. indexed ten-year notes in January and April and Federal receipts were almost 8V2 percent higher in added five-year notes earlier this month. A small the first eight months of fiscal year 1997 than in the number of agency and other borrowers issued their year-earlier period and apparently are on track to own inflation-indexed debt immediately after the first outpace the growth of nominal GDP for the fifth year Treasury auction, and the Chicago Board of Trade in a row. Individual income tax payments have risen recently introduced futures and options contracts sharply this fiscal year—on top of a hefty increase based on inflation-indexed securities. As one would last year—reflecting strong increases in house- expect at this stage, however, the market for indexed holds' taxable labor and capital income; preliminary debt has not yet fully matured: Trading volume as a data from the Daily Treasury Statement indicate that share of the outstanding amount is much smaller than individual income tax revenues remained strong for nominal debt, and a market for stripped securities in June. Moreover, corporate tax payments posted has yet to emerge. another sizable advance through May of this fiscal year. Federal outlays during the first eight months of the State and Local fiscal year rose 3'/2 percent in nominal terms from the comparable period last year. Although this increase is The fiscal condition of state and local governments up from the restrained rate of growth in fiscal 1996— has remained positive over the past year, as the which was held down by the government shutdown— surplus of receipts over current expenditures has been spending growth remained subdued across most cate- stable at a relatively high level. Strong growth in gories. Outlays for income security programs rose sales and incomes has led to robust growth in revemodestly in the first eight months of the fiscal year, nues, despite numerous small tax cuts, and many partly as a result of the continued strong economy, states have held the line on spending in the past and spending on the major health programs grew several years. Additionally, the welfare reform somewhat more slowly than their average pace in legislation passed in August 1996, while presenting recent years. Although still restrained, outlays for long-term challenges to state and local governdefense have ticked up this fiscal year after trending ments, actually has eased fiscal pressures in recent down for several years. quarters: Block grants to states are based largely As for the part of federal spending that is included on 1992-94 grant levels, but caseloads more recently directly in GDP, real federal expenditures on con- have been falling. Overall, at the state level, accusumption and gross investment declined 3VA percent mulated surpluses—current surpluses plus those in the first quarter of 1997, a shade more than the from past years—were on track to end fiscal average rate of decline in recent years. An increase in year 1997 at a healthy level, according to a survey real nondefense spending was more than offset by a by the National Association of State Budget Officers decline in real defense outlays. taken shortly before the end of most states' fiscal The substantial drop in the unified budget deficit years. reduced federal borrowing in the first half of 1997 Real expenditures for consumption and gross compared with the first half of 1996. The Treasury investment by state and local governments increased responded to the smaller-than-expected borrowing moderately in the first quarter of this year, about the need by reducing sales of bills; this traditional strat- same as the pace of advance in the past two years. egy of allowing borrowing swings to be absorbed For construction, the average level of real outlays primarily by variation in bill issuance enables the during the first five months of the year was a little Treasury to have predictable coupon auctions and to higher than in the fourth quarter. Hiring by state and issue sufficient quantities of coupon securities to local governments over the first half of the year was maintain their liquidity. The result this past spring somewhat above last year's pace, with most of the was an unusually large net redemption of bills, which increase at the local level. pushed yields on short-term bills down relative to The pace of gross issuance of state and local debt yields on other Treasury securities and on short-term was roughly the same in the first half of the year as in private paper. 1996. Net issuance turned up noticeably, however, as The issuance of inflation-indexed securities at sev- retirements of debt that had been pre-refunded in the eral maturities has been a major innovation in fed- early 1990s waned. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin • August 1997 The External Sector ties amounted to $15 billion in the first quarter, down from the strong pace of 1996. Private foreigners Trade and the Current Account continued to add to their holdings of U.S. paper currency in the first quarter, but at a rate substantially The nominal deficit on trade in goods and services below earlier peaks. was $116 billion at an annual rate in the first quarter, Foreign official assets in the United States, which somewhat larger than the $105 billion in the fourth rose a record $122 billion in 1996, increased another quarter of last year. The current account deficit of $28 billion in the first quarter of 1997. Apart from $164 billion (annual rate) in the first quarter exceeded the oil-producing countries, which benefited from the $148 billion deficit for 1996 as a whole because high oil prices, significant increases in holdings were of the widening of the trade deficit and further associated with efforts by some emerging-market declines in net investment income. In April and May, countries to temper the impact of large private capital the trade deficit was slightly narrower than in the first inflows on their economies. Information for April quarter. and May suggests that official inflows have abated. The quantity of U.S. imports of goods and services surged in the first quarter at an annual rate of about 20 percent. Continued strength in the pace of U.S. Foreign Economies economic activity largely accounted for the rapid growth, but a rebound in automotive imports from Economic activity in the major foreign industrial Canada from their strike-depressed fourth-quarter countries has generally strengthened so far this year level boosted imports as well. Preliminary data for from the pace in the second half of last year. In Japan, April and May suggest that strong real import growth real GDP accelerated to a 6!/2 percent annual growth continued. Non-oil import prices fell through the rate in the first quarter, boosted by extremely strong second quarter, extending the generally downward growth of consumer spending ahead of an increase in trend that began in mid-1995. the consumption tax on April 1. Activity appears to The quantity of U.S. exports of goods and services have fallen in the second quarter, but continued expanded at an annual rate a bit above 10 percent in improvement in business sentiment suggests that the the first quarter, about the same rapid pace as during current weakness is only temporary. In Canada, the second half of last year. Growth of output in our growth of real output increased to 3'/2 percent at major trading partners, particularly the industrial an annual rate in the first quarter. Final domestic countries, helped to sustain the growth of exports, as demand more than accounted for this expansion, as did increased deliveries of civilian aircraft. Exports to business investment, consumption, and residential western Europe and to Canada grew strongly, while construction all provided significant contributions. those to the Asian developing countries declined Indicators suggest that output growth remained somewhat. Preliminary data for April and May sug- healthy in the second quarter. gest that real exports rose moderately. Economic activity has remained vigorous so far this year in the United Kingdom and appears to have strengthened in Germany and France. In the first Capital Flows quarter, U.K. real GDP grew at an annual rate of 3'/2 percent as domestic demand, particularly invest- Large gross capital inflows and outflows continued ment, accelerated from its already strong pace in the during the first quarter of 1997, reflecting the contin- fourth quarter. Strong household consumption spendued trend toward globalization of financial and prod- ing supported demand in the second quarter. Weak uct markets. Both foreign direct investment in the demand for exports, associated with the appreciation United States and U.S. direct investment abroad were of the pound since mid-1996, and some tightening of very strong, swelled by mergers and acquisitions. monetary conditions should moderate growth in the Private foreign net purchases of U.S. securities current quarter. In Germany, economic expansion amounted to $85 billion in the first quarter, down revived in the first quarter and appears to have firmed somewhat from the very high figure in the previous in the second quarter. After growing very little in the quarter but still above the record pace for 1996 as a fourth quarter of last year, German real GDP rose at whole. Net purchases of U.S. Treasury securities were an annual rate of PA percent in the first quarter, led particularly robust. Private foreigners also showed by government consumption, equipment investment, increased interest in the U.S. stock market in the first and exports. Manufacturing orders and indicators of quarter of 1997. U.S. net purchases of foreign securi- business sentiment suggest additional gains in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 651 second quarter. French real GDP grew only three- sumer prices were essentially flat through the second quarters percent at an annual rate in the first quarter, quarter after almost no increase last year. Brazilian as declines in investment offset strong export growth, inflation has declined to historically low rates. In but data on manufacturing output and consump- contrast, Venezuelan inflation, though it has come tion suggest a pickup in activity during the second down from its 1996 rate of more than 100 percent per quarter. year, remains near 50 percent. Consumer price infla- In most major Latin American countries, real out- tion remains generally low in Asia, including in put growth remained vigorous. In Mexico, real eco- China, where it fell to less than 3 percent in the nomic expansion slowed some in the first quarter twelve months through May. from its very rapid pace in the second half of last year but remained robust. The industrial sector continued to be the source of strength, while the service sector The Labor Market lagged. A pickup in import growth has resulted in a narrowing of the trade surplus; through May, the Payroll employment continued to expand solidly durtrade balance of %VA billion was about half the size it ing the first half of 1997. The growth in nonfarm was in the same period last year. In Argentina, contin- payrolls averaged about 230,000 per month; this ued healthy economic growth in the first quarter has figure may overstate slightly the underlying rate of brought real GDP back to its level before the reces- employment growth in the first half because technical sion induced by the Mexican crisis of 1995. In Brazil, factors boosted payroll figures in April. The strength real output declined in the first quarter after three in labor demand drew additional people into the job quarters of strong expansion. market, raising the labor force participation rate to Economic growth in our major Asian trading part- historical highs during the first half. Nevertheless, the ners other than Japan slowed a bit on average in the civilian unemployment rate moved down to 4.9 perfirst quarter but appears to have rebounded in the cent, on average, in the second quarter. second quarter. Nationwide labor strikes in Korea Employment gains in the private service-producing affected many of the country's key export industries sector, in which nearly two-thirds of all nonfarm and were partly responsible for weakness in first- workers are employed, accounted for much of the quarter output and a ballooning of the current account expansion in payrolls through June of this year. deficit. Data for April and May show recovery in Within this sector, higher employment in services, industrial production, and the trade balance improved transportation, and retail trade contributed imporin the second quarter. Real output growth in Taiwan tantly to the gain. After advancing substantially for remains strong so far this year, though not quite so several years, payrolls in the personnel supply vigorous as during the second half of 1996. In China, industry—a category that includes temporary help real GDP continues to expand at an annual rate of agencies—actually turned down in the second quarnearly 10 percent, about the same brisk pace as last ter; anecdotal reports suggest that some temporary year. help firms are having difficulty finding workers, espe- Despite the pickup in growth, considerable excess cially for highly skilled and technical positions. capacity remains in the major foreign industrial Employment gains were also posted in the goodscountries. As a consequence, inflation has generally producing sector. In the construction industry, payremained quiescent. The increase in the Japanese rolls increased substantially between December and consumption tax lifted the twelve-month change in June. Factory employment moved somewhat higher the consumer price index to about 1 Vi percent, but in the first part of the year after declining a little elevation of the inflation rate should be temporary. during 1996, and manufacturing overtime hours CPI inflation remains less than 2 percent in Germany, remained at a high level. Producers of durable goods France, Canada, and Italy. Only in the United King- increased employment further between December dom, where output growth has resulted in tight labor and June, while makers of nondurable goods continmarkets and consumer prices are rising at an annual ued to reduce payrolls. Since the end of 1994, factory rate of more than 2'/2 percent, are inflation pressures employment and total hours worked in manufacturcurrently a concern. ing have changed little. Even so, manufacturers have In most major countries in Latin America, inflation boosted output considerably over this period, prieither is falling or is already low. Mexican inflation marily through ongoing improvements in worker continues to improve: The monthly inflation rate was productivity. below 1 percent in May and June, the lowest monthly Although productivity for the broader nonfarm rates since the 1994 devaluation. In Argentina, con- business sector rose substantially in the first quarter, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin • August 1997 it was just 1 percent above its value a year earlier. amount of mismeasurement has not increased over Moreover, output per hour changed little from the time, then the economy's productive capacity also end of 1992 to the last quarter of 1995. The average increased more rapidly in earlier years than shown rate of measured productivity growth in the 1990s is by published measures. In this case, the official still somewhat below that of the 1980s and is even statistics on productivity growth—though perhaps further below the average gains realized in the understated—would not give a misleading imprestwenty-five years after World War II. The slower sion about changes in productivity trends. reported productivity growth during this expansion After changing little, on net, since the late 1980s, could partly reflect measurement problems. Produc- the labor force participation rate turned up early last tivity is the ratio of real output to hours worked, and year; it reached a record high 67.3 percent in March official productivity indexes rely on a measure of real of this year and remained at an elevated 67.1 percent output based on expenditures. In theory, a matching in the second quarter. Better employment opportunimeasure of real output should be derivable by sum- ties have drawn additional people into the workforce. ming labor and capital inputs on the "income side" Although the recent welfare reform legislation probof the national accounts. However, the income-side ably has not yet had a large effect on aggregate labor measure of real output has increased considerably force dynamics, it may generate an additional, albeit faster than the expenditure-side measure in recent small, boost to labor force participation rates over the years, raising the possibility that productivity growth next few years. Since the beginning of 1996, the has been somewhat better than reported in the official increases in the labor force associated with a higher indexes. participation rate have eased pressures on labor mar- Measurement difficulties may also affect estimates kets, as additional workers have stepped in to satisfy of the longer-term trajectory of productivity growth. continuing strong demand for labor. Nevertheless, In particular, if inflation were overstated by official hiring was sufficiently brisk during the first half of measures—as a considerable amount of recent this year to pull the unemployment rate down about research suggests it is—then real output growth one-quarter percentage point between December and would be understated. This understatement would June. arise because too much inflation would be removed Just as the low unemployment rate points to tightfrom nominal output growth in the calculation of real ness in labor markets, anecdotal reports from many output growth. Indeed, productivity growth for non- regions and industries mention the difficulties firms financial corporations—a sector for which output are having hiring workers, especially workers with growth arguably is measured more accurately than in specialized skills. With this tightness, labor combroader sectors—has been more rapid than for non- pensation costs have accelerated slightly. Although farm business overall. In particular, productivity for hourly labor costs, as measured by the employment nonfinancial corporations increased at an average cost index (ECI), increased only 2.5 percent at an annual pace of about IV2 percent between 1990 and annual rate during the first three months of this year, 1996, while productivity in the nonfarm business they were up 3.0 percent over the twelve months sector rose a little less than 1 percent per year over ending in March, compared with 2.7 percent over the the same period. This difference—which implies very preceding twelve months. These increases are smaller weak measured productivity growth outside of the than might have been expected on the basis of historinonfinancial corporate sector—raises the possibility cal relationships, perhaps partly reflecting persistent that overall productivity growth is stronger than indiworker concerns about job security. In addition, modcated by official indexes for nonfarm business.1 Of est increases in employer-paid benefits have partly course, a critical—and still unanswered—question is offset faster increases in wages and salaries in the the extent to which any understatement of productivpast couple of years. With smaller increases in health ity growth has become larger over time. If productivcare costs than earlier in the decade, shifts of employity growth were more rapid than indicated by official ees into managed care plans, and requirements that statistics, then the economy's capacity to produce employees assume a greater share of health care goods and services would be increasing faster than costs, employer costs for health-related benefits have indicated by current official statistics. But if the been well contained. However, growth in employer health care costs may be in the process of bottoming out, as reports of rising premiums for health insur- 1. More detail is provided in a paper by Lawrence Slifman and ance have become more common. Moreover, the Carol Corrado, "Decomposition of Productivity and Unit Costs," wages and salaries component of the ECI has contin- Board of Governors of the Federal Reserve System, November 18, 1996. ued to accelerate, rising 3.4 percent during the twelve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 653 months ending in March 1997, about one-quarter prices of all goods purchased in the United States— percentage point faster than during the previous increased the same amount over the year ending in twelve months and roughly half a percentage point the first quarter of 1997 as during the previous four faster than in 1994 and 1995. quarters. All of these price measures indicate that inflation remains muted, despite high levels of resource utiliza- Prices tion. Several factors have contributed to the recent favorable performance of price inflation. Energy The underlying trend of price inflation has remained prices have declined this year. Non-oil import prices favorable this year. In particular, the CPI excluding also have fallen significantly, reducing input costs for food and energy—often referred to as the "core" some domestic companies and likely restraining the CPI—increased at an annual rate of 2 Vz percent over prices charged by domestic businesses that compete the first two quarters of the year, about the same pace with foreign producers. Besides being restrained by as in 1996. The overall CPI registered a smaller some price competition from imported materials and increase than the core CPI during the first half of this supplies, prices of manufactured goods at earlier year. Both the overall CPI and the core CPI have stages of processing have been held in check by an been affected by a series of technical'changes imple- expansion of industrial capacity that has been rapid mented by the Bureau of Labor Statistics over the enough to restrain increases in utilization rates over the past year. Also, to the extent that firms have past two and one-half years to obtain a more accurate succeeded in their efforts to realize large efficiency measure of price changes. If not for these changes, gains and reduce unit costs, upward pressure on increases in the CPI since 1994 would be marginally prices may be reduced. Finally, an extended period of larger. relatively low and steady inflation has reinforced a Other measures of prices also suggest that favorbelief among households and businesses that the able inflation trends continued into 1997. Measured trend of inflation should remain muted, and consefrom the first quarter of last year to the first quarter of quently helped to hold down inflation expectations. this year, the chain price index for personal consumption expenditures excluding food and energy rose Developments in the food and energy sectors were 2 percent, the same as in the four-quarter period a favorable to consumers in the first half of 1997. year earlier.2 Similarly, the chain price index for Consumer energy prices declined in the first half of overall GDP—which covers prices of all goods and the year as the price of crude oil dropped back services produced in the United States—and the chain following last year's run-up. In 1996, the price of measure for gross domestic purchases—which covers crude oil was boosted by refinery disruptions, uncertainty about the timing of Iraqi oil sales, and unusual weather patterns that increased energy demand for heating and cooling. As these factors receded this 2. The price measure for personal consumption expenditures (PCE) is closely related to the CPI because components of the CPI are key year, crude oil prices fell. Although the downward inputs in the construction of the PCE price measure. Nevertheless, the trend was interrupted by some transitory spikes in PCE price measure has the advantage that by using chain weighting prices—as in May when tensions in the Middle East rather than fixed weights it avoids some of the substitution bias that affects the CPI. flared up—the price of crude is now roughly back to the range that prevailed before last year's run-up. Since December, gasoline prices have tumbled more 3. Alternative measures ol price change than 16 percent at an annual rate, and heating oil Percent prices have fallen significantly. Natural gas prices also fell as stocks, which had dwindled over the I995:Q1 1996:Q1 Price measure to to winter, were replenished. Reflecting the declines in 1996:Q1 1997:Q1 fuel prices, the CPI for energy fell about 9 percent at Fixed-weight an annual rate between December 1996 and June Consumer price index 2.7 2.9 Excluding food and energy 2.9 2.5 1997. Chain-type Consumer food prices increased at an annual rate Personal consumption expenditures ... 2.0 2.5 Excluding food and energy 2.0 2.0 of only about 1 percent in the first half of the year. Gross domestic purchases 2.2 2.2 Although coffee prices jumped, the prices of many Gross domestic product 2.2 2.2 other food items were flat or edged lower. Most Deflator Gross domestic product 2.1 1.8 notably, declines in grain prices that began in mid- 1996 have been working their way to the retail level NOTE. Changes are based on quarterly averages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin • August 1997 and have held down prices for a variety of grain- finance fell in May and June as automakers sweetdependent foods, such as beef, poultry, and dairy ened incentives. In contrast, price increases in the products. Prices of foods that depend more heavily first half of the year picked up in some other areas; on labor costs have been rising modestly this year. shelter prices rose a bit more rapidly than last year, as Consumer prices for goods other than food and did tuition and prices for personal care services. energy rose a restrained three-quarters percent at an annual rate between December and June of this year, a touch below last year's pace. Declining prices for Credit and the Monetary Aggregates non-oil imports helped contain prices of goods in the CPI in the first half of the year, in part by constrain- Credit and Depository Intermediation ing U.S. businesses in competition with importers. For example, prices of new and used passenger cars The total debt of domestic nonfinancial sectors declined in the first six months of the year, and prices increased at an annual rate of about 43/4 percent from of light trucks were essentially flat. Also, prices of the fourth quarter of 1996 through May of this year, house furnishings were about unchanged, on balance, placing the aggregate near the middle of the range for in the first half of the year, although apparel prices 1997 established by the FOMC. This pace is more moved up after declining in recent years. than half a percentage point below that for 1996, The CPI for non-energy services rose about 3 perreflecting significantly slower growth of borrowing cent at an annual rate between December and June, a by the federal government. The total debt of the other touch below last year's pace. After rising markedly sectors has risen at a roughly constant pace over the last year, airfares declined, on net, in the first half of past few years, even though the growth rate of nomithis year. Fares fell substantially early in the year nal output has been increasing. when the excise tax on tickets expired, and even with the reimposition of the tax in March, ticket prices Credit on the books of depository institutions rose were still lower in June than in December. Increases more rapidly than total debt in the first half of 1997, in prices of medical services also continued to slow indicating that their share of total debt outstanding somewhat this year.3 In addition, the CPI for auto increased. Credit growth at thrift institutions eased late last year and early this year after increasing moderately in the first three quarters of 1996. However, commercial bank credit grew at a brisk pace in 3. In January 1997, the Bureau of Labor Statistics introduced a new the first half of the year, with both securities and measure of the prices of hospital services—which account for roughly loans increasing more rapidly than they did last year. one-third of the CPI for medical services—and this new measure Real estate lending at banks rose about 9 percent at should, over time, provide a more accurate gauge of price movements in this area. an annual rate between the fourth quarter of 1996 and 4. Growth of money and debt Percent Domestic Period Ml M2 M3 nonfinancial debt Annual1 1987 6.3 4.2 5.8 10.0 1988 4.3 5.7 6.3 9.0 1989 5 5.2 40 79 1990 4.1 4.1 1.8 6.9 1991 .... 7.9 3.1 1.2 4.6 1992 14.4 1.8 .6 4.7 1993 10.6 1.3 1.1 52 1994 25 .6 1.7 52 1995 -1.6 4.0 6.2 5.5 1996 -4.6 4.7 6.8 5.4 Quarterly (annual rate)* 1997:1 -.7 6.1 8.2 4.5 2 -5.4 4.3 6.8 n.a. Year-to-date 3 1997 -2.6 4.9 7.1 4.8 1. From average for fourth quarter of preceding year to average for fourth 3. From average for fourth quarter of 1996 to average for June (May in the quarter of year indicated. case of domestic nonfinancial debt), 2. From average for preceding quarter to average for quarter indicated. n.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 655 June of this year, compared with 4 percent in 1996. In one hand, the "credit crunch" at banks and the resocontrast, outstanding home mortgages at thrift institu- lution of troubled thrifts curbed the eagerness of tions grew little in the first part of the year after a these institutions to attract retail deposits, holding large run-up in 1996. Home equity credit lines from down the rates of return offered on brokered deposits banks expanded especially rapidly in the spring, as and similar accounts relative to the average deposit some banks promoted these loans as a substitute for rates used in constructing measures of opportunity consumer loans. The growth of consumer loans at cost. At the same time, the appeal of longer-term banks (including loans that were securitized as well assets was enhanced temporarily by the steeply as loans still on banks' books) fell from about 11 per- sloped yield curve and more permanently by the cent in 1996 to VA percent at an annual rate between greater variety and lower cost of mutual fund prodthe fourth quarter of 1996 and June of this year. ucts available to investors. More recently, robust inflows into stock funds apparently have substituted to only a limited extent for holdings of M2 assets, The Monetary Aggregates and M2 velocity and opportunity cost have again been moving roughly together since mid-1994, Growth of the monetary aggregates during the first although velocity has continued to drift up slightly. half of 1997 was similar to growth in 1996. Between However, the period of renewed stability in the the fourth quarter of last year and June, M2 expanded behavior of M2—three years—is still fairly short, at an annual rate of almost 5 percent; as the Commit- and whether the stability will persist is unclear. Variatee had anticipated, the aggregate was running close tions in opportunity cost and income growth during to the upper bound of its growth cone, which had this period have been rather small, leaving considerbeen chosen to be consistent with price stability. The able doubt about how M2 would respond to more behavior of M2 over this period can be reasonably significant changes in the financial and economic well explained by changes in nominal GDP and inter- environment. est rates, using historical velocity relationships. In the M3 rose about 7 percent at an annual rate between first quarter, the velocity of M2 (defined as the ratio the fourth quarter of 1996 and June of this year. This of nominal GDP to M2) increased a little more than pace is a little faster than last year's and again left might have been anticipated from its recent rela- M3 above the upper end of its growth cone, which, tionship to the opportunity cost of holding M2—the like the growth cone for M2, was set to be consistent interest earnings forgone by owning M2 assets rather with price stability. Large time deposits, which are than market instruments such as Treasury bills. M2 not included in M2, continued to increase much more may have been held down a bit by savers' prefer- rapidly than other deposits. Banks have been funding ences for equity market funds, for which inflows their asset growth disproportionately through wholewere quite strong. Growth of M2 was much slower in sale deposits, leaving interest rates on retail deposits the second quarter than in the first quarter {AVA per- further below market rates than they have been hiscent compared with 6 percent at an annual rate), torically. Growth of institution-only money market consistent with the slowing of the economy and funds eased just a little from last year's torrid pace, as almost unchanged M2 opportunity cost. The monthly the role of these funds in corporate cash management pattern of M2 growth in the second quarter was continued to increase. heavily influenced by unusually high individual non- Ml contracted at a IVi percent annual rate between withheld tax payments. M2 surged in April, as house- the fourth quarter of 1996 and June of this year. holds apparently accumulated additional liquid bal- Growth of this aggregate was again depressed by the ances in order to make the larger tax payments, and spread of so-called sweep programs, whereby balwas about unchanged on a seasonally adjusted basis ances in transactions accounts, which are subject in May as payments cleared and balances returned to to reserve requirements, are "swept" into savings normal. accounts, which are not. Sweep programs benefit The correspondence between changes in M2 veloc- depositories by reducing their required holdings of ity and in opportunity cost during recent years may reserves, which earn no interest. At the same time, represent a return to the roughly stable relationship they do not restrict depositors' access to their funds observed for several decades until 1990—albeit at a for transactions purposes, because the funds are swept higher level of velocity. The relationship was dis- back into transactions accounts when needed. Until turbed in the early 1990s by households' apparent late last year, most retail sweep programs were limdecisions to shift funds out of lower-yielding deposits ited to NOW accounts, but demand-deposit sweeps into higher-yielding stock and bond mutual funds. On have expanded markedly since then. Adjusted for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin • August 1997 estimated total of balances swept owing to the intro- volatility has also been damped by banks' improved duction of new sweep programs, Ml expanded at a management of their balances at Reserve Banks, 43/4 percent annual rate between the fourth quarter of which in part reflects the improved real-time access 1996 and June 1997, a little below its sweep-adjusted to account information now provided by the Federal growth rate in 1996. Reserve. Whether these factors could continue to The drop in the amount of deposits held in trans- restrain funds-rate volatility if required reserve balactions accounts in the first half of 1997 caused ances were to become much smaller is as yet unclear. required reserves to fall about 10 percent at an annual Also unclear is whether a moderate increase in fundsrate, close to the rate of decline last year. Nonethe- rate volatility would have any serious adverse conseless, the monetary base has expanded at a moderate quences for interest rates farther out on the yield pace so far in 1997, because the runoff in required curve or for the macroeconomy. The Federal Reserve reserves has been more than offset—as it was also continues to monitor the situation closely. last year—by an increase in the demand for currency. Currency growth has been a little higher this year than last, as the effects of strong domestic spending Interest Rates, Equity Prices, more than offset a slight drop in net shipments of U.S. and Exchange Rates currency abroad in the first four months of the year. Further reductions in required reserves have the Interest Rates potential to diminish the Federal Reserve's ability to control the federal funds rate closely on a day-to-day Interest rates on Treasury securities were little basis. Traditionally, the daily demand for balances at changed or declined a bit, on balance, between the the Federal Reserve largely reflected banks' needs for end of 1996 and mid-July. Yields rose substantially required reserves, which are fairly predictable. As a in the first quarter as evidence mounted that the result, the Federal Reserve has generally been able to robust economic activity observed in the closing supply the quantity of balances that satisfies this months of 1996 had continued into 1997. By the time demand at the intended funds rate. Moreover, reserve of the March FOMC meeting, most participants in requirements are specified in terms of an average financial markets were anticipating some tightening level of balances over a two-week period, so if the of monetary policy, and rates moved little when the funds rate on a particular day moves above the level increase in the intended federal funds rate was expected to prevail on ensuing days, banks can trim announced. Beginning in late April, key data pointed their balances and thereby relieve some of the upward to continued low inflation and a slowing of economic pressure on the funds rate. If required reserves were growth in the second quarter, and interest rates to fall quite low, the demand for balances would retraced their earlier advance. become more linked to banks' desire to avoid The yield on the inflation-indexed ten-year Treaovernight overdrafts when conducting transactions sury note was little changed between mid-April and through their accounts at Reserve Banks. Demand mid-July, suggesting that at least part of the roughly from this source is more variable than is requirement- 60-basis-point drop in the nominal ten-year yield related demand, and it also cannot be substituted over that period reflected a reduction in expected across days; both factors would tend, all else equal, to inflation or in uncertainty about future inflation, or increase the volatility of the federal funds rate. both. Yet, relative movements in these two yields The decline in required reserves over the past should be interpreted carefully, as the market's expeseveral years has not created serious problems in the rience in trading indexed debt is relatively brief, federal funds market, but funds-rate volatility has making its prices potentially vulnerable to small risen a little, and the risk of much greater volatility shifts in market sentiment. Moreover, the Treasury would increase if required reserves were to fall sub- announced this spring a reduction in the frequency of stantially further. One factor mitigating an increase in nominal ten-year note auctions, perhaps putting downfunds-rate volatility has been an increase in required ward pressure on their nominal yields, and some clearing balances. These balances, which banks can investors may have paid renewed attention to upcomprecommit to hold on a two-week average basis, earn ing technical adjustments to the CPI, which will credits that banks use to pay for Federal Reserve reduce measured inflation. Survey-based measures of priced services. Like required reserve balances, expected inflation showed little change in the second required clearing balances are predictable by the Fed- quarter. eral Reserve and can be substituted across days The interest rate on the three-month Treasury bill within the two-week maintenance period. Funds-rate was held down in recent months by the reduced Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 657 supply of bills associated with the smaller federal sharply in the first quarter from its level in December deficit. Between mid-March and mid-July, the spread and has moved up somewhat further since then. On between the federal funds rate and the three-month balance, the nominal dollar is more than 10 percent yield averaged about 15 basis points above the aver- above its level at the end of December. A broader age spread in 1996. Interest rates on private short- measure of the dollar that includes currencies from term instruments increased a little in the second quar- additional U.S. trading partners and adjusts for ter after the small System tightening in March. changes in relative consumer prices shows appreciation of about 7 percent. After rising nearly 10 percent in terms of the Japanese yen to a recent peak in late April, the dollar retreated; it is currently about Equity Prices unchanged from its value in terms of yen at the end of December. In contrast, the dollar has risen about Equity markets have advanced dramatically again 17 percent in terms of the German mark since the end this year. Through mid-July, most broad measures of of last year. U.S. stock prices had climbed between 20 percent and Early in the year, data showing continued strength- 25 percent since year-end. Stocks began the year ening of U.S. economic activity surprised market strongly, with the major indexes reaching then-record participants, raised their expectations of some tightlevels in late January or February. Significant selloffs ening of U.S. monetary policy, and contributed to ensued, partly occasioned by the backup in interest upward pressure on the dollar. In light of the FOMC rates, and by early April the NASDAQ index was action in late March and the tendency for subsequent well below its year-end mark and the S&P 500 com- economic indicators to suggest a slowing of the posite index was barely above its. Equity prices growth of U.S. real output, pressure for dollar apprebegan rebounding in late April, however, soon push- ciation abated. While robust economic activity in the ing these indexes to new highs. Stock prices have United States generated a rise in U.S. long-term interbeen somewhat more volatile this year than last. est rates through April, market uncertainty about the strength of output growth in several foreign industrial The run-up in stock prices in the spring was bolcountries led to little change, on balance, in average stered by unexpectedly strong corporate profits for long-term (ten-year) rates in other G-10 countries. the first quarter. Still, the ratio of prices in the Since then, U.S. rates have returned to near year-end S&P 500 to consensus estimates of earnings over the levels, while rates abroad have moved down. Accordcoming twelve months has risen further from levels ingly, the long-term interest differential, on balance, that were already unusually high. Changes in this has shifted further in favor of dollar assets since ratio have often been inversely related to changes in December, consistent with the net appreciation of the long-term Treasury yields, but this year's stock price dollar this year. gains were not matched by a significant net decline in interest rates. As a result, the yield on ten-year Trea- Despite indications of further recovery of output in sury notes now exceeds the ratio of twelve-month- Japan, the dollar rose against the yen early in the year ahead earnings to prices by the largest amount since as planned fiscal policy in Japan appeared to be more 1991, when earnings were depressed by the eco- restrictive than had been expected, and Japanese nomic slowdown. One important factor behind the long-term interest rates declined in response. Stateincrease in stock prices this year appears to be a ments by G-7 officials at their meeting in Berlin further rise in analysts' reported expectations of earn- in February and on subsequent occasions suggested ings growth over the next three to five years. The some concern that the dollar's strength and the yen's average of these expectations has risen fairly steadily weakness not become excessive. The dollar moved since early 1995 and currently stands at a level not back down in terms of the yen in May and has since seen since the steep recession of the early 1980s, fluctuated narrowly. The yen has been supported by when earnings were expected to bounce back from data showing a widening of Japanese external surlevels that were quite low. pluses and by a partial retracing by Japanese longterm rates of their earlier decline, as indicators have suggested that the fiscal measures may not be as contractionary as previously expected. Exchange Rates The dollar also rose sharply early in the year in terms of the German mark and other continental The weighted average foreign exchange value of the European currencies. Market participants have been dollar in terms of the other G-10 currencies rose disappointed that the pace of economic activity has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin • August 1997 not strengthened further in continental European The dollar has changed little on balance in terms countries. In addition, uncertainties about the pros- of the Mexican peso since December, as improved pects for European Monetary Union, including the investor sentiment toward Mexico, reflected in narpossibility of delay and the question of which coun- rowing yield spreads between Mexican and U.S. tries will be in the first group proceeding to Stage dollar-denominated bonds, has supported the peso. Three, have resulted in fluctuations in the mark and, The trend in Mexican inflation has declined this year; on balance, appear to have strengthened the dollar. nevertheless, the excess of Mexican inflation over German long-term interest rates have declined some- U.S. inflation implies about a 7 percent real appreciawhat on balance this year. tion of the peso since December. Short-term market interest rates in most of the Since mid-May, financial pressures in Thailand, major foreign industrial countries have changed little which caused authorities there to raise interest rates on average since the end of last year. Rates in the and have led to depreciation of the currency, have United Kingdom have risen somewhat as the new spilled over to influence financial markets in some of government increased the official lending rate one- our Asian trading partners, particularly the Philipquarter percentage point in May and the Bank of pines and Malaysia. Interest rates in both of these England raised it by the same amount in June and countries rose sharply. Philippine officials relaxed again in July. Short-term rates in Italy and Switzer- their informal peg of the peso in terms of the dollar, land have eased. Stock prices have risen sharply so and the currency declined significantly; the Malayfar this year in the major foreign industrial countries, sian ringgit and Indonesian rupiah have also particularly in continental Europe. depreciated. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

659 Industrial Production and Capacity Utilization for June 1997 Released for publication July 15 tantly to the growth of output. As more seasonal weather returned, the output at utilities increased Industrial production increased 0.3 percent in June, 0.4 percent; the output at mines was unchanged. For about the same pace as in the previous three months. the second quarter as a whole, industrial production The production of motor vehicles rebounded sharply grew 4.3 percent at an annual rate, about the same as in June from the strike-reduced levels of April and in the previous two quarters. At 119.9 percent of its May. Continued strength in commercial aircraft and 1992 average, industrial production in June was the high-technology sector again contributed impor- 3.8 percent higher than it was in June 1996—more Industrial production indexes Twelve-month percent change Twelve-month percent change Manufacturing 5 0 \/ 5 1 i i Materials Durable 10 ~ manufacturing 10 5 0 Products V Nondurable manufacturing ~~ 5 I I J I 1 1 1 1 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 .—~—-—v_ -"_—-~^ 100 = • Production 80 Production - 80 I I I I J I I I I I I I 1 1 1 1 1 II 1 1 1 1 I Percent of capacity Percent of capacity Total industry Manufacturing 90 Utilization 90 Utilization 80 80 70 70 I I I I I I I J L I I I I I I I I 1983 1985 1987 1989 1991 1993 1995 1997 1983 1985 1987 1989 1991 1993 1995 1997 All series are seasonally adjusted. Latest series, June. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin • August 1997 Industrial production and capacity utilization, June 1997 Industrial production, index, 1992=100 Percentage change Category 1997 1997' June 1996 Mar.' Apr.' May' June? Mar.' Apr.' May' June? June 1997 Total 118.8 119.3 119.5 119.9 .4 .4 .2 .3 3.8 Previous estimate 118.8 119.2 119.7 .4 .3 .4 Major market groups Products, total2 115.3 115.4 115.7 116.2 .4 .1 .3 .4 3.5 Consumer goods 112.1 112.1 112.2 112.6 .4 .0 .1 .3 1.7 Business equipment . 134.3 135.4 135.9 137.0 .4 .8 .4 .8 8.2 Construction supplies 121.8 120.0 120.9 120.3 1.5 -1.5 .7 -.4 1.7 Materials 124.5 125.4 125.6 125.7 .3 .8 .1 .1 4.3 Major industry groups Manufacturing 120.6 120.9 121.3 121.7 .4 .3 .3 .3 4.5 Durable 131.7 132.2 132.9 133.7 .7 .4 .5 .6 5.8 Nondurable 108.7 108.8 109.0 108.9 .1 .1 .1 .0 2.9 Mining 107.5 106.1 108.2 108.1 1.1 -1.3 1.9 .0 3.6 Utilities 109.9 113.3 110.3 110.7 -.2 3.0 -2.7 .4 -2.9 Capacity utilization, percen MEMO Capacity, percentage 1996 1997 change, Average, Low, High, June 1996 1967-96 1982 1988-89 to June Mar.' Apr.' May' JuneP June 1997 Total 82.1 71.1 85.3 83.5 83.6 83.6 83.5 83.5 3.8 Previous estimate 83.6 83.6 83.7 Manufacturing 81.2 69.0 85.7 82.3 82.7 82.6 82.6 82.5 4.2 Advanced processing 80.6 70.4 84.2 80.5 80.7 80.6 80.5 80.5 5.1 Primary processing .. 82.3 66.2 88.9 86.5 87.3 87.1 87.4 87.0 2.3 Mining 87.5 80.3 86.8 91.8 94.3 93.0 94.6 94.5 .6 Utilities 87.2 75.9 92.6 91.4 86.8 89.3 86.9 87.1 1.9 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. than half of this increase reflects gains in computers, energy products was also little changed, with a small semiconductors, and commercial aircraft and parts. gain in residential electricity sales largely offset by a The rate of industrial capacity utilization was small loss in fuels. unchanged, at 83.5 percent. The output of business equipment rose 0.8 percent, and that of defense and space equipment also posted a strong gain. The growth in business equipment was MARKET GROUPS led by the rebound in business vehicles and by further strong increases in the output of information process- Paced by another sharp increase in the production of ing equipment and of commercial aircraft. However, durable consumer goods, the overall output of con- the production of industrial equipment and of other sumer goods rose 0.3 percent; the production of equipment, both of which had declined noticeably in nondurable consumer goods was unchanged. Among May, slipped again in June; even so, the output durables, the output of consumer motor vehicles rose indexes for both sectors remained above March 4.0 percent to near its pre-strike (March) level. The levels. production of appliances and home computing equip- The output of construction supplies fell 0.4 perment also posted strong increases. The production of cent, reversing part of the May increase; as a result, nondurable consumer goods other than energy prod- the June index for this market group is now more ucts was flat and little changed from its level in than 1 percent below its peak in March, but it is still March; gains in clothing and in paper products were above its average level for the fourth quarter of last offset by declines in foods and tobacco and in con- year. The production of materials edged up 0.1 persumer chemical products. The output of consumer cent, led by another gain in the output of durable Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 661 goods materials. Among the components of durable tion of nondurables was flat—gains in the apparel, materials, the output of equipment parts, particularly printing, and petroleum products industries were offsemiconductors, rose sharply, and the production of set by declines in the rest of the sector, especially parts for consumer durables, mainly for motor vehi- tobacco, paper, and leather and products. cles, also increased. Energy materials fell 0.3 percent, Mining output was flat, with another big gain in oil with a large decrease in coal production more than and gas well drilling offset by a large drop in coal offsetting increases in electricity generation and sales. mining; utility output increased. The output of nondurable goods materials slipped The factory operating rate edged down 0.1 percent- 0.2 percent. age point, to 82.5 percent, the same level as in December 1996. The utilization rate for advancedprocessing industries remained at 80.5 percent, which INDUSTRY GROUPS is slightly below its long-term average. The rate for Manufacturing output increased 0.3 percent after primary-processing industries, which had risen identical increases in April and May. Excluding 0.3 percentage point in May, fell 0.4 percentage motor vehicles and parts, the output in manufacturing point, to 87.0 percent, well below its recent high of rose 0.2 percent, or about half the rate recorded 89.6 percent in December 1994; the operating rates during the previous two months. As in the past few for all primary-processing industries fell. The operatmonths, much of the strength in manufacturing ing rate at mines decreased 0.1 percentage point, to reflects the increased output of durable goods; the 94.5 percent, while the rate at utilities increased production of nondurables remains little changed 0.2 percentage point, to 87.1 percent. from the end of last year. Gains were widespread Note: This release contains revised estimates of within the durable goods sector, with only the furni- capacity for selected industries for March through ture and primary metals industries declining apprecia- December 1997. The revision increased the estimated bly. Increases were especially strong in electrical growth of aggregate capacity 0.2 percentage point machinery and transportation equipment. The produc- between December 1996 and December 1997. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Announcements NOMINATIONS SOUGHT FOR APPOINTMENTS Federal Reserve membership and the location of a TO THE CONSUMER ADVISORY COUNCIL depository institution's reserve account. The Federal Reserve Board on June 13, 1997, PROPOSED ACTION announced that it is seeking nominations for thirteen appointments to its Consumer Advisory Council. The Federal Reserve Board on June 13, 1997, The council, which consists of thirty members, requested comment on a proposal for the Federal advises the Board on the exercise of its responsibili- Reserve Banks to offer an enhanced net settlement ties under the Consumer Credit Protection Act and on service to depository institutions. The proposed other matters on which the Board seeks advice. The service would combine and improve selected feagroup meets in Washington, D.C., three times a year. tures from the Reserve Banks' existing net settlement The thirteen new members will be appointed to services. Comments were requested by August 11, serve three-year terms beginning in January 1998. 1997. Nominations should include the following information about nominees: PUBLICATION OF THE JUNE 1997 UPDATE • Past and present positions held OF THE BANK HOLDING COMPANY • Knowledge, interests, or experience related to SUPERVISION MANUAL community reinvestment, consumer credit, or other consumer financial services The June 1997 update of the Bank Holding Company • Complete address with telephone and fax Supervision Manual, Supplement No. 12, is now numbers. available. The Manual comprises the Federal Reserve System's bank holding company inspection pro- Letters of nomination must be received by cedures and supervisory guidance. This information August 15, 1997, and should be mailed (not faxed) to includes the following: Dolores S. Smith, Associate Director, Division of Consumer and Community Affairs, Board of Gover- Supervisory Policy and Issues nors of the Federal Reserve System, Washington, DC • Revisions to Regulation O (Loans to Executive 20551. Officers, Directors, and Principal Shareholders of The Board announced on June 20, 1997, that the Member Banks); supervisory guidance on required Consumer Advisory Council would meet on Thurs- absences from sensitive positions; information on tax day, July 17 in a meeting open to the public. payments by bank holding companies and associated deferred tax assets and liabilities and Subchapter S elections; risk-focused, safety-and-soundness inspections; and inspection guidance for evaluating the REGULATIONS D AND I: AMENDMENTS management of interest rate risk. The Federal Reserve Board announced on June 25, Nonbanking Activities 1997, amendments to Regulation D (Reserve Re- • Modifications of the section 20 company inspecquirements of Depository Institutions) and Regula- tion procedures (involving fewer Board committion I (Issue and Cancellation of Capital Stock of ments), Board decisions from September 1996 Federal Reserve Banks) to define the location of a through January 1997 (involving certain earnings depository institution to facilitate interstate branch- treatment, an increase in the bank-ineligible revenue ing. The final amendments are effective October 1, limit from 10 percent to 25 percent, and the elimina- 1997. tion of the alternative indexed-revenue test [further The amendments clarify the Federal Reserve Dis- detailed in the March 1997 FR Y-20 report trict where a depository institution is eligible for instructions]). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

663 • Summaries of new nonbanking activities adopted Board's adoption of the CAMELS Rating System to by Board order; a revised section on holdings of debt include market risk (the new "S" component), and previously contracted (DPC) shares; real estate and the disclosure of the rating components (along with other assets; revisions to the accounting standards the composite rating). for the mortgage banking inspection procedures; modification of the prudential limitations for riskless The revision supplement includes a more detailed principal and private placement activities; and new list of changes to the Manual. The Manual and sections involving Board decisions with respect to updates, including pricing information, are available EDP services. from Publications Services, Mail Stop 127, Board of Governors of the Federal Reserve System, Washing- Financial Analysis ton, DC 20551 (or by fax at 202-728-5886). • • Inspection guidance on the use of certain cumulative preferred stock instruments in tier 1 capital, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

665 Legal Developments FINAL RULE—AMENDMENTS TO REGULATIONS D AND I are the Federal Reserve Bank whose District contains the location specified in paragraph (b)(2)(i) of The Board of Governors is amending 12 C.F.R. Parts 204 this section and the Federal Reserve Bank in whose and 209. its Regulations D and I (Reserve Requirements of District the institution is proposed to be located. In Depository Institutions and Issue and Cancellation of Cap- making this determination, the Board will consider ital Stock of Federal Reserve Banks), to define the location any applicable laws, the business needs of the instiof a depository institution for purposes of Federal Reserve tution, the location of the institution's head office, membership and reserve account maintenance. These the locations where the institution performs its busiamendments will facilitate interstate banking. ness, and the locations that would allow the institu- Effective October 1. 1997. 12 C.F.R. Parts 204 and 209 tion, the Board, and the Federal Reserve Banks to are amended as follows: perform their functions efficiently and effectively. Part 204—Reserve Requirements of Depository Institutions (Regulation D) Part 209—Issue and Cancellation of Capital Stock of Federal Reserve Banks (Regulation I) 1. The authority citation for Part 204 continues to read as follows: 1. The authority citation for Part 209 continues to read as follows: Authority: 12 U.S.C. 248(a), 248(c). 371a. 461, 601, 611. and 3105. Authority: 12 U.S.C. 248, 321-338, 486, 1814, 1816. 2. In section 204.3, paragraph (b) is revised to read as 2. A new section 209.15 is added to read as follows: follows: Seclion 209.1—Location of bank. (b) Form and location of reserves. (1) A depository institution, a U.S. branch or agency of a foreign bank, and an (a) General rule. For purposes of this part, a national bank Edge or agreement corporation shall hold reserves in or a state bank is located in the Federal Reserve District the form of vault cash, a balance maintained directly that contains the location specified in the bank's charter or with the Federal Reserve Bank in the Federal Reserve organizing certificate, or, if no such location is specified, District in which it is located, or a pass-through ac- the location of its head office, unless otherwise determined count. Reserves held in the form of a pass-through by the Board under paragraph (b) of this section. account shall be considered to be a balance maintained (b) Board determination. If the location of a bank as with a Federal Reserve Bank. specified in paragraph (a) of this section, in the Board's (2) (i) For purposes of this section, a depository judgment, is ambiguous, would impede the ability of the institution is located in the Federal Reserve District Board or the Federal Reserve Banks to perform their that contains the location specified in the institu- functions under the Federal Reserve Act, or would impede tion's charter or organizing certificate, or, if no the ability of the bank to operate efficiently, the Board will such location is specified, the location of its head determine the Federal Reserve District in which the bank is office, unless otherwise determined by the Board located, after consultation with the bank and the relevant under paragraph (b)(2)(ii) of this section, Federal Reserve Banks. The relevant Federal Reserve (ii) If the location specified in paragraph (b)(2)(i) of Banks are the Federal Reserve Bank whose District conthis section, in the Board's judgment, is ambiguous, tains the location specified in the paragraph (a) of this would impede the ability of the Board or the Fed- section and the Federal Reserve Bank in whose District the eral Reserve Banks to perform their functions under bank is proposed to be located. In making this determinathe Federal Reserve Act, or would impede the tion, the Board will consider any applicable laws, the ability of the institution to operate efficiently, the business needs of the bank, the location of the bank's head Board will determine the Federal Reserve District office, the locations where the bank performs its business, in which the institution is located, after consultation and the locations that would allow the bank, the Board, and with the institution and the relevant Federal Re- the Federal Reserve Banks to perform their functions effiserve Banks. The relevant Federal Reserve Banks ciently and effectively. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin • August 1997 FINAL RULE—AMENDMENT TO RULES REGARDING quire their subsidiary banks: State Bank of Mount Horeb, DELEGATION OF AUTHORITY Mount Horeb; Montello State Bank, Montello; State Bank of Argyle, Argyle: Citizens State Bank, Clinton; and Bel- The Board of Governors is amending 12 C.F.R. Part 265, leville State Bank. Belleville, all in Wisconsin. its Rules Regarding Delegation of Authority, to allow the Notice of the proposal, affording interested persons an Secretary of the Board to determine the Federal Reserve opportunity to submit comments, has been published District in which an institution is located for purposes of (62 Federal Register 14,910 (1997)). The time for filing Federal Reserve membership and reserve account mainte- comments has expired, and the Board has considered the nance. This amendment should provide for more expedi- proposal and all comments received in light of the factors tious handling of location determinations. set forth in section 3 of the BHC Act. Effective October 1. 1997. 12 C.F.R. Part 265 is amended AMCORE is the tenth largest commercial banking orgaas follows: nization in Illinois, controlling deposils of $1.9 billion, representing approximately 1.2 percent of total deposits in Part 265—Rules Regarding Delegation of Authority commercial banking organizations in the state, and is the 25th largest commercial banking organization in Wiscon- 1. The authority citation for Part 265 continues to read as sin, controlling approximately $192.6 million in deposits, follows: representing less than 1 percent of total deposits in commercial banking organizations in the state.1 Country is the Authority: 12 U.S.C. 248(i) and (k). 18th largest commercial banking organization in Wisconsin, controlling approximately $233.5 million in deposits, 2. Section 265.5 is amended by adding a new paragraph (f) representing less than 1 percent of total deposits in comto read as follows: mercial banking organizations in the state. On consummation of this proposal, AMCORE would become the tenth Section 265.5- -Functions delegated to Secretary of largest commercial banking organization in Wisconsin, the Board. controlling approximately $425.1 million in deposits, representing less than I percent of total deposits in commercial banking organizations in Wisconsin. (f) Location of institution. To determine the Federal Reserve District in which an institution is located pursuant to Interstate Analysis section 204.3(b)(2)(ii) of Regulation D (12 C.F.R. Part 204) or section 209.15(b) of Regulation 1(12 C.F.R. Section 3(d) of the BHC Act, as amended by section 101 of Part 209) if: the Riegle-Neal Interstate Banking and Branching Effi- (1) The relevant Federal Reserve Banks and the institu- ciency Act of 1994, allows the Board to approve an applition agree on the specific Reserve Bank in which the cation by a bank holding company to acquire control of a institution should hold stock or with which the institu- bank located in a state other than the home state of such tion should maintain reserve balances: and bank holding company, if certain conditions are met.2 For (2) The agreed-upon location does not raise any signifi- purposes of the BHC Act, AMCORE's home slate is cant policy issues. Illinois, and AMCORE would acquire a bank in Wisconsin. The conditions for an interstate acquisition under section 3(d) are met in this case,3 and the Board is permitted to ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT approve the proposal under section 3(d) of the BHC Act. Orders Issued Under Section 3 of the Bank Holding Company Act 1. Slate deposit data are as of December 31. 1996. and reflect AMCORE's acquisition of First National Bancorp, Monroe, Wiscon- AMCORE Financial, Inc. sin, which was consummated on April 18, 1997. Market deposit data Rockford, Illinois are as of June 30. 1996. 2. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding company's home state is the state in which the operations of the bank Order Approving the Acquisition of Bank Holding holding company's banking subsidiaries were principally conducted Companies on July 1, 1966. or the date on which the company became a bank holding company, whichever is later. 3. See 12 U.S.C. §§ l842(d)(l)(A) and (B) and l842(d)(2)(A) and AMCORE Financial, Inc., Rockford, Illinois (B). AMCORE is adequately capitalized and adequately managed. On ("AMCORE"), a bank holding company within the meanconsummation of the proposal, AMCORE and its affiliates would ing of the Bank Holding Company Act ("BHC Act"), has control less than 10 percent of the total amount of deposits of insured requested the Board's approval under section 3 of the BHC depository institutions in the United States and less than 30 percent of Act (12 U.S.C. § 1842) to acquire all the voting shares of the total amount of deposits of insured depository institutions in Wisconsin. The subsidiary banks of Country have been in existence Country Bancshares Corporation, Mount Horeb, and its and continuously operated for at least the minimum period required wholly owned subsidiary. Belleville Bancshares Corpora- under Wisconsin law. In addition, all other requirements of section tion, Belleville (collectively "Country"), and thereby ac- 3(d) of the BHC Act would be met on consummation of the proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 667 Competitive Considerations the banking market. Based on all the facts of record, the Board concludes that consummation of this proposal would AMCORE and Country compete directly in the Madison, not result in any significantly adverse effects on competi- Wisconsin, banking market.4 AMCORE operates the 18th tion or on the concentration of banking resources in the largest banking or thrift organization ("depository institu- Madison banking market or any other relevant banking tion") in the Madison banking market, controlling deposits market. of approximately $48.8 million, representing approximately 1.1 percent of total deposits in depository institu- Other Factors Under the BHC Act tions in the market ("market deposits").'1 Country operates the ninth largest depository institution in the market, con- The BHC Act also requires the Board, in acting on an trolling deposits of approximately $118.9 million, repre- application, to consider the financial and managerial resenting approximately 2.6 percent of market deposits. On sources of the companies and banks involved, the conveconsummation of the proposal, AMCORE would become nience and needs of the communities to be served, and the sixth largest depository institution in the Madison bank- certain other supervisory factors. ing market, controlling deposits of $167.7 million, representing approximately 3.7 percent of market deposits. The A. Financial, Managerial, and other Supervisory market would remain moderately concentrated, as mea- Factors sured by the Herfindahl-Hirschman Index ("HHI"), and the HHI would increase 6 points to 1247 as a result of the The Board has carefully considered the financial and manacquisition.h Numerous competitors also would remain in agerial resources and future prospects of AMCORE, Country, and their respective subsidiary banks, and other supervisory factors in light of all the facts of record. The facts 4. The Madison, Wisconsin, banking market ("Madison banking include supervisory reports of examination assessing the market") is approximated by Dane County except tor the townships financial and managerial resources of the organizations and of York, Medina. Deerfield, Christiana, and Albion; and Dekorra, confidential financial information provided by AMCORE. Lowville, Otsego, Fountain, Prairie. Columbus, Hampden, Leeds, Based on these and all other facts of record, the Board Arlington, Lodi. and West Point townships in Columbia County, all in Wisconsin. The Wisconsin Rural Development Center. Inc. ("Com- concludes that all the supervisory factors under the BHC menter") maintains that the proposal would increase market concen- Act, including financial and managerial resources, are contration and adversely affect competition for loans in a four county area sistent with approval of the proposal. in southwestern Wisconsin. Commenter presents no facts to support lending as the relevant product market or the four county area in southwestern Wisconsin as the relevant geographic market. The ap- B. Convenience and Needs Factor propriate product market for evaluating the competitive effects of acquisitions of depository institutions is the cluster of products and The Board has carefully considered the effect of the proservices offered by such institutions. .Sec Chemical Banking Corporaposal on the convenience and needs of the communities to tion, 82 Federal Reserve Bulletin 2.39 (1997). The Board and the courts also have concluded that the relevant banking market for be served in light of all the facts of record. In reviewing the analyzing the competitive effects of a proposal must reflect commer- convenience and needs considerations in the proposal, the cial and banking realities and should consist of the local area where Board notes that AMCORE provides a full range of finanthe banks involved offer their services and where local customers can cial services through its banking subsidiaries, including a practicably turn for alternatives. Id. The Board has considered Combroad range of mortgage, consumer, agricultural, and small menter's contentions in light of all the facts of record, and concludes that the appropriate geographic market is the Madison banking market business loan products. AMCORE has stated that after as defined above. The Board bases this conclusion on an analysis of consummation of the proposal, it would offer these seremployment, commuting data, shopping patterns, newspaper circula- vices, some of which are not available through Country, in tion, advertising by financial institutions, loan and deposit data, traffic communities currently served by Country. AMCORE also patterns, and other facts of record. has stated that it would review Country's credit products 5. Market data are as of June 30. 1995. Market share data are based and retain the products that are unique to the local market, on calculations in which the deposits of thrift institutions are included at SO percent. The Board previously has indicated that thrift institu- including the development and expansion of programs that tions have become, or have the potential to become, significant serve rural and farm areas. competitors of commercial banks. See Midwest Financial Group, 75 The Board has long held that consideration of the conve- Federal Reserve Bulletin 386 (1489): National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly nience and needs factor includes a review of the records of included thrift deposits in the calculation of market share on a 50- the relevant depository institutions under the Community percent weighted basis. See, e.^.. First Hawaiian, Inc.. 77 Federal Reinvestment Act ("CRA"). The CRA performance Reserve Bulletin 52 (1991). records of the institutions involved are reviewed below in 6. Under the revised Department of Justice Merger Guidelines. 49 light of all the facts of record, including comments re- Federal Register 26,823 (June 29. 1984), a market in which the ceived on the proposal. post-merger HHI is between 1000 and 1800 is considered moderately concentrated. The Justice Department has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by ing bank mergers and acquisitions for anticompetitive effects implicmore than 200 points. The Justice Department has staled that the itly recognizes the competitive effects of limited-purpose lenders and higher than normal threshold for an increase in the HHI when screen- other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin • August 1997 CRA Performance Examinations. As provided in the Federal banking law addresses branch closing by specif- CRA, the Board evaluates the convenience and needs ically requiring an insured depository institution to provide factor in light of examinations of the CRA performance notice to the appropriate regulatory agency prior to closing records of the relevant institutions by their primary federal a branch.1' The statute, however, does not authorize the supervisor. An institution's most recent CRA performance federal regulators to prevent the closing of any branch, and evaluation is a particularly important consideration in the the BHC Act does not make approval of a proposal continapplications process because it represents a detailed, on- gent on an applicant maintaining all branch offices of an site evaluation of an institutions overall record of perfor- acquired institution open. The most recent CRA performance under the CRA by its primary federal supervisor.7 mance examinations of AMCORE's subsidiary banks, All AMCORE subsidiary banks received "outstanding" moreover, found that AMCORE has a branch closing polor "satisfactory" ratings for CRA performance in the most icy that satisfactorily addresses the steps to be followed in recent evaluations by their primary federal supervisor. case of a branch closing, and that the policy considers the AMCORE"s lead subsidiary bank. AMCORE Bank, N.A., impact a branch closing would have on a delineated com- Rockford, Rockford. Illinois, which controls a majority of munity. the deposits in the AMCORE subsidiary banks, received an Conclusion Regarding Convenience and Needs Factor. "'outstanding" rating in its most recent CRA performance The Board has carefully considered the entire record in its examination from the Office of the Comptroller of the review of the convenience and needs factor under the BHC Currency ("OCC"), as of August 1995 (the "Rockford Act, including all the information provided by the Com- Examination"). The six remaining AMCORE subsidiary mentcrs. Based on all the facts of record, and for the banks received "satisfactory" ratings for CRA perfor- reasons discussed above and in the Board's previous orders mance in their most recent evaluations. In addition, all of involving AMCORE and Country, the Board concludes the subsidiary banks of Country received either "outstand- that considerations relating to the convenience and needs ing" or "satisfactory" ratings for CRA performance in factor, including the CRA performance records of the their most recent evaluations by their primary federal suinstitutions involved, are consistent with approval of the pervisor. application.10 The Rockford Examination concluded that the bank's lending activities and loan originations reflected excellent responsiveness to meeting community credit needs and that the bank was a leader in a number of federal loan pro- Shares Corporation. 83 Federal Reserve Bulletin 112 (1997) ("Country/Belleville Order"). Commenter reiterates contentions that grams. Examiners also concluded that the bank's distribuunfair and discriminatory lending practices occur at Country's lead tion of credit products was reasonable and significantly subsidiary bank. State Bank of Mount Horeb. Mount Horeb. Wisconpenetrated all segments of the delineated community, in- sin ("Ml. Horeb Bank"). After sampling accepted and rejected loan cluding low- and moderate-income ("LMI") neighbor- applications in connection with Mt. Horeb Bank's most recent examihoods. The Rockford Examination also noted that the bank nation for CRA performance, examiners concluded that loan denials appeared to be reasonable and supported. The examination found no was active in community development activities, including violations of substantive provisions of ami-discrimination laws and providing assistance to several community development regulations. The Country/Belleville Order also noted that the bank's organizations located in LMI areas. primary supervisor, ihe Federal Deposit Insurance Corporation ("FDIC"). was considering Commenter's allegations of unfair prac- Comments on the Proposal. Commenter contends that tices, particularly in connection with agricultural lending. The FDIC AMCORE will close branches in Wisconsin, specifically in concluded that the bank did not engage in improper practices. the Belleville community, as a result of this proposal and 9. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. requests the Board to prohibit any branch closings in § I83lr-1) ('section 42"), as implemented by the Joint Policy State- Wisconsin as a condition of approving the proposed acqui- ment Regarding Branch Closing (?8 Federal Register 49,083 1199.3)) sition.x ("Joint Policy Statement"), requires that a bank provide the public with at least 30 days, notice and the primary federal supervisor with at least 90 days notice before the date of the proposed branch closing. The bank also is required to provide reasons and other supporting data 7. The Statement of the Federal Financial Supervisory Agencies for the closure, consistent with Ihe institution's written policy for Regarding the Community Reinvestment Act ("Agency CRA State- branch closing. ment") (54 Federal Register 13.742. 13.745 (1989)) provides that a 10. Commenter has requested thai the Board postpone action on this CRA examination is an important and often controlling factor in proposal until Commenter has had the opportunity to arrange a meetconsideration of an institution's CRA record and that reports of these ing between Commenter and AMCORE. The Board has indicated in examinations will be given great weight in the applications process. previous orders and in the Agency CRA Statement that communica- 8. Commenter also contends that efforts by AMCORE and Country tion by depository institutions with community groups provides a to assess and to serve the banking needs of LMI borrowers and valuable method of assessing and determining how best to address the communities in rural and farming areas in Wisconsin are inadequate. credit needs of the community. Neither the CRA nor the Agency CRA The Board recently has considered almost identical contentions by Statement however, require an insured depository institution to meet Commenler in conneclion with AMCORB's application to acquire with community representatives. In reviewing an application under First National Bancorp. Inc.. Monroe. Wisconsin, and Country's appli- Ihe BHC Act. the CRA and the Agency CRA Statement instead cation to acquire Belleville Bancsharcs Corporation. Belleville. Wis- require the Board to focus on the established record of performance of consin, and concluded that the CRA performance records of the institutions involved and the programs and policies that the institu- AMCORE and Country were consistent with approval of those appli- tions have in place to assist in meeting the credit needs of their entire cations under the convenience and needs factor. See Anwore Finan- communities. In this case, the facts discussed above and the other cial. Inc.. 83 Federal Reserve Bulletin 429 (1997). and Counlrx Hunk facts of record indicate that the relevant institutions have programs to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 669 Conclusion SinoPac, with total assets equivalent to approximately $4.4 billion.: is the 26th largest banking organization in Based on all the facts of record, the Board has determined Taiwan. SinoPac does not currently operate in the United thai this application should be, and hereby is, approved. States. Far East Bank is the 71st largest depository institu- The Board's approval is specifically conditioned on com- tion in California, controlling approximately $447 million pliance by AMCORE with all the commitments made in in deposits, representing less than 1 percent of total deposconnection with this application. The commitments and its in depository institutions in the state.5 conditions relied on by the Board in reaching its decision are deemed to be conditions imposed in writing by the Competitive Considerations Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable The BHC Act prohibits the Board from approving an law. application under section 3 of the BHC Act if the proposal The proposed acquisitions shall not be consummated would result in a monopoly or if the effect of the proposal before the fifteenth calendar day following the effective may be substantially to lessen competition in any relevant dale of Ihis order, or later than Ihree months after the market, unless the Board finds that the anticompetitive effective date of this order, unless such period is extended effects of the proposal are clearly outweighed in the public by the Board or by the Federal Reserve Bank of Chicago, interest by the probable effect of the proposal in meeting acting pursuant to delegated authority. the convenience and needs of the community to be served. By order of the Board of Governors, effective June 16, SinoPac and Far East Bank do not compete directly in any 1997. banking market. Accordingly, the Board has determined that consummation of the proposal would not have a signif- Voting for this action: Chairman Greenspan. Vice Chair Rivlin. and icantly adverse effect on competition or on the concentra- Governors Phillips and Meyer. Absent and not voting: Governor tion of banking resources in any relevant banking market. Kelley. Certain Supervisory Considerations JENNIFER J. JOHNSON Deputy Secretary of 1 lie Board Under section 3 of the BHC Act. as amended by the Foreign Bank Supervision Enhancement Act of 1991.4 the Bank SinoPac Board may not approve an application involving a foreign Taipei, Taiwan bank unless the bank is "subject to comprehensive supervision or regulation on a consolidated basis by the appropri- SinoPac Bancorp ate authorities in the bank's home country."^ The Board Los Angeles, California previously has determined, in applications under the International Banking Act (12 U.S.C. S 3101 et seq.) ("IBA"), Order Approving the Formation of Bank Holding that certain Taiwan commercial banks were subject to Companies comprehensive consolidated supervision by their home country authorities.'' In this case, the Board has determined Bank SinoPac, Taipei, Taiwan ("SinoPac"), and its wholly that SinoPae is supervised on substantially the same terms owned subsidiary, SinoPac Bancorp, Los Angeles. Califorand conditions as other Taiwan commercial banks. Based nia ("Bancorp"), have requested the Board's approval on all the facts of record, the Board concludes thai SinoPac under section 3 of the Bank Holding Company Act (12 U.S.C. § 1842(a)) ("BHC Act") to become bank holding companies by acquiring all the voting shares of Far East National Bank, Los Angeles. California ("Far East 2. Asset dala are as of December 31. 19%. and use exchange rales Bank").1 then in eltect. Notice of the proposal, affording interested persons an 3. Deposit data are as of June 30. 1996. In (his context, depository institutions include banks, savings and loan associations, and savings opportunity to submit comments, has been published banks. (61 Federal Register 69,096 (1996)). The time for filing 4. Pub. L. No. 102-242. S, 201 el u'</ . 105 Stal. 22X6 (1991). comments has expired, and the Board has considered the 5. 12 Li.S.C. 5 IS42(c)(3)(B). As provided in Regulation Y, the notice and all comments received in light of the factors set Board determines whether a toreign bank is subject to consolidated home country supervision under the standards set lorth m Regulaforth in section 3 of the BHC Act. tion K (International Banking Operations). 12 C.F.R. 225.l3(a)(4). Regulation K provides that a foreign bank may be considered subject to consolidated supervision if the Board determines thai the bank is help serve the credit needs of their communities, and that denial or supervised or regulated in such a manner that its home country delay of the application is not warranted. supervisor receives sufficient information on the worldwide operations of the foreign bank, including the relationship of the bank to its I. Far East B.iuk would become a wholly owned subsidiary of affiliates, to assess the foreign bank's overall financial condition and compliance with law and regulation. 12 C.F.R. 211.24(c)( l)(ii). Bancorp. In connection with the proposal. Bancorp would establish an inlerirn national bank subsidiary that would be merged with and into 6. See, i'.y.. First Commercial Bank, X3 Federal Reserve Bullciin Far East Bank. Approval of this proposal is conditioned on SinoPac 315 (1997); Taiwan Business Bank. XI Federal Reserve Bulletin 746 receiving all required regulatory approvals. (1995); Bank of Taiwan. 79 Federal Reserve Bulletin 541 (1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670 Federal Reserve Bulletin • August 1997 is subject to comprehensive supervision and regulation on BHC Act.7 The Board also has concluded that considera consolidated basis by its home country supervisor. ations relating to the convenience and needs of the commu- The BHC Act also requires the Board to determine that nity to be served are consistent with approval of this the applicant has provided adequate assurances that it will proposal. make available to the Board such information on its opera- Based on the foregoing and all the other facts of record, tions and activities and those of its affiliates that the Board the Board has determined that these applications should be, deems appropriate to determine and enforce compliance and hereby are. approved. Should any restrictions on acwith the BHC Act. The Board has reviewed the restrictions cess to information on the operations or activities of Sion disclosure in jurisdictions where SinoPac has material noPac or any affiliates of SinoPac subsequently interfere operations and has communicated with the relevant author- with the Board's ability to determine the compliance by ities concerning access to information. SinoPac has com- SinoPac or any affiliates of SinoPac with applicable federal mitted that, to the extent not prohibited by applicable law. statutes, the Board may require termination by SinoPac or it will make available to the Board such information on the by any affiliates of SinoPac of their direct or indirect operations of SinoPac and any of its affiliates that the activities in the United States. The Board's approval of this Board deems necessary to determine and enforce compli- proposal is expressly conditioned on SinoPac's compliance ance with the BHC Act. the IBA, and other applicable with all the commitments made in connection with these federal law. SinoPac also has committed to cooperate with applications and with the conditions in this order. For the Board to obtain any waivers or exemptions that may be purposes of this action, these commitments and conditions necessary in order to enable SinoPac to make any such are deemed to be conditions imposed in writing by the information available to the Board. In light of these com- Board in connection with its findings and decision and, as mitments and other facts of record, the Board has con- such, may be enforced in proceedings under applicable cluded lhat SinoPac has provided adequate assurances of law. access to any appropriate information the Board may re- This transaction shall not be consummated before the quest. For these reasons, and based on all the facts of fifteenth calendar day following the effective date of this record, the Board has concluded that the supervisory fac- order or later than three months after the effective date of tors the Board is required to consider under section 3(a)(3) this order, unless such period is extended for good cause by of the BHC Act are consistent with approval. the Board or by the Federal Reserve Bank of San Francisco, acting pursuant to delegated authority. By order of the Board of Governors, effective June 11, Financial, Managerial, and Convenience and Needs 1997. Considerations Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and In considering the financial and managerial factors in this Governors Kelley. Phillips, and Meyer. case, the Board notes that SinoPac's capital exceeds the minimum levels that would be required under the Basle JENNIFER J. JOHNSON Deputy Secretary of the Board Capital Accord, and is considered equivalent to the capital that would be required of a U.S. banking organization. The Board also has considered other aspects of SinoPac's financial condition, as well as the capital position and other aspects of the financial condition of Far East Bank and the other institutions involved in the transaction. The proposed transaction is not expected to have a significantly adverse effect on the financial resources of the 7. Several shareholders of Far East Bank have submitted comments institutions involved. Far East Bank is well-capitalized and objecting to the transaction tee paid to an officer of the bank in all the institutions involved are expected to remain so after connection with the proposal, past compensation and benefits paid to consummation of this proposal. The Board also has consid- the bank's officers, and the amount paid for their shares in bank. The ered the size ol the acquisition relative to the assets of Board notes that the transaction fee discussed in these comments was disclosed in the shareholder proxy materials, and that shareholders SinoPac, and the effect of this proposal on the liquidity owning more than 80 percent of Far East Bank's stock voted in favor positions of the institutions. The Board also has considered of the proposal. In addition, there is no indication in the supervisory the managerial resources of the institutions involved in the information from the bank's primary federal supervisor, the OCC. that proposal in light of all the facts of record, including assess- the compensation paid to bank's management was excessive. Comments of their managerial resources by United States and menters also present no facts to substantiate that the compensation to be paid for their shares is inadequate, and Commenters may exercise Taiwan banking authorities. dissenting shareholder rights under the National Bank Act if they Based on the foregoing and all the facts of record, the believe the consideration they have been offered is unreasonable. Board has concluded that considerations relating to the 12 LJ.S.C. § 215 and 215a. The Board notes, moreover, that the limited jurisdiction to review applications under the specific statutory financial and managerial resources and future prospects of factors in the BHC Act does not authorize the Board to consider SinoPac. Bancorp and Far East Bank are consistent with matters relating to stock pricing, exchange ratios, and similar matters. approval of the proposal, as are the other supervisory See Western Banesluires. Inc. v Board of Governors. 480 F.2d 749 (10 factors the Board must consider under section 3 of the Cir. 1473). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 671 Exchange Bankshares Corporation of Kansas Farmers Bank is the fifth largest depository institution in Atchison, Kansas the market, controlling approximately 7.3 percent of market deposits. On consummation of the proposal, Atchison Order Approving the Acquisition of a Bank Bank would remain the largest depository institution in the market, controlling approximately 38.8 percent of market Exchange Bankshares Corporation of Kansas. Atchison deposits. Concentration in the Atchison County banking ("Exchange"), a bank holding company within the mean- market, as measured by the Herrindahl-Hirschman Index ing of the Bank Holding Company Act ("BHC Act"), has ("HHI") under the Department of Justice Merger Guiderequested the Board's approval under section 3 of the BHC lines ("DOJ Guidelines"), would increase by 462 points to Act (12 U.S.C. § 1842) to acquire The Farmers and Mer- 2098.5 chants State Bank, Effingham ("Farmers Bank"), both in A number of factors indicate that the market concentra- Kansas. tion as measured by the HHI tends to overstate the compet- Notice of the proposal, affording interested persons an itive effects of the proposal. The Atchison County banking opportunity to submit comments, has been published market is a relatively small rural banking market in the (62 Federal Register 16,579 (1997)). The time for filing northeast corner of Kansas, and nine depository institution comments has expired, and the Board has considered the competitors would remain in the banking market after proposal and all comments received in light of the factors consummation of the proposal. Six of the competitors, not set forth in section 3 of the BHC Act. including Atchison Bank, would each have market shares Exchange is the 25th largest commercial banking organi- of more than 5 percent, and two of them, which are zation in Kansas, controlling deposits of $153.8 million, subsidiary banks of large multistate bank holding comparepresenting less than 1 percent of total deposits in com- nies, would each have market shares of more than mercial banks in Kansas.1 Farmers Bank is the 240th 10 percent. The Board also notes that Atchison Bank largest commercial banking institution in Kansas, control- engages in a substantial amount of deposit-taking from, ling deposits of $20.5 million, representing less than and lending to, military personnel located outside the I percent of total deposits in commercial banks in Kansas. Atchison County banking market. On consummation of the proposal, Exchange would be- As in other cases, the Board has sought comments from come the 22nd largest commercial banking organization in the United States Department of Justice ("Justice Depart- Kansas, controlling deposits of $178.8 million, represent- ment') and the Federal Deposit Insurance Corporation ing less than 1 percent of total deposits in commercial ("FDIC") on the competitive effects of the proposal. The banks in the state. Justice Department has advised the Board that consummation of the proposal would not be likely to have any Competitive Considerations significantly adverse competitive effects in the Atchison County banking market or in any other relevant banking The BHC Act prohibits the Board from approving an markets. The FDIC did not object to consummation of the application under section 3 of the BHC Act if the proposal proposal or indicate it would have any significantly adwould result in a monopoly or if the effect of the proposal verse competitive effects in the Atchison County banking may be substantially to lessen competiiion in any relevant market or any relevant banking market. market, unless the Board finds that the anticompetitive Based on all the facts of record, and for the reasons effects of the proposal are clearly outweighed in the public discussed in this order, the Board concludes that consuminterest by the probable effect of the proposal in meeting mation of the proposal would not have a significantly the convenience and needs of the community to be served.2 Exchange's lead subsidiary bank. Exchange National Bank and Trust Company, Atchison, Kansas ("Atchison calculations in which the deposits of thrift institutions are included at Bank"), and Farmers Bank compete directly in the Atchi- 50 percent. The Board previously has indicated that thrift institutions son County. Kansas, banking market.' Atchison Bank is have become, or have the potential to become, significant competitors the largest depository institution in the banking market, of commercial banks. See Midwest Financial Group. 75 Federal controlling approximately 31.5 percent of total deposits in Reserve Bulletin 386 ( 1989); National City Corporation. 70 Federal depository institutions in the market ("market deposits").4 Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share on a 50-percent weighted basis. See. e.g.. First Hawaiian. Inc.. 77 Federal Reserve Bulletin 5H\W\). 1. State deposit data are as of June 30. 1996. 5. Under the revised DOJ Guidelines, 49 Federal Register 26,823 2. 12 U.S.C. § I842(c). (June 29. 19S4). a market in which the post-merger HHI is more than 3. The Atchison County. Kansas, banking market is approximated 1800 is considered highly concentrated. The Department of Justice by Atchison County and the towns of Everest, Horton, Nortonville. has informed the Board that a bank merger or acquisition generally and Whiting, all in Kansas, and Rushville, Missouri. will not be challenged (in the absence of other factors indicating 4. Market data are as of June 30. 1996. The data for Atchison Bank anticompetitive effects) unless the post-merger HHI is at least 1800 have been adjusted to exclude a $4.6 million real estate tax deposit and the merger increases the HHI by more than 200 points. The account from the Atchison County Treasurer. This account is redepos- Department of Justice has stated that the higher than normal HHI ited annually in a different local bank and is no longer on deposit with thresholds for screening bank mergers for anticompetitive effects Atchison bank. Market deposits include deposits at commercial banks implicitly recognizes the competitive effect of limited-purpose lenders and savings and loan institutions. Market share data are based on and other non-depository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin • August 1997 adverse effect on competition or on the concentration of of Milwaukee, Wisconsin. M&I's lead bank, Marshall & banking resources in any relevant banking market. Ilsley Bank, Milwaukee, Wisconsin ("M&l Bank"), also has requested the Board's approval under section 18(c) of Other Considerations the Federal Deposit Insurance Act (12 U.S.C. § I828(c)) (the Bank Merger Act) to merge with SSB. and under The BHC Act also requires the Board to consider the section 9 of the Federal Reserve Act (12 U.S.C. § 322) financial and managerial resources and future prospects of (the FRA) to establish branches at certain offices of SSB in the companies and banks involved in the proposal, the Milwaukee.1 convenience and needs of the community to be served, and Notice of the applications, affording interested persons certain supervisory factors. Based on all the facts of record, an opportunity to submit comments, has been published the Board concludes that the financial and managerial (62 Federal Register 17.622 (1997)). The time for filing resources and the future prospects of Exchange, Farmer's comments has expired, and the Board has considered the Bank, and Exchange's subsidiaries are consistent with ap- proposals and all comments received in light of the factors proval, as are the other supervisory factors the Board must set forth in section 3 of the BHC Act, the Bank Merger Act consider under section 3 of the BHC Act. In addition, and the FRA. considerations relating to the convenience and needs of the M&l, with total consolidated assets of $14.8 billion, communities to be served are consistent with approval of operates 28 subsidiary banks and one thrift in Wisconsin, the application. and one subsidiary bank in Arizona.2 M&I is the largest Based on the foregoing, and in light of all the facts of depository institution in Wisconsin, controlling approxirecord, the Board has determined that the application mately $9.8 billion in deposits, representing 15.6 percent should be, and hereby is, approved. The Board's approval of total deposits in depository institutions in Wisconsin.1 is specifically conditioned on Exchange's compliance with SCC is the sixth largest depository institution in Wisconall commitments made in connection with the application. sin, controlling approximately $2.3 billion in deposits, The commitments relied on by the Board in reaching this representing 3.6 percent of total deposits in depository decision are deemed to be conditions imposed in writing institutions in the state. On consummation of the proposal, by the Board in connection with its findings and decision, M&I would remain the largest depository institution in and as such may be enforced in proceedings under applica- Wisconsin, controlling approximately $12.1 billion in deble law. posits, representing 19.2 percent of total deposits in depos- The acquisition of Farmers Bank shall not be consum- itory institutions in Wisconsin. mated before the fifteenth calendar day following the effec- M&I and SSB compete directly in 13 banking markets in tive date of this order, or later than three months after the Wisconsin.4 The Board has carefully reviewed the competieffective date of this order, unless such period is extended tive effects of the proposal in these markets in light of all for good cause by the Board or the Federal Reserve Bank the facts of record, including the number of competitors of Kansas City, acting pursuant to delegated authority. that would remain in the markets, the projected increase in By order of the Board of Governors, effective June 30, the concentration of total deposits in depository institutions 1997. in the markets ("market deposits"), as measured by the Herfindahl-Hirschman Index ("HHI") under the Depart- Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and ment of Justice merger Guidelines ("DOJ Guidelines"),5 Governors Kelley, Phillips, and Meyer. JENNIFER J. JOHNSON 1. The branches are described in Appendix A. Other subsidiary Deptitv Secretary of the Board banks of M&l also have requested the Board's approval under the Bank Merger Act and the FRA to acquire SSB offices from M&I Bank Marshall & Ilsley Corporation after consummation of the merger, and to establish branches at those otfices. The M&l subsidiary banks and branches to be acquired, are Milwaukee, Wisconsin also described in Appendix A. 2. All banking data are as of June 30. 1996. Marshall & Ilsley Bank 3. In this context, depository institutions include commercial banks, Milwaukee, Wisconsin savings banks, and savings associations. Market share data before consummation are based on calculations in which ihe deposits of thrift institutions are included at 50 percent. The Board previously has Order Approving Merger of Bank Holding Companies indicated that thrift institutions have become, or have the potential to and Banks and Establishment of Branches become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in the calculation of market share on Marshall & Ilsley Corporation, Milwaukee, Wisconsin a 50-percent weighted basis. See, e.g., hirst Hawaiian, Inc., 77 Fed- ("M&l"), a bank holding company within the meaning of eral Reserve Bulletin 52 (1991). the Bank Holding Company Act ("BHC Act"), has re- 4. The banking markets and the effects of the proposal in those quested the Board's approval under section 3 of the BHC markets are discussed in Appendix B. 5. Under the revised DOJ Guidelines, 49 Federal Register 26.823 Act (I2U.S.C. § 1842) to merge with Security Capital (June 29. 1984), a market in which the post-merger HHI is between Corporation ("SCC") and thereby acquire SCC's state 1000 and 1800 is considered moderately concentrated, and a market in chartered savings bank, Security Bank SSB ("SSB"), both which the post-merger HHI exceeds 1800 is considered highly concen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 673 and commitments made by M&I to divest branches in A. Financial, Managerial, and other Supervisory certain markets to address potential anticompetitive ef- Factors fects.6 In light of the divestiture commitments, consummation of the proposal would not exceed the DOJ Guidelines The Board has carefully considered the financial and manin any relevant banking market, and numerous competitors agerial resources and future prospects of M&I, SCC, and would remain in each banking market.7 Based on these and their respective subsidiaries, and other supervisory factors all the facts of record, the Board concludes that consumma- in light of all the facts of record. The facts include supervition of the proposal is not likely to have a significantly sory reports of examination assessing the financial and adverse effect on competition or the concentration of bank- managerial resources of the organizations and confidential ing resources in any relevant banking market. financial information provided by M&I. Based on these and all other facts of record, the Board concludes that all Other Factors the supervisory factors under the BHC Act, including the financial and managerial resources and future prospects of The BHC Act and the Bank Merger Act also require the M&I, SCC, and their respective subsidiaries are consistent Board, in acting on an application, to consider the financial with approval of the proposal. and managerial resources of the companies and banks involved, the convenience and needs of the communities to B. Convenience and Needs Factor be served, and certain other supervisory factors. The Board has carefully considered the effect of the proposal on the convenience and needs of the communities to be served in light of all the facts of record. In reviewing the convenience and needs considerations in the proposal, the Board notes that M&I provides a range of financial sertrated. The Justice Department has informed the Board that a bank vices through its banking subsidiaries, including mortgage, merger or acquisition generally will not be challenged (in the absence consumer, agricultural, and small business loans. M&I of other factors indicating anticompetitive effects) unless the postindicates that the combined organization could develop merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Justice Department has stated that the higher new products and services, and implement products and than normal HHI thresholds for screening bank mergers for anticom- services shown to be feasible, more efficiently. After conpetitive effects implicitly recognize the competitive effect of limited- summation of the proposal, customers of both organizapurpose lenders and other non-depository financial institutions. tions would have greater access to products and services 6. The Board has reviewed comments contending that consummathrough an expanded network of branch offices, ATMs and tion of the proposal would reduce competition for loans and community redevelopment in the City of Milwaukee. The comments present electronic banking services. no facts to support lending or community redevelopment as the The Board also has long held that consideration of the relevant product market, or the City of Milwaukee as the relevant convenience and needs factor includes a review of the geographic market. The appropriate product market for evaluating the competitive effects of acquisitions of depository institutions is the records of the relevant depository institutions under the cluster of products and services offered by such institutions. Sec Community Reinvestment Act (12 U.S.C. § 2901 et seq.) Chemical Banking Corporation. 82 Federal Reserve Bulletin 239 ("CRA"). The CRA performance records of the institu- (1997). The Board and the courts also have concluded that the tions involved are reviewed below in light of all the facts relevant banking market for analyzing the competitive effects of a proposal must reflect commercial and banking realities and should of record, including comments received on the proposal. consist of the local area where the banks involved offer their services CRA Performance Examinations. As provided in the and where local customers can practicably turn for alternatives. Id. CRA, the Board evaluates the convenience and needs The Board has considered the comments in light of all the facts of factor in light of examinations of the CRA performance record, and concludes that the appropriate geographic market is the Milwaukee banking market which is defined in Appendix B to include records of the relevant institutions by their primary federal the Milwaukee RMA plus portions of four counties. The Board bases supervisors. An institution's most recent CRA perforthis conclusion on an analysis of commuting patterns, population mance evaluation is a particularly important consideration density, and other data that indicate a high degree of economic in the applications process because it represents a detailed, integration in the area in which competitive dynamics are readily on-site evaluation of an institution's overall record of pertransmitted and in which customers can practicably turn to alternate providers of banking services. formance under the CRA by its primary federal supervi- 7. With respect to each market in which M&I has committed to sor.K divest offices to mitigate the anticompetitive effects of the proposal, M&I's lead bank, M&I Bank, received an '"outstand- M&I has committed to execute sales agreements with a competitively ing" rating from the Federal Reserve Bank of Chicago at suitable purchaser prior to consummation of the acquisition of SCC and to complete the divestitures within 180 days of consummation of the acquisition. M&I also has committed that, in the event it is unsuccessful in completing any divestiture within 180 days of con- 8. The Statement of the Federal Financial Supervisory Agencies summation of the proposal, M&l will transfer the unsold bntnch(es) to Regarding the Community Reinvestment Act ("Agency CRA Statean independent trustee acceptable to the Board. The trustee will be ment") provides that a CRA examination is an important and often instructed to sell the branches promptly to competitively suitable controlling factor in the consideration of an institution's CRA record purchasers. BunkAmericu Corporation. 78 Federal Reserve Bulletin and that reports of these examinations will be given great weight in 338 (1992); United New Mexico Financial Corporation. 77 Federal the applications process. See 54 Federal Register 13,742 and 13,745 Reserve Bulletin 484 (1991). (1989). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin • August 1997 its most recent CRA performance examination, as of Janu- assist in meeting the credit needs of LMI residents in ary 22, 1996 ("1996 Examination"). All of M&I's remain- Milwaukee. In Milwaukee, for example, M&I Bank and ing insured depository institution subsidiaries have been M&I Mortgage made 128 WHEDA housing-related loans examined for CRA performance and received satisfactory in 1995 and 81 WHEDA housing-related loans in 1996.1: or better ratings from their primary federal supervisor at Thirty-four percent of the loans in 1995, and 32 percent of their most recent examinations for CRA performance.9 the loans in 1996, were made in Milwaukee's inner city Overall, insured depository institution subsidiaries of M&I area. M&I Bank also provided financial support to the area that control approximately 72.8 percent of the organiza- through a program started in 1993 with the Milwaukee tion's consolidated assets currently have "outstanding" Innercity Congregation Allied for Hope (MICAH) called CRA performance evaluations. SSB also received an "out- "Partners for Progress." As of year-end 1995, the bank had standing" rating at its most recent CRA examination from originated $55 million in housing-related, small business, its primary federal supervisor, the Federal Deposit Insur- and community development loans in Milwaukee's inner ance Corporation, as of October 1, 1993. city area through the program. CRA Performance Record of M&I Bank. The 1996 Examination concluded that M&I Bank's efforts in ascertain- Conclusion Regarding Convenience and Needs Factor ing credit needs and marketing of products and services were strong. Examiners also favorably noted the bank's The Board has carefully considered the entire record in its geographic distribution of applications and originations review of the convenience and needs factor under the BHC throughout its service community. The 1996 Examination Act. Based on all the facts of record, including information found no evidence of illegal discrimination or practices provided by commenters, the responses of M&I, and the intended to discourage applications for the types of credit relevant reports of examination, the Board concludes that described in the bank's CRA Statement. considerations relating to convenience and needs, includ- M&I Bank's business strategy focused on commercial ing the CRA performance records of the relevant institulending and commercial loans represented approximately tions, are consistent with approval. 46 percent of its loan portfolio. The bank was an active participant in federal and local government-sponsored loan C. FRA Factors programs, including programs offered by the Small Business Administration ("SBA") and the Milwaukee Eco- M&I Bank and other subsidiary banks of M&I also have nomic Development Corporation. During the period cov- applied under section 9 of the FRA to establish branches at ered by the 1996 Examination, M&I Bank originated 30 the offices of SSB listed in Appendix A. The Board has SBA loans totalling $3.7 million. The bank also partici- considered the factors it is required to consider when pated as a lender in the Lincoln Fund which was a small reviewing applications for establishing branches pursuant business lending program operated by the Lincoln Neigh- to the FRA and, for the reasons discussed in this order, borhood Redevelopment Corporation. finds those factors to be consistent with approval. Examiners also noted that M&I Bank engaged in housing-related lending through government-sponsored Conclusion loan programs directly and through its corporate affiliate, M&I Mortgage Corporation ("M&I Mortgage"). M&I Based on the foregoing and all other facts of record, the Bank was a significant participant in a loan program spon- Board has determined that the proposals should be, and sored by the Wisconsin Housing and Economic Develop- hereby are, approved.11 The Board's approval is expressly ment Agency ("WHEDA"). Examiners stated that the bank made 226 WHEDA loans during the period covered by the 1996 Examination.10 In addition, M&I Mortgage origi- by depository institutions with community groups provides a valuable method of assessing and determining how best to address the credit nated 120 loans under a Federal Housing Administration needs of the community, neither the CRA nor the Agency CRA program totalling $7.9 million in 1995. Statement requires depository institutions to enter into agreements Comments on the Proposal. The Board has carefully with particular organizations. Accordingly, in reviewing the proposal, the Board has focused on the programs and policies that M&I has in reviewed comments contending that the proposal would place to serve the credit needs of its entire community. result in a decrease in lending in Milwaukee's inner city 12. These loans represented 1 I percent of the total number of and to low- and moderate-income ("LMI") residents of WHEDA loans made in 1995 and 9 percent of the total number of Milwaukee." The Board notes that M&I has taken steps to WHEDA loans made in 1996. 13. One commenter requests that the Board hold a public hearing or meeting on this proposal. Section 3(b) of the BHC Act does not require the Board to hold a public hearing on an application unless the 9. Sixteen of M&I's remaining insured depository institutions re- appropriate supervisory authority for the bank to be acquired makes a ceived "outstanding" ratings, and 13 received '"satisfactory" ratings, timely written recommendation of denial of the application. The at their most recent examinations for CRA performance. Board has not received such a recommendation concerning this pro- 10. As noted in the 1996 Examination, the total dollar amount of the posal from any state or federal supervisory authority. In addition, loans was unavailable. neither the Bank Merger Act nor the FRA require a public meeting on 11. One commenter expressed concern that M&l would not honor an application. the terms of SSB's agreement with the commenter on CRA-related Under its rules, the Board also may, in its discretion, hold a publicactivities. The Board previously has stated that, while communication hearing or meeting on an application or notice to clarify factual issues Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 675 conditioned on compliance by M&I with all the commit- B. Branches to be established by other subsidiary banks of ments made in connection with the proposal. For purposes M&I where bank is located, unless otherwise indicated, all of this action, the commitments relied on by the Board in in Wisconsin: reaching this decision are deemed to be conditions im- M&I Lake Country Bank, Harland posed in writing and, as such, may be enforced in proceed- — 326 East Wisconsin Avenue, Oconomowoc ings under applicable law. M&I Bank Northeast. Green Bay This proposal shall not be consummated before the fif- — 802 George Street, DePere teenth calendar day following the effective date of this — 1334 Ellis Street, Kewaunee order, or later than three months following the effective — 2506 Roosevelt Road, Marinette date of this order, unless such period is extended for good M&I Bank of Racine, Racine cause by the Board or by the Federal Reserve Bank of — 4100 Durand Avenue Chicago, acting pursuant to delegated authority. M&I Bank Fox Valley, Appleton By order of the Board of Governors, effective June 30, — 2009 East Calumet Street 1997. C. Branches to be acquired by subsidiary banks of M&I Voting for this action: Chairman Greenspan. Vice Chair Rivlin, and where bank is located, unless otherwise indicated, all in Governors Kelley. Phillips, and Meyer. Wisconsin: M&I Central State Bank, Oshkosh JENNIFER J. JOHNSON — 347 North Sawyer Street Deputy Secretary of the Board M&I Bank of Eagle River, Eagle River — 633 North Railroad Street Appendix A — 624 Anderson Street. Three Lakes M&I Bank of Racine, Racine A. Branches to be established by M&I Bank, all in Wiscon- — 468 College Avenue sin: — 3215 Douglas Avenue Milwaukee — 5100 Washington Avenue — 184 West Wisconsin Avenue M&I Bank Fox Valley. Appleton — 7100 West Center Street — 2829 North Meade Street — 6645 West Oklahoma Avenue M&I Bank Northeast, Green Bay — 7600 West Layton Avenue — 1530 West Mason Street — 9049 North 76th Street — 1684 Main Street — 2701 West National Avenue — 1087 Velp Avenue — 4534 West North Avenue — 234 South Adams Street — 5555 North Port Washington Road — 2120 South Ridge Road, Ashwaubenon West Allis M&I Bank of Menomonee Falls, Menomonee Falls — 2555 South 108th Street — N85 W16058 Appleton Avenue — 5812 West Burnham Street M&I Bank of'Shawano, Shawano Wauwatosa — 401 East Green Bay Street — 9210 West North Avenue M&I Merchants Bank, Rhinelander Brookfield — 4 South Brown Street — 2225 North Calhoun Road M&I First American Bank, Wausau Cudahx — 400 4th Street — 4677 South Packard Avenue — 2001 Stewart Avenue and drive-through — 1134 Grand Avenue, Rothschild M&I Bank South Central. Watertown — 808 East Main Street related to the proposal and to provide an opportunity for testimony. See 12 C.F.R. 225.25(a)(2). 262.3(e). and 262.25(d). The Board has carefully considered commenler's request for a hearing or meeting in Appendix B light of all the facts of record. In the Board's view, commenter has had ample opportunity to submit views, and has, in fact, provided a written submission that has been considered by the Board in acting on A. Wisconsin banking markets in which consummation of this proposal. The request fails to demonstrate why this written the proposal would not exceed the DOJ Guidelines: submission does not adequately present commenter's allegations. Af- (1) Appleton: The Appleton banking market is approxiter a careful review of all the facts of record, the Board has concluded mated by Outagamie County except for Oneida townthat the request fails to identify any genuine dispute about facts thai are material to the Board's decision or any other basis on which ship; Winchester, Clayton. Neenah, and Menasha townhearing or meeting would be warranted. Based on all the lads o ships in Winnebago County; and Harrison, Woodville, record, the Board has determined that a public hearing or meeting i Britton, and Rantoul townships in Calumet County, all not necessary to clarify the factual record in the proposal, and is noi in Wisconsin. After consummation of the proposal, M&I otherwise warranted in this case. Accordingly, the request for a public hearing or meeting on the proposal is hereby denied. would control 22.8 percent of the market deposits and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin • August 1997 would remain the largest depository institution in the townships in Dodge County; plus the northern two teirs market. The HHI would increase by 636 points to 1207. of townships in Jefferson County. Wisconsin, excluding (2) Green Bay Banking Market: The Green Bay banking Ixonia township. After consummation of the proposal, market is approximated by Brown County; Morgan, M&I would remain the largest depository institution in Abrams. Pensaukee, Chase and Little Suamico town- the market. The HHI would increase by 136 points to ships in Oconto County. Angelica and Maple Grove 1310. townships in Manitowoc County; and Red River, Luxemburg, and Montpelier townships in Kewauuee County, B. Wisconsin banking markets in which consummation of all in Wisconsin. After consummation of the proposal, the proposal would not exceed the DOJ Guidelines with M&I would remain the second largest depository institu- divestitures: tion in the market. The HHI would increase by (1) Algoma Banking Market: The Algoma banking mar- 117 points to 1591. ket is approximated by Kewaunee County, excluding the (3) KenoshalRacine Banking Market: The Kenosha/ townships of Red River, Luxemburg, and Montpelier; Racine Banking Market is approximated by Kenosha plus Union, Brussels. Forestville, and Claybanks town- County, Wisconsin, as well as the Racine RMA which ships in Door County, all in Wisconsin. After divestiture consists of Caledonia. Month Pleasant, Yorkville, Dover of one branch and consummation of the proposal. M&l and Rochester townships in Racine County. Wisconsin. would become the second largest depository institution After consummation of the proposal. M&I would be- in the market. The HHI would increase 109 points to come the fourth largest depository institution in the 2265. market. The HHI would increase by 13 points to 1408. (2) Langlade Banking Market: The Langlade banking (4) Marinette-Menomonee Banking Market: The market is approximated by Langlade County. Wisconsin. Marinette-Menomonec banking market is approximated After divestiture of one branch and consummation of the by Marinette County, Wisconsin, excluding Niagara, proposal, M&l would remain the second largest deposi- Pembine, Beecher, Dunbar, and Goodman townships, tory institution in the market. The HHI would not inplus Menomonee County. Michigan, excluding Harris, crease. Spaulding, and Meyer townships. After consummation (3) Rhinelander Banking Market: The Rhinelander bankof the proposal, M&I would become the seventh largest ing market is approximated by Vilas and Oneida Coundepository institution in the market. The HHI would ties; Forest County, excluding the townships of Alvin increase by 5 points to 1054. and Popple River; and the northern two-fifths of Lincoln (5) Milwaukee Banking Market: The Milwaukee bank- County, all in Wisconsin. After divestiture of three ing market is approximated by the Milwaukee RMA, branches and consummation of the proposal, M&I would plus portions of Jefferson, Racine, Walworth, and Wash- remain the largest depository institution in the market. ington Counties, all in Wisconsin. After consummation The HHI would increase by 177 points to 1914. of the proposal, M&I would become the largest deposi- (4) Shawano Banking Market: The Shawano banking tory institution in the market. The HHI would increase market is approximated by Menomonee County; plus by 294 points to 1424. Shawano County, excluding the townships of Angelica (6) Oshkosh Banking Market: The Oshkosh banking and Maple Grove, all in Wisconsin. After divestiture of market is approximated by Winnebago County, Wiscon- one branch and consummation of the proposal. M&I sin, excluding Winchester, Clayton, Menasha, and would remain ihe largest depository institution in the Neenah townships. After consummation of the proposal, market. The HHI would increase by 185 points to 2223. M&I would remain the second largest depository institution in the market. The HHI would increase by 61 points National Canton Bancshares, Inc. to 1779. Canton, Illinois (7) Waupaca Banking Market: The Waupaca banking market is approximated by Waupaca County, Wisconsin, Order Approving the Acquisition of a Bank Holding excluding Iola and Scandinavia townships. After con- Company summation of the proposal, M&I would become the second largest depository institution in the market. The National Canton Bancshares, Inc., Canton, Illinois ("Na- HHI would increase by 502 points to I 240. tional Canton"), a bank holding company within the mean- (8) Wausau Banking Market: The Wausau banking mar- ing of the Bank Holding Company Act ("BHC Act"), has ket is approximated by the southern three-fifths of Lin- requested the Board's approval under section 3 of the BHC coln County, plus Marathon County, excluding Holton, Act (12 U.S.C. § 1842) to acquire Sturm Investment, Inc., Hull, Brighton. Spencer, McMillan and Day townships, Denver, Colorado ("Sturm"), and thereby indirectly acall in Wisconsin. After consummation of the proposal. quire 99.4 percent of the voting shares of The Union M&I would remain the largest depository institution in National Bank of Macomb, Macomb, Illinois ("Macomb the market. The HHI would increase by 360 points to Bank"). 1703. Notice of this proposal, affording interested persons an (9) Wateriown Banking Market: The Watertown banking opportunity to submit comments, has been published (62 market is approximated by the southern two tiers of Federal Register 14,145 (1997)). The time for filing com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 677 merits has expired, and the Board has considered the pro- Seven depository institutions would remain in the marposal and all comments received in light of the factors set ket after consummation of the proposal. Four of the reforth in section 3 of the BHC Act. maining competitors, not including National Canton, each National Canton is the 212th largest depository organiza- control 1 1 percent or more of market deposits. As it has tion in Illinois, controlling deposits of $125.2 million, previously, the Board also has considered the competitive representing less than 1 percent of the total deposits in effect of the presence in the market of one of the state's depository institutions in that state ("state deposits").1 largest credit unions.3 Sturm is the 3()2d largest depository organization in Illi- The Board has sought comments from the United States nois, controlling deposits of $85.5 million, representing Department of Justice ("Justice Department"), the Office less than 1 percent of stale deposits. On consummation of of the Comptroller of the Currency ("OCC"), and the this proposal. National Canton would become the 125th Federal Deposit Insurance Corporation ("FDIC") on the largest depository organization in Illinois, controlling de- competitive effects of this proposal. The Justice Departposits of $210.7 million, representing less than 1 percent of ment has advised the Board that consummation of the state deposits. proposal would not be likely to have any significantly adverse effect on competition in any relevant market. The Competitive Considerations OCC and the FDIC have not objected to consummation of the proposal or indicated it would have any significantly The BHC Act prohibits the Board from approving an adverse competitive effects in the Canton banking market application under section 3 of the BHC Act if the proposal or any relevant banking market. would result in a monopoly, or if the proposal would Based on the foregoing and all the other facts of record, substantially lessen competition in any relevant market, including the increase in market concentration as measured unless such anticompetitive effects are clearly outweighed by the HHI and the number of competitors that would in the public interest by the probable effect of the transac- remain in the market, the Board has concluded that contion in meeting the convenience and needs of the commu- summation of the proposal would not have a significantly nity to be served. adverse effect on competition or on the concentration of National Canton and Sturm compete directly in the Can- banking resources in any relevant banking market. ton, Illinois, banking market.- National Canton is the largest depository organization in the market, controlling de- Other Considerations posits o{' $125.2 million, representing 35.6 percent of the total deposits in depository institutions in the market The BHC Act also requires the Board to consider the ("market deposits").3 Sturm is the smallest depository financial and managerial resources and future prospects of organization in the market, controlling deposits of approxi- the companies and banks involved in a proposal, the convemately $9.6 million, representing 2.7 percent of market nience and needs of the community to be served, and deposits. On consummation of the proposal. National Can- certain other supervisory factors. Based on all the facts of ton would remain the largest depository organization in the record, the Board has concluded that the financial and Canton banking market, controlling deposits of approxi- managerial resources and future prospects of National Canmately $134.8 million, representing 38.3 percent of market ton. Sturm, and their respective subsidiaries, are consistent deposits. Market concentration, as measured by the with approval of the proposal, as are the other supervisory Herfindahl—Hirschman Index ("HHI"), would increase by factors the Board must consider under section 3 of the 194 points to 2265 and would not exceed the Department BHC Act. Considerations relating to the convenience and of Justice Merger Guidelines ("DOJ Guidelines").4 needs of the communities to be served also are consistent with approval. Based on the foregoing, and in light of all the facts of record, the Board has determined that the application 1. State deposit data are as of June 30. 1996. In this context, depositor) inslilulions include commercial banks, savings banks, and should be. and hereby is, approved. The Board's approval savings associations. is specifically conditioned on compliance by National Can- 2. The Canton. Illinois, banking market is approximated by the ton with all the commitments made in connection with this northeastern portion of Fulton County. Illinois, including the townapplication. For purposes of this action, the commitments ships of Fairview, Farmington. Joshua, Canton. Orion. Putman. Buckheart. Banner. Lewistown. Liverpool, and Walerford. and conditions relied on by the Board in reaching its 3. Market data are as of June 30, 1996. Market concentration calculations include deposits of thrift institutions at 50 percent. The Board previously has indicated that thrift institutions have become, or formed the Board that a bank merger or acquisition generally will not have the potential to become, major competitors of commercial banks. be challenged (in the absence of other factors indicating anticompeti- Sec Midwest Financial Group, 75 Federal Reserve Bulletin 386 tive effects) unless the post-merger HHI is at least 1800 and the (1989); National City Corporation, 70 Federal Reserve Bulletin 743 merger increases the HHI by more than 200 points. The Justice (1984). Thus. Ihe Board has regularly included thrift deposits in the Department has slated that the higher than normal threshold for an calculation of market share on a 50-percent weighted basis. See, e.g.. increase in the HHI when screening bank mergers and acquisitions for First Hawaiian Inc.. 77 Federal Reserve Bulletin 52 (1991). anticompetitive efiects implicitly recognizes the competitive effects of 4. Under the revised DO.I Guidelines, 49 Federal Register 26,823 limited-purpose lenders and other non-depository financial entities. (June 29. 1984), a market in which the post-merger HHI is over 1800 5. See Nonvest Corporation. 82 Federal Reserve Bulletin 156 is considered highly concentrated. The Justice Department has in- (1996). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin • August 1997 decision are deemed to be conditions imposed in writing Notice of the proposal, affording interested persons an by the Board in connection with its findings and decision, opportunity to submit comments, has been published and, as such, may be enforced in proceedings under appli- (62 Federal Register 23,244 (1997)). The time for filing cable law. comments has expired, and the Board has considered the The acquisition shall not be consummated before the notice and all comments received in light of the factors set fifteenth calendar day following the effective date of this forth in section 4(c)(8) of the BHC Act. order, or later than three months after the effective date of Commerzbank, with total consolidated assets of approxthis order, unless such period is extended for good cause by imately $289 billion, is the fourth largest banking organizathe Board, or by the Federal Reserve Bank of Chicago, tion in the Federal Republic of Germany, and the 24th acting pursuant to delegated authority. largest banking organization in the world.3 In the United By order of the Board of Governors, effective June 11, States, Commerzbank operates branches in New York, 1997. New York; Chicago, Illinois; and Los Angeles, California; and an agency in Atlanta, Georgia. Commerzbank also Voting for this action: Chairman Greenspan. Vice Chair Rivlin. and engages in a number of nonbanking activities in the United Governors Kelley, Phillips, and Meyer. States.4 Company would be an investment advisor registered with the Securities and Exchange Commission JENNIFER J. JOHNSON ("SEC") under the Investment Advisers Act of 1940 Deputy Secretary of the Board (15 U.S.C. § 80b-1 et seq.) ("Advisers Act"), subject to the recordkeeping and reporting obligations, fiduciary stan- Orders Issued Under Section 4 of the Bank Holding dards, and other requirements of the Advisers Act and the Company Act SEC. In addition, Services LLC would be a broker-dealer registered with the SEC under the Securities Exchange Act Commerzbank AG of 1934 (15 U.S.C. § 78a et seq.), and would be subject to Frankfurt am Main, Federal Republic of Germany the recordkeeping and reporting obligations, fiduciary standards, and other requirements of the Securities Exchange Order Approving Notice to Engage in Nonbanking Act of 1934 and the SEC.S Activities The Board previously has determined by regulation that the investment advisory, securities brokerage, and private Commerzbank AG. Frankfurt, Federal Republic of Gerplacement services that Commerzbank proposes to conduct many ("Commerzbank"), a foreign banking organization through Company are closely related to banking and persubject to the provisions of the Bi\nk Holding Company missible for bank holding companies under section 4(c)(8) Act ("BHC Act"),' has requested the Board's approval of the BHC Act. Except as discussed below, the Board also under section 4(c)(8) of the BHC Act (12 U.S.C. previously has determined that the administrative services § 1843(c)(8)) and section 225.24(a) of the Board's Regula- Commerzbank proposes to provide through Company are tion Y (12 C.F.R. 225.24(a)) to acquire through its wholly closely related to banking within the meaning of secowned subsidiary, CAM Acquisition, LLC, Wilmington, tion 4(c)(8) of the BHC Act, and Commerzbank has com- Delaware ("Company"), substantially all the assets of mitted that it will conduct the proposed activities subject to Montgomery Asset Management, L.P. ("Partnership"), inthe prudential and other limitations established by the cluding a membership interest in Montgomery Services, Board in Mellon.'1 LLC ("Services LLC"), both in San Francisco, California.2 Commerzbank would thereby engage in the following activities: 3. Asset data arc as of December 31. 1996. Foreign ranking data are (1) Providing financial and investment advisory ser- as of December 31. 1995. vices, pursuant to section 225.28(b)(6) of Regulation Y 4. Commerzbank also owns a finance company. Commerzbank U.S. (12 C.F.R. 225.28(b)(6)): Finance, Inc.. Wilmington. Delaware, and, pursuant to the grandfather provisions of section 8(c) of the IBA (12 U.S.C. § 3106(c)). engages (2) Providing securities brokerage and private placement in investment banking and securities brokerage activities through services, pursuant to section 225.28(b)(7)(i) and (iii) of Commerzbank Capital Markets Corporation, New York, New York Regulation Y (12 C.F.R. 225.28(b)(7)(i) and (iii)); and ("CCMC"). Commerzbank has committed that there will be no (3) Providing administrative services for open-end in- business transactions or relationships between CCMC and Company or Services LLC. vestment companies or mutual funds. 5. Services LLC also would provide transfer agency services to mutual funds advised by Company (the "Funds"). 6. See Mellon Bank Corporation 79 Federal Reserve Bulletin 626 (1993) ("Mellon"), and The Governor and Company of the Bank of Ireland. 82 Federal Reserve Bulletin 1129 (1996) ("BO1"). The 1. As a foreign banking organization operating branches and an administrative services lhat Company would provide to mutual funds agency in the United States. Commerzbank is subject to certain include computing the fund's financial data, maintaining and preservprovisions of the BHC Act by operation of section 8(a) of the ing the records of the fund, accounting and recordkeeping, providing International Banking Act of 1978 ("IBA") (12 U.S.C. $ 3 IO6(a>). office facilities and clerical support for the fund, and preparing and 2. After consummation of the proposal. Commerzbank would hold a riling tax returns and regulatory reports for the fund. A complete list majority ownership interest in Company and senior employees of of the proposed administrative services is included in the Appendix. Company would hold a minority interest. Commerzbank also would provide telephone services to shareholders Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 679 Glass-Steagall Act "principal underwriter" of the Funds." The independent distributor also would enter into the sales agreements with Under the Glass-Steagall Act. a company that owns a financial intermediaries to sell shares of the Funds on member bank may not control "through stock ownership behalf of the Funds.12 Accordingly, actual sales activities or in any other manner" a company that engages princi- would be conducted solely by the distributor or an indepenpally in distributing, underwriting or issuing securities.7 dent broker-dealer for the Funds. The Board has found that this provision prohibits affiliates Commerzbank does not propose to solicit retail customof banks from sponsoring, organizing, or controlling a ers to purchase shares in particular Funds, or accept orders mutual fund. The Board previously has determined, how- for the purchase of shares, or to engage in any retail sales ever, that the Glass-Steagall Act does not prohibit a bank activities. In addition, neither the Company nor any emholding company from providing advisory and administra- ployee of Company would receive transaction-based intive services to a mutual fund.* come or commissions in connection with Company's pro- Commerzbank proposes to provide marketing support to motional or marketing activities. the Funds by directly contacting broker-dealers, 401(k) Furthermore, while Company would have primary replan providers, financial planners, insurance companies, sponsibility for preparing the advertising and marketing and other financial intermediaries to recommend the Funds materials, the independent distributor would be responsible and to be primarily responsible for the development of for placing all advertisements. The independent distributor marketing plans and the preparation of advertising and also would have legal responsibility under the rules of the sales literature materials for the Funds.1' Although the National Association of Securities Dealers, Inc. ("NASD") Board has authorized bank holding companies to provide for the form and use of all advertising and sales literature many different types of services to mutual funds including prepared by Company, and would be responsible for filing assisting the distributor of mutual funds in preparing adver- these materials with the NASD or the Securities and Extising and marketing materials, the Board has not consid- change Commission.13 ered whether a bank holding company may provide the For these reasons, the Board believes that the promodegree of promotional or marketing services proposed by tional and marketing activities proposed by Commerzbank Commerzbank. would not involve Commerzbank in the underwriting or The Board does not believe that these promotional and distribution of shares of the Funds for purposes of the marketing activities would cause Commerzbank to control Glass-Steagall Act. the Funds or be involved in underwriting or distribution of Commerzbank also proposes that the chief executive the Funds' securities to the public. The proposed promo- officer of company serve as chairman of the four-member tional activities involve contact only with financial interme- board of trustees for the Funds and that no more than three diaries and are similar to activities that previously have officers or employees of Company serve as junior-level been approved by the Board.1" officers of the funds.14 The Board previously has autho- Distribution and sales activities of the Funds would be rized a bank holding company to have director and officer the responsibility of an independent distributor. Commerz- interlocks with mutual funds that the bank holding combank has committed that no U.S. affiliate of Commerzbank, pany advises and administers.15 In this case, the Board including Company, will be obligated by any agreement to does not believe that the proposed interlocks between engage in any sales activities with regard to shares of the Company and the Funds would compromise the indepen- Funds or will enter into any distribution agreement with dence of the boards of trustees of the Funds, or the indepenthe Funds without the prior approval of the Board. An independent distributor would enter into an agreement with the Funds under which the distributor would serve as 11. As defined under the Investment Company Act of 1940 (" 1940 Ac!"), a principal underwriter is any underwriter who. as principal, purchases from a mutual fund any security for distribution, or who as agent for such fund sells or has ihe right to sell the fund's securities to a dealer and/or to the public. 15 U.S.C. 5 8()a-2(a)(29). through a toll-free 800 number. Commerzbank has committed that 12. The Funds also may enter into distribution agreements with telephone service operators will not solicit callers to purchase shares intermediaries, but in no even: will Company enter into such agreein particular mutual funds anil will refer to the independent distributor ments. orders for the sale of shares. I?. Sec Barclays at n. 8. 7. I2U.S.C. §§ 221 a and .177. 14. These employees would serve as assistant secretary, assistant 8. See 12 C.F.R. 225.28(b)(6); 12 C.F.R. 225.125; and Mellon. treasurer or assistant vice president of the Funds, and would be 9. The Funds would be distributed through an independent distribu- supervised by the board of trustees or senior-level officers. These tor, and would not be "proprietary mutual funds" (funds sold primar- employees would have no policy-making authority at the Funds and ily to customers of Commerzbank). See Barclays PLC. 82 Federal would not be responsible for. or involved in. making recommenda- Reserve Bulletin 158 at n. 7 (1946) {"Barclays"). tions regarding policy decisions. No employee or officer of Company 10. The Board has permitted bank holding companies to present would serve as a senior-level officer of the Funds. information about the operations of mutual funds advised and admin- Commerzhank also may acquire up to 5 percent of the shares of istered by the bank holding company at meetings or seminars for mutual funds for which it provides administrative or advisory serbrokers of mutual funds. See Mellon at n.15. In addition, the Office of vices, but any such ownership may not be used in any way in the Comptroller of the Currency has authorized subsidiaries of na- marketing or selling the shares of the investment company. See tional banks, in connection with their brokerage and advisory services. Mellon at n. 21. to provide marketing and advertising support to mutual funds. 15. See BO I. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

680 Federal Reserve Bulletin • August 1997 dent distribution of the Funds, or result in control of the resources, decreased or unfair competition, conflicts of Funds by Commerzbank. "• interests, or unsound banking practices that are not out- Based on the foregoing, the Board concludes that control weighed by the benefits of this proposal. of the Funds would rest with the independent members of On the basis of the foregoing and all the other facts of the boards of trustees of the Funds, and that the proposed record, including the commitments made by Commerzinterlocks between Company and the Funds would not bank, the Board has determined that the performance of the compromise the independence of the boards of the Funds proposed activities by Company reasonably can be exor permit Commerzbank to control the Funds. Thus, the pected to produce benefits to the public that would out- Board concludes that this proposal is consistent with the weigh any possible adverse effects under the proper inci- Glass-Steagall Act. dent to banking standard of section 4(c)(8) of the BHC Act. In every case involving a proposal by a bank holding Proper Incident to Banking Test company to engage in nonbanking activities under section 4 of the BHC Act, the Board also must consider the In order to approve this proposal, the Board also must find financial and managerial resources of the notificant and its that the performance of the proposed activities by Commer- subsidiaries and the effect of the transaction on those zbank "can reasonably be expected to produce benefits to resources.1** The Board notes that Commerzbank meets the the public . . . that outweigh possible adverse effects, such relevant risk-based capital standards established under the as undue concentration of resources, decreased or unfair Basle Accord and has capital equivalent to that which competition, conflicts of interests, or unsound banking would be required of a U.S. banking organization. Based practices." 12U.S.C. § 1843(c)(8). on these and other facts of record, the Board has deter- The Board expects that the activities in which Commerz- mined that financial and managerial considerations are bank proposes to engage through Company would provide consistent with approval of this proposal. added convenience to Commerzbank's customers by offering an expanded range of products and investment manage- Conclusion ment expertise. The proposed acquisition also would provide Commerzbank with further access to U.S. markets for Based on all the facts of record, including all the commitits advisory services and products. In addition, the Board ments and representations made by Commerzbank, and previously has determined that the provision of advisory subject to all of the terms and conditions set forth in this and administrative services to mutual funds within certain order, the Board has determined that the notice should be, parameters is not likely to result in the types of subtle and hereby is, approved. This determination is subject to hazards at which the Glass-Steagall Act is aimed or in any all the conditions set forth in the Board's Regulation Y, other adverse effects. For example, as required by the including those in sections 225.7 and 225.23(g), and to the Board's regulations, Company would provide to customers Board's authority to require modification or termination of disclosures designed to alert its customers to the relation- the activities of a bank holding company or any of its ships between Company and the Funds. These disclosures subsidiaries as the Board finds necessary to assure compliinclude those required by the Board's interpretive rule on ance with, or to prevent evasion of, the provisions and investment advisory activities to address conflicts of inter- purposes of the BHC Act and the Board's regulations and ests that may be raised by the relationship between Com- orders issued thereunder. The Board's decision is specifipany and the Funds.17 There is no evidence in the record, cally conditioned on compliance with all the commitments moreover, that consummation of this proposal, subject to and representations made in the notice, including the comthe limitations noted above, would result in any signifi- mitments and conditions discussed in this order. The comcantly adverse effects, such as undue concentration of mitments, representations, and conditions relied on in reaching this decision shall be deemed to be conditions imposed in writing by the Board in connection with its 16. Any trustee of the Funds who also serves as an officer or findings and decision, and, as such, may be enforced in employee of Company would be an "interested person" under the proceedings under applicable law. 1940 Act and. therefore, would be required to abstain from voting on This proposal shall not be consummated later than three the Funds' investment advisory and other major contracts. In addition, months after the effective date of this order, unless such Commerzbank has committed that only disinterested persons would vote on the contract for administrative services provided to the Funds period is extended for good cause by the Board or the under the same requirements established for advisory contracts in the Federal Reserve Bank of New York, acting pursuant to 1940 Act. delegated authority. 17. See 12 C.F.R. 225.125. The interpretive rule requires a bank By order of the Board of Governors, etfective June 16, holding company that recommends to customers shares of a mutual 1997. fund that the bank holding company advises to caution customers to read the fund prospectus before investing and to advise customers in writing that the fund's shares are not insured by the Federal Deposit Insurance Corporation, and are not deposits, obligations of. or endorsed or guaranteed in any way, by any bank, unless that happens to be the case. The holding company also must disclose in writing to the 18. 12 C.F.R. 225.26; Barclays; The Fuji Bank, Limited, 75 Federal customer the role of the company or its affiliate as investment advisor Reserve Bulletin 94 (1989): Baxerishe Vereinhank AG, 73 Federal to the fund. Reserve Bulletin 155 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 681 Voting for this action: Chairman Greenspan, Vice Chair Rivlin. and Bank Holding Company Act ("BHC Act"), has requested Governors Phillips and Meyer. Ahscnl and nol voting: Governor the Board's approval under section 4(c)(8) of the BHC Act Kelley. (12 U.S.C. § 1843(c)(8)) to acquire all of the voting shares of Buck Consultants, Inc., New York, New York ("Buck"), JENNIFER J. JOHNSON and thereby engage in certain employee benefits consulting Deputy Secretary of the Board activities pursuant to section 225.28(b)(9)(ii) of the Board's Regulation Y (12 C.F.R. 225.28(b)(9)(ii)).' Appendix Notice of the proposal, affording interested persons an opportunity to submit comments, has been published List of Administrative Services (62 Federal Register 26,315 (1997)). The time for filing comments has expired, and the Board has considered the 1. Maintaining and preserving the records of the Funds, proposal and all comments received in light of the factors including financial and corporate records. set forth in section 4(c)(8) of the BHC Act. 2. Computing net asset value, dividends, performance data Mellon, with total consolidated assets of $42.7 billion, is and financial information regarding the Funds. the 22nd largest bank holding company in the United 3. Furnishing statistical and research data. States and engages in a wide range of permissible banking 4. Preparing and filing with the SEC and state securities and nonbanking activities.- Buck provides employee beneregulators registration statements, notices, reports, and fits consulting services worldwide.3 other materials required to be filed under applicable laws. The Board previously has determined by order that bank 5. Preparing reports and other informational materials reholding companies may provide employee benefits consultgarding the Funds, including proxies and other shareholder ing services under section 4 of the BHC Act,4 and this communications, and reviewing prospectuses. activity is now included in the list of permissible nonbank- 6. Providing legal and other regulatory advice to the Funds ing activities set forth in Regulation Y.s Mellon has comin connection with their other administrative functions. mitted to provide these services in accordance with the 7. Providing office facilities and clerical support for the Board's rules/' Funds. In connection with providing and designing Benefit 8. Developing and implementing procedures for monitor- Plans. Buck may provide insurance-related services being compliance with regulatory requirements and complicause a client may choose to include a life, medical, dental, ance with the Funds' investment objectives, policies and or other insurance plan as an element of its employee restrictions as established by the trustees of the Funds. benefit program. In these circumstances, in addition to 9. Providing routine fund accounting services and liaison assisting in the analysis, recommendation, and selection of with outside auditors. Benefit Plans, Buck may contact the selected insurer, nego- 10. Preparing and tiling tax returns. tiate with the insurer on behalf of the client, and otherwise 1 I. Reviewing and arranging for payment of expenses of the Funds. 12. Providing communication and coordination services with regard to the Funds' transfer agent, custodian, distrib- 1. Mellon also would acquire the foreign subsidiaries of Buck under utor and other service organizations that render recordkeep- the general consent provisions of the Board's Regulation K (12 C.F.R. ing or shareholder communication services. 21 1.5(c)>. 13. Preparing advertising materials, sales literature, and 2. Asset data are as of December 31, 1996. 3. Buck was established in 1916 and currently has 30 offices marketing plans for the Funds. throughout the United States and provides sen ices in 16 other coun- 14. Providing information to the distributor's personnel tries. Buck currently serves approximately 5,000 clients, including concerning performance and administration of the Funds. large multinational corporations, other businesses, educational institu- 15. Providing marketing support with respect to sales of tions, health care providers, state and local government retirement systems, and quasi-governmental organizations. the Funds through financial intermediaries. 4. Norslar Bamorp. 71 Federal Reserve Bulletin 656 (I9KS); Bunk 16. Assisting in the development of additional Funds. Vermont Corporation, 72 federal Reserve Bulletin 337 (1986): 17. Providing reports to the trustees of the Funds with Nm-snir Bancorp. 72 Federal Reserve Bulletin 729 (1986). regard to the activities of the Funds. 5. 12 C.F.R. 225.2X(bl(9)(ii). 6. Buck's services consist of providing plan actuarial consulting, 18. Providing telephone shareholder services through a employee benefit consulting, and plan administration and outsourcing toll-free 800 number. services with respect to a broad range of employee benelit plans, including pension and other rclirement plans, life insurance plans, medical and dental plans, disability plans, and compensation and Mellon Bank Corporation human resource management plans (collectively, "Benefit Plans"). Pittsburgh. Pennsylvania Plan actuarial consulting includes the design of Benefit Plans, valuation of plan assets and liabilities, allocation of plan costs, and cost Order Approving Notice to Acquire an Employee Benefits projections associated with plan implementation or modification. Employee benelit consulting services involve the design, implementation, Consulting Company and analysis of Benefit Plans. Buck's plan administration and outsourcing services include recordkeeping and administrative services Mellon Bank Corporation, Pittsburgh, Pennsylvania ("Mel- for Benefit Plans, as well as the performance of plan feasibility studies lon"), a bank holding company within the meaning of the and plan participant education. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin • Ausust 1997 communicate with the insurer concerning the client's em- consulting assignments involve the receipt of commisployee benefit needs. sions.'' In these types of projects, Buck may receive a commis- Mellon also maintains that the provision of insurancesion from the insurance company. In these cases, however, related services is necessary because Buck would operate Buck reduces the consulting fee charged to the client by at a competitive disadvantage if it could not accept insurthe amount of any commission that Buck receives from the ance commissions and satisfy the state licensing requireinsurance company. Buck is, nevertheless, required to be ments that permit it to accept such commissions. As noted licensed as an insurance broker under certain state insur- previously, Buck offsets any commissions it receives ance laws because it receives commissions from insurance against the consulting fees to be paid by its clients. Mellon companies. These commissions represent a small part of has indicated that the inability to accept commissions and the total revenues Buck derives from its employee benefits pass them on to clients in the form of an offset would place consulting activities. Mellon proposes to continue these Buck at a competitive disadvantage in pricing its consultinsurance-related activities after it acquires Buck. ing services against those of another firm that could accept Section 4(c)(8) of the BHC Act. as amended by the commissions, and thereby reduce consulting fees, because Garn-St Germain Act of 1982 ("Garn-St Germain Act"), it was not affiliated with a bank holding company.1" expressly provides that providing insurance as a principal, The Board believes the record here indicates that the agent, or broker is not closely related to banking. Mellon proposed insurance-related activities are incidental activiargues that Buck's insurance-related activities, while not ties. They are necessary elements of another permissible closely related or grandfathered in this case, are a neces- activity and represent a small fraction of the consulting sary incident to its permissible employee benefits consult- work performed. Accordingly, the Board has concluded, ing services. The Board and the courts have held that bank under the unique circumstances of this case, that approval holding companies and their subsidiaries may engage in of this proposal is not prohibited by the Garn-St Germain activities that may not be closely related to banking where Act, and that Buck may continue to perform these activities those activities are incidental to other activities that are upon acquisition by Mellon. closely related to banking.7 In determining whether an In order to approve the proposal, the Board also must activity is an incidental activity, the Board generally has determine that the proposed activities are a proper incident considered whether the activity is reasonably necessary to to banking, that is, that the proposal "can reasonably be the conduct of a permissible activity and whether the expected to produce benefits to the public, such as greater activity constitutes a relatively minor part of the overall convenience, increased competition, or gains in efficiency, business of the company conducting the activities.s that outweigh possible adverse effects, such as undue con- In this case, the insurance-related activities are a minor centration of resources, decreased or unfair competition, part of Buck's overall business, and are necessary to the conflicts of interests, or unsound banking practices."" conduct of Buck's employee benefits consulting services. As part of its review of these factors, the Board has Buck's core activity is the provision of employee benefits considered the financial and managerial resources of Melconsulting services, which involves providing advice about lon, its subsidiaries, and Buck, and the effect the proposal the design, analysis, selection, valuation, and implementa- would have on such resources.'- Based on all the facts of tion of all types of Benefit Plans, including retirement, record, the Board has concluded that financial and manageprofit-sharing, human resource management, and health rial considerations are consistent with approval of the and medical plans, some of which may involve an insur- proposal. ance component. Buck also provides certain recordkeeping The Board expects that the proposed activities would and other administrative services with respect to Benefit result in benefits to the public. In particular. Mellon would Plans. Buck generally becomes involved in insurance- be able to offer a broader array of products and services to related services only when the client selects an insurance its customers. Because of the range of products and serplan and requests that Buck negotiate with the insurer on vices that Mellon provides, customers of Buck also would its behalf. Buck performs all of its consulting work on a fee-for-service basis, and offsets any insurance commission against that fee. Payment of the fee is never contingent on 9. In addition, due to Buck's practice of offsetting any commissions received against its consulting fee. Buck's insurance-related services the receipt of an insurance commission or on the purchase do not provide it with any direct economic reward. Buck also hiss of an insurance policy. Furthermore, as noted previously, indicated that, in lieu of receiving commissions, it generally attempts insurance commissions represent only a small part of to negotiate an elimination or reduction of commissions, and thereby Buck's total revenues, and only a small fraction of Buck's to reduce the premiums paid by its clients, where such arrangements are permitted by law. It). Mellon also notes that, although commissions are paid only in a minority ot projects, neither Buck nor its client would know at the commencement of a consulting assignment whether the client will elect insurance coverage involving a commission. Therefore, the 7. See National Cornier Association. 516 F.2d 1229, 1239-41 competitive disadvantage will be present in every case in which the (1975) ("National Courier"). See also 12 C.F.R. 225.21 (a)(2). receipt of commissions is a possibility, even if the client eventually H. See Letter to Patrick J. Mulhcm. Esq.. from Jennifer J. Johnson selects some other form of Benefit Plan. (June 19. 1989) (relating to Citicorp's acquisition of Quotron Sys- 11. 12 U.S.C. § 1843(c)(8). tems. Inc.). 12. Sec 12 C.F.R. 225.26(b). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 683 derive increased convenience from being able to purchase Order Approving the Acquisition of a Savings a wider range of services from a single organization. Cus- Association tomers of Buck also would benefit from the operational efficiencies of consolidating their trust and participant ser- Mercantile Bancorporation Inc., and its subsidiary Amerivice needs within one organization. Consummation of the banc, Inc.. both of St. Louis, Missouri (collectively "Mertransaction also may enhance Buck's ability to compete cantile"), bank holding companies within the meaning of with other firms that provide both trust services and em- the Bank Holding Company Act ("BHC Act"), have reployee benefit consulting services. In addition, there is no quested the Board's approval under section 4(c)(8) of the evidence in the record that consummation of the proposal BHC Act (12 U.S.C. § 1843(c)(8)) to acquire Roosevelt would produce any significant adverse effects, such as Financial Group, Inc. ("Roosevelt"),1 and thereby acquire undue concentration of resources, decreased or unfair com- Roosevelt's wholly owned savings association subsidiary, petition, conflicts of interests, or unsound banking prac- Roosevelt Bank, a federal savings bank ("Roosevelt tices. FSB"), both of Chesterfield, Missouri.2 Based on all the facts of record, the Board has deter- Notice of the proposal, affording interested persons an mined that the balance of the public interest factors it is opportunity to submit comments, has been published required to consider under the proper incident to banking (62 Federal Register 11,454 and 17,828 (1997)). The time standard of section 4(c)(8) of the BHC Act is favorable, for filing comments has expired, and the Board has considand consistent with approval of the proposal. ered the application and all comments received in light of Based on the foregoing and all the facts of record, the the factors set forth in section 4 of the BHC Act. Board has determined that the proposal should be, and Mercantile is the second largest depository institution in hereby is, approved. Approval of the proposal is specifi- Missouri, controlling deposits of $10.5 billion, representcally conditioned on compliance by Mellon with all the ing approximately 14.4 percent of the total deposits in commitments made in connection with the proposal and depository institutions in the state.3 Roosevelt, with total with the conditions referred to in this order. The Board's consolidated assets of $7.8 billion, controls one bank and determination also is subject to all the conditions set forth one thrift in Missouri. On consummation of the proposal in Regulation Y, including those in sections 225.7 and and all proposed divestitures, totalling $268.4 million. 225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)), Mercantile would become the largest depository institution and to the Board's authority to require such modification or in Missouri, controlling approximately 21.5 percent of total termination of the activities of a bank holding company or deposits in depository institutions in that state.4 any of its subsidiaries as the Board finds necessary to The Board previously has determined by regulation that ensure compliance with, and to prevent evasion of. the operating a savings association is closely related to bankprovisions of the BHC Act and the Board's regulations and ing for purposes of section 4(c)(8) of the BHC Act.5 The orders issued thereunder. For purposes of this action, these Board requires savings associations acquired by bank holdcommitments and conditions shall be deemed to be condiing companies to conform their direct and indirect activitions imposed in writing by the Board in connection with its findings and decision, and, as such, may be enforced in proceedings under applicable law. 1. Roosevelt has grunted Mercantile an option to purchase up to This transaction shall not be consummated later than 19.9 percent of the outstanding common stock of Roosevelt under certain conditions. The option would terminate on consummation of three months after the effective date of this order, unless the proposal. such period is extended for good cause by the Board or by 2. Mercantile also has requested the Board's approval under secthe Federal Reserve Bank of Cleveland, acting pursuant to tion 3 of the BHC Act (12 U.S.C. § 1842) to acquire Roosevelt's subdelegated authority. sidiary bank. Missouri State Bank and Trust Company, St. Louis. By order of the Board of Governors, effective June 16. Missouri ("Missouri State Bank"). Mercantile has committed to divest Missouri State Bank simultaneously with the acquisition of Roosevelt 1997. and Roosevelt FSB. Based on the foregoing and all the facts of record, the Board has determined that the proposal is consistent with approval Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and under the factors required to be considered under section 3 of the BHC Governors Phillips and Meyer. Absent and not voting: Governor Act and that the application should be, and hereby is. approved. Kelley. 3. State and market data are as of June 30, 1996. In this context, depository institutions include commercial banks, savings banks, and savings associations. JENNIFER J. JOHNSON 4. Missouri law prohibits a bank holding company from obtaining Deputy Secretary of the Board control of any bank if the total deposits in the bank together with the total deposits in all banks in Missouri controlled by the bank holding company exceed 13 percent of the total deposits in all financial institutions in Missouri. The Division of Finance of the Missouri Mercantile Bancorporation Inc. Department of Economic Development has determined that the state St. Louis, Missouri deposit cap would not apply in this case because Mercantile has committed to divest Missouri State Bank simultaneously with consummating the proposal and would therefore not acquire a Missouri state bank within the meaning of stale law. See Mo. Ann. Stal. S 362.1J15 Ameribanc, Inc. (West 1997). St. Louis, Missouri 5. 12 C.F.R. 225.28(b)(4)(ii). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Federal Reserve Bulletin • August 1997 ties to those permissible for bank holding companies under tent with the DOJ Guidelines in 12 banking markets withsection 4 of the BHC Act and Regulation Y. Mercantile has out divestitures,1" and in five banking markets with divesticommitted that it will conduct this activity in accordance tures. '' with the Board's regulations.'1 Consummation of the proposal in the two remaining banking markets—Pettis County and Phelps County12— Competitive Considerations would exceed the DOJ Guidelines. The HHI would increase 223 points to 2522 in the Pettis County banking In order to approve the proposal, the Board also must market, and 204 points to 2234 in the Phelps County determine that the performance of the proposed activities banking market. The Board previously has indicated that are a proper incident to banking, that is. that the proposed HHI levels are guidelines that are used by the Board, the transaction "can reasonably be expected to produce bene- Department of Justice, and other banking agencies to help fits to the public . . . that outweigh possible adverse effects, identify cases in which a more detailed competitive analysuch as undue concentration of resources, decreased or sis is appropriate to assure that the proposal would not unfair competition, conflicts of interests, or unsound bank- have a significantly adverse effect on competition in any ing practices." As part of the Board's evaluation of these relevant market. A proposal that fails to pass the HHI factors, the Board has carefully considered the competitive market screen may, nonetheless, be approved because other effects of the proposed transaction in light of all the facts of information may indicate that the proposal would not have record. a significantly adverse effect on competition. Mercantile and Roosevelt compete directly in 19 bank- Several factors mitigate the increases in concentration, ing markets in Missouri. The Board has carefully reviewed as measured by the HHI, in the Pettis and Phelps County the competitive effects of the proposal in these bunking banking markets. After consummation of the proposal, six markets in light of all the facts of record, including the competitors, including a large bank holding company comnumber of competitors that would remain in the markets, petitor with a substantial share of market deposits, would the characteristics of the markets, the projected increase in remain in each market and Mercantile would control less the concentration of total deposits in depository institutions than 30 percent of the market deposits in each market as a in the markets ("market deposits"),7 as measured by the result of the proposal." In addition, the proposed transac- Herfindahl-Hirschman Index ("HHI") under the Depart- tion would not reduce the number of competitors in the ment of Justice Merger Guidelines ("DOJ Guidelines"),8 Pettis County banking market because Mercantile would and commitments made by Mercantile to divest certain divest a branch office to an out-of-market competitor. branches.1' Consummation of the proposal would be consis- The Board also has considered certain aspects of the Pettis and Phelps County banking markets that indicate that the markets are attractive for entry to potential compet- 6. Mercantile intends to merge Roosevelt FSB with and into Mer- itors. In both Pettis and Phelps Counties, for example, the cantile's subsidiary state non-member bank. Mercantile Bank of population has increased at a higher rate than in other Plattsburg, Plaltsburg. Missouri. The merger is subject to the approval non-MSA counties in Missouri, and per capita income, of Federal Deposit Insurance Corporation ("FDIC") under section I8(e) of the Federal Deposit Insurance Act (12 U.S.C. $ I828(c(). deposits per banking office, and increases in total deposits 7. Market share data before consummation are based on calculations are all greater in both counties than the same staiistics are in which the deposits of thrift institutions are included at 50 percent. for other non-MSA counties in Missouri. In addition, pop- The Board previously has indicated that thrift institutions have beulation per banking office in Phelps County is larger than come, or have the potential to become, significant competitors of commercial banks. See WM Bancorp. 76 Federal Reserve Bulletin for other non-MSA counties in Missouri, and entry into the 743 (1484). Because the deposits of Roosevelt FSB would be controlled by a commercial banking organization after consummation of the proposal, those deposits arc included at 100 percent in the calculation of Mercantile s pro f<>rnia market share. See Nonvest Corporation, 78 Federal Reserve Bulletin 452 (1942); First Bank, Inc.. 76 evelt and to complete the divestitures within 180 days of consumma- Federal Reserve Bulletin 669. 670 n. 9 (1990). tion of the acquisition. Mercantile also has committed that, in the 8. Under the revised DOJ Guidelines. 49 Federal Register 26.823 event it is unsuccessful in completing any divestiture within 180 days (June 29, 1984), a market in which the post-merger HHI is less than of consummation of the proposal. Mercantile will transfer the unsold 1000 is considered unconcentrated. and a market in which the post- branch(es) to an independent trustee that is acceptable to the Board merger HHI is between 1000 and 1800 is considered moderately and that will be instructed to sell the branches promptly. BunLAmerica concentrated. The Justice Department has informed the Board that a Corporation. 78 Federal Reserve Bulletin 338 (1992); United New bank merger or acquisition generally will not be challenged (in the Mexico Financial Corporation, 11 Federal Reserve Bulletin 484 absence of other factors indicating anticompetitive effects) unless the (1991). Mercantile has further committed to submit to the Board, prior post-merger HHI is at least 1800 and the merger increases the HHI by to consummation, an executed trusl agreement acceptable to the Board more than 200 points. The Justice Department has stated that the slating the terms of these divestitures. higher than normal HHI thresholds for screening bank mergers for 10. These hanking markets are discussed in Appendix A. anticompetitive effects implicitly recognize the competitive effect of I I. These banking markets are discussed in Appendix B. limited-purpose lenders and other non-depository financial institu- 12. The Pettis and Phelps County banking markets are approxitions. mated by Pettis County and Phelps County, respectively, both in 9. In each market in which Mercantile has committed to divest Missouri. offices to mitigate the anticompetitive effects of the proposal. Mercan- 13. Mercantile s pro fonna share of market deposits is adjusted to tile has committed to execute sales agreements with a competitively account for its proposed divestiture in the Pettis County banking suitable purchaser prior to consummation of the acquisition of Roos- market. 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Legal Developments 685 Phelps County banking market occurred as recently as A. Record of Performance Under the Community 1995. Reinvestment Act The Board sought comments from the United States Attorney General ("Attorney General"'), the Office of the In acting on applications to acquire a savings association, Comptroller of the Currency ("OCC"), and the FDIC on the Board reviews the records of performance of the deposthe competitive effects of this proposal. The Attorney itory institutions involved under the Community Reinvest- General has stated that in light of the proposed divestitures, ment Act (12 U.S.C. § 2901 etseq.) ("CRA"). As provided the transaction is not likely to have significantly adverse in the CRA, the Board evaluates these records in light of competitive effects in any relevant banking market. The examinations by the primary federal supervisor of the CRA OCC and the FDIC also have not objected to consumma- performance of the relevant institutions. An institution's tion of the proposal. Based on all the facts of record, most recent CRA performance evaluation is a particularly including the proposed divestitures, the Board concludes important consideration in the applications process because that consummation of the proposal would not have a signif- it represents a detailed, on-site evaluation of the instituicantly adverse effect on competition or on the concentra- tion's overall record of performance under the CRA by its tion of banking resources in the Pettis and Phelps Counties primary federal supervisor.^ The Board also considers banking markets or in any relevant banking market.14 information on an institution's lending and other activities that assist in meeting the credit needs of low- and Other Considerations moderate-income ("LMI") neighborhoods and an institution's policies and practices for compliance with applicable As part of its evaluation of the public interest factors, the fair lending laws. The Board has carefully considered the Board has carefully considered the financial and manage- records of performance by the insured depository institurial resources of Mercantile, Roosevelt, and their subsidiar- tion subsidiaries of Mercantile and Roosevelt, including ies, and the effect the transaction would have on such their CRA performance examinations and comments that resources in light of all the facts of record. These facts of focused on the CRA performance record of Mercantile's record include supervisory reports of examination assess- lead bank, Mercantile Bank of St. Louis. National Associaing the financial and managerial resources of the organiza- tion, St. Louis, Missouri ("Mercantile St. Louis").16 tions and recent pro forma financial information provided CRA Performance Examinations. Mercantile St. Louis, by Mercantile. The Board notes that Mercantile and Roos- which represents approximately 34.3 percent of Mercanevelt, and each of their insured depository institutions, tile's total assets, received an "outstanding" rating from its meet or exceed the "well capitalized" thresholds under primary federal supervisor, the OCC, in its most recent applicable law. and Mercantile is expected to continue to CRA performance examination, as of May 5. 1995 ("Merdo so after consummation of the proposal. Based on all the cantile St. Louis CRA examination"). The Board also facts of record, the Board has concluded that the financial considered updated supervisory information from the OCC and managerial resources of the organizations involved in regarding the bank's CRA performance. All of Mercanthe proposal are consistent with approval. tile's remaining insured depository institution subsidiaries that have been examined for CRA performance received satisfactory or better ratings from their primary federal supervisor at their most recent examinations for CRA performance.17 Roosevelt's two insured depository institution subsidiaries received "satisfactory" ratings from their 14. A commenter maintains lhat the proposal would increase market primary federal supervisors, the FDIC (Missouri State concentration and adversely ailed competition for loans in the Bank) and the Office of Thrift Supervision (Roosevelt St. Louis. Missouri, banking market ("Si. Louis hanking market"). As FSB), in the most recent examinations of their CRA perfornoted in Appendix A. consummation of the proposal in the St. Louis mance. banking market would not exceed the DO.I Guidelines and the market would remain moderately concentrated after Mercantile's acquisition Mercantile's Lending Record. Mercantile offers various of Roosevelt. In addition, numerous competitors v\ould remain in the lending programs designed to enhance its lending to minormarket. The comments also rely on dividing the relevant product market in a manner thai is inconsistent with the Board's precedent. The Board traditionally has recognized that the appropriate product market for evaluating the competitive effects of mergers and acquisi- 15. The Statement of the Federal Financial Supervisory Agencies tions of depository institutions is the cluster of products (various kinds Regarding the Community Reinvestment Act provides that a CRA of credit) and services (such as checking accounts and trust adminis- examination is an important and often controlling (actor in the considtration) offered by such institutions. Sec Chemical Banking Coi'pora- eration of an institution's CRA record and that reports of these tioii. X2 Federal Reserve Bulletin 239 (1997): First Hawaiian, Inc., 79 examinations will be given great weight in the applications process. Federal Reserve Bulletin 966 (1993), and discussions of relevant case See 54 Federal Register 13.742 and 13.745 (19X9). law and economic studies therein. Commenter presents no facts to 16. Comments on the proposal were received from the Association support an alternative product market that would consider only lend- of Community Organizations for Reform Now and the Missouri ing. Based on all the facts of record, the Board concludes that Association of Community Organizations for Reform Now (colleccompetitive considerations in the St. Louis banking market are consis- tively. "Commenter"). tent with approval lor the reasons discussed above. The effects of the 17. Eighteen of Mercantile's remaining insured depository instituproposal in helping to meet the credit needs of the community are tions received "outstanding" ratings, and 12 received "satisfactory" discussed later in the order. ratings, at their most recent examinations for CRA performance. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Federal Reserve Bulletin • August 1997 ities and to residents of LMI communities through each of Mortgage Disclosure Act (12 U.S.C. §2801 et seq.) its depository institution subsidiaries. Mercantile St. Louis, C'HMDA") for Mercantile subsidiary banks in general for example, offers several flexible home lending programs represented a reasonable penetration of their respective through its Community Partnership Program ("CPP mort- delineated communities. gage program") that focus on LMI borrowers. The Mer- Ascertainment and Outreach Efforts. Mercantile uses cantile St. Louis CRA examination noted that the CPP various methods to ascertain community credit needs, inmortgage program featured lower down payments, closing cluding direct contacts with public officials, neighborhood cost grants, various fixed and adjustable-rate mortgages, organizations, and community groups involved in affordand higher qualifying debt ratios than were available for able housing, small business, economic and community conventional home loan products. In addition, examiners development, and minority affairs. The Mercantile noted that Mercantile made several changes to the CPP St. Louis CRA examination found that the bank's board of mortgage program, such as increasing the debt-to-income directors and management established useful contacts with ratio guidelines for home improvement loans, in order to a number of groups and organizations that enabled the increase the number of loans to LMI borrowers. Mercantile bank to assess the community's credit needs. Management St. Louis made 115 loans, totalling approximately $5 mil- was also found to have identified and as noted, responded lion, through the CPP program in 1996. to several credit-related needs for LMI residents in its Mercantile also assists in meeting the affordable housing community, including home purchase and home improveneeds of LMI residents throughout its delineated commu- ment loans with lower down payments and higher qualifynity with a variety of community development programs ing ratios than conventional loan products. with government agencies, non-profit organizations, and The Mercantile St. Louis CRA examination concluded private developers. These programs include the Federal that the bank offered a full range of credit products that Home Loan Bank Affordable Housing Programs. The pro- were well-suited to meeting the community's identified grams provide down payment and closing cost assistance credit needs, including modifying or creating products that through the Federal Home Loan Bank and the City of focused on the needs of LMI individuals. In addition, St. Louis. The Mercantile St. Louis CRA examination examiners found that Mercantile marketed its products and found that Mercantile St. Louis was one of the largest lenders services to reach all segments of its community by using for several of the programs.ls In addition, examiners noted advertising that was widely circulated in the local media, that Mercantile St. Louis began to offer mortgage loans including advertising that focused on residents in LMI and through programs offered by the Federal Housing Adminis- predominately minority communities. tration ("FHA") and the Department of Veterans Affairs in Branch Locations. The Mercantile St. Louis CRA exam- 1994. Mercantile intends to enhance Roosevelt's commu- ination stated that the bank's office locations and services nity development efforts by carefully considering whether reasonably served all segments of the delineated commuadditional products or services would be required to better nity, including LMI areas. Examiners also found that when serve the communities and customers served by Roosevelt. closing branches, management used adequate branch clos- Mercantile also has designed special products to meet ing policies. Examiners noted that, when deciding to close the housing needs of LMI residents. For example, the a branch, Mercantile considered the proximity of potential bank's CRA examination noted that Mercantile supported branches to be closed to other Mercantile branches, and the the St. Louis Equity Fund, which is a real estate investment location of competitors. partnership that focus on the development and redevelop- Comments on the Proposal. Commenter maintains that ment of affordable rental housing for low-income families. HMDA data from 1993 to 1996 indicate a growing dispar- Mercantile St. Louis and a subsidiary bank recently ac- ity in the volume and rates of HMDA-reported loans quired by Mercantile have invested approximately originated to minority loan applicants and LMI neighbor- $1.8 million in the fund. Mercantile St. Louis also partici- hoods as compared to rates of loan originations to nonmipates with various charitable and non-profit organizations nority loan applicants and high income neighborhoods.1'' In in the Home Ownership Purchase Services program. This addition, Commenter contends that the ascertainment efprogram is designed to assist individuals in obtaining a mortgage, including individuals with a history of credit problems. 19. Commenter states that communication between Roosevelt and Examiners concluded in the Mercantile St. Louis CRA Commenter has been adversely affected by the proposal. The Board examination that the bank actively solicited applications has indicated in previous orders and in the Agency CRA Statement from all segments of its community, including LMI areas. that communication by depository institutions with community groups provides a valuable method of assessing and determining how best to In addition, examiners found that the geographic distribuaddress the credit needs of the community. However, both the CRA tion of loans required to be reported under the Home and the Agency CRA Statement require the Board's review to focus on the established record of performance of the institutions involved and the programs and policies that the institutions have in place to 18. The Mercantile St. Louis CRA performance examination also assist in meeting the credit needs of their entire communities. See noted that the bank participated in the Missouri Housing Development Fifth Third Bancorp. 80 Federal Reserve Bulletin 838 (1994). In this Commission's Home Improvement Loan Program which provided case, the facts discussed above and the other facts of record indicate state-subsidized, below market interest rates for terms of up to ten that the relevant institutions have programs to help serve the credit years to LMI borrowers. needs of their communities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 687 forts of, and branch locations for, Mercantile St. Louis do Mercantile St. Louis also has a second review process not adequately meet the credit and banking needs of resi- prior to denial for loan applications subject to HMDA dents in LMl and predominately minority communities.20 reporting requirements. The process is designed to ensure The 1996 HMDA data generally indicate that Mercantile that all applicants, including minority applicants, receive improved its record of home mortgage lending in LMI equal consideration in credit decisions. Auditors review census tracts and its record of home mortgage loans to rejected minority and accepted nonminority applications to African-American applicants for loans. These data indicate determine if applicants are being treated differently bean increase in the percentage of loans originated to African cause of their race. Moreover, Mercantile has adopted a Americans compared to all loan applications. These data fair lending policy and Mercantile St. Louis's mortgage also indicate a narrowing of the disparity between the lending division regularly conducts fair lending classes and denial rates to African Americans compared to the denial testing for its staff. rates to nonminority applicants. The data reflect, however, Based on all the facts of record, and for the reasons some disparities at Mercantile St. Louis in the rate of loan discussed in the order, the Board concludes that the record origination, denials, and applications by racial group or of Mercantile St. Louis under the CRA in the areas of income level. lending, fair lending law compliance, ascertainment and The Board is concerned when the record of an institution branch locations is consistent with approval of the proposindicates disparities in lending to minority applicants, and it believes that all banks are obligated to ensure that their lending practices are based on criteria that assure not only B. Conclusion Regarding CRA Considerations safe and sound lending, but also equal access to credit by creditworthy applicants regardless of race. The Board rec- In light of all the facts of record, including information ognizes, however, that HMDA data alone provide an in- provided by Commenter, Mercantile's responses, and the complete measure of an institution's lending in its commu- relevant reports of examination and other confidential sunity. The Board also recognizes that HMDA data have pervisory information provided by the OCC, Ihe Board limitations that make the data an inadequate basis, absent concludes that considerations relating to the CRA perforother information, for concluding that an institution has mance records of Mercantile and Roosevelt24 are consisengaged in illegal discrimination in making lending deci- tent with approval.25 sions. In light of the limitations of HMDA data, the Board has carefully reviewed the record of Mercantile's lending to minorities, particularly African Americans, and to LMI 23. The Board has provided a copy of Commenter's submissions to residents in light of information from the OCC. the primary the OCC. the primary federal supervisor for Mercantile St. Louis, for federal supervisor of Mercantile St. Louis, that includes the its consideration and use. The Board also notes that Commenter submitted oral and written comments to the OCC. in connection with bank's CRA examination and other confidential supervithe OCC's examination of Mercantile St. Louis, that relate to the sory information. The Mercantile St. Louis CRA examinabank's record of CRA performance and the OCC's examination tion found no evidence of practices intended to discourage policies and practices. In reviewing this proposal, the Board has individuals from applying for credit.-1 In addition, examin- considered the OCC's response to Commenter and other confidential ers found no evidence of disparate treatment on a prohib- information from the OCC. in addition to all the comments provided by Commenter. ited basis, and concluded that the bank was in substantial 24. Commenter also contends that Roosevelt has an inadequate compliance with antidiscrimination laws and regulations. — record of helping to meet the credit needs of predominantly minority communities in St. Louis. As discussed above, the Board has given substantial consideration to the existing CRA record of Mercantile as 20. Commenier also maintains that the fees charged by Mercantile reflected in its performance examination, policies and programs, and St. Louis are excessive. As discussed above. Mercantile St. Louis other confidential supervisory information because Mercantile will provides a full range of credit products and banking services that acquire Roosevelt. In addition, the Board has reviewed Roosevelt's assist in meeting the credit and banking needs or LMI individuals. In record of CRA performance in light of all the facts of record, includaddition, there is no evidence in the record that the fees charged by ing its most recent CRA performance examinations. Mercantile St. Louis are based on any factor that would be prohibited 25. Commenter has requested that the Board hold a public hearing under law. Although the Board has recognized that banks help serve or public meeting to consider the record of Mercantile in meeting its the banking needs of their communities by making basic services responsibilities under the CRA. Section 3(b) of the BHC Act does not available at nominal or no charge, the CRA does not impose any require the Board to hold a hearing or meeting on an application limitation on the fees or surcharges for services. unless the appropriate supervisory authority of the bank to be acquired 21. Commenter contends that Mercantile illegally "steers" minority makes a timely written recommendation of denial of the application. loan applicants to federally subsidized loan programs like the pro- The Board has not received such a recommendation, in this case. The grams offered by the FHA. As noted, examiners found no evidence of Board's rules also provide for a hearing on notices under section 4 of illegal credit practices in any of the bank's lending programs. the BHC Act to acquire a savings association if there are disputed 22. Examiners compared a sample of African-American and nonmi- issues of material fact relating to the acquisition of the savings nority applicants for mortgage loans as part of the CRA examination association that cannot be resolved in some other manner. After and found no evidence of discrimination or other illegal credit prac- careful review of all the facts of record, the Board has concluded that tices. Examiners also sampled denied housing-related loan applica- Commenter's arguments amount to a dispute with the weight that tions from African-American applicants and approved housing-related should be accorded to, and the conclusions that the Board should draw loan applications from nonminority borrowers and found no evidence from, the facts of record, but do not identity disputed issues of fact of discrimination or other illegal credit practices. that are material to the Board's decision. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin • August 1997 Public Benefits to be conditions imposed in writing by the Board in connection with its findings and decision, and, as such, may be The record also indicates that consummation of the pro- enforced in proceedings under applicable law. posal would result in public benefits. The proposal would The acquisition of Missouri State Bank shall not be result in a broader financial network through which Mer- consummated before the fifteenth calendar day following cantile may serve its customers, and in Roosevelt's custom- the effective date of this order, and the proposal shall not be ers having access to the increased services offered at Mer- consummated later than three months after the effective cantile's subsidiary banks. Additionally, there are public date of this order, unless such period is extended for good benefits to be derived from permitting capital markets to cause by the Board, or by the Federal Reserve Bank of St. operate so that bank holding companies may make poten- Louis, acting pursuant to delegated authority. tially profitable investments in nonbanking companies By order of the Board of Governors, effective June 4. when those investments are consistent, as in this case, with 1997. the relevant considerations under the BHC Act. and from permitting banking organizations to allocate their resources Voting for this action: Vice Chair Rivlin and Governors Kelley and in the manner they believe is most efficient. Based on all Phillips. Absent and not voting: Chairman Greenspan. Abstaining the facts or record, the Board has determined that the from this action: Governor Meyer. Mercantile proposal can reasonably be expected to produce JENNIFER J. JOHNSON public benefits that outweigh possible adverse effects under Deputy Secretary of the Board the proper incident to banking standard of section 4(c)(8) of the BHC Act. Accordingly, the Board has determined that the balance of public interest factors it must consider Appendix A under section 4(c)(8) of the BHC Act is favorable and consistent with approval. Missouri banking markets in which consummation of the Conclusion proposal would be consistent with the DOJ Guidelines without divestitures: Based on the foregoing, and all the facts of record, the (1) Boone Country: Approximated by Boone County, Board has determined that the notice should be, and hereby Missouri. After consummation of the proposal, Mercanis, approved. The Board's approval is specifically condi- tile would control I 1.5 percent of the market deposits tioned on compliance by Mercantile with all the commit- and would become the fourth largest depository instituments made in connection with this application, including tion in the market. The HHI would not increase as a the divestiture commitments discussed in the order.-^ For result of this proposal. the purpose of this action, the commitments and conditions (2) Cape Girardeau: Approximated by Cape Girardeau relied on by the Board in reaching its decision are deemed County plus Kelso township in Scott County, all in Missouri. After consummation of the proposal. Mercantile would control 21.9 percent of the market deposits In addition. Commenter has had an opportunity lo present its views. and would remain the third largest depository institution and has submitted substantial written comments that have been consid- in the market. The HHI would increase 81 points to ered by the Board. The request fails to show why a written presenta- 2353. tion would not suffice, to identity specifically any questions of fact (3) Clinton: Approximated by Henry County, plus that are in dispute, and to summarize what evidence would be presented at a hearing or meeting. Sec 12 C.F.R. 262.3(c). In light of all St. Clair County, except the area around the town of the facts of record, ihe Board lias determined that a public hearing or Appleton City, all in Missouri. After consummation of meeting is not necessary to clarify the factual record in this applicathe proposal, Mercantile would control 21.2 percent of tion, and is not otherwise warranted in this case. Accordingly. Comthe market deposits and would become the second largmenter's request tor a public hearing or meeting on the application is denied. est depository institution in the market. The HHI would 26. Commenter requests that the Board delay action on the proposal increase 88 points to 1801. until the OCC has publicly released the final version of its most recent (4) Dexter: Approximated by Stoddard County, less the CRA examination of Mercantile St. Louis and released more informacommunity of Bernie. all in Missouri. After consummation concerning the bank's lending, investment, and small business lending data. The Board is required under the BHC Act to act on tion of the proposal, Mercantile would control applications and notices within specified time periods. As noted, 26.6 percent of the market deposits and would become moreover, the Board has considered confidential supervisory informa- the second largest depository institution in the market. tion from the OCC and concludes that the record is complete without The HHI would increase 193 points to 2454. Commenter's analysis of data that may be disclosed in the OCC's examination of Mercantile St. Louis. In addition. Commenter has had (5) Joplin: Approximated by Jasper & Newton Counties, a reasonable opportunity to comment as provided under the Board's Missouri, plus the communities of Galena and Baxter application processing procedures and has. in fact, submitted com- Springs in Cherokee County, Kansas. After consummaments that have been carefully considered by the Board. Based on all tion of the proposal. Mercantile would control the facts of record, and for the reasons discussed above, the Board concludes that the record is sufficient lo act on the proposal at this 31.3 percent of the market deposits and would remain time, and that delay or denial of the proposal on the grounds of the largest depository institution in the market. The HHI informational insufficiency is not warranted. would increase 315 points to 1545. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 689 (6) Kansas City: Approximated by the Kansas City (2) Grundy County: Approximated by Grundy County, Ranally Metro Area. After consummation of the pro- Missouri. After consummation of the proposal. Mercanposal. Mercantile would control 14.9 percent of the tile would control 31.1 percent of the market deposits market deposits and would become the second largest and would remain the second largest depository institudepository institution in the market. The HHI would tion in the market. The HHI would not increase as a increase 57 points to 972. result of the proposal. (7) Nodaway County: Approximated by Nodaway (3) Vernon County: Approximated by Vernon County, County, Missouri. After consummation of the proposal, Missouri. After consummation of the proposal. Mercan- Mercantile would control 9.3 percent of the market tile would control 45.2 percent of the market deposits deposits and would remain the fourth largest depository and would become the largest depository institution in institution in the market. The HHI would not increase as the market. The HHI would not increase as a result of a result of the proposal. the proposal. (8) Poplar Bluff: Approximated by Butler County, Mis- (4) Warrenton: Approximated by Warren County, Missouri. After consummation of the proposal, Mercantile souri, except the area surrounding the community of would control 27.1 percent of the market deposits and Dutzow. After consummation of the proposal. Mercanwould become the largest depository institution in the tile would control 6.7 percent of the market deposits and market. The HHI would increase 174 points to 1906. would remain the fifth largest depository institution in (9) Sikeston: Approximated by Mississippi County, Scott the market. The HHI would not increase as a result of County, excluding Kelso township, plus New Madrid the proposal. County, excluding Como and Anderson townships and (5) Washington: Approximated by Franklin County, Misthe western half of Portage township, all in Missouri. souri, except for Boles and Calvey townships and the After consummation of the proposal, Mercantile would area around Burger in Boeuf township, plus the commucontrol 25.7 percent of the market deposits and would nity of Dutzow in Warren County, Missouri. After conbecome the largest depository institution in the market. summation of the proposal. Mercantile would control The HHI would increase 206 points to 1740. 25.9 percent of the market deposits and would become (10) Springfield: Approximated by Greene & Christian the second largest depository institution in the market. Counties, plus the area around the community of Rogers- The HHI would increase 91 points to 2232. vilie in Webster County, all in Missouri. After consummation of the proposal, Mercantile would control Orders Issued Under Sections 3 and 4 of the Bank 21.5 percent of the market deposits and would become Holding Company Act the largest depository institution in the market. The HHI would increase 178 points to 1372. First Bank System, Inc. (11) St. Joseph: Approximated by the St. Joseph Ranally Minneapolis, Minnesota Metro Area. After consummation of the proposal, Mercantile would control 25.6 percent of the market deposits Order Approving the Acquisition of a Bank Holding and would become the largest depository institution in Company the market. The HHt would increase 97 points to 1523. (12) St. Louis: Approximated by the city of St. Louis, First Bank System, Inc., Minneapolis, Minnesota ("First Missouri; St. Louis, St. Charles and Jefferson Counties, Bank System"), a bank holding company within the mean- Missouri; plus Calvey and Boles townships in Franklin ing of the Bank Holding Company Act ("BHC Act"), has County, Missouri; Madison, St. Clair and Monroe Coun- requested the Board's approval under section 3 of the BHC ties, Illinois; plus Sugar Creek and Looking Glass town- Act (12 U.S.C. § 1842) to acquire U.S. Bancorp, Portland, ships in Clinton County, Illinois. After consummation of Oregon ("U.S. Bancorp"), and its subsidiary banks listed the proposal, Mercantile would control 31.3 percent of in Appendix A.' First Bank System also has requested the the market deposits and would become the largest depos- Board's approval under section 4(c)(8) of the BHC Act itory institution in the market. The HHI would increase (12 U.S.C. § 1843(c)(8)) and section 225.24 of Regula- 358 points to 1666. tion Y (12 C.F.R. 225.24) to acquire the nonbanking subsidiaries of U.S. Bancorp and thereby engage in the non- Appendix B banking activities listed in Appendix B.- Missouri banking markets in which consummation of the proposal would be consistent with the DOJ Guidelines 1. First B;mk System proposes to exchange its shares for all the outstanding shares of U.S. Bancorp. On consummation, U.S. Bancorp with divestitures: would he merged with and into First Bank System, which would (1) Ben ton County: Approximated by Barton County, change its name to U.S. Bancorp. First Bank System also has re- Missouri. After consummation of the proposal, Mercan- quested the Board's approval to exercise an option to purchase up to tile would control 18.1 percent of the market deposits 19.9 percent of the voting shares of U.S. Bancorp. The option would become moot on consummation of the proposal. and would remain the third largest depository institution 2. First Bank System also has tiled a notice under section 4(c)( 14) in the market. The HHI would not increase as a result of of the BHC Act (12 U.S.C. § 1843(c)(14)) and section 211.34 of the the proposal. Board's Regulation K (12 C.F.R. 211.34) to acquire U.S. Bancorp's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690 Federal Reserve Bulletin D August 1997 Notice of the proposal, affording interested persons an poses of the BHC Act, First Bank System's home state is opportunity to submit comments, has been published Minnesota, and First Bank System proposes to acquire (62 Federal Register 19,762 (1997)). The time for filing banks located in California, Idaho. Nevada, Oregon, Utah, comments has expired, and the Board has considered the and Washington. The conditions for an interstate acquisiproposal and all comments received in light of the factors tion under section 3(d) are met in this case.7 In view of all set forth in sections 3 and 4 of the BHC Act. the facts of record, the Board is permitted to approve this First Bank System, with total consolidated assets of proposal under section 3(d) of the BHC Act. approximately $36.5 billion, is the 25th largest commercial banking organization in the United States, controlling less Competitive Considerations than 1 percent of the total banking assets of insured commercial banks in the nation ("total banking assets")."1 First The BHC Act prohibits the Board from approving an Bank System's subsidiary banks operate in Colorado, Illi- application under section 3 of the BHC Act if the proposal nois, Iowa. Kansas, Minnesota, Montana. Nebraska, North would result in a monopoly or if the effect of the proposal Dakota, South Dakota, Wisconsin, and Wyoming.-1 First may be substantially to lessen competition in any relevant Bank System also engages through other subsidiaries in a market, unless the Board finds that the anticompetitive number of permissible nonbanking activities. U.S. Ban- effects of the proposal are clearly outweighed in the public corp, with total consolidated assets of approximately interest by the probable effect of the proposal in meeting $33.4 billion, is the 27th largest commercial banking orga- the convenience and needs of the community to be served. nization in the United States, controlling less than 1 per- First Bank System and U.S. Bancorp do not compete cent of total banking assets in the nation. U.S. Bancorp with each other in any geographic banking market. Based operates subsidiary banks in California, Idaho, Nevada, on all the facts of record, the Board has concluded that Oregon, Utah, and Washington, and engages through sub- consummation of the proposal would not have a signifisidiaries in a broad range of permissible nonbanking activ- cantly adverse effect on competition or on the concentraities.5 tion of banking resources in any relevant banking market.s On consummation of the proposal, First Bank System would become the 14th largest commercial banking organi- Other Factors Under the BHC Act zation in the United States, with total consolidated assets of approximately $69.9 billion, representing 1.5 percent of The BHC Act also requires the Board, in acting on an total banking assets in the United Slates. First Bank System application, to consider the financial and managerial rewould control 1.6 percent of the total deposits in banks and sources of the companies and banks involved, the convesavings associations insured by the Federal Deposit Insur- nience and needs of the communities to be served, and ance Corporation ("FDIC"). certain other supervisory factors. Interstate Banking Analysis on July I. 1966, or the date on which the company became a bank holding company, whichever is later. Section 3(d) of the BHC Act, as amended by Section 101 7. 12 U.S.C. §§ 1842(d)(l)(A) and (B) and 1842(d)(2)(A) and (B). of the Riegle-Neal Interstate Banking and Branching Effi- First Bank System is adequately capitalized and adequately managed. ciency Act of 1994, allows the Board to approve an appli- On consummation of the proposal, First Bank System would control less than 10 percent of the total amount of deposits of insured cation by a bank holding company to acquire a bank depository institutions in the United States. In addition, all the banks located in a state other than the home state of such bank to be acquired by First Bank System have been in existence for the holding company if certain conditions are met.6 For pur- minimum period of time necessary to satisfy age requirements established by applicable state laws. All other requirements of section 3(d) of the BHC Act also would be met on consummation of the proposal. 8. The Board has reviewed comments maintaining that the proposed subsidiary. U.S. World Trade Corporation. Portland. Oregon, an ex- combination of two large banking organizations would have anticomport trading company. petitive effects and that the proposal could result in increased fees or 3. Asset, deposit, and ranking data are as of December 31, 1996. lower deposit rates. Commenters present no facts to support these 4. First Bank System recently merged or consolidated its subsidiary contentions. In order to determine the effect of a particular transaction banks in Colorado. Illinois. Nebraska. Wisconsin, and East Grand on competition under the BHC Act. it is necessary first to designate Forks, Minnesota, certain assets of its subsidiary bank in South the area of effective competition between the parties. The courts have Dakota, and its savings association operating in Iowa. Kansas, Minne- held that the area of effective competition is determined by reference sota. Nebraska. North Dakota, and Wyoming into its lead subsidiary to the "line of commerce" or product market and a geographic bank. First Bank National Association. Minneapolis, Minnesota. In market. The appropriate product market for evaluating the competitive addition. First Bank System also owns First Bank Montana. N.A., effects of acquisitions of depository institutions is the cluster of Billings, Montana, and First Bank of South Dakota, N.A.. Sioux Falls, products and services offered by such institutions. .Sec Chemical South Dakota. Baiikiiif- Corporation, 82 Federal Reserve Bulletin 239 (1997). The 5. The Office of the Comptroller of the Currency C'OCC") recently Board and the courts also have concluded that the relevant banking approved a proposal by U.S. Bancorp to merge all its existing subsid- market for analyzing the competitive effects of a proposal must reflect iary banks with and into its lead subsidiary bank. U.S. National Bank commercial and banking realities and should consist of the local area of Oregon. Portland. Oregon. where the banks involved offer their services and where local customers can practicably turn for alternatives. Id. As noted, First Bank 6. Pub. L. No. 103-328. I OS Stat. 2338 (1994). A bank holding System and U.S. Bancorp do not offer products or services to customcompany's home state is the state in which the operations of the bank ers in the same local banking markets. holding company's banking subsidiaries were principally conducted Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 691 A. Financial, Managerial, and Other Supervisory After consummation of the transaction, First Bank Sys- Factors tem would meet the needs of its communities and the communities formerly served by U.S. Bancorp through a The Board has carefully considered the financial and man- Community Reinvestment Act (12 U.S.C. § 2901 et seq.) agerial resources and future prospects of First Bank Sys- ("CRA") program that would retain the current structure tem, U.S. Bancorp, and their respective subsidiary banks and focus of the two entities. The combined organization and other supervisory factors in light of all the facts of would continue to have a CRA manager assigned to each record. The Board notes that the bank holding companies state, who would be responsible for coordinating commuand their subsidiary banks are currently well capitalized nity reinvestment efforts in that state. In addition, senior and are expected to remain so after consummation of the management and the board of directors of the combined proposal. The Board also has considered other aspects of organization would continue to oversee CRA policy the financial condition and resources of the two organiza- through the Senior CRA Policy Committee and the Credit tions, the structure of the proposed transaction, and the Policy and Community Responsibility Committee of the managerial resources of the entities and the combined board of directors. First Bank System also states that the organization, the Board's supervisory experience with First combined organization would enhance the products and Bank System and U.S. Bancorp, and examinations by the services available to the customers of each institution. First OCC and other federal banking authorities assessing the Bank System intends, for example, to offer U.S. Bancorp\s financial and managerial resources of the entities. Based on small business loan program to First Bank System customall the facts of record, including all comments received and ers and to offer its affordable housing programs for lowrelevant reports of examination of the companies and banks and moderate-income ("LMI") borrowers to U.S. Baninvolved in this proposal, the Board has concluded that corp's customers if the programs better serve their credit considerations relating to the financial and managerial re- needs. sources and future prospects of First Bank System, U.S. Bancorp, and their respective subsidiaries are consistent CRA Performance Examinations with approval of the proposal, as are the other supervisory factors that the Board must consider under section 3 of the As provided in the CRA, the Board evaluates the conve- BHC Act.c) nience and needs factor in light of examinations of the CRA performance records of the relevant institutions by B. Convenience and Needs Factor their primary federal supervisor. An institution's most recent CRA performance evaluation is a particularly impor- The Board has carefully considered the effect of the pro- tant consideration in the applications process, because it posal on the convenience and needs of the communities to represents a detailed on-site evaluation of the institution's be served in light of all the facts of record. In reviewing the overall record of performance under the CRA by its priconvenience and needs aspects of the proposal, the Board mary federal supervisor.10 notes that First Bank System and U.S. Bancorp assist in All subsidiary depository institutions of First Bank Sysmeeting the convenience and needs of their communities tem and U.S. Bancorp received "outstanding" or "satisfacby providing a full range of financial services, including tory" ratings from their primary supervisors at their most commercial and retail banking, trust and investment man- recent examinations for CRA performance." First Bank agement, and community development services through System's lead subsidiary bank, First Bank National Associvarious bank and nonbank subsidiaries. ation, Minneapolis, Minnesota ("First Bank"), with approximately 47 percent of First Bank System's consolidated assets, received an "outstanding" rating from the OCC at its most recent examination for CRA performance, as of July 1995 ("First Bank Examination").12 U.S. Ban- 9. Several commenters allege that U.S. Buncorp's subsidiary banks corp's lead subsidiary bank, U.S. National Bank of Oregon, have acted improperly in foreclosure, bankruptcy, or other legal proceedings arising from individual loan transactions or have breached Portland, Oregon ("U.S. Bank"), with approximately settlements reached in connection with those proceedings. The Board 43 percent of U.S. Bancorp's consolidated assets, also has carefully reviewed these allegations in light of examiners' assessments of the managerial resources in reports of examination for the relevant institutions, including the institutions' policies and procedures for administering loans. The Board notes that most of the 10. The Statement of the Federal Financial Supervisory Agencies contentions are or have been in litigation and. so far, no court has Regarding the Community Reinvestment Act provides that a CRA found that any commenter is entitled to relief. The courts, moreover, examination is an important and often controlling factor in the considhave the full authority to grant adequate remedies for all the improper eration of an institution's CRA record, and that reports of these actions alleged by the commenters if they can substantiate their claims examinations will be given great weight in the applications process. of improper conduct by the relevant subsidiary bank of U.S. Bancorp. 54 Federal Register 13,742, 13,745 (1989). The Board has provided a copy of the comments to the OCC. the 11. The most recent CRA performance ratings for First Bank primary federal supervisor of the banking institutions involved, and to System's and U.S. Bancorp's subsidiary banks are set forth in Appenthe Department of Justice for consideration and review. The Board dices C and D. also has considered commenters' contentions in connection with its 12. Asset data used in this section of the order are as of September evaluation of the convenience and needs factor discussed later in the 30, 1996, and do not reflect the recent mergers and consolidations of order. other subsidiary banks and a subsidiary thrift with and into First Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin • August 1997 received an "outstanding" rating from the OCC at its most effectively in each of its delineated communities, including recent examination for CR A performance, as of April 1997 LMI neighborhoods. In particular, the bank devoted special ("U.S. Bank Examination"). Overall, banks with more attention to identifying the credit needs of individuals in than 60 percent of the consolidated assets of First Bank LMI and minority areas and developed successful credit System, and more than 70 percent of the consolidated products as a result of this program, including small busiassets of U.S. Bancorp, received "outstanding" CRA per- ness loans made in conjunction with the Mainstreet Loan formance ratings at their most recent examinations. The Center. Colorado Bank offered both traditional and special Board also has considered other aspects of the CRA perfor- credit products to meet the credit needs of its communimance records of First Bank System and U.S. Bancorp in ties.n Examiners also found that Colorado Bank's credit light of all the facts of record, including the lending activi- products were effectively marketed throughout all segties of their subsidiary banks in states that were specifically ments of the bank's delineated communities, including mentioned by commenters. through marketing efforts concentrating on LMI and minority areas. Lending Performance Record of First Bank System In 1996, First Bank System originated 13,381 consumer loans totalling approximately $117.9 million and Minnesota. The First Bank Examination concluded that the 1,630 small business loans totalling approximately $107.5 delineated community served by First Bank was reason- million in LMI areas in Colorado. First Bank System also ably defined and did not arbitrarily exclude any LMI areas. made 25 Home Advantage loans to LMI Colorado home Examiners also concluded that First Bank effectively iden- buyers totalling approximately $1.7 million, and tified credit needs within its community, with a particular 223 government-sponsored housing loans in Colorado toemphasis on the needs of LMI areas. Examiners noted, for talling approximately $17.7 million. In rural areas. First example, that First Bank placed special emphasis on mar- Bank System originated 5,288 loans to businesses and keting its products within LMI and minority areas of its individuals totalling approximately $97.1 million. community, and that the bank's ascertainment efforts Montana. Examiners found that the delineated commuthrough public/private partnerships had produced credit nity for First Bank Montana, N.A., Billings, Montana products that assisted in meeting the credit needs of all the ("Montana Bank"), was reasonable and did not arbitrarily communities served by the bank. First Bank actively particexclude any LMI areas. In addition, the geographic distriipated in government-sponsored programs offering bution of Montana Bank's loan portfolio was considered to housing-related and small business loans.1' reasonably penetrate all segments of the delineated com- In 1996, First Bank System originated 8,213 consumer munity, including LMI areas. Examiners also noted that loans totalling approximately $73 million and 1,192 small Montana Bank frequently participated in governmentbusiness loans totalling approximately $117 million within sponsored loan programs."1 LMI areas in Minnesota. Small business lending totalled In 1996. First Bank System made 670 consumer loans approximately $569 million for the entire state. First Bank totalling approximately $6.8 million and 243 small busi- System also made 261 Home Advantage loans totalling ness loans totalling approximately $22.4 million in LMI approximately $13.1 million to LMI borrowers.14 and 163 areas in Montana. Small business lending for the state government-sponsored housing loans totalling approxi- totalled approximately $70 million. First Bank System also mately $13.3 million in Minnesota. First Bank System also originated 15,608 loans to businesses and individuals originated 7.062 loans to businesses and individuals in located in rural areas totalling approximately $247.1 milrural areas in Minnesota totalling $176.7 million. lion. Colorado. According to the most recent CRA perfor- South Dakota. According to examiners in the most remance examination of Colorado Nalional Bank, Denver, cent CRA performance examination of First Bank of South Colorado ("Colorado Bank"), the bank's community de- Dakota, N.A., Sioux Falls, South Dakota ("South Dakota lineation was reasonable and did not arbitrarily exclude Bank"), the bank served a reasonably delineated commuany LMI areas. Moreover, examiners found that Colorado nity that did not arbitrarily exclude LMI areas, and the Bank had in place a strong program to identify credit needs bank's lending activities addressed a significant portion of the community's identified credit needs, including housing, small business, and small farm credit needs. South Dakota 13. Examiners noted that, in 1994, First Bank originated 23.823 Bank's loans were considered to be geographically distribgovernment-sponsored loans totalling approximately $220 million. First Bank also originated 4,.106 small business loans totalling approximately $91.2 million to businesses and (arms located in Minnesota. 14. Home Advantage allows home buyers to obtain housing that could not be financed due to its age or condition by providing the additional financing needed to renovate the property. In addition. 1?. In 1994, Colorado Bank originated 2,8X5 small business loans Home Advantage provides zero percent "gap" financing to LMI totalling $33.2 million and 14.600 government-sponsored loans totalborrowers when renovation costs exceed appraised value and zero ling approximately $226.4 million. percent downpayment assistance loans to borrowers earning less than 16. In 1994, Montana Bank originated more than $35 million in 80 percent of the relevant area's median income. In ll)%. First Bank such loans. The bank also made 817 small business loans totalling System provided almost $800,000 in zero percent home buyer assis- approximately S24 million, including 155 loans totalling approxitance loans for down payments and other purposes. mately $6.5 million for agricultural purposes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 693 uted in a manner that reasonably penetrated all parts of its used comprehensive geographic analysis to develop marcommunity, including LM1 areas.17 keting strategies to reach specific segments of its commu- First Bank System made 3.144 loans to businesses and nity. Based on this market research, in October 1995, U.S. individuals located in rural areas in South Dakota totalling Bank introduced a pre-approved consumer installment loan approximately $59.7 million in 1996. Statewide. First Bank to individuals in LMI communities in Oregon. U.S Bank System originated 1.319 small business loans totalling also had a comprehensive advertising campaign designed $99 million. Within LMI areas. First Bank System made to reach the mass market through television, radio, print, 376 small business loans totalling $43.4 million and billboard, and direct mail, and to reach particular segments 952 consumer loans totalling approximately $8.9 million. of the community through advertisements in ethnic media, First Bank System also made 17 government-sponsored foreign language publications, and community newspapers housing loans totalling $1.2 million. and on radio stations that reach farmers and other rural North Dakota and Wyoming. First Bank System formerly residents. served communities in North Dakota and Wyoming From 1994 through 1996, U.S. Bank originated 20.203 through First Bank, fsb, Fargo. North Dakota ("First Sav- small business loans for approximately $2.46 billion in ings Bank"). Examiners found that the delineated commu- Oregon, including 3.307 loans totalling approximately nity of First Savings Bank was reasonable and did not $84 million under the U.S. Simply Small Business Loan arbitrarily exclude LMI areas. In 1995, First Savings Bank Program. Through the Commercial Opportunity Loan Promade 579 small business loans totalling $42 million in gram, U.S. Bank offers flexible collateral requirements for North Dakota, including approximately 19 percent of those businesses owned by women and minorities and businesses small business loans in LMI areas.l!< In Wyoming. First in economically distressed areas. The bank originated Savings Bank made 204 small business loans totalling 618 loans under the program totalling approximately approximately $18.4 million in 1995, including 19 percent $24 million. of its small business loans in LMI areas in that state. U.S. Bank also offers a variety of lending products to Other Banks. First Bank System's remaining subsidiary address the credit needs of LMI individuals. HomePartners banks were found by the OCC to have delineated commu- U.S. provides housing-related credit for LMI home buyers nities that were reasonable and did not arbitrarily exclude through flexible underwriting criteria that include the LMI areas. In addition, the geographic distribution of the amount of down payment, debt-to-income ratios, credit loan portfolios of these subsidiary banks was found to histories, and a waiver of private mortgage insurance. reasonably penetrate all parts of the delineated community, From 1994 to 1996, U.S. Bank originated 56.1 HomePartincluding LMI areas. All of the subsidiary banks were ners U.S. loans totalling $40 million. U.S. Bank also particfound to have a level of participation in community devel- ipates in the Oregon State Bond Mortgage Loan Program, opment projects that was consistent with the resources of which subsidizes below-market lending rates for LMI the bank and local economic conditions. home buyers. Through this program, U.S. Bank originated 269 loans for $19 million. In addition, U.S. Bank otters Lending Performance Record of U.S. Bancorp special consumer lending programs such as the Consumer Opportunity Loan Program, which provides flexible under- Oregon. The U.S. Bank Examination concluded that the writing criteria for LMI borrowers. The bank originated bank's ascertainment of community credit needs was effec- 1,598 Consumer Opportunity Loans for approximately tive and extensive. U.S. Bank identified the credit needs of $6.4 million. its community through community forums in rural and U.S. Bank also participates in government-sponsored metropolitan areas of the state, market research, and em- lending programs. The bank originated more than ployee involvement in community organizations. Examin- $336 million in government-sponsored loans, including ers also noted that U.S. Bank took affirmative steps to $31 million in Small Business Administration loans. $66 address those identified credit needs. In 1995, for example, million in housing-related loans, and $220 million in stu- U.S. Bank developed and introduced the U.S. Simply Small dent loans. In addition, U.S. Bank provided $9.7 million in Business Loan Program tluit served businesses with credit loans to six Native American tribes through its Native needs of less than $35,000. Examiners also found that U.S. American Tribal Community Development Program.1" Bank's marketing strategies for its new products were Washington. Examiners found that the ascertainment efdesigned to reach all segments of the bank's delineated forts of U.S. Bank of Washington, N.A., Seattle. Washingcommunity, including LMI areas. In addition. U.S. Bank ton ("USBW"). were extensive and effective, and that USBW took steps to address identified community credit needs. For example, since implementing the U.S. Simply 17. Examiners noted thai South Dakota Bank originated 465 mortgage loans, 36 small business loans, and 2X agricultural loans totalling Small Business Loan Program, USBW has originated 1,947 approximately S27 million, SI.2 million, and $900,000. respectively, loans totalling $49 million. Examiners also found that in 1994. 18. Firsl Bank System also sponsored a S300.000 Federal Home Loan Bank Affordable Housing Program gram for ihe reviializ.ation of 19. U.S. Bancorp also contributes to organizations that provide Little Earth of llnited Tribes Housing Corporation, a nonprolit corpo- technical assistance and support to businesses owned by Native Amerration that provides urban housing owned and controlled by Native icans and to hospital and medical centers that provide health services Americans. to Native Americans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin • August 1997 products were introduced to the community through mar- mance examinations of U.S. Bancorp's subsidiary national keting strategies designed to reach all segments of the banks, and concluded that branch closings during the evalbank's delineated community, including LMI areas. Ac- uation period had not adversely affected the ability of the cording to examiners, LJSBW showed a very strong com- banks to provide banking services to its community, includmitment to lending in its community by offering a variety ing LMI neighborhoods.21 of loan products designed to meet community credit needs The Board also notes that Federal banking law addresses and maintained a leadership position in community devel- branch closings by specifically requiring an insured deposopment and redevelopment programs. itory institution to provide notice to the appropriate regula- From 1994 through 1996, USBW originated 18,102 tory agency prior to closing a branch.22 Moreover, branch small business loans in Washington totalling $3.2 billion. closings by the combined organization may be considered USBW also made more than $531 million in government- by the Board in future applications. sponsored loans and provided financing totalling $68.2 million for 29 affordable housing projects with 2,136 HMD A Data for First Bank System and U.S. Bancorp units of affordable housing.20 Since 1994, USBW has extended more than $31.6 million in community develop- The Board has reviewed the 1994, 1995, and preliminary ment loans to Native Americans and Native American 1996 data reported by subsidiaries of First Bank System organizations. and U.S. Bancorp under the Home Mortgage Disclosure Idaho. The most recent CRA performance examination Act (12 U.S.C. S280I et seq.) ("HMDA"). These data of U.S. Bank of Idaho, Boise, Idaho ("Idaho Bank"), reflect some disparities in the rate of loan originations, showed that the geographic distribution of the bank's credit denials, and applications by racial group. The Board is extensions and applications reflected a reasonable penetra- concerned when the record of an institution indicates such tion of all segments of its local community, including LMI disparities, and believes that all banks are obligated to neighborhoods. Examiners also found that Idaho Bank's ensure that their lending practices are based on criteria that community delineation met the purposes of the CRA and ensure not only safe and sound lending, but also equal did not arbitrarily exclude LMI areas. Moreover, the bank's access to credit by creditworthy applicants regardless of lending volume was determined to represent an effective race. The Board recognizes, however, that HMDA data response to community credit needs, including the credit alone provide an incomplete measure of an institution's needs of LMI areas. lending in its community because the data cover only a few Idaho Bank also assists in meeting the credit needs of its categories of housing-related lending. Moreover, HMDA communities in Idaho through lending programs that focus data provide only limited information about the covered on rural communities and LMI borrowers. In 1996, Idaho loans.-'1 HMDA data, therefore, have limitations that make Bank originated 6,379 small business loans totalling the data an inadequate basis, absent other information, for $492 million. Of those loans, 4.046 totalling approximately concluding that an institution has engaged in illegal lend- $269 million were in rural areas, and 22 percent of the ing discrimination. dollar volume of the bank's small business loans was In light of the limitations of HMDA data, the Board has extended to LMI borrowers. In addition, the bank origi- carefully reviewed other information, particularly examinanated 3,756 small farm loans totalling $261 million. Of tion reports that provide an on-site evaluation of complithose loans, 3,110 totalling approximately $211 million ance with fair lending laws by the depository institution were made in LMI areas, and 15 percent of the dollar subsidiaries of First Bank System and U.S. Bancorp. The volume of small farm loans was extended to LMI borrow- CRA examinations of those subsidiaries found no evidence Branch Locations and Closings 21. Some commenters criticized branch closings by First Bank System. The OCCs CRA performance examinations concluded that First Bank System's subsidiary banks provided reasonable access to First Bank System does not anticipate any branch closures banking services in all parts of their communities, including LMI as a direct result of the proposal because there is no market areas. As part of the CRA performance examinations of these instituoverlap with U.S. Bancorp. After consummation of the tions, examiners reviewed branches closed and did not note any materially adverse effects on LMI neighborhoods or other areas resultproposal. First Bank System intends to use the branch ing from branch closures. closing policies and procedures used by U.S. Bancorp's 22. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. subsidiary banks. The policies require consultation wilh § 1831r-1), as implemented by the Joint Policy Statement Regarding the community before making any final decision to close a Brunch Closings (58 Federal Register 49,083 (1993)), requires that a branch or to reduce the services available at a branch in an bank provide the public with at least 30 days notice and the primary federal supervisor with at least 90 days notice before the date of the LMI neighborhood. The OCC recently reviewed the effect proposed branch closing. The bank also is required to provide reasons of branch closings under the policies in the CRA perfor- and other supporting data for the closure, consistent with the institution's written policy. 23. These data, for example, do not provide a basis for an independent assessment of whether an applicant who was denied credit was. 20. Although USBW sold its mortgage subsidiary in 1994. the bank in lact. creditworthy. Credit history problems and excessive debt continues to finance affordable housing projects through a nonbank levels relative to income — reasons most frequently cited by a credit affiliate that specializes in community development lending. denial — are not available from HMDA data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 695 of prohibited discrimination24 and found the banks to be in mended First Bank System's community development efsubstantial compliance with antidiscrimination laws and forts, including efforts with economic development corporegulations.25 rations and inner-city business ventures. Other commenters The record also indicates that First Bank System and noted First Bank System's role in establishing or providing U.S. Bancorp have taken a number of affirmative steps to financing for affordable housing initiatives. ensure compliance with fair lending laws. For example, A number of commenters opposed the proposal.26 Those First Bank System uses credit scoring in its credit under- commenters criticized the records of First Bank System or writing to help ensure that standards are applied uniformly U.S. Bancorp in assisting to meet credit needs in various without regard to race or gender. First Bank System also states, particularly in minority and LMI communities, in conducts, or retains third parties to conduct, periodic re- part on the basis of HMDA data. Some commenters mainviews of underwriting guidelines and procedures, together tained that First Bank System's efforts to meet the credit with comparative file reviews of similarly situated appli- needs of minority borrowers, including Native American cants, to ensure compliance with fair lending laws. More- borrowers, or the credit and economic development needs over, First Bank System's senior management has devel- of rural areas, small cities, and LMI neighborhoods, were oped and implemented extensive written policies, inadequate.27 Other commenters commended the banking procedures, and training programs to help ensure that its and lending services provided by U.S. Bancorp and thought subsidiaries do not illegally discourage or prescreen appli- that those services would be adversely affected by the cants, and First Bank System regularly assesses those proposal.2X Several commenters objected to First Bank policies, procedures, and programs through internal and System's sale of its mortgage subsidiary in 1996 or otherexternal audit reviews to ensure that they are effective. In wise criticized the organization's home mortgage lending addition, as part of its continuing evaluation of fair lending record. Other commenters criticized the proposal because practices and procedures, First Bank System has contracted of the lending and community development record of U.S. with an outside vendor to evaluate the treatment of pro- Bancorp, based in part on HMDA data. spective applicants throughout its network of bank After carefully reviewing all the facts of record, includbranches. ing the comments received, and for the reasons discussed U.S. Bancorp also has initiated policies, procedures, and above, the Board concludes that the CRA performance training to ensure that all loan applicants have an equal records of First Bank System and U.S. Bancorp are consisopportunity to obtain credit. A fair lending policy has been adopted and fair lending training is provided to all employees involved in the lending process. Other initiatives in- 26. During the processing of the applications, the Community clude centralizing underwriting decisions, revising under- Reinvestment Coalition of Oregon ("CRCO") entered into a private writing procedures, adopting an underwriting checklist, agreement with First Bank System that addressed CRA-related issues and implementing a three-tier review structure for all hous- raised by CRCO and a number of other commenters that concurred in CRCO's comments. Based on this agreement, CRCO supports the ing loan applications that are declined. Finally, U.S. Banproposal. First Bank System also has agreed to designate a senior corp subsidiaries have conducted a self-assessment proofficer in Portland, Oregon, with the responsibility and the authority to gram, which includes ongoing quality control review, resolve consumer complaints from Oregon residents. In this light, the comparative file reviews, and matched-pair testing. Oregon Division of Finance and Corporate Securities states that it has no objection to the proposal. 27. Some commenters also maintained that the proposal would Comments on the Proposal result in unemployment in affected communities. The Board notes that the convenience and needs factor has been consistently interpreted by As noted, the Board has reviewed the CRA performance the federal banking agencies, the courts, and Congress to relate to the records of First Bank System and U.S. Bancorp in light of effect of a proposal on the availability and quality of banking services in the community. In this light, the Board previously has concluded all the facts of record, including the comments received on that the effect of a proposed acquisition on employment in a commuthe proposed transaction. Some commenters supported the nity is not among the factors to be considered under the BHC Act. See proposal on the basis of the CRA performance records of Wells Farao & Company, 82 Federal Reserve Bulletin 445. 457 First Bank System or U.S. Bancorp. Commenters com- (1996). 28. Those commenters contended that services — particularly fees charged, interest rates paid, and credit availability — would be adversely affected by the acquisition of U.S. Bancorp by an out-of-state 24. In the CRA examinations of the subsidiary national banks of organization. In the Board's view, an institution's performance should First Bank System and U.S. Bancorp, the OCC sampled a pool of be assessed on the basis of its actual record of helping to meet the credit applications and performed a comparative analysis designed to credit needs of its entire community. Accordingly, in reviewing the detect racial or gender bias. The reviews found no evidence of illegal proposal the Board has focused on the CRA performance records of credit discrimination. First Bank System's bank subsidiaries, as discussed above. The Board 25. The most recent CRA performance examination for U.S. Bank also notes that First Bank System provides a full range of credit of California, Sacramento, California, conducted by the FDiC, as of products and banking services that assist in meeting the credit and May 1994, noted certain violations of fair lending laws, particularly banking needs of LMI individuals, including checking accounts withthe Equal Credit Opportunity Act. The Board has carefully reviewed out monthly service charges. Although the Board has recognized that the matter in light of all the facts of record, including additional banks help to serve the banking needs of their communities by making supervisory information about the nature of the violations and the basic services available at nominal or no charge, the CRA does not FDIC's conclusion that management promptly implemented compre- impose any limitation on the fees or other charges that banks may hensive measures to address the issues. assess for their services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Federal Reserve Bulletin • August 1997 tent with approval of the proposal. The Board notes that the Conclusion on Convenience and Needs Considerations record indicates efforts by First Bank System to assist in meeting the credit needs of Native American borrowers The Board has carefully considered all the facts of record, and the credit and economic development needs of rural including the comments received, responses to those comareas. First Bank System and U.S. Bancorp have products ments, and the CRA performance records of the subsidiary and programs in place to meet the credit needs of Native depository institutions of First Bank System and U.S. Ban- American communities. For example, First Bank System corp, including relevant reports of examination from their made a $4.5 million loan to a manufacturing firm on the primary federal supervisors.'- Based on a review of the Flathead Indian Reservation. Examiners found, moreover, entire record, the Board has concluded that convenience no evidence of illegal discrimination against Native Amer- and needs considerations, including the CRA records of icans or any other racial group. The record also indicates, performance of each organization's subsidiary depository for example, that in 1996. approximately 50 percent of institutions, are consistent with approval of this proposal." First Bank System's housing-related loan applications from Montana, North Dakota, and South Dakota came from Nonbanking Activities non-MSA areas, and that the approval rate for those applications was 71 percent.-'1 First Bank System also has filed notice, pursuant to section Although First Bank System no longer has a subsidiary 4(c)(8) of the BHC Act, to acquire the nonbanking subsidmortgage company, it continues to assist in meeting the iaries of U.S. Bancorp and thereby engage in mortgage housing-related credit needs of its communities, including banking, letter of credit, trust and fiduciary, investment LMI areas.50 First Bank System has expanded its Commu- advisory, leasing and equipment financing, community denity Lending Program, which provides housing-related velopment, and credit-related insurance activities. The loans to LMI individuals, into seven new markets in Chi- Board previously has determined by regulation that each of cago. Illinois; Colorado Springs. Colorado; Fargo, North these activities is closely related to banking within the Dakota; Rochester, Minnesota: Omaha and Lincoln. Ne- meaning of section 4(c)(8) of the BHC Act.'4 First Bank braska: and Des Moines, Iowa. The program encompasses System proposes to conduct the activities in accordance a broad range of mortgage loan products, including Federal with Regulation Y and relevant Board interpretations and Housing Administration and Veterans Administration orders. mortgage loans, state and local mortgage bond programs, In order to approve this proposal, the Board also must and First Bank System's Home Advantage mortgage prod- determine that the performance of the proposed activities uct. The Board also notes that the CRA contemplates that a are a proper incident to banking, that is, that the proposed depository institution may choose to focus on addressing transaction "can reasonably be expected to produce beneparticular credit needs of the community consistent with fits to the public . . . that outweigh possible adverse effects, the bank's overall business strategy, and that the CRA does such as undue concentration of resources, decreased or not require a financial institution to provide any specific unfair competition, conflicts of interests, or unsound banktype of loan product. Moreover, the CRA requires the ing practices."15 As part of its evaluation of these factors, federal banking agencies to encourage depository institu- the Board considers the financial and managerial resources tions to help meet the credit needs of their entire communi- of the notificant. its subsidiaries, and any company to be ties, and does not establish a statutory preference for any acquired; the effect the transaction would have on such specific type of credit.11 resources; and the management expertise, internal control and risk-management systems, and capital of the entity 29. First Bank System also sponsors Federal Home Loan Bank Affordable Housing Program grants through which a financial institu- 32. Commenters contended that First Bank System has unfair hiring tion may apply on behalf of a nonprofit corporation for a grant to practices that disadvantage Native Americans. The Board has detersupport an affordable housing program. First Bank System has ob- mined that its limited jurisdiction to review applications and notices tained grants from the program to support projects in small communi- under the specific factors in the BHC Act does not authorize it to ties in Minnesota, lown. Nebraska. North Dakota. Montana, and adjudicate disputes between a commenter and an applicant that arise Wyoming. under a statute, other than a banking statute, administered and en- 30. U.S. Bancorp also sold its mortgage subsidiary in 1994. U.S. forced by a federal or state agency (other than a federal or state Bank began to originate loans through its branch .structure and its banking agency) or the courts. In particular, the Board has determined affiliate. U.S. Bancorp Home Loans. U.S. Bank also plans to continue that disputes that arise in the area of employment discrimination are to assist in meeting housing-related credit needs through another beyond the Board's jurisdiction. The Board also has concluded that nonbank affiliate specializing in community development lending. the managerial resources of First Bank System are consistent with 31. The Board has considered comments that First Bank System approving the proposal for the reasons discussed earlier in the order. favors urban areas for charitable donations and that philanthropic 33. Commenters have requested that the Board delay action on this contributions in Montana, North Dakota, and South Dakota are dispro- case, or condition approval on specified CRA-relaled requirements. portionately low. Charitable and philanthropic donations are only one As discussed above, the Board has carefully reviewed the record in aspect of an institution's CRA-related activities, and the CRA does this case, and based on all the facts of record has concluded that the not create a preference for a particular type of charitable donation or record is sufficient to act on the proposal at this time, and that the grant. As discussed above, moreover, the Board's consideration of record is consistent with approval of the proposal without delay or the First Bank System's CRA performance record has focused on all specific conditions requested by commenters. activities to assist in meeting the credit needs of the community, 34. See 12C.F.R 225.28(b)(l).(3).(5).(6). (11), and (12). including lending activities. 35. Sec 12U.S.C. § 1843(c)(8). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 697 conducting the activity.'6 For the reasons discussed above, posal is specifically conditioned on compliance by First and based on all the facts of record, the Board has con- Bank System with all ihe commitments made in conneccluded that financial and managerial considerations are tion with this proposal and the conditions referred to in this consistent with approval of these notices. order. The Board's determination on the proposed non- First Bank System has indicated that the proposed trans- banking activities also is subject lo all the conditions set action would result in operational efficiencies that would forth in Regulation Y, including those in sections 225.7 and allow the combined organization to be a more efficient and 225.25(c) of Regulation Y. and to the Board's authority to effective competitor. The proposal would result in a broader require such modification or termination of the activities of financial network through which First Bank System can a bank holding company or any of its subsidiaries as the serve its customers. Additionally, there are public benefits Board finds necessary lo ensure compliance with and to lo be derived from permitting capital markets to operate so prevent evasion of the provisions of the BHC Act and the that bank holding companies can make potentially profit- Board's regulations and orders issued thereunder. For purable investments in nonbanking companies when those poses of this action, these commitments and conditions investments are consistent, as in this case, with the relevant shall be deemed to be conditions imposed in writing by the considerations under the BHC Act, and from permitting Board in connection with its findings and decision, and, as banking organizations to allocate their resources in the such, may be enforced in proceedings under applicable manner they consider most efficient. law. The Board also has carefully considered the competitive The acquisition of U.S. Bancorp's subsidiary banks may effects of the proposed acquisition of U.S. Bancorp's non- not be consummated before the fifteenth calendar day after banking subsidiaries. The Board notes that each of the the effective date of this order, and the proposal may not be markets for the nonbanking services are unconcentrated, consummated later than three months after the effective and that there are numerous providers of the services. date of this order, unless such period is extended by the Consummation of the proposal, therefore, would have a Board or by the Federal Reserve Bank of Minneapolis, de minimis effect on competition, and the Board has deter- acting pursuant to delegated authority. mined that the proposal would not have a significantly By order of the Board of Governors, effective June 23, adverse effect on competition in any relevant market. 1997. Based on the foregoing and all the other facts of record, the Board has concluded that consummation of the pro- Voting for this action: Chairman Greenspan. Vice Chair Ri\ lin. and posal would not result in adverse effects, such as undue Governors Kelley. Phillips, and Meyer. concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices, JENNIFER J. JOHNSON that would not be outweighed by the public benefits of the Deputy Secretary of the Board proposal. Accordingly, based on all the facts of record, the Board has determined that the balance of public benefits Appendix A that the Board must consider under the proper incident to banking standard of section 4(c)(K) of Ihe BHC Act is U.S. Bancorp's Subsidiary Banks favorable and consistent with approval of the proposal." 1. U.S. National Bank Of Oregon, Portland, Oregon Conclusion 2. U.S. Bank of Washington, N.A., Seattle, Washington 3. U.S. Bank of Nevada, Reno, Nevada The Board has considered all the facts of record in light of 4. U.S. Bank of Utah, Salt Lake City, Utah the factors that it is required to consider under the BHC 5. U.S. Bank of Idaho, Boise, Idaho Act. Based on the foregoing and a review of all the facts, 6. U.S. Bank of California, Sacramento, California the Board has determined that the proposal should be. and 7. First State Bank of Oregon, Canby. Oregon hereby is, approved.3" The Board's approval of this prorelated to the proposal and to provide an opportunity for testimony. 36. See 12 C.F.R. 225.26. See 12 C.F.R. 225.2?(a)(2). 262.3(e), and 262.25ld).'The Board has 37. First Bank System also lias given notice of its intention to carefully considered commenters" requests for a hearing or meeting in acquire U.S. World Trade Corporation, an export trading company, light of all the facts of record. In the Board's view, commenters have which First Bank System proposes to operate in accordance with the had ample opportunity to submit views, and have, in fact, provided Bank Holding Company Act and Regulation K. Accordingly, the numerous written submissions that have been considered by the Board Board has determined not to disapprove this notice. in acting on this proposal. The requests fail to demonstrate why the 38. Commenters have requested that the Board hold a public hear- written submissions do not adequately present commenters' allegaing or meeting on this proposal. Section 3(h) of the BHC Act does not tions. After a careful review of all the facts of record, the Board has require the Board to hold a public hearing on an application unless the concluded that the requests fail to identify any genuine dispute about appropriate supervisory authority lor the bank to be acquired makes a facts that are material to the Board's decision or any other basis on timely written recommendation of denial ot the application. In this which a hearing or meeting would be warranted. Based on all the facts case, the Board has not received such a recommendation from any of record, the Board has determined that a public hearing or meeting is state or federal supervisory authority. not necessary to clarify the factual record in the proposal, and is not otherwise warranted in this case. Accordingly, the request for a public- Under its rules, the Board also may, in its discretion, hold a public hearing or meeting on the proposal is hereby denied. hearing or meeting on an application or notice to clarity tactual issues Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin • August 1997 8. Sun Capital Bank, St. George, Utah (1) West One Trust Company d/b/a U.S. Bank Trust 9. Business & Professional Bank, Woodland, California Company, Salt Lake City, Utah; (2) LNB Corp., Alameda, California; and Appendix B (3) U.S. Bank Trust Company, Portland, Oregon. U.S. Bancorp's Nanbanking Activities and Subsidiaries Investment advisory services conducted pursuant to section 225.28(b)(6) of Regulation Y: Mortgage banking and letter of credit activities conducted (1) Compass Group, Inc., Spokane, Washington. pursuant to section 225.28(b)( 1) of Regulation Y: (1) CBI Mortgage, Modesto, California; and Credit-related insurance activities conducted pursuant to (2) U.S. Trade Services, Inc., Portland, Oregon. section 225.28(b)(l l)(i) of Regulation Y: 1I) U.S. Bancorp Insurance Agency, Inc.; and Leasing and equipment financing activities conducted pur- (2) West One Life Insurance Company, both in Portland, suant to section 225.28(b)(3) of Regulation Y: Oregon. (1) Island Bancorp Leasing, Inc., Alameda, California. Community development activities conducted pursuant to Trust and fiduciary activities conducted pursuant to section section 225.28(b)(12) of Regulation Y through corpora- 225.28(b)(5) of Regulation Y: tions and limited partnerships in Portland, Oregon. Appendix C CRA Performance Examination Ratings for First Bank System's Subsidiary Banks Subsidiary Banks of First Bank System' CRA rating Date First Bank National Association Minneapolis. Minnesota Outstanding July 18. 1995 Colorado National Bank Denver. Colorado Outstanding July 18. 1995 Colorado National Bank Aspen Aspen. Colorado Satisfactory July IX. 1995 First Bank National Association Chicago. Illinois Satisfactory July 18. 1995 First National Bank of Fast Grand Forks East Grand Forks. Minnesota Satisfactory July IX. 1995 First Bank Montana. N.A. Billin'js. Montana Satisfactory July 18. 1995 First Bank of South Dakota. N.A. Sioux Falls. South Dakota Satisfactory July 18, 1995 First Bank National Association Milwaukee. Wisconsin Satisfactory July 18, 1995 First Bank, fsb FarKo. North Dakota Satisfactory November 6. 1995 First Bank (National Association) Omaha. Nebraska Satisfactory Novembet 21. 1994 1 This chiiii contains the rut ings Tor the subsidiary bunks of First Bunk System beiore First Bank Sysiem merged or consolidated seven of its subsidiary banks and its subsidiary ihril't with and into First Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 699 Appendix D CRA Performance Examination Ratings for U.S. Bancorp's Subsidiary Banks U.S. Bancorp's Subsidiary Banks CRA rating Dale Business & Professional Bank Wuodland, California Satisfactory May IWS U.S. Bank ol California Sacramento, California Satisfactory May 16. 1994 U.S. Bank of Idaho Boise. Idaho Satisfactory March 31. 1994 First State Bank of Oregon Canby. Oreiion No CRA rating1 U.S. National Bank of Oregon Portland. Oregon Outstanding April X. 1497 U.S. Bank of Nevada Reno, Nevada Outstanding November 21, 1995 U.S. Bank of Utah Salt Uake Citv. Ulah Outstanding May IS. 199S U.S. Bank of Washington. M.A. Seattle. Washington Outstanding April X. 1997 Sun Capital Bank St. Georee. Utah Outstanding August 2. 1996 1 First State Bank of Oregon. Canby. Oregon, is a special-purpose bank for purposes of the CRA because it does not grant credit to the public in the ordinary course of business. The bank provides only controlled disbursement services for commercial and governmental depositors of other U.S. Bancorp entities, and on this basis the FDIC has concluded that it is not subject to evaluation for CRA performance. APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) Effective Date Community Capital Corporation, The Bank of Newberry County, June 5. 1997 Greenwood, South Carolina Newberry, South Carolina Section 4 Applicant(s) Nonbanking Activity/Company Effective Date National City Corporation, lnTraCon, Inc., June 12, 1997 Cleveland, Ohio Burton, Michigan National Processing, Inc., Louisville, Kentucky National City Corporation. MRS Jamaica. Inc., June 13, 1997 Cleveland, Ohio Houston, Texas National Processing, Inc., Louisville, Kentucky Wachovia Corporation, Macro*World Research Corporation, June 19, 1997 Winston-Salem. North Carolina Winston-Salem, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Federal Reserve Bulletin • August 1997 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 Bancorp of New Glarus. Inc.. The Bank of New Glarus, Chicago June 11, 1997 New Glarus. Wisconsin New Glarus, Wisconsin Bank of Idaho Holding Company, Bank of Eastern Idaho, San Francisco June 12, 1997 Idaho Falls, Idaho Idaho Falls, Idaho Bay Bankcorp, Inc., baybank, Minneapolis June 2, 1997 Gladstone, Michigan Gladstone, Michigan Bedford Bancshares, Inc.. Western American National Bank. Dallas June 26, 1997 Bedford, Texas Bedford, Texas Bedford Delaware Bancshares, Inc., Dover. Delaware Binger Agency, Inc., Midstate Bancorp, Inc., Kansas City June 26, 1997 Binger. Oklahoma Hinton, Oklahoma Capitol Bancorp Limited, Valley First Community Bank, Chicago June 3. 1997 Lansing, Michigan Scottsdale, Arizona Sun Community Bancorp Limited, Tucson, Arizona Community Bankshares, Inc.. County Bank of Chesterfield, Richmond June 5, 1997 Petersburg, Virginia Midlothian, Virginia Community Financial Corp., Community Savings Bank, Chicago June 3, 1997 Edgewood, Iowa Robins, Iowa Dunn Investment Co., Dunn Shares, Inc., Chicago May 22, 1997 Eagle Grove, Iowa Eagle Grove, Iowa Security Savings Bank, Eagle Grove, Iowa F & M Shares Corp., Eagle Grove, Iowa Farmers & Merchants Savings Bank, Manchester, Iowa Eagle Investment Company, Inc., Eagle Bank, Minneapolis June 18, 1997 Glenwood, Minnesota Glenwood, Minnesota Fannin Bancorp, Inc., Employee Fannin Bancorp, Inc., Dallas June 26, 1997 Stock Ownership Plan and Trust, Windom, Texas Windom, Texas The Farmers State Bank of Fort FSB Bancorporation, Kansas City June 5, 1997 Morgan. Colorado ESOP, Fort Morgan, Colorado Fort Morgan. Colorado Farmers State Holding Company, First State Financial Services, Inc.. Minneapolis June 5. 1997 Marion, South Dakota Bridgewater, South Dakota First State Bank, Bridgewater, South Dakota Financial Services of St. Croix State Bank of Dennison, Minneapolis June 18, 1997 Falls, Dennison, Minnesota St. Croix Falls, Wisconsin Firstbank Corporation, Lakeview Financial Corporation, Chicago June 16, 1997 Alma, Michigan Lakeview, Michigan Bank of Lakeview, Lakeview, Michigan First Citizens BancShares, Inc., First Savings Financial Corp., Richmond June 19, 1997 Raleigh, North Carolina Reidsville, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 701 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date First National Community Bancorp, First National Community Bank, Philadelphia May 23, 1997 Inc., Dunmore, Pennsylvania Dunmore, Pennsylvania GLB Bancorp, Inc., Great Lakes Bank, Cleveland May 30, 1997 Mentor, Ohio Mentor, Ohio Gold Bane Corporation, Inc., Peoples Bancshares, Inc., Kansas City June 18, 1997 Leawood, Kansas Clay Center, Kansas Guaranty Bancshares Corporation, Bank of Coffey, Kansas City June 11, 1997 Kansas City, Kansas Coffey, Missouri Imperial Bancorp, Imperial Bank Arizona, San Francisco May 29, 1997 Inglewood, California Phoenix, Arizona Hohl Financial, Inc., Wahoo State Bank, Kansas City June 25. 1997 Wahoo, Nebraska Wahoo, Nebraska InvestorsBancorp, Inc., InvestorsBank. Chicago June 4. 1997 Pewaukee, Wisconsin Pewaukee, Wisconsin Louisiana Bancshares, Inc., Louisiana Bank and Trust Company, Atlanta May 30, 1997 Baton Rouge, Louisiana Baton Rouge, Louisiana Mansfield Bancshares, Inc., Riverside Bancshares, Inc., Dallas June 6, 1997 Mansfield. Louisiana Logansport, Louisiana Bank of Logansport, Logansport, Louisiana MASSBANK Corp., Glendale Co-operative Bank, Boston May 29, 1997 Reading. Massachusetts Everetl. Massachusetts Meade Bancorp, Inc., Bedford Loan and Deposit Bancorp, Si. Louis June 25, 1997 Brandenburg. Kentucky Inc., Bedford. Kentucky Bedford Loan and Deposit Bank, Bedford, Kentucky Mellon Bank Corporation. 1st Business Bancorp, Cleveland June 9, 1997 Pittsburgh, Pennsylvania Los Angeles. California National City Bancshares, Inc.. Bridgeport Bancorp, Inc., St. Louis June 12, 1997 Evansville, Indiana Bridgeport, Illinois First National Bank of Bridgeport, Bridgeport, Illinois NEB Corporation. State Bank of St. Cloud, Chicago June 5, 1997 Fond du Lac, Wisconsin St. Cloud, Wisconsin PBT Bancshares, Inc., Yoder Bankshares, Inc., Kansas City June 13, 1997 McPherson. Kansas Yoder, Kansas The Peoples Bank Employee Stock Peoples-Marion Bancorp, Inc., St. Louis June 17. 1997 Ownership Trust, Marion, Kentucky Marion, Kentucky The Peoples Bank. Marion, Kentucky Peoples-Marion Bancorp, Inc., The Peoples Bank, St. Louis June 17. 1997 Marion, Kentucky Marion, Kentucky PN Holdings, Inc., Pelican National Bank, Atlanta June 16, 1997 Ann Arbor, Michigan Naples, Florida PN Holdings, Inc.. Washtenaw Mortgage Company, Atlanta June 16, 1997 Ann Arbor. Michigan Ann Arbor, Michigan Premier Bancshares. Inc., Premier Holdings - Nevada, Inc., Dallas May 27, 1997 La Grange, Texas Carson City, Nevada Citizens State Bank, Hempstead. Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

702 Federal Reserve Bulletin • August 1997 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Schonath Family Partnership, a InvestorsBancorp, Inc., Chicago June 4, 1997 Limited Partnership, Pewaukee, Wisconsin Oconomowoc, Wisconsin Security State Corporation, Security State Bank, San Francisco June 12, 1997 Centralia. Washington Centralia, Washington Shorebank Corporation, Shorebank Pacific Corporation, Chicago June 3, 1997 Chicago, Illinois Ilwaco, Washington ShoreTrust Bank, Seattle, Washington Shorebank Pacific Corporation, ShoreTrust Bank, Chicago June 3, 1997 Ilwaco, Washington Seattle, Washington South Branch Valley Bancorp, Inc., Capital State Bank, Inc., Richmond June 2, 1997 Moorefield, West Virginia Charleston, West Virginia Southern Security Financial Southern Security Bank Corporation. Atlanta May 22, 1997 Corporation, Hollywood, Florida Hollywood, Florida Southern Security Bank of Hollywood, Hollywood, Florida Stearns Financial Services, Inc., Arizona Community Bank of Scottsdale, Minneapolis June 24, 1997 Employee Stock Ownership Plan, Scottsdale, Arizona St. Cloud, Minnesota Stearns Financial Services, Inc., St. Cloud, Minnesota Susquehanna Bancshares, Inc., Founders Bank, Philadelphia May 27, 1997 Lititz, Pennsylvania Bryn Mawr, Pennsylvania Trustcorp Financial, Inc., Missouri State Bank and Trust St. Louis June 5, 1997 St. Louis. Missouri Company. St. Louis, Missouri Roosevelt Financial Group, Inc., St. Louis, Missouri United Bankshares, Inc.. First Patriot Bankshares Corporation, Richmond June 20, 1997 Charleston, West Virginia Reston, Virginia Village Bancshares, Inc.. Village Bank, St. Louis June 26, 1997 Springfield, Missouri Springfield. Missouri Zions Bancorporation, Tri-State Bank, San Francisco June 11, 1997 Salt Lake City, Utah Montpelier. Idaho Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Allegiant Bancorp, Inc., Reliance Financial. Inc., St. Louis June 12, 1997 Clayton, Missouri St. Louis, Missouri Reliance Federal Savings and Loan Association of St. Louis County, St. Louis, Missouri Bane One Corporation. Bane One Capital Corporation, Cleveland June 19, 1997 Columbus, Ohio Columbus, Ohio Venture Marketing Corporation. Columbus, Ohio BB&T Corporation, Refloat, Inc., Richmond June 5, 1997 Winston-Salem, North Carolina Pilot Mountain, North Carolina Sheffield Financial Corp., Clemmons, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 703 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Caisse Nationale de Credit Agricole, Indosuez Carr Futures, Inc., Chicago June 18. 1997 Paris, France Chicago, Illinois Credit Agricole Indosuez, Dean Witter Reynolds, Inc., Paris. France New York, New York Dean Witter International Ltd.. London, England CCB Financial Corporation, American Federal Bank, FSB, Richmond June 4, 1997 Durham, North Carolina Greenville, South Carolina Commercial Guaranty Bancshares, To engage de novo in acting as an agent Kansas City May 29, 1997 Inc., for the private placement of securities Shawnee Mission, Kansas Commerzbank Aktiengesellschaft, Commerz Futures Corporation, New York May 30, 1997 Frankfurt am Main, Germany Chicago, Illinois Concord EFS, Inc., EFS Federal Savings Bank. St. Louis June 3, 1997 Memphis, Tennessee Oakland. Tennessee Dresdner Bank AG, To engage de novo in extending credit New York June 23, 1997 Frankfurt, Germanv and servicing loans, leasing personal or real property, financial and investment advisory activities, agency transactional services for customer investments, and management consulting and counseling activities Fifth Third Bancorp. Suburban Bancorporation, Inc., Cleveland June 12. 1997 Cincinnati, Ohio Cincinnati, Ohio Fifth Third Bank, Suburban Federal Savings Bank, Cincinnati. Ohio Cincinnati, Ohio Marquette Bancshares, Inc., Offerman & Company, Inc., Minneapolis May 23, 1997 Minneapolis, Minnesota Minnetonka, Minnesota Mid Am, Inc., MFI Investments Corp., Cleveland May 28, 1997 Bowling Green, Ohio Bryan, Ohio Monitor Bancorp, Inc.. The Monitor Bank, Cleveland June 18, 1997 Big Prairie, Ohio Big Prairie, Ohio Pinnacle Financial Services, Inc.. CB Bancorp. Inc.. Chicago June 26. 1997 St. Joseph, Michigan Michigan City, Indiana Community Bank. FSB, Michigan City. Indiana Republic Bancshares, Inc., F.F.O. Financial Group, Inc., Atlanta June 25, 1997 St. Petersburg, Florida St. Cloud. Florida First Federal Savings and Loan Association of Osceola County. Kissimmee, Florida Summit Bancorp., Collective Bancorp, Inc.. New York May 29, 1997 Princeton, New Jersey Egg Harbor City. New Jersey Collective Bank, Egg Harbor City, New Jersey TCF Financial Corporation, Winthrop Resources Corporation, Minneapolis May 30, 1997 Minneapolis, Minnesota Minnetonka, Minnesota Union Illinois Company, Missouri PayDay Loan Company. Inc.. St. Louis My 23. 1997 Swansea. Illinois St. Louis, Missouri Missouri Budget, Inc., St. Louis, Missouri Budget Finance, Inc., St. Louis. Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

704 Federal Reserve Bulletin LJAugust 1997 Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date 1st United Bancorp, Seaboard Savings Bank. F.S.B.. Atlanta June 17, 1997 Boca Raton, Florida Stuart, Florida FirstFederal Financial Services FirstFederal Bank, N.A., Cleveland May 23, 1997 Corp. Wooster, Ohio Wooster, Ohio Mobile Consultants, Inc., Alliance. Ohio FirstFederal Financial Services Summit Bancorp, Cleveland May 23, 1997 Corp, Akron. Ohio Wooster. Ohio Summit Bane Investments Corporation, Akron. Ohio 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 Fifth Third Bank of Western Ohio. The Fifth Third Bank, Cleveland May 29, 1997 Piqua. Ohio Cincinnati, Ohio Gulf Bank, First Bank of Baldwin County. Atlanta May 29, 1997 Orange Beach, Alabama Robertsdale, Alabama Mercantile Bank, Mark Twain Kansas City Bank, Kansas City June 10. 1997 Overland Park, Kansas Kansas City, Missouri Old Kent Bank. Old Kent Bank, Chicago June 13, 1997 Grand Rapids. Michigan Elmhurst. Illinois United Bank, Patriot National Bank, Richmond June 20. 1997 Arlington, Virginia Reston, Virginia PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Pharaon v. Board of Governors, No. 97-1 1 14 (D.C. Cir., tiled Federal Reserve Banks in which the Board of Governors is not February 28, 1997). Petition for review of a Board order named a party. dated January 31, 1997, imposing civil money penalties and an order of prohibition for violations of the Bank Holding Company Act. Inner City Press/Community on the Move v. Board of Gover- Research Triangle Institute v. Board of Governors, No. 97nors, No. 97-1394 (D.C. Cir., filed June 12, 1997). Petition 1282 (4th Cir., filed February 24, 1997). Appeal of district to review a Board order dated May 14, 1997. approving the court's dismissal of contract claim. application of Bane One Corporation, Inc., Columbus, Ohio, Jones v. Board of Governors, No. CV97-0I98 (W.D. Louisito merge with First USA. Inc.. Dallas. Texas. On June 16, ana, filed January 30. 1997). Complaint alleging violations 1997, petitioners moved for a stay pending appeal. The of the Fair Housing Act. The case was dismissed on motion was denied on June 27, 1997. May 29, 1997. Vickery v. Board of Governors, No. 97-1344 (D.C. Cir., filed The New Mexico Alliance v. Board of Governors, No. 96— May 9. 1997). Petition for review of a Board order dated 9552 (10th Cir., filed December 24, 1996). Petition for April 14, 1997, prohibiting Charles R. Vickery, Jr., from review of a Board order dated December 16, 1996, approvfurther participation in the banking industry. ing the acquisition by NationsBank Corporation and NB Wilkins v. Board of Governors, No. 3:97CV331 (E.D. Va., Holdings Corporation, both of Charlotte, North Carolina, of filed May 2. 1997). Customer dispute with bank. On Boatmen's Bancshares, Inc., St. Louis, Missouri. Also on June I I, 1997, the Board filed a motion to dismiss. December 24, 1996, petitioners moved for an emergency Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 705 stay of the Board's order. The motion for a stay was denied ing Corporation to merge with The Chase Manhattan Corby the 10th Circuit on January 3, 1997; on January 6, 1997, poration, both of New York, New York, and by Chemical petitioners' application for emergency stay was denied by Bank to merge with The Chase Manhattan Bank, N.A., both the Supreme Court. of New York, New York. Petitioners' motion for an emer- Artis v. Greenspan, No. 1:96CVO26I9 (D.D.C., filed Novem- gency stay of the transaction was denied following oral ber 19, 1996). Employment discrimination action. On argument on March 26, 1996. The Board's brief on the May 30, 1997. the court granted the Board's motion to merits was filed July 8, 1996. The case was consolidated for dismiss (he action. oral argument and decision with Lee v. Board of Governors, Snyder v. Board of Governors, No. 96-1403 (D.C. Cir., filed No. 95-4134 (2d Cir.); oral argument was held on Janu- October 23, 1996). Petition for review of Board order dated ary 13, 1997. On July 2. 1997, the court of appeals dis- September II, 1996, prohibiting John K. Snyder and missed the petition for review. Donald E. Hedrick from further participation in the banking Lee v. Board of Governors, No. 95-4134 (2nd Cir., filed industry. On May 8, 1997. the court of appeals granted the August 22, 1995). Petition for review of Board orders dated Board's motion to dismiss the petition. Petitioners filed a July 24, 1995, approving certain steps of a corporate reorgapetition for rehearing or rehearing en bane on May 15. nization of U.S. Trust Corporation, New York, New York, 1997. and the acquisition of U.S. Trust by Chase Manhattan American Bankers Insurance Group, Inc. v. Board of Gover- Corporation, New York, New York. On September 12, nors, No. 96- CV-2383-EGS (D.D.C., filed October 16. 1995, the court denied petitioners" motion for an emergency 1996). Action seeking declaratory and injunctive relief instay of the Board's orders. The Board's brief was filed on validating a new regulation issued by the Board under the April 16, 1996. Oral argument, consolidated with Inner City Truth in Lending Act relating to treatment of fees for debt Press/Community on the Move v. Board of Governors, took cancellation agreements. On October 18, 1996, the district place on January 13, 1997. On July 2, 1997, the court of court denied plaintiffs' motion for a temporary restraining appeals dismissed the petition for review. order. On January 17, 1997, the parties filed cross-motions 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., hied 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 an enforcement action against them. On May 6, bankruptcy against the Federal Deposit Insurance Corpora- 1997. the court of appeals granted the Board's motion to tion. The Board filed its opposition on January 20. 1995. dismiss the petition. Oral argument on the motion was held July 14, 1995. Artis v. Greenspan, No. 96-CV-02105 (D. D.C. tiled Septem- Board of Governors v. Phtiraon. No. 91-CIV-6250 (S.D. New ber I I, 1996). Class complaint alleging race discrimination York, filed September 17, 1991). Action to freeze assets of in employment. On December 20, 1996, the Board moved individual pending administrative adjudication of civil to dismiss the action. On June 30, 1997, the court granted money penalty assessment by the Board. On September 17, the motion and dismissed the case. 1991, the court issued an order temporarily restraining the Leutlw v. Board of Governors, No. 96-5725 (E.D. Pa., filed transfer or disposition of the individual's assets. August 16. 1996). Action against the Board and other Federal banking agencies challenging the constitutionality of the Office of Financial Institution Adjudication. On January 24, 1997, the agencies tiled a motion to dismiss the action. FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD Long v. Board of Governors, No. 96-9526 (I Oth Cir., filed OF GOVERNORS July 31, 1996). Petition for review of Board order dated July 2, 1996, assessing a civil money penalty and cease and Donald G. Austin desist order for violations of the Bank Holding Company New York, New York Act. Oral argument was heard on May 12, 1997, and on June 30, 1997, the court affirmed the Board's decision. The Federal Reserve Board announced on June 3, 1997, Interumcricus Investments, Ltd. r. Board of Governors, No. the issuance of an Order of Prohibition against Donald G. 96-60326 (5th Cir., hied May 8, 1996). Petition for review Austin, a former employee and institution-affiliated party of order imposing civil money penalties and cease and of The Bank of New York, New York, New York. desist order in enforcement case. On August 20, 1996, petitioners' motion for a stay of the Board's orders pending David A. Kuhn judicial review was denied by the Court of Appeals. On New York, New York April 16, 1997, the court denied the petition for review. Inner Citv PresslCommunitx on the Move v. Board of Gover- The Federal Reserve Board announced on June 30. 1997, nors, No. 96-4008 (2nd Cir.. Hied January 19, 1996). Peti- the issuance of an Order of Prohibition against David A. tion for review of a Board order dated January 5, 1996, Kuhn, a former bond trader and institution-affiliated party approving the applications and notices by Chemical Bank- of the New York Branch of Credit Lyonnais, Paris, France. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

706 Federal Reserve Bulletin D August 1997 Robert L. McCook — Cease and Desist Order dated September 22, 1994; Richmond, Virginia terminated March 24, 1997. Purdy Bancshares, Inc., Monett, Missouri, and Glen Gar- The Federal Reserve Board announced on June 3, 1997, rett the issuance of an Order to Cease and Desist against — Cease and Desist Order dated May 4, 1993; termi- Robert L. McCook, a former registered representative and nated March 25, 1997. institution-affiliated party of Crestar Securities, Inc., Rich- Nova Ljubljanska Banka d.d., New York, New York mond, Virginia, a broker-dealer subsidiary of Crestar Fi- — Cease and Desist Order dated December 20, 1991; nancial Corporation, Richmond, Virginia. terminated March 27, 1997. Mount Vernon Bancshares, Inc., Mount Vernon, Kentucky, Michael Quinn and Jerry Ikerd and Brenda Ikerd New York, New York — Cease and Desist Order dated February 23, 1994; terminated May 19, 1997. The Federal Reserve Board announced on June 4, 1997. First State Bank of Maple Park and Maple Park Bancthe issuance of an Order to Cease and Desist against shares, Maple Park, Illinois Michael Quinn, a former employee of the New York — Written Agreements dated September 7, 1995; termi- Branch of Swiss Bank Corporation. nated June 2, 1997. Zia New Mexico Bank Tucumcari, New Mexico WRITTEN AGREEMENTS APPROVED BY FEDERAL The Federal Reserve Board announced on June 30, 1997, RESERVE BANKS the issuance of a Cease and Desist Order against the Zia New Mexico Bank, Tucumcari, New Mexico, and G.A. Poling, Jr., president of the bank. John Widmer New York, New York TERMINATION OF ENFORCEMENT ACTIONS The Federal Reserve Board announced on June 18, 1997, The Federal Reserve Board announced on June 4, 1997. the execution of a Written Agreement by and between the the termination of the following enforcement actions: Federal Reserve Bank of New York and John Widmer, a former officer and institution-affiliated party of the New State Bank of India, Bombay, India, and the bank's Los York Branch of Swiss Bank Corporation, New York, New Angeles, Chicago, and New York offices York. 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—Transactions 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 Policy Instruments A31 New security issues—Tax-exempt state and local 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 A33 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 A35 Mortgage debt outstanding Monetary and Credit Aggregates Al 1 Aggregate reserves of depository institutions Consumer Credit and monetary base A12 Money stock, liquid assets, and debt measures A36 Total outstanding A14 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 A15 All commercial banks A41 Summary of financial assets and liabilities A16 Domestically chartered commercial banks A17 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— A22 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 • August 1997 DOMESTIC NONF1NANCIAL STATISTICS- Reported by Nonbanking Business CONTINUED Enterprises in the United States A58 Liabilities to unaffiliated foreigners Selected Measures—Continued A59 Claims on unaffiliated foreigners A48 Gross domestic product and income A49 Personal income and saving Securities Holdings and Transactions A60 Foreign transactions in securities INTERNATIONAL STATISTICS A61 Marketable U.S. Treasury bonds and notes—Foreign transactions Summary Statistics Interest and Exchange Rates A50 U.S. international transactions—Summary A51 U.S. foreign trade A61 Discount rates of foreign central banks A51 U.S. reserve assets A61 Foreign short-term interest rates A51 Foreign official assets held at Federal Reserve A62 Foreign exchange rates Banks A52 Selected U.S. liabilities to foreign official A63 GUIDE TO STATISTICAL RELEASES AND institutions SPECIAL TABLES Reported by Banks in the United States A52 Liabilities to and claims on foreigners SPECIAL TABLE A53 Liabilities to foreigners A64 Assets and liabilities of U.S. branches and A55 Banks' own claims on foreigners agencies of foreign banks, March 31, 1997 A56 Banks' own and domestic customers' claims on foreigners A56 Banks' own claims on unaffiliated foreigners A68 INDEX TO STATISTICAL TABLES A57 Claims on foreign countries— Combined domestic offices and foreign branches 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 • August 1997 1.10 RESERVES. MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1996 1997 1997 Monetary or credit aggregate Q3 04 Ql Jan. Feh. Mar. Apr.' May Reserve*, oj depo\it'>n institutions1 I Tolal . . . .' ' -6.6 - 16.4 -17.2 -8.3 -13.1 -12.3 -17.0 -21.9 -107 2 Required -5.9 -16.5 -18.5 -8.4 -8.5 -7.9 -20.7 -18.6 -16.2 3 Nonborrowed -79 -17.6 -16.2 -7.2 -10.5 -12.3 -19.9 -24.5 -10.3 4 Monetary base' 3.0 5.3 5.1 5.6 3.9 5.7 3.5 1.6 3.4 Com c/vs of money, lu/md assets, and debt* 5 Ml ' -1.4 -6 5 -73 -.7 -I.?1 .9' -6.0 -11.3 -2.7 6 M2 4.5 3.4 5.0 5.9 5.2 5.1 5.1 6.0 -.5 7 M3 6.4 5.4 7.9 7.7 .5.4' 9.0 6.8 8.6 1.3 8 L 7..V 6.4' 6.9' 6.3' 2.8' 8 7' 7.(1' 8.0 n.ii. >> Debt 5.8' 5.2' 5.0' 4.6' 3.7' 5.1' 5.5' 5.7 n.a. Nontransactioii toinpotwnt.s 10 In M2S 7.(1 7.7 10.1 8.5 7.8 6.7 9.4 12.6 .3 1 1 In M3 only'1 1 .'.9 12. 8 18.5 14.0' 6.0' 22.9' 12.6' 17.4 7.4 Time and sttvini>.\ deposits Commercial banks 12 Savings, including MMDAs 12.1 12.(1 17.0 14.0 13.4 9.3 17.1 17.6 -4.4 13 Smalfltmc7^ . . .". -1.(1 3.7 4.7 28 1.0 1.8 4.9 5.4 6.4 14 Large time*'' 18.6 IX (I 12.5 -3 16.7 25.4 34.7 6.3 Thrift institutions 1 lf> 5 S S m av a in ll g t s im , i e n 7 cluding MMDAs -3 6 .0 .5 j\ 2. . 1 8 -1 2 .7 7 4. . 6 3 2.9 -11 2 . . 9 3 -4 9 . . 8 7 6 3 . . 8 8 17 Large limes -3.0 9.0 9.1 I2.S 28.8 1L8 1.5 7.3 -2.9 Monev market mutual funds 1S Retail . . ...................... 16.3 16.3 17.2 16.3 13.(1 13.9 19.9 24.5 -4.2 19 Instituliun-only 12.0 20.7 19. K 15.5 -12.0 36.9 25.1 -.8 .0 Rcpunhasf agreements and Eurodollars 20 Repurchase agreements'" 16.3 -4.4 1.8 7.8' 19.3' 24.5' -10.8' 11.5 -9.0 21 Eurodollars"1 10.9 8.5 40.2 280 39.4 14.4 -17.3 18.6 66.2 Debt compt'/ienis4 w .^ lC VIC lt|l~>- . ....,•-.. ..-.......'....I,.,... 4.7 3.8 12 1.8 -.<•> 1.8 4.7 2.4 n.a 23 Nnnlcilcrul 6.2' 5.7' 5.6' 5.6' 5.2' 6.3' 5.7' 6.8 11.a. 1. Unless otherwise noted, rales ol 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 hy summing large 2. Figures incorporate adjustments tor discontinuities, or "breaks."' associated with time deposits, institutional money fund balances. RP liabilities, and Eurodollars, each regulatory changes in icsc-rve rei|uircmenls. (See also table ) .20.) seasonally adjusted separately, and adding this result to seasonally adjusted M2. 3. The seasonally adjusted, break-adjusted monetary base consists of (I) seasonally L: M3 plus the nonhank public holdings of U.S. savings bonds, shori-lerm Treasury adjusted, break -adjusted total reserves (line I), plus (2) the seasonally adjusted currency securities, commercial paper, and bankers acceptances, net of money market fund holdings of component of the money slock, plus (3) 11or all quarterly reporters tin the "Rcpoil of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, shorl-letm Transaction Accounts. Other Deposils 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 cuneru vnu.il cash and the amount applied to satisfy cuvrcnl vesew? requivemiMilv Debt: The debt aggregate is the outstanding credit market debi of the domestic nontimmcial 4. Composition of the money stock measures and debt is as follows: sectors—the federal sector (U.S. government, not including government-sponsored enter- MI: (I) currency outside the U.S. Treasury. Federal Reserve Banks, and the vaults of prises or federally related mortgage pools) and the nonlederal sectors (state and local depository institutions. (2l travelers checks of nonhank issuers. (?) demand deposits at all governments, households and nonpvolil organizations, nonfinancial corporate and nonfarm commercial banks other than those owed to depository institutions, the U.S. government a\u\ noncorporate businesses, and farms). Non federal debt consists ol mortgages, lax-exempt and foreign hanks 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 NOJI, and (4) other checkable deposits (OCDs). consisting of negotiable order ot which are derived from the Federal Reserve Board's (low of funds accounts, are hreakwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions. adjusted (thai is. discontinuities in the data have hcen smoothed into the series) and credit union share draft accounts, and demand deposits at thrill institutions. Seasonally month-averaged (that is. the data have been derived hy averaging adjacent month-end levels). adjusted Ml is computed hy summing currency, travelers checks, demand deposits, and 5. Sum oft I) savings deposits (including MMDAs). (2) small time deposits, and (3) retail OCDs. e.ieh seasonally adjusted separately. money fund balances, each seasonally adjusted separately. M2: Ml plus (I) savings (including MMDAs). (2) small-denomination time deposils (time 6. Sum of 11) large lime deposits. 12) institutional money fund balances. (3) RP liabilities deposits—including retail RPs— in amounts of less than .1.100.000). and (3) balances in retail (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and money market mukia! funds (money funds with minimum initml investments of less than term) of U.S. addressees, each seasonally adjusted separately. $50,000). Excludes individual retirement accounts (IRAs) mid Keogh balances at depository 7. Small lime 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 halances al commercial hanks and thrift institutions savings deposits, small-denomination lime deposits, and retail money fund balances, each are subtracted front small lime deposits. seasonally adjusted separately, and adding this result to seasonally adjusted Ml. H. Large lime deposits are those issued in amounts of $IOO,O(X) or more, excluding those M3: M2 plus (I) large-denomination lime deposits (in amounts of $100,000 or more). (2) booked at international banking facilities. balances in institutional money funds (money tuiuK uith minimum initial investments of 9. Large lime deposils ai conimu'ivuil 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, ihe U.S. government, and foreign hanks and official institutions. and (4) Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. 10. Includes boih overnisihl and term. banks worldwide and M all bankinu ollkes in ihe Untied 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 CREDIT1 Millions of dollars Average of c ail) ligures Average >" daily tigurcs for week eii ing on d. leindicated Factor 1997 1997 Mar. Apr. May Apt. 16 Apr. 2.1 Apr. 30 May 7 Ma) 14 Mav 21 May 28 SUPPLYING RKSERVR Ft NDS 1 Reseive Bank credit oulsiandiii- 437.437 448.875' 448.772 441.099 445.861 466.37 1 460.923 450.194 442.274 442.663 195.970 400.786 405.099 401 I81 400.720 401.462 403.480 404.852 405.907 406.056 3 Held under repurchase agreements 7.388 l.l.«7 10.616 8.243 10.182 28.701 22.850 1 1.33) 4.841 4.889 Federal agenc) obligations 4 Boutihi Dulnght 2.008 1.985 1.970 1.984 1 984 1.972 1.970 1.970 1.97(1 1.97(1 ? Held under lepurchase agreements 1.387 817 680 685 730 69| 872 450 399 631 6 Acceptances I) 0 0 0 0 0 0 0 0 0 Loans lo depository inslitulioii1- 7 Ad)ustmenl eredii 199 95 66 51 235 1 19 65 15 18 H Seasonal credil 37 85 76 76 95 1 14 140 154 183 209 l) Extended creilit 0 0 0 0 0 0 0 ) 0 0 10 Floai 413 643 51 2.11 887 828 96 62 195 50 i 1 Other Federal Reserve assets 30.0.15 31.107 30.013 50.648 31.028 .12.48.1 11.450 31.559 28.552 28.8.19 12 Gold slock 1 1.051 1 1.052 11.151 11.052 1 1.052 11.052 1 1.052 1 1.052 11.051 11.051 9.200 9.•>(!() 9.">()() 9.100 9.200 9 200 9 ^00 9.200 14 Tre;iMii> currency outstanding 25J42 25.207' 25.270 25.202' 25.217' 25.231' 25.245 25.259 25.271 25.287 ABSORBING RESFRVL FIMJS l*i Currenc\ in eireuliilinn . 443.404 446.04V 448.775 446 627' 445.826' 445.567' 446.696 448.079 448.126 450.865 16 Treasitrv cash hoUinjis 297 1(11 120 308 108 .105 510 3 321 327 Deposits, other than reserve balances, with Federal Reserve Banks 17 TrcasuiA 5.840 1 2.996 11.il.i 7.837 8.660 32.937 2.1.899 14.661 5.176 5.051 IS Fotc.gn' 202 174 75 176 164 187 175 171 166 186 7.058 7 018 7. 17 7.021 7.108 7.089' 7.I51 7 141 n 1 11 7.059 20 Other 394 376 56 401 350 337 .156 148 360 368 14.501 15.040 15. 1 5.032 15.026 15.24.1 15.029 15.163 15.046 15.008 22 Reserve balances uith Federal Reserve Banks4 . . 1 1.158 12.366 10.X)4 11.152 13.887 10.190' 12.80.1 9.827 1 1.2X9 9.335 F.nd-ol-moiiih ligures Wednesday figures Mar. Apr. Apr. 16 Apr. 2.1 Apr. 30 M.i) 7 Ma) 14 May 21 Ma) 28 SITPl YINti Rt-..sl:k\F Ft NDS I Reserve Bank credil outstanding 442.403 489.362 447.010 449.550 459.936 489.362 461.318 451.275 446.925 444.098 U.S. government securities^ 2 Boughi outright—System account' 395.071. 402.513 405 P4 40(1.719 401.155 402.513 404.126 4(16.500 406.087 406.293 5 Held under lepurchase agreements 10.488 50.378 7.453 13.512 21.072 50.178 23.256 1 1.596 8.068 5.213 Federal agency ohltgaiions 4 Boughi outright \ 1.994 1.970 1.970 1.984 1.984 1.97(1 1 970 1,97( 1 970 1.970 5 Held under repurchase agreements 1.096 989 1.847 785 2.0,14 989 1.924 41 1.553 827 6 Acceptances 0 0 (I 0 0 0 0 0 0 Loans lo depositor) institutions 7 Adjustment credit . 3.943 28 353 104 1.161 28 294 | 12 12 8 Seasonal credil 55 128 219 79 107 128 1.15 17 200 213 9 Fvlended credil 0 0 0 0 0 0 0 0 0 10 Floal - 5 19 241 107 1.599 592 241 189 1.1)5 190 512 1 1 Otliei Fcilci.il Reserve assets 30.272 .1.1.1 15 29.938 30.768 .11.830 3.1.115 .11.423 51.545 28.845 2«.(I57 1 2 Gold slock 1 1.050 11.051 11.051 11.052 11.052 11.051 11.052 1 1.051 11.051 1 1.051 13 Special drawing lights certificate account 9.200 9.200 9.20(1 9.200 9.200 9.2011 0.2(10 9.2(10 9.200 9 ""on 14 Treasury currenc) oulslanding 25.173 25.231' 25.301 25.202' 2.5.217' 25.211' 25.245 25.259 25.275 25.287 ABSORBING RFSI-RVF. FUNDS 15 Currencv in circulation 444.544 446.632' 451 158 447.007' 446 245' 446.632' 448 -"> 1 449.053 449.653 452.181 16 TieasmC cash holdings .111 309 111) .108 305 .109 315 322 327 3.10 Deposits, oilier than reserve balances, with Federal Reserve Banks 17 Treasury 5.945 52.215 5.174 17.884 15.86.1 52.215 19.70(1 16.838 5.107 4.824 18 Foreign 916 169 177 178 156 169 176 158 16.1 223 19 Service-related halances and adjuslntenls 6.945 7.089' 7.124 7.021 7.108 7.089' 7.152 7.141 7.1 1 3 7.059 20 Other '. 35(1 548 325 366 323 348 145 355 370 370 21 Olher Federal Reserve liabilities and capital 14.816 14.977 16.0.17 14.997 14.993 14.977 15.187 15.01 14.827 14.800 22 Rescue halances with Federal Reserve Banks4 . . 13.997 11.106' 12.2.17 7.244 20.4 1 1 1.1.106' 17.649 9.9 7 14.690 9.650 1. Amoiiills of cash held as reserves are shown in table 1.12. line 2. 3. Includes compensation that adjusts lor the effects of inflation on the principal ol 2. Includes securities loaned—fully guaranteed b> U.S. government securilies pledged inflation-indexed seauiiies. with Federal Reserve Banks—mid exdudes securities sold and scheduled lo he bought hack 4. Excludes required clearing halances ami adjustments to compensate lor final. under matched sLile-pun.hase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • August 1997 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions o! dollars Prorated monthly averai.es of brweeMy averages Reserve da'•silk-anon 1994 1995 1996 1996 1997 Dec. Dec. Dec. Nov. Dec. Jan, Feb. Mai. Apr,' May 1 Reserve balances wuli Reserve Banks" 24.658 20.440 13.395 12 895 13.195 11,710 11.455 11.515 12.308 10.899 2 Tola) vaull cash1 40.178 42.094 44.426 42.745 44.426 47.172 43.375 42.116 41.181 41.1 II 1 Applied vaull cash.4 36.682 17.460 37.848 36.862 37,848 38.912 .16.588 16.029 35.571 35 (159 4 Surplus vaull cash1 1.696 4.634 6.578 5.883 6 57« 8.24(1 6.788 6 087 5.810 6.052 5 Ti.lal reserves'' 61.340 57.900 51.241 49.756 51.243 511.642 48.043 47.543 47.X79 45.959 6 Required reserves 60.172 56.622 49.819 48.721 49.819 49.419 47.012 46.383 46.869 44.744 7 Excess reserve balances al Reserve Banks 1.168 1.278 1.424 1.015 1 424 1.221 1,031 1.160 1.010 1.214 8 Total noiTovvines al Reserve Banks* 209 2S7 155 214 155 45 42 156 261 243 9 Seasonal borrowings Kill 40 68 109 68 19 21 17 88 171 10 Extended credit'' 0 0 0 0 0 0 0 0 0 (1 B 1997 Jan. 29 Feb. 12 Feb. 26 Mar. 12 Mar. 26 Apr. 9 Apr, 21 Mav 7 May 2 1 June 4 1 Reserve balances with Reserve Banks: 111.285 1 1.052 1 1.817 11.141 1 1.269 12.620 12.516 11.493 10.547 10.978 2 Total vaull cash1 48.679 45.130 41.948 42,841 41.665 41,640 40.986 41 838 40.879 40,929 1 Applied vault cash4 19.078 37.67.1 35.672 16,490 35.674 15.916 .15,359 15.551 34.7KII 15,107 4 Surplus vault cash1 9.601 7.458 6.276 6..151 5.991 5.724 5.627 6.28K 6.099 5,821 5 Tolal reserves'' 49.363 48.724 47.489 47.8.11 46.943 48.516 47.874 47.04.1 45.326 46.(185 6 Required reserves 48.142 47.688 46.493 46,593 45.872 47.313 47.209 45.619 44.280 44.782 7 Excess icseive balances al Reserve Banks7 1.221 1.036 996 1.238 1.071 1.22.1 665 1,424 1.046 1.101 8 Tolal borrowings al Reserve Banks* 12 34 511 15 194 .144 228 219 189 136 9 Seasonal borrovi iircs 18 18 23 27 38 61 86 127 169 210 10 Exlciuled credit'' 0 0 1) 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.I (502) weekly statistical release. For 5. Total vaull cash (li 2) less applied vault cash (line 3). nrdciini; address, see inside I'roni cover. Data are not break-adjured or seasonally adjusied. 6. Reserve balances wnh Federal Reserve Banks (line I) plus applied vaull cash 2. Excludes required clearing balances and adjustments to compensate lor float and (line 3). includes other tiff-balance-sheet "ns-oP adjustments. 7. Total reserves (line >) less rcquiied reserv s (line ft). 3. Total "lugged" vault cash held by depository inslilutions subject to reserve S. Also includes adjusiincnl credit. requirements. Dales refer to the maintenance periods during which Ihe vault cash may be used 9. Consists ol" borrow inu at ihe discount window under the terms and conditions estabto salisly reserve requiremenls. The maintenance period for weekly reporters ends sixteen lished for the extended credit program io help depository institutions deal wilh sustained days allcr the lagged computation period during which the vaull cash is held. Before Nov. 25. liquidity pressures. Because tliL-ie is not Ihe same need to repay such borrowing promptly as 1992. the maintenance period ended thirty days after the lagged compulsion period. with traditional short-icrm 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. lliose whose required reserves exceed their vaull cash) plus ihe amount ol' vault cash applied during the maintenance period by "nonbound" institutions (that is. those whose vault cash exceeds thai" required reserves) io satisfy current reserve requirements. 1.13 SELECTED BORROWINGS IN IMMEDIATELY AVAILABLE FUNDS Large Banks1 Millions of dollars, averages of dailv figures 1997 Source ami maturily Mat. 3 1 Apr. 7 Apr. 14 Apr. 21 Apr 2S May 5 May 12 May 19 May 26 federal fluids pun based, repiucliase amectueuls. and olhcr selected iKirmmnifs From commercial banks in the United Stales 1 Foi one dav or under continuing contract 84.553' 9.1.7A.V 90.054' 83.347' 78.170 84,93(1 85.007 8 1.694 79.967 2 Fur all other maturities 15.956' 14.756 15.401 15.737 16.144 16,00.1 I5.S75 15.757 16.022 From other depository inslilutions. foreign banks and official institutions, aird U.S. eovcrnrnenl agencies 3 For one ilay or unclei continuing contract 2O.31S' 22.4 IK' 21.696' 16.620' 16.375 21.002 18.957 19.156 19.3.58 4 For all other malm ities 1 K.651' IS. 172' 19,269' 21.608' 25.144 22.128 21.528 22.576 24.369 (r|«inli,nr ii-nn.mm nil (V ^iveitiiiieiu and federal ii^cnix \ecurilie\ Brokers and nonbank dealers ill securities 5 For one day or under eonlinuine coulracl 1.1.918 13.716 11.788 11.927 12.191 15.162 14.125 15.144 15.401 6 For all other malurilies 17.965 34.876 37.558 19,659 41.519 39.692 .19.859 IX.779 .17.420 All other customers 7 For one day or under eonlinuini; contract 40.673' 44 615' 45.660' 46.142' 46.792 46.802 46.728 47.000 43.930 8 For all other maturities 19.255' 14.231' 13.5OI>' 13.8K01 14.200 1.1.704 14.077 11.379 13.881 MEMO Fnkral funds limns ami resale aaimmnn in mmmlinh-h available funds in maturities of one day nr under continuing contract 9 To commercial banks in Ihe United State* 76.602 SI. 1X7 75.802 76.355 81.0X7 85.s;7 80.548 77.241 7X 087 10 To all olhcr spccilicd customers: 23.046 25.408 23.052 24.212 2.1.O7H 24.414 22.114 23.351 22.179 NOTF. This table will be discontinued after the September issue of the FcJcn,/ RewYc I. Banks wilh assets of $4 billion or more as of DCL\ 1\. I9XX. Bulletin as the detailed data necessary Io produce both this table and the H.5 (5(17)slalistical Data in this (able also appear in the Board's H.5 (5(17) weekly .statistical release. For release will no longer be available after July 2. 1997. Data on the repurchase .igreemeni ordering address, see inside front cover. liabilities of depositor) institutions will continue io be provided in table 1.2] and i>ii ihe H ft 2. Brokers and nonbank dealers in securities, other depository inslilutions. foreign hanks (508) statistical release. '"Money Stock. Liquid Assets, and Debt Measures." and official institutions, and U.S. government agencies. 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 poi vcar CLIITCIII and pievious levels Ailjuslmenl eredil1 .Seasonal eiedir Exlended eiedil' Federal Reserve Bank 7/ ( 4 )i /97 Fffemve dale Previous rale 7/ O 4/ i 9 l 7 Flleelive dale Previous rale 7/ O 4/ n 97 Elfeenve dale Previous rale Bosion 5.1)0 2/1/9ft 5.25 5.65 7/3/97 5.ftO 6.15 7/3/97 6.1(1 New York 1/11/96 1 Philadelphia 1/31/96 ("lew-land 1/31/96 Riellmond 2/1/9ft Allanla 1/31/96 Chieauo 2/1/9ft Si. Louis 2/5/9ft Minneapolis 1/31/96 <ansas Cilv 2/1/46 Dallas . . . .' 1 1/31/96 ' 1 San ri.mdM.-o 5.01) 1/31/96 5.25 5h5 7/3/97 5.60 h S 7/_V7 ft. 10 RaiiL'e of rales lor adjusimei Range lor F.R. Bank Ranae lor F.R. Bank Ransje (or F.R. Bank FJIeelive dale level I—All of Flleelive dale levefi— All of Elleelive dale level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. luelleel Dee. 31. 1977 ft 6 19X1 — Nov 2 13-14 13 I9SK—Auii. 9 6-ft 5 ft.5 ft 13 13 11 ft.5 6.5 l'"«—Jan. 9 ft-6.5 ft. 5 Dee 4 12 12 20 6.5 6.5 19X9—Feb. 24 ft.5-7 7 Mav II 6.5-7 7 19X2— Jills 20 11.5-12 11.5 27 7 7 12 7 7 23 1 1.5 1 1.5 Jills 3 7- 7.25 7.25 Au- 2 ll-l 1.5 I i 199(1—Dee. 19 65 ft.5 10 7 25 7.25 II [ | Ann 21 7.75 7.75 )ft 10.5 10.5 1991—Feb. 1 ft-65 6 Sepl 22 s « 27 10-10.5 10 4 6 ft Oel. 16 X-S.5 X.5 30 10 10 Apr. 30 5.5-6 5.5 20 X.5 X.5 Oel. 12 9.5-10 9.5 May 2 S.s, 5.5 Nos 1 . X.5-9.5 9.5 13 9.5 9.5 Sepi. 13 5-5.5 5 3 9.5 9.5 Nov. 22 9-9.5 9 17 5 5 2ft 9 9 Nov ft 45-5 4.5 1979- Juls 21) 10 10 Dee. 14 X 5-0 9 7 4 5 4.5 Ail- 17 10-1(1.5 10 5 15 X.5-9 X.5 Dee. 2(1 ............... 3.5-4.5 3.5 20 10.5 10.5 17 X.5 X.5 24 3.5 3.5 Sepl I'l 10.5-1 1 1 1 21 I | 1 1 19X4—Api. 9 X 5-9 9 1992—Julv 2 3-i 5 3 (lei S 11-12 12 13 9 9 7 3 " 10 12 12 Nov 21 X 5 -0 X.5 26 X.5 8.5 1994—Mav 17 3-3.5 s s 19X0—Feb. 15 12-13 13 Dee. 24 X X IX 3.5 3.5 19 13 13 Auu. 1ft 3.5-4 4 Mav 29 (2-13 13 19X5—Mas 2(1 7 5-.S 7.5 IX 4 4 30 i: 12 24 7.5 7.5 Nov. 15 4—4.75 4.75 June 13 1 1-12 11 17 4.75 4.75 1ft 1 ) 11 19X6—Mai. 7 7-7.5 7 Juh 2K 10-1 1 10 10 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 Sepl. 26 I l 11 6.5 ft. 5 Nov. 17 12 12 Jnl\ 11 6 ft 1996—Jan. 31 5 00-5 75 5.00 Dee. 5 12-13 13 Aug. 21 5.5-6 5.5 Feb. 5 5.00 5.01) X n 13 5.5 5.5 19X1— Mav 5 13-14 14 Inelleel July 4. 1997 5.00 5.00 X 14 14 19M7—Sepl 4 5.5-6 6 11 ft ft I Available on a short-term basis m help deposil insiiiiiimns meet temporary needs lor of Hie Federal Reserve B.mk. irm lime pciunl ma> he shoiiened. Beyond tliis initml period. .1 kinds that cuiunil be met through reasonable altcrii- somces. The iughesi rale established flexible rate somewhal above rales chaiLied i^n markel souues of" funds is diaryed. The i.uo lor loans in depository institutions nui_\ bo charged • .Ijusinienl credit loans of unusual si/.c ordinarily is reestablished on die lirsi business day of each two-week reserve maintenance lliitl lesuli I'mni a major operating piohlem ai ihc be .erMaeiliiv. period, bin it is never less than ihe discounl rule applicable to adjustment credit plus .SO basis 2 .Available lo lielp lelalivcfy small depository insinuiioiis meel regular seasonal needs for poinls. funds thiii arise from a clear pattern o\' inlrayearly movements in tiieii deposits and loans ami 4. For earlier data, see ihe Inlliuviim publications of the Board of Governors: Banking and t be mel Ihrougii special industry lenders. The discount rale on seasonal credit lakes M(nwmr\ Statistn-s. 1914- 1941. and ^W/-fV7(); and the Annual Staiistual Digest. 1970unl iales dialled b\ muik< of hinds ami onlinunh 1979. ol each s lhan In 1LJXO and 1 yS1. the Federal Reserve applied a surcharge to sliorl-lerni adjustment-credit liseounl rale applicable lo adji borrowings by iiisiiiuiioiis uith deposits ul S.*)00 million or more thai had borrowed in Mas be made available io .leposiiorv instil ul ions when similar assi> successive weeks or in more lhan lour weeks in ;i calendar quarter. A 3 percent surcharge w;is .nuhiy asailable Ironi other sc neludiiiii special industry lenders. SLM iuelVecl from Mai. 17. I--mi), ihiuusih Ma\ 7. lVHd. A surcharge of 2 percent was reimposcd be pr ided uhen exeepli. eumslances (including susiained tieposh drains. on Nov. 17. iy«»: the surchaige was subsequently raised to 3 percent on Dec. 5. \Wi). and to . lo money niaiket lunds. or sutlden delerioraiion in loan repayment perform.) -1 peiceni <m May 5. 19X1. The surehai-e uas reduced lo 3 percent elleciive Sepl. 22. 19X1. pi.i muilv. •nlyapar in lo meel ihe needs of insiilutions expei .\m\ lo 2 percent' effective Oct. 12. ISW1. As of Oel. I. HJM. ilic tnrniuki for applyiii" the ditticuliies adjus etiaivjin" markel eondilii mger period (parlieuktrly ;i suicliarge was changed from a calendar quarter to a moving thirteen-week period. The of deposit disiiuennedialion). The discount rale applicable lo adjustment ucdil orilm, surcharge was eliminaied on Nov. 17. 19X1. Ic Ihi : hi. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics • August 1997 I.IS RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Requirement Type of deposit Percentage of deposits Effective dale Net UVIIMH linn accounts' 1 %{\ million-^.3 million' 3 1/2A>7 2 More than $44.3 million4 10 1/2/^7 1 .Nonpersonal lime deposits"" (i 12/27/9U 4 Eurocurrency liabilities'1 0 12/27/90 I. Required reserves must be held in the lorm of deposits with Federal Reserve Ranks succeeding calendar year by 80 pereenl of the percentage increase in the total reservable 01 vault cash. Nonmember institutions may maintain reserve balances with a Federal liabilities of all depository institutions, measured on an annual basts as of June 30. No RCSLMVC Bank indirectly, on a puss-through basts, with certain approved insliimions. Foi corresponding adjustment is made in the eveni of a decrease. The exemption applies only lo previous reserve requirements, see earlieV editions of the Annual Report or [he I'cdcuil accounts that would be subject lo a 3 percent reserve requirement. Effective with the reserve Hulli'tin. Under the Monetary Control Act o\' 1980. depository institutions maintenance period beginning January 2. IW7. for depository institutions that report weekly, Klude al banks 111 ' - b.Hlks. ,ul lo and wilh the period beginning January 16. IW7. Vor insiiluiions thai repovl quarteik. the unions, agencies and branches ol 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 negotiahle or tt.insfetable in si ru me tils, pay mem orders of with- Apv. 2. 1992. for mslinuions ihat repovl weekly, and on Api. 16. 1992. tor insiiiutions itui drawal, or lelephone or preaulhorized transfers lot me purpose ot making payments lo third report quailerl). persons or others. However, accounts -aihjecl to the rules that permit no mote than six IS. For institutions that report weekly, the reserve requirement on nonpersonal lime deposits preaLithori/ed. automatic, or othct transfers pc-r moriili (of which no more than three may be w ith an original matuuty of le^ ilum I'-'z years was reduced from 3 percent to 1'/; percent lor by check, drali. debit cant, or similar order payable directly to third parlies) are savings the maintenance period that began Dec. 13. 1990, and lo zero for the maintenance period that deposits, not transaction accounts. began Dec. 27. 1W0. For institutions that report quarterly, the reserve requirement on }. The Monetaiy Control Act ol 198(1 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than I f/i years was reduced from 3 against which the 3 percent reserve requirement applies be inodilied annually by SO 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 lime deposits with an original maturity of I'/: as of June M) ot'each year. Effective with the reserve maintenance period beginning January 2. years or more has been zero since Oct. 6. 19X3. I°-M7. for depository institutions that report weekly, and with the period beginning January lf>. 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent lo zero I9LJ7, lor iusiitiitioiis that report quarterly, the amount was decreased Irom %S2ii million to in the same manner and on the same dales as the reserve requirement on nonpersonal time S.44.3 million. deposits wilh an original maturity of less than 1 K'l years (see note 5). Under the Garn-St (iermain Depository Insiiiulions Act ol ll>S2. llie Bn.nd adjusts the amount of rcservahle liabilities subject to a zero percent reserve requirement each year lor the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS' Millions of dollars 1996 1997 Typ a e n o d f m tr j a t n u s r a il c \ tion 1994 1995 1996 Oct. Nov. Dec. Jan. Feb. Mai Apr. U.S. TREASURY SECURITIES-1 Outright transactions lenlitding matched transactions) Treasury bills 1 Gross purchases 17.484 10.932 9.901 0 6.502 0 0 0 1) 4.006 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 376 ">77 198.487 426.928 38.661 34.037 34 "Ml 40.346 33.997 31.77(1 27.895 4 For new hills 376.277 398.487 426.928 3S.661 34.037 34.211 40.346 33.647 31.770 27.895 5 Redemptions 0 900 0 0 0 0 0 0 0 0 Others wiiliio one year 6 Gross purchases 1.238 390 524 0 0 (I 0 818 0 0 7 Gross sales 0 0 0 (1 0 1) 0 0 0 0 X Maturity shifts 0 43.574 30.512 1.623 3.818 2.259 2.481 5.086 3.143 2.006 9 Exchanges -31.949' - 35.407' -41.394 -1.770 -5.655 - 1.950 -550 - 2.864 -1.534 -2.10(1 ID Redemptions 0 0 2.015 (1 0 0 607 (I (I 0 One io live years 11 Gross purchases 9.168 4.966 3.898 0 0 0 0 1.125 2.861 1.924 12 Gross sales 0 0 0 0 0 0 0 (I 0 0 13 Muiimiv shills -6.004 -34.646 - 25.022 -1.623 -2 UP -2.259 -2.481 -4.926 -3 143 -2.006 14 Exchanges 26.458' 26.387' 31.459 1.395 2.716 1.950 55(1 1.874 1.534 1.700 Five id leu years 15 Gross purchases 3.818 1.239 1.116 0 0 0 0 0 0 0 16 Gross sales 0 0 0 0 (I 0 0 0 17 Maturity shifts -3.145 -3.093 -5.469 (1 -1.716 0 0 1.236 0 (1 1K Exchanges 4.71T 7.220' 6.666 375 1.470 0 0 890 0 40(1 More than ten years 19 Gross purchases 3.606 3.122 1.655 0 0 0 0 0 1.117 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Miiiuriiy shitis -918 -2.253 -2(1 0 (I 0 0 - 1.396 0 (I 22 Exchanges 775 1.800 3.270 0 1.470 0 0 450 0 0 All maturities 2"* Gross purchases 35.314 20.649 17.094 0 6.502 0 0 1.943 3.978 5.930 24 Gross sales 0 (1 (I 0 0 0 0 (1 0 0 25 Retlemptions 2.337 2.676' 2.015' (1 0 0 607 0 0 376 Matched transat lions 26 Gross purchases 1.700.836 2.197.736 3.092.399 268.304 227.577 ''V 1 17 285.667 250.867 288.373 303.056 27 Gross sales 1.701.309 2.202.030 3.094.769 267.128 226.505 273.872 283.240 254.741 288.073 301.177 Hepiin hose agreements 2X Gross purchases 309.276 331.694 457.568 33.836 36.383 85.924 74.422 48.805 60.425 102.578 3 t 1.898 3">8.497 450.359 33.020 36.665 73.501 86 67 1 45 747 60 718 6"* 685 Ml Nel change in U.S. Treasury securities 29.882 16.875' 19.919' 1.993 7.293 10.669 -10.430 1.127 3.984 47.326 FEDHRAL AtiKNO OBLIGATIONS 31 Gross''purchases 0 0 0 0 0 (I 0 0 0 0 12 Gross siilcs 0 0 0 0 0 0 0 0 0 0 13 Redemptions 942' 1,103' 409' 63 10 12 187 27 17 24 Repurchase agreements 14 Gross purchases . ... 52.696 36.851 75.354 12.683 9.264 7.796 17.668 9.795 14.300 10.178 35 Gross sales 52.696 36.776 74.842 1 1.051 9.47! 8.947 17.995 9.454 14.830 1O.2K5 941' -1.028' 103' 1.569 -217 -1.163 -514 314 -547 -131 17 Total net change in System Open Markrl Account . . . 2K.9401" 15.8481" 20.021 3,562 7,076 9.506 -10.944 1,441 3,437 47.195 1. Sales, redemptions, and negative ligmes reduce holdings of the System Open Market 2. Transactions exclude changes in compeir ,»n for the effects of intlaliuii on Ihe principal Account: all other li-ures increase such holdings. of intlalion-inclexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • August 1997 I.IS FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements' Millions of dollars Wednesday tnei ol month Account 1997 1997 Api 30 Ma> 7 Mas 14 May 21 Mav 28 Mar. 3 1 Apr 30 Mav 31 toisoiidatedeo dilion slatemei AsMTS 1 Gold certilicaie account 1 1.051 1 1.052 1 1.051 11.051 1 1.051 1 1.050 1 1.051 1 1.051 2 Special drawing rights eertilicaie account 9.200 9.200 9.200 9.200 9.200 9.200 9.200 9 200 3 Coin "". . ^ 619 608 591 566 526 671 619 511 Loans -I To depository institutions . , , 156 430 191 21.1 226 3.998 156 571 5 Other (1 0 I) 0 (I 0 0 0 {1 0 (1 o 0 h'etkiul axciity <>hti-uti>>ns 7 Bought ouinuhi 1.970 1.97(1 1.970 1.970 1 970 1.994 1.970 1.970 H Held under repurchase agreements 989 1.924 414 1.553 827 1.096 989 I.X47 V Total LLS. Treasury securities 452.891 427,382 418.1)96 414.155 411.506 405.561 452,891 412,577 HI Fkuiiilit nuiii'jhr 402.5 P 404.126 406.5(10 406.087 406.29.1 39MI76 402.513 405.124 11 BdK . . . . . 195.034 195.659 195.815 195.401 195.607 1X9.149 195.034 194 417 12 Notes 156.079 156.080 157.769 157 770 157.770 IS4.527 156.079 157.770 13 Bonds 51.399 52.387 52.916 52.916 52.916 5 1.399 51 399 52.916 14 Held under repurchase agreements 50.378 23.256 11.596 8.068 5.213 10.485 5O.37K 7.45? 15 Total loans and securities , 456.(106 431.7(16 420,671 417,891 414.530 412.649 456.006 416,165 Id Items in process of collection 6.294 6.505 6.221 6.191 8.780 1.955 6 liH 4.188 1 7 Bank premises 1.238 1.2.19 1.243 1.243 1.244 1.249 1.238 1.243 Oilier assets IN Denominated in 1 oreisin currencies 17.420 17.3,81 17.388 17.395 17.402 17.950 17.420 18.080 IM All oilier4 " 14.006 12.946 I3.0S1 10.316 10.524 11.076 14.606 10.727 20 Total assets 516,434 490.637 479.416 473.853 473,257 465.803 516.434 471,985 LIABILITIES 2 1 Fedeial Reserve notes 422.329 423.969 424.707 425.273 427.950 420.357 422.329 426.718 22 Tulal deposit* 73.266 45,398 34,020 27.943 22.563 29,056 73,266 25,268 2^ Depositors insiiiuiioiis 20.514 25.177 16.669 22.103 17.144 21.845 20.514 19.592 2-1 U.S. Tieasury—General account 52.215 19.700 16.838 5.507 4.824 5.945 52.215 5.174 25 Foremn—Official accounts , , 169 176 158 163 916 169 177 26 Othc] .US 345 355 170 370 350 348 325 27 Deferred credit items 5.862 6.083 5.688 5.81 1 7.944 1.574 5.862 3.962 5 is 1 s 160 SOP 4 844 4.799 4 (•-,(, | 5 5^1 5 1X7 29 Total liabilities 507,008 480.810 469.427 463.870 463,256 455,648 507.008 461,135 C\H i Al. Arrot'Nis 30 Capital paid in 4.796 4.798 4.808 4.815 4.826 4.762 4.796 4.X2S 31 Sin plus 4.475 4 496 4.496 4 496 4.496 4.496 4 47s 4.496 32 Other capital accounts 155 53.1 685 672 679 898 155 1.527 33 Total liabilities and capital accounts 516,434 490.637 47<MI6 473.853 473.257 465.803 516,434 471.985 34 Markelahle U.S. Treasure sectuilies held in custody lor 648.745 643.399 640.941 64 1.666 643.430 653.897 648.245 643.549 -cdcial Resell note statemen .15 Hedejal Reserve notes outstanding (Issued to Banks) 529.350 530.034 531.412 533.927 515.437 525.843 529.350 536.348 36 LESS; Held by Federal Reserve7 Banks 107.022 106.065 106.705 108.654 107.4X6 105.486 107.022 109.630 37 Federal Reserve notes, net 422.329 423.969 424.707 425.273 427.950 420.357 422.329 426.7 IS Ciillunnil Ih'lil utiaiiM nuns, IUI 38 Cold cerlllicatc acconnl 11.051 11.052 11.051 11.051 1 1.051 1 1.05(1 1 1.(151 1 1.051 39 Special drauin;: imhls cerlilualL- acciMinl 9.200 9.200 9.200 9.200 9.200 9.200 9.200 9.200 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Tieastiry and agencv securities 402.077 403.717 404.456 405.022 407.699 400.107 402.077 406.468 42 Tolal collateral 422.329 423,969 424,707 425.273 427,950 420.357 422,329 426,718 1. Some of the data in this table also appear in ihe Board's H.-J I {SOI) wcekK statistical 3. Valued monthly al market exchange rates. release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury 2. Includes securities loaned—lully guaranteed by U.S. Treasui\ securities pledged unit bills maturing within ninety days. Federal Reserve Banks—ami includes compensation that ad|tisis for ihe elleels ol' inflation on 5. Includes exchange-translation accouni reflecting ihe monihly levalualion al market the principal of inflation-indexed securities. Excludes securities sold ant) scheduled in lv exchange rales of I ore i sin 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/Monetary and Credit Aggregates A1 ] .19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions ot dollars Wednesday Knd ol month Type nl hokinv.: and inalunK 1997 1997 Apr. 3D May 7 May 14 May 21 May 28 Mar. 31 Apr. 30 May 30 1 Tutal loans 156 4.MI 191 213 226 3.998 IS6 571 2 Within lillccn day-,1 Kid 321 64 1X7 201 3.977 106 466 3. Sixteen days to ninety days 511 109 127 26 25 21 50 105 4 Total US. Treasury securities2 452.891 427.382 418.096 414.155 411.51)6 405.561 452.891 412.577 5 Within Mrtcen days' 68.449 36.028 29.416 22.667 20.304 23.476 68.449 8.778 6 .SiMcen days to ninety da\s 9(1.661) 91.296 86.551 87.826 93.491 92.382 90.660 100.730 7 Ninety-one tlays ID one year 120.651 125.941 126.174 127.649 121.699 118.S49 120.653 127.057 8 One year so live years 94.000 94.0011 95.102 94.392 94.392 92.3X1 94.000 94.392 9 Five years to ten years 37.012 37.012 37.746 3S.5I6 38.516 36.608 37.012 38.516 11 More than ten vcats 42.117 43.105 43.105 43.105 43.105 42.117 42.117 43.105 1 Total federal agency obligations 2,959 3.894 2.384 3.523 2.797 3.090 2,959 3.797 12 Within lillcen days' 1.141 1.924 4 14 1.8611 1.301 1.378 1.141 2.301 \? Sisteeti davs to ninety clays 6(14 76X 76S 601 4 VI 50(1 604 414 14 Ninely-one days to one year 327 315 315 315 315 2X1 327 3L5 15 One veal to live years 416 416 416 416 416 4fi() 416 416 16 Hive years to len vears 447 447 447 307 307 447 447 307 1 7 More than ten years 2<s 25 25 25 •>s 25 25 1. Holdings under repurchase agreements are classified as maturing within litteen (lays in 2. Includes compendium that adjusts lor the elleiis ol' inflation on lhe principal ol .cordatice wild maximum malurit) oi'llie agreements. inllatioii-indexed securities. 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages nl" diiily figures 1996 1997 1991 1994 1995 1996 Item Dec. Dec. Dec. Dec. Oct. Nov. Dee. Jan. Feb. Mar. Apr. May Seasonal! adjusted ADH'STF.D H)R CHANCES IN RI-.SCRVE RI:L>I IREMENIS- 1 Total reserves' 60.55 59.40 56.19 50 06 50 (IX 49.81 50.06 49.52 49.01 4X.3I 47.4V 47.01 2 Nonborrowed reserves4 60.46 59.20 56.13 49.1) | 49.79 49.60 49.9 1 49.47 48.97 48.16 47.17 46.77 3 Nonborrowed reserves plus extended credit 60.46 59.20 56.13 49 9| 49 79 49.60 49.91 49.47 48.97 48.16 47.17 46.77 4 Required resci \ es 59.48 5.8.24 55.11 4,8.64 49.OS 4X.7X 4,8.64 4X.2V 47.9X 47.15 46.42 45.79 5 Monetary base'1 386.88 418.48 43452 452.67 447.08 449.37 452.67 454.14 4.56.28 457.62 45X.24' 459.5.3 NM season.IK adjusicd 6 Tolal reserves7 62.37 61.13 58.02 51.52 49 7S 51) 01 51 52 50.67 4X.I2 47.69 4X.09 46.22 7 Nonhorrowed reserves 62.29 60.92 57.76 51.37 49.49 49.79 51.37 50.62 48.08 47.53 47.S3 45.98 60.92 57.76 51.37 49.49 49.79 51.37 50.62 4X.0X 47.53 47.X3 45.98 11 9 ) R M e o q n u e ir l. e i d ry r b e a se se rv " es* 3 6 9 1 0 . . 3 5 1 9 42 5 2 9 . . 5 9 1 6 4 5 3 6 9 . 0 7 3 4 45 5 6 0 . 7 1 2 0 44 4 5 8 . . 3 7 K 8 44 4 9 8 .9 2 7 0 45 5 6 0 . . 7 1 2 0 45 4 5 9 .4 5 4 5 45 4 2 7 . . 5 0 6 9 4 4 55 6 .5 2 3 6 45 47 X . . O 1 X 71 4 4 5 5 8 . . 0 2 1 1 Not ADJUST!.n l-ok CHANCES IN Rt.sFKVF. Rl-QlilREMKNIs'0 1 1 Tolal reserves'' 62.86 61.34 57.90 51.24 49.55 49.76 51.24 50.64 48.04 47.54 47.XX 45.96 12 Nonborrowed reserves 62.7X 61.13 57.64 51.09 49.n6 49.54 51.09 50.60 48.00 47.39 47.62 45.72 13 Nonhnrrowed u-serves plus eMendcd aedif 62.78 61.1 3 57.64 51.09 4".26 49.54 5 1.09 50.60 4X.00 47 39 47.62 45.72 14 Required rescues 61.80 60.17 56.62 49X2 4,8.56 4X.72 49.X2 49 41 47.01 46.3X 46.X7 44.74 15 Monel.nv basc'v 397.62 427 T> 444.45 463.49 451.9] 455.90 463.49 462.71 459.64 462.22 465.06' 465.17 16 Fxeess reserv es' ' 1.06 1.17 1.28 1.42 .99 1.04 1.42 1.22 1.03 1.16 1.01 1.21 17 Borrow ings Irom the Federal Reserve .08 .21 .26 .16 .29 .21 .16 .05 .04 .16 .26 .24 1. Latest monthly anil biweekly ligures are available Irom lhe Board's H.3 (502) weekl) X. To ad|ust required reserves lor discontinuities that are due to regulatory chances in staiistieal release. Historical data'starling in 1959 and estimate- ol the died on required reserve requirements, a multiplicative procedure is used to estimate what requned reserves reserves ol changes in reserve requirements arc available JYorn llic Mono add Reserves would h.ivc been in past periods had current reserve requirements been in elled. Break- Projections Section. Division of Moneury Affairs. Board ol Governors ol (he Federal Reserve adjusted required reserves include required reserves against transactions deposiis and nonper- System. Washington. DC 20551. sonal lime and savings deposits (but not reservable nondeposil liabilities). 2. Figures reflect adjustments lor discontinuities;, or "•breaks." associ.iicd with icuiilaiory 4. The break-adjusted monelar; base equals (I) break-adjusted lotal reserves (line 6). plus changes in reserve requirements. (See also table 1.10.) (2) die iunad|iisted) currency component ol lhe money stock, plus il) (for all quarieily 3. Seasonally adjusled. break-adjusted lolal reserves equal seasonal)} adiusled. bre.ik- reporters on the -Report uf Transaction Accounts. Other Deposiis and Vault Cash" and for ,\'\\ adjusled required reserves (line 4) pins excess reserves (line 16). [hose week)) reporters whose vaull cash exceeds their required reserves) ihe break-adjusted 4. Seasonally adjusted, hreak-adjusied nonborrowed reserves i-ijua) -easonalh .idjusied. dilfeicnce he! •Lirreni vault ea.sh and ihe amounl applied lo salrsfy current reserve break-ad jusled tolal reserve-, (line 1) less total borrowings of depositor) insiiunions irom ihe requite Federal Reserve (line 17). 0. Rellecis actual reserve requirement-. iciuding those on nondeposil liabilitic 5. Exi id elir dis irv change' conditions esiablished lor the exlended credit program to help deposilon uisliiLiiions deal reser\e requirements. with sustained liquidity piessures. Because there is not the same need io repay such II. Reserve balances with Fedeial Reserve Banks plus vault cash used 10 saiisly reserve borrowing promptly as with traditional short-term adjustment credil. lhe money market ellecl requirements. of extended credil is similar lo that ol' nonborrowed reserves. I 2. The monetary base, not bie.ik-adiusied and noi -easonalh adjusled. consists ol (I) lolal 6. The seasonally adjusted, break-adjusted monetarv base consists of (1) seasonally reserves (line III. plus (2| requned clean MLI halances and adjysiuieuts m compel [sale lor float adjusled. break-adjusled total reserves (line I), plus (2) the seasonally adjusted currency at Federal Reserve Bank.s. plus (?) lhe currency component ol ihe money siock. plus (4) (lor component of the money siock. plus (?) (Tor all quarterly reporlers on the "Report ot all quarterly reporters on (he "Report ol Transaction Accounis. Olhci Deposiis and Vaull !i;tiisiiciion Accnmus. Other Deposii.s and Vaull Cash" JIKI (or all (hose ueekl\ repoiieis Cash" and lor alt ihose weekly repoiier.v whose v;wh c.is)i vxi:c<:<.h (hen lequired reserves) ilie whose vault cash exceeds their rcquiied reseives) lhe seasonally adjusled. break-adjusted difference between current vault cash and lhe amouni applied to saiisty cuneni reserve ditlerence between current vaull cash and the amount applied to satisfy current reserve requirements. Since the introduction of contemporaneous reserve requirements in February requirement. 1984. currency and vaull cash figures have been measured over lhe compulalion periods Digitized for FRASER 7. Break-iidnisies.1 lolal rcseives equal fueak-adjusied lequiicd reserves (line 9) plus excess ending on Mondays. http://frasiecsre.rsvetsl o(luinies fJe6)d. .org/ 13. Unadjusted lotal reserves (line 111 less unadjusted requned reserves (line 14). Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics D August 1997 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1997 1993 1994 1995 1996 Dec. Dec. Dec. Dec. Feb. Mar. Apr. May Seasonally adjusted Afm.vmi-.v- 1 Ml .129.8 1.150.7 1.129 0 1.081.0 1.080.6 1.075.2 I.O65.11 1.062.7 2 M2 3.486.6 3.502.1 3.655.0 3.833.1' 3.866.0 3.882.5' 3.901.8' 3.9M.2 3 M3 4.254.4 4.328.7 4.594.8 4.927.7 4.987.1' 5.015.4' 5.011.2' 5,056.6 4 L 5.167.8 5.309.8 5.699.8 6.093.2' 6.I5I.81' 6.187.6' 6.228.6 n.a. 5 Debt 12.508.7' I3.I5O.91 13.869.7' 14.622.2' 14.730.6' 14.797.9' 14.868.1 n.a. Ml components 6 Currency' 322.2 .354.4 372 6 39.1.2 400.5 402.4 403.7 406.1 7.9 8.5 8.9 8.6 8.6 8.5 8.3 8.2 X Demand deposits'1 385.2 3K4.1 391.1 402.4 404.2 402.8 395.3 395.3 9 Other checkable deposits'' 414.5 403.8 356.5 274.8 267.3 261.6 257.8' 253.1 Noiilrtinsucli.m components 10 In M27 2.356.8 2.351.4 2.526.0 2.752.0 2.785.4 2.807.2 2.836.7' 2.837.5 11 In M3 only* 767 8 939 8 1.094 6 1 121 1' 1 13"1 9' 1.149 3' 1 116.4 Commercial hanks 12 Savings deposits, including MMDAs 7X5.2 752.4 776.0 90.3.9 921.1 934.2 947.9' 944.4 13 Small time deposits'' 468.3 5(1.3.2 576.0 592.0 593.4 .195.8 598.1 601.7 14 Large lime deposils1"' 271.9 298.4 344.7 410.4 416.0 424.8 437.11 439.4 Thrift institutions 15 Savings deposits, including MMDAs 434.0 397.2 361.1 367.1 369.4 370.1 373.11 .375.2 16 Small lime deposits'' 314.3 314.3 357.7 352.4 352.8 349.3 347 9 349 0 17 Large lime deposits111 61.5 64.7 75.1 79.2 81.9 82.0 82.5 82.3 IX Retail 354.9 384.3 45.1.2 536.6 148.7 .157.8 569.2 567.2 19 Institution-only 209.5 198.5 246.9 299.3 305.4 311.8 311.6 311.6 Repurchase a^reemeuls and Eurodollars 20 Repurchase agreements ' 158.6 IK2.9 182.1 193.0 200.1' 198.3' 2OO.21 198.7 ^1 Eurodollars1^ IP 1 91 0 1 P 7 117 8 1 16 1 117 9 P4 4 Deln components 22 Federal debt 3.323.3 3.492.2 3.638.8 3.780.4 3.784.2 3.799.1 3.806.8 n.a. 23 Nonl'ederal debt 9.185.4' 9.658.7' 10.231.0' I0.X4I.81 10.946.5' 10.998.8' 11.061.3 n.a. Nol season*lly adjusted Measures2 24 Ml 1.153.7 1.174.4 1.152.8 1.103.0 1.066.4 1.067.2 1.071.6' 1.051.8 3.506.6 3 1^ 5 3 671 3 3 851 5 3 810 3 3 887 3 3.918.8' 3.882.7 26 M3 4.274.8 4.348.X 4.614.3 4.944.7 4.978.3' 5.022.2' 5.058.9' 5.038.4 V L 5.197.7 5.340.2 5.731,7 6.122.6' 6.147 0' 6.2(14.3' 6.240.4 it.a. 28 Debt 12.510.7' 13.152.4' 13.870.2' 14.621.4' 14.691.8' 14.767.8' 14.829.4 n.a. Ml components 29 Currency' 324.8 357.5 376.2 397 9 397.7 401.0 4(13 4 406.1 30 Travelers checks4 7.6 8.1 X.I 8.3 8.3 8.2 8.2 8.2 31 Demand deposits5 401.8 40O..3 407.3 418.8 394.6 396.0 396.3 .387.0 32 Other checkable deposits'' 419.4 408.6 .360.8 278.0 265.8 262.0 263.8' 250.5 Nonlransuclion components 33 In M27 -> 352 9 2.348.1 2.522.6 2.748.5 2.783.9 2.820.1 2.847.2' 2.830.9 34 In M.3 only* 768.2 826.3 939.0 1,093.2 1.1 28.0' 1.134.9' 1.140.0' 1.155.7 Commercial hanks 35 Savings deposits, including MMDAs 784.3 751.7 77.1.3 902.9 915.4 935.1 949.4' 942.7 36 Small time deposits' 466.8 501.5 573 8 589.8 591.8 597.3 600.3 602.9 37 Large lime deposits11'' ''' 272.0 298.9 345.7 41 1.9 414.3 424.0 433.1' 441.6 Thrift institutions 38 Savings deposits, including MMDAs 433.4 396 8 .360.8 366.7 367.1 370.5 373.7' .374.6 39 Small time deposits' 313.3 313.2 356.? 351.1 3.13.1 350.2 349.0 349.7 40 Large time deposits10 61.5 64.8 75.4 79.5 81.6 81.8 81.7 82.7 Mone\ market mutual lands 41 Rclaii 355.0 .385.0 456.3 5.38.1 554.6 567.1 574.8 561.1 42 Inslilution-only 210.6 199.8 248.2 300.5 31.1.5 316.4 309.2 307.0 Repurchase (f^rirrm'iir.v auif EtinxliiUais 43 Repurchase agreements'* 1.16.6 179.6 178.0 187.8 197.4' 195.6' 199.0' 201.2 83 ~> 113 5 ] 17 i 117 1 1 ~3 "> Debt components 45 Federal debt .3.329.5 3.499.0 3.645.9 3.787.0 3.783.0 3.815.4 3.810.3 n.a. 46 Nonl'cderal debt 9.1X1.2' 9.653.5' 10.224.2' 10.833.5' 10.908.8' 10.952.4' 1 1.019.1 n.a. Footnotes appear on to I Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 NOTES TO TABLE 1.21 1. Latest monthly ;nul weekly ligures ;ire available from ihe Board's H.6 (508} weekly these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term statistical release. Hjsioi icul data si lining in 1959 air available from the Money ami Reserves Treasury securities, commercial p.iper. and bankers acceptances, each seasonally adjusted Projections Section. Division of Monetary Alfairs. Board <if Governors ol (he Pedaal Reserve separately, and then adding ihis result lo M3. System. Washington. DC 21)551. Debt: The cleht aggregate is llie outstanding credit market debt of the domestic nonlinancial 2. Composition of the money slock measures and debt is as follows: sectors—ihe federal sector (U.S. government, not including government-sponsored enter- M!: (1) currency oulside ihe U.S. Treasury. Federal Reserve Banks, and the vaults of prises or federally related mortgage pooh) and (he nonledcral sectors (stale and local depository inslilutions. (2> travelers checks of nonbank issuers. (3) demand deposits at all governments, households and nonprolil organizations, nonlinancial corporate and nonfarm commercial banks other than those owed lo depository institutions, the U.S. government, and noncorporate businesses, and farms). Nun federal debt consists of mortgages, tax-exempl and foreign hanks and official institutions, luss cash items in the process of collection and Federal corporate homK. consumer credit, bank loans, commeicial paper, and other loans. The daia. Reserve lloat. and (4) other cheekahlc deposits (OCDs). consisting of negotiable order of which are derived from me Federal Reserve Board's (low of funds accounts, are break withdrawal (NOW) ,ind automatic (rartsrer service (ATS) accounts at depository insiilinions. adjusted (that is. discontinuities in the data have hcen smoothed into the series) and credit union share draft accounts, and demand deposits at thrift institutions. Seasonally month-averaged llhat is. ihe 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 MMDAst. (2) small-denomination lime 4. Outstanding amount of U.S. dollar-denominated travelers checks ol nonbank issuers. deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (1) Travelers checks issued by depository institutions arc included in demand deposits.. balances in retail money market mutual funds (mones funds with minimum initial imesi- ft. Demand deposits nl commercial banks and loreign-tclaieif iiwiimions other than (hose IIK-IKS oi less than $50,000). Excludes individual ret'iremenl accounls (IRAs) and Keogh owed to depository institutions, the U.S. government, and loreign banks and official institubalances at depository institutions and money market funds. Seasonally adjusted M2 is tions, less cash items in the process of collcclion and Federal Reserve tloat. calculated by summing savings deposits. small-denomination lime 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 M 1. 7. Sum of (I) savings deposits (including MMDAs). (2) small time deposits, and (3) retail M3: M2 plus (I) large-denomination lime deposits (in amounts of SI00.000 or more) money fund balances. issued by all depository institnlions. (2) balances in insiinuional money funds (money funds 8. Sum of 11) large lime deposits. (2) institutional money fund balances. (3) RP liabilities with minimum initial investments of $50.00(1 or morel. (3) RP liabilities (overnight and term) (overnight and lenni issued by depository institutions, and (4) Eurodollars (overnight and issued by all depository inslilutions. and (4) Eurodollar uivernighl and term I held by U.S. term) of U.S. addressees. residents al foreign branches of U.S. banks worldwide and at all banking offices in the United •). Small lime deposits—including retail RPs—ate 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 markei funds, and foreign banks and official institutions. Seasonally adjusted subtracted from small time deposits. M3 is calculaiL'Ll by summing large lime deposits, institutional money fund balances. RP 10. Large iinie deposits are those issued in amounts of $100,000 or more, excluding those habililies. ami Eurodollars, each seasonally adjusted separately, and adding this result lo hooked ai international banking facilities. seasonally uiliusied M2. 11. Large nine deposits al commercial banks less those held by mone\ market funds, L; M3 plus the nonbank public holdings of U.S. savings bonds, shoit-term Treasury depository institutions, the U.S. government, and foreign banks and official inslilulions. securities, commeicial paper, and bankers acceptances, net of money market lund holdings of 12. Includes bolh overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 14 Domestic Financial Statistics • August 1997 1.22 DEPOSIT INTEREST RATES AND AMOUNTS OUTSTANDING Commercial and BIF-insured saving banks' 996 1997 1995 1996 Item Dec. Dee. Sept. (JIM. Dee. Jan. Feb. Mar.1 Api.1 May (annual cflielive yields INSCKI.D OlMMtKCIAl BANKS 1Nei! iliablc order i:if withdraw; accounts" . . 1.91 n.a. 1.911 1.9! I.9X n.a. n.a. nil. n.ii. lu n.a. 2 Sat ii?s deposits- ' 3.10 n.a. 2.84 2.85 2.X5 n.a. n.a. n.d. n.a. n.a. n.a. line e-.l-hectiiii-t lime Jeposlls , nil hciluiH esof less than SI00.0O0. In nuliirin 1 7 lo91 davs '. .. 4.10 401 4 1 1 4.1 1 4.OX 4 01 4 01 4.05 4.02 4.01 4.07 4 92 I) 182 da\s 4.68 4.61 4.61 4.60 4.60 4 61 4.61 4 62 4.67 4.72 4.77 5 1X3 davs to 1 vear 5.02 5.00 5 04 5.02 4.99 5 00 501 5.02 5.08 5.13 5 15 6 More than 1 year to 2 'A years 5.17 5.22 -5.29 5.27 5.23 5.22 5.25 5.27 5.36 5.46 5.45 7 Mot e ihan 2 */2 years 5.40 5.46 5.54 5.52 5.4X 5.46 5.49 5.51 5.60 5.69 5.6X BIF-INSI RED SAVINGSBANKS4 X Nee iliahle orderor withdraw; aLH)iints: . 1.91 n a 1.X4 1 90 1.92 n a n.a. n.a. n.ii. n.ii. u.,1 9 Sav iys deposits2' 2.98 n.i. 2.X4 2. XI) 2.82 n.a. n.a. n.a n.a. n.a. n.ii. hue e\l-l'eann'i lime tleposii* mil l>tiltime\of lew rlian ^100.000. in uunn IIV 10 7 lo9 1 da\s 4.43 4.66 4.59 4.64 4 67 4.66 4.75 4 71 4.80 481 4 83 I |92 1i 182 dins 4.95 5.02 5.11 5.OX 5.0.1 5.02 5.05 5.04 Slid 5.11 5.14 12 1X3days lo i year 5.18 5.2X 5.11 5.32 5 -".) 5.2X 5.31 5.11 5.37 5.43 5.45 \\ Mme lliai) 1 \ear h) 21'; \ears 5.11 5.5.1 .5.61 5.61) 5 56 5.53 5.58 5 59 5.69 5 75 5 77 14 Mme than 2'•': years 5.46 5 72 5.82 5.79 5.76 5.72 5.77 5.78 5.X4 5.91 5.91 A l\si KI i) COMMERCIAL B^NKS 15 Ne« >liilble ordci^qlnillidrawi1 accounts" . . 248.417 n.a. 190.033 1X8.803 167.501 n.a u.a. n.a. n.a. n.ii. na. 16 Sav ii:s deposits"' 776.466 n a 852.336 859.524 896.820 n.a. n.a. n.ii. n.a. n.a. n.a. 17 P rsonal 615.1 11 n.a. 675.576 6X0.596 713.672 ii..i. u a n it n.a. n.a. u a. IX N)n])ersonal 161.351 n.a. 176.759 178.928 183.148 n.a. n.a. n.ii. n.a. na. n.a. . . .. line lew llnm SI00.O0O. /)i MI 19 7 to91 davs 32.170 12.931 32.695 12.42X 32 044 12.931 .12.799 32.796 34.851 34.485 .12.501 20 92 I) 182 days 93.941 92.301 91.167 91.195 92.503 92.301 94.955 95 235 91.X04 92.432 91.252 21 183davs to 1 vear 183.814 201.449 "'00 OOX 199.397 201.281 201.449 201.491 207.129 203.316 207.006 209.267 n Mo e liian 1 year lo 2'-? years 208.601 213.198 211.214 213.012 ^14 4115 213.198 2I1.X75 212.970 214.066 226.159 220.XO2 23 Moe than 2 ': years 199.002 199.906 I9X.124 199.126 198.539 199.906 198.077 197.958 200.282 199.147 198.760 34 IRA anil Keoyh plan deposits 150.067 151.275 15 1.109 151.276 151.189 1.5 1.775 HIF-INSI RED SAVINGS BANKS4 25 Neu uiahle order^qf withdraw;1 accounts' . 1 1.91X u a. 9.838 9.91X 9.710 n.a. n.a. n.a ii.a. n a n.a. 26 Sj\~ nils deposits1' 68.643 n.a. 67.9X0 67.975 6X. 102 n.a. n.a. 11 a n.a. n.a. n.ii. 27 P•rsoiial 65.166 n.a. 64.425 64.126 64.169 n.a. n.a. n.a. n.a. n.a. n.ii. 2X N)iipcrsonal 1.277 n.ii. 1.555 .1.649 3.733 n.a. n.a. n.a. n.a. n.ii. n.a. line•e\l-be<inii'j lime deposits IV/I/I hulamnol less lliun $100,000. In innnrily 29 7 lo91 days 2.001 i 428 2.540 2.501 2.405 2.428 2.542 2.5.15 2.656 2.69X 2.716 10 92 1v 1X2 da\s 12.140 13.011 1 3.474 13.301 1.1.074 n.on 13.112 13.(199 1.1.377 13.461 11.585 31 183days to i year 25.686 28.792 29.381 29.659 29.129 28.792 29.503 29.510 10.007 10 076 29.381 32 Moi e llian 1 >ear lo 21.': years 27.482 29.095 27.192 28.061 28.571 29.095 29.163 29.699 31.028 31.616 31.916 .11 Mene llian 21/' years 22.866 22.254 22.348 22.I5( 21.821 22.254 2I.82X 21.877 21.711 21.64(1 21.503 .14 IRA and KcOL'h plan accounls 2I.40X 21.165 21.002 20.9X3 20.627 21.365 20.405 20.423 20.860 20.860 20.683 1. BIT. Bunk tiiMiiaiux' f;unJ. D,«:i m lins C.ibU.' UIMI appear ii thv Bn.ird\ !I.f> (fUSl iisticat dillicullivr p.) Special SuppJcnicniuty Tiihlc nionilily siatislical release, hor ortli•ring address, see inside accounts, e for NOW and n available beginning December from cover, fisiiniatcs are based on data collected by ihc Federal Reserve SyMan from ;i 19%. Mv;iiilk\l random sample ol ahnm 42? commercial banks and 75 sav ngs banks on the List day 3. Includes personal and nonpeisonal money market deposits. DI cai.li monih. Data are JIOI seasonally adjusted and include IRA and Keo-h <1 -pnMt^ and 4. Includes both mutual and leiicnil savings hanks. r<iK'ij:ii lairR'ncy-denominaied deposits. Data exclude retail repurch;ise agreements and tleposiis held in Li.S. branches ami agencies of loreii;n banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A15 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities' A. All commercial banks Billions of dollars Monthly averages Wednestay rt'jdrcs Account 1W6' I9961 1997' 1997 May No; Dee. Jan. Feb. Mar. Apr. Ma> May 7 May 14 May 21 May 28 Scasonall adjusted Assets 1 Bank eredil .1.665.6 1.743 1 3.770.6 3.804.9 3.841,5 3.861.1 3.894.4 .3.902.0 3.895.0 3.898.0 3.902.1 3.909,1 2 Securities in hank eredil 992.2 9X0.7 990.1 1.005.5 1.021.1 1.015.1 1.032.6 1.014.2 1.0188 1.016.8 1.1)11.0 1.011.6 3 ILS. lUivcinnlcnt seetiiities 711.6 7(17.3 706.9 7(17 3 7W.5 7086 721.8 721 7 721 1 720.1 7IX.6 724,5 4 Other seem mes 280.6 171 4 281.2 29X.2 316.7 306.5 310.9 292,5 297.7 296.5 2914 287.1 5 Loans and leases in bank credit- . . . 2.673.4 2.762.4 2.780.5 \799.5 2.820.4 2.846.0 2.861.8 2.887.7 2.876.2 2.881.2 2.891.1 2.897.7 6 Commercial and industrial 7.16.3 775.0 783,1 785.5 793.8 798.2 805.4 811.2 X06.8 811,1 812.5 813.0 7 Real estate 1.1(11.7 1.121.5 1.1277 1.134.4 1.140.0 1.153.5 1.161.9 1.172.2 1.169.4 1.169.8 1.172,5 1.174.2 8 Revolving home equity 79.9 84.2 85.2 85.7 86.5 X7.9 89.0 90.2 89.7 89.9 90.0 91.0 9 Other . ." ' I.02I.X 1.037.3 1.1)42.5 1.IU8.8 1.051.5 1.065.6 1.072.9 I.0R2.0 1.079.7 1.079.9 1.082.4 1.083.2 1) Consumer 504.1 520.5 5210 521.8 520.9 518,5 516.1 519.0 517,3 518.1 519.2 520.1 1 1 -Security1 76.6 76.9 78.7 82.4 83.9 8X.2 89.7 89 1 88 5 88.9 89 5 90.5 12 Olher loans and leases 254.7 268,5 W7 275.4 281.9 287.6 288.7 MG.3 294.3 29.3.1 297.3 300.0 1.1 Interbank loans 2117.6 212.0 204.9 198.9 2(W.7 220.0 216.0 218.6 222.8 213.6 224.0 2~"2.2 14 Cash assets4 220.1 232.6 231.0 ->V2 233.4 219.9 246.2 243.8 244.8 236,5 248 0 2491 15 Other assets' 236.7 260.0 265.4 257.0 265.7 273,5 277,5 277.7 271.4 275.5 282.7 278.7 16 Total assets'1 4.273.2 4J9I.2 4.415.3 4.436.9 4.489.2 4,538.4 4.577.5 4.585.5 42577.6 4-567.2 4.600.2 4.603.0 Liabilities 17 Deposits 2.724.4 2.831.4 2.X59.9 2.871.9 2.XV2.6 2.916.0 2.943.9 2.930.9 1930.5 19291 2.i)ln8 2.942.5 IS Transaction 756.2 72I..1 719,5 715.1 705.1 699.8 700.6 688.6 678.9 686.7 6X7.7 706.0 19 Nonlransaclion 1.968.2 2.110.0 2.140.4 2.156.8 2.187.6 2.216.2 2.243.3 2.242,3 2.251.6 2.242.6 2.229.1 2.236,5 211 Lariw lime 434.6 5(X).8 519.6 526,5 54T I 54X.3 567.3 562.6 569.4 563.8 552.6 562.7 21 Olher 1.533.6 1.609 2 1.620.X 1.630.3 1.645.5 1.667.9 1.676.1 1 679 7 1.682.2 1.678.7 1.676.5 1.671.8 22 Borrowings 709.2 70K 5 705.5 724.2 735.3 747.9 762.2 7652 772.0 767,3 777 0 756.6 2.1 From banks in Hie US 295.5 It K 1.4 3(H7 300.9 105 4 .111.6 31.3.1 303.0 116 9 296.7 311,1 297.7 24 From others 413.7 408.1 400.7 423.3 429.9 434,1 449.0 462.1 455.1 470.6 465.6 458.9 25 Net due to relaied foreign othces 257.4 23X. 1 231.3 217.7 209.1 211.7 219.7 26 Other liabilities . . ..* 214.7 252.2 259.8 269.4 287.0 27X.5 271.3 263.4 26.3.8 260.1 268.0 261,5 27 Total liabilities 3,905.7 4.030.2 4,056.5 4,087.8 4,132.6 4.151.5 4.189.0 4.193.2 4,197.6 4,174.9 4.202.2 4.20IU 28 Residual (assets less liabilities)^ 367.5 361.0 358.9 .149.1 356.6 3X6.K 3X8.5 392.3 .1.80.0 39;.3 398.1 402.7 Not season.lly adjusted Assets 2') Bank eredil 3.669.1 3.747.4 3.769.X 3.X03.6 3.834.4 3.851.5 1.893.9 3.906.6 3.906.8 1.9(U,5 3.901.7 3.906.0 1(1 Scxurilies in bank credit 999.4 979 4 976.4 996.8 1.017.7 1.017.7 1.035.1 1.023,1 1.0.10.0 1.026.1 1.(118 1 1018 1 >l U.S. Liovermueiil securities 713.9 707.7 7027 701,1 703.2 71.1.2 724,5 724.2 725.7 723.0 7210 723.9 12 Other secunties 2X5.5 271.7 271.6 ">95.6 314.6 304.6 310.6 299 1 .104,3 .10.1.2 297.1 294.2 13 Loans and leases ill bank credit- . . . 2.669.6 2 767.9 2,793.4 2.806.7 2.816.6 2.X3.1.8 2.858.8 2.883,1 2.X76.8 2.878.4 2.88.1.7 2.887.9 .14 Commercial and industrial 742.3 773.1 7X0.3 783.2 793.4 800.X 812.6 8180 817.3 818.2 818.8 817.0 Is Real estate 1.097.7 I.I25.S 1.1.12.6 1.136.4 1.136.9 1.147.5 1.157,5 1.167.8 1.165.2 1.166.2 1.167.2 1.169.4 16 Revolving home equity 79.7 SJ.7 X54 85.7 86.1 X7.1 88.3 '10.0 89.4 89.7 89.8 90.8 17 Other . ." 1 l)l« 1 I.IUI.I 1.047.2 1 0508 1.050 K 1.060,5 1.069 1 I.O77.X 1.075.8 1.076.5 1.077.4 1.078 6 IX Consumer 502.2 521.(1 525.8 527.4 521.5 513.9 513.7 516.9 5L5.4 516.2 517.2 517 7 I1' Security1 77.1 ">X.2 79» 81.6 85.0 87.8 90.2 89.5 89.8 89,1 90.0 90.0 4(1 Olher loans and leases 250.3 269 9 274.8 278.0 279.X 283.7 284.8 291.1 289.0 288,5 290 5 293.9 41 Interbank loans 203.2 216.1 214.2 ">O8.7 209.1 216.4 214.3 214.1 220.4 208,5 217.5 215.0 42 Cash assets4 217.9 2.19.6 247.0 242.5 2.14,5 230.8 241.4 241.6 239.1 232.7 234.2 257.1 41 Other assets' 2.18.7 25X.8 265.4 257.6 2656 268.9 275.1 2X0.0 277.6 279.0 279.1 280.8 44 Total assets" 4,272.0 4,4(15.5 4,4.19.8 4,456.5 4,487.6 4,511.5 4.568.4 4.585.8 4.587.4 4.56K.I 4.575.9 4,6(12.5 Liabilities 45 Deposits 2.714.X 2.848,5 2.892.1 2.875.8 2.877.6 2.9IW.8 2.941.3 2.922.2 2.925.3 2.919.1 2.890.4 2.933.8 46 Transaction 745.5 7.11.5 752.6 726.5 698.1 687.6 703.8 67X.7 674.2 676.6 661 7 696.1 47 Nonlrans;ielion 1.969.3 2.117.0 2.1.19 5 t 149.2 2.179.5 2.217.2 2 237.5 2.241,5 2.251.1 2.242.5 2.228.8 2.237.7 48 Lari:e lime 41X.4 5IU.0 5IK.3 525.2 541.6 548.4 562.9 567.4 571.4 567.6 558.7 569.8 49 Other 1.531.0 1. hi 2.9 1.621 2 1.624.0 1.637.9 1.668.8 1.674.6 1.676.1 1.679 7 1.674.9 1.670.1 1 667.9 5(1 Bormwimis 715.3 698.4 697 X 7IX.7 719.8 728.4 763.1 774 9 784.5 774.X 785.(1 767.0 5 From banks in the U.S 299.3 294.2 195.1 293.6 301.8 111.9 311.1 320.0 102,1 320.2 311.4 52 From others 416.0 404.1 .398.3 423.5 426.3 426,5 451.2 4618 464.4 472.5 464.X 455.6 5 i Net due to related fore-inn ollices 259.5 2.15.2 230.0 232.7 228.6 218.3 210,3 236.7 226.5 223.9 246.5 251.5 54 Olher liabililies 217.2 156.0 255.7 266.6 289.0 276.7 271.6 267.1 268.7 265.1 268.7 265.4 55 Total liabilities .VHI6.8 4,038.0 4.075.6 4,093.8 4.115.0 4,128.2 4.186.1 4,200.9 4,204.9 4.182.9 4.190.7 4,217.7 56 Residual (assets less liabilities^ .165.3 367.5 364.3 362.7 3726 .181,1 3X2.1 184.9 382,5 385.2 385.2 384.8 MEMO 57 Revaluation gains on otf-balalicc-shcel items* n a. 65.6 69.4 89.2 103.0 92.2 92.1 834 84.8 82.4 81.3 79.1 58 Revaluation losses on oll-balancesheet hems* n.a. 60.5 64.4 849 98.2 86.4 87.3 85.1 911.0 X5.7 85.4 83.4 loolnotes ap|vur on p. A2I. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • August 1997 1,26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday ligures Aeeounl 1996' 1996' 1997' 1997 May Nov. Dee. Jan. Feb. Mar. Apr. May May 7 May 14 May 21 May 28 Seasonall adjusted /lvvrt.v 1 Bank eredil 3.214.1 3 ">48 8 3.265.5 3.289.1 3.310.8 3.335.7 3.36(1.8 3.362.0 3.357.7 3.359.2 3.362.1 3.365.5 845.5 822.7 825 6 835.3 844.1 842.1 854.6 838.6 843.3 84.3.2 837.1 833.6 3 ILS. goveniinenl secuviues 635.7 620.2 619.3 625.5 619.1 624.9 633.9 631.8 631.7 632.8 630.8 631.4 4 Other seeurities 209.8 202.5 206.3 209.8 225.0 217.1 220.7 206.8 211.6 210.5 206.3 202.2 5 Loans and leases in bank credit- 2.368.6 2.426.2 2.439 9 2.453 8 2 466 7 2.493.6 2.506.2 2.523.4 2 514.4 2.515.9 2.525.1 2.531.9 6 Commereial and industrial 548.2 566.6 570.3 571.1 576.7 582.1 588.7 591.4 589.2 590.5 591.7 593.1 7 Real estate I.06S.1 1.089.1 1.095.7 1.102.6 1.108.0 1.122.0 1.13(1.5 1.141.6 1.138.3 1.1 39.0 1.142.0 1.144.0 8 Revolving home equity 79 9 84.2 85 2 85 7 86 5 87 9 S9 0 90 2 89.7 89.9 90.0 91.0 9 Other " 98 X. 2 1.004.8 1.010.5 1.016.9 1.021.5 1.034.1 1.041.5 1.051.4 1.048.6 1.049.1 1.051.9 1.053.0 1 (1 Consumer 504.1 520.5 521.0 521.8 520.9 518.5 516.1 519.0 517.3 518.1 519.2 520.1 1 1 Security5 48.8 41.9 42.5 44.3 44.1 48.4 46.5 45.6 45.3 43.9 46.3 47.0 1 2 Olher loans ami leases 199.4 2118.1 210.3 214.1 217.1 m s 224.2 225.7 224.3 224.5 225.9 227.8 13 Inteibank loans 184.5 191.8 183.2 176.2 183.8 197.3 197.0 198.0 204.3 197.1 201.6 196.4 14 Cash assets4 192.6 201.8 199.8 201.1 200.5 207.6 213.5 209.8 208.9 203.2 214.6 216.0 15 Other assets5 1916 2^3 6 "8 3 "H87 T>3 9 231.7 237.6 238.1 233.8 235.3 243.4 239.1 16 Total assets" .1,726.1 .1.809.7 .1,82(1.7 .1.828.7 .1.86.1.2 3,916..1 .1,952.6 .1.951.7 3.948.6 .1.9.18.5 .1,965.5 .1.960.8 Liabilities 17 Deposits 2.549.4 2.627.5 2.640.4 2.646.2 2.654.7 2.673.4 2.686.2 1 678,9 2.668.9 2.674.3 2.674.4 2.692.1 IK Transaction 745.4 711.2 709 3 704.8 695.4 689.3 689.8 677.3 666.6 675.7 676.8 695.1 \9 Nonlransaclion 1.804.1 1.916.3 1.931.1 1.941 4 1.959.3 1 984 (I 1.996.4 2 001.6 2 002.3 1.998.6 1.997.6 1.997.0 20 Liirse time 272.7 309.5 313.1 313.3 317.8 319.7 322.8 324.3 322.5 322.3 323.4 325.7 21 Other 1.531.3 1.606 « 1.618.1 1.628.1 1.641.5 1.664.4 1.673.6 1.677.3 1.679.8 ! .676.3 1.674 1 1.671.4 22 Borrowinas 578.0 583.0 583.9 593.9 592 0 607.8 622.2 621.4 629.9 622.6 626.6 615.4 23 From lianks in the US 260.6 267.1 271.8 272.6 271.0 278.2 279.7 269.1 281.0 265.5 275.3 26.3.3 24 From others 317.5 315.8 312.1 321.3 321.0 329.5 342.5 352.3 349.0 357.1 351.3 352.0 25 Net due to related foreign otliees 88.5 71.0 69.1 72.0 78.2 68.0 77.1 85.0 92.4 78.1 89.8 82.1 26 Other liabilities ". 144.5 171.8 176.5 178.6 186.4 183.7 178.4 173.2 174.3 172.5 175.9 171.0 27 Total liabilities .1..160.4 .1,45.1.2 .1,469.9 .1,490.7 .1,511..! .1,5.12.9 .1.563.9 .1.558.6 .1.565.5 .1.547.5 .1.566.7 .1,560.6 28 Residual (assets less liabilities)7 365.7 356.4 350.8 3.38.0 351.9 383.5 388.6 393.1 383.1 391.0 398.8 400.2 Not seasonally adjusted Aysels 29 Bank credit 3.216.4 3.253.5 3.268.6 3.290.5 3.303.1 3.326.3 3.360.2 3.364.1 3.364.4 3.362.5 3.360.6 3.362.3 30 Securities in bank eredit 849.8 821.7 818.1 830.5 839.7 844.1 856.6 842.8 S47.9 847.6 839.9 836.5 31 U.S. government securities 637.7 620.7 617.6 618.5 616.0 626 6 637.1 633.7 634.4 635.1 632.6 6.31.6 32 Other securities 212.1 201.0 200.5 212.0 223.7 217.5 219.4 209 1 213.5 212.6 207.3 204.9 33 Loans and leases m bank credit- 2.366.6 2.431.8 2.450.5 2.459.9 2 46i 3 "5O'>6 1 V1 1 ~>5I6 5 2.514.H 2.520.7 2.525.8 34 Commereial and industrial 554.1 564.9 566.9 568.9 576.4 585.1 595.3 598.0 598.7 597.3 597.9 597.5 35 Real estate 1.064.4 1.(192.9 I.KXI.4 I.KH/i 1.104.9 I.I 16.0 1.120.5 1.137.5 1.134.4 1.135.7 1.137.0 1.139.4 36 Revolving home ecjuilv 79.7 84.7 85.4 85.7 86.1 87.1 8K.3 9(1.0 89.4 89.7 89.8 90.8 37 Olher . . '. ' 9X4.7 1.008.2 1.015.1 1.018.9 1.018.8 1.028.9 1.038.2 1.047,5 I.IH5.0 1 .(H6.0 1.047.1 1.(48.6 38 Consumer 39 Security' 49.4 43.2 43.8 43.5 45.2 48.1 47.0 46.0 46.6 44.3 46.7 46.5 40 Other loans and leases I96.fi 209.8 213.6 215.5 215.4 219.1 221.0 222.9 221.3 221.4 221.9 224.7 41 Interbank loans 180.2 196.1 192.5 186.1 188.2 193.7 195.4 193.5 201.9 191.9 195.2 189.2 42 Cash assets' 19(1.4 208.5 214.8 211.1 "HP 4 IWI) •W.f> 207.6 203.9 199 7 2(K).8 223.2 43 Olher assets' 192.6 222.1 227.6 219.6 223.0 227.7 236.7 239.4 2.39.0 237.3 239.0 240.3 44 Total assets'1 .1.722.8 .1,82.1.8 .1,847.1 .1.8515 .1.860.9 .1,890.9 .1.945.7 .1.948.2 .1.952.9 .1.9.15.1 .1,9.19.2 .1,958.7 lMihilinr\ 45 Deposits ~> 539 5 "'647(1 2.669.9 2.649.9 2.642.8 2.662 1 2.690.0 2.669.7 ^ 666.5 \665.l 2.646 9 2.679.7 46 Transaction 735.2 721.3 741.7 716.2 688.2 677.3 693.4 668.0 662.7 666.2 651.5 685.3 47 Nontransaetiou I.8M.3 1.920.7 1.928.2 1.933.8 1.954.7 1.985.0 1.996.6 2.001.8 2 003.8 13)98.9 1.995.4 1.994.3 48 Laiiie time 275.7 310.2 309.7 311.9 3207 319.7 124.3 328.1 326.6 326.4 127.7 128 9 49 Other 1.528.6 1.610.5 1.6185 1.621.8 1.634.0 1.665.2 1.672.2 1.673.7 1.677.3 1.672.5 1.667.7 1.665.5 50 Borrowings 583.8 576.3 577.4 591.5 583.1 594.2 620.7 631.4 636.8 631.3 637.9 629.0 51 From banks in the US 264.8 260.9 265 8 265.8 261.5 268.1 278.3 177.6 "•83 7 271.4 286.2 277.8 52 Front others 319.0 315.4 311.5 325.6 321.6 326(1 342.4 353.8 353.1 359.9 351.6 351.1 53 Net due to related loreiun oitices 93.9 68.4 66.2 73.6 79.9 72.5 7X.8 92.2 95.3 83.8 98.4 96.7 54 Olher liabilities 144.9 174.9 173.8 176.7 185.8 182.1 17X9 174.2 176.3 174.0 174.8 172.4 55 Total liabilities .U62.I .1,461.7 .1,487.2 .1,491.8 .1,491.7 .1,511.0 .1368.4 .1367.5 .1375.0 .1,554.2 .1,557.9 3377 .8 56 Residual (assets less liabilities)" 360.7 362.2 359.9 359.7 369.2 379.S 377.3 380.7 378.0 380.9 381.3 380.9 MEMO 57 Revaluation gains on off-balance-sheet items* n.a. 33.1 36.0 47.5 55.9 49.0 49.5 42.0 44.7 43.3 42.1 39.5 58 Revaluation losses on oil-balancesheet items* n.a. 28 9 31.8 44.0 50.9 43.2 44.6 4.3.4 46.4 44.0 43.4 41.0 59 Mortgage backed securities1' n.a. 238.3 241.4 244.0 243.6 245.9 249.3 249.7 249.4 248.6 248.0 247.4 Footnotes iippcar on p. 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 [N THE UNITED STATES Assets and Liabilities'—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account I996r 1996' 1997' 1997 May Nov. Dec. Jan. Feb. Mar. Apr. May May 7 May 14 May 21 May 28 Seasonally adjusted 1 Bank credit 1.867.6 1.858.0 1.867.7 1.882.4 1.901 1 1.913.0 1.929.9 1.921.9 1.922.0 1.920.7 1.922.1 1.922.6 2 Securities in bank credit 439." 417.0 419.9 425.9 4363 430.4 440.3 413.9 429 1 427.7 422 6 419.6 3 V.S government securities 310.3 294.4 293 2 296.4 291.1 295.0 103 0 300.1 300.5 300.2 2W.3 300.6 4 Trading account 21.1 21.6 19.5 17.3 16.2 18.2 20.3 19.4 18.0 17.1 2(1.1 21.7 5 Investment account 289.2 272.8 273.7 279.2 274.9 276.8 282.7 n80.7 282.4 283.1 279 1 278.9 6 Other securities 129.6 122.6 126.7 129.4 145.2 135.4 137.3 123.8 128.6 127.4 123.4 119.0 7 Trading account 59.4 57.8 6(1.7 64.6 79.9 69.3 71.9 58.3 63.4 61.8 57.6 53.9 8 Investment account 70 2 64.8 66.0 64.9 65.3 66.1 65.4 65.5 65.2 65.6 65.8 65.1 9 Stale ami local government. . 21.0 20.2 20.4 20.5 21.1 20.8 20.7 21.0 20.9 20.8 21.0 20.9 10 Other ." _ . . . 492 -14.fi 45.7 44.3 44.1 45.3 44.7 44.5 44.3 44.7 44.8 44.1 1 1 Loans and leases in bank credit- . .. 1.427.8 1.441.0 1.447.8 1.456.6 1.465.1 1.482.5 1.489.6 1.498.0 1.492.9 1.493.1 1.499.5 1.503.0 12 Commercial and industrial 377.9 390.2 .191.9 392.2 396.1 400.1 405.6 406.7 405 2 406.0 406.7 408.0 13 Bankers acceptances 1.5 1.8 2.0 1.9 1.6 1.7 1.6 1.5 1.5 1.6 1.4 1.5 14 Other 376.4 388.3 389.9 390.3 394.5 398.4 404.0 405.2 401.7 4IH.4 4(15.2 406.4 15 Real estate 581.0 578.6 581.2 581.9 582.6 588.4 5914 W7.8 597.2 596.2 597.4 598.2 16 Revolving home equity 55.X 56.9 57.5 57.6 58.1 58 8 59.4 60.3 59.8 60.0 60.0 61.0 17 Other ... 525.2 521.7 523.7 5241 524.5 5295 5.32.0 537.5 537.3 5.36.2 537.4 5.173 18 Consumer 286.9 290.7 290.9 293.7 295.5 "*94 "* 292.8 294.1 293.1 294.0 294.4 294.4 19 Security1 44.0 370 37.7 39.5 39.1 43.2 41.6 40.7 40.3 38.9 41.4 42.1 2(1 Federal funds sold to and repurchase agreements with broker-dealers 28.5 21.4 21.8 2.3.6 23.1s 26.8 23.5 23.1 22.3 21.6 22.7 25.1 2 1 Other 15.4 15.6 15.9 15.9 15.3 16.4 18.1 17.6 17.9 17.4 18.7 17.0 22 Stale and local government 11.5 11.4 11.6 11.4 11.3 113 11.0 109 10.9 10.9 10.8 10.8 23 Agricultural 8.6 8.3 8.2 8.2 8.2 8.2 8.2 8.3 8.3 8.3 83 8.4 24 Federal funds sold to and repurchase agreements with others 5.4 5.5 5.1 5.6 4.8 5.7 6.7 5.2 5.4 5.4 5 0 5.5 25 All other loans 63.0 60.6 61.0 60.9 62 4 64.6 63.7 64.4 63.0 63.7 65.3 65.4 26 Lease-tinancing receivables 49.4 58.8 60.3 6.3.2 65.2 66.9 68.5 69.9 69.5 69.6 70.1 70.2 27 Interbank loans 135.7 140.5 1302 123.6 128.1 137.4 142.5 143.4 149.7 143.0 149.0 140.3 28 Federal funds sold to and repurchase agreements with commercial banks 88.9 87.5 80.5 75.8 78.3 86.2 90.5 87.3 93.1 83.1 92.8 86.8 "N Other 46.8 52.9 49 7 47.8 49.8 51.1 52.0 56.1 56.6 59.9 56 2 53.5 3(1 Cash assets4 130.7 136.2 134.4 134.1 130.9 136.0 140.5 138.3 138.8 133.0 142.7 142.4 31 Other assets' 145.7 170.4 173.7 164.9 168.4 169.4 174.4 176.1 174.5 17.3.0 179.5 176.0 32 Total assets" 2,242.5 2.258.6 2,269.5 2,269.0 2.292.8 2,319.8 2,351.2 2.U3.8 2.349.2 2.333.8 2,357.4 2.345.5 Liuhiliiu-s 33 Deposits 1.370.6 14090 1.416.7 1.408.9 1.406 8 1.414.6 1.426.4 1.416.4 1.41 1.4 1.413.1 1.412.0 1.425.8 34 Transaction 428.8 .198.3 397.3 393.9 384.1 377.5 377.1 367.0 361.0 366.0 365.1 379.0 35 Nontransacliou 941.8 1.010.8 1.019.5 1.015.1 1.022.7 1.037.1 1.049.3 1 049.4 1.050.4 1.047.1 1.046.9 1.IM6.8 36 Large time 132.9 156.4 158.1 156.4 159.3 160.1 164.2 164.3 162.4 162.5 164.0 165.8 37 Other 808.9 854.4 861.3 858.7 H63.4 877.0 885.1 885.2 888.0 884.6 882.9 881.0 38 Borrowings 441.4 423.0 422.7 432 5 431 « 445.4 457.9 458.1 464.4 460.5 465.0 451.8 19 From hanks in the U.S 184.2 182.0 188.8 188.1 1874 194.0 I95..3 184.2 193.8 179.3 190.1 178.6 40 From others 257.3 241.0 113 9 244.4 244.5 251.4 262.6 271.9 270.5 281.2 275.0 273.2 41 Net due to related foieign olh'ces 83.8 68.8 66.3 68.0 74.2 64.1 72.7 80.9 88 0 73.5 86.1 78 2 42 Olhci liabilities . ..." 118.7 146.1 150.9 153.8 160.8 156.7 151.7 145.8 147.4 145.5 148.2 143.1 43 Total liabilities 2,0145 2.047.1 2.056.7 2,063.2 2,073.8 2,080.9 2,108.7 2,101.2 2,111.0 2,092.6 2.111.4 2.098.9 44 Residual (assets less liabilities)7 228.0 221.5 2I2.K 205.8 219.0 238.9 1415 242.6 mi 241.2 246.0 246.5 Fooinotcs appear on p. A2 I. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • August 1997 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued C. Large domestically chartered commercial banks—Continued MuniliK averages WCCIIK-.CN y fiiiurcs Account 1 996' 1997' 1997 May Nov. Dec Jan. Feb. Mar. Apr. May May 7 Ma> 14 May 21 May 28 Mill M.UMHK l> adjusled 45 Bank eredil 1.870.0 1.861 1 1.868.0 1.8X5.7 1.899.(1 1.908.1 1.928.9 1.924 1.928.3 1.922.8 1.921.1 1.921.1 46 Securilies in bank credit 442.2 417.6 412.8 422.6 433.5 431.1 43X.9 426.2 431.1 429.7 424.5 421.0 71(16 ^96 5 291 9 K)o 7 "H)5 f, 303 1 100 4 i(K) 8 300 5 3(X) 1 3()9.6 48 Trading account 2L3 22.8 18.2 16.4 16.4 193 205 19.6 18.1 17.4 21.3 20.6 49 Investment account 273.7 273.7 274 4 271.0 276.2 282.6 280.8 2X2.7 2X2.6 279 0 279 1 5(1 Mortgage-backed securilies. V 168.9' 173.6' 176.5' 177.3' 178.9' 180.3' 1802 181.5 180.6 179.6 179.2 51 Other HW.8' KXI.I 97 K' 95.7' 97.3' 102.3' 100.6 101.2 102.0 99 4 99 8 52 One year or less ll.Ll. 29.3' 26.4' 26 7' 25.5' 25.8' 28.2' 26.7 27.6 274 26.2 25.7 53 Between one and five years 1 60.0' 59.8' 56.9' 54.8' 54.8' 55.9' 55.2 54.9 55.4 54.8 55.2 54 More than live years .... 15.5' 13.8' 14.2' 15.4' 16.7' IX 1 18.7 18.7 187 18.4 IX.9 55 Olhei securities ' I 1 1.6 121.1 120.9 131.9 144.1 115.5 1.15.8 125.8 110.2 124.2 124.1 121.4 56 Trading account 61.7 55.4 54.2 66.5 78.8 69.8 70.7 60 5 65.3 65.8 58.7 56.5 57 Investment account 69.9 65 7 66.7 65 4 65 4 65.7 65.(1 65.3 64.9 65.4 654 M.9 58 Slate and l<x;;il government . . 21.1 20.3 2(1.5 20.6 21.1 20. S 20.9 21. 21.0 21.0 21.1 21.1 59 Olher ." 4X.9 45.4 46.1 44.8 44.2 44.9 442 44.2 44.0 44.4 44.3 43.7 60 Loans and leases in bank credit-1 . . 1.427.8 1.443.5 1.455.2 1.463.1 1.465.5 1.4771) 1.490.1 1.497.9 1.497 2 1.493.1 1.496.6 1.50O.0 61 Commercial ami industrial 382.4 389.2 389.0 390(1 396.1 402.5 410.9 411.9 411.3 41 1.4 411.5 411.2 62 Bankers acceptance^ I.S 1.8 2.0 1.9 1.6 1.7 1.6 1.5 1.5 1.6 1.4 1.5 63 Other 3X< )4 387.1 586.9 188.1 394.5 400.9 409.4 4104 411.7 409.8 410.1 409.7 64 Real estate 578 7 580.2 583.9 584 3 582.(1 5X5 4 590.1 595 2 545 4 594.3 593.X 594.8 65 Revolving home equity 55.7 57.2 57.6 57.7 57 9 583 59 0 60 ^ '.« 7 59.9 59.9 60 9 66 Other n ,i. 327.9' 327.8' 326.0' 323.3' 325.4' 332^9' 335.2 3 >6.8 334.9 334.1 133.2 67 Commercial n ,i. 195.11 198.5 2(X).6' 200.8' 201.8' 198.2' 199.8 148.9 199.5 199.7 21X1.6 68 Consumer 285.5 2904 294.8 298 4 2954 291.4 290.7 292.5 291.3 292.1 292.6 293.2 69 Seeurilv5 44.7 38.2 38.7 38.6 411.1 42.9 42.1 41.3 41.7 39.6 42.1 41.9 70 Federal funds sold to and lepurchase agieemenls with broker-lie:ilei\ 294 ^2 1 21.9 22.7 24.0 21..5 24.5 23.9 244 22.5 25.3 24 7 71 Olhei 15 3 i.s'.'J I6.X 15.4 16.1 164 17 6 17.4 17.3 17.1 IX.X 17.3 72 Sluie and local government 1 1.5 11.5 1 1.6 11.2 11.2 11.2 III) 10.9 10.9 111.4 10.9 10.9 73 Agricultural . . T 8.6 8.2 X.I 8.1 7.9 8.0 8.1 8.3 8.2 83 8.3 8.4 74 Federal funds sold to and repurchase agreenienls with others 5.4 4.6 4.5 S 7 5.6 5.6 6.4 5.3 54 4.8 5.6 75 All other loans 61.5 62.5 64.2 62.6 61.4 62.7 62.4 62.8 61.7 61.X 62.X 619 76 Lease-linancini: u-iTjv.iblrjs .... 49.3 5S.S 60.4 (vl.2 65.9 67 •> 68.4 69 8 694 69 1 69.9 701 77 Interbank loans 134.9 139.9 136.5 1322 130.4 133.8 140.5 142.4 148.2 141.0 146.7 140.5 7S Federal funds sold lo ami repurchase agrecmenis with commercial banks 89.6 87.5 84.0 80.8 80.4 84.2 1X1.6 88 •> 94.X 83.9 91.9 87.9 79 Other 45.4 52.4 52.4 51.4 50.0 49.6 49.9 54.2 534 57.1 54.7 53.6 80 Cash assets4 128.8 140.1 145 7 141.4 133.6 129 6 138.1 136.4 1 U4 110.5 m.x 147 6 SI Olhei as-ieiV 147.0 ',68.3 172.3 165.2 IU> 1 166 4 174.5 177.9 177 4 176.2 178.9 177.5 82 Total assets'1 2,2-13.5 2,273.1 2,285.9 2,289.2 2.293.3 2JU2.0 2J45.9 2,344.8 2J52J 2.334.6 2.342.5 2.350.9 Liahifint'\ 83 Deposits 1.363.5 1.415.9 1.432.8 1.415 2 1.4IH.X 1.408.5 1.428 0 1.4(19 8 1.406.4 1.407.7 1.394.3 1 418.4 S4 Transaction 422.1 404.8 4IX.5 401.5 380.8 369.8 380.5 360.9 356.2 361.0 348.9 374.3 S5 Nontransaction 941.4 1.01 I.I 1.(114.3 1.013.7 1.024.(1 1.038.7 1.047.5 I.IW8.9 1.050.: I.IU6.7 1.0454 I.IU4.I 86 hut <ic lime 115.2 1.56.7 ]SS 7 IV)..' 161.5 159.3 IM.7 167.2 165.7 165.7 167.3 I6X. 1 87 Olher 806.2 854.4 858.6 857. 1 862.5 879.4 8K2 8 881.6 884.5 881.0 878.1 X75.9 XX Borrowings 444.6 4178 416 6 428.4 424.3 437.3 458.9 464 471.6 464 6 469.9 459.0 X9 From banks in the IJ.S 187.4 177.6 1834 181.6 179.7 187.6 194.7 1902 196.4 1X3.2 197.1 188.1 c>0 From nonbanks in the L'.S 257.2 240.2 231.2 246.8 244.6 249.6 264 ^ 273.9 274.6 2X1.4 272.8 2709 91 Net due to related foreign ollices .... 89.2 66.2 63.4 69.7 76.0 68.6 74.4 88. 90.9 79 3 94.7 92.8 V2 Other liabilities "! . 119.5 149.4 148.7 151.6 159.8 154.7 151.9 147.0 1444 147 1 147.4 145.0 L)3 Total liabilities 2.016.S 2.IM9.1 2,061.6 2.064.8 2,064,9 2,(K)9.0 2.113.2 2,109.0 2.1.IL. 2.098.7 2.1(16.3 2.115.2 94 Residual (assets less habililies)7 "•23.X •"4.4 MEMO 95 Revaluation gams on olf-balanceshwi items* * 33.1 36.(1 47.5 55.9 49.0 49.5 42.0 44.7 43.3 42.1 14 ^ % Revaluation Uv.se>. on oll-bakmce- T sheel items* 2«.9 31.8 4411 509 43.2 44.6 43.4 46.4 44.0 43.4 41 II 97 Mortgage-backed securities1' I 192.4' 194.8' I*./1 196.4' 197.3' 199.8' 199.4 200.6 199.9 198.8 I9X.3 98 Pass-through securities 130.9' I33.O1 I35.21 135.5' 136.8' 139.2 139.7 140.5 139.8 139.1 139.1 99 CMOs. REMICs. and other mortgage-backed securilies . ., I 61.4' 61.8' 61 5' 60.9' 60.5' 60.6' 59.7 60.1 60.1 59.7 54^ 100 Net unrealized gains (losses) on availablc-for-sale securities'" . . . 2.4 2.8 2.7 2.7 27 1.8 Ml 2 1 2 1 -> y 101 Offshore eredil to U.S. residenis11 . . . 274 31.3 31.7 31 1.9 32.1 32.9 53.3 33.6 33.4 55.4 13.7 33.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A19 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued D. Small domeslically chartered commercial banks Billions of dollais Monthly averages Wednesday ligures Accounl 1996' 1996' 1997' 1997 May Nov. Dee. Jan. Feb. Mar. Apr. May May 7 Ma> 14 May 21 May 28 Seasonally adjnsieu 1 Bunk crcdil 1.146.5 1.390.8 1.397.X 1 406.6 1.409.5 1.422.7 1 A30.X 1.440.1 1.435.7 I.41X.4 1.440.0 1.442.9 2 Securities in hank credit 405.6 405.7 405 7 409.4 407.8 41 1.6 414.2 414.7 414.2 415.6 414.4 414.(1 3 U.S. governmenl securities 325.4 325.9 326.1 329.0 328.(1 130 4 331.1 331.7 331.2 332.5 .131.5 330.8 4 Oilier securities 80.2 79 8 79.6 80.4 79.9 81.3 X3.2 X3.0 83.0 83.0 82.9 83.2 S Loans anil leases in hank credit- 940.X 9X5.1 992.1 997.3 1.001.7 1.01 I.I 1.016.6 1.025.4 1.(121.5 1.022.9 1.1125.6 1.028.9 6 Coniineicial and induslrial 170.2 176.5 178.4 178.9 180.6 182.1 1X3.2 1X4.7 184.(1 184.4 185.0 18.s. 1 7 Real eslalc 487.1 510.5 514.5 520.7 525.4 533.6 .519.1 541.8 541.2 542.8 544.5 545.8 8 RevoK in;: home equity 24 1 27.1 27.7 28 0 28.4 290 29.6 29.9 29.9 29.9 300 111.0 9 Olhcr . .'. ' 46.1.(1 483.2 486 8 492.7 497.0 51M.6 509.5 513 9 511.3 512 9 514.5 51." HI Consumer 217.1 229.X 230.1 22X.I 4.9 48 4.9 4.X 5.0 5.2 4.9 5.0 5.0 5.(1 4.8 5 II 12 Olhcr loans and leases 61.5 61.6 64.2 64.X 65.3 65.9 66.0 67.0 67.1 66.5 664 O" s 13 Interbank loans 48.9 51.4 53.1 52.6 55.7 59.9 54.5 54.5 54.6 54.0 52 6 56.0 14 Cash assets4 61.8 65.6 65.4 67.1) 69.6 71.6 72.9 71 4 70.1 70.3 71.9 7.16 IS Olhcr assels' 46.0 53.2 54.7 53.4 S5.S 62.3 63.2 62.1 59.3 62.2 63.9 63,2 16 Total assets1' 1.4K3.7 1.541.1 1351.1 1559.7 1370.4 1396.5 1,601.4 1.607.X 1399.5 1.604.7 1.60X.1 1,615.3 Liiihilmi's 17 Deposits 1.17X.X 1.218.5 1.221.7 1.2.17.3 1 147 8 I.25K.8 1.259.x 1.262.5 1.257.5 1 261.2 1.262.4 1.266.3 18 Transaelion 316 6 .112.9 .112 0 310.9 111 2 311.9 312.7 110.4 305.6 3(19.7 311.7 116.1 19 Nonliailsaelion X62.2 905.6 9|| 7 926.4 9366 946.9 947.1 952.1 951.9 951.5 950.7 950.2 20 l.uriic nine 139.8 15.1.1 154.9 156.9 15X5 159.5 IS8.6 160.0 160.1 159.8 159.4 159.8 21 Olhcr 722.4 752.5 756.7 769.4 778.1 7X7 4 788.5 792.1 791.8 791.7 791.2 790.4 22 Bin rowings ! 16.li 159.') 161.2 161.4 160.1 162.4 164.3 163.3 165.6 162.1 161.5 163.6 2.1 From banks in ihe US 76.4 85.1 83.(1 84.5 83.6 84.2 X4.4 84.9 87.1 86.2 85.2 84.8 24 ITO.II i.lhers 60.2 74.8 78.2 76.9 76.5 78.1 79.9 7X.4 78.5 75.9 76 3 78.9 4.7 2.2 2.7 4.0 4.1) 3.9 4.4 4.1 4.4 4.5 3.7 3.9 2h Olhcr hahililies 25.8 25.6 27.0 27.6 27.') 27 Total liabilities 1.345.9 1,4116.2 1,413.2 1,427.6 1,437.5 1.452.1) 1,455.2 1.457.4 1.454.5 1.454.9 1.455.3 t.461.7 28 Residual lasseis less liabililiesl7 137.7 114 9 1.17.9 132.2 1.12 9 144.5 1462 150.5 I4S.0 149.8 152.9 1516 Nol seasona ly adjusted .4.S.W7.S 29 Bank eredil 1.346.5 1.392.4 1.400.6 I.4IH.S 1.404.0 1.418.2 1.431.2 1.44(1.0 1.436.1 1.419.7 1.439.5 1.441.3 10 ScLiinlies in hank eredil 407.6 404.11 405.3 407.9 406 i 413.0 417.7 4165 416.9 417.9 415.4 415.5 I17 1 1^4 ^ 1^5 7 1^7 X 326 fi 111 5 114 "* 111 "* 1316 334.6 IP 1 13^ 0 32 Other sceumics _ 80.5 79.9 79.6 X0.2 79.6 81.5 83.5 X3.3 XIJ 83.4 8.1.1 83.5 1.1 Loans MKI leases in bank eredil- 938.9 9X8.3 995.3 996.8 sW7.8 1.005.2 1.01.1.5 1.0234 1.019.3 1.021.7 1.024.1 1.025.8 14 Coniineicial and induslrial 171.7 175.8 177 9 178.9 1X0.1 182.6 184.4 1X6.1 1X5.5 185 9 186.4 1X6.1 15 Real cslale 485.7 512.7 516.5 520.3 522.8 530.6 536.4 542.3 539.0 541.4 543.2 544.7 In Revolving home cquilv 24.(1 27.4 27.8 27.9 28. ^ 28.8 29.3 ~>Q 8 29.7 n9 8 29.9 29.9 17 Olhei . . . 461.7 485 1 48X.7 492.4 494.6 501.8 5(17.1 5I2J 509.3 511.6 513.3 514.7 18 Consumer 2l6.(i 2.111.5 2.11.(1 229.(1 226.2 222.5 223.0 224.5 224.2 224.1 224.6 224.5 19 Securu\ ; 4.7 5.1 5.1 4.9 5 I 5.2 5.0 4.8 4.9 4.X 4.6 4fi 4(1 Olhcr loans and leases 60.: 64.1 64.K 63.6 63 4 64.4 64.8 65.8 65 7 65 6 65.1 65.8 41 Interbank loans 4\2 56.2 56.1 53.9 57 K 59.9 54 9 51.1 53.7 51)9 48.5 486 42 Cash assels4 61.6 68.1 69.1 69.2 riX1' 69 4 71.6 71.2 69.6 69 2 68 9 75.6 4.1 Oilier assels' 45.6 51.7 55.3 54.4 569 61.5 62.2 61.6 61.6 61.1 6U2 62.8 44 Total assets" 1,479.4 1.550.7 1.561.2 I.562J 1,567.6 I38S.9 1399.8 I.6IU.4 1.600.7 1,6(10.5 1396.7 1.607.9 Liiihilino 45 Deposils 1.176.0 1.226.2 1.237.1 1.234.X 1.238.0 1.253.X 1.262.(1 1 260 0 1.260.1 1.257 4 1.252.6 1.261.3 46 Transaction 31.1.0 316.6 323.2 314.7 307.4 3(17.6 312.9 307.1 306.4 105.2 302.6 311.1 47 Nonlransarlion 863.0 909.6 913.9 920.1 930.6 946.3 949.0 952.9 953.6 952.3 950.0 950.3 48 Urac lime 140.5 153.5 1^4 0 I5S.6 159.2 160.4 159.6 160 8 160.8 160.7 160.5 1611.7 49 Olhci 722.4 756.1 7su« 7645 771.4 785.8 7X9.4 792.1 792.8 7" 1.5 789.6 789.5 S 5| O Bo l- r r r o o m u in h - a s nks in ihc I'.S 1 7 .1 7 9 . . 4 2 1 8 5 3 X . 5 4 824 84.3 81 X 80.5 XI 5 87.4 86 8 8X2 1 8 6 9 7 . . 1 9 1 8 7 9 0 . , 7 0 52 homoilicis 61.8 75 1 78 1 78.X 77.1 76.4 78.1 79.9 78.5 78.5 78.8 X0.2 S.I Net due (o leljled lorcign olliees . . . 4.7 2.2 2.7 4.0 4.0 3 9 44 4.1 4.4 4.5 3.7 3.9 54 Other li.ihiluies 25.4 25.5 I'S. 1 25.1 26.0 27.3 27.0 5S Total liabilities IJ45.3 1.412 J 1,425.7 1.427.(1 1,426.8 1,442.0 1,455.2 1,45X3 1.456.6 1.455.5 1,451.6 1,462.6 56 Residual lassets less liabilities)' 134.0 1.18.4 135.5 135.3 140.8 146.9 144.6 145.0 144.0 145.(1 145.1 145 2 Mt:\to 57 Morlgagc-backai seciinlies'1 n a 46.1 46.6 47.6 47.7 49.1 49.9 5(1.6 4X.8 48.8 49.2 49.1 i p. A2I Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • August 1997 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued E. Foreign-related institutions Billions ul'dollars Monthly averages Wediiesc.v tigures Account 1996' 1996' 1997' 1997 May Nov. Dee. Jan. Feb. Mar. Apr. May May 7 May 14 May 21 May 28 Seasonally adjusted A sscts 1 Bank credit 451.5 494.3 505.0 515.9 530.7 525.4 533.7 539.9 537.4 538.8 540.0 543.8 2 Securities in bank credu 146.7 158.0 164.5 170.2 177.0 173.0 178.1 175.6 175.5 173.6 174.0 178.0 3 U.S. government securities 75.9 87.0 87.6 8 l.X X5.4 83.6 87.8 89.9 X9.4 87.5 87.8 93.1 4 Other securities 70.X 71.0 76.9 8X.4 91.6 89.4 00.2 S5.7 86.1 H6.0 86.1 849 5 Loans and leases in bank credit2 . . . 3IM.X 336.2 340.6 345.7 353.6 352.4 355.6 364.3 361.9 165.2 366.0 365.8 6 Commercial and industrial IXX.2 208.4 213.0 ^14.4 217.1 216.1 2166 219.7 217.7 220.9 220.8 219.9 7 Real estate 33.6 32.4 32.0 31.8 32.0 31.5 31.4 30.6 31.0 30.X 30.5 30.2 8 Security' 27.8 35.(1 36.2 38.1 39.X 39.7 43.2 43.5 43.2 45.0 4.3.3 4.3.5 9 Other loans and leases 55.3 60.4 59.3 61.3 64.7 65.1 64.5 70.5 70.0 68.6 71.5 72.2 10 Interbank loans 23.0 20.2 21.7 22.7 20.9 22.7 18.9 20.6 18.5 16.5 22.4 25.8 11 C'isli issets"1 27.5 30.9 31 1 31. 32.9 32.4 32.7 34.0 15.9 33.3 33.4 31.3 12 Other assets* 45.1 36.5 37.0 38.X 41.8 4I.X 39.9 39.6 37.6 40.3 39.3 39.6 13 Total assets'1 547.0 581.5 594.7 608.2 626.0 622.0 625.0 633.9 629.0 628.7 634.8 642.2 Liahililics 14 Deposits 174.9 20.3.9 219.5 225.7 238.0 242.7 257.7 252.0 261.7 255.0 242.4 250.4 15 1 raiisaclion 10.8 10.2 10.2 10.3 9.7 10.4 KIS 11.2 12.3 III 10.8 10 16 Noutrailsaction 164.1 193.7 209.3 215.4 22X.2 232.2 246.9 ">40 8 249.3 244.0 231.6 239.5 17 Lai'Lje lime 161.X 191.3 206.5 213.2 224.3 •"8 7 244.5 238.4 246.9 241.6 229.2 237.1 IX Other 2.3 2.4 2.8 2.2 4.0 3.6 2.5 2.4 2.4 2.4 2.4 2.4 19 Borrowings 131.1 125.5 121.6 110.3 143.3 140.1 139.9 143.7 142.1 1447 150.4 141.2 20 From banks in the U.S 34.9 3.1.2 33.0 28.3 34.4 35.3 33.5 3.3.9 36.0 31.2 .36.1 34.3 2 1 From others 96.3 92.3 X8.6 102.1 108.9 KV4.X 106.5 109.8 106.1 11.3.5 114.4 106.8 22 Net due to ivlatcd Ibiuiiin ottiees 169.0 167.1 162.2 150.3 1.39.4 141.1 134.6 148.7 139.0 140.2 150.5 157.6 23 Other liabilities ..." 70.2 X0.4 X3.3 90.8 KKI.fi 94.X 92.9 90.2 X9.4 87.5 92.1 90.5 24 Tolal liabilities 545.3 577.0 586.5 597.1 62 U 618.6 625.1 634.6 632.1 627.4 635.5 639.7 25 Residual (assets less liabilities!7 l.X 4.5 X.I II.1 4.7 3.4 -0.1 -0.8 -3.1 1.2 -0.7 2.6 Not seasonally adjusted Aiscis 26 Bank credit 452.6 493.9 501.2 513.1 5.31.3 525.2 533.7 542.6 542.4 542.1 541.1 54.3.7 27 Securities in bank credit 149.6 I57.X I5X.2 166.3 I7X.0 173.7 178.5 1X0.5 182.1 178.5 178.2 1X1.6 28 U.S. government securities 76.2 87.0 X5.I 8^.X 87.2 86.6 87.3 90.5 91.3 87.9 88.4 92.3 29 Trailing account u a. 2 l.X 19.9 17. 21.4 19.9 186 18.8 19.7 16.2 17.8 19.6 30 Investment account u.a 65.2 65.3 65.7 65.6 66.3 68.5 71.3 71.6 71.7 70.6 72.7 31 Other securities 73.4 70 8 73.1 83.6 90.8 X7.I 91.2 90.1 90.8 90.6 89.8 89.3 32 Trading account n.a 51.3 53.4 60.2 66.3 61.3 62.0 60.2 60.2 59.7 59.5 60.2 19.4 19 7 "•13 24.5 25.9 10 7 ^06 30.3 ^9 1 34 Loans and leases in bank credit2 . . . 103.0 336.1 343.0 346.X 353.3 351.6 355 2 362.0 360.3 »j .36.3.0 362.1 35 Commercial and industrial 1X8.3 208.2 21.3.4 214.3 217.1 215.7 217.3 220.0 2IX.6 220.9 2209 219.5 36 Real estate 33.3 32.9 32.2 3 l.X 32.1 31.5 30.9 30.3 30.X 10 5 30.3 30.0 37 Security1 27.X 35.0 36.2 38.1 39.8 39.7 43.2 43.5 43.2 45.0 43.3 43.5 38 Other loans and leases 53.7 60.0 61.2 62.6 64.4 64.6 63.8 68.3 67.7 67.1 68.5 69.2 39 Inlcitnmk loans n10 20.2 21.7 22.7 20.9 22.7 !X.» 20.6 18.5 16.5 IT 4 25.8 40 Cash assets' 27.5 31.1 32.2 31.5 32.1 3 l.X 31.8 34.0 35.2 33.0 33.4 34.0 41 Other assets' 46.1 36.7 37.8 38.0 42.7 41.2 38.4 40.6 38.6 41.6 40.0 40.5 42 Total assets'' 549.2 581.7 592.7 605.0 626.7 620.6 622.7 637.6 634.4 633.0 636.7 643.8 Uuhililu-!. 4.3 Deposits 175.3 206.5 222.2 225.X 234.8 242.5 251.3 252.5 25X.X 254.0 243.5 254.1 44 Transaction 10.3 10.2 10.9 10.4 9.9 10.2 10.4 10.7 11.6 10.4 10.2 10.X 45 Nonlransaclion 165.0 196.3 211.3 215.5 224.9 232.3 241.0 241.8 247.2 243.6 233.3 243.3 46 Larue time 162.7 193 9 208.5 213.2 221.0 22X.7 238.6 2.39.4 244.8 241.2 230.9 ">40.9 47 Other 2.3 2.4 2.8 2.2 3.9 3.5 24 2.4 2.4 2.4 2.4 " 2.4 48 Borrowings 131.5 122.1 120.4 127.2 1.36.7 134.2 142.4 143.5 147.6 143.5 147.1 138.0 49 l-rom banks in the U.S 34.5 33.3 33.6 29.3 32.1 33.7 33.7 33.5 36.4 30.9 34 0 3.3.6 50 From others 97.0 88.8 86.8 97.9 104.6 100.5 KM.8 110.1 II 1.3 112.7 11.3.1 104.4 51 Net due to related foreign ollices 165.6 I66.X 163.8 159. 148.6 145.8 1.31.5 144.4 131.2 140.1 148.2 154.7 52 Other liabililies '. 72.3 81.0 XI. 9 X9.9 103.1 94.7 92.7 92.9 92.4 91.1 94.0 93.0 5.3 Total liabilities 544.6 576.4 588.3 602.11 623.3 617.2 617.9 633.4 629.9 628.7 632.7 639.9 54 Residual (assets less liabilities)' 4.6 5.3 4.4 l.) 3.4 3.5 4.7 4.2 4.5 4.3 3.9 .3.9 MF.MO 55 Revaluation ^ains on oil-balance-sheet items* n.a. 32.5 33.5 41.7 47.1 43.2 42.6 41.3 40.1 39.2 39.2 39.5 56 Revaluation losses on oll-balanceshect ilems* n.a. 31.6 32.6 4U9 47.3 43.2 42.8 41.7 43.5 41.7 41.9 42.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A21 NOTES TO TABLE 1.26 NOFK. Tables 1.26. ] .27. and 1.2B have been revised to reflect changes in (he Board's H.X group that contained the acquired bank and put inin past data for the group containing the statistical release. "Assets and Liabilities of Commercial Bunks in (lie United Stales." Table acquiring bank. Balance sheet data for acquired hanks are obtained from Call Reports, and a 1.27. "Assets and Liabilities of Large Weekly Reporting Commercial Ranks.' and table 1.2N. ratio procedure is used to adjust past levels. "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," arc no longer 2. Excludes federal funds sold to. reverse RPs with, and loans made to commercial banks being published in the Bulletin. Instead, abbreviated balance sheets for both large and small in the United Stales, all of which are included in "Interbank loans." domestically chartered banks have been included in lublc 1.26. parts C and D. Data are both 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry mcrger-mljusted and break-adjusted. In addition, data from large weekly reporting U.S. securities. branches and agencies ol foreign banks have been replaced by balance sheet estimates ut' all 4. Includes vault cash, cash items in process of Lolleclion, balances due from depository forcign-ielaled insiiiuiions and arc included in table 1.26, pan E. These data are break- insiiiutions, and balances due from Federal Reserve Banks. adjusted. 5. Excludes the due-from position with related foreign otlices, which is included in "Net The not-seasonally-adjusied data for all tables now contain additional balance sheet items. due to related foreign offices." which were available as of October 2. 14%. 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for 1. Covers the following types of institutions in the fifty states and the District of transfer risk. Loans are reported gross of these items. Columbia: domestically chartered commercial banks that submit a weekly report of condition 7. This balancing item is not intended as a measure (if equity capital for use in capital (large domestic): other domestically chartered commercial banks (small domestic); branches adequacy analysis. On a seasonally adjusted basis this item rellects any differences in the Lind agencies of foreign banks, and Edge Act and agreement corporations (foreign-related seasonal patterns estimated for total assets and total liabilities. institutions). Excludes International Banking Facilities. Data are Wednesday values or pro X. Fair value of derivative contracts (interest rale, foitiitn exchange rate, other commodity and iiihi averages ot Wednesday values. Large domestic banks constitute a universe: data for equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. small domestic hanks and foreign-related institutions are estimates based on weekly samples 9. Includes mortgage-backed securities issued by U.S. government agencies, U.S. and on quarter-end condition reports. Data are adjusted for breaks caused by reclassilieations government-sponsored enterprises, and private entities. ol assets and liabilities. 10. Difference between fair value and historical cost lor securities classified as available- The data for large and small domestic banks presented on pp. A17-I9 are adjusted to for-sale under FASB Statement No. 115. Data are reported net of tax cffccls. Data shown are remove the estimated effects of mergers between Ihcse two groups. The adjustment for restated to include an estimate of these tax effects. mergers changes past levels to make them comparable with current levels. Estimated 11. Mainly commcicial and industrial loans but also includes an unknown amount ol credit quantities of balance sheet items acquired in mergers are removed from past data for the bank extended to other than nontiuancial businesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Financial Statistics • August 1997 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1996 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 . Apr. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 545,619 555,075 595,382 674.904 775,371 766,556 775,371 804,644 813,168 836,979 838,366 Financial companies' 2 3 D D e ir a c l c e l r l y p la p c la e c d e d p a p p a e p r e 2 r . (t . o t t a o l t a . l . . 2 1 2 7 6 1 . . 4 6 5 0 6 5 2 1 8 I 1 S 1 . . 9 3 4 8 7 9 2 2 2 0 3 7 . . 0 7 . 0 1 1 8 2 2 7 1 5 0 . . 8 8 1 2 5 9 3 2 6 2 1 9 . . 1 6 4 6 7 2 3 2 5 2 4 8 . . 4 55 0 3 0 3 2 6 2 1 9 . . 1 6 4 6 7 2 3 2 7 3 6 8 . . 9 1 0 3 8 3 3 2 8 3 7 9 . . 1 5 6 0 4 9 4 2 0 4 2 6 . . 2 2 9 1 1 5 4 2 0 4 4 8 . . 7 9 2 2 7 0 4 Nonfinancial companies 188.260 184.563 Bankers dollar acceptances (not seasonally adjusted)^ 5 Total 29,242 25,754 fiv holder 6 Accepting hanks 10.555 12.421 11.7X3 7 Own bills 9.097 10.707 10.462 8 Bills bought from oilier banks 1.458 1.714 1.321 Federal Reserve Banks" 9 Foreign correspondents 1.276 725 410 1(1 Olhcrs 26.364 19.202 17.642 fl.v basis 11 Imporls into United Slates 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. institulions engaged primarily in commercial, savings, and mortgage banking: sales, 5. Data on bankers dollar aeceplanees are gathered from approximately 100 institutions. personal, and mortgage financing; factoring, linance 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 disconlinued operations in bankers dollar acceptances for 3. As reported by financial companies thai place their paper directly with investors. ils own account. 4. Includes public utilities and lirms 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 Loans' Percent per year Dale of change Rale 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 l a e ge 1994—Mar. 24 6.25 1994 7.15 1995—Jan 8,5(1 1996—Jan 8.50 Apr. 19 6.75 1995 8.8.1 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 I994--Jan 6.00 May 9.00 May 8 25 Fcb 6.00 June 9.(10 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 S.75 Ausi 8.25 Dec. 20 8.50 May 6.99 Sept 8.75 Sepl 8.25 June 7.25 Oct 8.75 Oct 8^5 1996—Feb. 1 8.25 July 7.25 Nov 8.75 Nov 8.25 1997—Mar. 26 8.5(1 Aua 7.51 Dee 8.65 Dec 8.25 Scpl 7.75 Get 7.75 |W7—Jan 8.25 Nov 8.15 Feh 8.25 Dec 8.50 Mar 8.30 Apr 8.50 May 8.50 June 8.50 I. The prime rule is one of several base rates that banks use to price short-term business Report. Daia in this table also appear in Ihe Board's H.15 (519) weekly and G.I3 (415) loans. The table shows Ihe date on which a new rate came lo be the predominant one quoted monthly statistical releases. For ordering address, see inside front cover. by a majority o( Ihe twenty-five largest hanks 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 PLMCCIII per year; ligurcs are averages of business day data unless otherwise noted 1997 1997. week ending Hem 1994 1995 1996 Feb. Mar. Apr. May May 2 May 9 May 16 May 23 May 30 MONI-:V MARKEI INSTRUMENTS 1 Federal funds'21 v 4.21 5.83 5.30 5.19 5.39 5.51 5.50 5.61 5.55 5.49 5.52 5.4.3 2 Discount window horrowintr g 3.6(1 5.21 5.02 5.00 5.0(1 5.0(1 5.00 5.00 5.00 5.00 5.00 5.00 Ciiiiimereial papei ' 'h 3 1 -monlh 4.43 5.93 5.43 5.19 5 51 5.61 5.61 5.60 5.60 5.61 5.6"> 5.60 4 3-monlh 4.66 5.93 5.41 5.40 5.56 5.71 5.69 5.72 5.70 5.69 5.70 5.67 5 6-monlh 4.93 5.93 5.42 5.42 5.61 5.79 5.78 5.81 5.79 5.78 5.77 5.75 I'liitim e paper direelh /i/aeetl'^ ' 6 l-monlh 4.11 5.81 5.31 5.27 5.39 5.51 5.53 5.52 5.51 5.54 5.54 5.50 7 3-monlh 4.53 5.78 5.29 5.28 5.42 5.61 5.61 5.62 5.63 5.60 5 60 5.59 8 6-monlh 4.56 5.68 5.21 5.27 5.41 5.60 5.66 5.63 5.69 5.67 5.64 5.63 Hunkers a, i eplaut r.i1-5-1' 9 3-iMoiuh 4.56 5.81 5 11 5.29 5.44 5 62 5.62 5.61 5.65 5.63 5.63 5.59 10 6-month 4 81 5.80 5.31 5.30 5.50 5.71 5.71 5.72 5.74 5.71 5.72 5.6S Ccrn/li tiles of depnsil. seeondars murker' 11 1-monlh 4.38 5.87 5.15 5.31 5.44 5.57 5.58 5.57 5 57 5 59 5 60 5.57 12 3-month 4.63 5.92 5.39 5.37 5.53 5.71 5.70 5.73 5.71 5.70 5.71 5.69 13 6-monlh 4.96 5.98 5.47 5.47 5.69 5.90 5.87 5.91 5.89 5.87 5.86 5.85 14 Eurodollar deposils. 1-monlh' ln 4.63 5.93 5.3S 5.36 5.50 5.70 5.69 5.70 5.69 5.68 5.70 5.69 U.S. Treasury hills _ Secondary millkcl ° 15 3-month 4.25 5.49 5.01 5.01 5.14 5.16 5.05 5.15 5.06 5.05 5 10 4.94 16 6-monlh 4.64 5.56 5.08 5 06 5.26 5.37 5.30 5.34 5.32 5.31 5.29 5.25 17 1 -year 5.02 5.60 5.22 5.23 5.47 5.64 5.54 5.60 5.57 5.5.3 5.51 5.53 Auction average * '' IS 3-monlh 4.29 5.51 51)2 5 00 5.14 5.17 5.13 S ^ 5.14 1.08 5.17 5 03 19 6-monlh 4.66 5.59 5.09 S.05 5.24 5.35 5.35 5.45 5?7 5.30 5.3.S 5.26 20 l->cnr 5.02 5.69 5.23 5.34 5.36 5.66 5.64 5.72 n.a n.a. n.a. 5.55 US. TKl.ASLRY NOTES AND BONDS Ciulslaill mutliriries'2 21 1 -\ear 5.32 5.94 5.52 5.53 5.80 5 99 5.87 5.91 5.90 5.86 5.85 5.86 22 2-\e;ir 5M4 6 15 5.84 5.90 6 22 645 6.28 6.33 6.30 6.26 6.26 6.29 21 1-vear 6 27 6.25 5.99 6.03 6.38 6.61 6.42 6.48 6.44 6 40 6.41 6.44 24 5-year 6 69 6.38 6.18 6.20 6.54 6.76 6.57 6.62 6.57 6.54 6.58 6.60 25 7-year 6 91 6.50 6.14 6.32 6.65 6.86 6.66 6.72 6.66 6.63 6.67 6.69 26 10-year 7.09 6.57 6.44 6.42 6.69 6.89 6.71 6.76 6.70 6.68 6.71 6.75 27 20-ycar 7.49 6.95 6.83 6.77 7.05 7.20 7.02 7.08 7.00 6.98 7.04 7.07 28 30-year ... 7.37 6.88 6.71 6.69 6.93 7.09 6.94 6.98 6.91 6.90 6.96 6.99 Ciimposile 29 Moic lhan 10 yeais (lony-ieniu 7.41 6.93 6.80 6.76 7.03 7.18 7.00 7.06 6.98 6.96 7.02 7.05 STATE AND LOCAL NOTKS AND BONDS Moodxs series'' 30 A;m 5.77 5.80 5.52 5.36 5.55 5.66 5.48 5 ^ 5.45 5.50 5.46 5.43 11 Baa 6.17 6.10 5.79 5.60 5.75 5.85 5.67 5.76 5.65 5.69 5.65 5.62 12 Bund Huyer series" 6.18 5.95 5.76 5.63 5.76 5.88 5.70 5 77 5.71 5.67 5.66 5.67 COKTOKATE BONDS 1.1 Seasoned issues, all industries'^ 8.26 7.83 7.66 7.59 7.83 7.99 7.S6 7.91 7.84 7.83 7.88 7.92 Kuril,!; group 14 A.I.I 7.97 7.59 7 17 7 3) 7.55 7 71 7.58 7.64 7.56 7.55 760 7 64 15 A.I 8.15 7.72 7.55 7.54 111 7 93 7.80 7 85 7 78 7 77 7.82 7.85 16 A 8.28 7.83 7 69 7.59 7.82 7.98 7.86 7.91 7.84 7.83 7.88 7.91 17 Baa 8.63 8.20 8.05 7.94 8.18 8.34 8.20 8.26 S.I8 8.17 8.22 8.25 38 A-raled. reeenllv olfercd utility bonds"1 8.29 7.86 7.77 7.81 8.08 8.23 8.01 7.98 7.97 S.00 8.07 8.02 MI-.MO Dnidend-puie .,«.,;'' 39 Common slocks 2.82 2.56 2.19 1.91 1.91 1.98 1.85 1.91 1.88 1 84 1.83 1.83 1. The daily effecuve lederal funds rate is a weighted average of rates on liudes 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. cinient week: monthly hyures include each calendar day in the monlh. 14. Slate and local govcrnmenl general obligation bonds maturing in twenty years are used 3. Annuali/ed usini: a 360-day year for bank interest. in compiling this imlcv The luenty-bond index has a rating roughly equivalent to Moodys" 4. Rate for ihe Federal Reserve Bank ol New York. A I rating. Based on Thursday ligures. 5. Quoted on a discount bas \5. Daily figures from Moody's Investors Service. Based on yields to maturity on selected 6. An average of offering rates on commercal paper placed by several leading dealers for long-term bonds. liims whose bond ruling is AA or ihe eu,uivaleni 1*6. Compilation of ihe Federal Reserve. This series is an estimate of the yield on recently 7. An average of olfering rates on paper din.•clly placed by finance companies. ofl'ered. A-rated utility bonds with a thirty-year maturity and live years of call protection. S. Representative dosing yields lor aceeptaiices of the highest-rated money center hanks. Weekly dam arc based on Friday quotations. 9. An average of dealer offering ralt>s on uanally traded certificates of deposit. I 7. Standard & Poor's corporate series. Common slock ratio is based o» the 500 stocks in 10. Bid rates for Eurodollar deposits at appi\ iiikiu.1!) 11:00 a.m. London time. Data are the price index. i indication purposes only. NOTH. Some oi the data in this table also appear in the Board's H 15 Ol4| weekly and I 1. Auction date lor daily data: weekly and monthly averages computed on an issue-dale G.I 3 (415) monthly statistical releases. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics • August 1997 1.36 STOCK MARKET Selected Statistics 1996 1997 Indicalor 1994 1995 1996 Sept. Oct. Nov. Dec. Jan. Feh. Mai-. Apr. May Prices and trading volume (averages of daily ligu us)1 Conuimi! .\/<><A />Wro (iudi'Aesi 1 Neu York Slock E.vchailLZCiDcc. 31. 1965 = SO) 254.16 291.18 157 98 160.96 171.54 388.75 191.61 403.58 418.57 416.72 401.00 43.1.36 2 Indu-.! rial 315.32 167.40 451.57 459.69 473.98 490.60 494.38 509.18 524.30 523.08 506.69 549.65 3 Transportation 247.17 270.14 327.30 323.12 312.80 348.32 352.28 359.40 364.15 372.37 366.67 395.50 4 Utility 1(14.96 1 10.64 126.36 121.12 1.10.04 135.88 128.55 131.95 142.88 132.38 126.66 140.52 5 Finance 209.75 238.48 .10.1.94 108.16 324.42 345.30 350.01 361.45 388.75 387.19 364.25 392.32 6 Standard & Poor's Corporation (1941-43 = |()): 460.42 541.72 670.49 674.88 701.46 735.67 743.25 766.22 798.39 792.16 76.1.9.1 833.09 7 American Stock Excliaime (Aug. .11. 1973 - SO)1 449.49 498.13 570.86 564.87 574.46 583.21 582.96 585.09 593.29 593.64 554.13 584.06 Volume nj nmlim; \llttms(iml\ of v/n/rc.sj 8 New York Stock Exchange 290.652 345,729 409.740 400.95 1 420.835 443.521 431.538 526,631 508.199 496.241 473.094 479.907 9 American Stock Exchange 17.951 20.387 22.567 19.449 18.780 22,151 2.1.648 24.019 21.250 19.232 19.122' 19.6.14 Customer linaneing (millions o dollars, end-ol-period balances) 10 Margin credit at broker-dealers4 61.160 76,680 97,400 89,300 88,740 91,680 97,400 99,460 100,000 100,160 98,870 106.010 Free ereilil bahmees m bmkerS 1 1 Mamin accounts'1 14.095 16.250 22.540 17.940 19,890 20.020 22.540 21.870 •"2.2IKI "910 ".700 22.050 12 Cash accounts 28,870 34,340 40.430 .15.360 36,610 36.650 40.430 41.280 40.090 41.1)50 37.560 39.400 Margin requirements (percent of market value and elleclive date)7 Mar. 1 1. 1968 June 8. 1968 May 6. 1970 Dec. 6. 1971 Nov. 24. 1972 Jan. 3. 1974 1.1 Margin Mocks 7(1 K0 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 10 the Board tit Governors. For ordering 6. Series initiated in June 1984. address, sec inside iron! cover. 7, Margin requirements, staled in regulations adopted by (he 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 slocks 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 slocks (formerly 425), 20 trans portal ion (formerly 15 rail), 40 public utility (formerly 60). and collaterali/.ed by securities. Margin requirements on securities are the difference between the 40 financial. market value <IO<) percent! and the maximum loan value of collateral as prescribed by the 3. On July 5. 19X3. (he American Stock Exchange rebascd Us index, cfleclively culling Board. Regulation T was adopted effective Oct. 15. 1934: Regulation U. ellective May I. previous readings in hall. 1936; Regulation G.elleciive Mar. II. 1968: ami Regulation X."effective Nov. I. 1971. 4. Since July 1983. under the revised Regulation T. margin credit at broker-dealers has On Jan. I, 1977. the Board of Governors for the lirst time established in Regulation T the included credit extended against slocks, 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. ?>(). 1985. the Board changed the ing of data tor margin stocks, convertible bonds, and subscription issues was discontinued in required initial margin, allowing it to be (he same as the option maintenance margin required April 19X4, by the appropriate exchange or self-rcgulaiory 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 arc 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 ot dollars Fiscal year Calcncar year Type ot account or operanon 1996 1997 1994 1995 1996 Dec. Jan. Feb. Mar. Apr. May t'.V. hmlstel' 1 Receipts, lotal I.25X.627 1..151.830 1.453.062 I4X.489 150,718 90.293 108.099 22X.5X8 94.493 2 On-budgct 923.601 1.000.751 1.0X5.570 1 19.528 113.841 59.673 7.1.869 1X7.997 63.146 3 Oil-budget 335.026 351.079 367.492 28.961 36,877 30.620 34.230 40.591 31.347 4 Outlays, tolal 1.461.731 1.515,729 1.560.330 129.666 137.354 134.303 129,422 134.650 142.988 5 On-budizet 1.181.469 1,227.065 1.259.872 120.429 110.552 104.964 100.427 107.842 1 12.625 6 Off-budget 279.372 28X.664 300.458 9,237 26 802 29.339 2K.996 26.807 30.362 7 Surplus or Jelicit ( - ). total -201.104 -I63.X99 -IO7.26X IX,823 13.364 -44.011) - 21.32* 93.939 -48.494 X On-budiKl -25X.75X -226.314 -174.302 -901 3.2X9 -45.291 -26.55X 80.155 -49,479 9 Oil-budget 55.654 62.415 67.0.34 19.724 10.075 1.2X1 5.234 13.784 985 Sounc of Jiiiaiicinx ilohtl) 10 Borrowing from ihe public 1X5.344 171.288 129.712 -12.321 -16.776 35.96X 28.X13 -39.001 -19,054 1 1 Operating cash ulecR'ase. or increase [-)) 16.564 -2 007 -6.276 -6.488 -3,785 21.357 -18.274 -55 908 72.532 12 Other:." 1.196 -5.3X2 -I6.I6X -14 7.197 -13.315 10.764 970 -4,984 MEMO 13 Treasury operating balance (level, etrd oi period) 35.942 37.949 44.225 32,794 36.579 15.222 11.496 89 404 16.872 14 Federal Reserve Banks 6.848 8.620 7.700 7,742 6.770 5.258 5.945 52.215 5.174 15 Tax and loan accounts 29.094 29.329 36.525 25.052 29.X09 9.965 27.551 37.189 11.698 I Since ls>90, olf-budget items have been the social security trust tunds (federal uld-age net gam or loss tor U.S. currency valuation adjustment: net gain or loss for IMF loansurvivois insurance and federal disability insurance) and the U.S. Postal Service. ^alualinn adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on ihe U.S. quoin in the SOUKCE. Monthly totals: U.S. Depaitment of the Treasury. Monthly Tiv,i.\in\ Statement of linernational Monetary Fund (IMF); loans 10 the IMF: oiher cash and monetary assets: Receipts and Outlays of ihe U.S. Government; fiscal year totals: U.S. Office of Management accrued interest payable to the public: allocations of SDRs; deposii funds; iniscelkineou1- and Budget, Budget of the U.S. Government. hability (including checks outstanding) and assel accounts; seigniorage; incremeni on gold; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics • August 1997 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS' Millions of dollars Fisca vcar Calendar \var Source or tvpe 1995 1996 1997 1995 1996 HI H2 HI H2 Mar. Apr. May I All sources 1.351,83(1 1.453,062 711,003 656.865 767,099 707,551 108.099 228,588 94,493 2 Individual income taxes, net 590.244 656.417 307.498 292.393 347.285 323.884 36.434 134.291 30.690 3 Withheld 499.927 533.080 251.398 256.916 264.177 279.988 49.994 45.582 48.097 4 Nonwiihheld 175.855 212.168 132,001 45,521 162.782 53.491 6.380 110.878 5.873 ,*i Refunds 85.538 88.897 75.959 10.058 79.735 9.604 19.955 22.177 2.1.300 Corporation income luxes (i Gross receipts 174.422 189,055 92.132 88.302 96.480 95.364 21,059 29.547 5 005 7 Refunds 17,418 17,231 10.399 7.518 9.704 10.053 2.335 2.125 752 X Social insurance taxes and contributions, net . . . 484,473 509.414 261.837 224.269 277.767 240.326 44,197 54,644 50.220 4 Employment taxes and contributions" 451.045 476.361 241.557 211.323 257.446 ^27.777 43.547 50.771 39.835 10 Unemployment insurance 28.878 28.584 18.001 10.702 I8.06X 10.302 311 3.532 9.963 11 Other net receipts1 4.550 4,469 2.279 2.247 2.254 2.245 339 341 422 12 Excise laxes 57.484 54.014 27.452 30.014 25.682 27.016 3.998 4.768 4.808 13 Customs deposits 19.301 18.670 8.848 9.849 8 7H 9.294 1.315 1.492 1.443 14 Estate and gift taxes 14,763 17.189 7,425 7.718 8.775 8.835 1.468 1.308 1.412 15 Miscellaneous receipts"1 28.561 25.534 16.211 1 1.839 12.087 I2.88S 1.962 2.662 1.667 Ot'TI.AYS 16 All types 1,515.729 1.560,330 761,289 752.856 785.368 799,851 129,422 134.650 142.988 17 National defense 272.066 265.748 135.648 132.K87 I32.5991 138,350 19.854 21.872' n6.152 IX Inlernalional a Hairs 16.434 13,496 4.797 6.908 8,074 8.895 1.094 1.654 256 19 General science, space, and technology 16.724 16.709 8.611 7.970 8.897 9.498 1.478 1.395 1 655 20 Energy 4.936 2.836 2.358 1.992 1.356 806 490 28 129 1410 22 Agriculture 9.778 9.159 4019 3/165 ~73' 10.699 26 -206 -205 23 Commerce and housing credit -17.808 10.646 - 13.471 -1.947 -6.886' -6.198 -2.986 -2,314 -6"1 24 Transportation 39.350 39.565 18.193 20.725 18,290 21.205 2.810 2,955 3.320 25 Community and regional development 10.641 10,685 5.073 5.569 5.245 6.192 920 1.067 883 26 Education, training, empkninen!. and social services 54.263 52.001 25,893 26.212 25.979 26.032 3.S43 4.123 3.799 27 Heallh l)541« 119.378 59.057 57.128 59.989 61.466 10.478 10 419 10.374 28 Social •security and Medicare 495.7111 523,901 251.975 251.588 264.647 269.409 43.935 46.823 48.887 29 Income security 220.493 225.989 1 17.190 104.847 121.186' 107.181 23.639 20.624' 22.357 30 Veterans beneliis and services 37.890 36.985 19,269 18.678 18.140 21.107 1.772 3.342 4.333 31 Administration of justice 16.216 17.548 8,051 8.091 9.015 9,595 1,612 1.454 1.875 32 General eovernmenl . ... H 835 1 1.892 5.796 7.601 4.641 6.544 1.447 1.519 484 33 Net inleivsi* -•32.169 241.090 116.169 1 19.348 120.576 122.568 20.410 21.132 21.162 34 Undisiiibuied olVseiling receipts'1 -44.455 -37,620 - 17.631 - 26.995 -16.716 -25.140 -2.810 -2.KO3 -J.128 Functional details do no! sum lo loial outlays for i.alendar year data because revisions to 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. iithly totals have not been distributed among 1'iinetiDns. Fiscal year total for receipts and 5. Includes interest received by trust funds. lays do not correspond to calendar year data heciu> e revisions from the finely ft have not 6. Rents and royalties lor the outer coniincinal shelf, U.S. government contributions for n fully distributed across months. employee retirement, and certain assel sales. . Old-utie, disability. and hospital insurance, anil r.t Iroad retirement accounts. SOURCE. Fiscal year iolals: U.S. Ottiire of M.itugcmenl ami Buik^l. Riulsici <>/ tin- IIS . Federal employee retirement contributions and civil service retirement ami Government, Fiscal Van IWS\ monthly and hall-year totals; U.S. Department ol the Treaibilitj \\i\u\. sury. XUmi/iix Treasury Statement of Receipts ami Outlays oft/ie U.S. (io\rnimeni. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A27 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of mown 1995 1996 1997 Mar. 31 June .1(1 Sepl. 3(1 Dec. 11 Mar. 31 June 30 Scpl. 1(1 Dec. 3 1 Mar. 11 1 Federal debt outstanding; 4.891 4,978 5,001 5,017 5,153 5,197 5.26U 5.357 5,415 2 Public debl secuiitics 4.864 4.951 4.974 4 9X9 5.118 5.161 5 ">""* 5 121 5.381 1 Held by public 3,61(1 1.615 3,653 3.684 3.764 1 719 1J78 V«26 n.a. 4 Held by agencies 1.255 1.317 1.321 1.105 1.354 1.422 1.447 1.497 n.a. 5 Agency securities 27 27 27 28 36 16 IJi .14 14 6 'Held by public 26 27 21 28 28 28 27 27 n.a. 7 Held by agencies (1 (1 0 0 8 S 8 8 n.a. 8 Deljl subject ti> statutory limil 4.775 4.861 4,885 4,901) 5.030 5,07.1 5.137 5.237 5,294 9 Public Jehl securities 4.774 4.861 4.885 4.900 5.010 5.071 5.117 5.237 5.294 II) Other debt1 0 I) 0 0 0 (I (1 (1 (1 MI-.MO I 1 Statutory debl limil 4.91)11 4.90(1 4.900 4.900 5.500 5.500 5.500 5.5(10 5.500 1. Consists of !2uaranlecd debt of U.S. Treasury and oilier leilenil avenues, specilk'd CE. U.S. Departnlent of the Treasury. Mmilhlv Statement of tin- Public Debt of the parlicipatioii eerlilfcales. mites to iulernationat lending organi/aiions. and District of Colum- i/rtft'.i and Trcasniv 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 199.1 1994 1995 1996 02 Q? 04 Ql ! 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 S, ,v,,e 2 1 mere*.!-hearing 4.532.1 4 769 i 4.964.4 5.317.2 5.126.8 5.220.8 5.117.2 5.175.1 3 Marketable 2.989.5 .1.126.0 3.307.2 1 459.7 1.148.4 3.418.4 1,45<).7 1.504.4 4 Rills 714.6 73.1.8 760.7 777.4 77.1.6 761.2 777.4 785.6 ^ Notes 1.764.0 1 H67 0 2.111(1.1 :. i i2.i 2.025.8 2.098.7 2.112.1 2.131.0 6 Runds 495.9 510.1 521.2 .555.0 534.1 543.5 555.0 565 4 7 lnllalion-iiKk;\cd notes' n.a. n a. n.a. n.a. n.a. n.a. n.a. 7.4 X Noninarkelahle" 1.542.9 1.641.1 1.657.2 1.857.5 1 778.1 1.802.4 1.857.5 I.87O.S ') Slak1 and loc.il iitivenimenl series 149.5 132.6 104.5 101.1 97.8 95.7 101.1 104.8 1(1 Fmviun issues'^ 43.5 42.5 40.8 17.4 17.S 37.5 .17.4 36.8 1 1 Government 43.5 42.5 40.8 47.4 37.8 17.5 47.4 36.8 1 2 Public .0 .0 .0 .0 .0 .0 .0 .0 169.4 177.8 1 K1 9 182.4 183.8 184.2 182.4 182.6 14 Government account series^ 1.150.0 1.259.8 1.29".6 1.505.9 1.428.5 1.454.7 1.505.9 1.516.6 15 Non-iniciest-beariii" 3.4 11.(1 24.3 6(1 34.3 4.0 6.0 5.8 By holder ' 16 U.S. Treasury and olher fedeial 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 17 Federal Reserye Banks ' 334.: .174.1 391.0 41(1.9 391.0 .190.9 410.9 18 Private investors 3.047.4 .1.168.0 1 294 9 1.41 1.2 3.347.3 1.186.2 1.411.2 19 Commercial banks 322.2 290.4 278.7 272.0 280.2 274.8 272.0 20 Money niarkel funds SO 8 67 6 71.3 9^ 1 82.1 85.2 92.1 2 1 Insurance companies 234.5 2411.1 241.5 2.14.0 214.4 234.5 214.0 22 Oilier companies ^ 211(1 226.5 228.8 25S.5 21(1.9 249.1 25S.5 n.a. 2.1 Stale and local ueasurics'' ' 590.8 468.1 .144.1 290.0 316.8 298.5 290.0 Individuals 24 Savings bonds 171 9 180.5 185.0 187.0 1 86.5 186.8 187.0 25 Other seem ilies 137.9 150.7 162.7 169 6 161.1 167.0 169.6 26 Horei'ju and international* 623.0 (188.6 862.2 1.111.5 959.8 1.010.9 1.111.5 27 Other miscellaneous invesiois7" 673.1 H55.3 920.6 776.5 895.5 859.4 77(i.5 1. Tbe US. Treasury lirsi issued inflation-indexed noles during the lirsl quarter of I9(>7. X. Consists of invi foreign balances and iniernational account the Unileil 2. Includes (not shown sepaialelyi securities issued m the Rural Electriticalion Administra- Stales. tion, depository bonds, retirement plan bonds, and individual retirement bonds. 9. IIICIULICS saving and loan associations, nonprofit institutions, cretlil unions, mutual 3. Nonmarkelable seiics denominated in dollars, and series denominated in foreign cur- savings banks, eorpe iHe pension irusl funds, dealers and brokers, certain U.S. Treasury rency held by foreigners, deposit accounts, and derally spm 4. Held almost cnincly h\ U.S Ticasur> and oilier federal ajzoneies and trust funds. SOURCE. U.S. Tie:.my Departnieiit. data b> I pe of security. Monthly Slute/runt of the 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual Public Debt of the Uh d States: &dia bv holder. Tirawin Bulletin. holdings', dalii fur other groups are Treasury estimates. fi. Includes Male and local pension fuiuK. 7. In March ]<>%. in a raliMiniiion of series, fully defeased debt backed by nonmarkeiable federal securities was removed from •'Olher mmisicecllaenue ous invetosriors" and added lo "State and local Ueasui ies." The data shown here havebeen revised accordingly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • August 1997 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1997 1997. v.eck cmme llcni Feb. Mar. Apr. Apr. 2 Apr. 9 Apr. 16 Apr. 23 Apr. 10 May 7 May 14 May 21 May 28 OiTkKiHT TRANSACTIONS Bv type „/ iirrra, 1 U.S. Treasury bills 43.025 51.479' 49.329' 57,308 48.797 56.12.3 41.435 47.754' 37.016 35.920 43.207 50.796 Coupon securilies. h\ m;mirilv 2 Five yenrs or less 1 OX.281 114.432' 104.196' 1 IX.69! 101.1X2 97.0X5 105.669 118.815' 1 1 1.939 104.920 99.2X0 1 12 461 3 More Ihan live ye.irs 6f>.9b7 55.743' 49.121' 54 252 50 739 50.914 43.433 51.203' 58.914 66.357 52.694 53.208 4 Federal agency 36.1170 36.352 3X.I94 43.4X7 34.627 3(1.995 36.003 49.033 58.854 37.197 42,299 45.390 5 Morlgage-haeked 45.37.1 41.42(1 41.9X4 42.243 62.772 37,574 34.216 33.270 46.230 47.955 29.544 33.017 By ivpc i>l i utuucrputlv Wiih inlerdcalci broker 6 li.S. Ticasiiry !2:.671 127 691' II 7.0 IX' I2X.4K1 111629 1IX.529 106.416 125.120' 121,200 120.911 II6.1K7 124.211 7 Federal agency I.33X 1.117 I.02X X01 1.215 923 1.200 866 1.021 1.070 X.1X 993 8 Morleaex-backcLi 15.X72 15.314 13.923 17.546 17..354 12.511 11.631 12.747 13.628 15.45(1 10.145 1 1.008 Wiih oilier 9 U.S. Trcasmy 95.602 9<.9fil X5.62K' 101.767 87.0X9 S5.592 K4.I2I 95.652' 86 669 81.2X6 79.093 92.256 Ill Federal asency 34.732 35.235 37,166 42.6X6 33.412 30.072 34.8113 48 168 17.833 36.126 41.461 44.397 1 1 Mortgage-backed 29.5(11 26.105 2X.O6I 24.696 45.4 IX 25.064 22.585 20.523 32.602 32.506 19.398 22.009 Fl 'Tl 'Rts TRANS, \CT1ONS ' Bv rvpc al JWiiiTo/i/f scan-in 12 US.'Treasury hills 296 4*2' 191 2X7' 213 222 9X n a 218 263 247 107 Coupon securities, hv nialurilv 1.5 Five vears or less' ' 1.797 \I5O 1.72(1 2.561 1.407 1 .S3"1 1.798 1.806 1.992 I.7IX 1.439 2.4^8 14 More ihan live vears 13.442 14.67(1 12.314 1.3,205 12.417 P.6I7 10.399 13.467 13.417 I5.IP9 14.953 12.591 15 Federal asie-ncv 0 0 0 (1 0 0 (1 0 0 0 0 0 16 Mongage'-hjcked 0 0 0 0 0 0 0 0 0 0 0 0 OITIONS TRANS «/nnNSJ Bv npc ul muh'ihiiK seiunlv 17 U.S. Treasury bills .' ' 0 (I 0 0 0 0 0 (I 0 0 0 0 18 Five years m less 3.7711 3.469 3,195 2,2X6 3.3HO 3.475 3.319 3.049 4,435 3.659 4,701 1.577 19 More than live years 5.19-6 4.649 4.277 5,513 4.207 3.461 3.5«6 5.360 6.X55 4.412 5.919 2.729 20 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 21 Mongage'-backcd 714 57X 5X4 661 559 917 43X 392 589 X45 393 433 1. Transactions arc market purchases arid sales of securities us reported to the Federal Forward transactions are agreements made in the over-the-counter market lhat 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 aizency debl primary dealers. Monthly averages are basal on the number ol trading days in Ihe month. securities are included when ihe lime io delivery is more than live business days. Forward Transactions arc assumed evenly distributed among the trading days of the report week. contracts for mortgage-backed agency securilies are included when the lime lo delivery is Immediate, forward, and futures transaction'' are reported at principal value, which does not more than thirty business days. include accrued interest: options transactions are reported al the face value of the underlying 3. Futures transactions arc standardized agreements arranged on an exchange. All futures securilies. transactions arc included regardless ol' lime to delivery. Dealers report cumulaiive 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 refeis io pmchases or \,\\c\ ol' securities (other than mortgage-backed federal .igeniA securi- contracts on U.S. Treasury ami ledeval agency securities. ties) for which delivery is scheduled in live businuss days or less jnd "when-issued" NOTK. "n.a." indicates trial data are not published because of insufficient activity. securities that settle on the issue date of ottering. Transactions for immediate delivery n[ morlyagi:- Major changes in the report form tiled by primary dealers induced a break in the dealer data backed agency securities include purchases and sales lor which deliver is scheduled in ihirn business series'as of ihe week cndiim Julv 6. ISW4. days or less. Stripped securiiies are reported al market value by matunly of coupon oru»puv 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 1997 1997. ue;k ending Feb. Mar. Apr. Apr. 2 Apr. 9 Apr. 16 Apr. 23 Apr. 3(1 May 7 May 14 May 21 P.>silions: NI-;I oiTRKiHT POSITIONS1 H\ t\pc <>/ \ccnn!\ 1 U.S. Treasury bills 5.047 14.352 4.082 26.710 16.311 3.724 -7.883 -2.2X8 -2.870 -6.817 - 1 1.566 Coupon seeurities. hy maturilv - 8.602 -20.140 -24.443 - 22.0X8 -22.454 -28.635 -21.512 - 25.842 -17.715 -21.724 -24.070 3 More than live years -20.818 -2X.545 -2X.I53 -3I.32X -29.141 -2X.769 -27.9W -25 X55 - 17.057 -17,1 15 - 18,634 4 Federal aneney 22.896 24.3X0 29.723 26.516 29.322 27.7X1 31.474 31.230 30.592 30.382 25.764 5 Mnrtgage-haeked 39.289 40.292 34.916 36.652 36.155 34.737 34.28fi 33.990 33.163 39.457 3X.26O Nin FuruRF-.s PosnIONS4 Bv type ill ilelivemhle seamn 6 U.S. Treasury hills . -3.437 - 2.494 -2.3OB - 2.625 -2.87(1 -2.225 -1.823 1.464 - 1.009 •1.032 Coupon seeurities. hy maluntv 7 Five years or less 851 3.130 4.01X 3.855 4.792 4.XX.3 4.067 2.375 2.095 2.798 2.753 X More lhail live years - 1 1.153 -5.256 -5.916 -3,686 - 2.955 - 5.794 -5.X22 -9.72X - 11.944 -14.945 - 10.008 9 Federal aiiency 0 0 0 (I (1 0 (1 0 0 0 0 10 Morlgage-baekcd 0 (I 0 (1 0 0 0 0 0 II 0 NKI OITIONS POSITIONS H\ type of deliverable secnnl\ 11 U.S. Treasury bills 0 0 0 0 0 0 (l 0 0 0 0 Coupon seeurities. hv maluri!) 12 Five yeatsor less'. 2.518 -2.532 -2.45X -2.665 -3.793 -2.135 -3.121 -725 -693 16 1.690 13 More than live years 3X2 -433 -1,44X -1.515 -1.592 - 1.1X7 -974 -2.019 -601 776 -486 14 Federal aaeney 0 0 0 0 0 0 I) 0 0 0 0 IS Morlgage'-baeked 1.3X3 1.405 2.457 2.1XII 2.124 2.439 2.472 2.7X5 2.492 2.259 2.36X Finaneing* Reverse repurchase agreements •>98 371 •>X4 574 179 ^64 183 P0 176 493 ^69 X0I 174 540 ">95 pi 19] 8X8 ^89 947 l'i 169 17 Term 4K7.X43 503.6X7 537.456 48(1.771 536.000 532.910 570.364 526.746 563.468 597.502 511.002 Securities bnrnmed IX Overnight and eonlinuins; 205.656 213.214 213.138 214.001 213,709 211.511 211.8(17 215.280 214.(198 214.759 227.741 19 Term ." !" X3.514 77.K77 81.206 74.734 78.199 X1.905 X5.447 K1.124 X4.883 81.694 73.246 Securities received <is pledge 20 Oveinighl and eontinuinsi 3.204 5.937 6.499 7.356 7.58X 8.42X 5.722 4.012 4.094 4.01 1 4.163 21 Term .1 ." 43 n.a. n.a n.a. n.a. n.a. n.a. n.a. n.a. 1X4 203 Repnnliase agreements 22 Overniiihl aird eonlmuint! 604.841 599.64 1 595.167 601.8 17 610.038 609.606 5X6.782 572.343 585.445 607.208 633.677 23 Term .' ." 453.XI4 456.464 4X4.562 415.957 471.07! 475.738 515.661 495.378 518.171 54X.46X 461,055 Securiiies loaned 24 Overnight and eonliuuing 6.8X1 5.321 5.795 5.207 5.289 6.535 5.135 6.387 6.63 1 7.156 6.339 25 Term 6.746 6.057 4.430 4.5X5 4.1X9 3.912 4.595 4.979 4.441 5.165 3.713 Sccunhes pledged 26 Overniyhl and eonlimiirui 57.526 62.775 59.877 63.301 56.67 1 56.443 60.220 65.196 66.523 63.219 64.797 27 Term ." .' 2.245 2.026 2.363 1.653 2.359 2.570 2.325 2.401 3.347 3.945 2,757 Cnllatcnilr.nl liitm\ 28 Overniiihl and eoniinuhi!! n.a. n.ii. n.a. n.a. n.a. n.a. n.a. n.a. 29 Term .1 ' n.a. n.a. it.a. n.a. n.a. n.a. n.a. n.n. n.a. n.a. M) Total Ml-:\?O: Matehed book'1 Securities in 31 Overnight and eonlmuins: 294.19(1 281.495 28 1.975 278.245 176.500 272.708 285,844 293.913 W4.X8X 292.435 322.439 32 Term .' T 4X7.344 487.773 521.831 464.X53 515.407 527.157 551.947 509.093 540.911 575.827 490.500 Securities mil 33 Overnight and eonlinuing 367.612 35X.23O 362.6X7 363.626 357.959 365.058 363.043 364.41 8 V>4.387 363.224 379.851 34 Term ." ' 400.1X8 393.532 418.703 359.443 407.422 409.212 448.247 426.861 451.559 4X0.873 394,500 1. Data for positions and linanciny arc obtained from ivports submilted to ihc Federal 4. Fui Reserve Bank of New York hy llie U.S. go\L'rnineni seeurilies dealers on Us published lisi of position1 prinnu> dealers. Weekly liymes are dose-of-business Wednesday daia. Positions lor calendar 5. O' days of ihe report week are assumed to be constant. Monthly averages are based on the nextbu number of calendar days in the month. bu: 2. Securiiies positions are repoiled al market value. cither pa .i. Net outright positions include immediate and loiward positions. Net immediate posi- data are tions include securiiies purchased or sold (other than mortgage-backed agency securities) (hat 6. Ma have been delivered or are scheduled to be delivered in live business days or less and lend i n«transactions are matched. Matched-book data are included in the financing break- "ulien-isMieJ" sectinlies iliai settle on ihc issue dale orof)"c-ring. Ncl iiumeduie positions for down.1 even above, llie reverse repurchase and cepiiichasL" numbers air no! always equnl mortgage-backed agency securities include securities purchased or sold that have been becauseof ihe "'matching" of securiiies o\' dilferenl values or diHereM lypes of coilalerali/.adelivered or are scheduled to be delivered in thirty business days or less. lion Forward positions, lvllect agreements made in ihe over-the-counicr markei lhul specify NOTF:. "n.a." indicates ihat data arc not published because of insullicienl activity delayed delivery. Forwynl coitliacls loi U.S. Treasuiy securities and federal agencj debt Ma • chanties in the report form tiled by primary dealers induced a break in the dealer claia securities are included when the lime lo delivery is more than five business days. Forward of the week ending July 6. 1994.' eonlracts for mortgage-hacked agency securiiies are included when ihe time lo delivery is more than thirty business days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics • August 1997 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dullarv end ot period 1996 1997 Agency 1993 1994 1995 1996 Nov. Dec. Jan. Fcb Mar. 1 Federal and federally spunsored agencies 570,711 738,928 844,6 ri 925,823 912,100 925,823 939.416 927.400 929.809 2 Federal agencies 45.193 39.1 86 37,347 29.380 29.909 3 Defense Department^ 6 6 6 6 6 6 o 6 4 Export-Import Bank~( 5.315 3.455 2.050 1.447 1.828 1.447 1.437 1.417 1.163 5 Federal Housin;: Administration4 255 116 97 84 84 84 144 146 26 6 Govcrnmenl National Mortgage Association cerlilicatcs ol participation^ n.a. n.a. n.a. n.a. n.a. n a. n.a n.a. n a. 7 Poslal Service'' 9.732 8.073 5.765 n.a. n.a. n.a. in n.a. n tl S Tennessee Valley Authority 29,885 27.536 29.429 27.853 27.991 27.X53 27.831 27.714 27.594 9 United Stales Railway Association'1 n.a. n.a. n.a. n.a. n.a. n.a. n..i n.a n a. 10 Federally sponsored agencies7 523.452 699.742 807.264 896,443 882.191 896.443 9(19.998 898.097 900.820 1 1 Federal Home Loan" Banks 139.512 205.817 243.194 263.404 252.S68 263.404 257.055 255.407 266.456 1 2 Federal Home Loan Moitgage Corporation 49.993 93.279 119.961 156.980 15X.I5S 156.9X0 163.17 161.532 153.621 13 Federal Nalional Mortgage Association 201.1 12 257.230 299.174 331.270 .324.37X 331.270 333.302 332.046 336.174 14 Farm Credit Ranks* . .' c 53.123 53.175 57.379 60 053 59.797 60.051 67.*i[(l 60.075 60.884 1? Student Loan Marketing Association'' 39.7S4 5(1.3 35 47.529 44.763 46.991 44.763 48.78X 48.707 43.105 16 Financing Corporation"1 8.170 8.170 8.170 8.170 K. 1711 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 IX Resolution Funding Corporation'' 29.996 29.996 29.996 29.996 29.996 29.996 29.99d 29.996 29.996 MKMO 19 Federal Financing Bank debt1' 128,187 103,817 78,681 58,172 58,921 58,172 57.635 57,625 53,688 Lemlinx lo federal anil federally sponsored agemies 20 Export-Import Bank S.W9 3.449 2.1)44 1.431 1.822 1.4.31 1.43 1.431 1.357 21 Poslal Service'' 9.732 X.O73 5.765 n.a. n.a. n.a n.a. n.a. n.a. 22 Student Loan Marketing Association 4.760 n.a. n.a n.a. n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority 6.325 3.200 3.200 n.a. n.a. n.a. n.a. n.a. n.a. 24 United Slates Railway Association" n.a. n a n.a. n.a. n.a. n.a. n.a. n.a. n.a. Oilier leiulinn" 2? Farmers Home Administration 38.619 33.719 21.015 18.325 18.325 18.325 17.875 17.875 16.675 26 Rural Electrification Administration 17.578 17.392 17 144 16 702 16.772 16.702 16.702 16.710 15.696 27 Other 45. SM 37.984 29.511 21.714 22.002 21.714 21.627 21.609 21.317 1. Consists of mortgages assumed by the Defense Department between 19.*i7 and I9A.1 Id. 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 lirsl borrowing in October 19X7. 2. Includes participation eertilicalcs reclaimed ;\«- debt beeinninti Oct. 1. !97ft. . The Farm Credit Financial A1*.lance Corporation, established in January 198S lu 3. On-budgel since Sept. 3(1. 197f>. lovide assistance to the Farm Credit S •item, undertook its lirsl borrowing in July I9KS. 4. Consists of debentures issued in payment of Federal Housing Administration insurance 12. The Resolution Funding Corporalion. established by ihe Financial Institutions Reform. claims. Once issued, these securities may he sold privatcK on the secuiiues nutikci. ccuveiy. and Enforcemeni A*ci of ISW undertook its first boi Ains: in October I 5. Certificate1, of participation issued before fiscal year 1969 by (he Government National 1.1. The FFB. which began operation in i°74. is authorized to purchase < bhgalions Mortiiage Association acting as trustee for the Farmers Home Administration, the Department old, or Guaranteed by other federal aszencies. Because FFB incurs debt sc !> for the of Health. Education, and Welfare, the Department of Housing wwl Urban Development, the puipose of lending lo other agencies, its debt is nol included in die main portion ofhte table to Small Business Administration, and the Veterans Administration. avoid double counting. 6. Oil-budget. 14. Includes FFB purchases of agency assets and guaranteed loans; the lall 7. Includes outstanding noncontingcni liabilities: notes, hoiuK and debenluies Includes guaianteed by numeious agencies, with the amounts guaranteed by any one agency generally Federal Agricultural Mortgage Corporation; therefore detail?, do not sum lo total. Some data being small. The Farmers Home Administration entry consists exclusively of agency assets, are estimated. whereas the Rural Eleclrilication Administration entry consists of both agency assets and 8. Excludes borrowing by the Farm Credit Financial Assistance Coiporation. which is siuaiaiileed loans. shown oft line 17. 9. Before late 1982. the association obtained financing through the Federal Financing Bank (FFB). BorrowiHi: 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 1997 Type of i o s r s u u e s e or issuer, 1994 1995 1996 Oil. Nm. Dec. Jan. Feb. Mar.1 Apr.1 May 1 All issues, new and refunding1 15.1.950 145.657 171,222 16,750 14,520 17.4.11 1(1.34(1 12,052 1.3,701 15.390 14,267 Hy type ,./ ;.,.««• 2 General obligation 54.404 56.980 60.409 5,467 5,134 4.755 4,160 4.287 5.491 6,224 5.725 3 Revenue 99.546 KS.677 110.813 11.283 9,386 12.676 6,180 7.765 8.210 9.166 8,542 Hy type ,,[ issuer 4 State ^ 19.186 14.665 13.651 1,769 1.351 663 728 713 4.017 1,126 1.216 5 Special disirict or sialnlory nulhorily2 95 896 9"!.500 113.228 10.923 9.091 12.315 6.306 8.34] 7,206 10.773 8.456 6 Municipality, county, or lownship 38,868 37.492 44.343 4.058 4.078 4,453 3.306 2.998 2,458 3.491 4.595 7 Issues for new capital 105.972 I02..190 112.298 12,113 8.656 12311 6,106 8,409 8,7.16 11,476 9,6.12 fli use <•/ pimeejs 21.267 23.964 26,851 2.693 1.530 2,306 1.974 1 924 2.130 3.264 2.844 9 Transportation 10.836 1 1.890 12.324 2.907 1.164 736 808 639 393 I.K73 1.225 10 Utilities and conservation 10.192 9,618 9.791 1.441 1.102 1.006 749 90! 954 425 1.6(18 1 1 Social wellare 20.289 19.566 24.583 1.573 1.974 3.294 1.265 1.281 2.644 1.929 1 291 12 Industrial aid 8.161 6.58 1 6.287 556 460 1.081 231 481 317 765 462 35.227 30.771 32,462 2.943 2.426 3.888 1.079 3.IK3 2.098 3,220 2.202 I Par amounts of long-term issues based on dale of sale. SOURCE. Securities Data Company beginning January 1990; Investment Dealer'. 2. hiduifes school districts. Digest before then. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars I99(i I9971 Type of issue, ollc'cing. 1994 1995 1996 Sep.. Oct. Nov. Dec, Jan. Feb. Mar. Apr. 1 All issues1 583,240 ii.a. n.a. 60.57S 60..187 57,9.17 48,747 57,186 53,027 62,232 42,58.1 ~> Bonds' 498,0.19 57.1.206 5.1,875 47.498 44,569 .19.S85 44,027 44,980 54,612 16,902 Bx txpc oj offering 3 Pubiic. domestic i 365.222 408.804 386.280 44.658 39.855 38.948 37.108 35.449 35,245 45.886 28.846 4 Private placement, domesiit' 76.065 87.492 n.a. n.a. n.a. n.a. n.j. n,a. n.a. n.a. n,a. 5 Sold abroad 56.755 76.910 74.793 9.218 7.643 5.621 2,477 8,577 9.735 8.746 8.056 By imliiAiry group 6 Manufacturing 43.423 A 1,070 41.959 4.045 5.969 2 7^0 5,(196 4.088 4.791 3.060 2.291 7 Commercial and miscellaneous 40.735 50.689 34.076 3.191 5.010 4.282 1.727 4,926 2.004 1.641 6.144 S Transportation 6.867 8.4.3(1 5.1 1 1 62(1 436 •>7() .141 366 100 324 257 9 Public utility M.322 13.751 8.161 279 1.067 773 680 858 1.476 1.185 47 10 Communication 13.34(1 22,999 13.320 829 802 475 628 1.210 405 2.802 500 1 1 Real estate and linaneial 380.352 4 16.269 358.446 44.908 34.215 36.049 31.113 32.578 16.204 45.619 27.663 12 Stocks" 85.155 100.57.1 n.a. 6,70.1 12.889 1.1,368 9,162 1.1.159 8,047 7.600 5.681 By txpe of op-ring 13 Public prelerred 12.570 10.917 33.208 1.8911 3.855 5.656 5.452 8.048 1 510 2.714 1.937 14 Common ( 47.828 57.556 8.1.052 4,813 9.034 7.712 3.710 5.1 I 1 6.537 4.886 3.744 15 Privale placement 24.800 32,100 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By imlitslrx i^niup 16 Manufacturing 17.798 21,545 t 7S7 l.^KS 1.530 899 608 2.008 I.O14 853 1 7 Commercial and miscellaneous 15.713 27.844 3,08(1 5.752 3.974 2.922 1.827 3.041 2,022 1.058 18 Transporlation 2.201 804 1) 42 367 54 250 258 50 0 19 Public utility 2.214 1.936 n.a. 212 100 210 103 1.847 96 793 570 20 Communication 494 1.077 1 (I 480 4** 23 0 28 0 22 21 Real estate and linaneial 46.713 47.367 2,624 4.928 7.219 5.161 8.292 2.57S 3.774 3.178 I, Figures represcni gross proceeds of issues maturing in more than one yc:». uVy .ire the 2. Monthly dma cover only public oiler ii 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- SoUKCIi. Beginning July 1493. Securitici Data Company and the Bo.ird of Governors of end, inlincorporate transactions, equities sold abroad, and Yankee bonds. Slock data include he Federal Reseive Svsti-m. ownership secuiilies issued by limited partnerships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics • August 1997 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1996 1997 Ocl. Nov. Dec. Jan. Feb. Mar. Apr.1 May 1 Sales of own shares: 871,415 1.149.918 92.730 87,958 122.791 134,460 102,169 101,390 110,721 103,291 2 Redemptions of own shares 699 497 853.460 72.537 65.949 87.949 96.243 73.871 79.976 100.188 76,233 1 Ncl sales1 171.918 296.45K 20.193 22.009 34.843 38.218 28.298 2 1,413 10.532 27.058 2,067.337 2.637.398 2,517,049 2.652.884 2,637,398 2,752,273 2,772,715 2,700,474 2,782,077 2,944,547 5 Cash5 142.572 1 39.396 149.937 146.044 137.973 152.297 153.525 160.570 177.979 180.322 6 Olher 1.924 765 2.498.002 2.367.112 2 S06 X40 2.499.4^5 2.599.976 2.619 189 2.539.906 2.604.098 2.764.225 1. Dala on sales and redemptions exclude money markel mutual funds bui include 4. Market value at end ol period, less current liabilities. limited-maturity municipal bond funds. Data on assei positions exclude hoih ninney market 5. Includes all U.S. Treasury securities and olher 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 yams comprises substantially all open-end investment companies registered with the Securities and distributions and sluirc issue of conversions from one fund Ui another in the same yroup. Exchange Commission. DaUi retted uiKlcrv-uun^s uf newly Uunuxl com pun ie-. iittei iheii 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 1997 Accounl 1994 1995 1996 Q2 0.3 Q4 01 Q2 03 04 01 1 Prolils wilh invcnlory valuation and capital consumpiion adjustment 554.1 604.8 670.2 580.8 630.0 628.1 661.2 672.1 677.3 670.1 712.5 2 Prolils before taxes ' 531.2 598 9 6.39.9 589.6 607.2 604.2 642,2 644.6 635 6 637.1 668.5 3 Prolils-lax liability 195.3 2IX.7 233.0 214.2 224.5 218.7 233.4 236.4 233.4 228.9 ^46.2 4 Prolils at'ler luxrrs 335.9 380.2 4(16.8 375.3 382.8 3X5 5 408.8 408.1 402.2 408.2 422.3 5 Dividends 211.0 227 4 244.2 224.6 228.5 234.7 239.9 243.1 245.2 248.7 254.2 6 Undisinrnueci proiils 124.8 152.8 162.6 150.8 154.3 15(1.8 168.9 I6S.1 1 56.9 159.5 I6S.I 7 Inventory valuation -13.3 -28.1 -8.9 -42.3 -9.3 -8.8 -17.4 -1 1.0 2.0 -9.2 -.4' < Capital consumption adjustment 36.2 34.(1 39.2 33.5 32.1 329 36.4 38.6 39.7 42.2 44.4' SOURCE. U.S. Department of Commerce. Surrey ojCuncnl Business Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A33 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities' Billions of dollars, end of period; not seasonally adjusted 1995 1996 1 ?>6 Q2 01 CM Q2 Q1 04 Assins 1 Accounts leeeivahle. gross" 551.(1 614.6 658.3 586.9 594.7 614 6 62 1.8 611.4 642.(1 658.1 2 Consumer 1 14 8 152.0 154.5 141.7 146.2 152 0 151.9 154 6 154.8 154.5 1 Business 117.6 175.9 198.1 161.8 162.4 175.9 3KO.9 181.7 187.0 19X.I 4 Real estate 78.5 86.6 105.7 XI.4 86.1 86.6 89.] 93.1 10(1.2 105.7 5 LHSS: Reserves lor unearned ineonie 55.0 61.2 59.1 62.1 61.2 61.2 61.5 59.6 58.9 59.1 6 Reserves for losses 12.4 14.1 14.X 11.7 13.8 14.1 14.2 14.1 14.7 14.8 7 Aeenunls reeeivahle. nel 483.5 517.1 584 4 5111 519.7 537.3 146 1 557.7 568.4 584.4 8 All oilier 1X1.4 21(1.7 242.5 19X1 198.1 21(1.7 2128 216.1 226.8 242.5 9 Total assets 666.9 748.0 826.9 7(19.2 717.8 748.0 758.9 773.8 795.2 826.9 I.IAIill.d/hS Afst) CAIJITAI. 10 Bank loans 21.2 21.1 27.8 21.5 21.8 21.1 21.5 26.2 27.5 27.8 1 1 Commercial paper 1S4.6 184.5 192.9 181.1 178.0 184.5 184.8 1 86.9 189.4 192.9 12 Owed lo parent 51.0 62.1 79.2 57.5 59.(1 62 1 62.1 68.4 71.9 79.2 11 Nol elsewhere elassilicd 215.(1 284.7 320.0 264.4 272.1 284.7 291.4 101.1 11 1.5 120.(1 14 All other liabilities 99.5 106.2 109.1 102.1 102 4 106 •> 105.7 10(1.1 102.8 109.1 15 Capital, surplus, and undivided profits 75.7 K7.2 97.9 82.5 84 4 X7.2 91.1 90.9 92.1 97.9 16 Total liabilities and capital 666.9 748.0 826.9 709.2 717.8 748.0 758.9 773.8 795.2 826.9 | I, Include* finance company subsidiaries of bank holding companies bul deduction lor unearned income aim! lo: and banks. Data are amounts carried on the balance sheets of limincv compani 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 ol credit 1994 1995 1996 Nov. Dee. Jan. Feb. Mar. Apr. Seasonal!) adjused 1 Ttital 615,618 691.616 755.827 757,064 755.827 762,3(15 763.525 767,l87r 771,223 2 Consumer 176.085 I9X.86I 21.1.511 212.775 211.511 211.504 211.429 209.744' 211.705 3 Real estate" 78.910 87.077 106.100 104.776 106.100 108.476 1 I0.S41 1 11.710' 114.820 4 Business 360.624 Jos.678 436.014 419.514 416.014 44(1.125 41').255 441.714 442.698 Nol seasonally adjusli-d 5 Total 620,975 697.340 761,756 757,079 761,756 763,714 764,717 769.258' 773,876 6 Consumer 178.999 202.101 7 16.886 214.227 M6 886 215.122 2I1.O5X 20X.6041 211.974 7 Minor vehicles 61.609 70.061 73.484 75.304 73.484 71.911 74.117 71 119 70.766 X Other consumer' 71.221 8 1.98X 80.984 77.868 80.984 80.927 79.798 77.274 79.158 9 Seeurili/.ed motor vehicles1 11 897 11.611 15 644 14.177 35.644 13.976 11.069 12.1(11 16.106 1(1 Seeuriti/ed other consumer4 12.272 16.419 26.774 26.878 26.774 26.286 25.854 "•6 119(1' 25.944 1 1 Real estate- 7X.479 86.606 105.728 104.941 105.728 108.980 1 1 1.265 111.157' II4.X66 12 Business 161.497 408.611 419.142 417.909 419.142 439.612 440.194 447 497 447.016 11 Motor vehicles 118.197 111.277 142.009 142.210 142.(109 145.129 148.114 152.017 150.712 14 Retail loans" 21.514 25.104 27.868 28 825 27.X6X 28 549 28.629 2X.6I7 27.915 15 Wholesale loans'' 15.017 16.427 12.117 12.262 12.117 33.811 16.259 18.846 37.165 16 Leases 61.646 71.546 K 1.804 81.121 81.804 82.969 81.446 84.574 85.612 17 Equipment 157.951 1 77.297 1X4,942 182.229 1,84.942 182.484 181.949 181.155 184 444 18 Loans' 49.158 59.1(19 60.991 60.167 6(1.991 57.977 56.785 57.166 57.4.10 19 Leases 108.595 1 IX. 188 121.951 122.062 121.951 124 507 125.164 125.789 127.014 20 Olher business* .... 61.495 65.363 71.1 1(1 71.999 71.110 71.784 7^718 74.434 74.735 11 Secunli/ed business assets4 25.85i V 696 41 081 19.471 41,081 40.015 17.193 17.871 37.145 22 Retail loiins 4.494 4.721 5.25(1 5.4(12 5.25(1 5.0X6 4.778 4.470 4.1X4 21 Wholesale loans 14.826 21.327 24.712 21.191 24.7.12 24.143 21.699 22.247 21.874 24 Leases 6.532 6.646 11.099 10.678 11.099 10.786 1(1.916 1 1.154 1 1.087 !. Includes linance company subsidiaries of bank holding companies but nol ol retaileis 5. Passengci car fleets and commercial land vehicles lor \Uucli licenses are ivquued. and banks. Data are before deductions lor unearned income and losses. Dala in this table also 6. Credn arising from transactions between manufacturers and dealers, that is. llooi plan appear in ihe Board's G.20 (422) monthly Malisiical release. For ordering address, see inside linancing. front cover 7. Beginning willi the Juin 10% data. nJ and win- 2 bus equipniL Sllil 2. Includes all loans secured hy liens on A\\\ type of real estate, forexainpfe first and |iinior been combined and are no I separ d\ ;t\atlahlf. mortgages and home equity loans. X. Includes loans on connercial act mitts icceivable, lactored commeicial accounts, and 3. Includes personal cash loans, mobile home loans, and loans to purchase olher types ol receivable dealer capital: >null loans used primarily for husinc (arm purpo consumer goods such as appliances, apparel, general merchandise, and recreation vehicles, wholesale and lease paper !'•II mobile homes, campers, and travel inulor- 4. Outstanding balances ol pools upon which .secmincs have been issued; ilicse balances are no lonyer 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 • August 1997 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except ;is noled 1996 1997 Nov. Dec. Jan. Feb. Mar Apr. M.iy Terms and yelds in prim; y and seeoncary markets PRIMARY MARKITIS 1 Purchase price (thousands of dollars) 170.4 175.8 1X2.4 188.1 170.8 172.4 166.6 169.2 172.5 1 77.6 2 Auiouul ol loan (thousands of dollars) 130.8 134.5 139,2 143.3 129 9 1.33,6 130.9 132.1 134.8 137.7 5 1 nan-lo-piicc ratio (percent) 78.8 78.6 7X.2 7X.0 79.3 79.7 80.9 80.8 XI .1 XO.O 4 Maluiuv Hears) 27.5 27.7 27.4 27.5 27.9 2X.2 2X.0 27.X 2X.2 5 Fees and charges (percent of loan amount!" 1.29 1.21 i.21 1.19 101 1.02 1,03 0.99 1.04 1.00 Y/t'U iptn vat per \an I 6 Comiact late1 7.26 7,65 7.56 7.60 7.65 7 6s 7.61 7.72 7 86 7.X5 7 Flfeclivc rate1' 7.47 7 xs 7.77 7.80 7.79 781 7.78 7.X8 8.0.3 X.0I 8 Contract rale (HUD series)1 8.58 «05 8.03 7.73 7,91 7.94 7,94 8.25 X.I 9 8.(18 SHCONOAK1) MARK! Is YiclJ tpi'irvnl per v<v/ 1 9 I-1IA nwvlauaes iSeMion 2113T S.fiX 8.18 8.19 8.14 8.06 8.06 8.1W 8.5s 8,56 X.I 15 10 GNMA secLirilies" 7,96 7.57 7.48 7,19 7.33 7.51 7 ^7 7.69 7.XII 7.59 A m ily in secindary markcIs FK>rK\L NMIONAI MORKIAGI: ASSOCIATION 1 1 loiaf. .". " 222.057 253.51 1 287.052 283.X35 287.052 288.504 2X8.951 292.1 15 295.804 197 021 12 Fll WA insured 27.558 2X.762 30.592 30.744 30.592 30.152 10.1 19 30.100 30.839 11.4.17 13 Ci.menlinnal 194,499 224.749 256,460 253.091 256.460 258.152 258.832 262.015 264.965 265.586 14 Mortgage nansaciions purchased (during period) 62.389 56.59X 68.618 6.805 6.178 4.128 1,029 5.839 6.6X3 4.148 54.038 56.092 65.859 6.533 3.991 4.3X4 4.407 8.299 3.X9X 1.704 16 To sell8 1.820 360 130 4 28 7! (1 1 0 23 FlOiiRAI HOMI- LOW MORHiAGk CORPORATION 17 I'nlal 107.424 137.755 135.271) 137.755 13X.935 1 39.925 144.558 147.190 148.698 IX IIIA/VA insured "276 267 220 223 216 213 208' 205 210 72.410 107.157 137.535 135,047 137,535 138.719 139.712 144.350' 146985 148.4X8 ,l/"Wc'</cr lnin\(i< Hun* idurin^ /'criotll 20 Purchases ' 124.697 98.470 128.566 9.198 9,943 9.507 8.204 7.40.3 8.9X1 X.I 9s 21 Sales 1 17.1 10 85.877 119.702 8.456 9.220 9.204 10 271 6.796 X.209 7.569 ^ Monsauc commiimenis conlracled (durina period)'1 136.067 1 18.659 128.995 9.032 9,905 9.0"! 7.537 7.595 9.746 7.4OX I. Wt'iiihk'd a\oraii(.'s hastxi <m ^al^pk MM vijy^ nl' morigancs oei'iiiuutxi by major mMiiu- <\. Avcngc ncl yields lo iiuesl i lulls mudilied p.iss-llnougli securities Kicked h\ ni.il lender grnups I'm purchase o\ ncwl) hmli liome-.: compiled by ihc Federal Hoiismi: mortgages and guaranteed h\ the .•rnniL-nl National Mortgage Association (GNMAi. cc Bnard in cooperation with ihe FedcRil Depusii Insurance Corporation. assuming prepaymenl in twelve on ppools ol' thirty-year mortgages insured by the 2 Inclludd es allll lo K-dcrnl Housing Ailminisiralion I>I ed h> the Dc|i. l Vet Allairs. sclleo lo obUiin :\ loan. 7 Does noi include standby commiimenK cd. bni includes Maudln ommitments .1. Average clleclivc iniercsl )o;ins eloseo1 lor puicha.se of newly buili homes. converted. iissunimg prc]iaynieni ;it the end o 8. Includes participation lo-ins as well as whole loans. 4. Avemge contract rale on new commitments for conventional tiix m on gages; from US. L). Include^ conventional and govcrnmenl-uiKlerwritien lo.nis. The Kxleral Home Loan Department ol Housing ;uid Urban Development (HUD). Ba-.L-d on tiansaelions on die lirst Mongage Corpoi.uion's mortgage commiimenis and niortL'aue lunsaclions include .iciivily day ol ihe sLihset|uent month. under morigage seuuiucs swap programs, whereas tln:\>)rrcsponding dan lor FNMA 3. Average gross yield on iliirty-ycai'. minimum-tluwnpax menl In si morl!;at:es insuretl exclude swap aclivus hy Hie ledciarHnus'inii Adminis'ualiou (HHM lor immediate delivers in the private secondary maikei. Based on transactions on first da_\ ol subsequent moiilli. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A35 1.54 MORTGAGE DEBT OUTSTANDING Millions ol dollars, end ol' period 1996 1997 Tvpe ol holder anil pioperlv 199.1 1994 1995 Ql O2 O.3 U4 Ql" 1 All holders. 4,269,33 lr 4,475,550r 4.709.386' 4.788.889' 4.882,718' 4.964.129' 5.052.167 5.113.053 Bvl.v/ir ../;>">/><•"> 2 One- lo lour-lamilv resideuees 3.232.753' 3.436.677' 3.633.779' 3.700.246' 3.775.5591 3.S4X.X64' 3.915.412 3.966.770 1 Miillifamilv resideiiees 270.3X0' 275.501' ••S7 761' 292.084' 297.543' 301.943' .310.195 311.28.5 4 Nunlarm. lumresidenlial 683.015' 680.615' 703.226' 71 1.1.55' 723.090' 725.919' 738.301 744.567 5 larm 81.1X3' 82.957' X4.620 85.204' 86.526' 87.405' 88.060 XX.432 B. n,,,' „! Imltler 6 Ma|or (iiKineia! inslilutions 1.7(i3.404' 1.8 11.4 17' 1.8X4.623' 1.897.|9| 1.919.622' 1.945.088' 1.967.948 1 979.222 7 Coinniereial hanks" 940.595 1.004.322 1.080.366 1.(1X7.207 1.099.643 LI 12.914' 1.136.1 28 1.149.716 X One- lo foui-familv S56.660 61 1.391 663.614 665.935 670.756 679.217' 696.333 705.210 ') WullilamiK 58.6.57 39.160 43.842 44.700 45.36X 46.529' 47.057 47 904 10 Nontarm. noniesidential .124.413 3.11.004 349.0X1 352.641 358.956 362.35.1' 367.875 171.372 1 I Farm 2(1.866 22.567 21.X29 23.931 24.563 24.X 15 24.883 25.231 2 Savings mslilunons' 508.437 596.191 596.7X9 602.631 611.715' 628.037 628.337 627.212 3 One- lo loiu-iamilv 470.0(10 477.626 4.82.35 1 4X9.634 49K.2I9' 513.291 513.176 .513.901 14 Mullilumilv 67.367 64.141 61.988 6(1 540 60.6X0' 61.434 61.624 60.718 15 Nonlarni. nonresidenlial 60.765 53.933 52.162 52.155 52.522' 52.991 53.007 52.255 Id Farm 305 289 28X 302 315' 32(1 13 336 1 7 Lile insuranee eomp.imes 224.372' 210.9(14' 2(17.468' 207 15V 208.244' 204.13X: 203.481 202.291 X One- lo lour-lamilv X.591' 7.018' 7 316' 7.273' 7.270' 6.190' 5.817 5.412 'I Mullilamilv 25.376' 23.902' 23.435' 2.1.427' 23.534' 23.155' 23.082 22.968 20 Nonlarm. nonresidenlial 1X0.934' 170.421 167.095' 167.039' 167.800' 165.1196' 164.573 163.765 21 Farm 9.469' 9.563 9.622 9.614' 9.640' 9.697' 10.01 1 10.148 22 Federal am! relaled ageneies 327.014 319.327 113.760 312.950 114.694 311.697 309.757 303.591 23 (iovnnmenl N.ilioiial Moiljage Assoeialion ->•> 6 'i i i -i 6 24 One- lo lour-lamilv 15 6 2 2 i 2 2 6 25 Mulnlamilv .' 7 0 (1 0 0 0 (I (I 26 Fanners Home Adminislrulion4 41.386 41.781 41.791 4 1.594 41.547 41.575 41.596 41.485 27 One- (o lour-lamilv i 5.31(3 13.X26 12.643 12.327 11.982 11.630 11.319 11.311 28 Mullilamilv .' 10.940 1 1.119 11.617 11.636 1 1.6-15 1 1.652 1 1.685 1 1.692 29 Nontarm. nmiresidenlial 5 406 5.670 6.248 6.365 6.552 6.681 6.841 6.969 30 Farm 9.719 10.966 11.782 11.266 1 1.369 11.613 11.752 11.51.3 11 Federal Housing and Veleians' Adminislralions 12.215 10 964 9.809 X419 8.052 6.627 6 244 4.330 32 One- lo loui-'lamilv 5.364 4.753 5.180 4.228 3.861 3.190 3.524 2.335 33 MullilamiK ' 6.85 1 6.211 4.629 4.21 1 4.191 3.458 2.719 1.995 34 Resolulion Tnisi Corpoialion 17.2X4 10.428 1.864 (I 0 0 0 0 15 One- 10 loin -l.lllllK 7.203 5.200 641 (I (I 0 0 0 16 Mullilamilv .' 5 327 2 859 647 0 0 0 0 0 17 Nonlami. lioiiresidenlial 4.754 2.369 525 0 0 0 0 0 "(s r.iini 0 0 0 0 0 0 0 0 19 Fedeial Deposil Insuranee Corporalion 14.112 7.871 4.303 5.555 5.016 4.025 2411 2.2 1 7 4(1 One- lo lour-lamilv 2.367 1.049 492 839 840 675 365 11 i 41 Mullilamilv 1.426 1.545 428 1.099 955 766 413 177 42 Nonlarni. iiotuesidennal 10.319 5.177 .3.3X3 3d 16 3.221 2.5X4 1 65.1 1.508 43 Farm 0 0 0 0 0 0 0 44 Federal Naliona! MorlLMue Assoeialion 166.642 178.059 183.782 183.531 186.041 185.221 184.445 182.556 45 One- lo loui-lamiK ." 151.31(1 162.160 168.12] 167.895 170.572 170.083 169.765 168.436 46 MullilamiK. . . .' 15.332 I5.X99 1.5.660 15.636 15.469 15.1.IS 14.6X0 14.120 47 Federal Land hanks 28.460 28.555 28.428 2X.89I 29.579 29 HP 29.668 48 One- lo Icim -lannlv 1.675 1.671 1.67 1 1.700 1.778 1.740 1.742 1.746 49 Farm 26.7X5 26.885 26.755 27.191 27.614 27.839 27.860 27.922 50 Federal Home Loan MorlOTie Corpoialion 46.892 41.712 4.3.781 44.9.39 44.674 44.668 45.4.37 43.329 s| One- lo lour-lamilv . ..".? 44.345 38.8X2 39.929 40.877 40.477 40.304 40.69 38.301 52 Mullilamily 2.547 1830 .3.8.52 4.062 4.197 4.364 4.746 5.028 5 1 MoiteiL'e pools or uusls' 1.570.666 1.726813 1.861.864 1.905 5 |5 1.963.909 2.0OX.229 2.057.873 2.100.674 54 Cioveinment Nalional Morluaee Assoeialion 414.066 450.934 472.292 47.5.829 4X5.441 497.248 505.977 513.531 55 One- lo lour-lamilv . ..".." 404.864 441.198 461.447 464.6.50 473.950 485.503 493.795 500.651 56 MullilamiK 9.202 9.716 I0.X45 1 1.1 79 11.491 I 1.945 12.182 12.880 57 Federal Home Loan Mormasie C.nporalion 447.147 490X51 51 5.05| 524 127 536.671 54.5.608 554 26(1 562.X9-1 58 One- lo loui-iamilv . . ~. . 442.612 4X7.725 512.238 521.722 534.238 543.341 551.513 560.369 59 Mullilamilv 4.515 3.126 2.8 1.1 2.605 2.433 1 Vi7 2.747 2.52s 60 Federal .Wiliiiiul Moneaue AssoeiaOon 495.525 5111.343 5X2.950 599.546 621.2X5 616.367 650 7X0 663.6fiX il One- lo loui-lamilv 486.804 520.763 569 7 M 585.527 606 ^71 619 869 633.211 645.324 62 Mullilamilv ' 8.721 9.580 13.235 14.019 15.1114 16.49.3 17.57(1 18.344 61 Farmers Home Adminisiralioil4 28 19 1 1 10 9 7 64 One- lo lour-lamilv s I 1 0 (I 0 65 Mullilamilv ' 0 0 0 0 (1 (I 0 0 66 Nonlarm. nonresidenlial 11 9 5 5 4 4 0 0 67 Farm 10 7 4 4 4 18 Privale inorliiaue eonduils 211.901 254.686 291.551 305.803 12(1.5(P l^J.OOl 346. X5.1 360.579 69 One- lo lour'-hiniilv" 179.73(1 202.987 222.892 230.221 239.153 244.527 n49 700 258.000 7(1 Miilulamilv . . . . ' 8.701 14.925 21.279 24.477 26.809 28.141 33.6X9 35.498 71 Noiilarm.nonresidenli.il 25.469 .16.774 47.380 5 1.104 54.54 1 56.3.16 63.464 67.081 72 hum I) 0 0 0 0 0 0 0 73 Individuals and olhers7 608.247' 617.972' 649.140' 673.233' 684 494' 699.1 15' 7 16 590 729.565 74 One- lo lour-lamilv 455.903' 460.419' 485.464' 507 414' 516.239' 529 501' 544.259 5SS.434 75 Mnlldamih ." 65.393' 69.615 73.492' 74.492' 75.758' 76.622' 7X.22I 79.256 76 Nonlarm. noniesidenlial 72.943' 75.257' 77.346' 78.4.11' 79.495' 79.874' 80 88X 81.616 77 Farm 14.0119 12.6X1 12.838' 12.896 13.002 1.1.1 18 15.221 13.2X0 1. MullilamiK di-bl ivlcp.li) loans on Mruciui or mine units. 6. Includes seeuriii/ed home equuy loans. 2. Includes Inuns held h> nondcposil Irusl c . but no! lo.m-. held bv hank irusl 7 Oilier hokleis include mortgage companies, real eslale imesinienl irusts. slale and Ideal oeih! ^uiukrv ^lale unii local lviiremeni I'mick. noinnsured pension liiiuis. civilil unions, and 3. Includes savings b.inks and savings and loan assodahons. finance companies. 4. FniHA-iiLiaiaiHeed securities sold to the Fedeial Financing Bank v\erc rcullocaied from Soi RO.. Based on data from various institulional and government sources. Separation of ImHA moiigage pools in l;mHA morlgage holdings in 19X6:04 because of acLouniing nofifann mori»ai:e debt by lype of properly j| nol reported directly. Liini interpolations and tli.inges b\ the Hinners Home Administralion. extrapolations, when lequired lot Mime i|u.irteis. are estimated in part hy (lie Federal Reserve. !\ Oulsianding principal balances ol morlga^e-haeked -ecui ities insured or guaranteed b\ Line 0i9 from lusiile Mortgage Securities and oilier sources. (lie iiuency iudicaied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics • August 1997 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1996 1997 Hokk'i and l\pe of credit 1994 1995 1996 Nov. Dec Jan. Feb. Mai.' Apr. Seasonally adjusud 1 Tolal 966,457 1,10.1,296 1,19.1,205 1,190.219 1,19,3,205 1,20.3.454 1,210.20,1 1,21.3,254 1,220,91.3 2 Automobile 317.182 350.848 375.182 .374.635 375.182 376.149 376.368 375.514 379.481 3 Revolving 339.337 413.894 467.854 464.267 467.854 476.261 481 288 482.8.19 484.566 4 Other .* 309 939 318.554 350.169 351.317 350.169 351.044 352.548 354.901 356.867 Not seasonally adjusled 5 Tolal 990.247 1.131.881 1,225,101 1,198.107 1,225,101 1,214.650 1,206.901 1,201.976 1,209,260 flv imijnr holder 6 Commercial banks 462.923 507.753 530.081 522 971 530.081 527.210 52I.29T 515.186 520.442 7 Finance companies 134.830 15\6'4 154.468 153.172 154.468 154.860 154.135 150.413 149.924 8 Credit unions 119.594 1.11.939 144.148 143.296 144.148 144.4.12 143 788 144.415 145.791 9 Savinys institutions . 38.468 40.106 44.711 44.786 44.71 1 44.6.36 44.56.1 44.488 44 414 10 Nontinanciu! business'1 86.621 85.061 79.745 69.808 79.745 75.6.11 72.639 74.561 71.922 1 1 Pools ol' seeuriti/cd assets4 147. XI 1 214.398 271.948 264.072 271.948 267.881 270.484 272.913 276.767 By mal'ir lync <>/Vfr<//^ 2 Automobile 319.715 354.055 378.791 378.788 378.791 175.740 374.012 371.519 .174.813 13 Commercial banks 141.895 149.094 153.983 154.817 153.983 153.256 152.311 151.186 151.556 14 Finance companies 61 609 70.626 73.484 75.304 73 484 73.933 74.1.37 73.139 70.766 15 Pools of sccurilizcil assets"1 36.376 44.411 51.171 48.242 51.171 48.473 47.070 46.266 50.670 16 Revolving 357.307 435.674 492.367 467.958 492.367 481.966 479.935 476.818 477.152 17 Commercial banks 182.021 210.298 228.615 217.924 228.615 224.153 217.709 210.157 213.108 18 Nonlinancwl business' 56.790 5.3.525 46.901 39.275 46.901 43.900 41.813 43,979 41.442 19 Pools of seeuritized assets4 96.130 147.934 188.712 183.987 188.712 187.865 192.332 194.823 194.480 20 Other 313.225 342.152 351.943 35] 361 153.943 354.944 352.954 353.639 357 295 21 Commercial banks 139.007 148.361 147.483 150.212 147.483 149.801 151.272 153.84.3 155.778 22 Finance companies . ^ 73.221 81.998 80.984 77 868 80.984 80.927 79.798 77.274 79.158 23 Nonfinancial business" 29 831 31.5.36 32.844 30.533 32.844 31.731 30.826 30.582 10 480 24 Pools of sccurili/ed asseis4 15.305 22.05.3 32.065 31.843 32.065 .11.54.3 31.082 31.824 31.617 1. The Board's series on amounts of cretin covers most short- and intermediaie-tcrm credit }. Includes retailers and gasoline companies. extended to individuals. Data in this table also appear in (he Board's 0,14 (421) monthly 4. Outstanding balances of pools upon which securities have been issued: these balances statistical release. For ordering address, sec inside troni covei. are no longer carried on llie balance sheets oV the loan origiiiulor. 2. Comprises mobile home loans and all other loans lhal 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 nui> be available. secured ui unsecured. 1.56 TERMS OF CONSUMER CREDIT1 Percent per year except us noled 1996 1997 Ocl. Nov. Dei. Jan. Feb. Mar. Apr. INTEREST R.-\Tt-:s Commercial banks2 1 48-monlh new car 8.12 9.57 9.05 9 01 n.a. n.a. 8.92 n.a. n.a. 2 24-monlh personal 1.1.19 1.3.94 1.3.54 n.a. 1.3.62 n.a. n.a. 13.46 n.a. n.a. Credit card plan 3 All accounts 15.69 16.02 15.63 n.a. 15.62 n.a. n.a. 15X8 n.a. n.a. 4 Accounts assessed interest 15.77 15.79 15.50 n.a. 15.52 n.a. n.a. 15.13 n.a. n.a. Auto (iuaitce ronipunk's 5 New car 9.79 11.19 9 84 10.40 10.31 8.60 7.17 7.44 8.08 8.56 6 Used car 11.49 14.48 13.53 13.75 1.1.56 1.3.42 12.93 13.08 13.18 13.29 OTHER TERMS' Maturity (months) 7 New ear 54.0 54.1 51.6 52.5 52.3 52.1 55.1 54.6 53.5 52.8 X Used car '. '.....'. .50.2 52.2 51.4 51.1 50.3 49.9 51.5 51.1 51.1 51.2 Unm-U'-vuUw uitin 9 New car 92 92 91 89 90 90 92 92 90 91 10 Used car 99 99 100 101 102 99 99 99 99 99 Amount finantctl (dollar*) ! 1 New car 15.375 16.210 16.987 17.435 17.719 17.670 17.090 16.837 17.198 17.620 12 Used ear 10.709 11.590 [2.182 12.326 12.393 12.492 12.162 12.202 12.194 12.195 I. The Board's series on amounts of credit covers most sir J intermediate-term credit 2. Data are available for only the second month of each quarter. c\iended u> individuals. Daia in this table also appear in the Bi•ward's G.lu (421) monthly 3. Al auto linance companies. statistical release. For ordeiing 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 US. CREDIT MARKETS' Billions of dollars: quarterly data at seasonally adjusted annual rates 1995 1996 1997 Transaction category or sector I99"1 1991 1994 UO" 1996 03 Q4 01 02 03 04 01 Nontinancial sectors Total net borrowing hv domestic nonfinancial sectors.... 545.6 628.8 621.6 719.7 751.8 571.1 590.2 886.1 715.0 712.7 693.2 762.9 By sector and insmimeiti 2 Federal government 304.0 256,1 115 9 144.4 145.0 86.0 591 2.19.9 62.4 161.3 1 16.5 93,7 3 Ta'asury securities 3O3.X 248.3 155.7 142.9 146.6 X5.6 54.1 242.2 60.2 164.4 119.X 95.2 4 Budget agency securities and mortgages .2 7.8 .2 1.5 -1.6 .4 5.1 -2.1 2.2 -3.1 - 3.3 -1.4 5 Nonlederal 241.6 372.7 465.8 575.1 606.7 485.1 530.9 646.3 652.6 551.4 576.7 669.1 H\ insinmienr 6 Commercial paper 8.6 10.0 21.4 18.1 - 9 IX.l 14.1 30.3 11.0 -16.1 -29.(1 13.1 7 Municipal securities and loans 30.5 74.8 -29.1 -44 2 1.5 -107.2 -12.6 -1 X.9 17.7 -76.2 63.5 26.X 8 Corporate bonds 67 6 75 •> 2.1.3 73.1 72.5 59.X X2.0 60.9 71.5 67.X X9.9 79.4 9 Bank loans n.c.c -13.7 3.6 71.2 99.5 70.2 7.1.0 77.9 40.6 75.0 134.3 31.0 1.18.4 10 Other loans and advances 10.1 -9,4 54.4 59.0 38.8 35.2 61.(1 32.9 26.X 79.4 16.2 34.9 1 1 Mortgages 133.5 157.0 196.4 22X0 331.4 247.7 191.(1 377.9 139.4 268.0 340.2 296.4 12 Home 190.3 1X6.4 203.9 197.1 281.6 219.2 161.4 333.5 ^76 1 248.4 26X5 274.3 1.1 Multifamilv residential -10.7 -5.9 1.7 10.5 18.9 1 1,6 13.1 14,7 IX.l 13.4 29.1 6.3 14 Commercial -47.5 -23,9 - 1 1.0 18.7 27.4 14.8 15.2 27.4 39.7 2.7 39.9 14.3 15 Farm 1.4 .1 I.X 1.7 3.4 2.2 1 1 2.3 5.3 1 5 2.6 1.5 16 Consumer credit 5.0 61.5 126,1 141.6 93.2 156,4 117.5 122.5 91.2 94.2 65.0 SO.2 Hv Itormmm; sector 17 Household, 201.0 256.5 172.4 1X1.9 403.4 41.1.X 3.14.6 473.5 420.3 372.1 347.7 391.4 18 Nonlinaneia! business 19.5 51 9 133.2 2.12.4 190.5 172.5 207.(1 176.4 1X7.X 240.9 156.8 237.5 19 Corporate 34.1 47.7 118.5 197.0 146.4 1118 174.9 110 9 I4X.1 211.8 94.6 189.2 20 Nonlann noncorporate -160 4 2 1 1.9 31.7 40.X 35.2 3.1.1 45.5 32.4 .10.2 55.0 4X.X 21 Farm 1.3 2.0 2.8 i.6 1.1 3.5 -1.(1 .1 7.1 -1.2 7.2 -.4 22 Stale and local government 21.1 62.1 -39.X -39.0 12.9 -101.3 -I0.K •3.6 44.4 -61.6 72.2 40.1 23 Foreign net borrowing in United States 23.7 70.4 -15,1 69 5 67.4 88.3 76.9 49.1 16.6 106.(1 77.8 29.0 24 Commercial paper 5.2 -9.0 -27.3 11.6 10.9 23.7 -I,') -8,5 9.5 38.6 3.8 13.3 25 Bonds 16.8 82 9 12.2 48.1 46.X 5.1.2 72.7 47.9 II.1 59.7 68,4 17.3 26 Bank loans n.e.c 2.3 .7 1.4 8.5 9.1 X.2 11.9 X.7 15.1 4.7 7.8 -.6 27 Other loans and advances -.6 -4.2 - 1.6 -.8 .7 1.1 -3.') II .7 1.1 -2.2 - .9 28 Total domestic plus foreign 569.3 699.3 606.4 789.1 819.1 659.4 667.1 935.3 751.5 818.7 771.0 791.9 Financial seclors 29 Total net borrowing by financial sectors 240.0 291.3 467.7 447.2 531.2 506.3 574.3 330.9 689.3 497.2 607.2 332.8 fly instrument 10 Federal government-related 155.8 165.1 287.5 204.1 231.1 227.7 305.5 I37.X 296.0 240.4 T50 0 112.4 11 Cio\erm»enl-sponsorcd ertlerpnse securilies 40.1 806 176.9 105.9 90.4 101.1 132.1 11,4 126.9 80.0 123.3 10,7 12 Mortgage pool securities 1 15.6 84.7 115.4 98.2 140.7 126.2 173.4 106.5 169.1 160.4 126.X 101, S 11 Loans from U.S. government .0 .0 -4.X .0 .0 .0 ,0 .0 .0 .0 .0 .0 14 Private X4.2 126.0 180.2 243.1 300.1 278.6 26X.S 191.1 393.3 256.X .157.2 220.3 15 Open market paper - .7 -6.2 41.6 42.6 92.7 41.7 55,1 17.8 105.7 85.2 162.0 177.1 16 Corporals' bonds X2.7 119.2 IIX.4 1X5.6 154.1 217,3 175.1 147.6 204.7 120.7 144.1 45.7 17 Bank loans n.e.c 2.2 1.1.0 -12.1 5.6 14.5 8.2 - 1.2 2.1.4 23.5 4.1 5.0 -2,4 18 Other loans and advances — .6 22.4 22.6 14 27.2 4,9 12.11 -1.5 48.6 11.9 31.8 - 16.1 19 Mortgages .6 1.6 9.8 5.9 1 1.4 4.5 7.7 7.7 10.8 12.9 14.1 16.0 flv himnvitfi scctoi 40 Commercial banking 10.0 1.1.4 20.1 22.5 11.6 38.9 -9.7 -32.5 40.1 15.7 -,, , 19.1 41 Saviii«s institutions -7.0 1 1.1 12.8 2.6 26.0 5.1 .11.5 1 1.0 42,1 26.4 24.7 -14.6 42 Credil unions .0 -I ,1 ,1 -I .3 1 41 Life insurance companies 0 .2 .! 1.1 - .1 -.4 2.5 - .4 2.0 .8 44 Governmenl-sponsored enterprises 40.2 80.6 172.1 105.9 90.4 101.5 112.1 11.4 126.9 XI).0 123.3 10.7 45 Federally related mortgage pools 115.6 X4.7 1 15.4 9S.2 140.7 126.2 173.4 1)6.5 169,1 160.4 126 8 101.8 46 Issuers of asset-backed securities (ABSs) 58.5 82.4 69.5 131.2 130.2 164.8 187.5 I 7.1 131.1 1(1 I.X 150.6 52.6 47 Finance companies -1.6 .2 50.2 51.6 4X.4 I9.X 54.1 7.1 6X.4 16,9 21.1 41.0 4S Mortgage companies X.O 0 -11.5 .4 9.9 4.0 -101) 0,0 16.0 1 6 1.x -2.6 49 Real estate investment trusts (RElTs) .1 3.4 13.7 6.0 12.8 4.5 X 1 X.2 11.5 13.7 17.7 18.9 50 Brokers and dealers i 7 12.0 5 - 5 0 -2,0 2.1 7.7 - I.X 13.2 .1.7 4.9 -2.9 5 Funding corporations 13.2 29 24.2 12.0 62.1 .19.4 .4 1.6 70.9 35,0 110.9 106,1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics D August 1997 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued 1995 1996 1997 Transaction category or secloi 1992 1993 1994 1995 1996 Q3 04 01 02 Q4 Ql All sectors 52 Total net borrowing, all sectors 809.3 99(1.6 1,(174.1 1,236.3 1,350.3 1.165.7 1.241.4 1,266.2 1.440.8 1.315.9 1,378.2 1,124.7 5.3 Opai market paper 13.1 -5.1 35.7 74.3 102.6 81 5 65.3 39.6 126.3 1(17.6 1 36.8 2(13.4 54 US. government securities 459.X 421.4 448.1 348.5 376.1 313.7 364.8 377.7 358.4 401.7 366.5 206.2 55 Municipal securities 311.5 74.8 -29.3 -44.2 1.5 -107 2 -12.6 - 18 9 37.7 -76.2 61.5 26.8 56 Corporate and foreign bonds 167.1 277.3 153.9 307.2 273.6 332.2 329.9 256.4 2S7.4 248.2 302.4 142.4 57 Bank loans n.e.c.. .". -9.3 -8.6 62.3 113.5 93.8 91.4 88.6 74.7 113.6 143.1 43.8 135.4 58 Other loans and advances X9 8.7 70.7 61.6 66 7 413 89.1 2S.6 76.1 116.5 45.8 179 59 Mortgages 134.1 160.6 206.2 231.8 342.8 252.2 198.7 385.6 350.1 280.9 354.5 312.4 60 Consumer credit 5.0 61.5 126.3 141.6 93.2 156.4 117.5 122.5 91.2 94.2 65.0 80 2 Fuiuls raised through mutual lunds am corporate equilies 61 Total net issues .112.5 453.9 153.0 156.3 240.1 197.1 228.6 306.3 396.7 91.9 165.4 184.3 62 Corporate equities 10.3.4 130 1 24.1 -17.7 -18.5 -4.9 -15.9 2.5 53.0 -106.3 -23.2 -54.5 63 Nontinancial corporations 27.0 21.3 -44.9 -73.8 -81.2 -92.8 -71.2 -92.4 -27.2 -138.8 -66.4 -K4.8 64 Foreign shares purchased by U.S. resiiicnts 32.4 63.4 4K. I 50.7 57.8 88.2 57.4 K9.8 69.7 32.1 39.5 47.3 65 Financial corporations 44.0 45 4 2(1.9 5 5 4.9 -.3 -i ~> 5.1 10.5 ..<i 3.7 -17.0 66 Mutual fund shares 209.1 3237 128.9 173.9 258.6 202.0 244.5 303.8 343.7 1W.2 188.6 238.8 I. Data in this lable aUo appear in the Board's Z t (7JM» quarterly siatislkal release, lahles F.2 through F.4. For ordering address, see inside from cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rales 1995 1996 1997 1993 1994 1995 1996 Q3 04 01 02 03 0-1 01 Nl-.T Ll-\I)ING IN CkKPli MAKK1-TS: 1 Total net lending in credit markets 809.3 990.6 1,074.1 1,236.3 1,350.3 1.165.7 1,241.4 1,266.2 1.440.8 1,315.9 1,378.2 1.124.7 2 Domestic nonfederal nonlinancial sectors 115.4 76.0 252.X - 98.5 .6 - 82.4 -1X99 -78.0 3.30. -179.9 - 69.9 -113.8 3 Household 86.0 35.3 2X9.9 -19.1 IX. 1 84.6 -93.6 -121.1 3105 -74.7 -42.4 - 1X7.X 4 Nonlinancial corporate busine.ss 27.8 9.1 17.7 -2.4 18.3 -3X.X -12.9 40.4 39.9 14.8 -21 X 81.1 5 Nonfarm noncorporate business -.1 -I.I 2 .3 4 .3 3 4 .4 .4 .4 .5 6 Stale and local governments 1.7 32.6 -55'o -77.4 -36.2 -I2X.5 -83.7 2.4 --20.8 -120.4 -6.2 -7.6 7 Federal government - 1 1.9 - 18.4 -24 n -21.5 -21.9 -24.3 -24 4 -20.7 -15.2 -26.4 -25.1 -18.7 X Rest of The world 98.4 129.3 132 1 272.7 405.6 361.0 157.6 341.1 268.2 484.4 528.5 360.3 l> hinancial sectors 607.4 XO3.7 713.2 1.0X3.7 966.0 911.3 1.298.0 1.023.8 857.7 1.037.8 944 X X96.8 10 Monetary authority 27.9 36.2 31.5 12.7 12.3 -4.1 19.7 16.9 9.4 19.3 3.6 17.5 1 1 Commercial banking 95.3 142.2 163.4 265.9 187.9 244.8 166.2 121.7 190.2 202.0 237.7 310.3 12 U.S.-charlered batiks 69.5 149.6 148.1 1 X6.5 119.7 227.0 1 IX.1 X0.5 125.5 123.6 149.2 210.0 11 Ford"ii bankiii" oilkes in United Slates 16.5 -9.X 75.4 63.3 25.6 36.1 44.2 57.5 72.9 7X.5 92.1 14 Bank holdina companies .*>6 .0 .9 -.3 .3.9 -9.6 4 6 -1.1 5.4 4.X 10.6 1 5 Banks in U.S.-altiiialed areas 3.7 2.4 3.3 4.2 I.I) I.X 7.4 2.1 1.7 J -.6 6.0 16 Savings institutions -79.0 -23.3 67 -7.5 199 32.2 -68 4 34.1 40.5 53.7 -4X.8 -10.0 17 Credit"" unions 17.7 21.7 28.1 16.2 25.5 11.(1 19.5 22.1 34.X 20.3 24 X 15.4 IS Bank personal Irusis und e-skues 8.0 9.5 7.1 -18.8 3.9 -23.7 -20.2 -J.5 4.2 7.X 7.2 •S 2 19 Life insurance companies 79.5 100.9 66 7 99.2 59.7 73.1 51 1 4X.7 2.5 120.1 67.6 56.1 20 Other insurance companies 6.7 27.7 24.9 21.5 24.4 21.9 22 3 23.6 23.7 24.9 25.3 26.2 21 Private pension funds 37.5 49.5 47 7 63.1 46.6 59.9 81.3 69.5 45.4 41.9 29.5 57.6 22 Stale and local government retirement funds 5.9 21.1 30.7 22.7 34.5 2.6 20 •> 62.1 50.6 X.O 17.3 -2.X 23 Money market mutual funds 4.7 20.4 30.0 X6.5 XX.X 30.0 125.1 175.0 1X4 X8.5 73.4 77.1 24 Muiual funds 126.2 159.5 -7.1 51 s 4X.9 58.0 141 9 81.8 54.1 3X..3 21.5 37.9 25 Closed-end funds 18.2 14.4 -3.3 13.1 9.3 16.7 13.2 10.9 9.X 9 0 7.5 6.7 26 (jovernmenl-sponsored enterprises 68.8 8X.6 120.6 X7.9 93.X 50.0 1 X6.5 33.4 122.2 X2.I 137.5 63.2 27 Federally relaied morigage pools 1 15.6 X4.7 1 15.4 98.2 140.7 126.2 173.4 106.5 169. 160.4 126.8 101.X 53.7 79.9 113 0 105.2 154.4 141.4 117.3 120. 75.1 107.3 29 F-inance companies 7.5 - 9.0 68.2 64.2 43 1 50.X 53 7 40.9 41. 55.9 34.3 72.3 M) Mortgage companies .1 .(] -24.0 -3.4 X.2 7.3 -36.4 51.8 -26. < 3.4 4.1 -5.0 31 Real estate investment trusts (RElTsi I.I .6 4.7 2.2 3.0 I.X 3.4 3.4 3. 3.4 2.0 2.0 32 Brokers ;md dealers -I 3 14.8 -44.2 90.1 -17 1 -5.2 1X9.1 -109.0 - 72. 35.5 77.0 -11.8 VI Funding eorporaiions 13.3 -35.6 -16.7 4.3 27.5 3.7 I2.X 1 16.7 15.9 - 11.9 -10.9 26.6 Rni. \no\ or Li,\Bii.iTirs io FINANCIAL. Assr-is 34 Net HUMS through credit markets X09.3 990.6 1.074.1 1.236.3 1.350.3 1,165.7 1,241.4 1.266.2 1,440.8 1.315.9 1.378.2 1.124.7 Other fintuii-iat sources ^ Official foreign exchange - 1.6 .X -5.X X.8 -6.3 9.0 -1.9 -.9 1. -26.6 .7 -22.2 36 Special draw ing rights certificates -2.0 .0 .0 2.2 -.5 8.6 .0 () -1.8 .0 -2.1 37 Treasury current.'v 2 .4 .7 .6 .0 .8 .0 ,0 ) 2.3 -2.3 .4 3X Foreign deposits.' 3.5 -IX.5 54.0 33.5 47 7 - 29.5 IX.2 85.0 9 1 13.2 •8.5 59.4 39 Net interbank transactions 49.4 50.5 X9.X 9.9 -52.7 -13.1 X0.9 -90.4 -54.3 -1 13.0 47.0 - 126.3 40 Checkable deposit anil current. \ 1 13.5 117.3 -9.7 •• 12.X 16 0 -113.1 -69.3 43 3 4.5 107.1 -91.0 123.4 -70.1 96.5 97.0 145.6 1 14.9 'P.S -4.6 84.6 95.6 170.8 42 Large lime deposits -73.2 -23.5 19.6 65.6 113.9 80.2 -.9 55.1 8.1.5 1X2.5 1 34.4 45.X 43 Money market fund shares 4.1 ]47 4 187.7 "'111 X 44 Security repurchase agreements 43.1 71.2 7X.3 1 10.7 3X6 92.6 62.2 -19.3 1 1 7.9 -29.4 X5.3 30.7 45 Corporate equities 103.4 130.1 24.1 -17.7 -1X5 -4.9 -15.9 2.5 53.0 - 106.3 -23.2 -54.5 46 MuliKil fund shares 209.1 323.7 128.9 173.9 25X.6 202.0 244.5 303.8 343.7 198 ' 188.6 ''IN X 47 Trade payables 46.6 5"1 4 91.0 102.5 74.3 147.0 98.7 62.3 137.4 -7.2 104.9 77.3 4X Security credit 4.6 614 -.1 •"6.7 52.4 32.1 50.1 120.6 - 37.7 -4.3 131.1 103.4 49 Life msur.mce reserves 2X.0 36.(1 14.5 44.9 40.0 3.3.1 383 19.(1 32.5 56.6 51.8 5X.5 23.1.X '59 1 '57 7 247.6 274.7 250.8 196 ' 260.9 1IX 3 291.1 308 5 '90 9 S1 Taxes payable 9 7 5.2 3 ~> 1.3 2.6 3.4 -10.2 5.6 6.6 -.6 -8.2 52 Investment in bank personal trusts -7.1 .9 I7X -49.7 12.5 -65.8 - 39.2 -.6 1 1.8 19.2 I9.X 23.5 53 Noncorporate proprietors" equity 29.9 35.5 27 9 33.5 25.7 36.4 29.8 26.0 148 43.2 I8.X 32.2 >-l Miscellaneous 267.8 363.9 290.2 564.0 500.X 510.2 X99.1 596.X 329.6 424.6 652.3 660.2 55 Total financial sources 1,808.3 2.407.0 2,179.5 2.820.6 2.972.9 2,613.9 3.0H7.9 3,192.3 2,724.3 2.696.0 3.279.2 3.028.5 Liabilities not iiieiitificii us as.sets { - | 56 Treasury currency - 2 .. 2 - 2 -.5 -I.I) - i -1.0 -I.I -1. 1.3 -3.1 .3 57 Foreign deposits 2.X -7.0 44.0 26.7 29.7 56.0 19.3 62.7 31.3 XX.6 -61.9 41.6 5X Net interbank liabilities -4.9 4.2 -2.7 -3.1 3.4 12.3 -23.6 10.9 -26.9 -9.2 1 1.6 26.9 59 Securitv repurchase agreements 4.7 46.1 57.3 55.1 2X.9 75.7 30.9 '7 ' 115. -112.0 X5.2 -70.1 W) Tines pavaMe .... !~ 11 9 II.1 X.6 X.7 .1.7 10.3 2.2 -23.2 24.9 9.9 1.2 34.2 61 Miscellaneous -37.9 •- 147.1 -139.2 - 4.3 -71.(1 -45.1 246.3 -147.1 -217.5 -62.4 143.0 -2S.5 Finals HOI mvlntlfj in mwt.\ \-) 62 Federal government checkable deposits .7 -1.5 -4.X -6.0 5 3.8 -13.X 8.6 - 10.5 2X.0 24.2 -3.9 63 Other checkable deposits 1.6 -1.3 -2.8 -3.X -4 0 -3.2 -4.7 -3.X -4.2 -4.0 4.0 -4.1 64 Trade credii 11.3 -4.(1 X.3 -27.3 -32.D -43.3 -149.3 45.1 26.6 - 98.6 - 101.0 -.8 65 Totul identified to sectors as assets 1,824.0 2.506.8 2,211.1 2.775.0 3,021.6 2.659.7 2.981.6 3.212.9 2.786.6 2.854.5 3.232.3 3.101.9 . Data in lliis (able also appear in the Board's Z. 1 (7X0) quarterly statistical release, table1 irporale equities and mutual fund shares. and F.5. For ordering address, see inside Iron! cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics • August 1997 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billion* of dollars, cdtl of period 1995 1916 1997 1993 1995 1996 03 04 01 02 01 04 01 No inaucial sci IIS 1 Total credit market debt owed b\ domestic nonh'naneial sectors 12.538.X 1.1.166.6 13,8X6.3 14.63X.1 13,702.9 I.1.X86.3 14.084.8 14.237.3 14,424.5 14.63X.I 14.K0X.2 2 Federal government 1.116.5 3.492.3 .1.636.7 1781.X 1.601 4 1.656.7 3.717.2 3.691.X 3.731.1 3.7X1 8 3.829 X 3 Treasury securities 1.309.9 3.465.6 3.608.5 1.755.1 3.576.5 5.608.5 3.689.6 3.665.5 3.705.7 3.755.1 3.803,5 4 Budget agency securities and mortgages 26.6 26.7 2X.2 26.6 26 9 28.2 27.6 2X.2 27.4 26.6 26,1 5 Nonlederal 9.202.3 9.674.3 10.249.6 IO.X56.3 10.099.5 10.249.6 10.367.6 10.543.5 10.691.4 I0.X56.3 10.978.4 B\ inurnmctii 6 Commercial paper 117.8 119.2 157.4 156.4 163 3 157.4 174.2 181.7 171.0 156.4 168.7 7 Municipal securities and loans 1.377.5 1.348.2 1.304.0 1.505.5 1.308.2 1.304.0 1.300.8 I.3O6.X 1.290.6 1.105.5 1.114.2 X Coiporale honds 1.229.7 1.253.0 1.326.1 1.198.8 1.305.8 1.326.3 1.341.5 1.359.4 1.376.4 1,198.8 1.418.7 9 Bank loans n.e.c 675.9 749.0 848.4 9 IX.6 824.3 84X.4 X56.4 X78.4 906.3 918.6 953.1 677 1 737.8 796.8 835.6 782.1 796 8 809 1 XI 5 7 811 X 815 6 X4X 7 1 1 Morlua-jes 4.260.4 4.456.8 4.684 X 5 016.2 4.637.6 4 6X4 X 4.762.4 4.X5.1.5 4.911.7 5.016.2 5.07.1.0 12 Home 3.232.X 3.4.16.7 3.633.X 1.915.4 1 594 0 1.631.8 1.700.2 3.775.6 3.X4X.9 3.915.4 3.966.X 11 MullilamiK a-sulcillial 267.4 269.1 279.6 298.5 276.3 279.6 2X33 287.9 291.2 198 5 300.1 14 Commercial 679.(1 66X. 1 686.8 714.2 683.0 6X6.X 693.6 703.5 704.2 7142 717.8 15 Tarm 81.2 8.1.0 84.6 88 1 X4.4 X4.6 X5.2 86 5 87.4 8X.1 XX.4 16 Consume! ircdil 863.9 990.2 1.1.11.9 1.225.1 I.O7X.2 1.1 3 1.9 1.123.0 1.147.9 1.1X1.6 1.225.1 1.202.0 fi\ hnmmiiiti \amr 17 Household 4.287.0 4.659.0 5.040.9 5.444.3 4.932.1 5.040.9 5.103.4 5.216.2 5.529.0 5.444.3 5.482.X 1 757 1 1 896 9 4 P9 1 4 119 7 4 084 1 4 129.1 4 1X4.2 4.219 6 4.287.1 4.119 7 4 191.1 19 Corporate 2.495.7 2.62OX 2.817.X 2.964.2 2.779.6 2.863.9 2.906.1 23)459 2.964.2 20 Nonl'arm noncorporate 1.121.1 1.135.0 I.I 68.7 1.209.5 1.159.9 1.168.7 1.180.0 1 I8X ^ 1.195.2 1.209.5 1.221.6 21 Farm 138.3 141.1 142.7 146.0 144.8 142.7 140.3 145,1 146.2 146.0 14.1.5 22 Stale and local government 1 158.2 I.I 18.4 1.079.4 1.092.5 1.0X3.1 1.079.4 1.080.0 1.087.7 1.075.1 1.092.3 1.104,1 23 Foreign credit market debt held in I'nited States 385.6 .170.4 4.19.9 507.2 419.8 439.9 450.8 459.6 4X7.1 507.2 513.3 24 Commercial paper 68.7 41 4 55.0 65.8 55.8 55.0 51.5 53.4 64.8 65.8 67.9 25 Bonds 230.1 242.3 290.6 117.1 272 4 290.6 302 5 305,3 320.2 337,3 341.7 2f> Rank loans n.e.c 24.6 26 1 14.6 45.7 31 6 14 6 16.x 40.5 41.7 43.7 4.1,5 27 Oilier loans and advances 62.1 60.6 59.7 60.4 600 59.7 60.0 60.4 60.4 60.4 60,3 2X Total credit market debt owed by nonfinancial sectors, domestic and foreign 12.924.3 13,537.0 14,326.2 15,145.3 14,122.7 14.326.2 14.535.6 14.696.9 14,911.6 15.145.3 15,321.5 t-i lanu.ll SCLIOs. 29 Total credit market debt mml liy financial sectors .1.321.7 .1,794.6 4,244.4 4,775.6 4,096.3 4.244.4 4.325.4 4,497.8 4,619.7 4.775.6 4.X57.9 By imrnuwnt 30 Federal govemmenl-relaled ... 1 8X5 •> 2.172.7 2.376.8 2.607.9 2.300.1 2 176.X 2.414.1 2.489.5 2.545.1 2.607.9 2.6.19.7 31 Government-sponsored enterprise securities 52.1.7 700.6 806.5 X96.9 773.5 806.5 814.4 846.1 866.1 X96.9 X99.6 32 Mortgage pool securities 1.556.8 1.472.1 1.570.3 1.71 1.0 1.526.6 1.570.3 1.599.7 1.643.4 1.679.2 .711.0 1.740 1 33 Loans from US. government 4.8 .0 .0 0 .0 .0 .0 .0 II .0 .0 14 Privale 1 416.4 1.621.9 1.867.6 2.167.7 1.796.2 1.867.6 1.911.4 2.008,1 2.074.4 \I677 2.2 IS.2 35 Open market paper 393.5 442.X 48X.0 <iX0.7 47.1.6 4X8.0 491.9 518.5 539.6 5X0.7 624.5 36 Corporate bonds 857.6 973.5 I.I 59.1 I..1H4 1.112.6 1.159.1 1.192.7 1.242.4 1.274.8 1,113.4 1.12 1.2 37 Bank loans n.e.e 67.6 55.3 60.9 75.4 60.3 60.9 66.7 72.4 73.3 75.4 74,1 3X Other loans and advances 108.9 n i .6 115.0 127.0 135.0 1.13.6 145.8 154.2 162.2 158.2 39 Mortgages X.9 1X.7 24 6 36.0 22.7 24.6 26.5 29.2 32.4 16.0 40.(1 BY hornminy *'<"""" 40 Commercial hajiks 84 6 94.5 102 6 1 12 2 1(12.(1 102.6 100.5 10.1.6 106.7 1 12.2 1 14.5 41 Bank holding companies 123.4 133.6 148.0 1^0.0 15(1.1 148.0 141.4 148.4 149 1 150.0 1^2.0 42 .Savings insiituiions 99.6 112.4 1 15.0 141.1 107.2 115.0 II 7.8 I2X.3 114.9 141.1 137.4 43 Ciedil unions 2 .4 4 .4 .4 .4 1 .4 .4 .4 44 Lite insurance companies .6 s 1 6 6 .5 1.1 1.2 I.I 1.6 1.8 45 Goverumeut-s|x)nsored enieipris.es 52x!.5 700.6 X06 5 896.9 771.5 X06.5 XI4.4 X46.I 866.1 896.9 899.6 46 Fedeialh related munmme IXKIK 1.356.8 1.472.1 1.570.3 1.711.(1 1.526.6 1.570.3 1.599 7 1.641.4 1.679.2 1.711.0 1.740.1 47 Ksueiv otas^el-bai-ked vanities < ABSsl 486.7 556.2 6X9.4 819.6 619.X 6X9.4 720.1 751.7 779,1 XI 9.6 X29.1 4S Brokeis and dealers 33.7 34.3 29.3 27.3 27.4 29.3 21.4 24.6 26.1 27,1 26.6 190.5 440.7 49M 540.7 471.9 49^.1 514.4 528.4 540.7 546.9 50 Mortgage companies 30.2 18.7 19.1 29.0 21 6 19 1 24.1 2.8 I 28.5 29.(1 28.3 51 Real estaie investment Musis iREITsi 17.4 .11.1 37.1 49.9 .15.0 37.1 59.1 42.0 45.4 49.9 54.6 52 Funding corporations 169.9 199 3 231.9 296.0 239.9 233.9 245.6 265.6 274.5 296.0 326.6 All seclors 53 Total credit market debt, domestic and foreign. . . . 16.246.0 17,3.11.7 18,570.6 19.920.9 IS.219.(1 18.570.6 18.861.(1 19.194.7 19,531.3 19,920.9 20.179.4 54 Open market paper 5X0.0 621.5 700.4 803.0 692.7 700.4 717.6 753.6 777.4 803.0 861.1 55 US. government securitie.s 5 216.9 5.665.0 6.013.6 6 389.7 5.903.5 6.013.6 6.131.3 6.183.2 6.278.4 6,389.7 6.469.4 5h Municipal securities 1.177.5 1.148 2 1.104.0 1.305.5 1.308.2 1.3(14.0 1.300.X 1 ,106.8 1.290.6 1.305.5 1.114.2 57 Coiporaie and foreign bonds 2.317.4 2.468 8 2.776.0 3.049.6 2.690.8 "> 776 0 2.836.7 2.907.1 2.971.4 1.049.6 3.OSI.6 5S Bank loans n.e.c.. ." 76X.0 830.4 941.9 1.037.7 916.2 941.9 959.9 991.4 1.021,1 1.037.7 1.070.9 54 Other loans and advances 852.9 929.9 991.5 1 058.2 969.1 991 5 1.002.9 1.021.8 1.046,5 1.05X2 1.067.2 60 Mortgages 4.269.3 4.475.6 4.709.4 5.052.2 4.660.3 4.709.4 4.7XX 9 4.X82.7 4.964.1 5.052.2 5.113.1 61 Consumer credit X63.9 990.2 1.13 1.9 1.225.1 1.078.2 I.I 31.9 1.123.0 1.147.9 1.181.6 .225.1 1.202.0 ). Dala in this laMe also appear in the Board's Z. I i7S0) quarter!) statistical release, table L.2 ihmu«li 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 1995 1996 1997 Transaciion category or sector 1993 1994 199.5 1996 03 04 01 02 03 Q4 01 CREDIT MARKEI DEBT OUTSTANDING2 1 Total credit market assets 16,246.0 17,331.7 18,570.6 19,920.9 18,219.0 18,570.6 18,861.0 19,194.7 19,531.3 19,920.9 20,179.4 2 Domestic nonfederul nonlinancial sectors 2.786.5 3.069.6 2.935.9 2.963.1 2.989.6 2.9.35.9 2.891.1 2.972.5 2.949.2 2.96.3.1 2.911.2 3 Household 1 693.0 2.013 3 1.959.1 2.003.8 2.005.5 1.959. 1.928.1 1.999.9 2.002.4 2.003.8 1.958.8 •4 Nonlinancial corporate business 271.5 289.2 286.8 305.1 273.8 286.8 273.6 285.7 291.6 .305.1 301..3 5 Nonfarm noncorporate business 37.0 37.2 37.5 37.9 37.4 37.5 .37.6 .37.7 .37.8 37.9 38.0 fi Slale and local siovernmcnts 784.9 729.9 652.5 616.3 672.9 652.5 651.X 649.1 617.4 616.3 613.0 7 Federal government 231.7 207.5 186.1 164.2 192.2 186.1 180.8 177.0 170.5 164.2 159.5 X Rest of The world I.I47.S 1.254.7 1.561.8 1.967.3 1.493.4 1.561.8 1.653.6 1.718.2 1.840.6 1.967.3 2.063.8 y Financial sectors 12.080.0 12.799.8 13.886.9 14.826.2 1.3.543.9 13.886.9 14.135.5 14.326.9 14.571.0 14.X26.2 15.045.0 10 Monetary authority 336.7 368.2 .380.8 393.1 .370.6 380 8 379.6 386.3 386 2 393.1 397.1 11 Commercial banking .3.090.8 3.254.3 3.520.1 3.708.0 3.47.3.2 3.520.1 3.541.6 3.590.8 .3.643.3 3.708.0 3.778.8 12 U.S.-chartered banks 2.721.5 2.X69.6 .3.056.1 3.175.9 3.023.7 3.056. 3.068.K 3.101.3 .3.135.3 3.175.9 3.220.9 13 Foreign banking ollices in United States 326.0 .337.1 412.6 475.8 401.1 412.6 422.2 4.37.1 454 2 475.8 499.5 14 Bank holdimz companies I7..5 18.4 18 0 22.0 16.9 18.0 16.8 18.1 19.3 22.0 22.5 15 Banks in U.S.-allilialed areas 25. X 29.2 33.4 34.4 31.5 33.4 .33.9 34..3 34.5 34.4 35.9 Id Savings institutions 914.1 920.8 91.3.3 9.33.2 9.30.4 913.3 921.8 9.32.0 945.4 933.2 930.7 17 Credit unions 218.7 246.8 263.0 288.5 258.5 263.0 267.0 276.9 2X2 6 288.5 "'90 9 IS Bank personal trusts and estates 240.9 248.0 229.2 2.33.1 234.2 T>y 1 228.3 229.4 231.3 23.3.] 235.2 ly Lite insurance companies 1.416.0 1.482.6 1.581 8 1.641.5 1.571.2 1.581.8 1.596.2 1.596.7 1.627.0 1.641.5 1,657.6 2(1 Other insurance companies 422.7 446.4 468.7 492.8 46.3.0 468 7 474.5 480.2 4X6.4 492.8 499.3 21 Private pension funds 611.4 659.2 722.3 768.8 701.9 722.3 7.39.6 751.0 761.4 768.8 783.2 22 Stale and loeal government retirement i'unds 423.4 454.1 476 8 511..3 470.6 476.8 491.9 505.0 506.3 511.3 510.2 23 Money market mutual I'unds 429.0 459.0 545.5 634.3 505.7 545.5 595.6 594.7 606.6 634.3 659.1 24 Mutual funds 725.9 718.8 771.3 820.2 7.39.2 771..3 795.9 809.0 818.3 820.2 834.2 25 Closed-end funds 82.0 78.7 92 0 101.3 88.7 9~> ) 94.8 97.2 99.5 101.3 10.3.0 2(> Government-sponsored enterprises 546.4 667.0 755.0 822.5 708.4 755.0 762.7 767.6 7X8.2 822.5 8.37.6 28 Asset-hacked securities issuers (ABSs) 457.9 .52(17 633 7 738.9 595.7 633J 659.7 688.5 7(R5 738.9 742'2 29 Finance companies 482.X 55 1.0 615.2 658.3 594.7 615.2 621.7 633.2 642.0 65X3 672.7 30 Mortgage companies 60.4 36.5 .33.0 41 •> 42.2 -33.0 46.0 39.3 40.2 41.2 39.9 31 Real estate investment trusts (REITs) 8.6 I.3..3 15.5 18.5 14.7 15 5 16.3 17.2 18.0 18.5 19.( 12 Brokers and dealers 137.5 93.3 183.4 166.3 1.36.1 183.4 156.2 138.2 147.1 166.3 163.4 33 Funding corporations 117.9 109.0 115.9 143.4 118.3 115.9 146.5 150.3 152.6 14.3.4 151.1 Rl l.ATION OF LlABILITIKS TO FINANCIAL ASSETS 34 Total vredil market debt 16.246.0 17,331.7 18,570.6 19,920.9 18.219.0 18,570.6 18,861.0 19,194.7 19.531.3 19,920.9 20.179.4 Other liabilities 35 Ollicial foreign exchange 5.3.4 5.3.2 63.7 53.7 65.1 63.7 62.1 61.4 54.3 5.3.7 46.3 36 Special drawing rights certilicales 8.0 8.0 10.2 9.7 10.2 10.2 10.2 10.2 9.7 9.7 9.2 37 Treasury currency 17.0 17.6 18.2 18.2 18.2 18.2 1X2 18.2 18.8 18.2 IX.3 38 Foreign deposits 271.8 324.6 361.4 409.1 35.3.6 .361.4 382.7 382.9 411.2 409 1 42.3.9 39 Net interbank liabilities 189..3 280.1 290.7 2.39.6 267.2 290.7 266.0 249.1 223.6 239.6 204.0 40 Checkable deposits and currency 1.251.7 1.242.0 1.229.3 1.245.2 1.200.3 1.229.3 1.183.3 1.212.3 1.220.8 1.245.2 I.2IX.9 41 Small lime anc! savings deposits "•223 2 2 183 3 ^.279.7 2.376.7 2.255.8 2.279.7 2.342.3 •".340.1 •>..357.4 "> 376 7 2.428.7 42 Large time deposits 391.7 411.2 476.9 590.8 477.5 476.9 493.6 .511.1 557.6 590.8 605.4 43 Money market fund shares 559.6 602.9 745.3 891.1 702.7 745.3 816.9 809.5 838.1 891.1 950.8 44 Security repurchase agreements 471.1 549.4 660.1 698.7 654.8 660. 666.1 692.1 687.6 698.7 717.1 45 Mutual fund shares 1.375.4 1.477.3 1.852.8 2.342.4 1.782.0 1.852.8 1.997(1 2.129.9 2.211.6 2.342.4 2.410.3 4(i Security credit 279.0 279.0 305.7 358.1 286.1 305 7 326 9 .318.6 3178 .358.1 374.4 47 Lile insurance reserves 470.8 505.3 550 •> 590.2 540.6 550.2 555.0 56.3.1 577.2 590.2 604.8 48 Pension lund reserves 4.642.9 4.848.4 5.570.8 6.285.9 5.442.0 5.570.8 5.74X.3 5.883.4 6.013.2 6.285.9 6.396.7 49 Trade payablcs 1.048.: 1.1.39.2 1.241.7 1.316.0 1.192.2 1.241.7 1.229.1 1.264.4 1.263.9 1.316.0 1 3()7 7 50 Taxes payable 84.9 88.(1 89.3 91.9 91.9 89.3 94.3 90.3 92. 91.9 93.6 51 Investment in bank personal trusts 691.3 699.4 767.4 872.0 758 6 767 4 793.7 811.7 829.0 872.0 890 4 52 Miscellaneous 5.176.6 5.462.9 5.928.9 6.274.4 S.757..3 5.928.9 6.067.5 6.089.1 6.I97..3 6.274.4 6.387.6 S3 Total liabilities 35.451.K 37,503.8 41,012.7 44,584.6 40.075.1 41,012.7 41,914.0 42.632.0 43.412.6 44,584.6 45.267.5 Financial assets not included in liabilities ( + > 54 Gold and special drawing rights 20.1 21.1 22.1 21.4 22.1 22.1 22.1 22.0 21.2 21.4 20.9 5.5 Corporate equities 6.280.0 6.263.3 8.389.9 10.090.0 7.972.4 8.389.9 8.875.8 9.170.9 9.3874 10.090.0 10.099.2 56 Household equity in noncorporate business 2.499.5 2.591.5 2.702.8 2.740.7 2.657.7 2.702.8 2.739.5 2.762.5 2.787.2 2.740.7 2.827.2 Liabilities nal identified a\ asscn (-> .57 Treasury currency -5.1 -5.4 -5.8 -6.8 -5.6 -5.8 -6.1 -6.3 -6.0 -6.8 -6.9 58 Foreign deposits 2.32.6 277.8 307.6 3.37.2 299.7 307.6 .32.3.2 .331.1 353.2 337.2 147.6 59 Net interbank transactions -4.7 -6.5 -9.0 -10.8 .1 -9.0 -2.6 -8.0 -1 1.6 - 10.8 -1.8 60 Security repurchase agreements -1.6 55.7 1 10.9 1.39.8 115.1 1 10.9 121 7 141.4 129.7 139 8 125.3 61 Taxes payable ~. 26.8 35.4 44 1 45 1 39.1 44.1 23.9 38.0 41.9 45.1 31.1 62 Miscellaneous -869.9 -959.9 -94.3.3 -1.240.4 - 876.} -993.3 -1.052.2 -1.145.9 -1.140.7 -1.240.4 - 1.18 1.9 Floats not included in awets ( - J 6.3 Federal government checkable deposits 5.6 .3.4 3.1 -1.6 6 .3.1 .0 -34 -1.7 -1.6 -9.7 64 Other checkable deposits 40.7 .38.0 .34.2 .30.1 27.3 34.2 29.6 .31.8 2.3.1 30.1 25.6 65 Trade credit -248.11 -240.7 -268.0 -299.9 -316.7 -268.0 -.319.2 -329.7 - 365.5 -299.9 -367.2 66 Total identified to sectors as assets 45,075.0 47.181.7 52,903.7 58,444.0 51.444.0 52,903.7 54,433.1 55,538.4 56,586.0 58,444.0 59,252.7 I. Data in this table also appear in the Board's Z. I (7X0) quarterly statistical release, tables 2. Excludes corporate equities ami mutual fund shan L. I and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • August 1997 2.10 NONF1NANCIAL BUSINESS ACTIVITY Selected Measures Monthly dala seasonally adjusted, and incle\cs 1992=100. except as noled 199ft 1997' Measure 1994 1995 1996 Sep. Oct. Nov. Dec. Jan. Fell. Mar. Apr. May 1 Industrial production1 108.6 112.1 115.2 116.0 116.2 117.2 117.7 II 7.X 118.4 II 8.8 119.2 119.7 Maii.fl jmi,,,»(!) 2 Products, lolal 106.8 109.1 1 12.0 112.7 1 12.8 114.1 114.1 1 14.2 1148 115 1 1 15.1 115 5 .1 Final, lol.it 1(17.1 11)9.9 112 S 1 11.1 1 13.6 114. S 115.3 115.1 115.6 116.4 lift.4 116 6 4 Consumer LHKILIS 107.4 108.9 1 11)5 1 10.5 110.8 112.1 1 12.7 1 1 1.7 1 1 1.6 1 p i 111.7 1 1 1.6 5 F:i)uipmenl 106.6 1 16.8 1 18.1 1 184 1 19.0 1 19.6 120.8 122.6 121^6 124.6 125.3 6 luleimcu'i.ilc 1(16.1 1075 1(19 4 1 111.6 1 10 2 1 1 1.9 II 1.1 111.6 112.(1 1 11.8 111.8 112 2 7 Matcnals 1 1 1.1 1 16.6 1211.1 121.2 121.7 1 22.2 123.1 12.1.4 124.1 124.5 125.5 126.4 Indian v v"itpi»<!> 8 rviimii 1 .telui ina 109 4 11.1.2 116. .1 117.4 117.6 1 18.5 1 19.2 119.3 120.1 120.5 120.8 121.4 9 Capacity ulili/atioii. nlanuracuiriny (pcrcenir . 13.1 S.I.I X2.1 82.1 82.0 82.4 82.5 82.4 82.6 82.7 K2.6 82.7 Ill Construction contracts' 117.1 121.5 1.1(1.1 13.1.0 126.0 112.0 12s.il 129.0 129.0 132.0 134.0 130.0 1 1 NonailiicuUiiial employmeiv,. lola!4 1 12.11 1 15.(1 117.1 1 17.7' 117 9' 1 18.1 118.1' IIS.6 lists 1 19.0 119.3 119.5 1 2 Goods-producing, lolal 9li9 98.1 98 1 99.1' 99.2' 99.1' 99.5' 99.6 99.9 100 0 100.0 100.0 11 Manufacturing, lotal 96.4 97.2 96.2 97.(1' 974' 97.11 97.1' 97.2 97.2 97.1 97.1 97 1 14 Manulacttirin!:. production workers 97.5 98.7 98.d 9K.7 15 Scrvice-protlueing 1 16.8 120.1 121.1 121.7' 1219' 124.1' 124.4' P4 6 124.9 125.1 125.5 125.7 16 Personal income, lolal 148.2 157.2 165.9 168.1 16X2 169.1 170.5 171.1 172.5 171.5 173.6 n.a. 17 Wages ami salary disbursements 142.6 150.9 159.7 162.2 ur o 161.4 165.1 165 0 167.2 168 4 168.3 n.a. Is ManLilaclininii 1 24.9 1.10.4 1.15 1 136.7 136.7 1.17.4 1.19.2 IIS.6 119.2 140.5 140.8 n.a. 19 Disposable personal income' 149.1 1 57.6 165.5 167.6 167.8 168.8 169.9 170.1 171.4 172.1 172.5 n.a. 2(1 Retail sales1 144.6 151.2 158.6' 159.ft 160 9 160.5 161.1 1619 166 1 165 6 164.1 163.9 Prim" 21 Consumer (1982-84^100) 158 1 158.6 158 6 1 59.1 159.6 160.0 160.2 160.1 22 Producer linishcd goods (19X2 = IO(li 12s.5 127.9 131.3 13 1 .K 112.7 132.6 112.7 112.6 132.2 112.2 131.6 111 5 1. Daia in mis lahlc also appear in the Hoard's G.17 i4lt)l monthly statistical release- For 4. Based on dala hom U.S. Department ofl.ahor, Emplo nt and Ea . Serie the ordering address, sec I he inside from cover. The latest historical revision of the industrial employees only, excluding personnel in die armed forces. production index and the capacity utilization rates uas 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 acf|Usted, Seasonally adjusted dala for changes in the price ments." Federal Risen v Bulletin. \ol. 8"* (February l^97i. pp. (>"-92. The article contains a indexes can be obiaincd Ironi lhe U.S. Deparimenl of Labor. Bureau of Labor Statistics. description of the new aggregation system for industrial production and eapacils utilization. Monthly Lahor Review. For a detailed description of the industrial production index, see "Industrial Production: I<W) N(HF. Bu; Development and Historical Revision." Federal Hc\enr liulU'ihi. vol. 7o (April IW0). pp. mentioned in notes 3 ami <\ can also he IOUIILI m the Survey of Cm rent Business. IS7-2O4. Figures for industrial production lor the latest month are preliminary, and many figures for 2. Ratio of index of production to index of capacin. Based on dala from the Federal the three months preceding! the latest monlli have been revised. See "Recent Developments in Rescue. DR1 McGraw-Hill. U.S. Department ot Commace. and oihei sources. Industrial Capacity ami Utilization." Federal Reserve Bulletin, vol. 1U (June I1W»), pp. 3. Index of dollar value of total construction contracts, including residential, nonresiden- 411-3?. See also "Industrial Production Capacity and Capacity Utilization since I9H7." lial. and heavy enL'ineerinu. from McGraw-Hill Information Systems Company. F.W. Dodce Federal Resen <• Bulletin, vol. 79 (June 1993). pp. 590-605. Dii 2.1 1 LABOR FORCE. EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 1996' 1997' CaleizoiN 1994 1995 1996 Ocl Nov. Dec. Jan Feb. Mar. Apr. May Hot. si.HOLD Si :KVI".'I DATA'1 1 Civilian labor loree: 1 '1.056 132.3(14 1 1.1.943 1 34.616 134.X3 1 135.022 135.848 135.634 136.319 136.098 1.16.173 1 19 651 PI "'64 1 74 167 P4 ^90 1 ^4 4">9 P5 IP P5 118 P5 789 1 ^5 8X7 P6 ^09 * Agiiculluie 3.409 1.441) 3.443 3.450 3.354 3.426 1.468 3.292 3.3.86 3.497 1.4KI 4 Numhev 7.996 7.404 7.236 7.019 7.1X7 7 167 7.268 7.205 7.144 6.714 6.534 5 Rate (percent oi civilian labor force) 6.1 56 5.4 5.2 5.3 5.1 5.4 5.3 5.2 4.9 4.X Hsl AHLIsHMCN 1 St R\ F:V DATA 6 Nunagricullunil payroll employment4 114.172 117,203 119,549 120.248 12(1,450 120,659 120,909 121,162 121..144 121.667 121,805 7 Manufacturing IX.321 IX.468 18.282 1 8.442 18.442 18.448 18.465 IX.475 18.489 1 8.491 18.486 K Mining 601 5X0 570 570 571 571 574 574 572 57.1 575 5.158 5.405 5.467 5.495 5.521 5.541 5.604 5.61)9 5.599 10 Transportation and public utilities 5.99.1 6.165 6.3 1X 6.293 6.303 6.288 6.351 6.376 6.405 6.426 6,4.13 1 | Trade 26.670 27.585 28.178 28.129 28.196 2,8.487 28.515 28.556 28.659 28.662 1 ^ Finiuce 6X10 6.977 6 941 6.949 Y.962 6.971 6.9X0 6 991 7.019 7 01(1 13 Service '.'..'.'..'.'.'.'.'.'.'..".'.'..'.'. . 11.579 33.107 .14.36(1 .14.717 34.X0O 34.884 34.9911 35.(191 15.176 35.322 35.447 14 Government 19.310 19.459 19.4X9 19.494 19.514 19.529 19.547 19.545 19.578 19.550 I. Beginning January ISW4. reflects redesign of airrent population survey and population 4. Includes all full- and part-lime employees who woiked during, or received pay for. Ihe controls from the W90 census. [ia\ period that includes the tuelfih day of the month: excludes proprietors, self-employed 2 Pet-sons sixteen years of usie and ofiier, incUitling Rcsidenl Aimed Force-.. Month I > peisons. household anil unpaul family uorkeis. anil mcmheisol the armed I'orces. Data are ligmes are based on sample data collected timing the calendar week that contains line twdhli adjusted to the March 1992 benchmark, and only seasonall> adjusted data are available al this day: annual dala aie averages of monthly figures. By definition. seasonalit\ does nut exist in time. population ligmo. Soi'KCL. Based on daia horn U.S. Department oi Labor Employment mid FAirnin»s. ?•. Includes sulf-employed, unpaid family, and domestic service uorkers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A43 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION' Seasonally adjusted 1996 1997 1996 1997 1996 1997 02 01 04 or 02 03 04 01 02 03 Q4 01 Oulpil (1992=1001 Capa 1 (pcreci of 1992 milput) Capa.ily ulili/aliin rale (pelccnl)2 1 Total industry 114.8 115.8 117.0 118.3 1.37.9 1.39.2 140.5 141.8 8.3.2 8.3.-3 8.3.5 2 Manufacturing 1 15.8 1 17.2 1 18.4 120.0 141.0 142.5 14.3.9 145.3 82.1 82.3 82.3 82.5 3 Primary processing1 1 1 1.7 113.2 11.3.9 114.7 129.9 130.7 131.5 132.2 86.0 86.6 86.6 86.8 4 Advanced processing4 117.8 1 19. 120.7 122.6 146.5 148.2 150.0 151.9 80.4 80.4 80.4 80.7 5 Durable goods 125.4 127.2 128.1 130.6 152.2 154.5 156.9 159.2 82.4 82.3 81.7 82.0 6 Lumber and products 11 1.0 1 10.5 110.1 111.2 128.2 129.1 1.10.0 131.0 86.6 85 6 84.7 84.9 7 Primarv meials 116.5 1 18.6 1 198 1 19.5 128.7 129.8 131.0 1.12.1 90.5 91.4 91 5 90.4 8 Iroii'and su-d 115.8 117.9 118.6 II 8.0 130.3 131.9 133.5 1.34.9 88 8 89.4 88.9 87.5 9 NonfeiTous 117.2 1 19.4 121.1 121.1 126.5 127.1 127.8 128.6 92.7 93.9 94.8 94.2 10 Indusirial machinery and equipment 154.6 158.9 161.5 166.2 171.6 176.3 181.3 1 86.5 90.1 90.1 89.1 89.1 1) tk-cirical macfiinen, 162.5 164.5 167.2 172.1 193.2 2(10.6 2(18.5 216.4 84.0 82.0 8(1.2 79.6 12 Motor vehicles and pails 1.10.4 131.3 126.0 1.10.2 174.9 176.1 177.3 178.2 74.6 74.5 71.0 7.3.1 13 Aerospace and miscellaneous transportation equipment 83.8 86.7 90.4 93.5 120.6 120.2 1 19.8 119.6 69.5 72.2 75.5 78.2 14 Nondurable noods 105.5 106.5 108.1 108.6 129.0 129.6 130.1 130.6 81.8 82.2 83.0 81.2 \5 Texlile mill products 106.5 107.9 107.4 107.1 129.4 130.1 130.8 1.31.3 82.3 82.9 82.1 81.6 16 Paper and products 107.9 109 ) 109.8 111.2 122.4 122.9 123.3 12.1.6 88.2 88 7 89.0 90.0 1 7 Chemicals and products 107.3 109.2 1 12.4 112.9 137.9 139.2 140.3 141.5 77.8 78.4 80.1 79.8 IS Plastics materials 122.1 125.3 125.3 127.0 129.5 131.8 134.0 1.36.2' 94.1 95.1 93.5 93.3 19 Petroleum products 106.(1 106.7 107.7 108.1 113.5 113.7 113.8 113.9 93.4 93.9 94.6 94.9 20 Minimi 103.5 103.7 103.8 105.8 1 13.7 1 11.7 113.7 113.7 91.0 91.2 91,3 93.0 21 Utilities 1 14.0 1 10.5 1 13.0 1 10.9 124.5 125.2 125.9 126.5 91.6 88.2 89.8 87.7 22 Eleclnc 114.0 1 10.8 1 12.4 1 11.5 122.8 123.6 124.4 125.1 92.8 89.6 90.4 89.1 1973 1975 Previous cycle' La (CMcycle'' 1996 1996 1997 High Low High Low Higli Low May Dec. Jan. Feb.1 Mar.1 Apr. May1' Capaeil} atli/aoon ralc (pcreenl)" 1 Total industry . KM.2 72.6 S7..3 71.1 85.3 78.1 8.3.2 8.3.5 S.3..3 8.3.5 8.3.6 8.3.6 8.3.7 2 Manufacturing 8S.5 70.5 86.9 69.0 85.7 76.6 82.0 82.5 82.4 82.6 82.7 82.6 82.7 3 Primary processing1 41 2 68 ^ 88.1 66 "> 88.9 77.8 85.9 86.6 86.2 86.9 87.2 87.1 87.5 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 80.3 80.8 80.7 80.7 80.7 80.6 80.7 5 Durable goods S9.2 689 87.7 63.9 84.5 73.2 82.2 81.7 81.7 82.1 82.3 82.3 82.5 6 Lumber antl products (SS.7 6} .2 87.9 60.8 916 86 9 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 90.4 90.4 89.4 90.8 9 1.0 9 1.0 92.0 S iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 88.7 87.1 87.7 87.6 87.1 88.5 89.9 9 NonfeiTous 90.S 59.8 91.1 60.1 89.3 74.2 92.5 94.7 91.7 95.0 95.9 94.2 94.7 10 Industrial machinery and equipment 960 74 1 93.2 64.0 85.4 72.4 89 9 89.0 89 ^ 89 1 88.8 89.8 89.6 11 Rleeirical machinery 89.2 64.7 89.4 71.6 84.0 75.1 83.7 80.0 78.9 79.7 80.1 80.0 80.2 12 Motor vehicles and pails 9.1.4 5 1.3 95. 45.5 89.1 55.9 74.6 71.9 74.1 72.7 J2.3 70.3 71.0 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.5 79.2 69.5 76.4 77.1 78.2 79.3 79.8 80.3 14 Nondurable iioods 87.S 71.7 87.5 76.4 87.3 K0.7 81.8 83.5 83.1 K3.2 83.2 82.9 83.0 15 Iexlilc mill products 91.4 60.0 91.2 72.3 90.4 77.7 82.0 81.1 81.0 81.4 82.4 81.4 82.0 16 Paper and products 97.1 69.2 96.1 80.6 93 5 85.0 88.1 90.4 89.3 89 9 90.7 89.9 90.1 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.1 77.7 81.0 80.6 79.7 79.0 79.6 79.3 IX Plaslics materials 102.0 5O.(i 90.9 63.4 97.0 74.8 94.1 94.0 93.5 93.3 93.0 19 Pem>leum products 967 81.1 90.0 66.8 88.5 85.1 93.6 94.2 94.3 95 4 94.9 95.2 97.8 20 Minim? 94.3 KS.2 96.0 80.3 86.S 86.1 90.7 91.9 91.1 93.4 94.6 94.0 95.9 21 Ulililics 96.2 82.9 89.1 75.9 92.6 8.1.4 92.0 89.3 89.3 87.1 86.8 88.6 86.9 22 Electric 99.0 82.7 88.2 78.9 95 0 87.1 93.5 90.3 90.7 88.7 88.1 89.5 87.3 1, Dn!a in ihis uble also appear in !he Board's G.I7 (419) momhl) staiislical release. For 3. Pnm;ir\ processing includes textiles; lumber; paper; industrialclici synihchL the ordering address, see the inside Ironl cover. The latesi historical revision oi the industrial materials; fertilizer materials; petroleum products; rubber and plastics; lone.elav.md !Jlass; 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 RecenI Develop- 4. Advanced processing includes foods: mbacco; apparel: furniture mil fixtures: prinling ments." Federal ftc.u-ivc bulletin, vol. S3 (Februaiy l()97i. pp. 67-92, The article contains a ,.d pu a I pi description of the new aggregation system for industrial production and capacity utilization. and pioducls: machinery; iranspoitution equipment; instruments; and m.ci-11incoLisman11 far- For a detailed description of the industrial production index, see "Industrial Production: 1989 tures, Development mnl Historical Ke\ ision." Federal Ren-rve Bulletin. \o\. 76 (April 1990). pp. 5. Monthly highs. I97S-K0: monihly lows. I9K2. 187-204. o. Monthly highs. 1<->S8-X9: monthly lows. [990-l)|. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted index o\ industrial production to the corresponding inde* o[ capacity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics D August 1997 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly dala seasonally adjusted 1992 1996 1997 Group pro- 1996 por- av». tion May June July AUK. Sept. Ocl. Nov. Dec. Jan. Feb.' Mar.1 Apr. May1' Index(1992 = 100) MAJOR MARKETS 1 Tulal index 11)0.0 115.2 114.8 115.5 115.5 115.8 116.0 116.2 117.2 117.7 117.8 118.4 118.8 119.2 119.7 1 3 Pro F d in u a c l t s prutlucts 4 6 6 0 . . 3 5 1 1 1 12 2 . . 8 0 | p 7 113^1 113.4 113.0 111.3 1 11.6 1 1 1 1 4 4 . . 8 1 1 1 1 1 5 4 .3 .1 1 11 1 5 4 .1 .2 1 1 1 1 4 5 . . 8 6 1 1 1 1 6 5 4 .3 1 1 1 1 5 6 . . 3 4 1 1 1 1 5 6 . . 5 6 4 Consumer goods, lota] 29.1 110.5 110.0 110.8 110.7 110.1 110.5 110.8 112.3 1 12.7 1 1 1.7 1 1 1.6 112.2 II 1.7 11 1.6 5 Durable consumer goods 6.1 126.2 126.9 129.9 129.7 128.0 127.1 124.5 127.1 128.4 127.3 129.2 131.1 127.4 128.4 6 Automotive products 2.6 125.8 126.9 130.0 1.32.1 128.7 127.7 122.0 127.4 127.2 129.6 131.0 131.7 125.0 126.2 7 Autos and trucks 1.7 IP 6 H5 0 137 7 145 7 118 7 114 6 P57 1118 115 5 118 7 138 9 118 9 P7 1 P9 5 S Autos, consumer .9 120.2 129.0 133.3 137.8 1.12.5 129.9 112 3 123.5 1 15.9 120.1 122.3 123.3 1 16.0 117.7 9 Trucks, consumer .7 147.2 147.3 148.7 161.3 152.3 146.6 147.4 151.4 164.9 167.0 165.0 163.8 146.1 149.6 10 Aulo parts and allied sioods .9 1 14.5 114.(1 117.4 112.4 113.5 116.2 114.4 116.4 114.0 1 15.5 118.1 119.7 119.2 118.9 11 Oihcv \ 3.5 1 '6 3 P6 7 P9 7 P8 0 P7 5 P6 6 P6 "> P6 8 P9 1 125.5 127.8 130.6 129.0 129.8 12 Appliances, televisions, anil air conditioners 1.0 173.0 172.0 180.1 181.1 175.9 174.2 176.5 176.9 181.1 171.2 179.5 183.6 180.8 182.7 13 Carpeting and furniture .8 1(19.9 112.4 114.6 107.0 lll.l 110.5 108.6 110.7 109.3 106.0 106.9 112.4 108.5 110.8 14 Miscellaneous home goods 1.6 107.9 11)8.1 11)8.7 11)8.5 108.0 107.6 106.5 106.4 109.6 109.2 109.2 109.9 109.9 109.5 15 Nondurable consumer goods 23.0 106.5 105.8 106.0 106.0 105.6 106.3 107.3 108.5 108.7 107.8 107.2 107.5 107.8 107.4 16 Foods and tobacco 10.3 106.1 105.3 105.8 105.9 105.4 106.1 106.6 107.2 108.2 107.7 108.0 108.8 107.7 107.4 17 Cloihin« 2.4 95.5 95.9 95.6 95.4 95.4 95.1 95.5 95.0 94.9 94.0 93.8 94.2 94.7 9.3.7 IX Chemical products 4.5 1 12.7 1 10.5 1 10.6 1 12.6 1 11.3 11.1.5 1 15.5 1 17.3 1 18.8 1 17.9 116.2 1 15.1 116.2 115.8 19 Paper products 2.9 101.1 10(1.7 100.2 101.4 101.8 101.9 102.9 102.9 10.3.0 101.1 101.5 102.3 102.5 102.9 20 Enemy 2.9 112.0 112.8 113.2 109.1 109.4 109.4 1 10.7 115.3 1 1 1.8 110.4 107.6 107.7 1 10.7 109.5 21 Fuels 8 106.6 106.8 106.7 106.7 107.7 105.4 I0S.I 107.8 106.0 105.1 106.2 108.5 108.2 1 12.1 22 Residenli.il utilities 2.1 1 14.3 1 15.4 1 16.0 109.9 1 10.0 1 10.9 111.7 118.5 1 14.2 1 12.6 108.0 107.0 II 1.6 108.0 23 Equipment 17 "> 116.8 116.0 117.1 118.1 117.9 1 18.1 1 18.4 1 19.0 119.6 120.8 122.6 121.6 124.6 125.3 24 Business equipment 13.2 126.6 125.0 126.6 128.1 127.7 128.3 128.8 129.8 130.7 132.1 133.8 134.4 135.7 136.4 25 Infoimmion processing and related 5.4 143.2 140.8 143.9 144.1 144.6 146.3 147.4 147.1 148.5 149.6 152.4 154.0 155 5 156.5 26 Computer and office equipment I.I 292.(1 279.7 289.4 301.7 306.2 314.3 318.8 323.5 327.1 3.35.7 343.0 349.9 357.2 365.1 27 Industrial 4.0 126.9 126.5 126.3 127.2 126.7 126.3 127.0 127.1 127.1 127.9 128.2 127.6 30.3 130.1 2X Transit 2.5 10(1.0 97.5 100.6 1(14.1 10.1.0 103.8 101.9 106.6 107.2 109.8 111.8 1 13.1 110.4 1II .9 29 Aulos and trucks 1.2 115.3 1 18.0 120.8 126.5 120.9 117.7 109.4 115.9 II.3.7 117.2 1 18.7 1 18.3 1 10.4 112.6 30 Other 1.3 1 16.4 1 1.5.3 1 14.3 1 18.0 116.1 1 15.5 1 18.7 1 19.9 121.4 123.4 124.4 124.4 128.7 129.7 31 Defense and space equipment 3.3 77.0 77.9 77.0 77.7 77.9 77.7 77.0 76.1 76.2 74.7 75.4 75.6 75.4 75.7 32 Oil and gas we)) drilling .6 120.5 127.0 127.8 122.1 122.6 117.5 120.2 120.7 123.6 130.8 140.7 153.9 154.4 157.8 33 Manufactured homes .2 162.0 165.7 167.9 16.3.0 167.4 165.6 165.3 159.8 156.3 163.5 160.9 168.0 34 Intermediate products, toial 14.2 109.4 108.9 109.7 108.9 1 10.0 1 10.6 1 10 2 1 1 1.9 111.3 1 1 1.6 1 1 2.0 11 1.8 II 1.8 112.2 35 Construction supplies 5.1 1 16.8 1 16.1 118.3 117.5 119.2 119.8 117.7 120.7 117.8 1 17.0 1 20.0 121.4 120.4 120.8 36 Business supplies 8.9 105.1 104.6 104.6 10.3.9 104.6 105.3 105.8 106.8 107.4 108.4 107.3 106.3 106.8 107.2 37 Materials 39.5 120.3 120.1 120.5 120.5 121.5 121.2 121.7 122.2 121.1 121.4 124.1 124.5 125.5 126.4 3X Durable goods materials 20.X 134.0 H3 5 134 0 114 5 I16"1 115 5 1158 136 5 1378 138 4 119 1 140 1 141 7 143 3 39 Durable consumer parts 4 0 128.8 130.6 130.4 131.1 113.9 128.1 126.6 129.7 130.3 132.1 129.7 129.9 1.10.8 131.1 40 Equipment parts 7.6 159.2 157.2 158.9 159.6 161.7 162.6 16.3.4 165.1 167.9 169.4 172.6 175.6 178.4 181.8 41 Other 9.2 UK.2 117.8 117.9 118.2 119.2 119.2 120.0 119.1 119.9 119.3 1 19.8 119.9 120.8 121.7 4"> B'tsic inet'il materials ^ 1 113 1 IP"1 1 P 6 1 P 9 113 6 114 7 1 ] -j ~> 114 4 115 7 114 9 116 4 1 16 ^ 116 9 118 1 43 Nondurable goods materials 8^9 106.4 105.9 106.2 107.4 106.5 IO6'9 108.0 108.4 KR5 109/1 1 10.5 1 10.6 1 10.7 1 10.7 44 Textile materials I.I 106.3 106.1 106.3 109.9 107.4 107.1 108.4 108.5 105.9 106 8 107.7 104.9 105 6 105.9 45 Paper materials 1.8 107.4 106.4 105.2 109.1 108.2 107.0 108.0 110.9 112.5 111.5 113.2 114.0 113.3 114.1 46 Chemical materials 3.9 105.9 104.7 105.3 106.1 106.2 106.8 109.3 107.7 110.2 lll.l 11 1 1 111"' 1 12.0 1 1 1.9 47 Other 2.1 106.1 107.1 108.0 107.1 104.7 106.2 103.9 106.8 106.3 105.3 107.5 108 4 107.2 106.9 4S Energy materials 9.7 103.9 104.6 104.8 102.4 104.0 103.9 103.9 104.(1 103.9 103.8 104.0 103.6 104.3 104.6 49 Primary energy 6.3 102.6 103.5 103.5 101.7 10.3.2 102.2 IO2.0 1OI.6 102.6 101.6 102.8 102.3 102.6 103.7 5(1 Convened fuel materials 3.3 106.2 106.7 107.2 103.9 105.4 107.0 107.5 108.5 106.3 108.0 106.2 105.9 107.5 106.4 SPECIAL ACIGREGAILS 51 Total excluding autos and trucks 97.1 1 14.9 114.4 115.0 114.9 115.4 115.7 116.1 116.9 117.4 1 174 1 18.0 1 18.5 1 19.2 119.6 52 Total excluding motor vehicles and parts 95.1 1 14.6 1 14.0 114.7 114.6 1 15.0 1 15.4 1 15.9 1 16.6 117.2 II 7.1 1 17.8 1 18.3 1 18.9 1 19.3 53 Total excluding computer and oflice equipment 98 ^ 1 1 2.9 1 1 2.6 1112 1 11.1 113 4 113 5 113 7 114 6 115 1 115 1 115 6 1 16 0 116 4 116 8 54 Consumer goods excluding autos and trucks . 27^4 109.2 108.7 109.3 108.9 108.6 109.2 109.9 II 1.4 110.3 110.1 M0\8 1 l()'« 110.5 55 Consumer goods excluding energy 26.2 110.2 109.6 110.4 1 10.9 110.2 110.6 110.8 1 11.8 1 12.8 111.9 112.1 112.8 1 11.8 11 1.8 56 Business equipment excluding autos and trucks 12.0 127.7 125.7 127.2 128.2 128.3 129.3 1.10.7 111.2 132.4 13.3.6 135.3 136.0 138.3 138.8 57 Business equipment excluding computer and oHice equipment 12.1 115.8 114.7 1 15.8 1 16.8 1 16.1 1 16.3 1 16.6 117.5 1 18.2 119.2 120.5 1 20.8 121.8 122.1 29. 8 125.4 124.9 125.4 126.1 117.0 1 ^6.6 P7.1 1 ^ 7 .H 119.0 1 ^9.4 130.3 1.11.0 1 32.0 133.1 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 1996 1997 SIC2 pni- 1996 tmiup sode Iklll May June July Aug. Scpl. Ocl. Dec. Jan. Feb.1 Mai.1 Apr. May1' Indcv (1992 = IDOi MAJOR i\DtSTKif-s 59 'lutul index 1 (III.II 115.2 114.8 115.5 115.5 115.8 116.0 116.2 117.2 117.7 117.8 118.4 118.8 119.2 119.7 (i) Manuiactuimg 85.4 116.3 1 15.7 116 4 1 17.(1 1 17.2 1 17.4 1 17.6 1 18.5 1 19.2 119.3 120.1 120.5 120.8 121.4 61 Primary processing 26.5 112.2 1 11.7 112.6 1 13.0 113.1 113.5 113.X 113.8 1 14 0 113.X 114.8 115.5 115.5 116.2 62 Advanced processing 58.9 118.4 117.6 118.3 11 X.9 1 19.2 119.3 1 19 5 P0.8 121.7 12M) I2\6 P3.0 123.4 P4.0 63 Durable ytxxK 45.(1 125.7 125.2 126.3 126.9 27.5 127.2 127.1 128.4 I2X.8 129.5 I30.X 131.7 132.4 1.33.4 64 Lumber and products 24 2.(1 109.7 110.4 112.4 109.3 1 1 1.4 1 10.7 109.2 113.1 108.0 10X.6 112.0 113.2 113.9 114.6 65 Furniture and fixtures 25 1.4 108.9 1 10.3 109.5 KIX.I 108.8 108.8 1 10.4 110.5 1 10.5 109.7 1 10.3 110.9 112.4 113.4 66 Slone. L-JJIV. and ^Jiixs products. 32 2.1 II 1.0 109.X II 1.3 114.1 I 1 l.X 113.1 II 1.7 1 11.8 111.3 1 12.7 112.5 1 13.1 114.3 1 1 3.9 67 Prinwry metals 33 3.1 117.2 1 16.3 117.0 1 18.(1 1 18.3 1 19.5 122.1 1 18.5 II 8.X 1 17.8 120.0 120.5 120.9 122.5 6S Iron and steel 33 1.2 1.7 116.4 115.7 117.1 118.0 118 2 117.4 123.2 1 15.9 116.7 118.0 118.2 1I7.X 120.1 122 "* 64 Raw sk-el 1.11PT .1 112.2 112.9 114.9 M3.6 112.6 11 l.i KIX 7 112.5 1 M.7 112.3 114.2 115.5 117.8 7(1 Nunfenous 333-6.9 1.4 118.(1 116.9 1 16.8 117.9 118.5 121.8 120.7 121.4 121.2 1 17.6 122.1 123.0 12 l.X 122.7 7 7 1 2 F In a d b u ri s c t a ri t a e l d m m ac e h ta in l e p r r y o a du n c d ts . . . 34 5.0 11 S.6 1 1 8.4 1 18.9 1 19.1 1 19.4 II .. II .. 120.6 equipment. . .* 3.^ X.O 156.4 154.3 156.1 157.7 159.6 159.4 159.9 161.7 162.9 164.7 166.6 167.3 170.9 172.2 73 Computer and ollice equipment 357 1.8 2%.9 284.7 294.3 306.5 510.8 119.0 323.6 328.3 332.5 340.3 347.X 354.7 362.2 370.1 74 Electrical machinery 3fi 7.3 163.3 161.8 164.0 163.X 164.6 165 2 165 6 167 2 168.8 16X6 172.5 175.3 177.2 179.X 73 Transportation equipment. . . 37 9.5 106.1 106.8 107.1 1 (19 5 109.3 107.3 105? 109.5 109.6 1 1 1.9 1 1 1.5 1 1 1.9 1 10.6 11 1.6 76 Motor vehicles and puns . 371 4.9 126.9 130.5 130.4 134.1 132.8 127.0 121.2 12X9 127.9 132.0 129.6 128.9 125.5 127.0 77 Autos and light trucks . 37IPT 2.6 124.6 127.6 130.4 137.3 131.0 127.4 117 3 125.7 125.6 128.8 129.4 129.5 119.1 121.3 7K Aerospace and miscellaneous transportation equipment 372-6.'* 4.6 85.6 83.8 84.3 85.7 86.5 X7.9 89.4 90.3 91.5 92.2 93.5 94.X 95.5 96.0 7L> liislnmicnls 38 5.4 11)2.S 102.4 103.3 102.3 103.0 103.0 103.4 103.0 104.1 103.3 104.6 I05O I05O 105.3 XO Miscellaneous 31) 1.3 112.9 112.2 I 13.1 113.0 112.9 113.0 113.0 114.1 116.6 1 16.3 117.1 116.3 1 16.6 116.1 XI Nondurable noods 40.4 106.3 105.5 105.9 106.4 106.2 106.9 107.4 107.9 108.8 10X5 108.6 108.7 10X 5 108.8 fO FoOtis . .? 0 9.4 1(16.3 1(15.6 106.1 106.5 105.5 106.2 107.1 107.6 I0X.2 108.2 10X4 109.2 Ids. 1 107.9 S3 Tobacco products 1 1.6 II15.6 103.7 105.1 102.5 104.1 104.9 104.0 105.4 I0X.9 104.6 105.7 107. 105.6 104.5 S4 Textile mill pmducls i 1.8 11)6.6 106.1 108.0 108.7 107 7 107.2 107.6 I0X.2 106.3 106.3 106.9 MIX i 107.11 107 X K5 Apparel products 1 i)8.2 99.0 99.0 9X.3 98.5 98.2 97.8 97.3 97.2 96.2 95.8 96.3 95.9 95.3 S6 Paper and produtls 6 3.6 1(18.0 107.X 108.5 1 10.2 I0X. 1 08.X 107.6 1 10.1 1! 1.6 110.3 1 1 I.I 1 1 2.2 1113 1119 K7 Priming and publishing 7 6.7 98.4 97.9 97.1 97.6 97.9 99.1 99.7 100.0 99.8 100 5 100 6 99.6 99.7 100.2 H8 Chemicals and prcxlucls .... 8 9.9 108.9 107.2 107.9 109.0 108.7 109.7 111.3 11 1.8 1 14.0 113.7 112.8 112. 1 1.3.1 113.1 K9 PLMmli'um products 9 1.4 106.5 106.2 106.3 105.3 107.8 106.9 108.4 107.4 107.3 107.4 108 6 108 108.4 1113 9<) Rubber and plastic products . 30 3.5 120.5 1 I9.X 120.9 120.7 122.0 22.8 121.4 121.7 1 22.6 121.1 123.1 124.1 123.4 P4.1 91 U'ather and products 31 .3 SO.O 80.7 81.0 80.0 79.5 79.4 78.4 77.3 80.1 78.3 77.6 78.6 76.8 76.4 92 Minim; 6.9 11)2.9 101 2 104.4 103.1 104.5 103.4 103.4 103 5 104.5 103 6 106.3 107. f, 107.1 109.2 93 Metal III .5 11)2.(1 100.9 101.7 103.1 104.0 105.3 105.6 102.5 106.3 105.7 105.7 105.2 10.3.0 102.X 94 Coal 12 1.0 11)5.9 108.(1 10X9 102.7 109.6 106.2 107.5 108.8 109.5 106.4 109.6 105.5 106.2 117.4 93 Oil and gas extraction 13 4.8 100.3 100.5 101.5 100.9 101.1 00.5 100.0 100.2 100.7 100.8 103.1 105.4 105.3 105.8 96 Stone; and earth mineral1- 14 .6 118.7 117.4 1 20.6 120.6 121.7 1 18.5 120.0 120.2 122.9 117.2 125.0 129,."; 124.9 126.3 97 Utilities 7.7 112.8 114.6 1 140 109.4 1 10.8 1 II.1 111.9 114.5 112.6 112.7 110.2 109.9 112.4 110.2 9X Elecnic 49I.493PT 6.2 112.7 114.8 1 14.2 1 10.1 1 1 1.5 1 10.9 112.0 112.7 112.6 113.2 110.9 110 3 112.2 109.7 v; CKLS 492.493PT 1.6 113.2 113.6 113.6 107.1 108.5 II l.X 1113 120.9 112.7 I 10.9 107.6 108.4 112.9 112.2 SPECIAL. AC;GR[;GATF-;S 1 (XI Manufacturing excluding motor vehicles and parts 80.5 115.7 114.8 115.6 116.0 1 16.3 116.8 117.3 1 17.9 1 IX.6 1 18.6 1 19.5 120.0 120.5 121.1 101 Manufacturing excluding office and computing machine . . . 83.6 11.3.7 113.2 1 13.8 1 14.3 1 14 4 1 14.5 1 14.7 1 15.5 116 1 1 16.2 116.9 117.3 117.5 118.(1 Gross viluc (bill)ins nl' 1992 dollar ales) MAIOK MARKETS UU Pntdutlv totiil 2.001.9 2.25S.7 2.255.7 2,274.2 2,276.1 2.272.9 2.27.1.4 2.270.7 2,303.5 2..301.I 2,302.9 2,315 J 2,327.1 2,319.9 2,328.4 1H.1 Filial 1.552.1 1.760.9 1.761.9 1.775.7 1.782.8 1.773.6 1.771 6 1.771 K 1.795 1 I.796.K 1.798.4 1.XI18.8 1.820.7 1.812.8 1.819.3 I(U Consumer goods 1.049.6 1.162.2 1.165.5 1.172.5 I.I 71.6 1.165.5 1.163 0 1.164.7 1.1X2.2 1.182.3 1.176.3 1.177.7 1.185.5 1.174 6 1.176.4 103 Equipmeni 5(12.5 598.0 595.7 602.4 610.5 607.4 607.8 606.1 612.1 61.3.7 621.4 630.4 6345 637.6 642.4 106 Imemiediate 449.9 498.2 494.4 499.0 494.3 499.7 502.1 499.3 SOX. 6 504.9 505.1 507.2 507.^ 5O7.X 509.7 I. Data in this lahle also appear m the Board's G.17 (419) monthly statistical release. For ments." Federal Reserve Bitlteiin. vol. X.I (February 1997). pp. 67-'>2. Fin ;i 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: 19S9 Developproduction index and the iapacitv uiili/.alion rales was released in January 1997. See ments and Historical Revision." h nivral Reset ve Bulletin, vol. 76. (April 1WIM. pp IX7-2IW. "iiulnsirial Production and Capacity Utilization: Historical Revision and Recent Develop- 2. Standard industrial classilication. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • August 1997 2.14 HOUSING AND CONSTRUCTION Monthly ligures at seasonally adjusted annual rates except as noted 1996 1997' lie in 1994 1 )9.s 1996 Inly Sep.. Oel. Nov. Dec. Jan. Feb. Mar. Apr. i NKW UMTS 1 Pcriniis authorized 1.372 1.3" 1.426 1.454 1.4(15 1.391 1.349 1.391 1.405 1.395 I.43X 1.457 ' 1.442 2 One-family 1.069 997 1.070 1.077 1.061 i (r9 1.1103 1.016 999 1.052 1.1169 1.034 1.060 3 Two-family or more M)^ 335 356 377 344 362 346 375 406 343 369 423 3X2 4 Skirted 1.457 1.354 1.477 1.492 1.515 1.470 1.407 I.4S6 1.353 1.375 1.554 1.479 1.468 5 One-family 1.19X 1.076 1.161 1.164 1.222 1.I4X 1 104 1.133 1.024 1.125 1.237 1.142 1.116 6 Two-family or more 259 ^78 316 32S 293 322 303 353 329 25(1 317 337 35n 7 Under consiruclion ;il end of period1 755 775 XI9 S25 X20 X25 X25 X2X X15 XIX X21 X17 SI7 X One-familv 5X4 554 584 593 593 592 5SS 5S4 571 573 574 56S 566 y Tuo-faniilv or mure 171 221 235 232 227 231 237 244 244 245 247 249 251 10 Cnmpk-led .'. 1.346 1.319 1.4(17 1.463 1.449 1.356 1.375 1.431 1.4X4 1.362 1.572 1.45 1 1.449 !1 Onc-liinuh 1.161 1.073 1.124 1.161 1.153 1.(197 1.129 1.151 1.177 1.109 1.267 1.152 1.153 iX5 246 2S3 302 296 259 "M6 ""HO 307 251 1(15 299 296 13 Mobile homes shipped 3(15 341 362 366 369 564 354 33X 339 353 353 372 Men haul builder actnitv in • »n--lu»nl\ m\ii\ 1 I? 4 N Nu u m m b b e e r r s lo o r ld sale al end of period1 6 3 7 4 0 0 6 3 6 7 7 4 7 3 5 2 7 6 7 3 X 52 2 S 34 I4 3 3 76 3 S 1 7 3 0 3 6 0 7 3 8 2 X 7 7 3 9 2 4 2 X 30 2 X 2 X 30 2 0 0 8 2X 36 7 7 2X 72 6 Pn.c of nuns \oUHilinnsamh 1 1 6 7 M Av e e d r i a an g o e f <ttilht>~\}~ 1 1 3 5 0 4.5 0 m I5X .9 .7 1 1 4 6 0 6 . . 0 4 1 I6 4 S 4 . . 4 2 1 15 3 9 7 . . 7 0 1 1 . 6 3 7 9 .4 .0 1 14 6 3 X4 .X 1 1 4 7 3 2 . . 5 0 1 17 4 1 4 . . 8 9 1 1 4 7 5 1 . 9 (1 1 17 4 0 1 . . 1 X 1 1 7 4 1 5 . . 7 0 1 1X 51 3. . 2 6 EXISI IMO UMIS (one-family) IX Nunthei sold 3.967 3.X 12 4.OS7 4.150 4.1(10 4.020 4.000 4.060 3.950 3.910 4.230 4.160 4.060 Pm <• n/ imm mill (tlmmamls Hi tlollurs r 19 Median 109.9 11.3.1 1 IS.2 121.5 122 3 1 I7.S 1 16 6 117.4 118.X 120.6 117.5 120.(1 120.7 2(1 Average 136.X 139. t 145.5 149.6 149.9 144.7 14 V6 144.1 147.1 149.6 144.7 147.5 150.4 llllOIK ol l >llars>' CONSTRIK! KIN 2 i Total put in place 525.96B 547.105 567.31.1 559.312 564,715 572,262 582,537 594,043 588.146 588.889 602,710 603,063 596.905 22 Private 3W.4J7 410.643 426.51X 419 293 426.703 42S.36I 437.034 446.059 445.439 446.646 455.613 453.677 450.2(14 23 Residential 238.531 2«6.916 2J6.090 244.931 246.019 246.407 246.935 249.167 250.297 250.126 255.4J 1 257.X16 258.246 24 Nonresidenlia! 160.896 173.727 ISO.42X 174.362 1X0.6X4 1X1.954 190.099 196 X91 195.142 196.520 200.172 195.861 I9I.95X 25 Industrial buildings 28.91 IS 12J17 29.9X 1 2S.77O 27.OS2 29.656 33.043 11.5X3 29.413 30.395 30.176 2X.412 28.952 26 Commercial building 59.506 67.513 70.(111 6S.262 72.146 70.672 74.530 77.669 75.735 77.996 79.6SX 7S.IS4 73.941 27 Other buildings ..." 27.025 26 902 29.235 2X.5I4 29 764 29.812 30 469 32.636 32.452 33.362 34.5JX 34.975 '5.646 2X Public utilities and other 45.457 46.994 51.2(11 4S.S16 51.692 51.814 52.057 .55.004 57.542 54.767 55.760 54.290 53.419 29 Public 126.541 136.462 14(1.795 14(1.020 I3X.II 12 143.WI 145.503 147.9X3 142.707 142.244 147.097 I49.W6 146.7(11 3D Military 1 314 •"J77 2.906 n439 "> 307 "> 5X3 1 774 "> 350 2.524 2 614 2.320 2.405 31 Highway 37.127 37.820 39.399 39.194 36.507 40.4X5 39.326 40.160 41.71 1 41.320 42.374 43.196 43.452 32 Conservation and development 6.37S 6 41 2 5.753 5.79.3 5.660 5.473 6.095 5.974 5.70S 5.X3X 5.534 6.129 5.519 33 Other SO.723 X9.253 92.737 92.594 93.53S 95.361) 97.3OX 99.499 92.S65 92.562 96.575 97.741 95.325 1. Noi al annual rales. SOURCE. BUI eau of the Census e imales for all series except <I) mobile homes, winch .ne 2. Not Ndisoiwlly ;Kl|iisted. pi-ivitlc, dome W shipments as ivp< irtetl by the Manufactured Housing InMiiuie and se.ison- 3. Reeeni daia on value of new consimclinn may noi he strieily comparable uiih dala for ally adjusied r the Census Burea , and (2) sales and prices of existing units, whii_h are previous periods because of changes hy the Bureau t 'the Census in jis estimatim: techniques. published by th National Associal in of Realtors. All back and currenl figures are available For a descriplion of these changes, see Construed m Report.-, (C-30-76-5). issued by the fiom the oriti ing agency. Perm aulhori/ations are those reported lo the Census Bureau Census Bureau in Julv )1>7<S. Irnm iy.000 ju .dictions beiiinnina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes hased on seasonally adjusted dala except as noted C m ha o n n g th e s ! e ro a n rl i i e 1 r 2 Change f ( r a o n m n u 3 : m r o a n le t ) hs en ier Change from 1 month earlier Index level. llem 1996 1997 1997 Mav 1996 1997 1997 ' May May June Sepl. Dee. Mar Jan. Feb. Mar. Apr. May CONSUMER PRICKS' (I9K2-X4=IOO> 1 All items 2.9 2.2 2.9 .VI 3.3 1.8 .1 .3 .1 .1 .1 160.1 2 Food 2.5 3.0 4.3 5.3 3.4 .3 -.3 .3 0 4 156.6 3 Enemy items 6.2 -27 4.9 I.I 16.2 -2.8 .8 3 -1.7 -1.5 -2.4 109.9 4 All hems less foml and energy 2.7 2.5 2.5 2.7 2.4 2.4 .1 .3 169 3 5 Commodilies 1.5 1.1 .0 1.1 9 1 1 I .1 .1 .3 .1 143.3 6 Services 3.2 3.2 3.4 3.4 3.1 2.7 I 3 .3 ,3 3 184 1 PRODUCER PRICES (19X2=100) 7 Finished goods 2.3 .3 i 5 2.5 4.3 -3.0 -.3 -.4 -.1 -.6 -.3 131.5 S Consumer roods 2.7 2.7 5.3 4.6 2.4 - 1 .K -1.0 - 4' .9 -.4 .4 135.0 9 Consumer energy 5.2 -3.1 2.5 7.0 26.2 -17.3 -1.0' -3.4 -2.6 -2.1 82.0 10 Olher consumer goods 1.8 .3 .6 .6 .6 -.1 -.1 .3 .0 -.3 144.7 11 Capital equipment 1.2 -.1 .6 1.2 -.6 1.2 .1 -.1 .3 -.4 _ ^ 138.1 liitcniK'iliiite milleriti/v 12 Excluding foods and feeds .(I -.6 .6 1.(1 -.1 -.6 _ ^ _ i 125.2 13 Excluding energy -I.I I .0 .0 -.3 .6 I .1' 1) .0 .0 134.2 Ciiulc luawiitils 14 Foods 28.2 -K.I 47.4 -9 4 -2K.."> -.3.1 -1.2' - 1.6' 2.1 3.3 - 3 117 4 15 Energy 15 1 -23 -14 1 18.7 235.2 -67.1 X.9' -14.0' - 19.2 -5 2 3.4 81 4 16 Olher -12.4 -.4 -9.3 -2.6 -1.3 L52 2.3' .7' .6 -2.3 12 1574 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor. Bureau of Labor Slalisik 2. h'i»ures tor consumer prices are for all urban consumers and rolled a lental-equivalenci measure ol homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • August 1997 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except its noted: quarterly data at seasonally adjusted annual rates 1996 1997 Account 1994 1995 1996 02 Q3 04 01' GROSS DOMESTIC PRODUCT 1 Total 6.935.7 7,253.8 7,576.1 7.426.8 7,545.1 7.616.3 7,716.1 7.867.7 By source 2 Personal consumption expend mites 4.711(1.9 4.924.9 5.151.4 s.oftii s 5.139.4 5.165.4 5 ''40 ! 5..3J7.3 ^ Durable "oods . . 580.9 606.4 6.32.1 6252 637.6 630.5 6.35.2 659.5 4 Nondurable noods 1.429.7 1.485.9 1.545.1 1.522.1 1.544 7 1.546.5 1.566.8 1.594.9 5 Services ... 2.69(1 1 2.832.6 2.974.3 2.913.2 2.957 1 2.988.5 3.038.3 3.0X2.9 6 Gioss private domestic invesiment 1.014.4 I.H65.3 1.1 17.0 1.068.9 1.096.(1 1.156.2 1.146.6 I.2O7..3 7 Fixed investment 954.9 1.028.2 1.1(11.5 1.070.7 1 (188 (1 1.119.6 1.127.8 1.149.9 S Nonresidential 667.2 738.5 791.1 769.(1 773.8 807 0 8145 831.4 9 Structures 180.2 199.7 214.3 208.4 207.4 213.5 227.8 2.32.5 10 Producers' durable equipment 487.0 538.x 576.8 560.6 566 3 593.5 586.7 59X.9 ! 1 Residential structures 287.7 289.8 310.5 301.7 314.2 .312.6 313.3 318.6 12 Change in business inventories 59.5 37 0 15.4 -1.7 8.0 36.6 18.8 57..1 1 3 Non farm 48.0 39.6 17.3 2.7 35.4 19.7 56.7 14 Nci L'xpimv ol goods .mil services - 94.4 -4-1.7 -9K.7 -86.3 -99.2 -120.2 -89.1 -106.7 \5 Exports 719.1 807.4 855 2 839.5 850.0 K44..3 887.(1 904.8 16 Imporls 81.3.5 902.0 95.3.9 925.8 949.2 964.5 976.0 1.01 1.5 17 Government consumption expenditures and gross inveslmeni 1.314.7 1.358.3 1.406.4 1.383.7 1.408.8 1.414.X 1.418.3 1.429.9 IS Federal 516.4 516.6 523.1 518.6 529.6 525.5 518.5 520.5 19 Slate and local 798.4 841.7 883.3 865.1 879.2 889.3 899.8 909.4 By major ivpc oj /mxlua 20 Final sales, total 6.876.2 7.216.7 7.56(1.7 7.O.6 7.537.1 7.579.6 7.697.4 7.810.4 21 Goods .... 2.534.4 2 662.2 2.784.4 2.749.3 2.782.(1 2 785.0 2.821.1 2.867.7 22 Dutable 1.086.2 1.147.3 1.219.6 1.192.1 1.219.1 1.225.5 1.241.7 1.267.0 23 Nondurable 1.448.3 1.515.0 1.564.X 1.557.1 1.562.9 1.559.5 1.579.5 1.60(1.7 24 Services 3.746.5 3.926.9 4.105.2 4.027.9 4.087.0 4.122.0 4.1X3.X 4.239.X 25 Structures 595.3 627.6 671.1 651.4 668.0 672.6 692.5 703.0 26 Change in business invenloi ies 59.5 37.0 15.4 -1.7 8.0 36.6 IX.K 57.3 27 Durable izoods 31.9 34.9 12.7 12.3 9.9 34.7 -6.0 28.4 28 Nondurable goods 27.7 2.7 -14.0 -1.9 2.0 24.8 28.9 MEMO 29 Total GDP in chained 1992 dollars 6.608.4 6.742.2 6,906.8 6,81.3.8 6.892.1 6.928.1 6,993.3 7.092.1 NATIONAL INCOME 30 Total 5,535.2 5,828.9 6,164.2 6,027.5 6.132.2 6.216.6 6,280.6 6.435.0 3 1 Compensation of employees 4.009.8 4.222.7 4.448.5 4 344.3 4.420.9 4.482.9 4.546.0 4 638.1 32 Wages and salaries .' 3.257.3 3.4.33.2 3.630.1 .3.540.2 3.606.5 .3.659.6 .3.714.2 .3.795.0 33 Government and government enierprises ..... 602.5 621.7 641.2 6.34.0 638.9 644.6 6472 655.7 34 Other ? 2.654.X 2.811.5 2.988.9 2.9(16 1 2.967.5 3.015 I 3.067.0 3.139.3 35 Supplement to wages and salaries 752 4 789.5 8184 804.1 814.4 823.3 8.31.8 843.1 36 Employer contributions Cor social insurance 350.2 365.5 .382.2 375.0 .380.4 .384.6 388.8 397.0 37 Other labor income 402.2 424.(1 4.36.2 429.1 434.0 438.6 442.9 446.1 3S Proprietors' income1 464.4 486.1 527.3 508.1 524.6 535.6 540.') 548.4 39 Business and professional' 430 0 458.2 482.6 471 5 480 5 485.5 493.1 502.9 •ti' •'aim ....... 34.3 27.9 44.7 36.6 44.1 50.1 47.9 45.6 41 Rental incnmc of persons- 1 12.1 1 11.7 1 15.0 114.5 112.4 115.2 1 17.9 I 16.8 42 Corporate profits , 554.1 604.8 670.2 661.2 672 1 677.3 670.1 716.8 43 Protits before la\ ' 531 •> s98 9 639.9 642.2 644.6 635 6 637.1 672.3 44 Inventory valuation adjustment -13.3 -28.1 -8.9 -17.4 -1 1.0 2.(1 -9.2 .0 45 Capital consumption adjustment 36.2 34.0 .39.2 36.4 38.6 39.7 42.2 44.6 46 Net interest 394.9 403.6 40.3.3 399.5 402 1 405.6 405.7 414.9 1. With inventory valuation and capital consumption adjustments 3. For after-lax profits. di\ ideiufs. and the Uke sec tableI.4X. 2. With capiuil consumption adjustment. SOL Kft. US. Department ol Commerce. Sum njCurrcit Bit: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data al seasonally adjusted annual rates 1996 1997 AL'L'OUDI 1994 1995 1996 01 02 Q1 04 01' 1 Total personal income 5 762 0 6,112.4 6.449.5 6,104.5 6.409.6 6.498.9 6.584.9 6.702.1 2 Wage and salary disbursements .1.241.8 3.43(1.6 .1.610.1 1.538.2 1.606.5 1.659.6 1.716 1 1.791(1 3 Commodity-producing industries 824.9 861.5 902.7 878.7 900.1 91 1.0 920.9 915.7 4 Manufacturing 621.1 648.4 672.5 654.8 671.8 678.5 685.0 691.1 5 Distributive industries 719.2 781.7 827.9 810.5 822.1 832.4 846.5 864 1 6 Service industries 1.075.2 1.161.6 1.258.1 1.215.1 1.244.9 1.271.6 1.301 5 1.337.4 7 Government and government enterprises 602.5 621.7 641 2 614.0 6.18.9 644.6 647 2 655.7 X Oilier fahtu- income 402.2 424.0 4.16.2 4">9.1 414.0 418 6 442.9 446.1 y Proprietors' income1 464.4 486.1 527.1 508.1 524.6 515.6 540.9 548.4 10 Business and professional1 4.10.0 458.2 482.6 471.5 480.5 485.5 491.1 502.9 1 1 Farm' __ .14.1 27.9 44.7 36.6 44.1 50.1 47.9 45.6 1 ~* Rental income of persons" 112.1 111.7 1 ISO 1 14 5 112.4 115.2 117.9 1 16.8 11 Dividends 199.6 214.8 210.6 226.6 229.1 2.11.5 234.X 240.0 14 Personal iiiteresl income 661.7 717 1 7.18.2 726.1 711.1 742.9 750.5 758.1 15 Transfer payments 956.3 1.022 6 1.079.7 1.061.0 1.075.6 1.085.1 1.095 0 1.120.1 16 Old-aye survivors, disability, and health insurance herielits 472.9 507.4 519.1 529.9 5.16.1 541.7 548.2 562.1 17 LESS: Personal contributions for social insurance 278.1 294.5 107.5 101.0 105.8 109.7 .111.4 120.9 18 EQt'AI S' Personal income 5 762.0 6.1 12.4 6.449.5 6.304.5 6.409.6 6.498.9 6.5X4 9 6.702.1 19 LESS: Personal lax and nontax payments 711.4 794.1 861 « 824.9 870.6 872.5 887.2 919.1 20 EQUALS: Disposable personal income 5.010.6 5.118.1 5.585.7 5.479.6 5.519.0 5.626.4 5.697.7 5.781.0 11 LESS' Personal oullavs 4.812.1 5.071.5 5.114 0 5.218.1 5.100.7 5.129.8 5.407.5 5.506.1 22 EQUALS: Personal saving 198.3 246.6 271.6 261.5 238.1 296.6 290.2 276.7 MEMO Per rupilti trlltiuh'j 1992 dulliinl 21 Gross domestic product 25.148.8' 25.625.9' 26.014 5' 25.751.4 "•5 988.4 26 065.0 26.251.1 26.572.2 24 Personal consumption expenditures 17.158.2' 17.199.6' 17.667 T 17.570.2 17.675.7 17.657.9 17.764 8 17.979.4 "*5 Disposable personal income 18.162.0 18.789.0 19.158.0 19.O2X.O 19.051.0 19.233.0 19.115.0 19.481.0 "*6 Savin" rate (percent) 1.9 4.6 4 9 4.8 4.1 5.1 5.1 4.8 GROSS SAVING 27 Gross saving 1,055.9 1.152.3 1.275.9 1,218.4 1,245.0 1.314.6 1.325.7 1.377.3 28 Gross privale saving 1.006.3 1.072.1 1.161.0 1.114.3 1.122.1 1.196.7 1.190.6 1.212.5 29 Personal saving 198.1 246.6 271.6 261.5 2.18.3 296.6 290.2 276.7 .10 Undistrihwed corporate profits1 147 8 15X7 192.9 1X7.9 192.6 198.6 192.5 216.9 11 Corporale inventory valuation adjustment - 1.1.1 -28.1 -8.9 - 17.4 - II.(I 2.0 -9.2 (1 Capital i IHIMUIIJUIOII ullawames *2 Corporale 416.4 415.9 457.9 449.6 454.7 461.1 466.1 471.2 11 Noncorporate 228.1 228.5 2.1X6 213.5 2.16.5 240.5 241.7 245.8 14 Gross government savin» 49 6 80.0 1 15.0 84.1 122.9 1 17.8 115.0 164.X 15 Federal -119.6 -<87.9 -54 6 82.0 -54.1 -48.4 -34.0 -9.6 16 Consumption ol tixed capnal 70.6 71.8 72.5 7.1.2 72.6 72..1 71.9 72.2 17 Current surplus or dericit ( -1. national accounts - 190.2 -161.7 -127 1 -155.2 -126.7 - 120.8 -105.9 -81.8 18 Slale and local 169 2 167.9 169.6 166.1 177.0 166.1 169.0 174.4 19 Consumption o( lixed capital 69.4 72.9 76.6 75.1 76.(1 77.1 78.1 79.1 40 Current suiplus or delieit ( -). national accounts 99.7 95.0 91.0 91.0 101.0 89.2 90.9 95.1 41 (iross investment 1.090.4 1.150.9 1.200.8 1.167.9 1.187.0 1.215.9 1.232.5 1.279.0 42 Gross privale eioiueslic investment 1.014.4 1.065.1 I.I 17 0 1.068.9 1.096.0 1 I561 1.146.6 1.207 1 41 Gross government investment 212.1 221.9 2.11.4 228.8 235.1 214.2 2.15.1 2.14.1 44 Nel forei"il investment - 116.4 - 116.1 -149.5 - 129.9 -144.2 - 174.6 - 149.4 -162.1 45 Statistical discrepancy 34.5 -1.5 -75.1 -50.6 -58.1 -98.7 -93.2 -98.2 1, With inventory valuation and capital consumption adjustments. SOURCE. U.S. Depai ol Commerce. Su iif Current Kli 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • August 1997 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1995 1996 01 02 Q3 Q4" 1 Balance on current account -148.40*5 - 14S.I54 -165.095 -30.435 -35.274 -40.593 -47.853 -41.38(1 2 Merchandise trade balance" - 166. PI -171-P4 - 1X7 674 -3s.o:6 4VP7 -47 "170 -5I.X69 -45.308 3 Merchandise exports 102.4 M 575.94(1 611.66') 149.422 150.032 153.120 150.144 15X..373 4 Merchandise imports 5 Military lransactions. net 1.963 3..5X.5 2.809 978 4X9 7n5 515 1.0X0 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 -S.0I6 -X.4I6 -1.890 311 - 2.215 -4.09X -2.414 K U.S. cmernmeni grants 15.816 - 10.9.59 -14.614 - \799 -4.259 -2.364 - 2.580 -5.431 9 U.S. »o\ernmeni pensions anil other translcrs -4.544 -3.420 -4.233 -731 -1.012 -1.0X1 - 1.064 - 1 076 10 Private remittances anil other transfers -19.506 - 20.696 -23.605 -5.624 -5.6X4 -5.975 -5.832 -6.1 14 i 1 Change in IJ S. ui>\ ernnu-m assets oilier lhan oliici.il resen e assets, nei (increase. — ) -341 -2S0 -665 - 199 -152 -353 166 - 326 5.346 -9.742 6.66X 191 7.4X9 13 Gold 0 0 0 0 0 0 0 (I 14 Special drawing iiidlls iSDRsi -441 -SOX 370 147 - 199 -131 84X -146 15 Reserve position in Inlernalional Monelaiv Kind 494 2.466 -1.2811 - 163 -849 -220 - 183 - 28 16 Foreign currencies 5.293 -6.46X 7.57X 501 1.065 -170 6824 -141 17 Change in U.S. private assels .ihm.ul (increase. -) -155.700 -297.X34 -3I2.X33 -9X.2O6 -6X..5XX 49.823 -Xt).9hX - 1 1 3.454 18 Bank-rcporieil claims' -K.I 61 -69.146 -88 ^I'l -7.272 1.714 -74 -'3.196 - 56.663 19 Nonbank-reporleiJ ilaims -3~>.XO4 -34.219 - I4.27X -12.707 -3.374 - 15.696 20 U.S. purchases of feren;n seem Hies, ncl -60.27(1 -9K.960 -104.533 -32.5.39 -34.420 -^0 ''(HI 22.933 -26.98(1 -54.465 -95.509 8X.3O4 -44.117 -M.17S -^6.175 9.143 -•").« II 40.253 109.757 1".77» 11.369 5">M->1 1 3.566 ^4 \35 3n,956 23 U.S. Treasury sccuniics 30.745 6X.XI3 111.151 1 ~> 984 55 600 -3.3X4 25.472 ' 1 463 24 Olhcr U.S. i!ovemiuonl obligations 6.(177 3.734 4.331 764 52 1.258 1.217 1.804 25 Other US. iinnimk-nl liabilities' \344 I.IW 1.404 I.'-W -156 ^O 1.0M 279 26 Olher US. liabilities reported In U.S. hanks' 3.560 32.862 4.614 - '.908 -3.264 14.187 - 1 .'Ml -4.379 27 Olhcr lorciyn official assets" -2.473 3.266 1.278 2X0 1.2X5 -1.58.5 1.789 245.123 314.705 4(12.268 X7.860 86.987 1 IX.715 149.092 29 U.S. bank-reported liabilities' 11I.X4T ">S.''X1 --1.55S 3^765 -.35.571 1 T5 -1.151 33. \19 .1(1 U.S. non hunk-reported liabilities -7.71(1 34.578 11.272 6.506 7.^96 20.6(18 31 Fore inn private purchases ot U.S. Treasury securities, net 34.225 99.340 153.7X4 1.734 1 1.832 .31.212 43.402 67.338 32 Foreign purchases ol other U.S. securities, net 57.0(16 95.268 131.6X2 27.321 35.993 29.1 22 34.X2O 31.747 60.236 83.950 2X.694 17.432 21.056 34 Allocation of special drawinsz rinhls (1 0 (i (1 0 0 0 0 3? Discrepancy 13 724 '1.548 -53.P2 29 420 4.521 -9.261 -11.X04 -26.57.3 36 Due to .seasonal adjustment 1.155 6.651 - 449 X.3IX \l 19 37 Before seasonal adjustment 13.724 .'I.MS -53.121 2K.2(.7 -2.131 -X.812 - 13.4X6 -28.692 MFMO Chum>c\ in official a\.sc!s 3H U.S. otiic.a! reserve assets (increase. -1 5.346 -9 742 6.668 19! 17 -523 7.489 - 315 (increase, -t ) .37.909 MIX.675 121.374 10.120 52.177 13.346 23.174 32.677 4(1 C'hanne in Or<:ani/alk'n of Petroleum Exporting Countries ollicial assels in United Siaies (part ol 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. 18-2(1. 2 -34. and 3X—to. 4. Associated primarily with military sales contracts and olhcr transactions aria 2. Data arc on an inlernalional accounts basis. The data dilfer nil the Census basis dala. >r through loreism ollicial agencies. shown in table 3.1 I. for reasons of coverage and I inline. Mililan :\porls are excluded horn 5. Consists of investments in U.S. corporate stocks and in debt sccurilics merchandise Irade data ami are included in line 5. corporations and slate and local governments. 3. Reporting banks include all types ol ileposilory institutions ; , well as some brokers and SofRcF.. U.S. Department of Commerce. Bureau of Economic Analysis. Sarvex ifCurrenl dealers. dnunni Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A5 I 3.11 US. FOREIGN TRADE1 Millions of dollars; monthly dulu seasonally adjusted 1996' 1997 llem 1994' I9951 1996' Ocl Nov. Dec. Jan.' Fell.' Mar. Apr '' 1 Goods and services, balance -104.416 - 101.857 - 1 1 1.040 -7.935 -7.665 -10.601 - 1 1.474 -9.884 -7.755 -8,360 2 Merchandise -166.192 - 171.560 -191.170 -15.321) -15.176 -17.695 -I8.14X - 16.76) -14.877 - 15,1 11 3 Services 61.776 71.701 80.130 7.3X5 7.5 1 1 7.094 6.674 6.X77 7.122 6.751 4 Cioods and services, exports 699.646 794.610 K48.833 73.OXK 71.969 7-.444 71.957 74.370 78.193 78.356 5 Merchandise 502.398 575.871 612.069 52.503 51.209 . 1 3.1 5I.6K6 53.687 57.155 57.623 6 Services 197.248 218.719 216.764 2O.5S5 20.760 1.311 20.271 20.681 21,038 20.733 7 Goods and services, imports -804.062 - 896.467 -959.873 -81.021 -81.634 -X .045 -83.4.11 84.254 -85.948 -86.716 8 Merchandise -668.590 -749.411 -X0.1.239 -67.823 -68 385 6) 8^8 -69.834 -70.448 -72.032 -72.714 9 Services - 135.472 -147.0.16 - 156.634 -13.20(1 13.249 - 1 .217 - 13.597 -13.806 -1.1.916 -13.982 I. Data show monthly values consistent uith quarterly figures Soi KCE. FT900, U.S. Deparimcnl ot Commerce. Bureau of the Census and Bure.iu <>! payments accounts. Rcononue Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1996 1997 Asset 199.1 1994 1995 Ocl. Nov. Dec. Jan. Feh Mar. Apr. May1' 1 Tolal 73,442 74,335 K5.S32 75.5SS 75,444 75,090 68.2IP0 67,482 67,222 65.873 68,054 2 Gold stock. iiKludina bxchiiniu Stabilization Fund' 11.05.1 11.051 11.050 1 1.049 1 1.049 1 1.049 1 1 048 1 1.05 1 1 1,050 1 1.051 1 1.051 3 Special drawing rights' 9.039 10.039 11.017 10.226 10.386 10.312 9.79.1 9.866 9.879 9.726 10.050 4 Reserve position in International Monetary Hund- 1 1.818 12.030 14.649 15.517 15.516 15.435 14.372 14.037 1.1. X46 13.660 13.962 5 Foreign cm,cnucs4 41.532 41.215 49.096 38.765 .18.49.3 38.294 .12.987 32.528 3^.447 31.436 1\991 1. Gold IK:Id "under earmark" al Federal Reserve• Banks foreign and inter national SDk holding and reserve positions in the IMF also have been valued on this basis since July accounts is nut included in [he gold stock ol the UniliL-d Stale- : tabTe 3.1 3- line 3. Gold N74. stock is valued at >42.22 per fine troy ounce. V Includes allocations ol SDRs by the Interiviiionul Monetary Fund on Jan. I of the year 2. Special drawing rights (SDRs) are valued according to a technique adopted by (he mdicaled. as follows: 1970—%M1 million: 1971—S717 million. 1972—S7I0 million: 197~9— International Monetary Fund (IMF) in July 1474. Values are based on a weighted average of SI. 139 milliuii: 1980—SI .152 million: 1981— SI.O93 million, plus net transactions in SDRs. exchange rates for the currencies ol" member countries. From July 1974 through December 4. Valued al current market exchange rates. 1980. sixteen currencies were used: since January 1981. live currencies. h;ive been used. U.S. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS' Millions of dollars, end of period 1996 1997 Asset 1993 1994 1995 Ocl Nov. Dec. .kin. Teh. M:II- Apr. May 1 Deposits 386 250 386 176 17(1 167 167 Wl 16 169 176 Held in custody 2 U.S. Treasury securities2 379.394 441.866 522.170 619 987 614.165 638.049 646.1 30 662.175 672.059 668.536 662.747 3 but-marked gold' 12.327 12.0.11 1 1.702 11.204 11.198 11.197 11.197 1 1.175 11.(134 10.944 10.868 I. Excludes deposits and U.S. Treasury securities held tor intemuiimiLiI am) regional 3. Held in foreign and inlernaminal accounts and valued at ,$42.22 per line troy ounce: nut )igani/ations. included in the gold slock of Ihe Uniled Slates. *2. Marketable U.S. Treasury hills, notes, and bonds and nonmaskable U.S. Treasury .ecuriiies. in each ciise measured at luce (1101 markel) value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 International Statistics • August 1997 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions ot dollars, end of period 1 99(V 1997 Item 1994 1995 Oct. Nnv. Dec. Jan.' Feb.' Mar. Apr.'1 1 Total1 520,9.34 6.30.918 722,761 7.17,524 752,618 76.3,068 772,026 780,907 777,545 B\ l\pc 2 Liabilities reported by banks in the United Stales- 73.3X6 107.394 IIW.W5 107.071 1 12.182 1 19.6X1 1 16.7 1 2 1 19.920 117.377 3 U.S. Treasury bills and certificates'' 1 39.571 168.534 186.180 197.692 193.435 1XX.076 191.090 191.548 I83.62X U.S. Treasury bonds and notes 4 Marketable 254.059 293.69(1 36.3.063 366 903 380.565 388.587 398.630 405.443 413.169 5 Noninarketable4 6.109 6.491 5.892 5.929 5.968 6.007 6.043 6.084 5.692 6 U.S. securities other than U.S. Treasury securities 47.XO9 54.X09 57.631 59.929 60.46X 6(1.717 59.551 57.912 57.679 By cum 1 Europe1 215.374 22"> 406 246 542 ^50 87"> ^53 099 ^ 145 161 05"1 "W 5">4 •"65 300 8 Canada 17.235 19.473 21.764 21.360 21.343 21.151 21.237 21.983 19.913 9 Latin America and Caribbean 41.492 66.721 70.481 76 977 81.807 77.557 79.478 80.444 77.237 10 Asia 236.H24 31 1.016 371.268 375.311 3X3.062 390.671 399.0S2 400.264 402.752 1 1 Africa 4.180 6.296 6.5X7 7.034 7.379 6.717 7.411 7.908 7.765 12 Other countries 5.X27 5.004 6.117 5.96X 5.926 4.X25 3.764 4.7X2 4.576 1. Includes the Bank for Internationa! Settlements. Venezuela, beginning December IW0. .10-year maturity issue: Argentina, bediming April 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, 1993. 30-year "maturity issue. negotiable time certificales of deposit, and borrowings under repurchase agreements. 5. Debt securities of U.S. government corporal ions ;md federally sponsored agencies. um.[ 3. Includes noninarketable certificates of indebtedness and Treasury bills issued to official U.S. corporate stocks and bonds. institutions of foreign countries. SOURC'R. Based on U.S. Department of the Treasury data and on data reported to the 4. Excludes notes issued to foreign otlicial nonresei ve agencies. Includes current value of department by banks (including Federal Reserve Banks) and securities dealeis in (he United zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning Stales, and on the IWJ benchmark sur\ey of loiekn portfolio investment in the United March lySX. 20-year maturity issue and beginning March 1W0. 30-year maturity issue; States. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States' Payable in Foreign Currencies Millions of dollars, end of period 1996 1997 Item 1993 1994 1995 June Sept. Dec. Mar. 1 Banks' liabilities 7X.259 89.258 109.713 1 11.651 111.140 103.820 109.170 2 Banks' claims 62.017 60.711 74.016 65.825 68.120 66.455 72.669 3 Deposits 2(1.993 19.661 22.696 20.890 24.026 22.904 24.706 4 Ollu-r claims v 41.024 41.050 51.320 44.935 44.094 43.551 47.963 5 Claims ol banks' domestic customers" 12.854 10.878 6.145 7,554 7.390 14.613 8.915 I. Data on claims exclude foreign currencies held by U.S. monetary authorise' 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for ihe accounts of the domestic 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 States' Payable in U.S. dollars Millions of dollars, end of period 1996 1997 Item 1994 1995 1996 Oct. Nov. Dec. Jan. Feb. Mar. Apr.1' BY HOLDER AND TYPE OF LIABILITY 1 Tutal, all foreigners 1,014,996 1,099.549 l.l.V7.742r 1,124,315 1,116,775 l,U7,742r l,U5,728r 1.15».707r 1.154,162 1,161.165 2 Banks" own liabilities 718.591 753.461 759.017' 757,645 740,998 759,017' 765.216' 782.741' 782.825 794.412 1 Demand deposits 23,386 24 448 27.014 21.858 27.637 27.0.14 26.228 25.084' 28.013 29.869 -1 Time deposits" 186.512 192.558 187.613' 197.388 192.543 187.613' 186.725' 189.754' 189.377 183.467 5 Other' 113.215 140.165 142. 842' 150,302 14.1.690 142.842' 158.871 161.843' 151.921 160.959 6 Own lorciyu olliees4 395.478 l%.29() 401.528 386.097 377.128 401.528 393.392 406.060' 413.514 420.117 7 Banks' euslodial liabilities5 296.405 346,088 178.725 366.670 375,777 178.725 370.512 175.966 371.337 366.75.1 8 U.S. Treasury bills and certificates'' 162.938 197.355 220.575 214.609 225.046 220.57.5 214.727 217.817 218.271 211.148 9 Other negotiable and readily transferable instrumenls7 42.539 52.200 64.040 54,045 54.568 64.040 62.971 59.668 55.843 59.141 10 Other 90.928 96,531 94.110 98.016 96.163 94.1 10 92.814 98.481 97.22.1 96.264 1 1 Nonmonetary inlernalional and regional organizations*. . . 8.606 11.039 13.864 16.666 14.772 13.864 14.849 14.626 12.192 12.053 12 Banks' own liabilities " 8.176 10 147 13.155 15.835 11.434 13.355 14.170 14.297 1 1.793 1 i.801 13 Demand deposits 29 21 29 67 46 29 55 51 49 10 14 Time deposits" 3.298 4.656 5.784' 6.005 4.906 5.784' 5.792 5,035 6.952 5.218 15 Other1 4.849 5.670 7.542' 9.763 8,482 7.542' 8.323 9,211 4.792 6.5.13 16 Banks' custodial liabilities5 430 692 51)9 8.11 1.3.18 509 679 329 199 252 17 U.S. Treasury hills and certificates'1 281 350 244 600 1.088 244 494 219 226 154 IS Olher negotiable and readily transferable instruments 149 341 265 231 226 265 185 no 158 98 19 Other 0 1 0 0 24 0 (I 0 15 0 20 Otficia! institutions'' 7P 957 ">75 yK 105 617' 796 175 104 763 305 617' 307.757' 307.802' 311.468 301.005 21 Banks' own liabilities 59.935 81.447 79.406' 81.706 82.714 79.406' 88.230' 87.357' 90.740 86.834 22 Demand dcposils 1.564 2.098 1.5 1 1 1.316 2.180 1.51 1 1 ~")t) 1.378 2.390 2.345 2 * Time deposils: 2.1.511 30.717 3.1.177' 35.551 35.292 33.377' 32.727' 34.538' 12.773 13.510 24 Oilier' 34.860 50.632 44.518' 46.839 45.242 44,518' 54,213 51.441 55.577 50.979 25 Banks' custodial liabilities' 151.022 192.481 226.211 212.469 222.049 226.21 1 219.527 220.445 220.728 214.171 2(i U.S. Treasury bills and certificates'1 139.571 168.534 193.435 186.180 197.692 193.435 188.076 191.090 191.548 183.628 27 Other negotiable and readily transferable instruments7 13,245 23.60.1 32.350 25.085 24.000 32.350 31.291 29.008 28.797 10 196 2K Other 206 344 426 1,204 357 426 160 347 3S3 147 29 Banks'" 678.532 691.412 680.946' 678.991 667.700 680.946' 669.269' 683.180' 687.908 699.102 10 Banks' own liabilities 563.617 567.834 562.935' 554.577 547.106 562.935' 553.694' 562.690' 567.818 578.910 11 Unalfiliated foreign banks 168.139 171.544 161.407' 168.480 169.978 161.407' 160.302' 156.630' 154.104 158.791 12 Demand deposits 10.633 11.758 13.692 11.156 13.304 13.692 12.898 11.642 13.312 14.865 13 Time deposits" 111.171 101.47 1 90.384' 96.223 94.345 90.384' 89.557' X9.197' 88 260 81.092 14 Other' 46.335 56.315 57.331' 61.101 62.329 57.331' 57.847 55.791' 52.712 60.816 35 Own foreign ollices4 395.47K 3%.290 401.528 386.097 377.128 401.528 393.392 406.060' 413.514 420.117 .16 Banks' custodial liabilities' 114.915 123.578 1 18.01 1 124.416 120.594 1 18.01 1 1 15.575 120.490' 120.090 120.192 17 U.S. Treasury bills and certilieates'' 11.264 15.872 11,886 16,865 14.227 13.886 13.969 13.289 13.996 14.177 IX Olhcr negotiable and readily transferable instruments 14.506 13.(135 12.321 12.455 13.295 12.321 11.142 11.210 1 1.204 12.169 10 Other 89.145 94.671 91.804 95.096 93.072 91.804 90.464 95.991' 94.890 93.846 41) Other foreigners 114.901 121.170 137.315 132.481 129.540 117.115 143.853' 151.099' 142.594 149.005 41 Banks' own liabilities 86,863 91 811 103.121 10.1.527 97.744 101.321 109.122' 118.397 112.474 116.867 42 Demand deposits 11.16(1 10.571 11.802 11.319 12,107 11.802 11.985 12.013' 12.262 12.629 41 Time deposits2 48.5.12 53.714 58.06X 59.609 58,000 58.068 58.649' 60.984' 61.192 61.627 44 Other 27.171 27.548 33.451 32.599 27.637 33.451 38.488 45.400 38.820 42.61 1 45 Banks' custodial liabilities'^ 28.038 29.337 33.994 28.954 31.796 33.994 34.731 14.702' 30.120 32.138 46 U.S. Treasury bills and certilicales'1 11.822 12.599 13.010 10.964 12.0.19 13.010 12,188 13.219 12.501 1.1.189 47 Other negunable and readily transferable instruments7 14.639 15.221 19.1(14 16.274 17.047 19.104 20,353 19.340 15.684 16.678 48 Other 1.577 1.517 1.880 1.716 2.710 1.880 2.190 2.143' 1.935 2.271 MEMO 49 Negotiable time certificates of deposit in custody for foreigner 17.895 9.103 9.934 11.657 10.540 9.934 9.035 8.745 9.332 10.658 1, Reporting banks include all types of depository institutions as well as some brokers and ft. Includes nonmarkelable certificates of indebtedness and Treasury bills issued to otticial (.tellers. Excludes bonds and notes of maturities longer lhan 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 certilieates o\' ble and readily transferable instruments." deposit. 3, Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the Inter- •1. 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 hanks, foreign central governments, and the Bank lor International principally of amounts owed to the head olticc or parent foreign bank, and to foreign Settlements, hranehes. agencies, or wholly owned subsidiaries of the head office or parent foreign bank. !(). Excludes central banks, which arc included in "Otficial 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 • August 1997 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States'—Continued 1996 1997 Item 1994 1995 1996 Ckl. Nov. Dec. Ian. Mar. Apr'1 AREA 50 Total, all foreigners. . 1,014,996 1,099,549 l.l.17,742r 1,124,315 1,116,775 l,137,742r l,135,728r 1.158,707r 1,154,162 1,161.165 51 Foreign countries t,006,390 1,088,510 l,)2.1.878r 1,107,649 1,102,003 I,l2.1,878r l,120.879r 1,144.08 lr 1,141,970 1,149,112 52 Europe 390.869 362.819 368.352 374.418 381.204 368.352 379.630 379.556 374.993 375.061 53 Austria .1,588 3.537 5.101 6,816 6,250 5.101 4 794 4.010 4 589 3.069 54 Belgium and Luxembourg 21.877 24.792 23.576 23.232 21.006 23.576 22.842 23.537 22.106 18.764 55 Denmark 2.884 2.921 2.450 1,801 2.790 2,450 2.213 1.594 1.691 1.647 56 Finland 1,436 2.831 1.463 1.509 1.557 1.463 1.583 1.338 1.017 1.747 57 Franco - 44,365 39.218 34.365 42.346 40.021 34.165 .14.558 35,457 34.860 40.228 58 Germany 27.109 24.(135 24.554 23.522 21.65(1 24.554 24.871 24.142 25.400 25.691 59 Greece 1,411(1 2.014 1.810 1.666 T m 1.810 2.080 1.930 2.392 1.740 60 Italy 10 885 10 86S 10.701 12.793 10.262 10.701 10.366 10.610 8,674 9.405 61 Netherlands 16.(133 13.745 10,995 12.017 11.132 10.995 9.760 10.946 11.005 1 1,971 62 Norway 2.318 1.394 1.288 1.552 I.8K2 1.288 1,860 1.538 1.891 1.357 63 Portugal 2.846 2.761 1.865 1.388 1 7^1 1.865 1.741 1.661 1.756 1.993 64 Russia 2J26 7,948 7^571 5!6()2 SJI5 71571 7.160 6.819 7.771 7.863 65 Spain 14.675 1(1.(11 1 16.922 17.665 18.228 16.922 20.41 1 17.961 18.789 1 7.671 66 Sweden 3.094 3.246 1.291 1.424 1.656 1.291 2.269 1.527 1.921 2.224 67 Switzerland 40.724 43.625 44.215 32.541 37 98 1 44,215 43.266 46 681 43.319 41.802 68 Turkey 3341 4,124 6.723 K.0I9 7.3 1 1 6.72.1 7.051 6.749 7.177 6.585 69 UniiL-d Kingdom 163,733 139.183 151 385 159 878 165.814 151.385 157.357 157.265 154.2 1 1 1 56.741 70 Yugoslavia" ^ 245 177 206 216 232 206 212 239 248 271 71 Olhcr Europe and other former U.S.S.R.'" 27.770 26,389 21.871 20.431 21.272 21.871 25.236 25.550 26.176 24.290 72 Canada 24.76H 30.468 38.111 35,147 33.035 38.11 1 34.830 33.985 37.116 19.572 73 Latin America and Caribbean 423.847 440.213 465.709' 444.S47 418.574 465.709' 455.458' 472.601 464.170 475,521 74 Argentina 17.203 12,235 13.794 11.701 1.3.860 13.794 16.475 17.0IK 16.739 14.021 75 Bahamas 104,014 94,991 88.304' 101.414 91.494 88.3(W 90.460 98.120' 89.417 104.847 76 Bermuda 8.424 4.897 5.299 4.910 6.443 5.299 5.103 8.803 8.196 7.197 77 Brazil 9.145 23 797 27.663 24.(183 26.920 27.663 22.468 23,859 23,694 23.419 IX British West Indies 224.594 239J183 250/761 229,493 226.502 25IU6I n44.611 248.571 253.685 149.007 79 Chile 3.127 2.826 2.915 2.767 2.728 2.915 2 987 3.459 3.278 3.114 80 Colombia 4.615 3.659 3.256 2.968 2.S38 3.256 2.791 2.855 2,807 3.1X5 HI Cuba 13 « 21 17 IS 21 19 19 19 52 82 Ecuador 875 1.314 1.767 1.383 1.574 1.767 1.617 1.633 1.484 1.469 S3 Guatemala 1.121 1.276 1.282 1.207 1.235 1 282 1.148 1.41(1 1.378 1.514 84 Jamaica 529 4SI 628 580 564 628 576 576' 585 525 S5 Mexico 12.227 24.56(1 31.230 27.673 27.981 31.230 27.139 27.442 26.594 27.718 86 Netherlands Antilles 5,217 4.673 5.977 5.076 4,437 5.977 6.401 6 085 3.474 5.314 K7 Panama 4.551 J.264 4,077 4.056 4.002 4.077 3.849 4.135' 3.847 3.71 1 88 Peru WO 974 834 1.024 «42 834 967 917 926 881 89 Urusiuav 1 ..597 1,836 1.888 1.841 1.753 1,888 1.915 1.857 1.843 1.756 90 Venezuela 13.9X6 1 1.808 17.361 16,369 17.361 18.1 19 IS.125' 18.454 18.968 91 Other 6.704 7^531 8.652 8^285 7,906 8.652 8.591' 7J17' 7.750 8.805 92 Asia 154.346 240,595 236.716 239.416 233.804 ^36 716 "'16418 ""44 509' 150 688 M1 VI China 93 Mainland 10.066 33.750 30.441 26.99K 29.41 1 30.441 27.917 31.634 31.374 28.582 94 Taiwan 9.844 1 1.714 15,99(1 15.449 16,613 1 5.990 16.682 15.621 15.797 14.617 95 Hong Kong 17.104 20.197 18,742 17,052 18.712 18.742 19.873 20.065 20.105 18.99(1 96 India " 2.338 3.373 3.936 3.709 3.832 1.936 4.329 4.752 5.435 4.756 97 Indonesia 1,587 2,708 2.297 2.436 2.401 2.297 2.159 2.473 2.671 2.440 9K Israel 5,157 4 041 6 (W 7.162 5 723 6 042 6.597 6.197 5.955 6.082 99 Japan 62.981 109.191 107.014 II2/IO2 103.680 107.014 106.421 108.705 I16}>54 1 14.925 100 Korea < South* 5.124 5.749 5.973 5.545 5 S97 5.973 6.048 6.276 6.534 7.151 101 Philippines 2,714 3.092 3.378 3.191 3.264 3..17K 2.340 2.437 2.189 2.335 102 Thailand 6,466 12.279 10.912 1 1.972 12,72') 10.912 9.873 10.752 9.394 10.361 103 Middle Eastern otl-exportins: countries1' 15,494 15.582 14.3(13 13.032 13.145 14.303 12.924 12.767 13.408 13.826 104 Other 15 471 1 S 91 7 17 688 ""() 268 18 397 17 6S8 21.255 2~\830' 21.572 18.256 105 Africa 6.524 7 641 8.06! 7.058 7.671 8.063 S.443 8 1 10 8.5.16 9.014 106 Egypt 1.879 2.136 2.(112 1.9(14 1.901 2.012 1.933 2.033 2,001 2.059 107 Morocco 97 104 1 P 74 66 112 1 1 1 97 107 129 108 Soulh Africa 433 739 458 435 641 458 610 720 827 783 109 Zaire 9 10 10 1 [ 10 10 5 7 9 5 110 Oil-exporting countries14 1.343 1 797 2.608 1.940 2.384 2.608 3,095 2,467 2.931 1.144 1 11 Other 2,763 2.855 2,863 2.694 2.669 2.863 2,689 2,786 2.661 2.694 112 Other 6(116 6.774 6.927 6.763 7.715 6.927 6.100 5.320 6.467 7.619 1 13 Australia 5.142 5.647 5,468 4,786 6.196 5.468 4.866 4.072 5.096 6.37(1 1 14 Other 894 1.127 1,459 1.977 1.519 1.459 1.234 1.248 1.371 1.249 1 15 Nonmonetary international and regional organisations. . . 8.606 11,039 13.864 16,666 14.772 1.1.864 14.849 14.626 12.192 12.053 116 InternationalL<i 7.537 9.300 1 1,991 14.887 12.974 1 1.991 11.230 13.000' 10.272 10.685 1 17 Lalin American regional"1 613 893 1.339 1.304 1.172 1.1.19 1.103 1.220' 1.459 1.050 1 18 Other regional17 .". 456 846 534 475 626 534 516 406 461 318 I 1. 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. ruis "holdings of dollars" of the International Moneiary Fund. included all parts of (he former U.S.S.R- (except Russia), and Bosnia, Croatia, and Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain. Iran. Irat|. Kuwait. Oman, Qatar. Saudi Arabia, and Uniled Arab 17. Asian. African, Middle Eastern, and European regional organizations, except the Bank Emirates (Trucial States). lor International Scltlemenls, which is included in "Other Europe." 14. Comprises Algeria. Gabon. Lihya. 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 1996 1997 Area or country 1994 1995 1996 Oct. Noy. Dec. Jan. Feb. Mar. Apr.1' 1 Total, all foreigners 485,432 532.444 600,692 563,454 574.920 600.692 608,506 634.694r 637.597 641,924 2 Fordyn countries 4X0,841 530.513 598,088 560.325 573,447 598.088 606,734 632.439' 636,091 639,636 3 Europe 124.124 132 150 166.5(11 165.634 168.794 166.501 179.495 194.236 205.803 184.159 4 Austria 692 565 1.662 1.197 1.097 1.662 1.643 1.284 1.911 1.541 5 Belgium and Luxembourg 6.923 7.624 6.727 6.828 6 403 6.727 7.61 1 6.855 8.439 8.054 6 Denmark 1.129 403 492 4X0 651 49' 678 571 546 888 7 Finland 512 1.055 971 1.068 1.228 971 1.144 976 1.684 1 198 8 hancc 12,149 1 5.033 15.246 12.792 12.198 15.246 18.1 1 1 20.576 24.929 15.306 9 Germany 7.62.1 9.263 8.472 8.546 7.195 8.472 9.659 9.077 11.971 9.517 Ill Greece 604 469 568 426 571 568 636 530 755 453 1 1 Italy 6.044 5.370 6.457 5.007 5.957 6.457 5.419 5.587 6.427 6,119 12 Nelherlands 2.960 5.346 7.080 7.386 7.350 7.080 8.119 8.658 7.616 8.900 1 3 Norway 504 665 808 1.617 1.894 808 1,058 766 1 226 846 14 Portugal 938 888 418 517 .341 418 420 310 421 326 1? Russia 971 660 1.669 1.413 1.533 1.669 1.673 1.704 2.028 1,799 In Spain .1.516 2.166 3.211 3.885 4.181 3.211 6.507 5.407 6.633 6.3(11 17 Sweden 4 098 2.080 2.673 2.919 2.882 2.673 3.028 3.32.3 3.320 2,966 IS Switzerland .5.747 7.474 19.798 16.1 10 18.071 19.798 21.457 25.258 20.855 21.301 19 Turkey ,S7S 803 1.109 962 1,131 1.109 1.029 1,221 1.238 1.216 20 United Kingdom 66.H61 67.784 85.0.57 89.961 92.143 85.057 86.7 1 1 96 988 99.130 90.948 21 Yugoslavia' 265 147 115 1 18 112 115 1(18 107 87 78 22 Oilier Europe and other former U.S.S.R.' 1.686 4.355 3.968 4.402 3.856 3.968 4.484 5.038 6.587 6.382 23 Canada 18.490 20.874 26.436 23,066 22.013 26.436 26.34* 27.881 35.773 3.1.569 24 Lalin America and Caribhean 2?4 229 256 944 ^74 P7 743 634 ^53 76] 274.127 271.654 175 T55 261.138 282.264 2? Argentina 5,854 6.439 7.400 7.057 7.212 7.400 6.987 6.952 6.995 6.869 26 Bahamas 66.410 5X.K18 71.871 61,991 64.911 7 i ,871 62.679 66.771 67.727 68.219 27 Bermuda 8.533 5.741 4.103 4,438 5.019 4.103 4.444 5.980 6.216 8.125 28 Brazil 9.583 1.3.297 1 7.259 15.417 16.141 17.259 17.620 17.758 17.752 17 429 2') British West Indies 96.373 124.(137 1(15.510 105.891 105.234 105.510 I0X.643 1111,14.1 98.762 111.236 «l Chile 3.82(1 4.864 5.136 4.2K8 4.554 5.136 5.509 5.602 5.7K4 5.6.36 11 Colombia 4.(104 4.550 6.247 4.811 4,960 6.247 6.166 6.033 6.099 6.026 32 Cuba 0 0 0 0 0 0 0 0 0 33 Ecuador 682 825 1.031 957 952 1.03! 1.079 1.134 1.155 995 34 Guatemala .166 457 620 546 568 621) 612 634 629 613 IS Jamaica 258 323 345 362 365 345 336 336 366 325 36 Mexico 17.749 18.024 18.425 17.742 17.993 IK.425 18.323 18.297 19.516 20.292 17 Netherlands Antilles 1.404 9.229 ''5 209 9.406 15.074 25 209 27.675 24.250 1 X.926 25.2.15 IK Panama 2.198 3.008 2.786 2.354 2.621 2.786 2.796 2.911 3.110 3.243 19 Peru 997 1.829 2.72(1 2.563 2.629 2.720 ">867 2.944 2,510 2.473 40 Uruguay 503 466 589 547 551 589 623 766 741 682 41 Venezuela ... 1.832 1.661 1.702 1.636 1,626 1.702 1.599 1.452 1.516 1.558 42 Other 3.663 3.376 3.174 3.628 3.351 3.174 .3.696 3.292 3.334 3.288 45 Asia 107.WK) 115.336 122.538 120.0(17 120.285 122.538 121.362 127.103' 124.299 129.442 China 44 Mainland 836 1.023 1.401 1.420 1.292 1.401 2,035 1,766 1.456 2.418 45 Taiwan 1.448 1.713 1.894 1.305 1.413 1.894 1.249 1.201 1.709 1.276 4d Hone Kona 9.222 12.821 12.802 12.984 13.550 12.802 1 1.764 11.877' 14.147 1 \348 47 India 994 1.846 1.946 2.181 2,027 1.946 1.824 1.957 2.194 2.147 4X Indonesia 1.472 1.696 1 76"1 1.577 1.636 1.762 1.749 1.896 2.081 2.182 49 Israel 688 739 633 1.017 624 633 692 617 635 542 Sn Japan 59.569 61.468 59.967 59.343 59.886 59.967 59 843 64 199' 56.409 59,061 51 Korea (South) 10.286 13 975 18.961 16.947 18.080 18.961 20.214 20.054' 19.943 20.863 52 Philippines 663 1.318 1.697 1.335 1.519 1.697 1.492 1.794 1.600 1.746 5.1 Thailand 2,902 2.612 2.679 2.699 2.820 2.679 3.003 3.092 3.44! 3,245 54 Middle Eastern oil-exporting countries4 13.982 9.639 10.424 11,372 10.31 1 10.424 8.582 8.889 10.078 11.320 5.5 Other 5.738 6.486 8.372 7.827 7.127 8.372 8.915 9.761 10.606 11.292 S6 Africa .3.053 2.742 2.777 2.638 2.557 2.777 2.731 2.772 2.735 3.282 57 Eaypt 225 210 247 204 212 247 246 245 244 23! 58 Morocco 429 514 524 543 587 524 489 522 473 47K 5i) South Aliica 674 465 584 614 551 584 572 564 470 452 fit) Zaire 2 1 (I 1 0 0 0 0 0 1 61 Oil-exporting countries5 856 552 420 414 427 42( 408 474 605 1.177 62 Other 867 1.000 1.002 862 780 1.002 1,016 967 943 943 6.1 Other 1.145 2 467 5.709 5.346 6.037 5.709 5.144 5.192 6.343 6,920 64 Australia 2.192 1.622 4.577 3.798 4.336 4.577 3,743 3,176 4.101 5.000 65 Other 953 845 1.132 1.548 1.701 1.132 1,401 2,016 2.242 1.920 66 Nonmonelarv international and regional organizations'5 . . . 4.591 1.931 2.604 3.129 1.473 2.604 1.772 2.255 1,506 2,288 1. RcportiiiL' hanks include all types of depository insiiiuiions ;is well as some brokers and 4. Comprise-. Bahrain, Iran. Iraq. Kuwait. Om;in. Qatar. Saudi Arabia, and Uniied Arab dealers. Emirates (Trucial States), 2. Since December IVJ2. has excluded Bosnia. Croatia. arn.1 Slovenia. .*). Comprises Algeria. Gabon. Libya, and Nigeria. 3. Includes the Bank tor International Settlements. Since December 1992. has included nil 6. Excludes the Bank lor International Settlements, which is included in "Other Europe." pans of the tormer 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 • August 1997 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States' Payable in U.S. Dollars Millions of dollars, end ot period 1996 1997 Type of claim 1994 1995 1996 Oct. Nov. Dec. Jan. Feb.1 Mar. Apr.1' 1 Tolol 601.814 655,211 744,136 744,136 799.569 2 Banks" claims 485.432 51">.444 600.692 563.454 574.920 600.692 608.506 634.694 637.597 641.924 3 Foreign public borrowers 23.416 22.518 22.220 25.185 20.420 22.220 26.039 24.755 28.864 29.176 4 Own foreign otlices' 283.015 307.427 342,51 1 330.377 335.089 342.511 131.276 361.571 361.360 363.485 5 Unallilialed foreign banks 110.410 101.595 113 523 108.701 107.928 113.523 121.203 118.074 1 18.444 116.178 6 Deposits 59.368 37.771 33.841 36.142 32.420 33.841 39.271 38.155 37.286 34.594 7 Other 51.042 63.824 79.682 72.559 75.508 79.682 81.932 79.919 81.158 81.584 8 All olhcr foreigners 68.591 100.904 122.438 99.191 11 1.483 122.438 129.988 130.292 128.929 133.085 9 Claims of hanks' domestic customers' 1 16.382 122.767 143.444 143.444 161.972 10 Deposits 64.829 58.519 77.650 77.650 95.147 1 1 Negotiable and readily transferable instruments 36.111 44.161 50.659 50.659 49.518 12 Outstanding collections and other 15.442 20.0X7 15,135 15.135 17.307 MEMO 13 Customer liability on acceptances 8.427 S.4I0 9.624 9.624 11.247 14 Dollar depiisits in banks abroad, reported by noilhanking business enterprises in the United Stales' 32.796 30.717 42.679 40.326 41.581 42.679 43.452 47.270 38.426 39.721 1, For bank.-.' claiitiv data are monthly: for claims of hanks' domestic customers, data arc principally of amounts due from the head office or parent I'oieign hank, and from foreign tor quarter ending with month indicated. branches, agencies, or wholly owned subsidiaries of the head olh'ce or purenl foreign bunk, Report ins; banks include all types of depository institution as well as some brokers :md 3, Assets held by reporting banks in the accounts of lheir domestic customers. dealers. 4, Principally negotiable time certilicales of deposit, bunkers acceptances, and commercial 2. For U.S. hanks, includes amounts due from own foreign branches and foreign subsidiar- pllpCl". ies consolidated in quarterly Consolidated Reports of Condition liled wilh hank regulatory 5, Includes demand and time deposits and negotiable and nomiegoliable 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 UNAFFIUATED FOREIGNERS Reported by Banks in the United States' Payable in U.S. Dollars Millions of dollars, end of period 1996 1997 Maturity, by bonowei and area" 1993 1994 1995 June Sept. Dec. Mar.1' I Tolal 202,566 202,282 224,9.12 228,5.14 232,997 257,935 276.136 B\ borrower 2 Maiunlv of one vear or less 1'2.662 170.411 178.857 IS5.S8I 189.047 211.717 223.8.W 3 Foreign public borrowers 7.82K i 5.435 14.995 14.982 16.003 15.390 19.876 4 All other foreigners 114.834 154.976 163.862 170.899 173.044 196.327 201.962 5 Maturity of more than one year '9.904 31.871 46,075 42.653 43.950 46.21 8 52.298 6 f"orei"ii public borrowers 0.874 7.838 7.522 X.I 26 ts.922 6.815 8.861 7 All olher foreigner* 9.030 24.033 38.553 34.527 37.028 39.403 43.437 By ami Maturity ol one year 01 le^s 8 Furope 57.413 56.381 55.622 57.138 58.545 55.490 75.019 9 Canada 7.727 6,690 6.751 6.806 8.81 1 8.319 10.404 10 Latin America anil Caribbean 60.490 59.581 72.504 78.622 79.622 103.253 96.875 1 1 Asia 41.418 40.567 40.296 38.078 37.199 18. Pfi l(i. SIX) 12 Africa 1.820 1.379 1,295 1.279 1.320 1.316 1.451 13 All other 3.794 5,811 2,389 3.958 3.55(1 5.183 3.589 Maturity ot more than one year 14 L-nrope 5.310 4.358 4.995 8.193 7.117 6.96.1 9.48.1 15 Canada 2.581 3.505 2.75 1 3.689 3.533 2.645 2.956 16 Latin America and Caribbean 14.025 15.717 27.681 19.564 21.382 24.917 26.786 17 A-aa 5.606 5.323 7.941 9.201 9,808 9,391 10,785 1 8 Africa 1.935 1.583 1.421 1.410 1.349 1.361 1.204 19 All other' 447 1,385 1.286 596 761 941 1.084 I. Reporting banks include all types ol depositor institutions as well as some brokers and Maiurny is tune remaining until maturity. dealers. Includes nontnonelary 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. Banks' Billions of dollars, end ot period 1995 1996 1997 Area of cottntr> 1993 1094 Mar. June Sept. Dec Mar. June Sepl. Dec. Mar.1' i i(ji<ii ~ . . ........ -. ........... ...... 499.5 545.0 5.M.9 5J5J 551.9 574.6 612. K 586.1) 645.(1 657.0 2 G-10 eoimlnes and Switzerland 161." 191.2 212 1 206.5 203.0 206.11 203.4 226.9 22(1.(1 22X.I 239.9 1 Bciiiiuni anil I.uvcniboure 7.4 7.2 104 9 7 1 1.(1 116 11.0 1 1 4 II 1 1 1.7 14.3 4 France 12.(1 19.1 19 9 19.9 IX.0 19 4 17.9 18.(1 17.4 16.6 °0 6 5 Cjermany 12.6 24.7 .11.2 10.(1 27.5 27 3 3 1.4 33.9 29.8 32.1 7.7 1 i .8 10.6 10.7 12.6 7 Nelherlands 4.7 16 1 5 4.3 4.5 3.7 3.0 4.7 5 9 3.9 47 X Sweden 2.7 2.7 1.1 3.1 2.9 3.3 2.7 3.(1 2.6 3.4 9 Swil/erland so .5.1 5.7 6.7 6.2 6.3 10 United Kingdom K4 4 85.X 911.1 X7.1 XII.4 X2.4 X4 7 101.6 90 S 104.6 1(15.7 1 1 Canada 6 9 1(1.0 10.8 1 1 1 12.9 I0..1 itl.X 12.2 14.8 14 0 16.4 1 2 Japan 17.(1 21.1 26.7 24.4 26.6 2X.5 22.7 23.6 21.7 216 21.6 1 3 Other induslriali/ed eounlries 26.5 45.7 44.4 4.1.3 5(1.5 50.2 61.3 55.5 62.1 65.7 66.9 14 Austria .7 1.1 .9 7 1.2 .9 1.3 1.2 1.0 I.I 1.9 15 Denmark 1.(1 1.3 1.7 I.I I.X 2.6 3.4 1 i 1.7 1.5 I.X If. (-inland .4 .9 1.1 .5 .7 .X .7 6 .6 .K .7 17 (lieece 1 2 4 5 4 9 5.0 5.1 5 7 5.6 .5.6 6.1 6.7 6 4 IX Noruav L7 2.(1 2.4 I.X 2 3 1 T 2.1 2.3 3.0 8.0 5.1 19 Portugal .8 1.2 1.(1 1.2 1.9 1.3 1.6 1 6 1.4 .9 1.0 -I) Spain 0.9 13.6 14.1 13.0 13 3 1 1.6 17.5 116 16.1 13.2 14.5 2 1 Turkey 2.1 1.6 1.4 1.4 2.0 1.9 2.(1 2.3 2.X 2.7 2.7 22 Other Western Europe 1 2 .1.2 2.X 2.u .1.1 4.7 3.8 3.4 4.X 4.7 6.3 21 South Africa I.I 1.0 1.5 1 4 1 1 1.2 1.7 2.0 1.7 2.0 2.0 24 Australia 2.1 15.4 12.6 14.3 17.4 16.4 21.7 19.6 22.X 24(1 24.4 25 OF'EC: 17.6 24.1 19.5 2(1.1 22.7 22.1 21.2 20.1 19.2 19.7 21.9 26 Ecuador .... .5 .5 .5 .7 .7 .7 .X .cj .9 II I.I 27 Venezuela 5.1 .1.7 .1.5 .1.5 3.0 2.7 ~> 0 2.3 2.3 2.4 1.9 2X Indonesia 1.1 3.X 4.(1 4.1 4.4 4.X 4.7 49 5.4 5.2 4.9 2L) Middle Eas! countries 7.6 15 3 10.8 11.5 13.9 13 3 12.3 1 1.5 10.1 10.6 13.2 10 Al'rkau countries 1.2 .<) .7 .6 .6 .6 .6 s .4 .4 .7 11 Non-OHEC developing countries X.l 2 96.(1 98.5 10.1.7 104.1 1 12.6 1 IX.6 126 4 124.1 130.1 128.9 Ullin America 12 Argentina 7.7 I 1.2 11.4 12.3 10 9 12.9 12.7 III 15.0 14.3 144 1.1 Brazil 12.0 X.4 9.2 1(1.(1 13.6 13.7 IX.3 21.7 17.8 2(1.7 22.4 34 Chile 4.7 6.1 6.4 7.1 6.4 6.X 64 6.7 6.6 7.(1 6.X 15 Colombia 2.1 2.6 2.6 2 6 2.9 2.0 2.9 2.x 3.1 4.1 3 7 16 Mexico 17.9 1X4 17.9 17.6 16.3 17.3 16.1 15.4 16.1 16.2 17.5 17 Peru .4 .5 6 X .7 8 » 1.2 1.3 16 1.6 IS Other .1.1 2.7 2.4 2.6 2.6 2 K 3.1 3.0 3.0 3.3 3.5 A \ia China lo Mainland 2.0 I.I I.I 1.4 1.7 1.8 3.3 2.9 2.6 2.5 2.7 41) Taiwan 7.3 9.2 X.5 9.0 9 (I 9.4 9.7 9 X 10.1 10.2 10.2 41 India 1 2 4.2 3.8 4.(1 4.4 4.4 4.7 4 2 3.X 4.3 4.9 42 Israel .5 .4 .6 7 5 .5 ,5 .6 ,5 5 .7 4.1 Korea (South! 6.7 16.2 16.9 IX.7 IX.0 19.1 19.3 21 7 21.9 2L5 14.6 44 Malaysia 4.4 3.1 3.9 4.1 4.3 4.4 5 "> 5 1 5.5 .5.9 6.6 45 Philippines .1.1 3.3 .1.(1 1.6 3.3 4 1 3.9 4.7 5.4 5.X 6 (1 46 Thailand 1.1 2.1 1.1 3.X 3.9 5.7 6.8 47 Other Asia 5 1 47 4.9 3.5 3.7 4.5 4.3 4.1 4.1 4.2 Afrku 48 Egypt .4 .3 .4 .4 .4 4 .5 .5 6 .7 .9 49 Morocco .7 .6 .6 ') .9 .7 .7 .8 .7 .7 .6 5(1 Zaire .0 .0 .0 .0 .0 ,(l .0 .0 .0 .1 .0 5] Other Africa' .8 .8 .7 6 .8 .9 .X .X 1.(1 .9 .9 52 Eastern Europe .1.2 2.7 IS 1.4 4.2 6.3 5.1 5.3 ,, o 9.3 51 Russia4 16 .X 7 .4 .6 1.(1 1.4 1.0 I.X 1.7 1.7 54 Other 1.6' 1.9' 1.7' I..V 2.X1 3.2' 4.9' 4 1' 3.5 3.2 5.6 55 Olfshoie banking centers 73.5' 72.91 85.7' X3.8' X7 5' 09.2' 101.3' 1(16 1' 105.3' 114 9' 110.6 56 Bahamas. . . ' 10.9' 10.2' 12.5' X.4 12.6' II (1' 13.9' 17.3' 1-1.2' 20.3' 20.0 57 Bermuda K.9' X.41 X.71 X 4' 6 1' 6 1 5.3' 4.1 4.(1' 4.5' 6.7 5K Cayman Islands and olher Binish West Indies IK J1 21.4' 2(1.7' 25.3' 25.1' 12A' 2X.X' 26.1 32.(1' 37 2' 3.1.0 5" Netherlands Antilles 2 S1 1.6' 1.2' 2.X' 5.7' 1(1 3' 1 1.1 11.2' II 7' 26 r 19.9 6(1 Panama" 2 4' 1.1' I.I 1.2' 1.3' 1 4' 1.6' 1.7' 1.7' 2.0' [9 61 Lebanon .1' .1 .1 I' .r .1 .1' T .1' .1' I 62 China. Hong Kong IX.8' 20.0' 22.5' 23. r 23.7' 25.0' 25.3'' 27.X' 26 '"' 2X.I 30.X 61 Singapore 1 1 ~*' id.r 19.2' 14.8' 13.3' 13.11 15.4' 15.9' 15.4' 16.7' 17.9 64 Other* .1' .(!' (1' .1' r .1' r .1' .r .1 65 Miscellaneous and unallocated7 4.1.6' 66.9' 82.5' 72.6' 64.2' 57.6' 62.6' 72.7' 5(1.0' 59.5' 59.8 1. The banking otlices covered by these dam include U S. ultiees and foreign brunches ol 2. Organization o! Pelroleum Exporting Countries, shown individualK: olliei i icmbeis of U.S. banks, including U.S. banks that aie subsidiaries of foieiyn banks. Ollices nol corned OPF.C (Algeiia. Gabon. Iran. Iraq. Kuwait. Libya. Nigeria. Qatar. Saudi Valiia. and United include U.S. agencies and branches of loreign banks. Beginning March 1994. the dala include Arab Emirates): and Bahrain and Oman (nol formally members of OPF.C I large loreign subsidiaries ol' U.S. banks. The data also include oiher lypes of US. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some lypes of hiokers and dealers. To eliminate duplication, the data 4. As of December 1992. excludes olher republics i>l the former Soviet I nion. are adjusted lo exclude the claims on foreign branches held by a U.S. ollice or another foreign 5. Includes Canal Zone. branch of the s.ime hanking institution. 6. horeign branch claims only. These dala arc on ,i gross claims basis and do not necessarily retleci (he ultimate counuy 7. Includes New Zealand, l.ibcna. and international arkl regional organizations risk or exposure of'U b. banks. More complete Jala on ihe country risk exposure of U.S. banks aie available in ihe quarterly Country Exposure Lending Survey published by the Federal Financial hisirKinons Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • August 1997 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in ihe United States Millions of dollars, end of period 1995 1996 Type of liability. and area or country 1993 1994 1995 Sept. Dec. Mar. June Sept.1 Dec. ] 50,597 54,309 46,448 47,673 46,448 49,907 4K,990 51,695 54,822 1 Payable in dollars 3X.72X 3X.29X 33,903 33.908 13.903 36.273 15 385 36 465 39.003 3 Payable in foreign currencies 1 1 .X69 16.01 1 12.545 13.765 12.545 11.634 1 3.605 15.230 15.819 B\ l.vpr 4 Financial liabilities 29,226 12.954 24.241 26.2.37 24.241 26.570 24.X44 25.492 26,089 5 Payable ul dollars 1X.545 18.818 12.903 13.872 12 9(13 13.X1I 12.212 11,119 11,174 6 Payable in loreign currencies 10.681 14,136 1 1.338 12.365 11.338 12.739 12.612 14,173 14.715 7Commercial liabilities 21.371 21 355 •" "'07 21 436 2\2O7 71 137 24.146 26.201 28.7.33 8 Trade payahlcs 8,802 10 005 11.013 10.061 11.013 10.815 11.081 1 1.791 12.720 9 Advance receipts and other liabilities 12,569 11.350 1 1.194 11.375 11.194 12.522 13.065 14.412 16.013 10 Payable in dollais 20.183 19.480 21.000 20.036 21.000 22.442 23.173 25.146 27.629 Payable in foreign Luireniics 1.188 I.X75 1.207 1.400 1.207 SM5 973 1,057 1.104 Bv area cr (<imi!r\ Financial liabilities 12 Europe IX. XII) 21.70.3 15.622 IM0I 15.622 16.950 16.434 16.133 16.242 13 Belgium and 1 uxenrbour" 175 495 369 347 369 483 498 .547 6.12 14 Fiance 2,539 1.727 999 1.365 999 1.679 1.011 1 ">20 1.091 15 Germany 975 1 961 1.974 1 670 1.974 2.161 1.X50 2.276 1,834 16 Netherlands 534 552 466 474 466 479 444 519 556 17 Switzerland 634 6X8 X95 94X 895 1.260 1.156 X30 699 IK United Kingdom 13.332 15.543 10.138 10.5 IX 10.138 10.246 10.790 9.X84 10.224 19 Canada 859 629 632 797 632 1.166 951 973 1.401 20 Latin America and Caribbean 3.359 2.034 1.7X3 1 904 1.7X3 1.876 969 1.169 1.668 21 Bahamas 1.148 101 59 79 59 78 31 50 216 2~> Bermuda 0 80 147 144 147 126 2X 25 50 23 Brazil 18 207 57 1 1 1 57 57 X 52 78 24 British West Indies 1.53.3 998 866 930 X66 946 X26 764 1.030 25 Mexico 17 0 12 3 12 16 II 1.1 17 26 Venezuela 5 5 2 3 2 i 1 1 1 27 Asia 5.956 8.403 5.9XX 6.947 5.98X 6.390 6.351 6.969 6.40(1 28 Japan 4.887 7.314 5.436 6.30X 5.436 5.9X0 6.051 6.602 5.846 29 Middle Eastern oil-eKporling countries 23 35 27 25 27 26 26 25 25 311 Africa , 133 135 150 149 15(1 1.11 72 153 18 31 Oil-exporting countries" 123 123 122 122 122 122 61 121 0 12 All other' 109 50 66 39 66 57 67 95 340 Commercial liabilities 3.1 Europe 6.827 6.773 7.700 7.26.3 7.700 8.425 7.916 8.702 9.767 34 Belgium and Luxembourg 2.39 241 3.31 349 3.31 370 326 427 479 35 France '. 655 728 481 528 4X1 648 678 657 680 36 Germany 684 604 767 660 767 867 839 959 1.002 37 Netherlands 68X 722 500 566 500 659 617 66X 766 38 Switzerland 375 327 413 255 411 428 516 409 624 39 United Kingdom 2.039 2.444 3.568 3.351 3,568 3.525 3.266 3.664 4,101 40 Canada X79 1.037 1.040 1.219 1,040 959 998 1.145 1.090 41 Lalin America ami Caribbean 1.658 I.X57 1.740 1.607 1.740 2.110 2,301 2,396 2,574 42 Bahamas 21 19 1 1 1 28 35 33 63 41 Bermuda 350 345 20.5 219 205 571) 509 355 297 44 Brazil "M4 161 9X 143 98 I2X 119 203 196 45 British West Indies 27 23 56 5 56 III 10 15 14 46 Mexico 481 574 416 .357 416 46X 475 451 665 47 Venezuela 123 276 221 175 221 243 283 341 328 48 Asia 10.980 10 741 10.421 10.275 10.421 10 474 1 1.1X9 12.2.38 11.422 49 Japan 4.314 4.555 3,315 3,475 3.315 3/725 3.943 4.150 4.614 50 Middle Eastern oil-exporting countries' 1.534 1.576 1.912 1.647 1.912 1.747 1,784 1.951 2,168 51 Africa 453 47X 619 5X9 619 70X 924 1 (P0 1,040 52 Oil-exporting countries2 167 256 254 241 254 254 462 490 5.32 .53 Other1 574 519 6X7 4X3 6X7 661 618 702 X40 I. Comprino Bahrain. Iran. Iraq, Kuwail, Onwii. Qaiar. Saudi Arabia, and United Arab 2. Comprises Algeria. Gabon. Libya, and Nigeria. miiaics (Truual Staler). .V Includes nonnioneuiry inicmaiinnat ;intl regional Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1995 1996 1993 1994 1995 Sept. Dec. Mar. June Sept.' Dee. 1 lotul 49,159 57,888 52,509 53,424 52,509 55,4(16 60,195' 59,(M8 6.1,604 2 Payable in dollars 45,161 53.XO5 48.71 1 49.696 48.711 51 007 55.350' 53.KX4 58.592 3 Payable in foreign eune/tcies 3.998 4.083 3.798 3.728 3.798 4,399 4.845 5.164 5,012 fiv type 4 Financial claims 27.771 33.X97 27.398 29.891 27.398 30.772 3.1.251' 34.200 5.268 5 Deposits 15.717 18.507 15.133 17 974 1.1.133 17,595 19.507' 19.877 1.404 6 Payable in dollars 15.182 18,026 14.654 17.393 14.654 17.044 19.069' 19,182 0.63 1 7 Payable in foreign currencies 535 481 479 581 479 551 438 695 773 8 Other linaneial claims 12.054 15.390 12.265 11.917 12.265 13.177 15.744' 14,32' 3.864 9 Payable in dollars I0.X62 14.306 10.976 10.689 10,976 1 1,290 13.347' 12.234 2.069 10 Payable in foreign currencies 1.192 1.084 .289 1.228 1,289 1.887 2.397 2.089 1.795 1 1 Commercial claims ~* 1.3XX 7 3.991 2V i i i ''3,533 25.1 1 1 1 2 Trade receivables 18.425 21,158 22.998 21,409 22.998 22.123 22.35.3' 22.410 2.1,713 1.3 Advance payments and other claims 2.963 2,833 2.591' 2.438 2.62.3 14 Payable in dollars 19 1 17 21.473 23.081 21,614 23.081 22.673 22.934' 2\468 25.892 15 Payable in foreign currencies 2.271 2,518 2.030 1.919 2.0.30 1.961 2.010 2.380 2.444 «v arm or rounln 16 Europe 7.299 7.936 7.609 7,840 7.609 8,929 10.498' 9.777 9 282 17 Beliiium and LiiXL'mboiir<i 134 86 193 160 193 159 111 126 18.1 IS France ~. 826 SOO 803 753 803 1 015 679 733 694 \L) Germany 526 540 436 301 436 32(1 296 272 276 20 Netherlands 502 429 517 522 517 4X6 488 520 493 21 Swil/erland 530 523 498 530 498 470 461 432 474 22 United Kingdom 3.5X5 4.649 4.303 4.924 4.303 5.56X 7.426' 6.603 6.119 23 Canada , 2.032 3,5X1 2.851 3.526 2.8.11 5,269 4.773 4.502 3.44.1 24 Latin America and Caribbean 16.224 19.516 14.500 15.345 14.500 I3.X27 17.644 17.241 19.577 25 Bahamas 1.336 2.424 .965 1.552 1.965 1.538 2.168 1.746 1.452 26 Bermuda 125 27 81 31 81 77 84 113 140 21 rira/n , . , , , , . . - 654 520 830 851 830 1.019 1,242 1.438 1,468 28 Brilish 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 4X7 5.14 461 392 41.3 4.17 30 Venezuela 161 35 32 50 32 40 23 20 31 31 Asia 1.657 1.871 1,579 2.16(1 1.579 1.890 1.571 1,834 2.221 32 Japan 892 953 871 1,404 871 1.171 852 1.001 .035 33 Middle F.astern oil-exporting countries1 3 141 3 4 3 13 9 13 22 34 Africa : 99 373 276 1X8 276 277 197 177 174 35 Oil-exporting countries' 1 0 5 6 5 5 1 13 14 36 All other 460 600 5X3 X32 .1X3 5X0 56X 669 569 Commercial claims 37 Europe 9.105 9.140 9.824 X.X62 9.824 9.776 9.842' 9.266 10.424 3X Belgium and Luxembourg . 184 213 231 224 231 247 239 213 22.1 39 France " 1.947 1.881 1.830 1,706 1.830 1.803 1.659' 1.532 1.644 40 Germany 1.018 1.027 1.070 997 1.070 1.410 1.335 1.240 1.336 41 Netherlands 423 311 452 33X 452 442 481 424 561 42 Swii/erlaml 432 557 520 438 52(1 579 602 590 642 43 United Kingdom 2.377 2.556 2.656 2,479 2.656 2,607 2.658' 2.515 2.946 44 Canada 1.7X1 1.988 1.951 1.971 1.951 2.045 2.074 2.082 2.165 45 Latin America and Caribbean 3.274 4.1 17 4.364 4.359 4.364 4.111 4.347' 4.399 5.264 46 Bahamas 1 j 9 30 26 30 30 28 14 35 47 Bermuda 182 234 272 245 272 273 264 ">90 275 48 Brazil 460 612 898 745 898 809 838' 963 1.291 49 British West Indies 71 X3 79 66 79 106 103 1 19 190 50 Mexico 990 1.243 993 1.026 993 S70 1.021 VI 1.128 51 Venezuela 293 348 285 325 28.5 308 313 316 357 52 Asia 6.014 6 9X1 7.312 6.X26 7,312 7.100 6.939' 7.278 8.372 53 Japan 2.275 2.655 1.870 1.998 1.870 2.010 1.877 1.918 2.003 54 Middle Eastern oil-exporting eouniries 704 70S 974 775 974 1,024 903' •145 971 55 Africa ^ 493 454 654 144 654 667 688 731 745 56 Oil-exporting countries- 72 67 87 74 87 107 83 142 166 57 Other 721 910 1.006 971 1,006 895 1.0.14 1 ,(192 1.366 1. Comprises Bahrain. Iran, Iraq, Kuwail. Oman. Qaiar. Saudi Arabia, and United Aiab 2. Comprises Algeria. Gabon, Libya, and Nigeria. Emirates (Trucial Stales). 3. Includes nonmonelaiy international and regional <i gam/alums. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • August 1997 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1997 1996 1997 Transaction, and area or country 1995 996 J A a p n t . . - Oil. Nov. Dee. Jan. Feb. Mar. Apr.'1 IAS. corpi.r. e seuunnes SlOCKS 1 Foreign purchases 462.950 623.760 2X4,74X 57.758 65.571 57.051 71.003 73.05 I1 68,450 70.244 2 Foreign sales 451.710 610.332 271.900 56.751 63.4.16 56.629 70.132 69.191 68.153 64.424 3 Net purchases, or salts (— ) 11.240 13.428 12,848 1,007 2,135 422 2.871 3,861)' 297 5.820 4 Foreign counlries 11,445 13.502 12,861 1,013 2,138 451 2,872 3,86()r 289 5,840 5 F.urope 4.912 6.546 17.514 447 270 -229 3.238 5.4X61 2.1 16 6.674 6 France - 1.099 -2.354 1.329 -219 -248 - 1.064 532 427 -309 679 7 German) -1.837 .104 3.392 116 -5 18 959 1.086 699 648 « Netherlands ?.5(I7 .3X9 744 -132 16? 16(1 322 -334 378 378 9 Switzerland -2.2X1 I.7I0 2.1X0 144 686 -470 2X9 7X41 304 803 10 United Kingdom 8.066 1.1 19 6.545 909 658 1.487 - 167 2.950 492 3.270 1 1 Canada ...."". -1.517 2.221 1.242 742 704 -9 422 30X 17.3 139 12 Latin America and Caribbean 5.S14 s.561 - 1 646 -653 964 994 1.364 405' - 1.433 - 1.982 13 Middle F.ast1 -117 .598 238 15 -53 -7 -1 26' 10 20.1 14 Other Asia 2.503 906 -4.S89 511 267 -232 -2.175 -2.549' -894 729 15 Japan -2.725 372 -I.01X 113 -579 - 343 -1.559 -500 -253 1.294 16 Africa 2 -XI 139 5 _-)} 10 -X 58 96 -7 1 7 Other counlries 68 -5.S 263 -54 9 -76 32 126' 21 84 18 ]S<inmonetary international and regional organizations -205 -74 -13 -h -3 -29 -' II 8 -20 BONDS2 *) Foreign purchases 293.533 42 .474 182.843 40 66X 46.440 43 054 4X.955 47.977' 43.693 42.218 20 Foreign sales 206.951 294.536 143.586 30.277 34.235 32.825 36.60.1 37.0X7' 38.104 31.792 2 1 Net purchases, or salts (-1 86.5S2 126.938 39.257 10.391 12,205 10,229 12.352 10,89«r 5.589 10,426 22 Foreign countries 87.036 126.767 39,238 10.406 12.215 10.229 12,356 10,877r 5.575 10,430 23 Europe 70.3 IS 74.997 25.126 6 ^79 5.578 4.770 6.6^0 8.914' 4 810 4.762 24 France 1.143 5.174 I.I 18 713 72 252 71 103 340 602 25 Germany 5.938 5.164 233 -260 237 -27 -274 184 493 -170 26 Netherlands 1.463 2.440 614 93 511 I4X 3.37 125 105 67 27 Switzerland 494 882 40 59 -132 -30 -58 -189 98 1X9 28 Uniied Kingdom 57.591 54.644 22.124 5.316 4.232 4 49X 6 443 8.738' 2.987 3.956 29 Canada ....". 2.569 4.197 2.440 181 402 .191 379 1.055 190 616 30 Latin Amciica and Caribbean 6.141 22.901 2.678 2.954 2.201 2.940 1.189 - 62T -2.4.14 2.550 31 Middle Hasi1 1.869 .637 1.667 21 1 511 412 480 691 4X0 16 32 Oilier Asia 5.659 22.765 6.416 787 3.3X4 1.644 1.661 405' 2.165 2.185 33 Japan 2.250 1 3.694 3.748 1.037 2.245 1.395 1.597 -291' 1.213 1.229 34 AtYicu 214 60(1 569 45 112 7<t S9 241 47 WO 33 Other connlries 246 - 330 342 -51 5 _7 62 176 117 III 36 NCKImonetary international and regional orguni/iittons -454 171 19 -15 -11) 0 -4 13 14 -4 Foreign eeu lilies 37 Slocks, nel purchases, or sales ( -) -50.291 -58.606 - 15.933 -2.473 2.161 -5.902 - 3.643 -4.353 -3.827 -4.1 10 38 Foreign purchases 345.54(1 456.X26 194.713 40.185 46.838 41.850 47.084 50.139 47.780 49.710 39 Foreign s;iles .195.S3 I 515.432 210.646 42.658 48 999 47.752 50.727 54.492 51.607 53.820 40 Bonds, net purchases, or sales ( -) - 4S.405 -4K.793 88« -5.948 2.97.1 -10.947 -710 - 1.626' -2.979 6.203 41 Foreign purchases 889.541 I.I IS.678 469.284 117.032 104.662 99.095 109.567 1 10.5 10 1 3 1.453 1 17.754 42 Foreign sales 937.946 I.I 67.471 468.39ft 122.980 107.635 110.042 1 10.277 1 12.136' 134.432 111.551 -98,696 -107.399 -15.045 -8.421 -5,134 -16.849 -4.353 -5.979'" -6.806 2.093 44 Foreign i-ounlries -97.S9I - I06.J28 -15.255 -8,443 -5,166 -16.838 -4.401 -6.061' -6.872 2.079 45 Flurope -48.125 -57.432 1.447 - 6.31 8 -3.174 - 10.740 741 -2.030 -1005 5.741 46 Canada - 7.8 12 -6.279 2.032 -642 667 - 2.269 526 1.855' -110 - 2.39 47 Latin Amerien iind C aiihheasi . . . -7.634 9.503 -8.066 K86 1.57 1 -2.02(1 -2.264 -3.41 T - 1.574 -811 48 Asi., -34.056 -27.745 - 10.256 -796 -4.115 -771 -1 829 -2.2X4 -1.517 -3.626 49 Japan -25.072 -5.X88 -5.624 696 -633 2.218 -1.12 -2.269 -674 -2.349 50 Al'nea 327 - 1.529 -168 46X - 115 36 14 -7 -74 -121 51 OiliL-i uoijnlvies 63 - 4.040 -244 -I.I 11.5 - 646 -1.072 609 -178 - 592 1.135 52 Nonmonetary international and regional organizations -SOS -871 2111 22 32 -11 48 82 66 14 I- Comprises oil-exporting counlries as follows: Bahrain. Iran, Iraq. Kuwait, Oman. Qatar. icludes stale and loc; U.S. inivernmenl Saudi Aiabia. and United Arab Emirates (Trucial States). s and corporations. A .ild abroad h\ U.S. ilinns orgar •tl to tinance diree Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions/Interest and Exchange Rates A61 .V2S MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions' Millions of dollurs; nel purchases, or sales ( —) during period 1997 1996 1997 Area or country 1995 1996 Jan- Oct. Nov. Dec. Jan. Feb. Mar. Apr.'1 Apr. 1 Total estimated 1.14,115 244,725 9.1,70.1 24,321 21,28.1 47,662 22,225 25,561' 20,929 24.9HS 2 Foreign countries 133.676 246.567 93.111 23.784 " 475 46 519 ~>2 691 24 651' i| 219 14 528 1 Europe 49.976 118.345 17.056 P99' 9.312 14.778 4.410 11,365' 11.872 9.409 4 Relgium and Luxembourg 591 1.486 1.701 -120 1.15 370 IS 659 67 937 5 Germany 6.136 17.647 - 5.275 2.813 3.024 1.499 556 -1.227 -3.124 -1.480 6 Netherlands 1.891 -582 1.6.311 -423 676 855 -671 546 343 1.412 7 Sweden 358 2.34.3 - 1.268 169 -52 26 - 255 -346 -581 -86 S Switzerland -472 327 828 -599 -207 -517 241 992 - 1,438 1.033 9 United Kingdom 34.754 65 181 2S.824 10.121 801 7.265 2.914 7.828 12.503 5.579 10 Other Europe and former U.S.S.R 6.718 31.743 10.616 1,2.31 4.7.15 5.280 1 587 2.911' 4.102 2.014 1 1 Canada 252 2.389 682 - 1.744 -23 -780 667 -92' -215 322 12 Latin America ami Caribbean 48.609 25.379 7.842 1.479 12.745 15,228 10.241 -505' -3.2K5 1.389 13 Venezuela -2 -69 68 -29 -68 212 -.1 69' 1(1 -8 14 Olhcr Latin America and Caribbean 25.152 11.026 9.460 926 2.715 5.292 6.461 1.834 3.814 - 2.649 15 Nelheilands Antilles 23.459 12.422 - 1.686 582 10.098 9.724 3.785 -2.408 -7.109 4.046 16 Asia 32.467 98.001 48.865 9.889 1 317 16.744 8.540 14.348' 12.538 1.1.4.19 17 Japan 16.979 41.390 19.555 6.629 1.219 7.593 4.264 6.528 2.063 6.700 18 Africa 1.464 1.085 48 -13 -12 —2 29 57 -22 -16 19 Olhcr 908 1.368 -1.382 1.181 -.884 551 -1.198 -520 351 -15 20 Noninonetarv international and regional organizations 439 - 1.842 592 537 -1.192 1.14.1 -466 90S -310 460 21 International 9 - 1.190 129 338 -1.146 773 -484 530 -.184 467 22 Latin American regional 261 -779 465 -4 _2 252 -1 362 80 24 Ml-: MO 23 Foreign countries 133.676 246.567 91,111 23.784 22.475 46.519 22.691 24.65.1' 21.239 24.528 24 Official inslilnlions 39.63 1 86.875 32.604 4.838 3.840 13.662 8.022 10.04.1 6.813 7.726 25 Other foreign 94.045 159.692 60.507 18.946 18,635 32.857 14.669 14.610' 14.426 16.802 26 Middle Fasl: 1.075 10.227 9.286 -1.876 332 2.279 1.242 2.519 2.536 2.989 27 Africa' 2 1 0 0 0 0 0 -1 0 1 I. Ollicial and private transactions in marketable U.S. Treasury securities having an 2. Compiiscs Bahrain, [ran. Iraq. Kuwait, Oman. Qalar. .Saudi Arabia, and United Aiab original iii.iiurily nf inure than one year. Dai;i are based on monthly transactions reports. Emirates (Tiucial States), Excludes nonmarketahle U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria. Gabon. Libya, and Nigeria. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1 Perecnl per year, averages of daily figures Rate on June 30. 1997 Rale nn June 10. 1997 Country Country Pe cent 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 Germain 2,5 Apr. 1996 lelimun 2.5 Apr, 1995 llalv 6.25 June 1997 Canada 3.5 June 1997 Japan .5 Sepl. 1995 Dcnmaik 3.25 Nnv 1996 Netherlands 2.5 Apr, 1996 France- 3.1 Jan. 1997 Switzerland 1.0 Sepl. 1996 1. Rates shown are mainly those at which the ITIIIIJI bank eiiher discounts or makes 2. Since February WHI. the rale has been dial at which the Bank of hrana advances ayainst eligible commercial paper or government si-euihics lor commercial banks or Treasury hills lor seven to ten days. biokers. For countries with more than one rule applicable lo such discounts or advance:-., the rale shown is the one at which it is understood thai ilie ccnlml hank 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 counlrv 1994 1995 1996 Dec Jan. Feb. Mar. Apr. May June 1 Eurodollars 4 6' 5.93 5.38 5.41 5.44 5.36 5.50 5.70 5.69 5.66 2 United Kingdom 5.45 6.63 5.99 6.31 628 6.16 6.17 6.15 6.41 6.63 3 Canada . . .". 5.57 7.14 4 49 3.16 1.18 3.16 3.25 3 49 1.35' 3.30 4 Germany 5 25 4.4.3 3.21 3.13 3.03 1.08 .1.16 3.14 .1.09 3.05 5 Switzerland 4.0.3 2.94 1.92 1.99 1.72 1.61 1.77 1.76 1.51r 1.25 6 Netherlands 5.09 4 30 291 2.99 2.94 2.95 3.12 3.15 3.15 3.14 7 Fianee 5 T> 6.43 3.81 .1.31 3.23 3.22 .1.26 3.28 1.37 3.30 8 llalv 8.45 10.43 8.79 7.22 7.21 7.33 7.4(1 7.09 6.82 6.85 9 Belgium 5 65 4 73 3.19 3.01 100 3.10 1.40 3.22 3.22 .1.2.1 10 Japan 2.24 1.2(1 .58 .51 .53 .54 .55 .55 .58 .60 I, Rates are Cor three-month interbank loans, with ihe following exceptions: Canada, liuance company paper; Belgium, three-month Treasury hills: and Japan. CD rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics D August 1997 3.28 FOREIGN EXCHANGE RATES' Currency units per dollar except as noted 1997 Country/currency unit 1994 1995 1996 Jjn. Feb. Mm. Ap,. Ma\ Juno 1 Australia/dollar" 73.161 74.073 78.283 77.756 76.768 78.747 77.868 77.510 75 422 2 Austria/schilling 11.409 1(1.076 10.589 11.289 II.7X5 11.932 12115(1 1 1.998 12 158 3 Belgium/franc 33.426 29.472 30.970 33 087 34.556 34.961 35.328 35.188 35.659 4 Canada/dollar 1.3664 1.3725 1.3638 1.3494 1.3556 1.3725 1.3942 1.3804 1.3842 5 China, P.R./yuan 8.6397 8.3700 8.3389 8.3260 8.3227 8.3258 8.3257 8.3229 8 3224 6 Denmark/krone 6.356] 5.5999 5.8003 6.1199 6.3867 6.4628 6 5226 6.4926 6.5804 7 Finland/markka 5.2340 4.3763 4.5948 4.7766 4.9792 51)632 5.1375 5.1444 5.1794 8 France/franc 5.5459 4.9864 5.1 158 5.4145 5.6536 5.7154 5.7672 5.7482 5.8307 9 Germany/cloutschc mark 1 6216 1.4321 1.5049 1.6047 1 6747 1.6946 1.7 1 19 1.7048 1.7281 10 Greece/drachma 242.50 231.68 240.82 251.54 262.42 266.86 270.58 271.95 271K3 1 1 Hong Kong/dollar 7.7290 7.7357 7.7345 7.7397 7.7474 7.7460 7.7483 7.7431 7.7445 12 India/rupee. , s 31.394 32.41H 35.506 35.904 35.891 35.885 35.828 35.825 35 820 13 Ireland/pound" 149.69 160.35 159.95 163.1 1 158.60 156.57 155.05 151.11 150 60 14 Italy/lira 1.61 1.49 1.629.45 ] .542 76 1.567.91 1 655 00 1 691.21 1.694.52 1.684.33 1.694.99 15 Japan/yen 102.18 93.96 108.78 117.91 ' 122.96 122.77 125.64 119.19 114.35 16 Mnlaysia/ringgU 2.6237 2.5073 2.5154 2.49(1(1 2.486(t 2.4773 2.5O2K 2 5070 2.5167 17 Netherlands/guilder 1.8190 1.6044 1.6863 1.8023 1.8812 1.9071 1.9256 1.9173 1.9443 IS New ZcalurnVdollar . . .' 59.358 65.625 68.765 70.088 69.084 69.789 69.220 69.097 68.713 19 Norway/krone 7.0553 6.3355 6.4594 6.4589 6.6323 6.7915 6.9932 7.0797 7.2240 20 Ponugal/escudo 165.93 149.88 154.2X 16(1.53 168.24 170.35 171.77 171.72 174.56 21 Singapore/dollar 1.5275 1.4171 1.4100 1.4061 1.4193 1 4378 1.4417 1.4368 1.4271 22 South Africa/rand 3.5526 3.6284 4.3011 4.6402 4.4557 44319 4.4417 4.4668 4.5005 23 South Korea/won 806.93 772.69 805.00 854.07 868.39 882.62 895.57 894.67 891.40 24 Spain/pcsela 133.88 124.64 126 68 134.79 141.85 141.72 144.48 143.93 145.98 25 Sri Lanka/rupee 49.170 51.047 55.289 57.278 57.772 57.873 58.826 58.862 58 531 26 Sweden/krona 7.7161 7.1406 6 7082 7.0692 7.4069 7.6502 7.6942 7.6856 7.7518 27 Swii/.erland/franc 1.3667 1.1812 1.2361 1.3913 1.4541 1 4634 1 4618 1.4331 1.4427 2S Taiwan/dollar 26.465 26.495 27.468 27.477 27.554 27.551 27.629 27.791 27.903 29 Thailand/baht "") 161 24.921 25.359 25.726 25.957 25.959 26.064 25.751 24.534 30 United Kingdom/pound2 153.19 157.85 156.07 165.85 162.56 160.96 162.93 163.22 164.47 MEMO 3 1 United States/dollar' 91.32 84.25 87.34 91.01 94.52 95.60 96.39 95.29 95.44 1. Averages of certified noon buying rales in New York for cable transfers. Data in this 3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, industrial countries. The weight for each of the ten countries is the 1972-76 average world see inside front cover. Hade ol ilui couiiirj divided hy the average world trade of all ten countries combined. Series 2. Value in U.S. eenis. revised as of Augusi I97K (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 June 30, 1996 November 1996 A108 September 30, 1996 February 1997 A72 December 31, 1996 May 1997 A72 March 31, 1997 August 1997 A64 Pro forma balance sheet and income statements for priced service operations March 31, 1996 July 1996 A64 June 30, 1996 October 1996 A64 September 30, 1996 January 1997 A64 March 31,1997 July 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 Special Tables • August 1997 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 1997' Millions of dollars except as noted All sutes- New York Calilirnia Illinois Item inc I T B l o u F t d a s i l n 1' g o IB n F ly s ' inc T IB l o u F t d a s i l ng I o B n F ly s inc T IB l o u F t d a s i l ng I o B n F ly s inc T IB l o u F t d a s i l n g " I o B n F ly s I Total assets4 862,812 275,074 677,364 229,559 65,181 19,367 73,637 14,913 2 Claims on nonrelateil parlies 750.457 140.7.37 582.X25 115.917 60.S88 8.346 66.607 9.336 3 Cash and balances due from deposiiory institutions 1 10.898 80.460 98.237 70.463 1.828 1.218 8.839 7.504 4 Cash items in process of collection and unposted debits 2.508 0 2.434 0 12 0 54 0 5 Currentv and coin (U.S. and foreign) 21 n.a. 14 n.a. 2 n.a. 1 n.a. 6 Balances with depository institutions in Uniied States 60.284 38.599 54.946 35.360 1.321 780 3,295 2.247 7 U.S. branches and agencies of other foreign bunks (including IBFs) 56.010 37.200 51.345 34.020 1.133 780 3.004 2.197 K Other depository institutions in United Slates (including IBFs).... 4.274 1.399 3.601 1.340 188 0 291 50 9 Balances with banks in foreign countries and with foreign central banks 47,555 41.861 40.400 35.103 461 439 5.471 5.258 10 Foreign branches of U.S. banks 1.621 1.22.3 1.156 776 0 0 443 443 11 Other banks in foreign countries and foreign central banks 45.934 40.638 39.244 34.328 461 439 5.027 4.814 1 2 Balances with Federal Reserve Banks .530 n.a. 442 n.u. 33 n.a. 19 n.a. 13 Total securities and loans 473,376 49,437 339.347 36,961 53,616 5,552 43,771 1,421 14 Total securities, book value 116.171 8.330 107.240 7.200 3.142 719 5.095 362 15 U.S. Treasury 34.334 n.a. 32 884 n.a. 591 n.a. 726 n.a. 16 Obligations of U.S. government agencies and corporations 35.139 n.a. 34.234 n.a. 364 n.a. 396 n.a. 17 Other bonds, notes, debentures, and corporate stock (including state and local securities) 46.699 8.330 40.122 73)0 2.187 719 3.973 362 18 Securities of foreign governmental units 15.888 3.927 14.718 3.479 584 200 491 203 19 All Other 30.811 4.403 25.404 3.721 1.603 520 3.482 1.59 20 Federal funds sold and securities purchased under agreements to resell "T 52.609 8.185 46.597 6.246 1.848 1.382 3.330 274 2\ U.S. branches and agencies of other foreign banks 14.130 4.284 12.647 3.776 488 182 709 256 22 Commercial banks m Uniied Slates 4.926 8 4.451 8 69 0 109 0 2? Other 33.553 3.892 29.499 2.462 1.290 1.200 2.512 18 24 Total loans, gross 3.57.451 41,124 232.257 29.772 50.528 4.835 38.682 1.059 25 LK.SS: Unearned income on loans 246 17 150 1 1 55 2 6 0 26 EQUALS: Loans, net 357.205 41.107 232.107 29.761 50.474 4.833 38.676 1.059 Total loans, t>ro.\x. h\ catt'<>ory ""7 Real estate loans 30.035 166 19.501 39 7.740 126 1.319 (1 2S Loans to depoviiory institutions 36 593 23.131 24.962 14.906 4.812 3.377 913 649 29 Commercial banks in United Stales (including IBFs) 12.244 6,213 8.301 4.1)85 3.1 10 1.907 306 150 10.884 6.010 7.079 3 882 3.064 1.907 236 150 31 Other commercial banks in United Slates 1.360 203 1 222 203 46 0 70 () 32 Other depository institutions in United Stales (including IBFs) 152 138 152 138 0 0 0 0 33 Banks in foreign countries 24.196 16.781 16.509 10.682 1.702 1.470 608 499 34 Foreign brandies o\' U.S. bunks 651 534 519 412 0 0 0 0 35 Other banks in foreign countries 23,546 16.247 1.5.990 10.271 1.702 1.470 608 499 36 Loans to other financial institutions 45.034 1.112 37.602 815 2.921 159 3.835 48 37 Commercial and industrial loans 224.312 14.490 132.177 1 1.912 34.120 1.139 31.528 360 3K U.S. addressees (domicile) 191.731 150 108.260 104 31.144 45 30.081 0 34 Non-U.S. addressees (domicile) 32.581 14.340 2.3.917 11.808 2.976 1.094 1.447 360 40 Acceptances of other banks 585 42 133 42 93 0 141 0 41 U.S. banks 29 0 17 I) 3 0 0 0 42 Foreign banks 556 42 316 42 90 0 141 0 43 Loans lo foreign governments and ollicial insiiiulu>ns (including loreign central banks) 3.280 1.949 2.791 1.840 252 34 68 3 1 1.603 182 10.493 I81 244 0 65 0 45 All oilier loans 5.692 52 4.1(10 36 346 (1 794 0 4 4 7 8 U N . o S n . -U ad .S dr . e a ss d e d e re s s s ( e d e u s m ( i d c o ilc m l icile) 3 3 1 1 7 5 1 0 0 0 2 "> 9 9 3 5 8 0 0 (I 0 ( 0 I 0 0 1 1 0 8 8 0 0 0 49 Trading assets 78.401 326 69.559 320 215 3 8.614 1 50 All other asscls 3.5.173 2.330 29.085 1.926 3.382 191 2.053 134 51 Customers" liabilities on acceptances outstanding 8.979 n.a. 6.198 n.a. 2.061 n.a. 491 n.a. 52 U.S. addressees (domicile) ' 6.631 n.a. 4.380 n.a. 1.846 n.a. 320 n.a. 53 Non-U.S. addressees (domicile) 2.348 1.817 n.a. 215 n.a. 172 n.a. 54 Other assets including other claims on nonrelaled parties 26.194 2.330 22.XKH 1.926 1.321 191 I..561 134 55 Net due front related deposiiory institutions' 112.355 134.337 94.539 1 13.642 4.293 1 1,020 7.030 5.578 5d Net due from head office and other related deposiiory institutions^. . . 1 12.355 n.a. 94.539 n.a. 4.293 n.a. 7.030 n.a. .57 Net due from establishing entity, head oliiee. and olher relaled deposiiory institutions^ n.a. 134.337 n.a. 113.642 n.a. 1 1.020 n.a. 5.578 .58 Total liabilities4 862,812 275,074 677,364 229,559 65.181 19,367 73.637 14.913 59 Liabilities to nonrelated parties 714.648 248.850 617.664 212.312 35.427 18.458 40.828 9.297 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A65 4.30 ASSETS AND LIABILITIES of US. Branches and Agencies of Foreign Banks, March 31, 1997'—Continued Millions of dollars except as noted All sales: New York Calilirnia Illinois Item T i H n a li l ne 1 Fs exc T l o u t d a i l ng IBFs ex T cl o u l d a i l ng IBFs ex T cl o u l d a i l ng IBPs It ps'' V IBFs * IBFs " 0 ily IBFs * only 60 Total deposits and credit balances 23X.45O 193.232 2OX.4O3 179.044 6.015 2.975 15,342 4.643 61 Individuals, partnerships, and corporations I7\7O3 13 91 149.914 X.657 4.1X9 6X5 13.127 65 62 U.S. addressees (domicile) 151.637 X30 132.541 X22 2.466 0 12.610 1 63 Non-U.S. addressees (domicile) 24.066 12.161 17.373 7.X34 1.923 6X5 697 64 64 Commercial banks in Uniled Slyles (including IBFs) 34.1X0 39.562 12 177 37.X49 441 XXX 1.352 6X4 65 U.S. branches and agencies of other foreign banks 16.492 15.XX0 15Ji79 .14.365 IX XI2 641 59X 66 Olher commercial banks in United States 17.6X7 3.6X2 16.39X 3.4X5 .123 76 711 X6 67 Banks in foreign countries 11.421 107 161 10.125 10 XII 945 X22 216 2.623 6X Foreign branches oi U.S. banks 1.X3X 4.739 2.947 4 91 X55 25 15 424 69 Olher banks in foreign countries 7.5X5 102.322 7.I7X 97.640 90 697 IXI 2. 99 70 Foieign governmenls and ollicial institutions 5.661 33.35.1 4.91.1 30.644 ">l 1 5X0 395 1.270 11.16X 65 1 1.100 63 10 0 44 1 72 Cerlilied and otlicial checks .115 271 IX t) X 490 6 X51 4 10 3^X 74 Individuals, partnerships, and corporations 6.552 5.I4X 352 312 75 U.S. addressees (domicile* 4.429 3.795 236 .106 76 Non-U.S. addressees (domicile) 2.123 1 352 1 17 6 77 Commercial banks in United States (uicludiug IBFsi 312 .106 1 0 7S U.S. branches and anencies of other foreign banks 2XX 2X7 0 0 7" Olhei commercial banks in Umled Slates 24 18 1 0 ISO B.inks in foreign countries 734 616 20 2 S 1 Foreign branches of U.S. banks 14 13 0 0 N2 Olher banks in foreign countries 720 60.1 20 2 S3 Foreign governments and official insiitmions (including foreign central banks) 3X1 .136 6 2 S4 All other deposits ami uedil halaiu.es 92 174 10 X5 Cerlilied and ollicial checks .115 273 IX 9 and credit balances) X.0I4 6.671 307 315 X7 Individuals, partnerships, anil unpoiiilions 6 69 5.035 262 300 4 121 3 74X 294 W Non-U.S. addressees (domicile) I.X4X 1.2X7 66 6 l>0 Commeicial banks in Uniled Slates (including IBPs) 30X 304 0 0 VI U.S. branches and agencies of other foreign hanks 2XX n.a. 2X7 n.a. 0 n.a. 0 n.a. 92 Other commeicial banks in United Stales 19 16 0 0 93 Banks in loreimi lounnies 710 594 19 2 94 Foreign branches of U.S. banks [ | 10 0 0 95 Other banks in foreign countries 69X 5X3 9 2 96 Foieign goveinmcnis and official msiiiuitnns (including foreign central banks) 372 3 1 . 1 1 3 2 6 1 ; 9X Ccrlllied and ollicial checks . 315 273 X 9 99 Nonlransaclion accounts (including MMDAs. excluding IBPs) 229.960 201.549 5.606 15.(115 100 Individuals, parlnerships. and corporations 169.15 1 144.766 4.0.16 13. 15 101 U.S. addressees (domicile) 147.20X I2X.746 2.2.10 12.324 IIP Non-U.S. addressees (domicile! 21.941 16 <P 1 1.X06 691 103 Commeicial hanks in United Stales (including IBPs) 3.1.X6X 11.772 4.1X 1,151 104 U.S. branches and agencies al' other foreign banks 16.204 15.391 1 IX 641 115 Olher eommeieial banks in United Stales 17.664 16.3X0 320 710 116 Banks in foreign countries 10.6X9 9.509 92.5 214 117 Foreign branches of U.S. banks 3.X24 2.934 X55 15 1IS Olher banks in foreign eounlries 6.X65 IS.575 70 79 119 Foreign governments and otticial institutions (including foreign central banks) 5.27X 4.577 206 39.1 1 10 All other deposits and credit balances 10.975 10.926 0 47 Ill IBP deposil liabilities 193.232 1 179.044 2,975 4.643 1 12 Individuals, partnerships, and corporations 13.191 X.657 6Xs 65 1 11 U.S. addressees (domicile) 8.1(1 X22 0 1 1 14 Non-U.S. addressees (domicile! 12.361 7.X34 6X5 64 1 15 Commercial banks in United Stales (including IBPs) .19.562 37.X49 XXX 6X4 1 16 U.S. branches and agencies of olher foreign banks 35.XXO 14.165 !• 59X 17 Other commercial hanks in United Stales n.a. .1.6X2 n.a. 3.4X5 n a 76 n.a. X6 [ X Banks in foreign countries 107,061 101.XII X22 2.621 19 Foreign branches ot U.S. banks 4.7.19 4 91 25 424 120 Other banks in foreign countries 102.322 97.640 697 2. 99 121 Foieign governments and ollicial institutions (including foreign central banks) 3.1.353 30.644 5X0 1.270 122 All nlher deposits and credii balances 65 63 (1 1 Footnotes appeal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Special Tables • August 1997 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31. 1997'—Continued Millions ol dollars except as noted All sales' New York Calilunia Illinois llcm iiiL T lu o d la n l is: ind T u ot i a li l na IBl-s ine T i o n l d a i l ni! IBFs ine T l o n t d a i l ni: IBFs IBFs' o tly' IBKs " oil\ IBFs "" on y IBFs " only repurchase y.i.lOi 4.456 1.9 1 5 4.665 594 15.23 1 3.SI4 1 1 908 2.189 2.184 1.280 9 HI 285 125 Olhcr commercial banks in United Stales 11.1:1 319 X.921 252 1.264 47 857 13 1 26 Other 66.75 1 7.80(1 62.426 6.X55 1.007 588 2.898 296 1 27 Other borrowed money 97.67(1 4(1.835 61.SI3 21 411 18.98(1 1 1.404 1(1.704 3.977 12S Owed lo nonrelated commeicial banLs in United Si.iies (including !BFs) "..... 24.845 9.8.57 13.550 4.24X 7.365 4.174 2.535 902 129 Owed to LLS. offices of nonrelatod U.S. banks X.84I I.I 16 5.346 634 1.829 356 1.176 67 130 Owed in U.S. brunches and agencies ol nomekiied foreign hanks 16.004 K.74I 8.204 3.624 .5.536 3.818 1.359 835 1 31 Owed to nonrelated banks in fore inn commies 3I.OS3 28.147 17.638 15.193 9.074 8.847 1.066 .1.060 132 Owed lo tovciun branches of nonre toted U.S. banks 1,601 1.394 636 541 856 7H9 11 22 133 Owed lo foreign offices ol nonreU.ted foreign hanks 29.482 26.753 17 0(12 14.550 8.219 8.058 1.(144 3(118 1 34 Owed to others 41.742 2.831 32.625 2J89 2.540 3X3 5.103 15 135 All olher liabilities M2.193 2.851 83.151 2.542 3.001 164 5.473 83 OUlMUIldllH! 9.442 n.a. 6.618 n.. . 2.066 n a. 495 n.a. 117 Trailing liatiilme's 60.9X5 03 .56.V35 100 148 2 .1.891 0 2 1 766 i 74X i 44^ 787 6^ 1.087 83 14X 164 ^6 115 59 700 17.247 29.754 908 12.809 5 616 141) Nel imal In head nltiee and other related depository institutions'. . . 148.164 n.;. 59.700 n.a. 29754 n.a. 32.809 n.a. depi>s>ioi\ instiiuhum1 ,,a. 26.225 n.a. 17.247 n.a. 9(m n.a. 5.616 Ml-MO 142 Non-inicivsr-heariii» balances with commacLiI banks in L'niieil Slak-s 734 (} 546 0 72 0 74 0 industrial loans 5.087 t 3.596 t 1.221 t 164 t 144 CpmineiLi.il and industrial Inans wiih remaining mammy ol" one year or less (excluding those in nonacciual skiiusj 123.922 72.538 18.950 18.739 145 Predetermined interest rales 75.282 ii.a. 45.616 n.a 1(1.055 n.a. 13.797 n.a. 146 Flnalinj: interest lales 4K.64II 2(1.922 8.895 4.943 147 Commercial and milu.sirial loans with remaining maturity ol more 99.161 58.919 15.068 12.405 I4S Piedeleimmed mlciesl vales 21.734 14.146 2.447 3.523 149 )-loiitIIIL! inleresl rales 77.427 44.573 12.621 8.X82 1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A67 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks. March 31, 1997'—Continued Millions of dollars except as noted All slalcs: New York Cali >rnu Illinois II em ex T cl o u t d al m" IBFs ex T cl o u t d a i l ng IBFs exc T l o u l d a i l ng IBFs exc T k o i l c a li l nn IBFs IBFs1 only' IBFs " only IBFs * only IBFs " only 150 Components of touil nontransaction accounts. inclULlcil in total deposits and credit balances ol nontransaclion accounts, excluding IBFs 225.4K2 n.a. 200.216 n.a. 3.591 n.a. 14.') 10 n.a. 151 Time deposits ol' S100.000 or more 214.125 n.a. 189.225 n.a. 3.484 n.a. 14.727 n.a. 152 Time CDs in denominations of $100,000 or more with remaining maturity oi" more than 12 monllis 1I.35X n.a. 10.991 n.a. 107 1X3 All slates2 New York California Illinois inc T IB l o u F t d a s i l nil I o B n F ly s inc T IB l o u F t d a s i l n g * I o B n F ly s inc T I l B o u F l d a s i l n s " i I o B n F ly s inc T I l B o u F t d a s i l n s " : I o B n F ly s 153 Immediately available funds with a maturity greater than one day included in other borrowed money 51 347 n.;i 31.110 15.604 n.a. 3.976 n.;i. 154 Numbe' ai reports liled'1 476 240 0 10.1 0 3« (1 1. Dan arc aggregates of categories reported on (he quarterly Conn FF1EC()(J2. "Report ol" either because the item is not an eligible IBF asset or liability or because that level of detail i Assets and Llahililies of U.S. Branches and Agencies of Foreign Banks." The form was first not reported for IBFs. From December 19X1 through September 19X5. IBF dala wen used for reporting dala as of June 30. 19X0. and was revised as of December 3 1. 19X5. From included in all applicable items rcporied. November 1972 through May 19X0. U.S. branches and agencies of foreign banks had hied a 4. Total assets and total liabilities include nc! balances, if any. due from or owed to relate* monthly FR XXoa report. Aggregate data from that report were available through the Federal banking institutions in the Uni :d Slates and in foreign countries (see note 5). On the former Reserve monlhly statistical release G. II. lasl issued on July 10, 19X0. Dala in this table and in monthly branch and agency n•pori. available through I he Gil monthly statistical release, die G. 11 tables are not strictly comparable because of differences in reporting panels and in xross balances were included i total assets and total liabilities. Therefore, total asset and total definitions of balance sheet ileins, liability figures in this table ar not comparable to ihosc in the G.I ] tables. 2. Includes die DIM rid of Columbia. 5. Relaied deposiloty rnsiiiuiions includes (he Ibreitiii head office and oilier U.S. ;tnd 3. Effective December 19X1. the Federal Reserve Board amended Regulations D and 0 i» foreign branches and agencies of a bank, a bank's parent holding company, and majoritypermit banking offices located in the United Stales to operate international banking facilities owned banking subsidiaries of the bank and of its parent holding company (including (tBFs). Since December 31. I9X?. data for IBFs have been reported in a separate column. subsidiaries owned hotli directly and indirectly). These data are either included in or excluded from the total columns as indicated in the 6. In some cases two or more ofiices of a foreign bank within the same metropolitan area headings. The notation "n.a." indicates thai no IBF dala have been reported lor that item. file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Index to Statistical Tables References are to pages A3-A67 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, 15-21 Federal credit agencies, 30 Domestic finance companies, 33 Federal finance Federal Reserve Banks, 10 Debt subject to statutory limitation, and types and ownership Foreign banks, U.S. branches and agencies, 64-67 of gross debt, 27 Foreign-related institutions, 20 Receipts and outlays, 25, 26 Automobiles Treasury financing of surplus, or deficit, 25 Consumer credit, 36 Treasury operating balance, 25 Production, 44, 45 Federal Financing Bank, 30 Federal funds, 6, 23, 25 BANKERS acceptances, 5, 10, 22, 23 Federal Home Loan Banks, 30 Bankers balances, 15-21, 64-67. (See also Foreigners) Federal Home Loan Mortgage Corporation, 30, 34, 35 Bonds (See also US. government securities) Federal Housing Administration, 30, 34, 35 Federal Land Banks, 35 New issues, 31 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) U.S. government securities held, 5, 10, 11, 27 CAPACITY utilization, 43 Federal Reserve credit, 5, 6, 10, 11 Capital accounts Federal Reserve notes, 10 Commercial banks, 15-21 Federally sponsored credit agencies, 30 Federal Reserve Banks, 10 Finance companies Central banks, discount rates, 61 Assets and liabilities, 33 Certificates of deposit, 23 Business credit, 33 Commercial and industrial loans Loans, 36 Commercial banks, 15-21 Paper, 22, 23 Weekly reporting banks, 17 Float, 5 Commercial banks Flow of funds, 37-41 Assets and liabilities, 15-21 Foreign banks, assets and liabilities of U.S. branches Commercial and industrial loans, 15-21 and agencies, 64-67 Consumer loans held, by type and terms, 36 Foreign currency operations, 10 Deposit interest rates of insured, 14 Foreign deposits in U.S. banks, 5 Real estate mortgages held, by holder and property, 35 Foreign exchange rates, 62 Time and savings deposits, 4 Foreign-related institutions, 20 Commercial paper, 22, 23, 33 Foreign trade, 51 Condition statements (See Assets and liabilities) Foreigners Construction, 42, 46 Claims on, 52, 55, 56, 57, 59 Consumer credit, 36 Liabilities to, 51, 52, 53, 58, 60, 61 Consumer prices, 42 Consumption expenditures, 48, 49 Corporations GOLD Profits and their distribution, 32 Certificate account, 10 Security issues, 31, 61 Stock, 5, 51 Cost of living (See Consumer prices) Government National Mortgage Association, 30, 34, 35 Credit unions, 36 Gross domestic product, 48, 49 Currency in circulation, 5, 12 Customer credit, stock market, 24 HOUSING, new and existing units, 46 DEBT (See specific types of debt or securities) INCOME, personal and national, 42, 48, 49 Demand deposits, 15-21 Industrial production, 42, 44 Depository institutions Insurance companies, 27, 35 Reserve requirements, 8 Interest rates Reserves and related items, 4, 5, 6, 11 Bonds, 23 Deposits (See also specific types) Consumer credit, 36 Commercial banks, 4, 15-21 Deposits, 14 Federal Reserve Banks, 5, 10 Federal Reserve Banks, 7 Interest rates, 14 Foreign central banks and foreign countries, 61 Discount rates at Reserve Banks and at foreign central banks and Money and capital markets, 23 foreign countries (See Interest rates) Mortgages, 34 Discounts and advances by Reserve Banks (See Loans) Prime rate, 22 Dividends, corporate, 32 International capital transactions of United States, 50-61 International organizations, 52, 53, 55, 58, 59 EMPLOYMENT, 42 Inventories, 48 Eurodollars, 23, 61 Investment companies, issues and assets, 32 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 Investments (See also specific types) Residential mortgage loans, 34, 35 Commercial banks, 4, 15-21 Retail credit and retail sales, 36, 42 Federal Reserve Banks, 10, 11 Financial institutions, 35 SAVING Flow of funds, 37-41 LABOR force, 42 National income accounts, 48 Life insurance companies (See Insurance companies) Savings institutions, 35, 36,37^-1 Loans (See also specific types) Savings deposits (See Time and savings deposits) Commercial banks, 15-21 Securities (See also specific types) Federal Reserve Banks, 5, 6, 7, 10, 11 Federal and federally sponsored credit agencies, 30 Financial institutions, 35 Foreign transactions, 60 Insured or guaranteed by United States, 34, 35 New issues, 31 Prices, 24 MANUFACTURING Special drawing rights, 5, 10, 50, 51 Capacity utilization, 43 State and local governments Production, 43, 45 Holdings of U.S. government securities, 27 Margin requirements, 24 New security issues, 31 Member banks (See also Depository institutions) Rates on securities, 23 Federal funds and repurchase agreements, 6 Stock market, selected statistics, 24 Stocks (See also Securities) Reserve requirements, 8 Mining production, 45 New issues, 31 Mobile homes shipped, 46 Prices, 24 Monetary and credit aggregates, 4, 11 Student Loan Marketing Association, 30 Money and capital market rates, 23 Money stock measures and components, 4, 12 TAX receipts, federal, 26 Mortgages (See Real estate loans) Thrift institutions, 4. (See also Credit unions and Savings Mutual funds, 12, 32 institutions) Mutual savings banks (See Thrift institutions) Time and savings deposits, 4, 12, 14, 15-21 Trade, foreign, 51 Treasury cash, Treasury currency, 5 NATIONAL defense outlays, 26 Treasury deposits, 5, 10, 25 National income, 48 Treasury operating balance, 25 OPEN market transactions, 9 UNEMPLOYMENT, 42 U.S. government balances PERSONAL income, 49 Commercial bank holdings, 15-21 Prices Treasury deposits at Reserve Banks, 5, 10, 25 Consumer and producer, 42, 47 U.S. government securities Stock market, 24 Bank holdings, 15-21,27 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, 15-21,35 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 VETERANS Administration, 34, 35 Reserves Commercial banks, 15-21 WEEKLY reporting banks, 17 Depository institutions, 4, 5, 6, 11 Wholesale (producer) prices, 42, 47 Federal Reserve Banks, 10 U.S. reserve assets, 51 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman EDWARD W. KELLEY, JR. 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 LARRY J. PROMISEL, Senior Associate Director DONALD J. WINN, Assistant to the Board THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Deputy Congressional Liaison DAVID H. HOWARD, Senior Adviser WINTHROP P. HAMBLEY, Special Assistant to the Board DONALD B. ADAMS, Assistant Director BOB STAHLY MOORE, Special Assistant to the Board THOMAS A. CONNORS, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board PETER HOOPER III, Assistant Director PORTIA W. THOMPSON, Equal Employment Opportunity KAREN H. JOHNSON, Assistant Director Programs Adviser CATHERINE L. MANN, Assistant Director RALPH W. SMITH, JR., Assistant Director LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel 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. MlNGO, 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 HOWARD A. AMER, Assistant Director DAVID E. LINDSEY, Deputy Director GERALD A. EDWARDS, JR., Assistant Director BRIAN F. MADIGAN, Associate Director STEPHEN M. HOFFMAN, JR., Assistant Director RICHARD D. PORTER, Deputy Associate Director JAMES V. HOUPT, Assistant Director VINCENT R. REINHART, Assistant Director JACK P. JENNINGS, Assistant Director NORMAND R.V. BERNARD, Special Assistant to the Board MICHAEL G. MARTINSON, Assistant Director RHOGER H PUGH, Assistant Director DIVISION OF CONSUMER SIDNEY M. SUSSAN, Assistant Director AND COMMUNITY AFFAIRS MOLLY S. WASSOM, Assistant Director GRIFFITH L. GARWOOD, Director WILLIAM SCHNEIDER, Project Director, GLENN E. LONEY, Associate Director National Information Center DOLORES S. SMITH, Associate Director MAUREEN P. ENGLISH, Assistant Director IRENE SHAWN MCNULTY, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 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

A72 Federal Reserve Bulletin • August 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

A73 CONSUMER ADVISORY COUNCIL JULIA W. SEWARD, Richmond, Virginia, Chairman WILLIAM N. LUND, Augusta, Maine, Vice Chairman 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

A74 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 Board's 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 231pp. $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 1990 November 1991 185 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1991 November 1992 215 pp. $25.00 available without charge. 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 A Consumer's Guide to Mortgage Settlement Costs ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— 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 GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 each. How to File a Consumer Complaint FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated Making Deposits: When Will Your Money Be Available? 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

A75 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 Board's 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

A76 Maps of the Federal Reserve System 1 9 • 2 BOSTON MINNEAPOLIS • 7 •M —"•» 12 • _ ' . i J • •NF.WYORK CHICAGO • 10 CL 4 EV ELAND 5 PHILADELPHIA • SAN FRANCISCO KANSAS CITY • g ^ „ • > ST. LOUIS RIC5HMOND 8 6 11 • ATLANTA 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

A77 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimolre MD m'- CT FA /N DC Buffalo •* •Cincinnati •Charlotte / NY KY «c BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H •Nashville TN — KY Birmingham-. Detroit* Louisville MS TN LA Jacksonville •Memphis New Orleans PL Little Rock Miami ATLANTA CHICAGO ST. LOUIS 9-1 •Helena MINNEAPOLIS 10-J 12-L Omaha* m KS Denver Oklahoma City KANSAS CITY 11-K Salt Lake City El Paso •Los Angeles San Antoniov DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 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 Carl W. 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. Cerino' 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 Dan M. Bechter' ATLANTA 30303 Hugh M. Brown Jack Guynn David R. Jones Patrick K. Barron James M. Mckee Birmingham 35283 D. Bruce Can- FredR. 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.AIlardice1 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. Gambs' 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, III1 San Antonio 78295 H. B. Zachry, Jr. James L. Stull' SAN FRANCISCO 94120 Judith M. Runstad Robert T. Parry Gary G. Michael John F. Moore Los Angeles 90051 Anne L. Evans MarkL. Mullinix1 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 for FRASER 2. Executive Vice President http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis