Federal Reserve Bulletin, 1998-01

VOLUME 84 • NUMBER 1 • JANUARY 1998 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 L NEW INFORMATION ON LENDING TO SMALL that are most in need of assistance; and that it will BUSINESSES AND SMALL FARMS: continue to participate in international forums to THE 1996 CRA DATA help foster an international awareness of Year 2000 issues, before the House Committee on As a consequence of recent revisions to the regu- Banking and Financial Services, November 4, lations that implement the Community Reinvest- 1997. ment Act (CRA), new information is now publicly available on the geographic distribution of 30 Alan Greenspan, Chairman, Board of Governors, small loans to businesses and farms and on com- remarks on recent developments in world finance munity development lending. Because small busi- and says that the financial disturbances that have nesses and small farms are more likely than larger afflicted a number of currencies in Asia do not at ones to borrow small amounts, the CRA data on this point threaten prosperity in this country and small loans are likely to provide a reasonable that it is in the interest of the United States and measure of the extension of credit to such busi- other nations to encourage appropriate policy nesses. Thus, the CRA data provide new opportu- adjustments, before the House Committee on nities to gauge the flow of credit to communities Banking and Financial Services, November 13, with differing economic and demographic charac- 1997. teristics. This article presents an initial assess- 32 Chairman Greenspan discusses putting Social ment of the new CRA data on originations and Security's Federal Old-Age, Survivors, and Dispurchases of small business and small farm loans ability Insurance Benefits program on a sound during 1996. The focus of the analysis is on financial footing for the twenty-first century and the broad patterns that emerge when the data says that the types of changes that will be are reviewed from a national perspective rather required to restore fiscal balance to our social than on the lending activities of any individual security accounts are significant but manageable institution. and that more important, most entail changes that are less unsettling if they are enacted soon rather 22 INDUSTRIAL PRODUCTION AND CAPACITY than waiting five or ten years or longer for legis- UTILIZATION FOR NOVEMBER 1997 lation; however, if we procrastinate too long, the adjustments could be truly wrenching, before the Total industrial production rose 0.8 percent in Task Force on Social Security, Senate Committee November, to 127.3 percent of its 1992 average, on the Budget, November 20, 1997. after a gain of 0.5 percent in October. The rate of industrial capacity utilization rose 0.3 percentage point, to 83.2 percent—its highest rate since Sep- 36 ANNOUNCEMENTS tember 1995. Appointments of chairmen and deputy chairmen of the Federal Reserve Banks. 25 STATEMENTS TO THE CONGRESS Amendment to Regulation Z. Edward W. Kelley, Jr., member, Board of Gover- Reduction in fees for electronic payment services nors, discusses the Federal Reserve's efforts to provided by the Federal Reserve Banks. address the Year 2000 computer systems issue and says that the Federal Reserve is on schedule Revision to the supervisory policy for small shell in validating its internal systems and preparing bank holding companies. for testing with depository institutions and others Decrease in the net transaction accounts to which using Federal Reserve services; that the Federal a 3 percent reserve requirement will apply. Reserve will continue to address the industry's preparedness, monitor progress, and target for Joint interagency proposal to revise the riskspecial supervisory attention those organizations based capital standards; proposal to integrate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve policies on Privately Operated 47 LEGAL DEVELOPMENTS Large-Dollar Multilateral Netting Systems and Various bank holding company, bank service Private Small-Dollar Clearing and Settlement corporation, and bank merger orders; and pend- Systems into a single comprehensive policy stateing cases. ment on Privately Operated Multilateral Settlement Systems; proposal to move from a system A1 FINANCIAL AND BUSINESS STATISTICS of contemporaneous reserve requirements to one in which reserves are maintained on a lagged These tables reflect data available basis. as of November 26,1997. Issuance of a report on the public disclosure of A3 GUIDE TO TABULAR PRESENTATION trading and derivatives activities of banks and A4 Domestic Financial Statistics securities firms worldwide by the Basle Commit- A42 Domestic Nonfinancial Statistics tee on Banking Supervision and the Technical A50 International Statistics Committee of the International Organisation of Securities Commissions. A63 GUIDE TO STATISTICAL RELEASES AND Changes in Board staff. SPECIAL TABLES A66 INDEX TO STATISTICAL TABLES 40 MINUTES OF THE FEDERAL OPEN MARKET COMMITTEE MEETING A68 BOARD OF GOVERNORS AND STAFF HELD ON SEPTEMBER 30,1997 A70 FEDERAL OPEN MARKET COMMITTEE AND At its meeting on September 30, 1997, the Com- STAFF; ADVISORY COUNCILS mittee adopted a directive that called for maintaining conditions in reserve markets that were A72 FEDERAL RESERVE BOARD PUBLICATIONS consistent with an unchanged federal funds rate of about 5 V2 percent. The members also agreed to A74 MAPS OF THE FEDERAL RESERVE SYSTEM retain a bias in the directive toward the possible firming of reserve conditions and a higher federal A76 FEDERAL RESERVE BANKS, BRANCHES, funds rate during the intermeeting period. AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data Raphael W. Bostic and Glenn B. Canner, of the munities with differing economic and demographic Board's Division of Research and Statistics, prepared characteristics. this article. Sheryl L. Hudson and John E. Matson Although intended primarily to facilitate assessprovided research assistance. ments of performance under the CRA, the data on small business and small farm lending are likely to be The Community Reinvestment Act (CRA) of 1977 is used in other ways as well. For example, lending intended to encourage commercial banks and savings institutions may use the data to help evaluate the associations to help meet the credit needs of their effectiveness of products and services and to calculocal communities in a manner consistent with safe late their share of the small business loan market in a and sound banking practices. As a consequence of given geographic area. Similarly, the federal agencies recent revisions to the regulations that implement the charged with enforcing the nation's antitrust laws CRA, new information is now publicly available on may use the CRA data in assessing the competitive the geographic distribution of small loans to busi- effects of bank mergers and acquisitions. nesses and farms and on community development This article presents an initial assessment of the lending. Because small businesses and small farms new CRA data on originations and purchases of small are more likely than larger ones to borrow small business and small farm loans during 1996. It is amounts, the CRA data on small loans are likely to mainly intended to provide a description of the depth provide a reasonable measure of the extension of and breadth of the data and to place the information credit to such businesses (and hence, in this article, in the context in which it will be used for CRA and inferences about lending to small businesses and other regulatory enforcement activities. The focus of small farms are based on data on small loans). the analysis is on the broad patterns that emerge The new CRA data, combined with information when the data are reviewed from a national perspecreported by institutions about the geographic areas tive rather than on the lending activities of any indithat constitute their local communities, enable lend- vidual institution. The article also discusses some of ers, supervisory agencies, and members of the public the important limitations of the data and challenges to better assess the performance of these institutions that arise in using this new information. in meeting their CRA obligations. Just as the avail- For 1996, we find that nearly 2,100 large commerability of credit to purchase, refinance, and improve cial banks and savings associations (savings banks homes is critical to the well-being of local communi- and savings and loan associations) reported data on ties, so is the availability of credit for small busi- their small business, small farm, and community nesses and small farms. The new CRA data thus development lending and on the geographic areas complement information made available pursuant to that constitute their local communities.2 While they the Home Mortgage Disclosure Act (HMDA) about account for only 18 percent of all commercial banks the flow of housing-related credit to communities and savings associations, the CRA reporters extend nationwide.1 The CRA data also provide new about two-thirds of all small business loans and about opportunities to gauge the flow of credit to com- one-fifth of all small farm loans granted by such institutions. Of the CRA reporters that extended loans, the most active 1 percent granted a large pro- 1. HMDA data have been available for many years and have been portion (nearly half) of the small business loans and widely analyzed. Research based on HMDA data has found that the flow of mortgage credit varies with characteristics of borrowers and 13 percent of the small farm loans. local neighborhoods. See Glenn B. Canner and Dolores S. Smith, Like the number of businesses and farms, the dis- "Home Mortgage Disclosure Act: Expanded Data on Residential Lending," Federal Reserve Bulletin, vol. 77 (November 1991), tribution of lending to small businesses and small pp. 859-81; and Glenn B. Canner and Wayne Passmore, "Home Purchase Lending in Low-Income Neighborhoods and to Low-Income Borrowers," Federal Reserve Bulletin, vol. 81 (February 1995), 2. The regulation implementing the CRA requires only large compp. 71-103. mercial banks and savings associations to report their lending activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 1998 farms varies geographically. Most small business results of those efforts. This approach to CRA assessloans are extended in central city and suburban areas; ments was heavily criticized, both by community most small farm loans, not surprisingly, are in rural organizations and lending institutions. Community areas. Overall, the distribution of small business lend- organizations argued that the examination process ing across census tracts categorized by their income failed to make meaningful distinctions between instigenerally follows the distribution of the population tutions that performed well and those that performed and businesses across these areas. Within central city poorly. Lenders contended that CRA enforcement areas, the data show that most small business loans was too focused on process and paperwork and that are extended in areas with low home-ownership the examination standards were unclear and inconsisrates—areas that tend to have high concentrations of tently applied. In response to these concerns, Presibusinesses. About half of the CRA reporters extended dent Clinton in July 1993 asked the supervisory agencommunity development loans, which tended to be cies to reform the regulations that implement the much larger in size than the average small business or CRA.4 small farm loan. The agencies subsequently adopted revised regulations in May 1995 that were intended to make CRA assessments more performance-based, more objec- ORIGINS OF THE NEW DATA REPORTING tive, and less burdensome for covered institutions. REQUIREMENTS ON SMALL BUSINESS AND The new regulations substitute three performance SMALL FARM LENDING tests—lending, investment, and service—for the twelve assessment factors contained in the original The CRA was enacted two decades ago in response regulation.5 (See the box "The Three CRA Perforto the concern that many commercial banks and mance Tests.") savings associations were thought to be accepting In assessing compliance with the CRA, the three deposits from households and firms in inner cities performance tests are evaluated in the context of while lending and investing them primarily else- information about the institution and its community, where. These "disinvestment" activities, it was main- competitors, and peers. For example, CRA assesstained, were contributing to the decline of many ments consider the economic and demographic charurban areas as evidenced by a deterioration in the acteristics of the local service areas; lending, quality of housing in these areas and a shift of jobs investment, and service opportunities in the local to surrounding areas. In adopting the CRA, the Con- community; the institution's product offerings and gress reaffirmed the principle that commercial banks business strategy; and its capacity and constraints.6 and savings associations have an obligation under their charters to serve the "convenience and needs" of their local communities by providing credit ser- Lending to Small Businesses and Small Farms vices to all segments of those communities. For purposes of enforcement, the supervisory agencies are Although data collection efforts in support of CRA directed to periodically assess the performance of enforcement have traditionally focused on home institutions in this regard, to make available to the mortgage lending, a consensus has evolved in recent public written evaluations, including CRA perfor- years that lending to small businesses and small mance ratings, and to consider the institution's record farms is also critical for a vital and viable commuin acting on applications for deposit facilities, merg- nity. Responding to this recognition, one of the more ers, and acquisitions.3 significant changes to the regulation requires commercial banks and savings associations defined as Evolution of CRA Regulation 4. For a discussion of the original regulation and concerns that led to the revised regulation, see Griffith L. Garwood and Dolores S. Historically, CRA performance evaluations focused Smith, "The Community Reinvestment Act: Evolution and Current on the processes used and efforts made by institutions Issues," Federal Reserve Bulletin, vol. 79 (April 1993), pp. 251-67. to serve their local communities as well as on the For a discussion of the new regulation and the regulatory alternatives considered before its adoption, see the Federal Reserve's press release on the new CRA regulations, April 24, 1995. 5. For a description of the original twelve assessment factors, see 3. The supervisory agencies are the Board of Governors of the Garwood and Smith, "The Community Reinvestment Act," p. 253. Federal Reserve System, the Federal Deposit Insurance Corporation, 6. For further details, see the Federal Reserve press release, the Office of the Comptroller of the Currency, and the Office of Thrift April 24, 1995, and Kevin T. Kane, "CRA's More Flexible Yard- Supervision. stick," Mortgage Banking (September 1997), pp. 54-60. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 3 geographic location (census tract or block numbering The Three CRA Performance Tests area) of the firms and farms receiving them. Unlike the business and farm loans, no geographic informa- The regulations that implement the CRA set forth three tion is provided for community development loans; tests by which the performance of covered institutions only the aggregate amount of lending by each instituwill be evaluated: a lending test, an investment test, and a tion is reported. service test. The data also include information on how many of The lending test involves the measurement of lending the reported loans were extended to businesses and activity for a variety of loan types, including small busifarms with annual revenues of $1 million or less. ness and small farm loans. Among the assessment criteria Such firms fall within generally accepted definitions are the geographic distribution of lending, the distribution of lending across different types of borrowers, the of a small business, although somewhat larger firms extent of community development lending, and the use of are also often categorized as being a small business innovative or flexible lending practices to address the or small farm.8 Finally, each reporting institution credit needs of low- or moderate-income individuals or includes a list of the areas that constitute its local areas. CRA assessment community. For a small institution, The investment test considers the extent of an institu- the assessment area may be a single, relatively small tion's involvement with qualified investments. A qualigeographic area; a large institution may have many fied investment is an investment, deposit, or grant that assessment areas, some small and some large, which benefits the institution's assessment area or a broader in some cases span the country. statewide or regional area that includes its assessment The data on business and farm lending reported area. under the CRA regulations are more limited in scope The service test considers the availability and responsiveness of an institution's system for delivering retail than data reported on home lending under HMDA. In banking services and judges the extent of its community particular, the CRA data include information only on development services and their degree of innovation. loans originated or purchased, not on applications Among the assessment criteria are the geographic distri- that are turned down or withdrawn by the customer. bution of an institution's branches and automated teller Also, unlike HMDA data, the CRA data do not machines, the availability of alternative systems for deliv- include the income, sex, or racial or ethnic backering retail banking services in low- and moderateground of applicants. Finally, the CRA data are not income areas and to low- and moderate-income persons, reported and disclosed application by application as and the provision of community development services. HMDA data are; rather the data are aggregated into the three loan size categories and then reported at the census tract level. From the information submitted by reporting insti- "large" under the regulation to collect and report tutions, the Federal Financial Institutions Examinadata annually on the number and dollar amount of tion Council (FFIEC) prepares a disclosure statetheir originations and purchases of small loans to ment for each institution, in electronic form, as well businesses and farms and any community developas an aggregate statement for each of the 332 metroment loans. Only independent institutions with total politan statistical areas (MSAs) and each of the nonassets of $250 million or more and institutions of any metropolitan counties in the United States and Puerto size if owned by a holding company that has assets of Rico. Before public release of the CRA data, the $ 1 billion or more are subject to the new data report- FFIEC and the supervisory agencies review it to help ing requirements. ensure its accuracy (see the box "Data Quality"). For purposes of reporting, small loans to busi- The FFIEC made the CRA data on 1996 lending nesses and farms are grouped in two ways. First, activity available to the public in October 1997.9 For loans are reported in three loan size categories based more information on the content of these disclosures on the original amount of the loan: $100,000 or less, and how to obtain the new CRA data, see the box $100,001 to $250,000, and more than $250,000.7 "CRA Disclosures." For businesses, the maximum loan size reported is $1 million; for farms, the maximum is $500,000. Second, these loans are categorized according to the 8. According to the 1993 National Survey of Small Business Finances, sponsored by the Federal Reserve Board and the U.S. Small Business Administration, about 84 percent of all small businesses (defined as having fewer than 500 full-time employees) have annual 7. For lines of credit, the reported amount is the size of the line at revenues of less than $1 million. the time of origination. 9. See the FFIEC press release, September 30, 1997. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 1998 Reporting Rules and Geocoding Data Quality Under the CRA, lending institutions are asked to To maximize the usefulness of the CRA data, the infor- report the geographic location of the business or farm mation must be accurate and made available to the public receiving the loan. According to the rules for such on a timely basis. To achieve these objectives, the report- "geocoding," institutions may designate the location ing institutions and their supervisory agencies have made of the loan as being either the location of the business a substantial commitment of resources. headquarters or the primary area where the loan The supervisory agencies seek to ensure that the proceeds are applied. For firms with operations in commercial banks and savings associations they supermultiple locations, the potential for incorrect interprevise provide complete and accurate information. To tations of data arises because some or all of the funds facilitate accurate reporting, the FFIEC makes available tools and information to assist covered institutions may be used to support activities in locations not through the CRA site on its World Wide Web home page reported by the lender. Thus, assessments of the data (http://www.ffiec.gov) and in various hard copy forms. may characterize a loan by the economic and demo- The FFIEC Web site for the CRA, for example, includes graphic characteristics of a reported location (the the regulation, instructions on how to file data reports, a census tract of the headquarters) even though the description of which institutions are covered by the data funds are used to support the activities of the business reporting requirements, the text of interagency interpreor farm in a location with different characteristics. tive letters pertaining to the regulation and interagency Unfortunately, it is not possible to identify the extent questions, and answers to the most frequently asked to which the geographic locations reported in the data questions about compliance. The CRA site also includes reflect where loan funds are actually used.10 a geocoding system that allows anyone to identify the census tract that corresponds to a specific street address. The potential for this type of census tract mis- Beyond informational tools, the FFIEC makes avail- categorization does not appear to be large, however. able an electronic data entry and reporting system that Information from the 1993 National Survey of Small incorporates a series of edit routines to detect and correct Business Finances indicates that most small busierrors in the data. In addition, the FFIEC reviews each nesses have few offices. According to the survey, reporting institution's CRA data before public release 84 percent of small businesses have only one office and subjects the data to further quality checks. Finally, and 95 percent have two or fewer offices. In addition, the supervisory agencies conduct on-site examinations the effects of such miscategorization are likely to be and periodically review the covered institutions' complismall, as the data are not considered in isolation for ance with the geographic reporting requirements of the CRA performance evaluations. Other information, regulation. Such reviews consider, for example, the accusuch as documentation in loan files, may be available racy of the geocoding done by reporters and the comto help examiners determine whether the census tract pleteness of their filings. categorization provided by the lender is appropriate. Post Office Boxes and Rural Routes CHALLENGES AND LIMITATIONS Another issue, also related to the proper geographic Whether the new CRA data are used to help gauge an categorization of small business and small farm lendinstitution's record with respect to the CRA or for ing, arises when the street address of a business or other purposes, the nature of the information and farm is not used by a lender to identify the location of limits on information that can be used in conjunction the firm or farm. This situation occurs when a street with the new data pose many challenges for analysts. address is not available to the lender because the firm Challenges arise because reporting rules and limits or farm provided only a post office box number or a on information available to the reporting institutions rural route or box number. create the potential for incorrect interpretations. Analysts also face challenges because the census data used to characterize neighborhoods and to assess the 10. The same issue arises in assessing HMDA data on home distribution of lending are collected only every ten lending. For home refinancing and, in some cases, home improvement years. Finally, an appropriate interpretation of the loans, the funds may be used to support activity in a location that is CRA data requires an understanding of the different not the same as that of the property. For home purchase lending, however, the HMDA data include the location of the property to be demand and supply conditions that prevail across purchased (with some minor exceptions), and consequently the approlocal markets. priateness of the census tract categorization is generally not an issue. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 5 CRA Disclosures The CRA data on small business, small farm, and commu- more than one state must make the statements available nity development lending are made available to the public at one office in each of those states. Central depositories via the financial institutions covered by the act, central data throughout the nation have the aggregate disclosure statedepositories (usually a public library, regional planning ments for inspection by the public. In addition, the FFIEC agency, or other public entity), and the FFIEC. Under the provides disclosure statements and aggregate reports in regulation, each financiali nstitution submits its lending data paper form and on CD-ROM. A single CD-ROM contains to the Federal Reserve Board, which processes the informa- all of the 1996 CRA data together with an audio-visual tion on behalf of the FFIEC. tutorial to help users access, view, and print disclosure From the reported information, the FFIEC prepares a statements of individual institutions and aggregate statedisclosure statement for each institution and an aggregate ments. The CD-ROM also includes a comprehensive onreport for each MSA and nonmetropolitan county in the line help system and a function that allows users to copy the United States and Puerto Rico. The aggregate reports dis- CRA data for use in other applications software. The FFIEC play lending activity by census tract. To better protect the believes that public access to the CRA data will be greatly confidentiality of the business relationships underlying the enhanced by electronic disclosure and that the costs associdata, disclosure statements for individual lenders group and ated with distribution of the data will be substantially lowdisplay the lending information in a limited number of ered by reducing the traditional reliance on paper copies. income categories. For lending activity in counties that The CRA data order form, which may be used to order have 500,000 or fewer residents, the data are shown in the CD-ROM for $10, and the location of each central four income categories—low, moderate, middle, and upper depository for an MSA are available on the FFIEC's Inter- (see the box "Categorization of Neighborhoods by Relative net site at http://www.ffiec.gov. The order form may also Median Family Income"). For larger counties, the data are be obtained by calling the CRA Assistance Line at displayed in income categories arrayed in intervals of (202) 872-7584. A copy of the September 30, 1997, press 10 percentage points up to a final group, 120 percent or release announcing the availability of the new CRA data is more of the median family income for the county. available from the Federal Reserve Board's Publications Individual institutions make their disclosure statements Section at (202) 452-3245 and on the FFIEC's Web site. available at their home office. Organizations with offices in For post office box addresses, loans were coded by most circumstances, the firm and the post office will the lender according to the census tract of the post be in close proximity. In many cases, the census tract office rather than the census tract location of the applicable to the firm may be the same one applicable business.11 This procedure creates two potential prob- to the post office. lems. First, the characteristics of the census tract To better understand the possible influence of the where the post office is located may be different from reporting of post office box locations on the lending those of the census tract where the firm is located.12 data, information was obtained on the census tract Second, the data may show inordinately high num- locations of those post offices that offer post office bers of loans in some census tracts with post offices boxes.13 These post office box census tracts were then because many businesses or farms outside the census matched to the data on the census tract locations of tract containing the post office may use that office's small business and small farm lending reported by boxes to receive correspondence. CRA-covered institutions. The extent of difficulties created by coding based The matching revealed that of the roughly 60,000 on post office boxes is unclear. However, because a census tracts nationwide for which small business firm is likely to select a convenient post office to loans were reported, 31 percent contained a postal receive correspondence, it is reasonably likely that, in service office with post boxes (table 1). Of the roughly 17,000 census tracts for which small farm loans were reported, 58 percent contained an office 11. In some cases, the census tract reported for a post office with post box services. location was determined from the ZIP code of the post office by mapping the post office location to the census tract at the center of the ZIP code area. 12. For the future, the agencies have attempted to minimize the use of post office addresses when coding by clarifying the instructions to 13. Information on the census tract numbers of postal service reporting institutions. The instructions emphasize that, except in locations with post office boxes was obtained from CENTRAX Serunusual circumstances, the street address of the business or farm, not a vices, Dallas, Texas. Census tract numbers were determined from the post office, should be the basis for coding. street addresses of post offices offering post office boxes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 1998 1. Post office box locations and small loans to businesses and census tract income grouping. Census tract and farms, 1996 boundaries and associated sociodemographic information are based on the 1990 decennial census, Business Farm which is the most recent information available about CCeennssuuss ttrraaccttss aanndd lleennddiinngg Number Percent Number Percent the characteristics of these geographic areas. The population characteristics of some census tracts may Census tracts in all areas .. 62,186 100 62,186 100 Census tracts with loans . 59,631 95.9 16,959 27.3 have changed substantially since the 1990 census and Census tracts with loans and the income categorization for any given census tract P.O. boxes 18,644 9,755 may no longer be the most appropriate. The super- As a share of all tracts visory agencies recognize this limitation, and examinwith loans 31.3 57.5 ers consider additional information that may help MEMO: Number of loans them better assess current conditions in a lender's in census tracts With P.O. boxes 876,978 175,927 CRA service area. As a share of each loan type 36.3 81.2 Average Without P.O. boxes 37.5 5.6 With P.O. boxes 47.0 18.0 Contextual Framework SOURCE. FFIEC and CENTRAX Services. The most significant challenge facing those using the The matched data file indicated that census tracts new CRA data will be to place the information in the with post office box locations received, on average, proper context. Variations in demand for credit forty-seven small business loans, nearly ten more among small businesses and farms across localities as than the average census tract without post office well as differences in underwriting standards and in boxes. At the same time, the typical census tract with the credit quality of local firms will greatly influence a post office box location had virtually the same the level and distribution of lending. Analysts must number of businesses on average as census tracts consider these issues in interpreting patterns in the with no post office box locations—139 and 136 data. respectively (data not shown in table). This result suggests that some fraction of businesses use post offices outside their census tracts as their primary Measurement of Demand mailing address and that this may affect the loan distributions observed in the data.14 Nationwide there are more than 22 million busi- Differences in lending between census tracts with nesses, most of which are small businesses or small and without a post office box location are more farms. They vary considerably with respect to many significant for farm lending. Census tracts with post characteristics, including age, location, industry, office boxes received, on average, eighteen small product markets, and financial condition.15 This farm loans while those without a post office box diversity, along with differences in local economic location had only six. Further, of the 100 census conditions, means that the demand for small business tracts with the largest numbers of small farm loans, and small farm lending will vary greatly across neighall but 2 included a post office that offered post office borhoods and regions. Although the new CRA data box services. On balance, the analysis suggests that, provide information on extensions of credit, they particularly for small farm lending, coding loan loca- do not provide any indication of these local credit tion by using the post office box location may influ- demands. Therefore, conclusions drawn from analyence the interpretation of the data related to the geo- ses using only the loan data should be made with graphic distribution of loans. caution, as differences in local loan volumes may reflect differences in local demands, among other things. Indeed, CRA performance assessments by the Timeliness of Census Data supervising agencies focus on evaluating the volume The 1997 CRA disclosure statements portray 1996 and distribution of lending in the context of local small business and small farm lending by census tract 14. An alternative explanation for this pattern is that businesses located in census tracts with post office box locations have a greater 15. See "Report to the Congress on the Availability of Credit to borrowing propensity than businesses located elsewhere. We lack data Small Businesses," Board of Governors of the Federal Reserve Systo assess this hypothesis. tem (October 1997). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 7 credit needs and the capabilities and capacities of the context, we provide information on population and lending institutions. For instance, examiners will con- the number of businesses and farms in different sider the size and characteristics of the population in geographic areas when possible. a lender's community, the number and types of small businesses and small farms, and many other factors. OVERVIEW OF THE 1996 CRA DATA Because the 1996 CRA data have been available for Supply Effects review for only a short time, relatively little is known about what the new data may reveal after thorough The volume of local lending will also reflect the analysis. Also, because there are no data from preinfluence of a number of supply-related factors, vious years with which to make comparisons, time including the underwriting standards applied in a trend analysis using the 1996 data is not possible. given community, the credit quality of local busi- The focus of the present analysis is on nationwide nesses and farms, and the expected rate of return on totals rather than on the activity of any individual such lending. Variation in lending activity across institution. When appropriate, comparisons are made communities may arise from local differences with data on small business and small farm lending in any of these factors. For example, in areas with from the Report of Condition and Income (Call weak economic conditions, as often happens during Report) submitted by commercial banks and some regional recessions, local firms may have more uncersavings associations and the Thrift Financial Report tain prospects and hence pose more credit risks. submitted by savings and loan associations. In Lenders may respond by limiting the amount and reviewing the nationwide totals, it should be noted terms of credit they are willing to offer in such that the lending activity of individual institutions may communities. vary greatly, both in comparison with other institutions and with patterns for the nation as a whole, depending on their location, the types of businesses Data Features they serve, the types of products they offer, the credit standards they employ, and the nature of their local In many ways, the new CRA data are quite similar to competition. the type of data available under the original provisions of HMDA. Each institution's lending activity is aggregated at the census tract level and pertains The Lending Institutions only to originations and purchases. Further, no information is available about the characteristics of indi- For 1996, 2,078 institutions, consisting of 1,564 comvidual borrowers. While these features limit the uses mercial banks and 514 savings associations, reported of the CRA data, much as they did the original data under CRA requirements (table 2, memo item).16 HMDA data, the new data still provide important Roughly 9 percent of the reporting institutions did insights into the nature and distribution of lending in not extend any small business or small farm loans; local markets. 44 percent did not report any community develop- Also, the CRA data include information only about ment lending (derived from table 10, memo item). new originations and purchases of loans during 1996. Overall, 133 institutions (6 percent) extended no The data contain no information about the total small business, small farm, or community developamount of small business and small farm credit ment loans and reported only the census tracts or outstanding or about the duration or other terms of block number areas that constituted each of their originated or purchased loans. Therefore, conclusions CRA assessment areas. Most of the reporting institudrawn about an institution's lending presence in a tions (75 percent) had assets of less than $1 billion community that rely exclusively on the CRA data (table 2, memo item). About one-third of the commay be misleading. For example, two institutions that extend comparable lending services to a community may have very different patterns of loan originations over a year depending on loan terms and products 16. The count of commercial banks and savings associations preoffered. sented here differs somewhat from the totals provided in the FFIEC's September 30, 1997, press release because, as a result of a different The following sections describe in some detail the grouping procedure used for the press release, some savings associa- 1996 CRA data. To help place this lending activity in tions were placed in the commercial bank category. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 1998 2. Originations and purchases of small loans to businesses and farms, grouped by type of borrower and loan and distributed by type and size of lending institution, 1996 Commercial banks, by asset size (millions of dollars) All commercial banks All institutions Type of borrower and loan Less than 100 100 to 249 250 to 999 1,000 or more Total Percent Total Percent Total Percent Total Percent Total Percent Total Percent Number of loans Business Originations ... 89,569 3.8 476,028 20.2 354,972 15.1 1,379,301 58.5 2,299,870 97.5 2,358,256 100 Purchases 160 .3 197 0.3 4,025 7.1 48,022 84.9 52,404 92.7 56,549 100 Total 89,729 3.7 476,225 19.7 358,997 14.9 1,427,323 59.1 2,352,274 97.4 2,414,805 100 Farm Originations ... 20,928 9.7 30,485 14.2 71,903 33.5 87,371 40.7 210,687 98.1 214,771 100 Purchases 197 10.6 240 12.9 585 31.5 531 28.6 1,553 83.6 1,858 100 Total 21,125 9.8 30,725 14.2 72,488 33.5 87,902 40.6 212,240 98.0 216,629 100 All Originations ... 110,497 4.3 506,513 19.7 426,875 16.6 1,466,672 57.0 2,510,557 97.6 2,573,027 100 Purchases 357 .6 437 .7 4,610 7.9 48,553 83.1 53,957 92.4 58,407 100 Total 110,854 4.2 506,950 19.3 431,485 16.4 1,515,225 57.6 2,564,514 97.5 2,631,434 100 Amount of loans (thousands of dollars) Business Originations ... 2,276,073 1.6 8,446,694 5.8 28,703,666 19.9 99,072,089 68.5 138,498,522 95.8 144,588,665 100 Purchases 25,316 1.1 46,420 1.9 398,622 16.7 1,549,036 64.8 2,019,394 84.4 2,391,819 100 Total 2,301,389 1.6 8,493,114 5.8 29,102,288 19.8 100,621,125 68.5 140,517,916 95.6 146,980,484 100 Farm Originations ... 656,122 6.4 1,181,149 11.5 3,147,226 30.7 5,070,868 49.4 10,055,365 97.9 10,266,808 100 Purchases 7,839 4.8 11,833 7.3 46,533 28.5 56,372 34.5 122,597 75.1 163,191 100 Total 663,961 6.4 1,192,982 11.4 3,193,779 30.6 5,127,240 49.2 10,177,962 97.6 10,429,999 100 All Originations ... 2,932,195 1.9 9,627,843 6.2 31,850,892 20.6 104,142,957 67.3 148,553,887 95.9 154,855,473 100 Purchases 33,155 1.3 58,253 2.3 445,175 17.4 1,605,408 62.8 2,141,991 83.8 2,555,010 100 Total 2,965,350 1.9 9,686,096 6.2 32,296,067 20.5 105,748,365 67.2 150,695,878 95.7 157,410,483 100 MEMO Number of institutions reporting . 208 293 690 373 1,564 2,078 Number of institutions extending loans 198 289 668 346 1,501 1,887 mercial banks but few of the savings associations The vast majority of the reported small business (5 percent) had assets of less than $250 million. loans (about 97 percent measured by the number of A total of 2,414,805 small business loans, for loans) were either originated or purchased by com- $147 billion, and 216,629 small farm loans, totaling mercial banks or their affiliates. The large role of $10 billion, were reported for 1996. Unlike the case commercial banks relative to savings associations in for mortgage lending, a well-developed secondary small business lending is consistent with information market for small business loans does not exist, and from other data sources, including the 1987 and 1993 the new CRA data reflect this market reality.17 Most National Survey of Small Business Finances, which of the small business and small farm loans reported show that commercial banks are the predominant were originations; only about 2 percent of small source of credit for small businesses.18 The CRA data business loans and less than 1 percent of small farm indicate that affiliates of commercial banks and savloans were reported as purchases from another ings associations account for only a small proportion institution. (1.1 percent) of the reported loans (table 3). 17. The one exception is for small business loans guaranteed by 18. See Rebel A. Cole, John D. Wolken, and R. Louise Woodburn, the Small Business Administration. See "Report to the Congress on "Bank and Nonbank Competition for Small Business Credit: Evi- Markets for Small Business- and Commercial Mortgage-Related dence from the 1987 and 1993 National Surveys of Small Business Securities," Board of Governors of the Federal Reserve System and Finances," Federal Reserve Bulletin, vol. 82 (November 1996), the U.S. Securities and Exchange Commission (September 1996). pp. 983-95. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 9 2.—Continued Savings associations, by asset size (millions of dollars) All savings TTyyppee ooff bboorrrroowweerr associations and loan Under 100 100 to 249 250 to 999 1,000 or more Total Percent Total Percent Total Percent Total Percent Total Percent Total Percent Number of loans Business Originations 635 * 597 * 26,638 1.1 30,516 1.3 58,386 2.5 2,358,256 100 Purchases 4 * 0 * 1,391 2.5 2,750 4.9 4,145 7.3 56,549 100 Total 639 * 597 * 28,029 1.2 33,266 1.4 62,531 2.6 2,414,805 100 Farm Originations 81 * 124 .1 1,789 .8 2,090 1.0 4,084 1.9 214,771 100 Purchases 0 .0 0 .0 80 4.3 225 12.1 305 16.4 1,858 100 Total 81 * 124 .1 1,869 .9 2,315 1.1 4,389 2.0 216,629 100 All Originations 716 * 721 * 28,427 1.1 32,606 1.3 62,470 2.4 2,573,027 100 Purchases 4 * 0 .0 1,417 2.5 2,975 5.1 4,450 7.6 58,407 100 Total 720 * 721 • 29,898 1.1 35,581 1.4 66,920 2.5 2,631,434 100 Amount of loans (thousands of dollars) Business Originations 63,787 * 61,718 * 2,796,333 1.9 3,168,305 2.2 6,090,143 4.2 44,588,665 100 Purchases 2,119 * 0 .0 157,720 6.6 212,586 8.9 372,425 15.6 2,391,819 100 Total 65,906 * 61,718 * 2,954,053 2.0 3,380,891 2.3 6,462,568 4.4 46,980,484 100 Farm Originations 4,294 * 8,289 .1 84,850 .8 114,010 1.1 211,443 4.1 10,266,808 100 Purchases 0 .0 0 .0 7,066 4.3 33.528 20.5 40,594 16.2 163,191 100 Total 4,294 * 8,289 .1 91,916 .9 147,538 1.4 252,037 2.4 10,429,999 100 All Originations 68,081 70,007 2,881,183 1.9 3,282,315 2.1 6,301,586 2.4 154,855,473 100 Purchases 2,119 0 164,786 6.4 246,114 9.6 413,019 13.4 2,555,010 100 Total 70,200 70,007 3,045,969 1.9 3,528,429 2.2 6,714,605 4.3 157,410,483 100 MEMO Number of institutions reporting .. 16 346 143 514 2,078 Number of institutions extending loans 12 260 107 386 1,887 NOTE. In this and subsequent tables, percentages may not sum to 100 consist of savings banks and savings and loan associations. The maximum size because of rounding. Institutions reporting are independent institutions with of loan reported is $1 million for businesses and $500,000 for farms. total assets of $250 million or more and institutions of any size if owned by a * Less than 0.05 percent. holding company that has assets of $1 billion or more. Savings associations SOURCE. FFIEC. Concentration of Lending Activity by type of loan—first by number of loans and then by dollar amount—further illustrates this variation Although a minority in number, larger commercial (table 4).19 A ranking of reporters by number of loans banks and savings associations (those with assets of shows that the top 1 percent of the lenders originated $1 billion or more) originated or purchased the major- or purchased 46 percent of the small business loans, ity (60.5 percent) of the reported small business 13 percent of the small farm loans, and 26 percent of loans. No significant differences between commercial the community development loans. When the dollar banks and savings associations were observed in this amount of lending is considered using this ranking regard, as larger institutions did the majority of small scheme, however, the distributions are less skewed. business lending within each institutional category. For example, while the top 1 percent of the reporters For small farm loans the overall pattern is less strik- extended 46 percent of the number of small business ing, as larger institutions accounted for 42 percent. loans, these institutions extended only 18.6 percent of As suggested, wide variation exists across institutions in the number and dollar amount of their 19. For ranking purposes, small business loans, small farm loans, reported lending. A ranking of reporting institutions and community development lending were each ranked separately. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Federal Reserve Bulletin • January 1998 3. Small loans to firms by affiliated lenders, as a share of all small loans to businesses and farms by commercial banks and savings associations, 1996 Lending by commercial bank affiliates Lending by savings association affiliates Lending by all affiliates TTyyppee ooff bboorrrroowweerr Share of Share of savings Total commercial Total Total Share of all loans association loans bank loans Number of loans Business 27,533 1.2 835 1.3 28,368 1.2 Farm 624 .3 14 .3 638 .3 All 28,157 1.1 849 1.3 29,006 1.1 Amount of loans (thousands of dollars) Business 1,046,673 128,753 2.0 1,175,426 * Farm 52,063 105 52,168 All 1,098,736 128,858 1.9 1,227,594 MEMO Number of institutions extending loans 118 127 NOTE. See note to table 2 SOURCE. FFIEC. * Less than 0.05 percent. the small business loan dollars. In other words, the of small farm loan dollars, and 32 percent of commuaverage small business loan extended by these active nity development loan dollars. lenders was relatively small. The highly concentrated nature of the reported lending that is apparent when institutions are ranked Specialized Banks by number of loans also holds when institutions are ranked by the dollar amount of their lending (table 4). The CRA data include lending information from By this ranking, the top 1 percent of lenders extended institutions that differ considerably in their product 22 percent of small business loan dollars, 17 percent offerings and market specializations. Although most 4. Small loans to businesses and farms and loans for community development, grouped by type of loan and distributed by institution ranked by amount of lending, 1996 Percent IInnssttiittuuttiioonnss bbyy Business loans1 Farm loans' deve C lo o p m m m e u nt n it l y o ans' aammoouunntt ooff lleennddiinngg ((ppeerrcceenntt)) By number By dollars By number By dollars By number By dollars Institutions ranked by number of loans Top 1 46.1 18.6 13.3 13.6 26.0 7.8 2-5 18.6 28.2 26.1 26.2 27.3 36.7 6-9 9.6 14.5 17.8 17.1 11.9 14.5 10-19 9.2 13.5 19.7 20.2 13.4 14.8 20-49 11.8 17.8 20.03 19.1 15.8 20.3 50-74 3.7 5.5 2.7 3.1 4.3 4.5 75-100 .9 1.8 .4 .7 1.4 1.3 All 100 100 100 100 100 100 Institutions ranked by dollar amount of loans Top 1 30.7 21.8 11.7 17.4 8.6 31.9 2-5 31.1 27.6 24.4 26.5 23.3 29.7 6-9 10.5 14.3 17.7 18.2 17.5 14.1 10-19 8.9 13.7 20.1 18.0 18.6 12.7 20-49 13.0 16.6 21.9 16.9 21.2 9.8 50-74 4.5 4.8 3.5 2.6 7.5 1.5 75-100 1.3 1.2 .7 .4 3.4 .3 All 100 100 100 100 100 100 MEMO Number of loans 2,414,805 216,629 32,677 Amount (in thousands) 146,980,484 10,429,999 1177,,770088,,116611 Number of lenders with data2 1,886 1,150 1,156 NOTE. See note to table 2. 2. Includes only lenders reporting the relevant type of loan. 1. For ranking purposes, small business loans, small farm loans, and com- SOURCE. FFIEC. munity development lending were each ranked separately. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 11 of the CRA reporters offer a wide range of products, the average loan to these small businesses was about some do not. Among these "specialized" banks, the $46,000, while the average loan amount for larger group most involved in small business lending are firms was $79,000 (derived from table 5). Similarly, those institutions that specialize in credit card lending the average size of the loan to farms with revenues of (referred to as credit card banks). In total, the CRA $1 million or less was about $44,000, and that to data include information from thirty-nine credit card larger farms was about $77,000. banks, of which twelve reported some amount of small business lending in 1996. These twelve credit card banks accounted for a substantial proportion How Comprehensive Are the CRA Data? of all the small business lending reported by CRAcovered institutions when measured by number of As of December 31, 1996, there were 9,446 insured loans, but a much smaller proportion when measured commercial banks and 1,980 savings associations.22 in dollars. In 1996, credit card banks accounted for The new CRA data on small business and small farm 30 percent of the number of reported small business lending include the lending activity of only the largloans but only 2.9 percent of the dollar amount of est commercial banks and savings associations, which such loans.20 Although credit card banks reporting represent just 18 percent of all commercial banks and CRA data were relatively active small business lendsavings associations. ers, they did little small farm lending: In 1996, they To assess the extent that the CRA covers small extended fewer than 100 small farm loans. business and small farm lending activity, a comparison was made between the small business and small farm lending activity of CRA-covered institutions Size of Loans and Size of Borrowers and that of all commercial banks and savings associations as reported on the Call Report and the Thrift The new CRA data include information about the Financial Report.23 Call Reports and Thrift Finansize of small business and small farm loans. For cial Reports include the outstanding amount of small 1996, the average small business loan was about loans to businesses and farms for all commercial $61,000 and the average small farm loan was about banks and savings associations. This analysis thus $48,000 at institutions reporting under CRA, and compares the outstanding amounts for CRA reporters 87 percent of the small business loans and 88 percent with the outstanding amounts for all commercial of the small farm loans (measured by number of banks and savings associations as of June 1996. loans) were for $100,000 or less (table 5). Measured The comparison shows that the CRA reporters by dollar volume, the distribution differs: 29 percent accounted for 64.6 percent of the number of small of small business loan dollars and 44 percent of small business loans and 65.9 percent of the dollar amount farm loan dollars were for $100,000 or less. of such loans outstanding in June 1996. Similarly, the The new CRA data also provide information on CRA reporters extended 21.6 percent of the number how many of the reported loans were extended to of small farm loans and 27.5 percent of the dollar businesses or farms with revenues of $1 million amount of such loans. Thus, despite the limited instior less. For 1996, 56 percent of the reported small tutional coverage of the CRA data reporting requirebusiness loans and 88 percent of the small farm loans ments, CRA reporters accounted for a sizable fraction (measured by number of loans) were extended to of the small business loans reported by all commerfirms and farms with revenues of $1 million or less cial banks and savings associations. However, they (table 5).21 The data show that, on average, loans to accounted for a much smaller fraction of small farm small businesses with revenues of $1 million or less lending. are smaller than those to larger firms. For example, 22. See "Financial Structure Information," Financial Structure Sec- 20. The CRA regulations direct institutions that issue credit cards tion, Division of Research and Statistics, Board of Governors of the to the employees of a small business to report all of the credit card Federal Reserve System, March 25, 1997. Savings associations lines opened on a particular day as a single business loan with the included in the structure data are state-chartered savings banks, fed-' "amount of the loan" equivalent to the sum of the available credit eral savings banks, savings and loan associations, industrial banks, lines of those credit card accounts opened on that day. and cooperative banks. 21. Patterns among credit card banks are quite similar—51 percent 23. We use the Call Report and Thrift Financial Report because of their small business loans were extended to firms with revenues of they include comparable data regarding both CRA reporters and $1 million or less. institutions not required to report under the CRA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 1998 5. Originations and purchases of small loans to businesses and farms, by size of loan, 1996 Size of loan (dollars) MEMO Loans to firms All loans with revenues Type of borrower of $1 million and loan 100,000 or less 100,001 to 250,000 More than 250,000 or less Total Percent Total Percent Total Percent Total Percent Total Percent Number of loans Business Originations 2,046,056 86.8 171,712 7.3 140,488 6.0 2,358,256 100 n.a. n.a. Purchases 52,660 93.1 1,901 3.4 1,988 3.5 56,549 100 n.a. n.a. Total 2,098,716 86.9 173,613 7.2 142,476 5.9 2,414,805 100 1,349,824 55.9 Farm Originations 188,252 87.7 19,604 9.1 6,915 3.2 214,771 100 n.a. n.a. Purchases 1,367 73.6 334 18.0 157 8.4 1,858 100 n.a. n.a. Total 189,619 87.5 19,938 9.2 7,072 3.3 216,629 100 191,027 88.2 All Originations 2,234,308 86.8 191,316 7.4 147,403 5.7 2,573,027 100 n.a. n.a. Purchases 54,027 92.5 2,235 3.8 2,145 3.7 58,407 100 n.a. n.a. Total 2,288,335 87.0 193,551 7.4 149,548 5.7 2,631,434 100 1,540,851 58.6 Amount of loans (thousands of dollars) Business Originations 42,021,720 29.1 29,574,408 20.5 72,992,537 50.5 144,588,665 100 n.a. n.a. Purchases .. 1,018,717 42.6 308,657 12.9 1,064,445 44.5 2,391,819 100 n.a. n.a. Total .... 43,040,437 29.3 29,883,065 20.3 74,056,982 50.4 146,980,484 100 62,583,338 42.6 Farm Originations 4,556,028 44.4 3,208,692 31.3 2,502,088 24.4 10,266,808 100 n.a. n.a. Purchases .. 48,277 29.6 55,673 34.1 59,241 36.3 163,191 100 n.a. n.a. Total .... 4,604,305 44.1 3,264,365 31.3 2,561,329 24.6 10,429,999 100 8,469,677 81.2 All Originations 46,577,748 30.0 32,783,100 21.2 75,494,625 48.8 154,855,473 100 n.a. n.a. Purchases .. 1,066,994 41.8 364,330 14.3 1,123,686 44.0 2,555,010 100 n.a. n.a. Total 47,644,742 30.3 33,147,430 21.1 76,618,311 48.7 157,410,483 100 71,053,015 45.1 NOTE. See note to table 2. The maximum size of loan reported is $1 mil- n.a. Not available. lion for businesses and $500,000 for farms. SOURCE. FFIEC. Analysis of Lending by Location and Area CRA-reporting institutions extended small business Income loans in the vast majority (96 percent) of census tracts nationwide (derived from table 6, memo items). The availability of information about the geographic Reflecting the rural location of most farm lending, location of businesses and farms receiving credit the proportion of all census tracts receiving farm provides an opportunity to examine regional credit loans is much smaller (27 percent) than the proporflows and the distribution of small business and small tion of census tracts receiving small business loans. farm lending across areas grouped by their socio- Although at least some small business loans are demographic and economic characteristics. Because made in most geographic areas, small business lendthe new CRA data do not include the lending of all ing by CRA-reporting institutions tends to be rather commercial banks and savings associations, the data concentrated geographically. When census tracts do not fully represent all small business and small receiving at least one loan are ranked by number of farm lending by these types of institutions. Nonethe- small business loans in 1996 (table 6, top panel), the less, as noted, covered institutions represent a signifi- top 5 percent received 26 percent of all small busicant portion of such lending. ness loans. Ranking census tracts by the dollar amount of small business lending (bottom panel of table 6) indicates that in 1996 the top 5 percent received 33 percent of the small business loan dol- Distribution of Lending by Census Tract lars. Small farm lending is even more concentrated than small business lending; for example, the 5 per- Like the number of businesses and farms, the distri- cent of census tracts with the highest levels of farm bution of small business and small farm lending lending (measured by number of loans) received 41 percent of the small farm loans. varies geographically. The 1996 CRA data reveal that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 13 6. Small loans to businesses and farms, grouped by type of loan and distributed by census tract Categorization of Neighborhoods ranked by amount of lending, 1996 by Relative Household Median Income Percent In counties with less than 500,000 residents, census tracts Business loans Farm loans CCeennssuuss ttrraaccttss are grouped in broad categories. The categories are bbyy aammoouunntt ooff lleennddiinngg By number By dollars By number By dollars defined by the median household income in the census tract as a percentage of the median household income in Census tracts ranked by number of loans the MSA or in the nonmetropolitan portion of the state (if Top 1 9.3 11.4 15.5 12.2 the census tract is not located in an MSA). The categories 2-5 16.4 18.4 25.6 24.1 6-9 12.9 13.5 16.6 16.4 are shown in the table below. 10-19 17.6 17.8 18.0 19.2 20-49 28.7 26.6 18.3 20.5 50-74 11.2 9.4 4.1 5.4 Income category Percentage of Share of census tracts 75-100 3.9 2.9 2.0 2.4 of census tract area median in 1996 (percent)1 Total 100 100 100 100 Low Less than 50 6.5 Census tracts ranked by dollar amount of loans 50-80 19.2 Top 1 8.3 13.1 12.1 15.8 2-5 14.8 20.2 23.2 25.9 Middle 80-120 50.4 6-9 12.1 14.4 16.7 16.9 10-19 17.0 18.2 18.2 18.4 Upper More than 120 20.8 20-49 29.6 25.4 20.6 18.9 50-74 13.1 7.3 6.3 3.5 1. Shares do not sum to 100 percent because median income was not 75-100 5.2 1.5 2.9 .6 reported by the Bureau of the Census for 3.1 percent of the census tracts. Total 100 100 100 100 MEMO Number of loans 2,414,805 216,629 Amount of loans (thousands Credit Flows by Neighborhood Income of dollars) 146,980,484 10,429,999 Number of census tracts with loans 59,631 16,959 CRA performance assessments include an analysis of Total number of census tracts 62,186 62,186 the distribution of small business and small farm NOTE. Includes only census tracts with the relevant type of loan. loans across census tracts grouped into four neighbor- SOURCE. FFIEC. hood income categories: low, moderate, middle, and upper (see the box "Categorization of Neighbor- Credit Flows by Region of the Country hoods by Relative Median Family Income"). Concerns have been expressed that small business loans To examine regional credit flows, reported loans were are not sufficiently available in lower-income neighgrouped by census region. Small business lending borhoods, particularly those in central cities. The data varies by region of the country roughly in proportion suggest that, at least from a national perspective, such to the distribution of businesses. For example, New concerns may be overstated, as the distribution of the England had 5 percent of the small business loans number and the dollar amounts of small business (table 7) and 5.9 percent of the businesses (table 7, loans across the four income categories generally memo item). The South Atlantic region had 20.4 perfollows the distribution of population and businesses cent of the small business loans and 17.8 percent of across these groups (table 8.A). For example, lowthe businesses. income areas include about 4.9 percent of the popu- The regional variation in small farm lending is lation and 5.6 percent of all businesses; and they more pronounced than in small business lending. The received 4.7 percent of the number and 5.6 percent of New England region had the smallest share (less the total dollar amount of new or purchased small than 1 percent) of all small farm lending by CRA- business loans at CRA-reporting institutions.24 Some reporting institutions (measured either by number or larger differences are observed in areas with higher dollar amount of loans) and the West North Central incomes. The total amount of lending to middle- and region had the largest share (more than 30 percent). upper-income neighborhoods taken together only As with small business loans, this regional variation slightly exceeds their share of the population and of fairly closely tracks differences in the share of farms businesses. These lending patterns stand in marked and the share of farm revenues by region. For examcontrast to the distribution of home purchase loans, ple, although New England had the smallest share of the small farm lending, it also had the smallest share of the nation's farms (1.3 percent) and farm revenues (1.2 percent). 24. Data on population and lending activity include Puerto Rico. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Federal Reserve Bulletin • January 1998 7. Originations and purchases of small loans to businesses and farms, by region, 1996 New England Middle Atlantic East North Central West North Central South Atlantic TTyyppee ooff bboorrrroowweerr aanndd llooaann Total Percent Total Percent Total Percent Total Percent Total Percent Number of loans Business Originations 117,469 5.0 322,205 13.7 366,551 15.5 180,875 7.7 476,862 20.2 Purchases 4,445 7.9 9,909 17.5 4,818 8.5 2,760 4.9 15,309 27.1 Total 121,914 5.0 332,114 13.8 371,369 15.4 183,635 7.6 492,171 20.4 Farm Originations 620 6,868 3.2 37,098 17.3 82,399 38.4 17,895 8.3 Purchases 1 4 .2 35 1.9 1,157 62.3 37 2.0 Total 621 6,872 3.2 37,133 17.1 83,556 38.6 17,932 8.3 All Originations 118,089 4.6 329,073 12.8 403,649 15.7 263,274 10.2 494,757 19.2 Purchases 4,446 7.6 9,913 17.0 4,853 8.3 3,917 6.7 15,346 26.3 Total 122,535 4.7 338,986 12.9 408,502 15.5 267,191 10.2 510,103 19.4 Amount of loans (thousands of dollars) Business Originations 7,507,367 5.2 22,338,690 15.4 26,628,373 18.4 12,233,773 8.5 26,341,624 18.2 Purchases 210,411 8.8 376,636 15.7 405,855 17.0 214,020 8.9 441,396 18.5 Total 7,717,778 5.3 22,715,326 15.5 27,034,228 18.4 12,447,793 8.5 26,783,020 18.2 Farm Originations 38,250 .4 340,974 3.3 1,727,932 16.8 3,163,081 30.8 811,663 7.9 Purchases 270 .2 93 .1 3,224 2.0 89,052 54.6 4,032 2.5 Total 38,520 .4 341,067 3.3 1,731,156 16.6 3,252,133 31.2 815,695 7.8 All Originations 7,545,617 4.9 22,679,664 14.6 28,356,305 18.3 15,396,854 9.9 27,153,287 17.5 Purchases 210,681 8.2 376,729 14.7 409,079 16.0 303,072 11.9 445,428 17.4 Total 7,756,298 4.9 23,056,393 14.6 28,765,384 18.3 15,699,926 10.0 27,598,715 17.5 MEMO Number of businesses in 1992 (thousands) 307.8 815.4 828.7 402.1 932.1 Share of businesses (percent) 5.9 15.5 15.8 7.7 17.8 Number of farms in 1994 (thousands) 26.7 95.9 346.0 477.0 248.0 Share of farms (percent) 1.3 4.6 16.8 23.1 12.0 Share of farm revenues (percent) 1.2 14.7 24.3 12.8 of which low- and moderate-income neighborhoods both income and degree of urbanization (central city, receive a smaller relative proportion measured by suburban, or rural location) generally parallels the number or by dollar amount.25 distribution of the U.S. population and businesses For small farm loans, about three-fourths of all (table 8.A). Small business loans are heavily concenlending, whether measured in number of loans or trated in central city and suburban areas (about in dollars, was in middle-income census tracts 80 percent of all small business loans), as are the bulk (table 8.B). Only a small proportion (less than 1 per- of the U.S. population and most small businesses.26 cent) of reported farm lending was in low-income In lower-income areas, most small business loans are neighborhoods, which, as noted, have only a small made in central city census tracts; in higher-income proportion of the U.S. population. areas, suburban census tracts have the most small business loans. The general observation that the number of loans Credit Flows by Degree of Urbanization and parallels the distribution of the population may not Neighborhood Income hold for all central city areas.27 Because businesses The distribution of small business lending by CRAreporting institutions across census tracts grouped by 26. According to the 1993 National Survey of Small Business Finances, 79 percent of small businesses are located in central city and suburban areas. 25. Canner and Passmore, "Home Purchase Lending in Low- 27. Previous research has identified significant differences in the Income Neighborhoods." economic experiences of different central city neighborhoods. For Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 15 7.—Continued East South Central West South Central Mountain Pacific Type of borrower and loan Total Percent Total Percent Total Percent Total Percent Number of loans Business Originations 171,995 7.3 230,560 9.8 144,250 6.1 347,489 14.7 Purchases 5,759 10.2 5,477 9.7 1,230 2.2 6,842 12.1 Total 177,754 7.4 236,037 9.8 145,480 6.0 354,331 14.7 Farm Originations 19,774 9.2 20,960 9.8 17,569 8.2 11,588 5.4 Purchases 32 1.7 192 10.3 67 3.6 333 17.9 Total 19,806 9.1 21,152 9.8 17,636 8.1 11,921 5.5 All Originations 191,769 7.5 251,520 9.8 161,819 6.3 359,077 14.0 Purchases 5,791 9.9 5,669 9.7 1,297 2.2 7,175 12.3 Total 197,560 7.5 257,189 9.8 163,116 6.2 366,252 13.9 Amount of loans (thousands of dollars) Business Originations 9,049,045 6.3 11,901,436 8.2 7,833,955 5.4 20,754,402 14.4 Purchases 102,125 4.3 198,372 8.3 66,716 2.8 376,288 15.7 Total 9,151,170 6.2 12,099,808 8.2 7,900,671 5.4 21,130,690 14.4 Farm Originations 663,873 6.5 958,193 9.3 1,155,080 11.3 1,407,762 13.7 Purchases 1,443 .9 20,107 12.3 3,621 2.2 41,349 25.3 Total 665,316 6.4 978,300 9.4 1,158,701 11.1 1,449,111 13.9 All Originations 9,712,918 6.3 12,859,629 8.3 8,989,035 5.8 22,162,164 14.3 Purchases 103,568 4.1 218,479 8.6 70,337 2.8 417,637 16.3 Total 9,816,486 6.2 13,078,108 8.3 9,059,372 5.8 22,579,801 14.3 MEMO: Number of businesses in 1992 (thousands) ... 279.5 514.1 318.3 I 4 Share of businesses (percent) 5.3 9.8 6.1 16.2 Number of farms in 1994 (thousands) ... 257.0 342.0 113.8 158.3 Share of farms (percent) ... 12.4 16.6 5.5 7.7 Share of farm revenues (percent) 6.2 13.2 7.9 15.7 NOTE. For the states that constitute each census region, see the inside front SOURCE. FFIEC; U.S. Department of Agriculture, Agricultural Statistics, cover of a recent edition of Statistical Abstract of the United States. 1995-96; and The State of Small Business, Report of the President, 1995. n.a. Not available. are not evenly distributed across central city neigh- sus tract income category) than areas with high homeborhoods, one might expect that the distribution of ownership rates, although their population shares are loans would not be either. To explore this issue, we effectively equal, and that lending patterns reflect attempt to identify those central city census tracts that these differences (table 8.A). Census tracts with low are likely to have high concentrations of small busi- home-ownership rates receive far more small businesses. Based on an assumption that residential areas ness loans (measured by number or dollar amount) in close proximity to business districts are likely to be than those with high rates. This relationship holds predominantly rental, central city census tracts within across all neighborhood income groups. These results each income category were grouped by their rates of show that areas with high concentrations of busihome ownership. nesses tend to receive the bulk of small business The results show that areas with low home- loans. ownership rates have significantly more businesses In contrast to the distribution of small business (50 percent to 100 percent more, depending on cen- loans, most small farm loans are in rural areas (74 percent of all small farm loans). The incomeurbanization pattern observed for small business example, differences across central city neighborhoods along various dimensions have been noted in Robert B. Avery, Raphael W. Bostic, loans does not generally hold for small farm loans, Paul S. Calem, and Glenn B. Canner, "Changes in the Distribution of however. Most small farm loans are made in rural Banking Offices," Federal Reserve Bulletin, vol. 83 (September areas regardless of area income (table 8.B). 1997), pp. 707-25. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 Federal Reserve Bulletin • January 1998 8. Small loans to businesses and farms, grouped by neighborhood characteristic and distributed by amount of lending, 1996 A. Loans to businesses MEMO Distribution of U.S. Number of loans, by size category (dollars) MMEEMMOO businesses and NNuummbbeerr ooff llooaannss population (percent) ttoo ffiirrmmss wwiitthh rreevveennuueess ooff More than 250,000 $$11 mmiilllliioonn oorr lleessss CCChhhaaarrraaacccttteeerrriiissstttiiiccc ooofff 100,000 or less 100,001 to 250,000 All nnneeeiiiggghhhbbbooorrrhhhooooooddd111 to 1 million nn BB eess uu ss ss ee ii ss -- 22 PPooppuullaattiioonn Pe M rc E e M nt O of Pe M rc E e M nt O of Pe M rc E e M nt O of Pe M rc E e M nt O of Percent of small Percent small Percent small Percent small Total Percent small Total business business business business business loans loans loans loans loans LOCATION Central city, by rate of home ownership Low 25.5 18.4 85.5 23.4 7.6 25.1 6.9 27.6 572,951 100 23.8 290,096 50.6 High 15.6 18.6 85.7 15.6 7.9 17.4 7.3 17.1 382,658 100 15.8 205,643 53.7 Suburban 41.0 42.7 87.0 41.1 7.0 40.2 6.0 41.6 991,943 100 41.1 527,682 53.2 Rural 17.8 20.3 89.4 19.9 6.4 17.3 4.2 13.6 467,253 100 19.3 326,403 69.9 Total 100 100 86.9 100 7.2 100 5.9 100 2,414,805 100 100 1,349,824 55.9 AREA INCOME (percent)3 Low (less than 50) Central city, by rate of home ownership Low 3.3 2.2 84.1 2.7 8.1 3.1 7.8 3.7 67,249 100 2.8 31,191 46.4 High 1.8 2.2 83.3 1.4 9.0 1.8 7.8 1.9 35,315 100 1.5 16,073 45.5 Suburban .4 .4 87.2 .3 6.8 .3 5.9 .3 7,155 100 .3 3,382 47.3 Rural .1 .2 90.0 .1 6.2 .1 3.8 .1 3,379 100 .1 2,311 68.4 Total 5.6 4.9 84.2 4.5 8.2 5.3 7.6 6.0 113,098 100 4.7 52,957 46.8 Moderate (50 to 79) Central city, by rate of home ownership Low 6.5 4.9 85.7 5.4 7.6 5.8 6.8 6.3 132,883 100 5.5 64,510 48.5 High 4.2 4.9 85.4 3.5 8.0 3.9 6.6 3.9 84,996 100 3.5 42,265 49.7 Suburban 5.6 6.0 88.3 4.8 6.4 4.2 5.3 4.3 113,724 100 4.7 59,628 52.4 Rural 2.5 2.8 90.2 2.3 5.8 1.8 4.0 1.5 53,346 100 2.2 36,835 69.0 Total 18.8 18.5 87.0 16.0 7.1 15.7 5.9 16.0 384,949 100 15.9 203,238 52.8 Middle (80 to 119) Central city, by rate of home ownership Low 8.9 7.2 86.2 8.0 7.4 8.3 6.4 8.8 194,717 100 8.1 101,970 52.4 High 6.1 7.5 86.3 6.1 7.5 6.5 6.2 6.5 149,483 100 6.2 82,480 55.2 Suburban 22.2 24.4 87.3 22.3 6.9 21.4 5.8 21.6 535,520 100 22.2 290,376 54.2 Rural 12.2 14.1 89.8 13.4 6.2 11.1 4.0 8.8 313,461 100 13.0 220,045 70.2 Total 49.4 53.2 87.7 49.8 6.9 47.3 5.5 45.7 1,193,181 100 49.4 694,871 58.2 Upper (120 or more) Central city, by rate of home ownership Low 6.4 4.0 85.5 6.9 7.6 7.4 6.9 8.1 168,220 100 7.0 88,954 52.9 High 3.5 4.0 86.0 4.6 8.1 5.2 6.0 4.7 111,767 100 4.6 64,322 57.6 Suburban 12.8 12.0 86.0 13.7 7.4 14.3 6.5 15.4 334,552 100 13.9 173,831 52.0 Rural 3.0 3.3 87.7 4.0 7.6 4.2 4.7 3.2 96,734 100 4.0 66,990 69.3 Total 25.7 23.3 86.1 29.2 7.6 31.1 6.3 31.4 711,273 100 29.5 394,097 55.4 Income not reported Central city, by rate of home ownership Low .4 .1 81.2 .4 8.4 .5 10.4 .7 9,882 100 .4 3,471 35.1 High .0 .0 81.5 .0 8.7 .1 9.8 .1 1,097 100 .0 503 45.9 Suburban .0 .1 80.2 .0 9.9 .1 9.9 .1 992 100 .0 465 46.9 Rural .0 .0 87.7 .0 7.8 .0 4.5 .0 333 100 .0 222 66.7 Total .4 .2 81.4 .5 8.5 .6 10.1 .9 12,304 100 .5 4,661 37.9 Total 100 100 86.9 100 7.2 100 5.9 100 2,414,805 100 100 1,349,824 55.9 MEMO Number of loans 2,098,716 173,613 142,476 Number of businesses (millions) 8.1 Population (millions) 252.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 17 .—Continued A.—Continued Amount of loans (thousands of dollars) MMEEMMOO AAmmoouunntt ooff llooaannss ttoo ffiirrmmss 100,000 or less 100,001 to 250,000 Mor t e o t 1 h a m n i l 2 li 5 o 0 n , 000 All $$ ww 11 ii tt mm hh ii rr ll ee llii vv oo ee nn nn uu oo ee rr ss ll ee oo ss ff ss CCChhhaaarrraaacccttteeerrriiissstttiiiccc ooofff nnneeeiiiggghhhbbbooorrrhhhooooooddd111 Percent P b e M u r s c s m E e i M n a n e l t O l s o s f Percent Pe M r s c m E e M a n l t O l o f Percent Pe M r s c m E e M a n l t O l o f Total Percent P b e M u r s c m s E e i M n a n e l t O l s o s f T o h f o d u o s l a l n ar d s s o b P u f e s r s i c m n e e n a s l t s l loans business business loans loans loans loans LOCATION Central city, by rate of home ownership Low 26.8 24.2 19.6 25.4 53.6 28.0 38,770,525 100 26.4 15,046,521 38.8 High 28.3 16.3 21.0 17.4 50.7 17.0 24,793,102 100 16.9 10,328,805 41.7 Suburban 28.3 39.6 20.1 40.5 51.6 41.9 60,167,192 100 40.8 23,997,476 39.9 Rural 36.8 19.9 21.5 16.7 41.7 13.1 23,249,665 100 15.8 13,210,536 56.8 Total, by location 29.3 100 20.3 100 50.4 100 146,980,484 100 100 62,583,338 42.6 AREA INCOME (percent)3 Low (less than 50) Central city, by rate of home ownership Low 24.8 2.9 19.3 3.2 55.9 3.7 4,957,683 100 3.4 1,749,976 35.3 High 24.4 1.5 21.1 1.9 54.5 1.9 2,617,885 100 1.8 884,280 33.8 Suburban 27.7 .3 20.3 .3 52.0 .3 429,503 100 .3 155,088 36.1 Rural 38.2 .1 21.6 .1 40.2 .1 158,946 100 .1 96,465 60.7 Total 25.1 4.8 20.0 5.5 54.9 6.1 8,164,017 100 5.6 2,885,809 35.3 Moderate (50 to 79) Central city, by rate of home ownership Low 26.9 5.6 19.8 5.9 53.3 6.4 8,910,232 100 6.1 3,381,621 38.0 High 27.3 3.6 20.7 3.9 52.0 4.0 5,650,967 100 3.8 2,053,835 36.3 Suburban 30.7 4.5 19.7 4.2 49.7 4.3 6,381,503 100 4.3 2,496,672 39.1 Rural 36.8 2.2 20.5 1.7 42.8 1.5 2,537,436 100 1.7 1,425,166 56.2 Total 29.1 15.9 20.0 15.7 50.9 16.1 23,480,138 100 16.0 9,357,294 39.9 Middle (80 to 119) Central city, by rate of home ownership Low 27.7 8.1 19.9 8.3 52.4 8.9 12,526,947 100 8.5 5,088,239 40.6 High 28.8 6.3 20.5 6.4 50.8 6.4 9,385,430 100 6.4 4,026,121 42.9 Suburban 29.1 21.3 20.3 21.4 50.7 21.7 31,631,288 100 21.5 12,734,763 40.3 Rural 37.6 13.3 21.1 10.8 41.3 8.5 15,215,257 100 10.4 8,578,759 56.4 Total 30.7 49.0 20.4 47.0 48.9 45.4 68,758,922 100 46.8 30,427,882 44.3 Upper (120 or more) Central city, by rate of home ownership Low 27.2 7.3 19.5 7.5 53.3 8.3 11,484,547 100 7.8 4,614,103 40.2 High 30.2 4.9 21.9 5.2 47.9 4.6 7,045,946 100 4.8 3,336,311 47.4 Suburban 26.7 13.4 20.0 14.5 53.3 15.6 21,633,230 100 14.7 8,588,377 39.7 Rural 34.5 4.3 22.9 4.1 42.6 3.1 5,318,300 100 3.6 3,099.475 58.3 Total 28.3 29.9 20.5 31.2 51.2 31.5 45,482,023 100 30.9 19,638,266 43.2 Income not reported Central city, by rate of home ownership Low 19.7 .4 16.7 .5 63.6 .8 891,116 100 .6 212,582 23.9 High 21.4 .0 19.0 .1 59.5 .1 92,874 100 .1 28,258 30.4 Suburban 18.2 .0 19.7 .1 62.1 .1 91,668 100 .0 22,576 24.6 Rural 40.1 .0 23.0 .0 36.9 .0 19,726 100 .0 10,671 54.1 Total 18.0 .5 17.2 .6 62.7 .9 1,095,384 100 .7 274,087 25.0 Total 29.3 100 20.3 100 50.4 100 146,980,484 100 100 62,583,338 42.6 MEMO Dollar amount of loans (thousands) 43,040,437 29,883,065 74,056,982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Federal Reserve Bulletin • January 1998 8.—Continued B. Loans to farms Number of loans, by size category (dollars) MMEEMMOO NNuummbbeerr ooff llooaannss ttoo ffiirrmmss MMMEEEMMMOOO 100,000 or less 100,001 to 250,000 More than 250,000 All wwiitthh rreevveennuueess ooff SSShhhaaarrreee ooofff to 1 million $$11 mmiilllliioonn oorr lleessss CCChhhaaarrraaacccttteeerrriiissstttiiiccc ooofff nnneeeiiiggghhhbbbooorrrhhhooooooddd111 UUU...SSS... pppooopppuuulllaaatttiiiooonnn MEMO MEMO MEMO MEMO (((pppeeerrrccceeennnttt))) Percent of Percent of Percent of Percent of Percent of Percent small farm Percent small farm Percent small farm Total Percent small farm Total small farm loans loans loans loans loans LOCATION Central city, by rate of home ownership Low 18.4 74.1 1.6 16.6 3.3 9.2 5.2 3,975 100 1.8 3,139 79.0 High 18.6 82.3 4.6 12.9 6.9 5.2 7.7 10,580 100 5.0 8,737 82.6 Suburban 42.7 84.6 18.6 10.9 22.8 4.5 26.8 41,738 100 19.3 35,559 85.2 Rural 20.3 89.0 75.3 8.3 67.0 2.7 60.3 160,336 100 74.0 143,592 89.6 Total 100 87.5 100 48.8 100 3.3 100 216,629 100 100 191,027 88.2 AREA INCOME (percent)3 Low (less than 50) Central city, by rate of home ownership Low 2.2 71.2 .1 19.2 .3 9.6 .4 260 100 .1 199 76.5 High 2.2 76.6 .1 15.9 .1 7.6 .2 145 100 .1 89 61.4 Suburban .4 91.8 .1 4.9 .0 3.3 .1 183 100 .1 169 92.3 Rural .2 88.3 .2 8.5 .2 3.2 .2 435 100 .2 356 81.8 Total 4.9 82.9 .4 11.6 .6 5.5 .8 1,023 100 .5 813 79.5 Moderate (50 to 79) Central city, by rate of home ownership Low 4.9 68.9 .2 19.5 .5 11.5 .8 486 100 .2 361 74.3 High 4.9 83.3 .4 10.7 .4 6.0 .7 813 100 .4 665 81.8 Suburban 6.0 85.0 2.7 10.0 3.0 5.0 4.3 6,067 100 2.8 5,111 84.2 Rural 2.8 88.1 7.6 8.9 7.3 3.0 7.0 16,387 100 7.6 14,583 89.0 Total 18.5 86.7 10.9 9.5 11.3 3.8 12.8 23,753 100 11.0 20,720 87.2 Middle (80 to 119) Central city, by rate of home ownership Low 7.2 74.9 .7 15.8 1.3 9.3 2.2 1,686 100 .8 1,337 79.3 High 7.5 82.9 3.0 12.3 4.2 4.8 4.6 6,831 100 3.2 5,774 84.5 Suburban 24.4 85.2 14.8 10.7 17.6 4.2 19.4 32,865 100 15.2 28,160 85.7 Rural 14.1 89.3 59.9 8.2 52.2 2.6 46.2 127,265 100 58.7 114,166 89.7 Total 53.2 88.1 78.3 8.9 75.3 3.0 72.4 168,647 100 77.9 149,437 88.6 Upper (120 or more) Central city, by rate of home ownership Low 4.0 75.6 .6 16.1 1.2 8.3 1.8 1,528 100 .7 1,231 80.6 High 4.0 79.3 1.2 14.9 2.1 5.8 2.3 2,791 100 1.3 2,209 79.1 Suburban 12.0 75.9 1.0 16.1 2.1 8.0 3.0 2,623 100 1.2 2,119 80.8 Rural 3.3 88.0 7.5 9.1 7.4 3.0 6.9 16,198 100 7.5 14,441 89.2 Total 23.3 84.7 10.3 11.0 12.8 4.3 13.9 23,140 100 10.7 20,000 86.4 Income not reported Central city, by rate of home ownership Low .1 66.7 .0 20.0 .0 13.3 .0 15 100 .0 11 73.3 High .0 .0 .0 .0 .0 .0 .0 0 100 .0 0 0.0 Suburban .1 .0 .0 .0 .0 .0 .0 0 100 .0 0 0.0 Rural .0 92.2 .0 3.9 .0 3.9 .0 51 100 .0 46 90.2 Total .2 86.4 .0 7.6 .0 6.1 .1 66 100 .0 57 86.4 Total 100 87.5 100 9.2 100 3.3 100 216,629 100 100 191,027 88.2 MEMO Number of loans 189,619 19,938 1,072 Population (millions) 252.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 19 8.—Continued B—Continued Amount of loans (thousands of dollars) MMEEMMOO AAmmoouunntt ooff llooaannss ttoo ffaarrmmss 100,000 or less 100,001 to 250,000 More than 250,000 All wwiitthh rreevveennuueess ooff CCChhhaaarrraaacccttteeerrriiissstttiiiccc ooofff to 1 million $$11 mmiilllliioonn oorr lleessss nnneeeiiiggghhhbbbooorrrhhhooooooddd111 Percent s P m e M r a c l E e l M n fa t O r o m f Percent s P m e M r a c l E l e M n f t a O r o m f Percent s P m e M r a c l E e l M n f t a O r o m f T o h f o d u o s l a l n a d rs s Percent s P m e M r a c l E l e M n fa t O r o m f Total s P m er a c l e l n f t a r o m f loans loans loans loans loans LOCATION Central city, by rate of home ownership Low 27.9 2.1 32.6 3.4 39.5 5.3 344,416 100 23.8 229,416 66.6 High 36.8 5.4 33.8 7.0 28.8 7.6 678,279 100 15.8 496,300 73.2 Suburban 39.0 20.1 31.7 23.0 29.3 27.2 2,371,704 100 41.1 1,802,397 76.0 Rural 47.4 72.4 30.9 66.5 21.7 59.7 7,035,600 100 19.3 5,941,564 84.4 Total, by location 44.1 100 31.3 100 24.6 100 10,429,999 100 100 8,469,677 81.2 AREA INCOME (percent)3 Low (less than 50) Central city, by rate of home ownership Low 28.6 .2 35.2 .3 36.2 .4 24,749 100 2.8 16,596 46.4 High 31.3 .1 32.9 .1 35.8 .2 12,029 100 1.5 4,826 45.5 Suburban 44.3 .1 24.3 .0 31.5 .1 6,343 100 .3 5,416 47.3 Rural 43.1 .2 32.7 .2 24.2 .2 20,277 100 .1 14,358 68.4 Total 35.3 .5 32.9 .6 31.8 .8 63,398 100 .6 41,196 65.0 Moderate (50 to 79) Central city, by rate of home ownership Low 23.2 .2 33.4 .5 43.4 .8 48,663 100 5.5 27,677 48.5 High 37.6 .4 27.6 .4 34.8 .7 52,222 100 3.5 35,280 49.7 Suburban 36.8 2.7 30.3 3.2 32.9 4.4 340,580 100 4.7 246,122 52.4 Rural 43.5 7.0 32.6 7.3 23.9 6.9 736,022 100 2.2 615,152 69.0 Total 40.5 10.3 31.7 11.4 27.8 12.8 1,177,487 100 11.3 924,231 78.5 Middle (80 to 119) Central city, by rate of home ownership Low 28.0 .9 31.3 1.4 40.7 2.3 145,409 100 8.1 98,342 52.4 High 38.0 3.4 33.6 4.3 28.4 4.6 417,458 100 6.2 318,450 55.2 Suburban 40.5 16.0 31.8 17.6 27.7 19.6 1,812,279 100 22.2 1,406,159 54.2 Rural 48.1 57.6 30.6 51.6 21.3 45.7 5,506,308 100 13.0 4,653,291 70.2 Total 45.5 77.9 31.0 75.0 23.5 72.2 7,881,454 100 75.6 6,476,242 82.2 Upper (120 or more) Central city, by rate of home ownership Low 29.6 .8 33.3 1.3 37.1 1.8 123,977 100 7.0 85,497 52.9 High 34.3 1.5 35.9 2.2 29.8 2.3 196,570 100 4.6 137,744 57.6 • Suburban 29.1 1.3 33.3 2.2 37.6 3.1 212,502 100 13.9 144,700 52.0 Rural 45.9 7.7 31.1 7.3 23.0 6.9 770,962 100 4.0 656,889 69.3 Total 39.9 11.3 32.4 12.9 27.8 14.1 1,304,011 100 12.5 1,024,830 78.6 Income not reported Central city, by rate of home ownership Low 19.5 .0 32.6 .0 47.9 .0 1,618 100 .4 1,304 35.1 High .0 .0 0.0 .0 .0 .0 0 100 .0 0 45.9 Suburban .0 .0 0.0 .0 .0 .0 0 100 .0 0 46.9 Rural 41.4 .0 12.4 .0 46.3 .0 2,031 100 .0 1,874 66.7 Total 31.7 .0 21.3 .0 47.0 .1 3,649 100 .0 3,178 87.1 Total 44.1 100 31.3 100 24.6 100 10,429,999 100 100 8,469,677 81.2 MEMO Amount of loans in (thousands of dollars) 4,604,305 3,264,365 2,561,329 1. Census tracts in central city locations are grouped by home-ownership 3. For census tracts in central cities and suburbs, which together constitute rate. A low rate of home ownership is defined as being less than or equal to the metropolitan statistical areas (MSAs), percentage is of MSA median. For median home-ownership rate for all central city census tracts; a high rate is census tracts in rural areas, percentage is of nonmetropolitan areas of state defined as being above the median. median. 2. Data on share of businesses derived from information provided by the SOURCE. FFIEC. Office of the Comptroller of the Currency. The shares are calculated on a slightly smaller subset of the census tracts than those included in the CRA data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Federal Reserve Bulletin • January 1998 Lending to Low- and Moderate-Income Community Development Lending Neighborhoods by Institutions Besides information about small business and small On average, institutions covered by the CRA report- farm lending, institutions covered by the CRA data ing requirements extended about 5 percent of their reporting requirements also disclose the number and small business loans in low-income census tracts and dollar amount of their community development loans. about 16 percent of their loans in moderate-income Community development loans are defined in the tracts (table 8.A). However, lending activity varies regulation as loans whose primary purpose is commugreatly across lending institutions because of a num- nity development and which have not been reported ber of different factors, including the characteristics elsewhere as a home purchase, small business, of the local service areas and market conditions. To small farm, or consumer loan.28 Examples include provide a sense of this diversity, we calculated the loans to local lending consortiums and local nonprofit share of each institution's lending that occurred in organizations. low- and moderate-income census tracts and ranked For 1996, 32,677 community development loans institutions by these shares. This procedure used all totaling $17.7 billion were reported (table 10). The small business lending in 1996 for each institution as average community development loan, at $542,000, a reference point, which differs from analytical proce- was far larger than the average small business loan of dures used by CRA examiners that focus on activity $61,000 reported in the CRA data. within specific assessment areas. A large proportion Among CRA reporters, 58 percent of the commerof institutions (39.8 percent) report that their small cial banks and 48 percent of the savings associations business lending in low-income areas makes up a extended community development loans in 1996 very small share (less than 1 percent) of their newly (derived from table 10). Of the total number of originated or purchased loans. By contrast, only 8.8 percent of these institutions report that their small business lending in moderate-income areas makes up such a small share of their small business lending 28. For more details see the Federal Reserve's April 24, 1995, activity (table 9). press release. 9. Institutions that lend to small businesses in low- or moderate-income neighborhoods, grouped by neighborhood income of the borrowers and distributed by the share of such loans in the institutions's tota llending to small businesses, 1996 Percent By number of loans By amount of loans SShhaarree ooff ssmmaallll bbuussiinneessss lleennddiinngg ((ppeerrcceenntt))11 Moderate Low and Moderate Low and Low income Low income income moderate income income moderate income Less than 1 39.8 8.8 7.2 40.7 10.1 8.7 1 to 2 8.6 3.3 3.3 8.2 3.4 2.4 2 to 3 8.2 3.4 2.5 7.2 2.9 2.8 3 to 4 7.1 2.8 2.7 6.6 3.0 2.1 4 to 5 6.6 2.7 2.0 4.8 3.3 2.1 5 to 6 5.6 2.5 1.8 6.0 3.2 2.3 6 to 7 4.8 3.7 2.1 4.5 2.4 2.0 7 to 8 4.6 3.2 1.9 4.3 3.9 2.8 8 to 9 3.2 3.8 2.9 2.5 3.6 2.1 9 to 10 1.9 3.9 2.7 2.7 3.8 1.4 10 to 15 5.8 21.5 14.0 8.0 19.4 14.5 More than 15 3.8 40.5 56.8 4.5 40.9 56.7 Total 100 100 100 100 100 100 NOTE. Excludes 151 lenders, about 8 percent of all lenders, that reported 1. Share is the percentage of a lender's total small business originations and fewer than 25 small business loans. purchases of loans to borrowers that are in the neighborhood income cate- Low-income neighborhoods are defined as census tracts with a median fam- gory. The share is based on all reported loans for which neighborhood income ily income of less than 50 percent of the median family income of the tract's data were available. metropolitan statistical area (MSA) or, if the tract is not in an MSA, less than SOURCE. FFIEC. 50 percent of the entire nonmetropolitan portion of the state. The median income of moderate-income neighborhoods is 50 percent to 79 percent of the median income of the broader area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Information on Lending to Small Businesses and Small Farms: The 1996 CRA Data 21 10. Community development lending, 1996 Amount of loans Number of loans MEMO: CRA reporters (thousands of dollars) TTTyyypppeee aaannnddd aaasssssseeettt sssiiizzzeee ooofff llleeennndddeeerrr Community development (((mmmiiilllllliiiooonnnsss ooofff dddooollllllaaarrrsss))) loans TToottaall PPeerrcceenntt TToottaall PPeerrcceenntt NNuummbbeerr PPeerrcceennttaaggee Number Percentage extending extending Commercial banks Less than 100 655 2.0 106,547 .6 208 10.0 78 6.7 100 to 249 1,634 5.0 240,605 1.4 293 14.1 128 11.1 250 to 999 10,181 31.2 2,146,720 12.1 690 33.2 417 36.1 1,000 or more 13,523 41.4 12,218,553 69.0 373 17.9 285 24.7 Total 25,993 79.5 14,712,425 83.1 1,564 75.3 908 78.5 MEMO: Lending by commercial bank affiliates 211 .8 423,976 2.9 28 3.1 Savings associations Less than 100 64 .2 46,799 .3 9 .4 2 .2 100 to 249 12 * 14,906 .1 16 .8 4 .3 250 to 999 2,181 6.7 764,314 4.3 346 16.7 151 13.1 1,000 or more 4,427 13.5 2,169,717 12.3 143 6.9 91 7.9 Total 6,684 20.5 2,995,736 16.9 514 24.7 248 21.5 MEMO: Lending by savings association affiliates 482 7.2 139,693 4.7 6 2.4 All 32,677 too 17,708,161 100 2,078 100 1,156 100 MEMO: Lending by all affiliates 693 2.1 563,669 3.2 34 2.9 * Less than 0.05 percent. SOURCE. FFIEC. community development loans, commercial banks ing incomes and degrees of urbanization. The analyextended nearly 80 percent, with large commercial sis also reveals considerable variation among indibanks and savings associations (assets of $1 billion or vidual lenders in the distribution of their small busimore) extending the majority (55 percent). These ness lending across neighborhood income categories. large lenders tended to make larger loans, as these By contrast, the data show that the distribution of institutions accounted for 81 percent of the commu- small farm lending is quite different from the distribunity development lending measured in dollars. Affili- tion of the population—most small farm loans were ates of reporting institutions extended relatively few extended in rural areas, which have relatively small (2 percent) of the community development loans. populations. The distribution of small farm lending does closely resemble the distribution of small farms across census regions, however. CONCLUDING THOUGHTS Regarding use of the data to gauge the performance of lending institutions in meeting their CRA The new CRA data on small business, small farm, obligation, it must be emphasized that the geographic and community development lending provide oppor- distribution of an institution's lending will be greatly tunities to gauge the flow of credit to communities influenced by the types of credit products it offers, throughout the country. Analysis of the data suggests the types of businesses in its local communities, the that, overall, the number and dollar amount of small competitive environment it faces, and the characterisbusiness loans originated and purchased by CRA- tics of the communities it serves. As a result, the reporting institutions are distributed in a manner that broad patterns of lending for all institutions found in parallels the distribution of population and businesses the data may not reflect those of a single institution or across the country. This relationship holds across group of institutions in any given neighborhood or census regions and across neighborhoods with differ- local market. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 Industrial Production and Capacity Utilization for November 1997 Released for publication December 15 notably to the gain. In addition, the production of motor vehicles, which had declined some in October, increased sharply. At 127.3 percent of its 1992 aver- Total industrial production rose 0.8 percent in age, industrial production in November was 5.6 per- November following a gain of 0.5 percent in October. cent higher than in November 1996. The rate of Increases were widespread among most major mar- industrial capacity utilization rose 0.3 percentage ket groups. Information processing equipment, and point, to 83.2 percent—its highest rate since Septemparts used in high-technology equipment, contributed ber 1995. Industrial production indexes Twelve-month percent change Twelve-month percent change Total industry 10 5 + 0 5 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 ~ 160 ~ Manufacturing * 160 — Capacity ^ — 140 Capacity ^ ~ 140 120 120 100 100 _ y P r o d u c t i on _ 80 _ , " Production _ 80 1 1 1 1 1 1 1 1 1 1 1 1 Percent of capacity Percent of capacity Total industry Manufacturing 9900 — Utilization — 90 Utilization 8800 80 7700 70 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1983 1985 1987 1989 1991 1993 1995 1997 1983 1985 1987 1989 1991 1993 1995 1997 All series are seasonally adjusted. Latest series, November. Capacity is an ndex of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

23 Industrial production and capacity utilization, November 1997 Industrial production, index, 1992=100 Percentage change Category 1997 19971 Nov. 1996 to Aug.r Sept.' Oct. Nov. P Aug. Sept.r Oct. Nov. P Nov. 1997 Total 125.2 125.7 126.4 127.3 .6 .4 .5 .8 5.6 Previous estimate 125.2 125.8 126.3 .5 .5 .4 Major market groups Products, total2 119.2 119.2 119.9 120.8 1.0 .0 .6 .8 4.4 Consumer goods 114.6 114.6 115.4 116.0 .7 .0 .7 .6 2.5 Business equipment 144.6 144.5 145.3 147.5 2.1 .0 .5 1.5 10.9 Construction supplies 122.7 120.9 121.9 122.9 1.2 -1.4 .8 .8 .5 Materials 134.9 136.2 136.9 137.9 .0 .9 .5 .7 7.4 Major industry groups Manufacturing 127.9 128.2 129.0 130.2 .7 .2 .6 1.0 6.3 Durable 144.3 144.6 145.5 147.6 1.3 .2 .6 1.4 9.4 Nondurable 111.0 111.3 112.0 112.4 .1 .3 .6 .4 2.6 Mining 106.3 106.5 105.8 105.6 -.2 .2 -.7 -.2 1.9 Utilities 113.0 115.0 115.7 114.7 -.7 1.7 .6 -.9 1.0 Capacity utilization, percent MEMO Capacity, cceennttaaggee 1996 1997 cchhaannggee,, Average, Low, High, NNoovv.. 11999966 1967-96 1982 1988-89 Nov. Aug.' Sept.r Oct.' Nov. P NNoovv.. tt oo 11 999977 Total 82.1 71.1 85.4 82.5 82.8 82.8 82.9 83.2 4.7 Previous estimate 82.8 82.9 82.9 Manufacturing 81.1 69.0 85.7 81.5 81.8 81.7 81.8 82.3 5.3 Advanced processing 80.5 70.4 84.2 79.5 80.0 79.8 80.1 80.6 6.3 Primary processing .. 82.3 66.2 88.9 86.0 85.8 85.8 85.7 86.0 3.4 Mining 87.5 80.3 88.0 88.3 90.0 90.2 89.5 89.3 .7 Utilities 87.2 75.9 92.6 90.6 89.2 90.7 91.1 90.2 1.4 NOTE. Data seasonally adjusted or calculated from seasonally adjusted 2. Contains components in addition to those shown, monthly data. r Revised, 1. Change from preceding month. p Preliminary. MARKET GROUPS 0.7 percent in November; most of the gain was in durable materials, mainly in parts for high-technology The output of consumer goods rose 0.6 percent, with equipment and for motor vehicles. Nondurable matean increase in the production of durable consumer rials posted a moderate gain; the production of energy goods accounting for the gain. Automotive products materials was down because of declines in electricity rebounded sharply, and the output of other durables, generation and coal mining. including appliances, carpeting, and furniture, rose also. The production of nondurable consumer goods was little changed, as gains in the output of food and INDUSTRY GROUPS chemical products were about offset by declines in the household use of fuels and electricity. Business Manufacturing output rose 1.0 percent, its largest equipment advanced 1.5 percent; the most sizable monthly gain since February 1996. Output in manugains were in the production of transit equipment, facturing excluding motor vehicles and parts was up which includes aircraft and motor vehicles for busi- 0.7 percent, with gains in most industries. The manuness use, and information processing equipment, facture of durable goods rose 1.4 percent; most of which includes computers. The output of construc- those industries posted sizable increases, the largest tion supplies rose 0.8 percent in both October and of which were in transportation equipment, lumber, November, reversing the decline in September. On and electrical machinery. The production of nondurabalance, this sector has been about flat, albeit at a ble goods rose 0.4 percent, its third successive month high level, for much of this year. The production of of moderate advances. Output in mining and at utilimaterials advanced for a third month, increasing ties declined in November. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Federal Reserve Bulletin • January 1998 The operating rate in manufacturing rose 0.5 per- reflected a jump in utilization in the motor vehicle centage point, to 82.3 percent—its highest level since and parts industry. The operating rate in primary- September 1995. The utilization rate in advanced- processing industries rose 0.3 percentage point, to processing industries was 80.6 percent, about equal 86.0 percent, which is about the rate that has perto its long-term average. The increase of 0.5 percent- sisted so far this year. • age point for advanced-processing industries largely Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

25 Statements to the Congress Statement by Edward W. Kelley, Jr., Member, Board The Fedwire securities transfer system supports the of Governors of the Federal Reserve System, before safekeeping, clearing, and settlement of U.S. governthe Committee on Banking and Financial Services, ment securities in both the primary and secondary U.S. House of Representatives, November 4,1997 markets. It provides custody of U.S. government securities in book-entry form as well as the transfer I am pleased to appear before the committee today to of securities ownership among market participants. discuss the Federal Reserve's efforts to address the On the custody side, the system calculates and credits Year 2000 computer systems issue. The Federal interest and principal payments to the holders of Reserve System has developed and is executing a securities, reconciles outstanding securities balances comprehensive plan to ensure its own Year 2000 with issuers, and performs other recordkeeping and readiness, and the bank supervision function is well collateral safekeeping functions. On the transfer side, along in a cooperative, interagency effort to promote the system delivers book-entry securities against timely remediation and testing by the banking indus- a simultaneous payment, called delivery-versustry. This afternoon I will focus on actions being taken payment, thus reducing the settlement risks of market by the Federal Reserve System to address our inter- participants. About 8,000 depository institutions use nal systems, coordination with the industry, and con- the Fedwire securities transfer service to transfer tingency planning. each year approximately 13 million securities valued at more than $160 trillion. The average total daily value of Fedwire securities transfers is about $650 billion. BACKGROUND The ACH is an electronic payment service that supports both credit and debit transactions and is The Federal Reserve operates several payments appli- used by approximately 14,000 financial institutions, cations that process and settle payments and securi- 400,000 companies, and an estimated 50 million conties transactions between depository institutions in sumers. Typical credit transactions include direct the United States. Three of these applications are the deposit of payroll and corporate payments to suppli- Fedwire funds transfer, Fedwire securities transfer, ers. Typical debit transactions include the collection and automated clearinghouse (ACH) applications. of mortgage and loan payments and corporate cash The first two applications are large-value payments concentration transactions. The ACH processes transmechanisms for U.S. dollar interbank funds transfers actions in batches one or two days before they are and U.S. government securities transfers. Users of the scheduled to settle. ACH transactions are settled applications are primarily depository institutions and through depository institutions' accounts at the Fedgovernment agencies. eral Reserve Banks. Approximately 4 billion ACH The Fedwire funds transfer system is a real-time transactions were processed in 1996, with a total credit transfer system used primarily for payments value of approximately $12 trillion. About 3.3 billion related to interbank funds transfers such as Fed funds of these payments were commercial transactions; transactions, interbank settlement transactions, and 625 million payments were originated by the federal "third-party" payments between the customers of government. depository institutions. Funds transferred over Fed- The Reserve Banks' critical applications, such as wire are immediately final; they cannot be revoked Fedwire funds and securities transfer, ACH, and supafter they have been accepted and processed by the porting accounting systems, run on mainframe com- Federal Reserve. About 10,000 depository institu- puter systems operated by Federal Reserve Automations use the Fedwire funds transfer system to trans- tion Services (FRAS), the internal organizational unit fer each year approximately 86 million payments that processes applications on behalf of the Federal valued at more than $280 trillion. The current aver- Reserve Banks and operates the Federal Reserve's age total daily value of Fedwire funds transfers is national network. These critical applications are approximately $1.1 trillion. "centralized," that is, one copy of the application is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Federal Reserve Bulletin • January 1998 used by all twelve Reserve Banks. In addition to lines of computer code. While there are challenges centralized applications on the mainframe, the Fed- and a great deal of work before us, I can report that eral Reserve Banks operate a range of applications in we expect to be fully prepared for the century date a distributed computing environment, supporting change. business functions such as cash distribution, banking The Federal Reserve recognized the potential probsupervision and regulation, research, public informa- lem with two-digit date fields more than five years tion, and human resources. The Reserve Banks also ago when we began consolidating our mainframe operate check processing systems that provide check data processing operations. Our new centralized services to depository institutions and the U.S. gov- mission-critical applications, such as Fedwire funds ernment. A national communications network, called transfer, Fedwire securities transfer, and ACH, were FEDNET, supports the exchange of information designed from inception with Year 2000 compliance among the Reserve Banks, FRAS, and external in mind. The mainframe consolidation effort also organizations. The scope of the Federal Reserve's necessitated extensive application standardization, Year 2000 activities includes all of these processing which required us to complete a comprehensive environments and the supporting telecommunications inventory of our mainframe applications, a necessary network. first step to effective remediation. Like our counterparts in the private sector, the Federal Reserve System still faces substantial challenges in achieving Year 2000 readiness. These challenges include man- YEAR 2000 READINESS aging a highly complex project involving multiple interfaces with others, ensuring the readiness of ven- It is crucial that the Federal Reserve provide reliable dor components, ensuring the readiness of applicaservices to the nation's banking system and financial tions, thorough testing, and establishing contingency markets. The Federal Reserve is giving the Year 2000 plans. We are also faced with labor market pressures its highest priority, commensurate with our goal of that call for creative measures to retain staff who are maintaining the stability of the nation's financial critical to the success of our Year 2000 activities. markets and payments systems, preserving public confidence, and supporting reliable government operations. We are taking a comprehensive approach to our CDC PROJECT MANAGEMENT preparedness which includes assessments of readiness, remediation, and testing. The Federal Reserve According to industry experts, up to one-quarter of has completed application assessments and internal an organization's Year 2000 compliance efforts are test plans, and we are currently renovating and test- devoted to project management. Managing preparaing software. We are also updating proven plans and tions for the century date change is particularly techniques used during other times of operational resource-intensive given the number of automated stress in order to be prepared to address potential systems to be addressed, systems interrelationships century date change difficulties. All Federal Reserve and interdependencies, interfaces with external data computer program changes, as well as system and sources and customers, and testing requirements. In user-acceptance testing, are scheduled to be com- addition, Year 2000 preparations must address many pleted by year-end 1998. Further, critical financial computerized environmental and facilities manageservices systems that interface with the depository ment systems such as power, heating and cooling, institutions will be Year 2000 ready by mid-1998. voice communications, elevators, and vaults. Our This schedule will permit approximately eighteen Year 2000 project is being closely coordinated among months for customer testing, to which we are dedicat- the Reserve Banks, the Board of Governors, numering considerable support resources. ous vendors and service providers, approximately A large cadre of top personnel in the Federal 13,000 customers, and government agencies. Reserve System have been assigned to this task. Our In 1995, a Federal Reserve System-wide project staff is putting in many extra hours to prepare for was initiated, referred to as the Century Date Change testing with customers, planning for business continu- (CDC) project, to coordinate the efforts of the ity in the event of any unanticipated problems with Reserve Banks, FRAS, and the Board of Governors. internal systems, and enhancing our ability to respond Our project team is taking a three-part approach to to possible Year 2000-related operating failures of achieve its objectives, focusing on planning, readidepository institutions. Assuring compliance inter- ness, communication, and monitoring. Our planning nally is requiring review of approximately 90 million began with a careful inventory of all applications and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 27 establishment of schedules and support mechanisms other institutions. Our test environments will be conto ensure that readiness objectives are met. The readi- figured to provide flexible and nearly continuous ness process involves performing risk assessments, access by customers. Network communications commodifying automated systems, and testing both inter- ponents are also being tested and certified in a special nally and with depository institutions, service provid- test lab environment at FRAS. ers, and government agencies. We are stressing effec- The testing effort for Year 2000 readiness within tive, consistent, and timely communication, both the Federal Reserve will be extensive and complex. internal and external, to promote awareness and com- Industry experts estimate that testing for readiness mitment at all levels of our own organization and the will consume more than half of total Year 2000 financial services industry, more generally. Some of project resources. To leverage existing resources and our most senior executives are leading the project, processes, we are modeling our Year 2000 testing on and the Board and senior Bank management are now proven testing methods and processes. Our customers receiving formal, detailed status reports at least every are already familiar with these processes and the sixty days. Any significant compliance issues will be testing environment. We shared our testing strategy reported to the Board immediately. The Reserve with depository institutions in October of this year, Banks' internal audit departments and the Board's and we are currently developing a coordinated test oversight staff are also closely monitoring progress. schedule. As I noted earlier, the Reserve Banks are A significant challenge in meeting our Year 2000 targeting June 1998 to commence testing with their readiness objectives is our reliance on commercial depository institution customers, which allows an hardware and software products and services. Much eighteen-month time period for depository instituof our information processing and communications tions to test their systems with the Federal Reserve. infrastructure is composed of hardware and software All of these activities require that we retain highly products from third-party vendors. Additionally, the skilled staff critical to the success of the project. As I Federal Reserve utilizes commercial application soft- mentioned earlier, we have placed the highest priority ware products and services for certain administrative on our CDC project and, as such, have allocated functions and other operations. As a result, we must many of the best managers and technical staff in the coordinate with numerous vendors and manufactur- Federal Reserve System to work on the project. The ers to ensure that all of our hardware, software, and information technology industry is already experiencservices are Year 2000 ready. In many cases, compli- ing market pressures due to the increased demand for ance will require upgrading, or even replacing, equip- technical talent. As the millennium draws closer, the ment and software. We have a complete inventory global market requirements for qualified personnel of vendor components used in our mainframe and will intensify even further. We are responding as distributed computing environments, and vendor necessary to these market-induced pressures by coordination and system change are progressing well. implementing programs to retain staff members in These preparations also include careful attention critical, high-demand positions. to the Year 2000 readiness of telecommunications Our focus at the Board goes beyond the immediate providers. need to prepare our systems and ensure reliable operation of the payments infrastructure. We are also working hard to address the supervisory issues raised TESTING by Year 2000 and are developing contingency plans, which I will discuss later. As we continue to assess our systems for Year 2000 readiness, we are well along in preparing a special central environment for testing our payment system applications. We are establishing isolated mainframe BANK SUPERVISION data processing environments to be used for internal testing of all system components as well as for testing As a bank supervisor, the Federal Reserve has worked with depository institutions and other government closely with the other supervisory agencies that are agencies. These environments will enable testing for part of the Federal Financial Institutions Examination high-risk dates, such as the rollover to the year 2000 Council (FFIEC) to alert the industry to our concerns and leap year processing. Testing will be conducted and to monitor Year 2000 preparations of the instituthrough a combination of future-dating our computer tions we supervise so that we can identify early and systems to verify the readiness of our infrastructure address problems that arise. Comptroller of the Curand testing critical future dates within interfaces to rency Eugene Ludwig is testifying today as Chairman Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 Federal Reserve Bulletin • January 1998 of the FFIEC to describe the interagency Year 2000 INTERNATIONAL AWARENESS supervisory initiatives of all of the five member agencies (Federal Reserve, Office of the Comptroller of With regard to the international aspects of the the Currency, Federal Deposit Insurance Corporation, Year 2000 issue, U.S. offices of foreign banks pose a Office of Thrift Supervision, and National Credit unique set of challenges. We are concerned about the Union Administration), so I will limit my comments possibility that some offices may not have an adeon the Federal Reserve's supervisory efforts. quate appreciation of the magnitude and ramifica- In May of this year, the Federal Reserve and the tions of the problem and may not as yet have commitother regulatory agencies developed a uniform ted the resources necessary to address the issues Year 2000 assessment questionnaire to collect infor- effectively. This is a particular concern for foreign mation on a national basis. Based on the responses bank offices that are dependent on their foreign parand other information, we believe the banking indus- ent bank for information processing systems. In additry's awareness level improved substantially during tion, we are increasingly concerned that the foreign 1997 and is reflected in the intensified project man- branches of U.S. banks may be adversely affected if agement, planning, budgeting, and renovation efforts counterparties in foreign markets are not ready for that have been initiated. the Year 2000. Generally speaking, the nation's largest banking Therefore, we are working through the Bank for organizations have done much to address the issues International Settlements (BIS) Committee on Bankand have devoted significant financial and human ing Supervision, composed of many of the internaresources to preparing for the century date change. tional supervisory agencies responsible for the for- Many larger banks are already renovating their oper- eign banks that operate in the United States. Through ating systems and have commenced testing of their formal and informal discussions, the distribution of critical applications. Large organizations seem gener- several interagency statements and advisories, and ally capable of renovating their critical operating the Federal Reserve's Year 2000 video (see below) to systems by year-end 1998 and will have their testing the BIS supervisors committee, we have sought to well under way by then. elevate foreign bank supervisors' awareness of the Smaller banks, including the U.S. offices of foreign risks posed by the century date change. banks and those dependent on a third party to provide The Group of Ten (G-10) governors issued an their computer services, are generally aware of the advisory in September that included a paper by the issues and are working on the problem; however, bank supervisors committee on the Year 2000 chaltheir progress is less measurable and is being care- lenge to banks and bank supervisors around the world fully monitored. We are directing significant attention to ensure a higher level of awareness and activity on to ensure that these banks intensify their efforts to their part. The BIS supervisors committee has develprepare for the Year 2000. oped a survey sent to about forty countries to collect Major third-party service providers and software better information on the state of readiness of banks vendors serving the banking industry are acutely in those countries and the extent of the efforts of the aware of the issue and are working diligently to bank supervisors to address the issues locally and address it. Most of these suppliers consider their internationally. The surveys will be evaluated and the Year 2000 capability to be a business survival issue, findings distributed early next year. Also on the interas it is of critical importance to their ability to remain national front, William McDonough, President of the competitive in an aggressive industry. Federal Reserve Bank of New York, in a keynote By mid-year 1998 we will have conducted a thor- address to the annual meeting of the Institute of ough Year 2000 preparedness examination of every International Finance in Hong Kong, emphasized the bank, U.S. branch and agency of a foreign bank, and importance of planning for the century date change service provider that we supervise. Our examination on an international basis and the significant risk to program includes a review of each organization's financial markets posed by the Year 2000. Year 2000 project management plans in order We also participated in the BIS meeting sponsored to evaluate their sufficiency, to ensure the direct by the Committee on Payments and Settlement Sysinvolvement of senior management and the board of tems and the Group of Computer Experts for G-10 directors, and to monitor their progress against the and major non-G-10 central banks in September, plan. As we proceed through the examination pro- which provided a forum to share views on and cess, we are identifying any institutions that require approaches to dealing with Year 2000 issues, and we intensified supervisory attention and establishing our have been active in various private sector forums. priorities for subsequent examinations. The majority of foreign central banks are confident Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 29 that payment and settlement applications under their resources to address the issue on a timely basis. The management will be Year 2000 ready. Like the Fed- video can be ordered through the Board's Web site. eral Reserve, however, the operation of foreign central bank payment systems is dependent on compliant products from hardware and software suppliers and CONTINGENCY PLANNING the readiness of telecommunication service providers. The approach of foreign central banks toward While we will continue our public outreach efforts, raising bank industry awareness varies widely. Infor- our main focus is preparedness. Because smooth and mation garnered from this meeting and similar meet- uninterrupted financial flows are obviously of utmost ings planned for the future will assist the BIS Com- importance, our main focus is on our readiness and mittee on Payment and Settlement Systems, as well the avoidance of problems. But we know from as the Federal Reserve, in understanding the state of experience that upon occasion things can go wrong. preparedness of payment systems on a global level. Given our unique role as the nation's central bank, the Federal Reserve has always stressed contingency planning—for both systemic risks as well as opera- PUBLIC AWARENESS tional failures. In this regard, we regularly conduct exhaustive We are mindful that extensive communication with business resumption tests of our major payment systhe industry and the public is crucial to the success of tems that include depository institutions. Moreover, century date change efforts. Our public awareness as a result of our experience in responding to probprogram concentrates on communications with the lems arising from such diverse events as earthquakes, financial services industry related to our testing fires, storms, and power outages, as well as liquidity efforts and our overall concerns about the industry's problems in institutions, we expect to be approprireadiness. We continue to advise our bank customers ately positioned to deal with similar problems in the of the Federal Reserve's plans and time frames for financial sector that might arise as a result of CDC. making our software Year 2000 ready. We have inau- However, CDC presents many unique situations. gurated a Year 2000 industry newsletter and have just For example, in the software application arena, the published our first bulletin addressing specific techni- normal contingency of falling back to a prior release cal issues. We would be glad to provide you with of the software is not a viable option. We are, of copies of our recent newsletter and the bulletin. We course, developing specific CDC contingency plans have also established an Internet Web site to provide to address various operational scenarios, and our depository institutions with information regarding contingency planning includes preparation to address the Federal Reserve System's CDC project. This site unanticipated problems when we bring our systems can be accessed at the following Internet address: into production as Year 2000 begins. Key technical http://www.frbsf.org/fiservices/cdc. staff will be ready to respond quickly to problems On behalf of the FFIEC, the Federal Reserve has with our computer and network systems. We are developed a Year 2000 information distribution sys- establishing procedures with our primary vendors tem, including an Internet Web site and a toll free Fax to ensure direct communication and appropriate Back service (888-882-0982). The Web site provides recourse should their products fail at Federal Reserve easy access to policy statements, guidance to examin- installations during Year 2000 date processing. Our ers, and paths to other Year 2000 Web sites available existing business resumption plans will be updated to from numerous other sources. The FFIEC Year 2000 address date-related difficulties that may face the Web site can be accessed at the following Internet financial industry. address: http://www.fifiec.gov/y2k. We already have arrangements in place to assist The Federal Reserve has also produced a ten- financial institutions in the event that they are unable minute video entitled "Year 2000 Executive Aware- to access their own systems. For example, we are ness" intended for viewing by a bank's board of able to provide financial institutions with access to directors and senior management. The video presents Federal Reserve computer terminals on a limited a summary of the Year 2000 five-phase project man- basis for the processing of critical funds transfers. agement plan outlined in the interagency policy state- This contingency arrangement has proved highly efment. In my introductory remarks on the video, I note fective when used from time to time by depository that senior bank officials should be directly involved institutions experiencing major hardware-software in managing the Year 2000 project to ensure that it is outages or that have had their operations disrupted given the appropriate level of attention and sufficient because of natural disasters such as the Los Angeles Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 Federal Reserve Bulletin • January 1998 earthquake, hurricane Hugo in the Carolinas, and in the United States that may be adversely affected hurricane Andrew in south Florida. In these cases we directly by their own computer systems or through worked closely with financial institutions to ensure difficulties caused by the linkage and dependence on that adequate supplies of cash were available to the their parent bank. Such circumstances would necessicommunity, and we arranged for our operations to tate coordination with the home country supervisor. function virtually without interruptions for twenty- Moreover, consistent with current policy, foreign cenfour hours a day during the crisis period. We feel the tral banks will be expected to provide liquidity supexperience gained from such crises will prove very port to any of their banking organizations that experihelpful in the event of similar problems triggered ence a funding shortfall. by the century date change. We are formulating responses for augmenting certain functions, such as computer help desk services and off-line funds transfers, to respond to short-term needs for these CLOSING REMARKS services. Beyond reliance on a sound plan and effective As I indicated at the outset, the Federal Reserve execution of the plan, the Federal Reserve provides views its Year 2000 preparations with great seriousseveral different payment services, such as Fedwire, ness. As such, we have placed a high priority on the ACH, check, and cash; therefore, the banking indus- remediation of date problems in our systems and the try is not totally dependent upon any single system development of action plans that will ensure business for executing payments. Alternatives are available in continuity for the critical financial systems we operthe event of a disruption in a segment of the elec- ate. While we have made significant progress and are tronic payment system. on schedule in validating our internal systems and We recognize that despite their best efforts some preparing for testing with depository institutions and depository institutions may experience operating others using Federal Reserve services, we must work difficulties, either as a result of their own computer to ensure that our efforts remain on schedule and that problems or those of their customers, counterparties, problems are addressed in a timely fashion. In paror others. These problems could be manifested in a ticular, we will be paying special attention to the number of ways and would not necessarily involve testing needs of depository institutions and the finanfunding shortfalls. Nevertheless, the Federal Reserve cial industry and are prepared to adjust our support is always prepared to provide information to deposi- for them as required by experience. We believe that tory institutions on the balances in their accounts we are well positioned to meet our objectives and with us throughout the day so that they can identify will remain vigilant throughout the process. shortfalls and seek funding in the market. The Fed- As a bank supervisor, the Federal Reserve will eral Reserve will be prepared to lend in appropriate continue to address the industry's preparedness, circumstances and with adequate collateral to deposi- monitor progress, and target for special supervisory tory institutions when market sources of funding are attention those organizations that are most in need of not reasonably available. The terms and conditions of assistance. Lastly, we will continue to participate in such lending may depend upon the circumstances international forums with the expectation that these giving rise to the liquidity shortfall. efforts will help foster an international awareness Our preparations for possible liquidity difficulties of Year 2000 issues and provide for the sharing of also extend to the foreign bank branches and agencies experiences, ideas, and best practices. Statement by Alan Greenspan, Chairman, Board of to improve materially the efficiency of the flows of Governors of the Federal Reserve System, before the capital and payment systems. That improvement, Committee on Banking and Financial Services, US. however, has also enhanced the ability of the finan- House of Representatives, November 13, 1997 cial system to transmit problems in one part of the globe to another quite rapidly. Doubtless, there is much to be learned from the recent experience in Recent developments in world finance have high- Asia that can be applied to better the workings of the lighted growing interactions among national financial international financial system and its support of intermarkets. The underlying technology-based structure national trade that has done so much to enhance of the international financial system has enabled us living standards worldwide. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 31 While each of the Asian economies differs in many especially relative to the yen, made their exports less important respects, the sources of their spectacular competitive. In addition, in some cases, the glut of growth in recent years, in some cases decades, and semiconductors in 1996 suppressed export growth, the problems that have emerged are relevant to a exerting further pressures on highly leveraged greater or lesser extent to nearly all of them. businesses. After the early post-World War II period, policies However, overall GDP growth rates generally generally fostering low levels of inflation and open- edged off only slightly, and imports, fostered by ness of their economies coupled with high savings rising real exchange rates, continued to expand, and investment rates contributed to a sustained period contributing to what became unsustainable current of rapid growth, in some cases starting in the 1960s account deficits in a number of these economies. and 1970s. By the 1980s most economies in the Moreover, with exchange rates seeming to be solidly region were expanding vigorously. Foreign net capi- tied to the dollar, and with dollar and yen interest tal inflows grew but until recent years were relatively rates lower than domestic currency rates, a significant modest. The World Bank estimates that net inflows part of the enlarged capital inflows into these econoof long-term debt, foreign direct investment, and mies, in particular short-term flows, was denomiequity purchases to the Asia Pacific region were only nated by the ultimate borrowers in foreign currencies. about $25 billion in 1990 but exploded to more than This put additional pressure on companies to earn $110 billion by 1996. foreign exchange through exports. A major impetus behind this rapid expansion was The pressures on fixed exchange rate regimes the global stock market boom of the 1990s. As that mounted as foreign investors slowed the pace of boom progressed, investors in many industrial coun- new capital inflows and domestic businesses sought tries found themselves more heavily concentrated in increasingly to convert domestic currencies into forthe recently higher valued securities of companies in eign currencies, or, equivalently, slowed the converthe developed world, whose rates of return, in many sion of export earnings into domestic currencies. The instances, had fallen to levels perceived as uncom- shifts in perceived future investment risks led to petitive with the earnings potential in emerging sharp declines in stock markets across Asia, often on economies, especially in Asia. The resultant diversifi- top of earlier declines or lackluster performances. cation induced a sharp increase in capital flows into To date, the direct impact of these developments those economies. To a large extent, they came from on the American economy has been modest, but it investors in the United States and Western Europe. A can be expected not to be negligible. U.S. exports to substantial amount came from Japan, as well, more Thailand, the Philippines, Indonesia, and Malaysia because of a search for higher yields than because of (the four countries initially affected) were about rising stock prices and capital gains in that country. 4 percent of total U.S. exports in 1996. However, an The rising yen through mid-1995 also encouraged a additional 12 percent went to Hong Kong, Korea, substantial increase in direct investment inflows from Singapore, and Taiwan (economies that have been Japan. In retrospect, it is clear that more investment affected more recently). Thus, depending on the monies flowed into these economies than could be extent of the inevitable slowdown in growth in this profitably employed at modest risk. area of the world, the growth of our exports will tend I suspect that it was inevitable in those conditions to be muted. Our direct foreign investment in, and of low inflation, rapid growth, and ample liquidity foreign affiliate earnings reported from, the econothat much investment moved into the real estate mies in this region as a whole have been a smaller sector, with an emphasis by both the public and share of the respective totals than their share of our private sectors on conspicuous construction projects. exports. The share is, nonetheless, large enough to This is an experience, of course, not unknown in the expect some drop-off in those earnings in the period United States on occasion. These real estate assets, ahead. In addition, there will be indirect effects on the in turn, ended up as collateral for a significant pro- U.S. real economy from countries such as Japan that portion of the assets of domestic financial systems. In compete even more extensively with the economies many instances, those financial systems were less in the Asian region. than robust, beset with problems of lax lending stan- Particularly troublesome over the past several dards, weak supervisory regimes, and inadequate months has been the so-called contagion effect of capital. weakness in one economy spreading to others as Moreover, in most cases, the currencies of these investors perceive, rightly or wrongly, similar vulnereconomies were closely tied to the U.S. dollar, and abilities. Even economies, such as Hong Kong, with the dollar's substantial recovery since mid-1995, formidable stocks of international reserves, balanced Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Federal Reserve Bulletin • January 1998 external accounts, and relatively robust financial otherwise could lead to distorted investments and systems, have experienced severe pressures. One can could ultimately unbalance the world financial debate whether the turbulence in Latin American system. asset values reflects contagion effects from Asia, the The recent experience in Asia underscores the influence of developments in U.S. financial markets, importance of financially sound domestic banking or homegrown causes. Whatever the answer, and the and other associated financial institutions. While the answer may be all of the above, this phenomenon current turmoil has significant interaction with the illustrates the interdependencies in today's world international financial system, the recent crises would economy and financial system. arguably have been better contained if long-maturity Perhaps it was inevitable that the impressive and property loans had not accentuated the usual misrapid growth experienced by the economies in the match between maturities of assets and liabilities of Asian region would run into a temporary slowdown domestic financial systems that were far from robust or pause. But there is no reason that above-average to begin with. Our unlamented savings and loan growth in countries that are still in a position to gain crises come to mind. from catching up with the prevailing technology can- These are trying days for economic policymakers not persist for a very long time. Nevertheless, rapidly in Asia. They must fend off domestic pressures that developing, free-market economies periodically can seek disengagement from the world trading and be expected to run into difficulties because invest- financial system. The authorities in these countries ment mistakes are inevitable in any dynamic econ- are working hard, in some cases with substantial omy. Private capital flows may temporarily turn assistance from the International Monetary Fund, the adverse. In these circumstances, companies should be World Bank, and the Asian Development Bank, to allowed to default, private investors should take their stabilize their financial systems and economies. losses, and government policies should be directed The financial disturbances that have afflicted a toward laying the macroeconomic and structural number of currencies in Asia do not at this point, as I foundations for renewed expansion; new growth indicated earlier, threaten prosperity in this country, opportunities must be allowed to emerge. Similarly, but we need to work closely with their leaders and in providing any international financial assistance, the international financial community to ensure that we need to be mindful of the desirability of minimiz- their situations stabilize. It is in the interest of the ing the impression that international authorities stand United States and other nations around the world to ready to guarantee the external liabilities of sovereign encourage appropriate policy adjustments, and where governments or failed domestic businesses. To do required, provide temporary financial assistance. Statement by Alan Greenspan, Chairman, Board of are projected to deplete the trust funds by the year Governors of the Federal Reserve System, before the 2031. Task Force on Social Security, Committee on the This imbalance in social security stems primarily Budget, U.S. Senate, November 20, 1997 from the fact that, until very recently, payments into the social security trust accounts by the average employee, plus employer contributions and interest I am pleased to appear here today to discuss one of earned, were inadequate to fund the total of retireour nation's most pressing challenges: putting Social ment benefits. This has started to change. Under the Security's Federal Old-Age, Survivors, and Disabil- most recent revisions to the law and presumably ity Insurance Benefits (OASDI) program on a sound conservative economic and demographic assumpfinancial footing for the twenty-first century. It has tions, today's younger workers will pay social secubecome conventional wisdom that the social security rity taxes over their working years that appear suffisystem, as currently constructed, will not be fully cient, on average, to fund their benefits during viable after the baby boom generation starts to retire. retirement. However, the huge liability for current The most recent report by the social security trustees retirees, as well as for much of the workforce closer projected that the trust funds of the system will grow to retirement, leaves the system as a whole badly over approximately the next fifteen years. However, underfunded. beginning in the year 2014, the annual expected costs This issue of funding underscores the critical eleof the OASDI program are projected to exceed annual ments in the forthcoming debate on social security earmarked tax receipts, and the subsequent deficits reform because it focuses on the core of any retire- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 33 ment system, private or public. Simply put, enough fewer of our older citizens retire from physically resources must be set aside over a lifetime of work to arduous work. Hopefully, other modifications to fund the excess of consumption over claims on pro- social security, such as improved cost-of-living duction a retiree may enjoy. At the most rudimentary indexing, will be instituted. level, one could envision households saving by actu- There are a number of broader reform initiatives ally storing goods purchased during their working that, through the process of privatization, could years for consumption during retirement. Even better, increase domestic saving rates. Given the considerthe resources that would have otherwise gone into the able stakes involved, these are clearly worthy of stored goods could be diverted to the production of intensive evaluation. Perhaps the strongest argument new capital assets, which would, cumulatively, over a for privatization is that replacing the current underworking lifetime, produce an even greater quantity of funded system with a fully funded one could boost goods and services to be consumed in retirement. In domestic saving. But we must remember that it is the latter case, we would be getting more output per because privatization plans might increase savings worker, our traditional measure of productivity and a that they are potentially viable, not because of their factor that is central in all calculations of long-term particular form of financing. social security trust fund financing. Moving toward a privatized defined-contribution In sum, the bottom line in all retirement programs plan would, by definition, convert our social security is the availability of real resources. The finance of system into a fully funded plan. But the same issues any system is merely to facilitate the allocation of and questions remain as under the current system. resources that fund retirement consumption of goods What level of retirement income would be viewed as and services. Unless social security savings are adequate, and should required contributions to priincreased by higher taxes (with negative conse- vate accounts (and savings) be increased to meet this quences for growth) or reduced benefits, domestic level? Is there an alternative to forced savings to raise savings must be augmented by greater private saving the level of contributions to the private funds? or surpluses in the rest of the government budget to Finally, if individuals did invest a portion of their ensure that there are enough overall savings to accounts in equities and other private securities, finance adequate productive capacity down the road thereby receiving higher rates of return and enhancto meet the consumption needs of both retirees and ing their social security retirement income, what active workers. would be the effect on non-social-security invest- The basic premise of our current largely pay-as- ments? As I have argued elsewhere, unless national you-go social security system is that future productiv- saving increases, shifting social security trust funds ity growth will be sufficient to supply promised retire- to private securities, while likely increasing income ment benefits for current workers. However, even in the social security system, will, to a first approxisupposing some acceleration in long-term productiv- mation, reduce non-social-security retirement income ity growth from recent experience, at existing rates to an offsetting degree.1 Without an increase in the of saving and capital investment, a pickup in produc- savings flow, private pension and insurance funds, tivity growth large enough by itself to provide for among other holders of private securities, presumably impending benefits is problematic. Moreover, savings would be induced to sell higher-yielding stocks and borrowed from abroad, our current account deficit, private bonds to the social security retirement funds cannot be counted on indefinitely to bridge the gap in exchange for lower-yielding U.S. Treasuries. This between domestic investment and domestic savings. could translate into higher premiums for life insur- Accordingly, short of a far more general reform ance and lower returns on other defined-contribution of the system, there are a number of initiatives, at a retirement plans. This would not be an improvement minimum, that should be addressed. As I argued at to our overall retirement system. length during the Social Security Commission delib- Furthermore, the potential consequences of moverations of 1983, with only modest effect, some ing social security to a system that features private delaying of the age of eligibility for retirement bene- retirement accounts need to be considered carefully. fits is becoming increasingly pressing. For example, Any move toward privatization will confront the adjusting the full-benefits retirement age further to problem of how to finance previously promised benekeep pace with increases in life expectancy in a fits. That would presumably involve making the way that would keep the ratio of retirement years to implicit accrued unfunded liability of the current expected life span approximately constant would significantly narrow the funding gap. Such an initiative 1. See my remarks at the Abraham Lincoln Award Ceremony of would become easier to implement as fewer and the Union League of Philadelphia, December 6, 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 Federal Reserve Bulletin • January 1998 social security system to beneficiaries explicit. For There is reason to suspect, however, that if such a example, participants at the time of privatization liability is made explicit in a manner similar to the could each receive a nonmarketable certificate that transition procedure in Chile, each dollar of new confirmed irrevocably the obligations of the U.S. liability will weigh far less on financial markets than government to pay a real annuity at retirement, a dollar of current public debt. In the case of the indexed to changes in the cost of living. The amount Chilean pension reform, a significant portion of the of that annuity would reflect the benefits accrued implicit liability of their old system was made explicit through the date of privatization.2 at the initiation of the new pension system by the Under our current system, social security beneficia- issuance of "recognition bonds" that were deposited ries technically do not have an irrevocable claim to in workers' individual accounts. These bonds were current levels of promised future benefits because initially nonmarketable, indexed for price inflation, legislative actions can lower future benefits. In con- and yielded a fixed real return on a specified face trast, the explicit liability of federal government debt value. In Chile, the liquidation of these bonds generto the public is essentially irrevocable. A critical ally occurs only after a worker retires, and the proconsideration for the privatization of social security ceeds from the bonds are required to be paid in the is how financial markets are factoring in the implicit form of an annuity or through programmed partial unfunded liability of the current system in setting withdrawals. These bonds have been viewed as a long-term interest rates. different instrument from other forms of public debt, If markets perceive that this liability has the same and it is likely that if an instrument such as recognistatus as explicit federal debt, then one must presume tion certificates were issued here, it would also be that interest rates have already fully adjusted to the viewed as distinct from fully liquid, marketable pubimplicit contingent liability. However, if markets lic debt. have not fully accounted for this implicit liability, In effect, under privatization, the obligations of then making it explicit could lead to higher interest social security would be transferred from an implicit rates for U.S. government debt. government account to millions of private individual For any level of real annuity at retirement, the accounts. Retirement needs would be funded first by corresponding current value of recognition certifi- the conversion of recognition certificates and later cates would depend on a number of technical assump- by withdrawals from private defined contribution tions. These assumptions have no impact on the real funds. The outstanding certificates would accordingly payouts from the retirement annuities but determine decline with time and finally be paid off some the current notional value of recognition certificates, decades in the future. But if benefits and contribuwhich is useful for making broad economic compari- tions do not change, national savings are only being sons. For example, factoring in a 2 percent real transferred from the federal government account annual rate of discount and including other technical to that of households and are not increased in the assumptions, the value of recognition certificates the process. It is only if contributions or private saving U.S. government would need to issue to ensure that increases that household and national saving all currently accrued legislated future benefits are increases. paid would be roughly %9Vi trillion. Alternatively, The transfer of savings from public to private at a 1 percent real rate the value would be roughly accounts would affect the unified budget balance of $12 trillion, and at a 6 percent real rate the value the U.S. government, although precisely how that would be about %AVi trillion.3 Because, under a wide balance would be affected would depend on the exact range of assumptions, the magnitude of this liability budgetary accounting treatment adopted for recogniremains very large relative to the current outstanding tion certificates. Certainly, with immediate and full federal debt to the public—$31/2 trillion—the market privatization, the ongoing annual unified budget adjustment could be substantial. balance would decline by at least the amount of the social security surplus: As payroll taxes were diverted from public coffers to private accounts, they 2. Calculating the accrued benefits would require an estimate of would no longer count as tax revenues; similarly, future national real wage growth. 3. Note that these estimates of the value of the accrued liability payments of social security benefits would not count differ in concept from the $3 trillion official OASDI unfunded liabil- as outlays. ity. That number represents the difference between expected future tax payments and future benefits over a seventy-five-year horizon and The issuance of recognition certificates under curalso includes the unfunded liability of the disability program. Even if rent accounting rules presumably would also increase the assets in the social security trust fund were to be increased by the outlays and the deficit by the value of the certificates $3 trillion, the social security system would still not be in balance over the long term (that is, in perpetuity). at the time of issuance. Exactly how much the deficit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 35 would be affected in the initial year, and how much in deficit) and smaller accompanying market risks but subsequent years, would depend on how the certifi- would have larger effects in subsequent years, as tax cates were structured and on bookkeeping conven- revenues from the younger groups would be diverted tions.4 However, the basic effects of privatization on as contributions to private accounts, whereas all the budget deficit are clear—the implicit liabilities of social security benefits to retirees would still be the social security system would start to appear on counted as government outlays.5 Thus, if there is a our balance sheets now, rather than when the baby unified budget surplus before the transition, it will be boomers retire. reduced or turned to a deficit at least to the extent of It is an open, but crucial, question as to how the loss in tax revenues. In effect, social security financial markets would respond to a change of the benefits will be increasingly financed with "general magnitude contemplated by immediate full privatiza- revenues" for a time. Should this be the direction that tion. Before any such move is made, a thorough the Congress decides to move, containment of spendexamination of the risks and benefits to the financial ing outside of social security doubtless would be markets would be wise. The key issues that will necessary to add assurances to the market. affect the economy are (1) the change from the Ultimately, of course, even under a gradual transiimplicit liability of the current system to one of an tion, the system would be almost fully privatized. I irrevocable obligation to pay, and (2) the magnitude say "almost" because I presume the Congress would of changes in national saving and the level of provide some form of assistance to those who through productivity-spurring investment. The budget book- investment imprudence or unforeseen events had keeping on how privatization is recorded has little retirement benefits below a certain level perceived as significance. an absolute minimum. Needless to say, such a new An alternative to what is clearly a "big bang," entitlement would have to be rigorously delimited one-shot transition, in which privatization occurs im- because political pressures to increase it could be mediately for all, is a gradual transition in which, for overwhelming. example, only younger workers are accorded recogni- Despite all of these complications, in the broader tion certificates and are required to fund the remain- scheme of things, the types of changes that will be der of their retirement needs through defined contri- required to restore fiscal balance to our social secubution plans. Over the years, ever-older groups would rity accounts are significant but manageable. More be included in the new system. During the transition, important, most entail changes that are less unsettling two systems would operate in parallel. Such a transi- if they are enacted soon, even if their effects are tion would involve smaller immediate increases in significantly delayed, rather than waiting five or ten recognition certificates (and in the unified budget years or longer for legislation. We owe it to those who will retire after the turn of the century to be given sufficient advance notice to make what alter- 4. For example, if the certificates could be treated as non-interestbearing, then the notional face value of the certificates would be quite ations in retirement planning may be required. If we large; their issuance would lead to a one-time spike in the deficit, but procrastinate too long, the adjustments could be truly the certificates would not affect the deficit in future years. Alternawrenching. Our senior citizens, both current and tively, if the certificates were accorded an imputed interest rate for budget accounting, while the immediate effect would be to record a future, deserve better. • lower deficit, the unified balance of the U.S. government would increase in subsequent years by interest accruing on the certificates. Finally, should the recognition certificates be kept separate from the 5. The cumulative total effect of privatization on the unified budget unified budget, the unified deficit would only be affected by the loss of is approximately the same whether the privatization is immediate or the social security surplus. phased in. Immediate privatization results in bigger up-front deficits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Announcements APPOINTMENTS OF CHAIRMEN AND DEPUTY Atlanta David R. Jones, President and Chief Executive Officer, CHAIRMEN OF THE FEDERAL RESERVE AGL Resources Inc., Atlanta, Ga., chairman. DISTRICT BANKS John F. Wieland, President, John Wieland Homes, Inc., Atlanta, Ga., Deputy Chairman. The Federal Reserve Board on November 3, 1997, announced the appointment of chairmen and deputy Chicago chairmen of the twelve Federal Reserve Banks for Lester H. McKeever, Jr., Managing Partner, Washington, 1998. Pittman & McKeever, Chicago, 111., renamed Each Reserve Bank has a board of directors of nine chairman. members. The Board of Governors in Washington Arthur C. Martinez, Chairman and Chief Executive Officer, appoints three of these directors and designates one Sears, Roebuck and Co., Hoffman Estates, 111., of its appointees as chairman and a second as deputy renamed deputy chairman. chairman. Following are the names of the chairmen and St. Louis deputy chairmen appointed by the Board for 1998. John F. McDonnell, Former Chairman, McDonnell Douglas Corp., St. Louis, Mo., renamed chairman. Boston Susan S. Elliott, President and Chief Executive Officer, William C. Brainard, Professor, Department of Economics, Systems Service Enterprises, Inc., St. Louis, Mo., Yale University, New Haven, Conn., renamed renamed deputy chairman. chairman. Deputy chairman—To be announced. Minneapolis David A. Koch, Chairman, Graco Inc., Plymouth, Minn., New York chairman. John C. Whitehead, Chairman, AEA Investors Inc., James J. Howard, Chairman, President, and Chief New York, N.Y., renamed chairman. Executive Officer, Northern States Power Company, Thomas W. Jones, Vice Chairman, Travelers Group Inc., Minneapolis, Minn., deputy chairman. and Chairman and Chief Executive Officer, Smith Barney Asset Management, New York, N.Y., renamed deputy chairman. Kansas City Jo Marie Dancik, Office Managing Partner, Ernst & Young Philadelphia LLP, Denver, Colo., chairman. Joan Carter, President and Chief Operating Officer, UM Deputy chairman—To be announced. Holdings Ltd., Haddonfield, N.J., Chairman. Charisse R. Lillie, Partner, Ballard Spahr Andrews & Dallas Ingersoll, Philadelphia, Pa., deputy chairman. Roger R. Hemminghaus, Chairman and Chief Executive Officer, Ultramar Diamond Shamrock Corp., Cleveland San Antonio, Tex., renamed chairman. G. Watts Humphrey, Jr., President, GWH Holdings, Inc., James A. Martin, Second General Vice President, Pittsburgh, Pa., renamed chairman. International Association of Bridge, Structural, & David H. Hoag, Chairman and Chief Executive Officer, Ornamental Iron Workers, Austin, Tex., deputy The LTV Corporation, Cleveland, Ohio, renamed chairman. deputy chairman. San Francisco Richmond Gary G. Michael, Chairman and Chief Executive Officer, Claudine B. Malone, President, Financial & Management Albertson's, Inc., Boise, Idaho, chairman. Consulting, Inc., McLean, Va., renamed chairman. Cynthia A. Parker, Executive Director, Anchorage Robert L. Strickland, Chairman, Lowe's Companies, Inc., Neighborhood Housing Services, Inc., Anchorage, Winston-Salem, N.C., renamed deputy chairman. Ala., deputy chairman. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

37 REGULATION Z: AMENDMENT of 0.2 percent in 1998. Fees for the noncash, Fedwire book-entry securities transfer, and net settlement ser- The Federal Reserve Board on November 21, 1997, vices will be retained at their 1997 levels. The 1998 issued an amendment to its Truth in Lending regula- priced services fee schedules are available from the tion (Regulation Z) that gives creditors flexibility in Reserve Banks. providing variable-rate disclosures. The Monetary Control Act of 1980 requires the The amendment applies to variable-rate loans with Federal Reserve to recover the costs of providing a term exceeding one year and secured by the con- priced services over the long run. The Federal sumer's principal dwelling. It allows creditors to Reserve continues to fully meet this requirement and provide a statement that the periodic payment may recovered 99.9 percent of the costs of priced services, substantially increase or decrease together with a including targeted return on equity, during the maximum interest rate and payment based on a 1987-96 period. $10,000 loan amount, in lieu of providing a fifteen- In 1998 the Reserve Banks project to recover year historical example of index values. The revi- 100.8 percent of their priced services costs, including sions were effective immediately, but compliance is targeted return on equity, generating after-tax net optional until December 22, 1997. The revisions income of $59.0 million. The Reserve Banks estimate implement a provision of the Regulatory Paperwork that they will recover 101.0 percent of their costs in Reduction Act of 1996. 1997. The Board on November 5, 1997, also approved the 1998 private sector adjustment factor (PSAF) for REDUCTION IN FEES FOR ELECTRONIC Reserve Bank priced services of $108.5 million—an PAYMENT SERVICES increase of $7.0 million, or 6.9 percent, from the 1997 targeted PSAF of $101.5 million. The PSAF is The Federal Reserve on November 5, 1997, an allowance for taxes and other imputed expenses announced a reduction for next year in fees for elec- that would have been paid and return on capital that tronic payment services provided by the Federal would have been earned had the Federal Reserve's Reserve Banks. Fees for paper-based payment ser- priced services been provided by a private business vices will remain relatively flat. The fees became firm. effective January 2, 1998. Overall prices for Reserve Bank priced services REVISION TO THE SUPERVISORY POLICY FOR are projected to decline approximately 4.0 percent SMALL SHELL BANK HOLDING COMPANIES in 1998, compared with an overall price decline of 3.7 percent in 1997. The 1998 price decline is mainly The Federal Reserve Board announced on Novemattributable to an 11.4 percent reduction across elecber 6, 1997, a revised policy for risk-focused supervitronic payment services, reflecting lower prices for sion of small shell bank holding companies, defined most Fedwire funds transfers and automated clearingas banking organizations with less than $1 billion of house (ACH) transactions. consolidated assets that do not have debt outstanding Depository institutions will save an estimated to the public and that do not engage in significant $15.6 million in 1998 because of these fee reducnonbank activities. Implementation of the new protions. The savings generally reflect the efficiencies gram was to commence no later than November 30, gained from the success of a five-year project to 1997. consolidate the Federal Reserve's automation pro- The new supervisory program supersedes the precessing facilities. This project has resulted in an vious guidelines for inspection frequency that were estimated savings for depository institutions of applicable to small shell organizations and permits a $41.8 million since 1995 from lower fees for elecmore flexible approach to supervising these entities tronic payment services. in a risk-focused environment. In the Fedwire funds transfer service, the basic funds transfer fee will decline 11.1 percent, from 45 cents to 40 cents. In the ACH service, fees will DECREASE IN THE NET TRANSACTION decline as much as 12.5 percent for 1998, including a ACCOUNTS TO WHICH A 3 PERCENT RESERVE decrease of one mill ($0,001) in fees for items origi- REQUIREMENT WILL APPLY nated, items received, and addenda items. Fees for the paper check service will remain rela- The Federal Reserve Board on November 13, 1997, tively flat, with a modest volume-weighted increase announced a decrease from $49.3 million to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 1998 $47.8 million in the net transaction accounts to which ISSUANCE OF A REPORT ON TRADING AND a 3 percent reserve requirement will apply in 1998. DERIVATIVES ACTIVITIES OF BANKS AND The Board also changed from $4.4 million to SECURITIES FIRMS WORLDWIDE $4.7 million the amount of reservable liabilities of each depository institution that is subject to a reserve A joint report on the public disclosure of trading and requirement of 0 percent. derivatives activities of banks and securities firms Additionally, the Board increased the deposit cut- worldwide has been issued by the Basle Committee off levels that are used in conjunction with the on Banking Supervision and the Technical Commitexemption level to determine the frequency and detail tee of the International Organisation of Securities of deposit reporting required for each institution from Commissions (IOSCO). $75.0 million to $78.9 million for nonexempt deposi- This joint report provides an overview of the distory institutions and from $48.2 million to $50.7 milclosures about trading and derivatives activities in the lion for exempt depository institutions.1 1996 annual reports of a sample of the largest, internationally active banks and securities firms in the Group of Ten (G-10) countries and notes improvements since 1993. The analysis builds, in part, on a PROPOSED ACTIONS framework used by the Federal Reserve in analyzing the trading and derivatives disclosures of major U.S. The Federal Reserve Board on November 4, 1997, banking organizations. requested public comment on a joint interagency proposal to revise risk-based capital standards to In total, the sample reviewed for the 1993-96 address the regulatory capital treatment of recourse period comprised seventy-nine major banks and secuobligations and direct credit substitutes that expose rities firms in the G-10 countries, representing more banks, bank holding companies, and thrift institutions than $14 trillion in total assets and more than $83 trilto credit risk. Comments were requested by Feb- lion in notional amounts of derivative instruments. ruary 3,1998. Disclosures in the 1995 and 1996 annual reports of a major securities firm in Hong Kong were also The Federal Reserve Board on November 6, 1997, reviewed. requested public comment on a proposal to integrate its policies on Privately Operated Large-Dollar Multi- The analysis revealed that there have been general lateral Netting Systems and Private Small-Dollar improvements as well as voluntary innovations in the Clearing and Settlement Systems into a single, com- annual report disclosures of a number of large, interprehensive policy statement on Privately Operated nationally active banks and securities firms. In par- Multilateral Settlement Systems. Comments were ticular, there were notable improvements in quanrequested by February 10, 1998. titative disclosures about market risk in 1996 and 1995. However, despite encouraging advances in dis- The Federal Reserve Board on November 10, 1997, closure practices by a number of institutions in the requested public comment on a proposal to move G-10 countries, many institutions continued to disfrom a system of contemporaneous reserve requireclose very little about their trading and derivatives ments to one in which reserves are maintained on a activities. lagged basis. The switch would make it easier for In addition, the report includes recommendations depositories to calculate their required reserves and made by the Basle Committee and IOSCO in 1995 would increase the accuracy of information needed for further improvements in disclosures of qualitative by the Open Market Trading Desk to carry out its and quantitative information about institutions' inoperations. Comments were requested by January 12, volvement in trading and derivatives activities, 1998. including their risk exposures and risk management policies, and the earnings impact of these activities. The report's recommendations draw on concepts developed in the Discussion Paper on Public Disclosure of Market and Credit Risks by Financial Intermediaries released by the Euro-currency Standing Committee of the G-10 central banks in September 1994, and in the joint report of the Basle Committee 1. The Board's notice includes the effective dates of these transac- and the IOSCO Technical Committee, Framework tions and is available from Publications Services, Board of Governors for Supervisory Information About the Derivatives of the Federal Reserve System, Mail Stop 127, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 39 Activities of Banks and Securities Firms, issued in and Fred Horowitz became Advisers to the Staff May 1995. Director for Management. S. David Frost continued as Staff Director for Management and also became the Director of the new Management Division. CHANGES IN BOARD STAFF Within the Management Division, Darrell R. Pauley and Stephen J. Clark were each promoted to the In September 1997, based on a recommendation of position of Assistant Director. Sheila Clark remained its Budget Committee, the Board approved a merger the EEO Programs Director and assumed responsibilof the Division of Human Resources Management, ity for coordinating Reserve Bank EEO matters. the Office of the Controller, the Equal Employment Opportunity Programs Office, and the procurement The Board also announced on November 10, 1997, function into a new Management Division. On Octo- that Portia W. Thompson, EEO Programs Adviser in ber 14, 1997, the Board approved a number of official the Office of Board Members, would be retiring from staff reassignments related to this merger, which took the Board on December 31, 1997, after twenty-nine effect December 31, 1997. years of service. The changes in the official staff were the follow- In addition, Catherine L. Mann, Assistant Director, ing: David L. Shannon and George E. Livingston Division of International Finance, resigned, effective became Senior Advisers to the Board. John R. Weis December 1, 1997. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 Minutes of the Federal Open Market Committee Meeting Held on September 30, 1997 A meeting of the Federal Open Market Committee Ms. Low, Open Market Secretariat Assistant, was held in the offices of the Board of Governors of Division of Monetary Affairs, Board of Governors the Federal Reserve System in Washington, D.C., on Tuesday, September 30, 1997, at 9:00 a.m. Mr. Varvel, First Vice President, Federal Reserve Bank of Richmond Present: Mr. Greenspan, Chairman Ms. Browne, Messrs. Dewald, Hakkio, Ms. Krieger, Mr. McDonough, Vice Chairman Messrs. Lang, Rolnick, Rosenblum, and Mr. Broaddus Sniderman, Senior Vice Presidents, Federal Mr. Guynn Reserve Banks of Boston, St. Louis, Kansas City, Mr. Kelley New York, Philadelphia, Minneapolis, Dallas, Mr. Moskow and Cleveland respectively Mr. Meyer Mr. Parry Mr. Judd, Vice President, Federal Reserve Bank of Ms. Phillips San Francisco Ms. Rivlin Messrs. Hoenig, Jordan, Melzer, and Ms. Minehan, By unanimous vote, the minutes of the meeting Alternate Members of the Federal Open Market of the Federal Open Market Committee held on Committee August 19, 1997, were approved. The Manager of the System Open Market Account Messrs. Boehne, McTeer, and Stern, Presidents of the reported on developments in foreign exchange and Federal Reserve Banks of Philadelphia, Dallas, and Minneapolis respectively international financial markets in the period since the previous meeting on August 19, 1997. There were no Mr. Kohn, Secretary and Economist open market transactions in foreign currencies for Mr. Bernard, Deputy Secretary System account since that meeting, and thus no vote Mr. Coyne, Assistant Secretary was required of the Committee. Mr. Gillum, Assistant Secretary Mr. Mattingly, General Counsel The Manager also reported on developments in Mr. Baxter, Deputy General Counsel domestic financial markets and on System open mar- Mr. Prell, Economist ket transactions in government securities and federal agency obligations during the period August 19, Messrs. Cecchetti, Goodfriend, Eisenbeis, Hunter, 1997, through September 29, 1997. By unanimous Lindsey, Promisel, Siegman, Slifman, and vote, the Committee ratified these transactions. Stockton, Associate Economists The Committee then turned to a discussion of the economic outlook and the conduct of monetary pol- Mr. Fisher, Manager, System Open Market Account icy over the intermeeting period ahead. A summary Mr. Ettin, Deputy Director, Division of Research and of the economic and financial information available Statistics, Board of Governors at the time of the meeting and of the Committee's discussion is provided below, followed by the domes- Messrs. Madigan and Simpson, Associate Directors, tic policy directive that was approved by the Com- Divisions of Monetary Affairs and Research and mittee and issued to the Federal Reserve Bank of Statistics respectively, Board of Governors New York. The information reviewed at this meeting sug- Messrs. Alexander, Hooper, and Ms. Johnson, Associate Directors, Division of International gested that economic activity had expanded briskly Finance, Board of Governors further in the third quarter. The expansion was paced Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

41 by robust growth in consumer spending and substan- categories of business equipment as well. Nontial further increases in business investment expendi- residential construction activity appeared to have tures. Housing demand seemed to have been well rebounded somewhat in late spring and early summer maintained over the summer. Employment and pro- after having declined moderately earlier in the year. duction had risen considerably further since midyear. While new construction contracts displayed little Despite widespread indications of tight labor mar- trend, favorable conditions for nonresidential conkets, increases in labor compensation had been struction were suggested by low vacancy rates, rising moderate in recent months, and price inflation had prices for commercial real estate, and a widespread remained subdued. availability of financing. Private nonfarm payroll employment rose substan- The accumulation of nonfarm business inventories tially over July and August despite the retarding slowed substantially in July (latest data) from its effects of a work stoppage at a major package ship- average pace in the second quarter. Inventory investping firm. Aggregate weekly hours of production or ment in manufacturing was only a bit below its pace nonsupervisory workers were considerably above in the second quarter, but the inventory-shipments their second-quarter average over the two months. ratio for the sector remained at a very low level. In The civilian unemployment rate, at 4.9 percent in wholesale trade, stocks fell after a sharp buildup in August, was marginally above its low for the current June, and the stock-sales ratio for this sector was at economic expansion. the middle of its relatively low range for the past Industrial production increased considerably in year. At the retail level, a rise in inventories in July July and August, extending a relatively brisk advance about matched that in June and the inventory-sales over the first half of the year. The output of business ratio for the sector also was near the middle of its equipment rose strongly over the two months, with range for the past year. sizable gains in all major categories, and the output The nominal deficit on U.S. trade in goods and of consumer nondurables turned up after having dis- services widened substantially in July, reflecting both played some weakness in earlier months of the year. a decline in exports and a rise in imports. The lower The production of consumer durables also increased exports of goods and services were associated with on balance over the two months. After having risen decreases in most trade categories and left total somewhat in other recent months, the utilization of exports slightly below their relatively high level of total manufacturing capacity was up appreciably in the second quarter. The July increase in imports also August, reaching its highest level since the spring of was spread among nearly all trade categories and 1995. brought total imports of goods and services to a level Retail sales were up substantially over the summer somewhat above the average for the second quarter. after having edged lower during the spring. The The available information suggested that economic upturn in recent months included a rebound in sales activity expanded further in recent months in all the at automotive dealers following some weakness in major foreign industrial countries except Japan. earlier months. Sales at non-auto durable and at non- Growth remained relatively robust in Canada and the durable goods stores also strengthened after having United Kingdom, and activity apparently picked up declined on balance during the second quarter. The in France and Germany after having been sluggish pickup in consumer spending occurred against a early in the year. Economic activity in Japan declined backdrop of further strong gains in incomes and appreciably in the second quarter, and more recent household net worth that, according to recent sur- information provided little clear evidence of subseveys, had fostered high levels of consumer confi- quent strength. dence. In addition, credit continued to be readily Price inflation had remained subdued. Consumer available to most consumers. Total private housing price inflation picked up slightly in July and August starts and building permits declined in August to from a slow rate of increase in each of the previous levels somewhat below their averages in earlier four months; reduced but still appreciable increases months of the year, but data on overall home sales in food prices contributed to the larger advance in and builder ratings of new home sales continued to both months, and a sizable rise in energy prices lifted suggest that demand for single-family housing was the index in August. At the producer level, the price still relatively buoyant. index for finished goods rose moderately in August Real business fixed investment had remained on a after having fallen for seven consecutive months; the steep uptrend since midyear, with exceptional ongo- August rise largely reflected a jump in energy prices. ing demand for computers and communications Over the twelve months ended in August, consumer equipment and relatively robust demand in other prices were up considerably less than in the pre- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 Federal Reserve Bulletin • January 1998 vious twelve months, while producer prices of declined somewhat over the intermeeting period. The finished goods were down slightly after having dollar was down considerably against the mark as increased moderately in the previous twelve months. data suggesting a pickup in German economic activ- The behavior of these broad measures of inflation ity and inflation led to market speculation concerning excluding the effects of food and energy prices also a possible increase in short-term German interest was favorable over the year ended in August, albeit rates. The dollar also registered sizable declines over slightly less so. Average hourly earnings of produc- the period against a number of other European curtion and nonsupervisory workers picked up in August rencies. On the other hand, the dollar rose appreciafrom a much reduced pace in July; the rise in such bly in relation to the Japanese yen, which came under earnings over the twelve months ended in July was selling pressure against the background of continuing slightly above that in the previous twelve months. sluggish economic conditions in Japan, persistent At its meeting on August 19, 1997, the Committee problems in its financial system, and concerns about adopted a directive that called for maintaining condi- the potential effect on Japan of the recent depreciations in reserve markets that were consistent with an tions of Southeast Asian currencies. The dollar also unchanged federal funds rate averaging about strengthened somewhat in terms of the British pound, 5l/2 percent. The directive included a bias toward the in part as a result of some indications that economic possible firming of reserve conditions and a some- activity in the United Kingdom was not as strong as what higher federal funds rate to reflect a consensus expected and the sizable declines that had occurred among the members that the economic risks remained recently in that nation's long-term interest rates. biased toward higher inflation. Although the mem- M2 expanded at a rapid pace in August and continbers did not see a high probability that likely develop- ued to grow at a still robust though diminished rate in ments would warrant a tightening of policy during September according to the limited data available for the intermeeting interval, they continued to anticipate that month. The strength of M2 and also that of M3 that the next policy move was more likely to be in the was related at least in part to changes in the allocadirection of some firming than toward some easing. tion of financial assets and liabilities rather than to The reserve market conditions associated with this the growth in spending; in particular, the volatility in directive were expected to be consistent with some the stock market evidently fostered a redirection of slowing in the growth of M2 and M3 to more moder- funds to M2 assets, among others, and included heavy ate rates over coming months. inflows to the money market funds component of Open market operations were directed through- M2. For the year through August, M2 rose at a rate out the intermeeting period toward maintaining the somewhat above the upper bound of the Committee's existing degree of pressure on reserve positions, and range. M3 grew at an exceptionally rapid rate over the federal funds rate averaged just slightly above the the summer months, with only few signs of modera- Committee's intended level of 5 ¥2 percent. Most tion in September according to the partial data availother interest rates in short-term markets were little able for that month. Apart from the strength in its M2 changed over the period. Rates on longer-term obli- components, the increase in this aggregate reflected gations were down somewhat on balance, apparently bank substitution of large time deposits for forreflecting a reassessment of the outlook for inflation eign borrowings to finance credit growth and also by some market participants in the light of unexpect- reflected substantial inflows to institution-only money edly low inflation and other statistics released during funds. For the year through August, M3 expanded at the latter part of the period. The downward move- a rate well above the upper bound of its range. Total ment in long-term interest rates resulted in some domestic nonfinancial debt continued to increase at a further flattening of the slope of the yield curve and relatively moderate rate in recent months. appeared consistent with an interpretation that market The staff forecast prepared for this meeting sugparticipants saw little likelihood of any tightening of gested that the economy would expand at a pace monetary policy in coming months. Share prices in significantly above that anticipated earlier for the equity markets continued to display considerable second half of the year and the early part of 1998, but volatility but increased appreciably further on bal- economic growth was likely to moderate appreciably ance over the intermeeting interval. to a more sustainable rate later. In the near term, In foreign exchange markets, the dollar experi- business fixed investment appeared to be providing enced mixed changes in relation to major foreign surprisingly strong impetus to income growth, and currencies, largely reflecting diverging economic rising levels of wealth were stimulating robust condevelopments abroad. On balance, the dollar's trade- sumer demand. With sales so strong, the downward weighted value in terms of the other G-10 currencies adjustment in inventory investment that had been Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 43 anticipated in the previous staff forecast seemed sion in investment expenditures by business firms for likely to occur more gradually. The projected strength equipment and structures would provide strong in aggregate demand appeared likely to intensify underlying support for the economic expansion. High pressures on resources and lead to some pickup in rates of return on investments in equipment, particuinflation. Less accommodative financial market con- larly for computers and communications equipment ditions were anticipated to damp these tendencies where prices were falling rapidly, coupled with ready over time. financing from both internal cash flows and external In the Committee's discussion of current and pro- sources were inducing firms to undertake large spective economic developments, members com- investment programs. Such investments would mented on the continued remarkable performance of expand capacity, improve productivity, and lower the economy. Strength in consumer spending and costs of production. Anecdotal reports suggested a further acceleration in capital investment sparked mixed picture in nonresidential real estate markets. In faster-than-expected growth in the third quarter, and much of the country, commercial and office vacanrelatively brisk economic expansion seemed to be in cies were declining from already low levels and lease prospect for a period ahead in the context of very rates were rising. Shortages of construction workers positive business and consumer sentiment, strong were said to be holding back construction in some demands for capital goods, and favorable financial areas, but in other parts of the country there were conditions. The rate of expansion might subsequently indications of some moderation in construction activbe expected to slow as stocks of business capital and ity and of emerging overcapacity in some markets. consumer durable goods built up relative to sales and The ready availability of financing was a supportive incomes, inventory investment moderated somewhat, factor in the outlook for nonresidential construction. and the recent strength of the dollar began to exert a A gradual decline in housing activity was expected drag on exports. It was an open question, however, as to exert only mild restraint on the increase of ecoto whether these influences would be sufficient to nomic activity. Solid job and income growth, the high slow the growth of demands for goods and services to level of household wealth, and the low cash flow a more sustainable pace, and many members sug- burden of homeownership would continue to provide gested that the risks to the forecast were on the side good support for housing demand. In this regard, of increases in final demands that would press more recent statistical and anecdotal information indicated intensely against the available resources. Despite high that home sales were holding up well across the levels of resource utilization, inflation and infla- country, although higher-priced homes appeared to tionary expectations had remained subdued to date, be selling relatively slowly in some areas. reflecting to some extent special influences like the In the Committee's discussion of the prospects for rise in the foreign exchange value of the dollar. inflation, members discussed the relative absence of Moreover, sizable gains in productivity combined price pressures in an environment of increasingly with moderate increases in wages and salaries seemed tight labor markets across the country and rising to have contributed to keeping unit labor costs and levels of manufacturing capacity utilization. In labor prices under control. However, the growing tightness markets, costs were increasing much less than would in labor markets in many parts of the country was have been expected on the basis of previous experibeing accompanied by some signs of rising pressures ence under similarly tight conditions. Among the on labor compensation, including the use of special possible explanations for this outcome were persistbonuses and other innovative compensation initia- ing concerns about job security; the muted rise in tives that are not included in the usual statistical worker benefits, notably health care; and the increasmeasures of labor costs. In the circumstances, mem- ing use by employers of more flexible and innovative bers saw a risk of added wage and price inflation if means to attract and retain workers that were in high economic activity did not slow to a more sustainable demand. Moreover, it was suggested that, at least in pace consistent at a minimum with no further appre- manufacturing, productivity had risen unusually rapciable increase in labor utilization rates. idly of late, allowing corporations to hold the line on With regard to the prospects for final demand in prices despite increases in labor costs. While the key sectors, members took note of the rebound in underlying reasons for the favorable inflation trends consumer expenditures after a sluggish second quar- were not entirely clear, the members noted that, in ter. Solid gains in employment, incomes, and house- addition to subdued increases in labor costs, the hold net worth were seen as sustaining further robust appreciation of the dollar and the relatively sluggish expansion in consumer spending. In addition, mem- performance of many foreign industrial economies bers anticipated that continued further rapid expan- seemed to be contributing to the better-than-expected Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Federal Reserve Bulletin • January 1998 inflation performance by holding down prices in were therefore subject to a considerable degree of world commodity markets and prices of imported uncertainty, and the expansion of economic activity goods more generally. These developments also could still slow to a noninflationary pace. Members added to competitive pressures on businesses, which also commented that a policy tightening was not together with customer resistance were making it anticipated at this time and such an action might very difficult for firms to raise prices to reflect their therefore have unintended adverse effects on finanhigher costs. cial markets. Members recognized that from the The members commented that while few signs of standpoint of the level of real short-term interest rising price inflation had surfaced, the widespread rates, monetary policy could already be deemed to be tautness of labor markets and the emergence of scat- fairly restrictive. Several noted, however, that credit tered indications of increased pressure on wages and from a wide variety of lenders appeared to be amply other labor costs were cause for concern. Anecdotal available in financial markets on favorable terms, reports suggested that increases in health care costs perhaps overly so in present circumstances, and some were likely to turn up, and there were indications that also noted that the strength in the broad measures of fears about job security might be diminishing and money in recent months suggested that policy was that workers were becoming less reluctant to leave not restraining liquidity or financial conditions more their jobs before finding better ones. In addition, generally. In the course of the Committee's discusbusinesses were reporting increasing difficulty in hir- sion of these diverging considerations, a consensus ing and retaining qualified workers. Growth in labor emerged for maintaining a steady policy course at demand had been outpacing sustainable increases in this time, but members also expressed the need for a labor supply; these reports suggested that the risk of heightened degree of vigilance as they continued to an acceleration in labor compensation was rising. assess ongoing developments for signs that inflation In the Committee's discussion of policy for the might intensify in the future. intermeeting period ahead, all the members endorsed In their discussion of possible adjustments to pola proposal to maintain an unchanged policy stance, icy during the intermeeting period, all the members but several also indicated that economic develop- indicated that they wanted to retain in the operating ments could well require a tightening of policy in the paragraph of the directive the existing asymmetry relatively near future. Members observed in this toward restraint that was initially adopted at the May regard that some factors that had contributed to a meeting. Such a directive was consistent with their currently subdued rate of inflation, notably the appre- view that the risks continued to be biased toward ciation of the dollar, damped wage demands, and rising inflation and indeed with the view of most relatively limited increases in the cost of health bene- members that those risks might have increased. fits, were not likely to continue to exert the same Accordingly, while the probability that the incoming restraining influence. Moreover, final demands had information would warrant a tightening move during been unexpectedly strong, with economic activity the intermeeting period might not be high, the memand the associated demand for labor expanding at an bers continued to view the next policy move as more unsustainable pace for some time, and it was unclear likely to be in the direction of some firming than whether without policy action overall demands would toward easing. moderate sufficiently to avoid increasing pressures on At the conclusion of the Committee's discussion, resources. In the circumstances, the risks to the econ- all the members supported a directive that called for omy appeared to be strongly tilted toward rising maintaining conditions in reserve markets that were inflation whose emergence would in turn threaten the consistent with an unchanged federal funds rate of sustainability of the expansion. Several members about 5V2 percent. All the members also agreed on emphasized in this regard that a tightening move the desirability of retaining a bias in the directive could be most effective if it were implemented pre- toward the possible firming of reserve conditions and emptively, before inflation had time to gather upward a higher federal funds rate during the intermeeting momentum and become embedded in financial asset period. Accordingly, in the context of the Commitprices and in business and consumer decision- tee's long-run objectives for price stability and susmaking. tainable economic growth, and giving careful consideration to economic, financial, and monetary There were, nonetheless, a number of reasons for developments, the Committee decided that a somedelaying a tightening of policy. The behavior of what higher federal funds rate would be acceptable or inflation had been unexpectedly benign for an a slightly lower federal funds rate might be acceptextended period of time for reasons that were not able during the intermeeting period. The reserve confully understood. Forecasts of an upturn in inflation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 45 ditions contemplated at this meeting were expected to The Federal Open Market Committee seeks monetary be consistent with some moderation in the expansion and financial conditions that will foster price stability and promote sustainable growth in output. In furtherance of in M2 and M3 over coming months. these objectives, the Committee at its meeting in July The Federal Reserve Bank of New York was authoreaffirmed the ranges it had established in February for rized and directed, until instructed otherwise by the growth of M2 and M3 of 1 to 5 percent and 2 to 6 percent Committee, to execute transactions in the System respectively, measured from the fourth quarter of 1996 to Account in accordance with the following domestic the fourth quarter of 1997. The range for growth of total domestic nonfinancial debt was maintained at 3 to 7 perpolicy directive: cent for the year. For 1998, the Committee agreed on a tentative basis to set the same ranges as in 1997 for growth The information reviewed at this meeting suggests that of the monetary aggregates and debt, measured from the growth of economic activity remains brisk. In labor marfourth quarter of 1997 to the fourth quarter of 1998. The kets, hiring continued robust over the summer months and behavior of the monetary aggregates will continue to be the civilian unemployment rate, at 4.9 percent in August, evaluated in the light of progress toward price level stabilremained near its low for the current economic expansion. ity, movements in their velocities, and developments in the Industrial production increased considerably further in July economy and financial markets. and August. Retail sales have risen sharply over recent In the implementation of policy for the immediate future, months after a pause during the spring. Housing starts the Committee seeks conditions in reserve markets consisdeclined in July and August, but home sales have been tent with maintaining the federal funds rate at an average strong. Business fixed investment has increased substan- of around 5XA percent. In the context of the Committee's tially further since midyear and available indicators point long-run objectives for price stability and sustainable to further sizable gains in coming months. After narrowing economic growth, and giving careful consideration to ecosomewhat in the second quarter, the nominal deficit on U.S. nomic, financial, and monetary developments, a somewhat trade in goods and services widened substantially in July. higher federal funds rate would or a slightly lower federal Inventory investment in July was well below the average funds rate might be acceptable in the intermeeting period. pace in prior months of 1997. Price inflation has remained The contemplated reserve conditions are expected to be subdued and increases in labor compensation have been consistent with some moderation in the growth of M2 and moderate in recent months. M3 over coming months. Most market interest rates are about unchanged on balance since the day before the Committee meeting on Votes for this action: Messrs. Greenspan, McDonough, August 19, 1997. Share prices in equity markets have Broaddus, Guynn, Kelley, Meyer, Moskow, Parry, increased considerably over the period, with some stock Mses. Phillips and Rivlin. Votes against this action: price indexes reaching new highs. In foreign exchange None. markets, the trade-weighted value of the dollar in terms of the other G-10 currencies declined somewhat on balance It was agreed that the next meeting of the Commitover the intermeeting period. Growth of M2 appears to have moderated somewhat in tee would be held on Wednesday, November 12, September from a very rapid pace in August, while expan- 1997. sion of M3 remained very strong in both months. For the The meeting adjourned at 12:45 p.m. year through August, M2 expanded at a rate somewhat above the upper bound of its range for the year and M3 at a rate substantially above the upper bound of its range. Total domestic nonfinancial debt has continued to expand in Donald L. Kohn recent months at a pace near the middle of its range. Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

47 Legal Developments September 1998. The Board is amending 12 C.F.R. Part FINAL RULE—AMENDMENT TO REGULATION D 204 as follows: The Board of Governors is amending 12 C.F.R. Part 204, its Regulation D (Reserve Requirements of Depository Part 204—Reserve Requirements of Depository Institutions), to decrease the amount of transaction ac- Institutions (Regulation D) counts subject to a reserve requirement ratio of three percent, as required by section 19(b)(2)(C) of the Federal Reserve Act, from $49.3 million to $47.8 million of net 1. The authority citation for Part 204 continues to read as transaction accounts. This adjustment is known as the low follows: reserve tranche adjustment. The Board is increasing from $4.4 million to $4.7 million the amount of reservable Authority: 12U.S.C. 248(a), 248(c), 371a, 461, 601, 611, liabilities of each depository institution that is subject to a and 3105. reserve requirement of zero percent. This action is required by section 19(b)(ll)(B) of the Federal Reserve Act, and 2. Section 204.9 is revised to read as follows: the adjustment is known as the reservable liabilities exemption adjustment. The Board is also increasing the deposit Section 204.9—Reserve requirement ratios. cutoff levels that are used in conjunction with the reservable liabilities exemption to determine the frequency of (a) Reserve percentages. The following reserve ratios are deposit reporting from $75.0 million to $78.9 million for prescribed for all depository institutions, Edge and Agreenonexempt depository institutions and from $48.2 million ment corporations, and United States branches and agento $50.7 million for exempt institutions. (Nonexempt insti- cies of foreign banks: tutions are those with total reservable liabilities exceeding the amount exempted from reserve requirements ($4.7 million) while exempt institutions are those with total Category Reserve requirement1 reservable liabilities not exceeding the amount exempted Net transaction accounts: from reserve requirements.) Thus, beginning in September $0 to $47.8 million 3 percent of amount. 1998, nonexempt institutions with total deposits of over $47.8 million $1,434,000 plus 10 percent of $78.9 million or more will be required to report weekly amount over $47.8 million. while nonexempt institutions with total deposits less than Nonpersonal time deposits 0 percent. Eurocurrency liabilities 0 percent. $78.9 million may report quarterly, in both cases on form FR 2900. Similarly, exempt institutions with total deposits 1 Before deducting the adjustment to be made by the paragraph (b) of this of $50.7 million or more will be required to report quar- section. terly on form FR 2910q while exempt institutions with (b) Exemption from reserve requirements. Each depository total deposits less than $50.7 million may report annually institution, Edge or agreement corporation, and U.S. branch on form FR 2910a. or agency of a foreign bank is subject to a zero percent The effective date of the amendment is December 16, reserve requirement on an amount of its transaction ac- 1997, and the compliance dates are as follows. For deposi- counts subject to the low reserve tranche in paragraph (a) tory institutions that report weekly, the low reserve tranche of this section not in excess of $4.7 million determined in adjustment and the reservable liabilities exemption adjust- accordance with section 204.3(a)(3). ment will apply to the reserve computation period that begins Tuesday, December 30, 1997, and the corresponding reserve maintenance period that begins Thursday, Janu- FINAL RULE—AMENDMENT TO REGULATION Z ary 1, 1998. For institutions that report quarterly, the low reserve tranche adjustment and the reservable liabilities The Board of Governors is amending 12 C.F.R. Part 226, exemption adjustment will apply to the reserve computa- its Regulation Z (Truth in Lending). The revisions impletion period that begins Tuesday, December 16, 1997, and ment an amendment to the Truth in Lending Act contained the corresponding reserve maintenance period that begins in the Economic Growth and Regulatory Paperwork Re- Thursday, January 15, 1998. For all depository institutions, duction Act of 1996 affecting the disclosure of a 15-year the deposit cutoff levels will be used to screen institutions historical example of rates and payments. The amendment in the second quarter of 1998 to determine the reporting applies to variable-rate loans with a term exceeding one frequency for the twelve month period that begins in year and secured by the consumer's principal dwelling. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • January 1998 The amendment allows creditors to provide a statement of any discount or premium) in effect as of an that the periodic payment may substantially increase or identified month and year for the loan program decrease together with a maximum interest rate and pay- disclosure assuming the maximum periodic inment based on a $10,000 loan amount, in lieu of having to creases in rates and payments under the program; provide a 15-year historical example of index values. and the initial interest rate and payment for that Effective November 21, 1997, and compliance is op- loan and a statement that the periodic payment may tional until October 1, 1998, 12 C.F.R. Part 226 is amended increase or decrease substantially depending on as follows: changes in the rate, (ix) An explanation of how the consumer may calculate the payments for the loan amount to be borrowed based on either: Part 226—Truth in Lending (Regulation Z) (A) The most recent payment shown in the historical example in paragraph 226.19(b)(2)(viii)(A) 1. The authority citation for Part 226 continues to read as of this section; or follows: (B) The initial interest rate used to calculate the maximum interest rate and payment in paragraph Authority: 12U.S.C. 3806; 15 U.S.C. 1604 and 1637(c)(5). 226.19(b)(2)(viii)(B) of this section. 2. Section 226.19 is amended by: a. Republishing the introductory text of paragraph (b)(2); 3. In Part 226, Appendix H is amended by revising the b. Revising paragraph (b)(2)(viii); appendix heading, H-4(C) Variable-Rate Model Clauses, c. Revising paragraph (b)(2)(ix); and H-14 Variable-Rate Mortgage Sample to read as fold. Removing paragraph (b)(2)(x); and lows: e. Paragraphs (b)(2)(xi), (b)(2)(xii), and (b)(2)(xiii) are redesignated as paragraphs (b)(2)(x), (b)(2)(xi) and (b)(2)(xii) respectively. APPENDIX H TO PART 226—CLOSED-END MODEL The revisions read as follows: FORMS AND CLAUSES H-4(C)—Variable-Rate Model Clauses Section 226.19—Certain residential mortgage and This disclosure describes the features of the adjustablevariable-rate transactions. rate mortgage (ARM) program you are considering. Information on other ARM programs is available upon request. (b) Certain variable-rate transactions. * * * How Your Interest Rate and Payment Are Determined (2) A loan program disclosure for each variable-rate • Your interest rate will be based on [an index plus a program in which the consumer expresses an interest. margin] [a formulal. The following disclosures, as applicable, shall be pro- • Your payment will be based on the interest rate, loan vided: balance, and loan term. —[The interest rate will be based on (identification of index) plus our margin. Ask for our current interest rate (viii) At the option of the creditor, either of the and margin.] following: —[The interest rate will be based on (identification of (A) A historical example, based on a $10,000 loan formula). Ask us for our current interest rate.] amount, illustrating how payments and the loan —Information about the index [formula for rate adjustbalance would have been affected by interest rate ments] is published [can be found] . changes implemented according to the terms of the —[The initial interest rate is not based on the (index) loan program disclosure. The example shall reflect (formula) used to make later adjustments. Ask us for the the most recent 15 years of index values. The amount of current interest rate discounts.] example shall reflect all significant loan program terms, such as negative amortization, interest rate How Your Interest Rate Can Change carryover, interest rate discounts, and interest rate and payment limitations, that would have been af- • Your interest rate can change (frequency). fected by the index movement during the period. • [Your interest rate cannot increase or decrease more (B) The maximum interest rate and payment for a than percentage points at each adjustment.] $10,000 loan originated at the initial interest rate • Your interest rate cannot increase [or decrease] more (index value plus margin, adjusted by the amount than percentage points over the term of the loan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 49 How Your Payment Can Change The example is based on the following assumptions: Amount $10,000 Caps [periodic interest rate • Your payment can change (frequency) based on changes Term cap] Change date lifetime interest rate in the interest rate. Payment adjustment . . . (frequency) cap • [Your payment cannot increase more than (amount or Interest adjustment . . . (frequency) [payment cap] percentage) at each adjustment.] [Margin]* [Interest rate carryover] [Negative amortization] • You will be notified in writing days before the due [Interest rate discount]** date of a payment at a new level. This notice will contain Index (identification of index information about your interest rates, payment amount, and or formula) loan balance. Interest Monthly Remaining Index Margin rate payment balance • [You will be notified once each year during which Year (%) (percentage points) (%) ($) ($) __ interest rate adjustments, but no payment adjustments, have been made to your loan. This notice will contain 1983 information about your interest rates, payment amount, and 1984 1985 loan balance.] 1986 • [For example, on a $10,000 [term] loan with an initial 1987 1988 interest rate of [(the rate shown in the interest rate 1989 1990 column below for the year 19 )][(in effect 1991 (month) (year))], the maximum amount that the inter- 1992 1993 est rate can rise under this program is percentage 1994 points, to %, and the monthly payment can rise from 1995 1996 a first-year payment of $ to a maximum of $ in the year. To see what your payments would be, divide To see what your payments would have been during that period, divide your mortgage amount by $10,000; then multiply the monthly payment by that your mortgage amount by $10,000; then multiply the amount. (For example, in 1996 the monthly payment for a mortgage amount of monthly payment by that amount. (For example, the $60,000 taken out in 1982 would be: monthly payment for a mortgage amount of $60,000 would $60,000 ^ $10,000 = 6; 6 X = $ per month.) be: $60,000 $10,000 = 6; 6 X = $ per month.)] * This is a margin we have used recently, your margin may be different. ** This is the amount of a discount we have provided recently; your loan may be discounted by a different amount.] [EXAMPLE] How Your Interest Rate Can Change • Your interest rate can change yearly. The example below shows how your payments would have • Your interest rate cannot increase or decrease more than changed under this ARM program based on actual changes 2 percentage points per year. in the index from 1982 to 1996. This does not necessarily • Your interest rate cannot increase or decrease more than indicate how your index will change in the future. 5 percentage points over the term of the loan. H-14—Variable-Rate Mortgage Sample How Your Monthly Payment Can Change This disclosure describes the features of the adjustable-rate • Your monthly payment can increase or decrease substanmortgage (ARM) program you are considering. Informa- tially based on annual changes in the interest rate. tion on other ARM programs is available upon request. • [For example, on a $10,000, 30-year loan with an initial interest rate of 12.41 percent in effect in July 1996, the How Your Interest Rate and Payment Are Determined maximum amount that the interest rate can rise under this • Your interest rate will be based on an index rate plus a program is 5 percentage points, to 17.41 percent, and the margin. monthly payment can rise from a first-year payment of • Your payment will be based on the interest rate, loan $106.03 to a maximum of $145.34 in the fourth year. To balance, and loan term. see what your payment is, divide your mortgage amount by —The interest rate will be based on the weekly average $10,000; then multiply the monthly payment by that yield on United States Treasury securities adjusted to a amount. (For example, the monthly payment for a mortconstant maturity of 1 year (your index), plus our margin. gage amount of $60,000 would be: Ask us for our current interest rate and margin. $60,000 - $10,000 = 6; 6 X 106.03 = $636.18 per —Information about the index rate is published weekly month.) in the Wall Street Journal. • You will be notified in writing 25 days before the annual • Your interest rate will equal the index rate plus our payment adjustment may be made. This notice will contain margin unless your interest rate "caps" limit the amount of information about your interest rates, payment amount and change in the interest rate. loan balance.] Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • January 1998 [EXAMPLE] and text are transferred immediately preceding the heading "Paragraph 19(b)(2)(ix)" The example below shows how your payments would have f. Paragraphs 1 and 2, under the heading "Paragraph changed under this ARM program based on actual changes 19(b)(2)(viii)(By are revised and a new paragraph 5 is in the index from 1982 to 1996. This does not necessarily added. indicate how your index will change in the future. The g. Paragraph 1, under the heading "Paragraph example is based on the following assumptions: 19(b)(2)(ix)" is revised. h. The heading "Paragraph 19(b)(2)(xiy is revised to read "Paragraph 19(b)(2)(x):, i. The heading "Paragraph 19(b)(2)(xiiy is revised to Amount $10,000 Caps 2 percentage points annual read "Paragraph 19(b)(2)(xi)T Term 30 years interest rate adjustment .... 1 year 5 percentage points lifetime j. The heading "Paragraph 19(b)(2)(xiiiy, is revised to Interest adjustment 1 year interest rate Payment read "Paragraph 19(b)(2)(xii).,, Margin 3 percentage Index Weekly average yield on points U.S. Treasury securities The revisions and additions read as follows: adjusted to a constant maturity of one year Year Margin* Interest Monthly Remaining SUPPLEMENT I TO PART 226—OFFICIAL STAFF (as of 1st week Index (percentage rate payment balance INTERPRETATIONS ending in July) (%) points) (%) ($) ($) 1982 14.41 3 17.41 145.90 9,989.37 1983 9.78 3 15.41** 129.81 9,969.66 Section 226.19—Certain Residential Mortgage 1984 12.17 3 15.17 127.91 9,945.51 1985 7.66 3 13.17** 112.43 9,903,70 Transactions. 1986 6.36 3 12.41*** 106.73 9,848.94 1987 6.71 3 12.41*** 106.73 9,786.98 1988 7.52 3 12.41*** 106.73 9,716.88 1989 7.97 3 12.41*** 106.73 9,637.56 19(b) Certain variable-rate transactions. 1990 8.06 3 12.41*** 106.73 9,547.83 1991 6.40 3 12.41*** 106.73 9,446.29 1992 3.96 3 12.41*** 106.73 9,331.56 1993 3.42 3 12.41*** 106.73 9,201.61 1994 5.47 3 12.41*** 106.73 9,054.72 Paragraph 19(b)(2). 1995 5.53 3 12.41*** 106.73 8,888.52 1996 5.82 3 12.41*** 106.73 8,700.37 * This is a margin we have used recently; your margin may be different. (2) Variable-rate loan program defined. ** This interest rate reflects a 2 percentage point annual interest rate cap. *** This interest rate reflects a 5 percentage point lifetime interest rate cap. (i) Generally, if the identification, the presence or To see what your payments would have been during that period, divide your absence, or the exact value of a loan feature must be mortgage amount by $10,000; then multiply the monthly payment by that amount. (For example, in 1996 the monthly payment for a mortgage amount of disclosed under this section, variable-rate loans that $60,000 taken out in 1982 would be: differ as to such features constitute separate loan $60,000 - $10,000 = 6; 6 X $106.73 = $640.38.) programs. For example, separate loan programs would exist based on differences in any of the following loan • [You will be notified in writing 25 days before the features: annual payment adjustment may be made. This notice will (A) The index or other formula used to calculate contain information about your interest rates payment interest rate adjustments. amount and loan balance.] (B) The rules relating to changes in the index value, interest rate, payments, and loan balance. (C) The presence or absence of, and the amount of, 4. In Supplement I to Part 226, under Section 226.19— rate or payment caps. Certain Residential Mortgage and Variable-Rate Transac- (D) The presence of a demand feature. tions, under paragraph 19(b) Certain variable-rate transac- (E) The possibility of negative amortization. tions, the following amendments are made: (F) The possibility of interest rate carryover. a. Paragraph 2, under the heading "Paragraph 19(b)(2)" is (G) The frequency of interest rate and payment revised. adjustments. b. Paragraph 1, under the heading "Paragraph (H) The presence of a discount feature. 19(b)(2)(v)" is revised. (I) In addition, if a loan feature must be taken into c. The heading "Paragraph 19(b)(2)(viiiy is revised to account in preparing the disclosures required by read "Paragraph 19(b)(2)(viii)(A)r section 226.19(b)(2)(viii), variable-rate loans that d. A new heading "Paragraph 19(b)(2)(viii),, and a new differ as to that feature constitute separate programs paragraph 1 is added below the new heading, and both are under section 226.19(b)(2). transferred immediately preceding "Paragraph (ii) If, however, a representative value may be given 19(b)(2)(viii)(A)r for a loan feature or the feature need not be disclosed e. The heading "Paragraph 19(b)(2)(xy is revised to read under section 226.19(b)(2), variable-rate loans that "Paragraph 19(b)(2)(viii)(By, and the paragraph heading differ as to such features do not constitute separate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 51 loan programs. For example, separate programs would this paragraph, a creditor should assume that the interest not exist based on differences in the following loan rate increases as rapidly as possible under the loan profeatures: gram, and the maximum payment disclosed should reflect (A) The amount of a discount. the amortization of the loan during this period. Thus, in a (B) The amount of a margin. loan with 2 percentage point annual (and 5 percentage point overall) interest rate limitations or "caps," the maximum interest rate would be 5 percentage points higher than Paragraph 19(b)(2)(v). the initial interest rate disclosed. Moreover, the loan would not reach the maximum interest rate until the fourth year 1. Discounted and premium interest rate. In some variable- because of the 2 percentage point annual rate limitations, rate transactions, creditors may set an initial interest rate and the maximum payment disclosed would reflect the that is not determined by the index or formula used to amortization of the loan during this period. If the loan make later interest rate adjustments. Typically, this initial program includes a discounted or premium initial interest rate charged to consumers is lower than the rate would be rate, the initial interest rate should be adjusted by the if it were calculated using the index or formula. However, amount of the discount or premium. in some cases the initial rate may be higher. If the initial interest rate will be a discount or a premium rate, creditors 2. Term of the loan. In calculating the initial and maximum must alert the consumer to this fact. For example, if a payments, the creditor need not base the disclosures on creditor discounted a consumer's initial rate, the disclosure each term to maturity or payment amortization offered might state, "Your initial interest rate is not based on the under the program. Instead, the creditor may follow the index used to make later adjustments." (See the commen- rules set out in comment 19(b)(2)(viii)(A)-5. If a historical tary to section 226.17(c)(1) for a further discussion of example is provided under section 226.19(b)(2)(viii)(A), discounted and premium variable-rate transactions.) In ad- the terms to maturity or payment amortization used in the dition, the disclosure must suggest that consumers inquire historical example must be used in calculating the initial about the amount that the program is currently discounted. and maximum payment. In addition, creditors must state For example, the disclosure might state, "Ask us for the the term or payment amortization used in making the amount our adjustable rate mortgages are currently dis- disclosures under this section. counted." In a transaction with a consumer buydown or with a third-party buydown that will be incorporated in the legal obligation, the creditor should disclose the program as a discounted variable-rate transaction, but need not disclose additional information regarding the buydown in 5. Periodic payment statement. The statement that the its program disclosures. (See the commentary to sec- periodic payment may increase or decrease substantially tion 226.19(b)(2)(viii) for a discussion of how to reflect the may be satisfied by the disclosure in paragraph 19(b)(2)(vi) discount or premium in the historical example or the maxi- if it states for example, "your monthly payment can inmum rate and payment disclosure). crease or decrease substantially based on annual changes in the interest rate." Paragraph 19(b)(2)(viii). Paragraph 19(b)(2)(ix). 1. Historical example and initial and maximum interest 1. Calculation of payments. A creditor is required to inrates and payments. A creditor may disclose both the clude a statement on the disclosure form that explains how historical example and the initial and maximum interest a consumer may calculate his or her actual monthly payrates and payments. ments for a loan amount other than $10,000. The example should be based upon the most recent payment shown in the historical example or upon the initial interest rate reflected in the maximum rate and payment disclosure. In Paragraph 19(b)(2)(viii)(A). transactions in which the latest payment shown in the historical example is not for the latest year of index values shown (such as in a five-year loan), a creditor may provide additional examples based on the initial and maximum Paragraph 19(b)(2)(viii)(B). payments disclosed under section 226.19(b)(2)(viii)(B). 1. Initial and maximum interest rates and payments. The The creditor, however, is not required to calculate the disclosure form must state the initial and maximum interest consumer's payments. (See the model clauses in Appendix rates and payments for a $10,000 loan originated at an H-4(C).) initial interest rate (index value plus margin adjusted by the amount of any discount or premium) in effect as of an Paragraph 19(b)(2)(x). identified month and year for the loan program disclosure. (See comment 19(b)(2)-5 on revisions to the loan program disclosure.) In calculating the maximum payment under Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 1998 Paragraph 19(b)(2)(xi). able upon request. It includes information on how the interest rate is determined and how it can change over time. Section 226.19(b)(2)(viii) permits creditors the option to Paragraph 19(b)(2)(xii). provide either a historical example or an initial and maximum interest rates and payments disclosure; both are illustrated in the sample disclosure. The historical example 5. In Supplement I to Part 226, under paragraph heading explains how the monthly payment can change based on a Paragraph 19(b)(2)(viii)(A), all references in paragraphs 3 $10,000 loan amount, payable in 360 monthly installments, and 4 to "Section 226.19(b)(2)(viii)" are revised to read based on historical changes in the values for the weekly "Section 226.19(b)(2)(viii)(A)." average yield on U.S. Treasury Securities adjusted to a 6. In Supplement I to Part 226, under paragraph heading constant maturity of one year. Index values are measured Paragraph 19(b)(2)(viii)(A), in paragraphs 6 and 7 the for 15 years, as of the first week ending in July. This words "comment 19(b)(2)(x)" are revised to read "com- reflects the requirement that the index history be based on ment 19(b)(2)(viii)(B)" in each place they appear. values for the same date or period each year in the exam- 7. In Supplement I to Part 226, under paragraph heading ple. The sample disclosure also illustrates the alternative Paragraph 19(b)(2)(viii)(B), in paragraphs 2, 3, and 4 the disclosure under section 226.19(b)(2)(viii)(B) that the iniwords "comment 19(b)(2)(viii)" are revised to read "com- tial and the maximum interest rates and payments be ment 19(b)(2)(viii)(A)" in each place they appear. shown for a $10,000 loan originated at an initial interest 8. In Supplement I to Part 226, Appendix H—Closed-End rate of 12.41 percent (which was in effect July 1996) and Model Forms and Clauses, Paragraphs 6 and 18, are re- to have 2 percentage point annual (and 5 percentage point vised to read as follows: overall) interest rate limitations or caps. Thus, the maximum amount that the interest rate could rise under this program is 5 percentage points higher than the 12.41 percent initial rate to 17.41 percent, and the monthly payment could rise from $106.03 to a maximum of $145.34. The loan would not reach the maximum interest rate until its fourth year because of the 2 percentage point APPENDIX H — CLOSED-END MODEL FORMS AND annual rate limitations, and the maximum payment dis- CLAUSES closed reflects the amortization of the loan during that period. The sample form also illustrates how to provide 6. Model H-4(C). This model clause illustrates the early consumers with a method for calculating their actual disclosures required generally under section 226.19(b). It monthly payment for a loan amount other than $10,000. includes information on how the consumer's interest rate is determined and how it can change over the term of the loan, and explains changes that may occur in the borrower's monthly payment. It contains an example of how to disclose historical changes in the index or formula values used to compute interest rates for the preceding 15 years. FINAL RULE—AMENDMENT TO RULES REGARDING The model clause also illustrates the disclosure of the AVAILABILITY OF INFORMATION initial and maximum interest rates and payments based on an initial interest rate (index value plus margin, adjusted by The Board of Governors is amending 12 C.F.R. Part 271, the amount of any discount or premium) in effect as of an its Rules Regarding Availability of Information ("Rules") identified month and year for the loan program disclosure to reflect recent changes in the Freedom of Information Act and illustrates how to provide consumers with a method for ("FOIA") as a result of the Electronic Freedom of Informacalculating the monthly payment for the loan amount to be tion Act Amendments ("EFOIA"). borrowed. Effective December 17, 1997, 12 C.F.R. Part 271 is amended as follows: Part 271—Rules Regarding Availability of 18. Sample H-14. This sample disclosure form illustrates Information the disclosures under section 226.19(b) for a variable-rate transaction secured by the consumer's principal dwelling with a term greater than one year. The sample form shows Section a creditor how to adapt the model clauses in Appen- 271.1 Authority and purpose. dix H-4(C) to the creditor's own particular variable-rate 271.2 Definitions. program. The sample disclosure form describes the fea- 271.3 Published information. tures of a specific variable-rate mortgage program and 271.4 Records available for public inspection and alerts the consumer to the fact that information on the copying. creditor's other closed-end variable-rate programs is avail- 271.5 Records available to the public on request. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 271.6 Processing requests. sults of which are not intended to promote any particular 271.7 Exemptions from disclosure. product or industry. 271.8 Subpoenas. (i) Records of the Committee includes rules, statements, 271.9 Fee schedules; waiver of fees. decisions, minutes, memoranda, letters, reports, transcripts, accounts, charts, and other written material, as well as any Authority: 5 U.S.C. 552; 12 U.S.C. 263. materials in machine readable form that constitute a part of the Committee's official files. (j) Representative of the news media refers to any person Section 271.1—Authority and purpose. actively gathering news for an entity that is organized and operated to publish or broadcast news to the public. (a) Authority. This part is issued by the Federal Open (1) The term "news" means information about current Market Committee (the Committee) pursuant to the Freeevents or that would be of current interest to the public. dom of Information Act, 5 U.S.C. 552, and also pursuant to (2) Examples of news media entities include, but are not the Committee's authority under section 12A of the Fedlimited to, television or radio stations broadcasting to the eral Reserve Act, 12 U.S.C. 263, to issue regulations govpublic at large, and publishers of newspapers and other erning the conduct of its business. periodicals (but only in those instances when they can (b) Purpose. This part sets forth the categories of informaqualify as disseminators of "news") who make their tion made available to the public and the procedures for products available for purchase or subscription by the obtaining documents and records. general public. (3) "Freelance" journalists may be regarded as working Section 271.2—Definitions. for a news organization if they can demonstrate a solid basis for expecting publication through that organiza- (a) Board means the Board of Governors of the Federal tion, even though not actually employed by it. Reserve System established by the Federal Reserve Act of (k)(l) Review refers to the process of examining docu- 1913 (38 Stat. 251). ments, located in response to a request for access, to (b) Commercial use request refers to a request from or on determine whether any portion of a document is exempt behalf of one who seeks information for a use or purpose information. It includes doing all that is necessary to that furthers the commercial, trade, or profit interests of the excise the documents and otherwise to prepare them for requester or the person on whose behalf the request is release. made. (2) Review does not include time spent resolving general (c) Direct costs mean those expenditures that the Commit- legal or policy issues regarding the application of extee actually incurs in searching for, reviewing, and dupli- emptions. cating documents in response to a request made under (1)(1) Search means a reasonable search, by manual or section 271.5. automated means, of the Committee's official files and (d) Duplication refers to the process of making a copy of a any other files containing records of the Committee as document in response to a request for disclosure of records seem reasonably likely in the particular circumstances to or for inspection of original records that contain exempt contain documents of the kind requested. For purposes material or that otherwise cannot be inspected directly. of computing fees under section 271.9, search time Among others, such copies may take the form of paper, includes all time spent looking for material that is remicroform, audiovisual materials, or machine-readable sponsive to a request, including line-by-line identificadocumentation (e.g., magnetic tape or disk). tion of material within documents. Such activity is dis- (e) Educational institution refers to a preschool, a public or tinct from "review" of material to determine whether private elementary or secondary school, or an institution of the material is exempt from disclosure. undergraduate higher education, graduate higher educa- (2) Search does not mean or include research, creation tion, professional education, or an institution of vocational of any document, or extensive modification of an existeducation that operates a program of scholarly research. ing program or system that would significantly interfere (f) Federal Reserve Bank means one of the district Banks with the operation of the Committee's automated inforauthorized by the Federal Reserve Act, 12 U.S.C. 222, mation system. including any branch of any such Bank. (g) Information of the Committee means all information coming into the possession of the Committee or of any Section 271.3—Published information. member thereof or of any officer, employee, or agent of the Committee, the Board, or any Federal Reserve Bank, in the performance of duties for, or pursuant to the direction of, (a) Federal Register. The Committee publishes in the the Committee. Federal Register, in addition to this part: (h) Noncommercial scientific institution refers to an institu- (1) A description of its organization; tion that is not operated on a "commercial" basis (as that (2) Statements of the general course and method by term is used in this section) and which is operated solely which its functions are channeled and determined; for the purpose of conducting scientific research, the re- (3) Rules of procedure; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 1998 (4) Substantive rules of general applicability, and state- procedures in this section and the exceptions in section ments of general policy and interpretations of general 271.7. applicability formulated and adopted by the Committee; (b) Procedures for requesting records. (1) A request for (5) Every amendment, revision, or repeal of the forego- identifiable records shall reasonably describe the records ing; and in a way that enables the Committee's staff to identify (6) General notices of proposed rulemaking. and produce the records with reasonable effort and with- (b) Annual Report to Congress. Each annual report made to out unduly burdening or significantly interfering with Congress by the Board includes a complete record of the any of the Committee's operations. actions taken by the Committee during the preceding year (2) The request shall be submitted in writing to the upon all matters of policy relating to open market opera- Secretary of the Committee, Federal Open Market Comtions, showing the reasons underlying the actions, and the mittee, 20th & C Street, N.W., Washington, D.C. 20551; votes taken. or sent by facsimile to the Secretary of the Committee, (c) Other published information. From time to time, other (202) 452-2921. The request shall be clearly marked information relating to open market operations of the Fed- FREEDOM OF INFORMATION ACT REQUEST. eral Reserve Banks is published in the Federal Reserve (c) Contents of request. The request shall contain the Bulletin, issued monthly by the Board, in the Board's following information: annual report to Congress, and in announcements and (1) The name and address of the requester, and the statements released to the press. Copies of issues of the telephone number at which the requester can be reached Bulletin and of annual reports of the Board may be ob- during normal business hours; tained from the Publications Services of the Federal Re- (2) Whether the requested information is intended for serve Board, 20th Street and Constitution Avenue, N.W., commercial use, and whether the requester represents an Washington, D.C. 20551 (pedestrian entrance is on C educational or noncommercial scientific institution, or Street, N.W.). Subscription or other charges may apply. news media; (3) A statement agreeing to pay the applicable fees, or a Section 271.4—Records available for public statement identifying any fee limitation desired, or a inspection and copying. request for a waiver or reduction of fees that satisfies section 271.9(f). (d) Defective requests. The Committee need not accept or (a) Types of records made available. Unless they were process a request that does not reasonably describe the published promptly and made available for sale or without records requested or that does not otherwise comply with charge, certain records shall be made available for inspec- the requirements of this section. The Committee may retion and copying at the Board's Freedom of Information turn a defective request, specifying the deficiency. The Office pursuant to 5 U.S.C. 552(a)(2). requester may submit a corrected request, which will be (b) Reading room procedures. (1) Information available treated as a new request. under this section is available for inspection and copying, from 9:00 a.m. to 5:00 p.m. weekdays, at the Free- Section 271.6—Processing requests. dom of Information Office of the Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551 (the pedes- (a) Receipt of requests. The date of receipt for any request, trian entrance is on C Street, N.W.). including one that is addressed incorrectly or that is re- (2) The Committee may determine that certain classes of ferred to the Committee by another agency or by a Federal publicly available filings shall be made available for Reserve Bank, is the date the Secretary of the Committee inspection and copying only at the Federal Reserve actually receives the request. Bank where those records are maintained. (b) Priority of responses. The Committee shall normally (c) Electronic records. Information available under this process requests in the order they are received. However, section that was created on or after November 1, 1996, in the Secretary's discretion, or upon a court order in a shall also be available on the Board's website, found at matter to which the Committee is a party, a particular http://www.bog.frb.fed.us. request may be processed out of turn. (d) Privacy protection. The Committee may delete identify- (c) Expedited processing. Where a person requesting expeing details from any record to prevent a clearly unwar- dited access to records has demonstrated a compelling ranted invasion of personal privacy. need for the records, or where the Committee has determined to expedite the response, the Committee shall pro- Section 271.5—Records available to the public on cess the request as soon as practicable. request. (1) To demonstrate a compelling need for expedited processing, the requester shall provide a certified statement, a sample of which may be obtained from the (a) Types of records made available. All records of the Board's Freedom of Information Office. The statement, Committee that are not available under sections 271.3 and certified to be true and correct to the best of the request- 271.4 shall be made available upon request, pursuant to the er' s knowledge and belief, shall demonstrate that: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 (i) The failure to obtain the records on an expedited quester elects to take delivery of the documents at the basis could reasonably be expected to pose an immi- Board's Freedom of Information Office or makes other nent threat to the life or physical safety of an individ- acceptable arrangements, or the Committee deems it ual; or appropriate to send the documents by another means. (ii) The requester is a representative of the news (2) The Committee shall provide a copy of the record in media, as defined in section 271.2, and there is ur- any form or format requested if the record is readily gency to inform the public concerning actual or al- reproducible by the Committee in that form or format, leged Committee activity. but the Committee need not provide more than one copy (2) In response to a request for expedited processing, the of any record to a requester, Secretary of the Committee shall notify a requester of (h) Appeal of denial of request. Any person denied access the determination within ten working days of receipt of to Committee records requested under section 271.5 may the request. In exceptional situations, the Secretary of file a written appeal with the Committee, as follows: the Committee has the discretion to waive the formality (1) The appeal shall prominently display the phrase of certification. If the Secretary of the Committee denies FREEDOM OF INFORMATION ACT APPEAL on the a request for expedited processing, the requester may file first page, and shall be addressed to the Secretary of the an appeal pursuant to the procedures set forth in para- Committee, Federal Open Market Committee, 20th & C graph (i) of this section, and the Committee shall re- Street, N.W., Washington, D.C. 20551; or sent by facspond to the appeal within ten working days after the simile to the Secretary of the Committee, (202) 452appeal was received by the Committee. 2921. (d) Time limits. The time for response to requests shall be (2) An initial request for records may not be combined 20 working days, except: in the same letter with an appeal. (1) In the case of expedited treatment under para- (3) The Committee, or such member of the Committee graph (c) of this section; as is delegated the authority, shall make a determination (2) Where the running of such time is suspended for regarding any appeal within 20 working days of actual payment of fees pursuant to section 271.9(b)(2); receipt of the appeal by the Secretary, and the determina- (3) In unusual circumstances, as defined in 5 U.S.C. tion letter shall notify the appealing party of the right to 552(a)(6)(B). In such circumstances, the time limit may seek judicial review of such denial. be extended for a period of time not to exceed: (i) 10 working days as provided by written notice to the requester, setting forth the reasons for the extension and the date on which a determination is ex- Section 271.7—Exemptions from disclosure. pected to be dispatched; or (ii) Such alternative time period as mutually agreed to by the Secretary of the Committee and the requester (a) Types of records exempt from disclosure. Pursuant to when the Secretary of the Committee notifies the 5 U.S.C. 552(b), the following records of the Committee requester that the request cannot be processed in the are exempt from disclosure under this part: specified time limit. (1) National defense. Any information that is specifi- (e) Response to request. In response to a request that cally authorized under criteria established by an Execusatisfies section 271.5, an appropriate search shall be con- tive Order to be kept secret in the interest of national ducted of records of the Committee in existence on the date defense or foreign policy and is in fact properly classiof receipt of the request, and a review made of any respon- fied pursuant to the Executive Order. sive information located. The Secretary shall notify the (2) Internal personnel rules and practices. Any informarequester of: tion related solely to the internal personnel rules and (1) The Committee's determination of the request; practices of the Board. (2) The reasons for the determination; (3) Statutory exemption. Any information specifically (3) The amount of information withheld; exempted from disclosure by statute (other than 5 U.S.C. (4) The right of the requester to appeal to the Committee 552b), if the statute: any denial or partial denial, as specified in paragraph (i) (i) Requires that the matters be withheld from the of this section; and public in such a manner as to leave no discretion on (5) In the case of a denial of a request, the name and title the issue; or or position of the person responsible for the denial. (ii) Establishes particular criteria for withholding or (f) Referral to another agency. To the extent a request refers to particular types of matters to be withheld. covers documents that were created by, obtained from, or (4) Trade secrets; commercial or financial information. classified by another agency, the Committee may refer the Any matter that is a trade secret or that constitutes request to that agency for a response and inform the commercial or financial information obtained from a requester promptly of the referral. person and that is privileged or confidential. (g) Providing responsive records. (1) Copies of requested (5) Inter- or intra-agency memorandums. Information records shall be sent to the requester by regular U.S. mail contained in inter- or intra-agency memorandums or to the address indicated in the request, unless the re- letters that would not be available by law to a party Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 1998 (other than an agency) in litigation with an agency, Section 271.8—Subpoenas. including, but not limited to: (i) Memorandums; (ii) Reports; (a) Advice by person served. If any person, whether or not (iii) Other documents prepared by the staffs of the an officer or employee of the Committee, of the Board of Committee, Board or Federal Reserve Banks; and Governors of the Federal Reserve System, or of a Federal (iv) Records of deliberations of the Committee and of Reserve Bank, has information of the Committee that may discussions at meetings of the Committee or its staff. not be disclosed by reason of section 271.7 and in connec- (6) Personnel and medical files. Any information con- tion therewith is served with a subpoena, order, or other tained in personnel and medical files and similar files the process requiring his personal attendance as a witness or disclosure of which would constitute a clearly unwar- the production of documents or information upon any ranted invasion of personal privacy. proceeding, he should promptly inform the Secretary of the (7) Information compiled for law enforcement purposes. Committee of such service and of all relevant facts, includ- Any records or information compiled for law enforce- ing the documents and information requested and any facts ment purposes, to the extent permitted under 5 U.S.C. that may be of assistance in determining whether such 552(b)(7). documents or information should be made available; and (8) Examination, inspection, operating, or condition re- he should take action at the appropriate time to inform the ports, and confidential supervisory information. Any court or tribunal that issued the process, and the attorney matter that is contained in or related to examination, for the party at whose instance the process was issued, if operating, or condition reports prepared by, on behalf of, known, of the substance of this part. or for the use of an agency responsible for the regulation (b) Appearance by person served. Except as disclosure of or supervision of financial institutions, including a state the relevant information is authorized pursuant to this part, financial institution supervisory agency. any person who has information of the Committee and is (b) Segregation of nonexempt information. The Committee required to respond to a subpoena or other legal process shall provide any reasonably segregable portion of a record shall attend at the time and place therein mentioned and that is requested after deleting those portions that are decline to disclose such information or give any testimony exempt under this section. with respect thereto, basing his refusal upon this part. If, (c) Discretionary release. Except where disclosure is ex- notwithstanding, the court or other body orders the disclopressly prohibited by statute, regulation, or order, the Com- sure of such information, or the giving of such testimony, mittee may authorize the release of records that are exempt the person having such information of the Committee shall from mandatory disclosure whenever the Committee or continue to decline to disclose such information and shall designated Committee members determines that such dis- promptly report the facts to the Committee for such action closure would be in the public interest. as the Committee may deem appropriate. (d) Delayed release. Publication in the Federal Register or availability to the public of certain information may be delayed if immediate disclosure would likely: Section 271.9—Fee schedules; waiver of fees. (1) Interfere with accomplishing the objectives of the Committee in the discharge of its statutory functions; (2) Interfere with the orderly conduct of the foreign (a) Fee schedules. The fees applicable to a request for affairs of the United States; records pursuant to sections 271.4 and 271.5 are set forth (3) Permit speculators or others to gain unfair profits or in Appendix A to this section. These fees cover only the other unfair advantages by speculative trading in securi- full allowable direct costs of search, duplication, and reties or otherwise; view. No fees will be charged where the average cost of (4) Result in unnecessary or unwarranted disturbances in collecting the fee (calculated at $5.00) exceeds the amount the securities markets; of the fee. (5) Interfere with the orderly execution of the objectives (b) Payment procedures. The Secretary may assume that a or policies of other government agencies; or person requesting records pursuant to section 271.5 will (6) Impair the ability to negotiate any contract or other- pay the applicable fees, unless the request includes a limiwise harm the commercial or financial interest of the tation on fees to be paid or seeks a waiver or reduction of United States, the Committee, the Board, any Federal fees pursuant to paragraph (f) of this section. Reserve Bank, or any department or agency of the (1) Advance notification of fees. If the estimated charges United States. are likely to exceed $100, the Secretary of the Commit- (e) Prohibition against disclosure. Except as provided in tee shall notify the requester of the estimated amount, this part, no officer, employee, or agent of the Committee unless the requester has indicated a willingness to pay or any Federal Reserve Bank shall disclose or permit the fees as high as those anticipated. Upon receipt of such disclosure of any unpublished information of the Commit- notice, the requester may confer with the Secretary to tee to any person (other than Committee officers, employ- reformulate the request to lower the costs. ees, or agents properly entitled to such information for the (2) Advance payment. The Secretary may require adperformance of official duties). vance payment of any fee estimated to exceed $250. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 Secretary may also require full payment in advance significantly to public understanding of the operation or where a requester has previously failed to pay a fee in a activities of the government, and that the disclosure of timely fashion. The time period for responding to re- information is not primarily in the commercial interest quests under section 271.6(d), and the processing of the of the requester. In making this determination, the folrequest shall be suspended until the Secretary receives lowing factors shall be considered: the required payment. (i) Whether the subject of the records concerns the (3) Late charges. The Secretary may assess interest operations or activities of the government; charges when fee payment is not made within 30 days of (ii) Whether disclosure of the information is likely to the date on which the billing was sent. Interest is at the contribute significantly to public understanding of rate prescribed in 31 U.S.C. 3717 and accrues from the government operations or activities; date of the billing. (iii) Whether the requester has the intention and abil- (c) Categories of uses. The fees assessed depend upon the ity to disseminate the information to the public; intended use for the records requested. In determining (iv) Whether the information is already in the public which category is appropriate, the Secretary shall look to domain; the intended use set forth in the request for records. Where (v) Whether the requester has a commercial interest a requester's description of the use is insufficient to make a that would be furthered by the disclosure; and, if so, determination, the Secretary may seek additional clarifica- (vi) Whether the magnitude of the identified commertion before categorizing the request. cial interest of the requester is sufficiently large, in (1) Commercial use. The fees for search, duplication, comparison with the public interest in disclosure, that and review apply when records are requested for com- disclosure is primarily in the commercial interest of mercial use. the requester. (2) Educational, research, or media use. The fees for (2) Contents of request for waiver. A request for a duplication apply when records are not sought for com- waiver or reduction of fees shall include: mercial use, and the requester is a representative of the (i) A clear statement of the requester's interest in the news media or an educational or noncommercial scien- documents; tific institution, whose purpose is scholarly or scientific (ii) The use proposed for the documents and whether research. The first 100 pages of duplication, however, the requester will derive income or other benefit for will be provided free. such use; (3) All other uses. For all other requests, the fees for (iii) A statement of how the public will benefit from document search and duplication apply. The first two such use and from the Committee's release of the hours of search time and the first 100 pages of duplica- documents; tion, however, will be provided free. (iv) A description of the method by which the infor- (d) Nonproductive search. Fees for search and review may mation will be disseminated to the public; and be charged even if no responsive documents are located or (v) If specialized use of the information is contemif the request is denied. plated, a statement of the requester's qualifications (e) Aggregated requests. A requester may not file multiple that are relevant to that use. requests at the same time, solely in order to avoid payment (3) Burden of proof. The burden shall be on the requester of fees. If the Secretary reasonably believes that a requester to present evidence or information in support of a reis separating a request into a series of requests for the quest for a waiver or reduction of fees. purpose of evading the assessment of fees, the Secretary (4) Determination by Secretary. The Secretary shall may aggregate any such requests and charge accordingly. It make a determination on the request for a waiver or is considered reasonable for the Secretary to presume that reduction of fees and shall notify the requester accordmultiple requests of this type made within a 30-day period ingly. A denial may be appealed to the Committee in have been made to avoid fees. accordance with section 271.6(h). (f) Waiver or reduction of fees. A request for a waiver or (g) Employee requests. In connection with any request by reduction of the fees, and the justification for the waiver, an employee, former employee, or applicant for employshall be included with the request for records to which it ment, for records for use in prosecuting a grievance or pertains. If a waiver is requested and the requester has not complaint of discrimination against the Committee, fees indicated in writing an agreement to pay the applicable shall be waived where the total charges (including charges fees if the waiver request is denied, the time for response to for information provided under the Privacy Act of 1974 the request for documents, as set forth in section 271.6(d), (5 U.S.C. 552a) are $50 or less; but the Secretary may shall not begin until a determination has been made on the waive fees in excess of that amount. request for a waiver or reduction of fees. (h) Special services. The Secretary may agree to provide, (1) Standards for determining waiver or reduction. The and set fees to recover the costs of, special services not Secretary shall grant a waiver or reduction of fees where covered by the Freedom of Information Act, such as certiit is determined both that disclosure of the information is fying records or information and sending records by spein the public interest because it is likely to contribute cial methods such as express mail or overnight delivery. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 1998 Appendix A to Section 271.9—Freedom of Information homa, controlling deposits of $64.9 million, representing Fee Schedule less than 1 percent of the total deposits in depository institutions in the state. Duplication: Photocopy, per standard page $ .10 Interstate Banking Analysis Paper copies of microfiche, per frame $ .10 Duplicate Microfiche, per microfiche $ .35 Section 3(d) of the BHC Act, as amended by Section 101 of the Riegle-Neal Interstate Banking and Branching Effi- Search and review: ciency Act of 1994, allows the Board to approve an appli- Clerical/Technical, hourly rate $20.00 cation by a bank holding company to acquire a bank Professional/Supervisory, hourly rate $38.00 located in a state other than the home state of such bank Manager/Senior Professional, hourly rate $65.00 holding company if certain conditions are met.2 For pur- Computer search and production: poses of the BHC Act, the home state of First National is Arkansas, and First National proposes to acquire a bank in Computer operator search, hourly rate $32.00 Oklahoma. The conditions for an interstate acquisition Tapes (cassette) per tape $ 6.00 Tapes (cartridge), per tape $ 9.00 under section 3(d) of the BHC Act are met in this case.3 Tapes (reel), per tape $18.00 Diskettes (3Vi"), per diskette $ 4.00 Competitive Considerations Diskettes (SW), per diskette $ 5.00 Computer Output (PC), per minute $ .10 The BHC Act prohibits the Board from approving a pro- Computer Output (mainframe) actual cost posal submitted under section 3 of the Act if the proposal would result in a monopoly or if the effect of the proposal ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT may be to substantially lessen competition in any relevant Orders Issued Under Section 3 of the Bank Holding market unless the Board finds that the anticompetitive Company Act effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transac- First National Security Company tion in meeting the convenience and needs of the commu- DeQueen, Arkansas nity to be served. First National and First Financial compete directly in the Order Approving the Acquisition of a Bank Holding McCurtain County, Oklahoma, banking market.4 First Na- Company tional is the fourth largest commercial banking organization in the McCurtain County banking market, controlling First National Security Company, DeQueen, Arkansas deposits of approximately $41.9 million, representing ("First National"), a bank holding company within the 16.1 percent of the total deposits in commercial banking meaning of the Bank Holding Company Act ("BHC Act"), organizations in the market ("market deposits").5 First has requested the Board's approval under section 3 of the Financial is the sixth largest commercial banking institu- BHC Act (12 U.S.C. § 1842) to acquire all of the voting tion in the market, controlling deposits of approximately shares of First Financial Corporation of Idabel ("First $23 million, representing 8.8 percent of market deposits. Financial"), and thereby acquire its subsidiary bank, First On consummation of this proposal, First National would State Bank of Idabel, both in Idabel, Oklahoma ("Bank"). become the largest commercial banking organization in the Notice of this proposal, affording interested persons an McCurtain County banking market, controlling deposits of opportunity to submit comments, has been published (62 Federal Register 53,007 (1997)). The time for filing 2. Pub. L. No. 103-328, 108 Stat. 2338 (1994). A bank holding comments has expired, and the Board has considered the company's home state is the state in which the operations of the bank proposal and all comments received in light of the factors holding company's banking subsidiaries were principally conducted set forth in section 3 of the BHC Act. on July 1, 1966, or the date on which the company became a bank First National operates subsidiary banks in Arkansas and holding company, whichever is later. 3. 12 U.S.C. §§ 1842(c)(1)(A) and (B) and 1842(d)(2)(A) and (B). Oklahoma. First National is the 144th largest depository First National is adequately capitalized and adequately managed. On institution in Oklahoma, controlling approximately consummation of the proposal, First National would control less than $41.9 million in deposits, representing less than 1 percent 10 percent of the total amount of deposits of insured depository of total deposits in depository institutions in the state.1 First institutions in the United States, and less than 30 percent of the total Financial is the 216th largest depository institution in Okla- amount of deposits of insured depository institutions in Oklahoma. In addition, Bank has been in existence for the minimum period of time homa, controlling approximately $23 million in deposits. necessary to satisfy age requirements established by applicable state On consummation of this proposal, First National would law. See Okla. Stat. Ann. tit. 6 § 506(D)(1)(a). All other requirements become the 96th largest depository institution in Okla- of section 3(d) of the BHC Act also would be met on consummation of the proposal. 4. The McCurtain County banking market is approximated by 1. Deposit data are as of June 30, 1996. In this context, depository McCurtain County, Oklahoma. institutions include commercial banks, savings banks, and savings 5. Market share data are as of June 30, 1996. No savings associaassociations. tions operate in the McCurtain County banking market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 approximately $64.9 million, representing 24.9 percent of is specifically conditioned on compliance by First National market deposits. Concentration in the market, as measured with all the commitments made in connection with this by the Herfindahl-Hirschman Index ("HHI"), would in- application. For the purpose of this action, the commitcrease by 285 points to 1971.6 ments and conditions relied on by the Board in reaching its In evaluating the competitive effects of the proposal in decision are deemed to be conditions imposed in writing the McCurtain County banking market, the Board has by the Board in connection with its findings and decision considered several factors. The McCurtain County banking and, as such, may be enforced in proceedings under applimarket is a relatively small rural market in southeastern cable law. Oklahoma and six competitors would remain in the market The acquisition of First Financial shall not be consumafter consummation of the proposal, including a large mated before the fifteenth calendar day following the effecmultistate bank holding company. Each of the five banks tive date of this order, or later than three months after the that would compete with First National after consumma- effective date of this order, unless such period is extended tion would have a market share of more than 5 percent, and for good cause by the Board or by the Federal Reserve three of the banks control more than 15 percent of market Bank of St. Louis, acting pursuant to delegated authority. deposits. The Department of Justice has reviewed the pro- By order of the Board of Governors, effective Novemposal and advised the Board that consummation of the ber 24, 1997. proposal would not likely have any significantly adverse competitive effects in the McCurtain County banking mar- Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and ket or any other relevant banking market. Governors Kelley, Phillips, Meyer, Ferguson, and Gramlich. Based on all the facts of record, the Board concludes that consummation of the proposal would not result in any JENNIFER J. JOHNSON Deputy Secretary of the Board significantly adverse effects on competition or on the concentration of banking resources in the McCurtain County banking market or any other relevant banking market. Orders Issued Under Section 4 of the Bank Holding Company Act Other Factors First Union Corporation The BHC Act also requires the Board to consider the Charlotte, North Carolina financial and managerial resources and future prospects of Order Approving Notice to Engage in Nonbanking the companies and banks involved in the proposal, the Activities convenience and needs of the communities to be served, and certain supervisory factors. The facts of record include supervisory reports of examination assessing the financial First Union Corporation, Charlotte, North Carolina ("First and managerial resources of the organizations and financial Union"), a bank holding company within the meaning of information provided by First National. Based on all the the Bank Holding Company Act ("BHC Act"), has refacts of record, the Board concludes that the financial and quested the Board's approval under section 4(c)(8) of the managerial resources and the future prospects of First BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.24 of National, First Financial, and their respective subsidiary the Board's Regulation Y (12 C.F.R. 225.24) to acquire all banks, are consistent with approval, as are the other super- the voting shares of Wheat First Butcher Singer, Inc. visory factors the Board must consider under section 3 of ("Wheat First"), and thereby acquire control of its wholly the BHC Act. In addition, considerations relating to the owned subsidiary, Wheat, First Securities, Inc. ("Compaconvenience and needs of the communities to be served are ny"), both of Richmond, Virginia.1 First Union would consistent with approval of the application. thereby engage in the following activities: (1) Underwriting and dealing in, to a limited extent, all types of debt and equity securities, other than ownership Conclusion interests in open-end investment companies, that a member bank may not underwrite or deal in ("bank-ineligible Based on the foregoing, and in light of all the facts of securities"); record, the Board has determined that the application (2) Providing financial and investment advisory sershould be, and hereby is, approved. The Board's approval vices, pursuant to section 225.28(b)(6) of Regulation Y (12 C.F.R. 225.28(b)(6)); 6. Under the revised Merger Guidelines, 49 Federal Register 26,823 (3) Providing securities brokerage, private placement, (June 29, 1984), a market above 1800 is considered to be highly riskless principal, futures commission merchant, and concentrated. The Department of Justice has informed the Board that a other transactional services, pursuant to section bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the 1. First Union would merge Wheat First into itself, and, immedihigher than normal HHI thresholds for screening bank mergers for ately thereafter, merge the existing section 20 subsidiary of First anticompetitive effects implicitly recognize the competitive effect of Union, First Union Capital Markets Corp., Charlotte, North Carolina limited-purpose lenders and other non-depository financial entities. ("FUCMC"), into Company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 Federal Reserve Bulletin • January 1998 225.28(b)(7) of Regulation Y (12 C.F.R. 225.28(b)(7)); also has determined that conduct of the proposed activities and is consistent with section 20 of the Glass-Steagall Act, (4) Underwriting and dealing in government obligations provided that the company engaged in underwriting and and money market instruments in which state member dealing activities derives no more than 25 percent of its banks may underwrite and deal under 12 U.S.C. §§ 335 gross revenues from underwriting and dealing bankand 24(7) ("bank-eligible securities"), engaging in in- ineligible securities over a two-year period.5 First Union vesting and trading activities, and buying and selling has committed that Company will conduct its bankbullion and related activities, pursuant to section ineligible securities underwriting and dealing activities 225.28(b)(8) of Regulation Y (12 C.F.R. 225.28(b)(8)). subject to the Board's 25-percent revenue limit.6 As a condition of this order, First Union also would be required Notice of the proposal, affording interested persons an to conduct its bank-ineligible securities activities subject to opportunity to submit comments, has been published the Operating Standards for section 20 subsidiaries.7 (62 Federal Register 55,403 (1997)). The time for filing comments has expired, and the Board has considered the Other Activities Approved by Regulation notice and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. The Board previously has determined by regulation that First Union, with total consolidated assets of approxi- the proposed financial and investment advisory services; mately $155 billion, is the sixth largest banking organiza- securities brokerage, riskless principal, private placement, tion in the United States.2 First Union operates bank sub- futures commission merchant, and other transactional sersidiaries in 12 states and the District of Columbia, and vices; and underwriting and dealing in bank-eligible securiengages through subsidiaries in a broad range of permissi- ties, investing and trading services, and buying and selling ble nonbanking activities. First Union currently engages in of bullion and related activities to be conducted by Comlimited underwriting and is dealing in bank-ineligible secu- pany after its acquisition by First Union are closely related rities that the Board has determined are permissible under to banking within the meaning of section 4(c)(8) of the section 20 of the Glass-Steagall Act (12 U.S.C. § 377).3 BHC Act.8 First Union has committed that it will conduct Company is, and will continue to be, a broker-dealer each of these activities in accordance with the BHC Act, registered with the Securities and Exchange Commission Regulation Y, and the relevant Board interpretations and ("SEC") under the Securities Exchange Act of 1934 orders.9 (15 U.S.C. § 78a et seq.) ("1934 Act") and a member of the National Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is and will remain (D.C. Cir. 1990); Citicorp, et al, 73 Federal Reserve Bulletin 473 subject to the recordkeeping and reporting obligations, (1987), aff'd sub nom. Securities Industry Ass'n v. Board of Goverfiduciary standards, and other requirements of the 1934 nors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, Act, the SEC, and the NASD. Following consummation of denied, 486 U.S. 1059 (1988); as modified by Review of Restrictions on Director, Officer and Employee Interlocks, Cross-Marketing Activithe proposal, Company also would be registered as a ties, and the Purchase and Sale of Financial Assets between a Secfutures commission merchant with the Commodity Futures tion 20 Subsidiary and an Affiliated Bank or Thrift, 61 Federal Trading Commission ("CFTC") and would be subject to Register 57,679 (1996), and Amendments to Restrictions in the the recordkeeping and reporting obligations, fiduciary stan- Board's Section 20 Orders, 62 Federal Register 45,295 (1997) (collecdards, and other requirements of the Commodity Exchange tively, "Section 20 Orders"). 5. Compliance with the revenue limitation shall be calculated in Act (7 U.S.C. §2 et seq.) and the CFTC. accordance with the method stated in the Section 20 Orders, as modified by the Order Approving Modifications to the Section 20 Underwriting and Dealing Activities Orders, 75 Federal Reserve Bulletin 751 (1989), and 10 Percent Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies Engaged in Underwriting and Dealing in Securi- The Board has determined—subject to the framework of ties, 61 Federal Register 48,953 (1996), and Revenue Limit on Bankprudential limitations to address the potential for conflicts Ineligible Activities of Subsidiaries of Bank Holding Companies Enof interests, unsound banking practices, or other adverse gaged in Underwriting and Dealing in Securities, 61 Federal Register effects—that the proposed activities of underwriting and 68,750 (1996) (collectively, "Modification Orders"). 6. Company may provide services that are necessary incidents to the dealing in bank-ineligible securities are so closely related proposed underwriting and dealing activities. Unless First Union to banking as to be a proper incident thereto within the receives specific approval under section 4(c)(8) of the BHC Act to meaning of section 4(c)(8) of the BHC Act.4 The Board conduct the activities independently, Company must treat any revenues from the incidental activities as bank-ineligible revenues subject to the Board's revenue limitation. 7. 12 C.F.R. 225.200. 2. Asset and ranking data are as of September 30, 1997, and include 8. See 12 C.F.R. 225.28(b)(6), (7), and (8). transactions approved by the Board after that date. 9. Wheat First also engages in certain real estate and insurance 3. See First Union Corporation, 81 Federal Reserve Bulletin 726 activities that are not permissible for a bank holding company under (1995); First Union Corporation, 75 Federal Reserve Bulletin 645 section 4 of the BHC Act. First Union has committed that it will (1989). conform the real estate activities of Wheat First to the requirements of 4. See J.P. Morgan & Co. Incorporated, et al., 75 Federal Reserve section 4 of the BHC Act within two years after consummation of the Bulletin 192 (1989), aff'd sub nom. Securities Industries Ass'n v. proposal, and will cease making any impermissible real estate invest- Board of Governors of the Federal Reserve System, 900 F.2d 360 ments immediately on consummation of the proposal. First Union also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 Proper Incident to Banking Standard mation of the proposal, therefore, would have a de minimis effect on competition in the market for these services, and In order to approve the proposal, the Board also must the Board has concluded that the proposal would not result determine that the proposed activities are a proper incident in any significantly adverse competitive effects in any to banking, that is, that the proposed transaction "can relevant market. reasonably be expected to produce benefits to the public . . . The Board expects that the proposed acquisition would that outweigh possible adverse effects, such as undue con- provide added convenience to customers of both First centration of resources, decreased or unfair competition, Union and Company. First Union has stated that the acquiconflicts of interests, or unsound banking practices."10 As sition would expand the range of products and services part of its evaluation of these factors, the Board considers available to its customers and those of Company. First the financial condition and managerial resources of the Union also has stated that the proposed transaction would notificant and its subsidiaries and the effect the transaction result in operational efficiencies that would allow it to would have on such resources.11 become a more effective competitor. In considering the financial resources of the notificant, As noted above, First Union has committed that, followthe Board has reviewed the capitalization of First Union ing the proposed acquisition, Company will conduct its and Wheat First in accordance with the standards set forth bank-ineligible securities underwriting and dealing activiin the Section 20 Orders. The Board finds the capitalization ties in accordance with the prudential framework estabof each to be consistent with approval of the proposal. The lished by the Board's Section 20 Orders. Under the frame- Board's determination is based on all the facts of record, work and conditions established in this order and the including First Union's projections of the volume of the Section 20 Orders, and based on all the facts of record, the bank-ineligible underwriting and dealing activities of Com- Board concludes that Company's proposed underwriting pany. and dealing activities in bank-ineligible securities are not The Board also has reviewed the managerial resources likely to result in significantly adverse effects that would of each of the entities involved in the proposal in light of outweigh the public benefits. Similarly, the Board finds no examination reports and the Board's supervisory experi- evidence that Company's proposed riskless principal, prience with First Union and FUCMC. The Board also has vate placement, and other nonbanking activities— considered that First Union has established policies and conducted under the framework and conditions established procedures to ensure compliance with this order and the in this order and Regulation Y—would likely result in any Section 20 Orders, including computer, audit, and account significantly adverse effects that would outweigh the public systems, internal risk management controls, and the neces- benefits of the proposal. sary operational and managerial infrastructure. On the ba- Based on all the facts of record, the Board has detersis of these and all the facts of record, including the mined that performance of the proposed activities by First commitments provided in this case and the proposed man- Union can reasonably be expected to produce public beneagerial structure and risk management systems of Com- fits. Accordingly, the Board has determined that perforpany, the Board has concluded that financial and manage- mance of the proposed activities by First Union is a proper rial considerations are consistent with approval of the incident to banking for purposes of section 4(c)(8) of the notice. BHC Act. The Board has carefully considered the competitive effects of the proposed acquisition. To the extent that Conclusion FUCMC and Company offer different types of products and services, the proposed acquisition would result in no On the basis of all the facts of record, the Board has loss of competition. In those markets in which FUCMC's determined that the notice should be, and hereby is, apand Company's product and service offerings overlap, such proved, subject to all the terms and conditions in this order as municipal finance underwriting, research, and placement and the Section 20 Orders, as modified by the Modification and investment advisory activities for mutual funds, there Orders. The Board's approval of the proposal extends only are numerous existing and potential competitors. Consum- to activities conducted within the limitations of those orders and this order, including the Board's reservation of authority to establish additional limitations to ensure that First Union's activities are consistent with safety and has committed that it will conform the insurance activities of Wheat First to the requirements of section 4 of the BHC Act within two years soundness, avoidance of conflicts of interests, and other after consummation of the proposal, and will cease selling new relevant considerations under the BHC Act. Underwriting insurance policies or annuities within six months after consummation and dealing in any manner other than as approved in this of the proposal. order and the Section 20 Orders (as modified by the Modi- First Union also has committed that it will conform its investment in fication Orders) is not within the scope of the Board's certain limited partnerships that serve as investment vehicles for certain Wheat First employees to the requirements of section 4 of the approval and is not authorized for First Union. BHC Act within two years after consummation of the proposal, and The Board's determination is subject to all the terms and will terminate the mutual fund distribution activities currently conconditions set forth in Regulation Y, including those in ducted by Wheat First immediately on consummation of the proposal. sections 225.7 and 225.25(c) of Regulation Y (12 C.F.R. 10. See 12 U.S.C. § 1843(c)(8). 11 .See 12 C.F.R. 225.26. 225.7 and 225.25(c)), and to the Board's authority to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 Federal Reserve Bulletin • January 1998 require such modification or termination of the activities of other transactional services, pursuant to section a bank holding company or any of its subsidiaries as the 225.28(b)(7) of Regulation Y (12 C.F.R. 225.28(b)(7)); Board finds necessary to ensure compliance with, and to and prevent evasion of, the provisions of the BHC Act and the (4) Providing investing and trading services, pursuant to Board's regulations and orders issued thereunder. The section 225.28(b)(8) of Regulation Y (12 C.F.R. Board's decision is specifically conditioned on compliance 225.28(b)(8)). with all the commitments made in connection with this In addition, USB proposes that Company engage in lendnotice, including the commitments discussed in this order, ing and loan servicing, activities related to lending, lease and the conditions set forth in this order and the above- financing, management consulting, and insurance agency noted Board regulations and orders. These commitments activities that are related to Company's underwriting and and conditions are deemed to be conditions imposed in dealing, private placement, riskless principal, and other writing by the Board in connection with its findings and securities activities.2 These activities would be conducted decisions, and, as such, may be enforced in proceedings in accordance with the Board's Regulation Y.3 under applicable law. Notice of the proposal, affording interested persons an The proposal shall not be consummated later than three opportunity to submit comments, has been published months after the effective date of this order, unless such (62 Federal Register 53,784 (1997)). The time for filing period is extended for good cause by the Board or by the comments has expired, and the Board has considered the Federal Reserve Bank of Richmond acting pursuant to notice and all comments received in light of the factors set delegated authority. forth in section 4(c)(8) of the BHC Act. By order of the Board of Governors, effective Novem- USB, with total consolidated assets of approximately ber 26, 1997. $71.8 billion, is the 14th largest banking organization in the United States.4 USB operates bank subsidiaries in Voting for this action: Chairman Greenspan and Governors Kelley, 17 states, and engages through subsidiaries in a broad Phillips, Ferguson, and Gramlich. Absent and not voting: Vice Chair range of permissible nonbanking activities. Company is Rivlin and Governor Meyer. and, following consummation of the proposal, will continue to be registered as a broker-dealer with the Securities JENNIFER J. JOHNSON and Exchange Commission ("SEC") under the Securities Deputy Secretary of the Board Exchange Act of 1934 (15 U.S.C. § 78a et seq.) ("1934 Act") and a member of the National Association of Securi- U.S. Bancorp ties Dealers, Inc. ("NASD"). Accordingly, Company is Minneapolis, Minnesota and will remain subject to the recordkeeping and reporting obligations, fiduciary standards, and other requirements of Order Approving Notice to Engage in Nonbanking the 1934 Act, the SEC, and the NASD. Following consum- Activities mation of the proposal, Company also would be registered as a futures commission merchant with the Commodity U.S. Bancorp, Minneapolis, Minnesota ("USB"), a bank Futures Trading Commission ("CFTC") and would be holding company within the meaning of the Bank Holding subject to the recordkeeping and reporting obligations, Company Act ("BHC Act"), has requested the Board's fiduciary standards, and other requirements of the Comapproval under section 4(c)(8) of the BHC Act (12 U.S.C. modity Exchange Act (7 U.S.C. §2 et seq.) and the CFTC. § 1843(c)(8)) and section 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to engage de novo through its wholly Underwriting and Dealing Activities owned subsidiary, U.S. Bancorp Investments, Inc., Minneapolis, Minnesota ("Company"), in the following activi- The Board has determined—subject to the framework of ties:1 prudential limitations to address the potential for conflicts (1) Underwriting and dealing in, to a limited extent, of interests, unsound banking practices, or other adverse certain municipal revenue bonds (including certain uneffects—that the proposed activities of underwriting and rated municipal revenue bonds), 1 -4 family mortgagedealing in bank-ineligible securities are so closely related related securities, consumer receivable-related securito banking as to be a proper incident thereto within the ties, and commercial paper (collectively, "bankmeaning of section 4(c)(8) of the BHC Act.5 ineligible securities"); (2) Providing financial and investment advisory services, pursuant to section 225.28(b)(6) of Regulation Y 2. USB is authorized to engage in insurance agency activities (12 C.F.R. 225.28(b)(6)); pursuant to section 4(c)(8)(G) of the BHC Act, which authorizes those (3) Providing securities brokerage, private placement, bank holding companies that engaged in insurance agency activities riskless principal, futures commission merchant, and prior to 1971 with Board approval to engage in insurance agency activities. 3. Section 225.28(b)(1), (2), (3), (9), and (ll)(vii) of Regulation Y (12 C.F.R 225.28(b)(1), (2), (3), (9), and (1 l)(vii». 1. Company currently is a wholly owned subsidiary of USB's lead 4. Asset and ranking data are as of June 30, 1997. bank subsidiary, U.S. Bank National Association, Minneapolis, Minne- 5. See Citicorp, et al., 73 Federal Reserve Bulletin 473 (1987), aff'd sota ("US Bank"). sub nom. Securities Industry Ass'n v. Board of Governors of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 63 The Board also has determined that conduct of the that outweigh possible adverse effects, such as undue conproposed activities is consistent with section 20 of the centration of resources, decreased or unfair competition, Glass-Steagall Act (12 U.S.C. § 377), provided that the conflicts of interests, or unsound banking practices."10 As company engaged in underwriting and dealing activities part of its evaluation of these factors, the Board considers derives no more than 25 percent of its gross revenues from the financial condition and managerial resources of the underwriting and dealing in bank-ineligible securities over notificant and its subsidiaries and the effect the transaction a two-year period.6 USB has committed that Company will would have on such resources.11 The Board has carefully conduct its bank-ineligible securities underwriting and examined the financial resources, management expertise, dealing activities subject to the Board's 25-percent revenue and risk management policies of USB and its subsidiaries. limit.7 As a condition of this order, USB also would be Based on all the facts of record, the Board concludes that required to conduct its bank-ineligible securities activities financial and managerial considerations are consistent with subject to the Operating Standards for section 20 subsidiar- approval. ies.8 The Board expects that the de novo entry of Company into the market for the proposed services would provide Other Activities Approved by Regulation added convenience to USB's customers and would increase the level of competition among existing providers of The Board previously has determined by regulation that these services. As noted above, USB has committed that extending credit and servicing loans; activities related to Company will conduct its bank-ineligible securities underextending credit; leasing personal or real property; finan- writing and dealing activities in accordance with the prucial and investment advisory activities; securities broker- dential framework established by the Board's Section age, riskless principal, private placement, futures commis- 20 Orders. Under the framework and conditions estabsion merchant, and other transactional services; investment lished in this order, the Section 20 Orders, and the Modifiand trading services; management consulting; and insur- cation Orders, the Board concludes that Company's proance agency activities are closely related to banking within posed limited conduct of underwriting and dealing in the meaning of section 4(c)(8) of the BHC Act.9 USB has bank-ineligible securities is not likely to result in significommitted that it will conduct each of these activities in cantly adverse effects, such as undue concentration of accordance with the BHC Act, Regulation Y, and the resources, decreased or unfair competition, conflicts of relevant Board interpretations and orders. interests, or unsound banking practices that would outweigh the public benefits. Similarly, the Board finds no evidence that Company's riskless principal, private place- Proper Incident to Banking Standard ment, and other nonbanking activities—conducted under the framework and conditions established in this order and In order to approve the proposal, the Board also must Regulation Y—would likely result in any significantly determine that the proposed activities are a proper incident adverse effects that would outweigh the public benefits of to banking, that is, that the proposed transaction "can the proposal. Accordingly, the Board has determined that reasonably be expected to produce benefits to the public . . . performance of the proposed activities by USB is a proper incident to banking for purposes of section 4(c)(8) of the BHC Act. Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. 1059 (1988); as modified by Review of Restrictions on Director, Officer and Employee Interlocks, Cross-Marketing Activities, and the Conclusion Purchase and Sale of Financial Assets between a Section 20 Subsidiary and an Affiliated Bank or Thrift, 61 Federal Register 57,679 (1996), and Amendments to Restrictions in the Board's Section On the basis of all the facts of record, the Board has 20 Orders, 62 Federal Register 45,295 (1997) (collectively, "Section determined that the notice should be, and hereby is, ap- 20 Orders"). proved, subject to all the terms and conditions in this order 6. Compliance with the revenue limitation shall be calculated in and the Section 20 Orders, as modified by the Modification accordance with the method stated in the Section Orders, as modified by the Order Approving Modifications to the Section 20 Orders, Orders. The Board's approval of the proposal extends only 75 Federal Reserve Bulletin 751 (1989), and 10 Percent Revenue to activities conducted within the limitations of those or- Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding ders and this order, including the Board's reservation of Companies Engaged in Underwriting and Dealing in Securities, authority to establish additional limitations to ensure that 61 Federal Register 48,953 (1996), and Revenue Limit on Bank- Ineligible Activities of Subsidiaries of Bank Holding Companies En- USB's activities are consistent with safety and soundness, gaged in Underwriting and Dealing in Securities, 61 Federal Register avoidance of conflicts of interests, and other relevant con- 68,750 (1996) (collectively, "Modification Orders"). siderations under the BHC Act. Underwriting and dealing 7. Company may provide services that are necessary incidents to the in any manner other than as approved in this order and the proposed underwriting and dealing activities. Unless USB receives Section 20 Orders (as modified by the Modification Orspecific approval under section 4(c)(8) of the BHC Act to conduct the activities independently, Company must treat any revenues from the incidental activities as ineligible revenues subject to the Board's revenue limitation. 8. 12 C.F.R. 225.200. 9. See 12 C.F.R. 225.28(b)(1), (2), (3), (6), (7), (8), (9), and 10. See 12 U.S.C. § 1843(c)(8). (ll)(vii). 11. See 12 C.F.R. 225.26. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Federal Reserve Bulletin • January 1998 ders) is not within the scope of the Board's approval and is accordance with the Bank Merger Act and the Board's not authorized for USB. Rules of Procedure (12 C.F.R. 262.3(b)). As required by The Board's determination is subject to all the terms and the Bank Merger Act, reports on the competitive effects of conditions set forth in Regulation Y, including those in the merger were requested from the United States Attorney sections 225.7 and 225.25(c) of Regulation Y (12 C.F.R. General, the Office of the Comptroller of the Currency 225.7 and 225.25(c)), and to the Board's authority to ("OCC"), and the Federal Deposit Insurance Corporation require such modification or termination of the activities of ("FDIC"). The time for filing comments has expired, and a bank holding company or any of its subsidiaries as the the Board has considered the applications and all com- Board finds necessary to ensure compliance with, and to ments received in light of the factors set forth in the Bank prevent evasion of, the provisions of the BHC Act and the Merger Act and the Federal Reserve Act. Board's regulations and orders issued thereunder. The Centura is a wholly owned subsidiary of Centura Banks, Board's decision is specifically conditioned on compliance Inc., Rocky Mount, North Carolina, which is the sixth with all the commitments made in connection with this largest commercial banking organization in North Caronotice, including the commitments discussed in this order, lina, controlling $4.7 billion of deposits, representing and the conditions set forth in this order and the above- 6 percent of total deposits in commercial banking organizanoted Board regulations and orders. These commitments tions in the state.2 The branch of First Union to be acquired and conditions are deemed to be conditions imposed in controls deposits of $22.8 million, representing less than writing by the Board in connection with its findings and 1 percent of deposits in the state. On consummation of the decisions, and, as such, may be enforced in proceedings proposal, Centura Banks, Inc., would remain the sixth under applicable law. largest commercial banking organization in North Caro- The proposal shall not be consummated later than three lina. months after the effective date of this order, unless such period is extended for good cause by the Board or by the Competitive Considerations Federal Reserve Bank of Minneapolis, acting pursuant to delegated authority. The Bank Merger Act provides that the Board may not By order of the Board of Governors, effective Novem- approve an application if the effect of the acquisition is to ber 26, 1997. create a monopoly or substantially to lessen competition in any section of the country unless the Board finds that the Voting for this action: Chairman Greenspan and Governors Kelley, anticompetitive effects of the proposal are clearly out- Phillips, Ferguson, and Gramlich. Absent and not voting: Vice Chair weighed in the public interest by the probable effect of the Rivlin and Governor Meyer. proposal in meeting the convenience and needs of the community.3 In evaluating the competitive factors in this JENNIFER J. JOHNSON case, the Board has carefully considered comments that Deputy Secretary of the Board assert that the proposal would create a monopoly for banking services by eliminating Centura's only competitor in Bakersville, North Carolina. ORDERS ISSUED UNDER BANK MERGER ACT The Board and the courts have found that the relevant banking market for analyzing the competitive effects of a Centura Bank proposal must reflect commercial and banking realities and Rocky Mount, North Carolina should consist of the local area where local customers can practicably turn for alternatives.4 In making a determina- Order Approving Acquisition and Establishment of a tion on the geographic market in this case, the Board has Branch considered worker commuting patterns (as indicated by census data) and other indicia of economic integration and Centura Bank, Rocky Mount, North Carolina ("Centura"), transmission of competitive forces among depository instia state member bank, has requested the Board's approval tutions. under section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to acquire a branch of First Union National Bank, Charlotte, North Carolina ("First Union"). Centura also has applied under section 9 of the Federal Reserve Act (12 U.S.C. § 321) to 2. State data are as of June 30, 1996, and have been updated to reflect transactions as of June 30, 1997. Deposits include Centura establish a branch at the former branch location of First recent acquisition of five branches of NationsBank, N.A., Charlotte, Union.1 North Carolina. Notice of the applications, affording interested persons 3. 12 U.S.C. § 1828(c)(5). an opportunity to submit comments, has been given in 4. See St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673, 674 (1982). The key question to be considered in making this selection "is not where the parties to the merger do business or even where they compete, but where, within the area of competitive overlap, the effect 1. Centura proposes to consolidate its branch at 117 Mitchell of the merger on competition will be direct and immediate." United Avenue into First Union's branch at 114 Mitchell Avenue, both in States v. Philadelphia Nat'l Bank, 374 U.S. 321, 374 (1963); United Bakersville, North Carolina. States v. Phillipsburg Nat'l Bank, 399 U.S. 350 (1969). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 65 A commenter contends that the market for evaluating the representing approximately 16 percent of market deposits. competitive effects of this proposal should be the town of On consummation of the proposal, Centura would become Bakersville, North Carolina. Based on all the facts, and for the second largest depository institution in the Mitchell the reasons discussed herein, the Board concludes that the County banking market, controlling deposits of approxirelevant geographic market for evaluating the competitive mately $49.8 million, representing approximately 35 pereffects of this proposal is the Mitchell County, North cent of market deposits. Centura proposes to purchase a Carolina, banking market ("Mitchell County banking mar- branch of First Union, the largest competitor in the market, ket"), which is the area approximated by Mitchell County which controls approximately 52 percent of market deposand includes the town of Bakersville. its. On consummation, First Union's share of market de- Mitchell County has a population of approximately posits would decrease to approximately 35.4 percent. Be- 14,400 residents and is located in the western corner of cause First Union's share of market deposits would be North Carolina adjacent to Tennessee. Census Bureau data substantially reduced and would be acquired by a smaller for 1990 indicate that approximately 68 percent of the competitor in the market, concentration in the market, as workers who reside in Mitchell County work in the county. measured by the Herfindahl-Hirschman Index ("HHI"), The county's major employers include several large furni- would decrease approximately 522 points to 3027.6 ture manufacturers in Spruce Pine, North Carolina, that In analyzing the competitive effects of the proposal in each employ more than 200 workers. this market, the Board also has considered that the number Other facts of record indicate that Spruce Pine is the of competitors in the Mitchell County banking market center for economic activity for the county. Spruce Pine, would not change because First Union would remain as with a population of more than 2,000 residents, is the one of the county's four competing depository institutions. largest town in Mitchell County and is located in the First Union and another large bank holding company comsouthern portion of the county which contains approxi- petitor would each control at least 20 percent of market mately 60 percent of the county's residents. Spruce Pine deposits. The Department of Justice also has reviewed the has a shopping mall and a hospital. The town also has the proposal and advised the Board that consummation of the only newspaper and radio station in the county, thereby proposal would not likely have any significantly adverse providing the primary advertising media for Mitchell competitive effects in these banking markets or any rele- County's residents. Four insured depository institutions, vant banking market.7 including First Union, are located in Spruce Pine. Based on the characteristics of the market, which will Bakersville is a smaller town with a population of ap- maintain the same number of competitors, the size of the proximately 330 residents, located 11 miles from Spruce market competitors, and all other facts of record, the Board Pine. The town's two largest employers employ a total of concludes that consummation of this proposal would not 125 workers, and there is no shopping mall or hospital in have a significantly adverse effect on competition or on the Bakersville. State Highway 226 provides Bakersville's res- concentration of banking resources in the Mitchell County idents with convenient access to the commercial and health banking market or any other relevant banking market.8 care facilities in Spruce Pine. In light of these, and all facts of record, the Board Convenience and Needs Considerations concludes that Mitchell County is a local area that is economically integrated by the commercial activities con- The Board has carefully reviewed the convenience and ducted in Spruce Pine to an extent that local customers, needs factor in the Bank Merger Act, which includes a including residents in Bakersville, can practicably turn for alternatives in the area. Accordingly, the relevant banking market for assessing the competitive effects of the proposal 6. Under the revised Department of Justice Merger Guidelines, is the Mitchell County banking market and not the town of 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is considered highly concentrated. Bakersville. The Justice Department has informed the Board that a bank merger or Centura is the third largest depository institution in the acquisition generally will not be challenged (in the absence of other banking market, controlling deposits of approximately factors indicating anticompetitive effects) unless the post-merger HHI $27 million, representing approximately 19 percent of the is at least 1800 and the merger increases the HHI by more than 200 total deposits in depository institutions in the market points. The Justice Department has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects ("market deposits").5 The First Union branch that Centura implicitly recognize the competitive effect of limited-purpose lenders proposes to acquire controls deposits of $22.8 million, and other non-depository financial entities. 7. The OCC and the FDIC also have not objected to the proposal. 8. Several commenters criticize the proposal because no alternative 5. Market data are as of June 30, 1996. In this context, depository banking services will be available in Bakersville. As discussed above, institutions include commercial banks, savings banks, and savings there is a branch of First Union and two other financial institutions in associations. Market share data before consummation are based on Spruce Pine which is 11 miles from Bakersville. The record indicates calculations in which the deposits of thrift institutions are included at that residents of Mitchell County, including Bakersville's residents, 50 percent. The Board previously has indicated that thrift institutions are likely to travel to Spruce Pine as the county's center for commerhave become, or have the potential to become, significant competitors cial activity to obtain services. The Board also has considered Centuof commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin ra's record of assisting to meet the credit needs of its communities in 788 (1990); National City Corporation, 70 Federal Reserve Bulletin light of the comments and, as discussed above, concludes that this 743 (1984). record is satisfactory. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 1998 review of the records of the relevant depository institutions view of the entire record and for the facts discussed above, under the Community Reinvestment Act (12 U.S.C. § 2901 the Board concludes that convenience and needs consideret seq.) ("CRA"), in light of all the facts and comments. ations, including the CRA record of performance of Cen- Commenters maintain that Centura generally does not as- tura are consistent with approval of this proposal. sist in meeting the credit needs of its communities and, in particular, is not responsive to the credit needs of small Other Considerations businesses. As provided in the CRA, the Board has evaluated this The Board has carefully considered the financial and manfactor in light of examinations by the primary federal agerial resources and future prospects of Centura and First supervisor of the CRA performance record of the relevant Union in light of all the facts of record. The facts of record institution. An institutions's most recent CRA performance include supervisory reports of examination assessing the evaluation is a particularly important consideration in the financial and managerial resources of the organizations and applications process because it represents a detailed on-site financial information provided by Centura. The Board evaluation of the institution's overall record of perfor- notes that Centura is in satisfactory financial condition and mance under the CRA by its primary federal supervisor.9 would remain so after consummation of the proposal. In Centura received a "satisfactory" rating under the Com- addition, reports of examination assessing the managerial munity Reinvestment Act from the Federal Reserve Bank resources of Centura indicate this factor is consistent with of Richmond at its most recent performance examination, approval. as of April 1996 ("1996 Examination"). The 1996 Exami- Based on all the facts of record, the Board concludes that nation found that Centura offered a wide range of services considerations related to the financial and managerial reand products to help in meeting the credit needs of all its sources and future prospects of the institutions involved communities, including residential mortgages, residential are consistent with approval as are the factors required to construction, home improvement, small business, commer- be considered under the Federal Reserve Act. cial, consumer, agricultural, and community development loans. There was no evidence of prohibited discrimination Conclusion or other illegal practices at Centura. Examiners considered the products and services offered Based on the foregoing and all the facts of record, the by Centura to be responsive to the significant credit needs Board has determined that this application should be, and in all its communities, including LMI neighborhoods. The hereby is, approved.12 The Board's approval of the pro- 1996 Examination also concluded that lending data demon- posal is specifically conditioned on compliance by Centura strated a reasonable penetration of various loan products with all the commitments made in connection with this into all segments of Centura's delineated communities. In application. For purposes of this action, the commitments addition, Centura was considered to be a leader in making and conditions relied on in reaching this decision are both Small Business Administration ("SBA") loans in North Carolina. In 1995, Centura made 90 SBA loans, totalling $13 million.10 The Board has carefully considered all the facts of preted by the federal banking agencies, the courts, and Congress to record, including the comments received, the CRA perfor- relate to the effect of a proposal on the availability and quality of banking services in the community, and does not extend to the effect mance record of Centura, and relevant reports of examinaof a proposed acquisition on employment in a community. See, e.g., tion and other supervisory information.11 Based on a re- Wells Fargo & Company, 82 Federal Reserve Bulletin 445, 457 (1996). 12. A commenter has requested that the Board hold a hearing on the 9. The Statement of the Federal Financial Supervisory Agencies application. The Board is not required under the Bank Merger Act or Regarding the Community Reinvestment Act ("Agency CRA State- the Federal Reserve Act to hold a public hearing or meeting in this ment") provides that a CRA examination is an important and often case. Under the Board's rules, the Board may, in its discretion, hold a controlling factor in the consideration of an institutions's CRA record public hearing or meeting on an application to clarify factual issues and that reports of these examinations will be given great weight in related to the application and to provide an opportunity for testimony, the applications process. See 54 Federal Register 13,742 and 13,745 if appropriate. The Board has carefully considered the commenter's (1989). request for a hearing in light of all the facts of record. In the Board's 10. Some commenters also contend that Centura's fees for services view, the commenter has had ample opportunity to submit his views, are excessive. Centura provides a full range of credit products and and has submitted two written comments that have been carefully banking services to assist in meeting the credit and banking needs of considered by the Board in acting on this application. The commentits communities, including low- and moderate-income ("LMI") com- er's request fails to demonstrate why his written presentations do not munities. The Board notes that examiners favorably noted Centura's adequately present his evidence, allegations and views. After a careful "Simple Checking," a low-cost checking account. In addition, there is review of all the facts of record, moreover, the Board has concluded no evidence in the record that the fees charged by Centura are based that the commenter disputes the weight that should be accorded to, on any factor that would be prohibited under law. Although the Board and the conclusions that the Board should draw from, the facts of has recognized that banks help serve the banking needs of their record, but does not identify disputed issues of fact that are material to communities by making basic services available at nominal or no the Board's decision. For these reasons, and based on all the facts of charge, the CRA does not impose any limitation on the fees or record, the Board has determined that a public hearing or meeting is surcharges for services. not required or warranted to clarify the factual record in the applica- 11. A commenter contends that the proposal will result in a loss of tion, or otherwise warranted in this case. Accordingly, the request for jobs. The convenience and needs factor has been consistently inter- a hearing on the proposal is hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 67 conditions imposed in writing by the Board and, as such, tative office in Canada.3 Bank does not engage, directly or may be enforced in proceedings under applicable law. indirectly, in any activities in the United States. The pro- The proposed acquisition shall not be consummated posed representative office would engage in traditional before the fifteenth calendar day following the effective representational functions, including serving as a liaison date of this order, or later than three months after the between customers and Bank's offices in Cyprus, promoteffective date of this order, unless such period is extended ing Bank's name, products, and services to potential cusfor good cause by the Board or by the Federal Reserve tomers, and advising on economic conditions and invest- Bank of Richmond, acting pursuant to delegated authority. ment opportunities in Cyprus. By order of the Board of Governors, effective Novem- In acting on an application to establish a representative ber 10, 1997. office, the IBA and Regulation K provide that the Board shall take into account whether the foreign bank engages Voting for this action: Vice Chair Rivlin and Governors Kelley, directly in the business of banking outside of the United Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting: States, has furnished to the Board the information it needs Chairman Greenspan. to assess adequately the application, is subject to comprehensive supervision or regulation on a consolidated basis BARBARA R. LOWREY by its home country supervisor, and has provided adequate Associate Secretary of the Board assurances of access to information on the operations of the bank and its affiliates to determine compliance with U.S. laws. (12 U.S.C. § 3107(a); 12 C.F.R. 211.24(d)). The ORDERS ISSUED UNDER INTERNATIONAL BANKING ACT Board may also take into account additional standards as set forth in the IBA (12 U.S.C. § 3105(d)(3),(4)) and Regu- Bank of Cyprus, Ltd. lation K (12 C.F.R. 211.24(c)). Nicosia, Cyprus The Board previously has stated that the standards that apply to the establishment of a branch or agency need not Order Approving Establishment of a Representative in every case apply to the establishment of a representative Office office, because representative offices do not engage in a banking business and cannot take deposits or make loans.4 Bank of Cyprus, Ltd. ("Bank"), Nicosia, Cyprus, a foreign In evaluating an application to establish a representative bank within the meaning of the International Banking Act office under the IBA and Regulation K, the Board will take ("IBA"), has applied under section 10(a) of the IBA into account the standards that apply to the establishment (12 U.S.C. § 3107(a)) to establish a representative office in of branches and agencies, subject generally to the follow- New York, New York. The Foreign Bank Supervision ing considerations. With respect to supervision by home Enhancement Act of 1991, which amended the IBA, procountry authorities, a foreign bank that proposes to estabvides that a foreign bank must obtain the approval of the lish a representative office should be subject to a significant Board to establish a representative office in the United degree of supervision by its home country supervisor.5 A States. foreign bank's financial and managerial resources will be Notice of the application affording interested persons an reviewed to determine whether its financial condition and opportunity to submit comments has been published in a performance demonstrate that it is capable of complying newspaper of general circulation in New York, New York with applicable laws and has an operating record that (The New York Times, January 6, 1993). The time for filing would be consistent with the establishment of a representacomments has expired, and the Board has considered the tive office in the United States. Finally, all foreign banks, application and all comments received. whether operating through branches, agencies or represen- Bank, with $6.3 billion in consolidated assets,1 is a tative offices, will be required to provide adequate assurcommercial bank chartered in Cyprus. Bank is wholly ances of access to information on the operations of the owned by a holding company, Bank of Cyprus (Holdings) bank and its affiliates necessary to determine compliance Ltd. ("Holdings"), Nicosia, Cyprus.2 with U.S. laws. Bank is chiefly engaged in the provision of banking and other financial services to retail, corporate and governmental clients, including the provision of deposit accounts, short- and long-term financing, trustee and credit card services, and facilities for international transactions. 3. Bank also has three bank subsidiaries: the Bank of Cyprus (London), Ltd., London, England; the Mortgage Bank of Cyprus, Ltd., Bank operates more than 200 branches in Cyprus, ten Nicosia, Cyprus; and the Bank of Cyprus (Channel Islands) Ltd., branches in Greece, three representative offices in Austra- Guernsey, Channel Islands. Two other subsidiaries of Bank provide lia, a representative office in South Africa, and a represen- factoring services in Cyprus and Greece, and another subsidiary specializes in the management of mutual funds. Holdings also controls six subsidiaries, other than through Bank, which engage in finance, insurance, investment banking, real estate development and management, and hotel operations activities. 1. Data are as of December 31, 1996. 4. See 58 Federal Register 6348, 6351 (1993). 2. No single shareholder owns more than 5 percent of the shares of 5. See Citizens National Bank, 79 Federal Reserve Bulletin 805 Holdings. (1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Federal Reserve Bulletin • January 1998 With respect to home country supervision of Bank, the extent that the provision of such information to the Board Board has considered the following information. The Cen- may be prohibited or impeded by law, Bank and Holdings tral Bank of Cyprus (the "Central Bank") is the supervi- have committed to cooperate with the Board to obtain any sory authority for all banks licensed in Cyprus, including necessary consents or waivers that might be required from Bank. The Board has previously determined, in connection third parties in connection with disclosure of certain inforwith an application involving another bank from Cyprus, mation. In light of these commitments and other facts of that such bank was subject to a significant degree of record, and subject to the condition described below, the supervision by the Central Bank.6 The Board has deter- Board concludes that Bank has provided adequate assurmined that Bank is supervised by the Central Bank on ances of access to any necessary information the Board substantially the same terms and conditions as the bank may request. previously considered by the Board. Based on all the facts On the basis of all the facts of record, and subject to the of record, the Board concludes that factors relating to the commitments made by Bank, and the terms and conditions supervision of Bank by its home country supervisor are set forth in this order, the Board has determined that consistent with approval of the proposed representative Bank's application to establish a representative office office. should be, and hereby is, approved. Should any restrictions The Board also has determined that, for purposes of the on access to information on the operations or activities of IBA and Regulation K, Bank engages directly in the busi- Bank and any of its affiliates subsequently interfere with ness of banking outside of the United States through its the Board's ability to determine the compliance by Bank or operations in Cyprus. Bank has provided the Board with its affiliates with applicable Federal statutes, the Board may the information necessary to assess the application through require termination of any of Bank's direct or indirect submissions that address relevant issues. activities in the United States. Approval of this application The Board also has taken into account the additional also is specifically conditioned on compliance by Bank standards set forth in section 7 of the IBA and Regula- with the commitments made in connection with this applition K (see 12 U.S.C. § 3105(d)(3),(4); 12C.F.R. 211.24(c)(2)). cation, and with the conditions in this order.7 The commit- As noted above, the Central Bank does not object to ments and conditions referred to above are conditions Bank's establishing the proposed representative office. imposed in writing by the Board in connection with its The Board also has determined that financial and mana- decision, and may be enforced in proceedings under gerial factors are consistent with approval of the proposed 12 U.S.C. § 1818 against Bank and its affiliates. representative office. Bank appears to have the experience By order of the Board of Governors, effective Novemand capacity to support the proposed office and also has ber 24, 1997. established controls and procedures for the proposed representative office to ensure compliance with U.S. law. Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Finally, with respect to access to information about Governors Kelley, Phillips, Meyer, Ferguson, and Gramlich. Bank's operations, the Board has reviewed the applicable provisions of law in relevant jurisdictions and has commu- JENNIFER J. JOHNSON Deputy Secretary of the Board nicated with appropriate government authorities regarding access to information. Bank and Holdings each have committed to make available to the Board such information on the operations of Bank and any of its affiliates that the 7. The Board's authority to approve the establishment of the pro- Board deems necessary to determine and enforce compliposed representative office parallels the continuing authority of the ance with the IBA, the Bank Holding Company Act of State of New York to license offices of a foreign bank. The Board's 1956, as amended, and other applicable Federal law. To the approval of this application does not supplant the authority of the State of New York and its agent, the New York State Banking Department, to license the proposed representative office of Bank in 6. See The Cyprus Popular Bank, 83 Federal Reserve Bulletin 1028 accordance with any terms or conditions that the New York State (1997). Banking Department may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 69 INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (JULY 1, 1997-SEPTEMBER 30, 1997) Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page ABSA Bank Limited, To establish a representative office in July 30, 1997 83, 788 Johannesburg, Republic of South New York, New York Africa ANB Holding Company, Ltd., Lakeside Bancshares, Inc., September 29, 1997 83, 902 Terrell, Texas Rockwall, Texas ANB Corporation, Lakeside National Bank, Terrell, Texas Rockwall, Texas Associated Banc-Corp, First Financial Corporation, September 8, 1997 83, 910 Green Bay, Wisconsin Stevens Point, Wisconsin First Financial Bank, F.S.B., Stevens Point, Wisconsin BankAmerica Corporation, Robertson, Stephens & Company Group, September 17, 1997 83, 913 San Francisco, California L.L.C., San Francisco, California Robertson, Stephens & Company, Inc., San Francisco, California Bankers Trust New York Corporation, Alex. Brown Incorporated, July 21, 1997 83, 780 New York, New York Baltimore, Maryland Barnett Banks, Inc., First of America Bank-Florida, FSB, September 15, 1997 83, 916 Jacksonville, Florida Tampa, Florida BB&T Corporation, Craigie Incorporated, September 17, 1997 83, 919 Winston-Salem, North Carolina Richmond, Virginia The Chase Manhattan Corporation, Chase Manhattan Bank and Trust September 29, 1997 83, 905 New York, New York Company, National Association, Chase Holding Delaware Inc., Los Angeles, California New York, New York Citizens Commercial Bank & Trust KeyBank, N.A., September 9, 1997 83, 933 Company, Cleveland, Ohio Celina, Ohio CoreStates Financial Corporation, CoreStates Securities Corporation, August 4, 1997 83, 838 Philadelphia, Pennsylvania Philadelphia, Pennsylvania First Chicago NBD Corporation, To engage to a limited extent in July 28, 1997 83, 784 Chicago, Illinois underwriting and dealing in all types of First Chicago Capital Markets, Inc., equity securities except ownership Chicago, Illinois interests in open-end investment companies Housing & Commercial Bank, To establish a state-licensed branch in September 17, 1997 83, 935 Seoul, Korea New York, New York Huntington Bancshares Incorporated, First Michigan Bank Corporation, September 2, 1997 83, 930 Columbus, Ohio Holland, Michigan KeyCorp, Key Capital Markets, Inc., September 8, 1997 83, 921 Cleveland, Ohio Cleveland, Ohio NationsBank Corporation, Montgomery Securities, September 10, 1997 83, 924 Charlotte, North Carolina San Francisco, California The Pyramid Company, San Francisco, California Neighbornood Bancorp, Neighborhood National Bank, July 21, 1997 83, 780 San Diego, California San Diego, California New Prague Bancshares, Inc., Community Security Bank, September 15, 1997 83, 909 New Prague, Minnesota New Prague, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Bulletin • January 1998 Index of Orders Issued or Actions Taken Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page Northwest Bancorp, MHC Northwest Savings Bank, August 18, 1997 83, 831 Warren, Pennsylvania Warren, Pennsylvania Northwest Bancorp, Inc., Warren, Pennsylvania Santa Barbara Bancorp, Citizens State Bank of Santa Paula, August 21, 1997 83, 833 Santa Barbara, California Santa Paula, California Siidwestdeutsche Landesbank To establish a state-licensed branch office September 17, 1997 83, 937 Girozentrale, in New York, New York Stuttgart and Mannheim, Germany Swiss Bank Corporation, Dillon, Read Holding, Inc., July 28, 1997 83, 786 Basel, Switzerland New York, New York Union Planters Corporation, Magna Bancorp, Inc., September 10, 1997 83, 928 Memphis, Tennessee Hattiesburg, Mississippi Magnolia Federal Bank for Savings, Hattiesburg, Mississippi Magna Mortgage Company, Hattiesburg, Mississippi 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 4 Applicant(s) Bank(s) Effective Date Wachovia Corporation, Solutions by Design, Inc., November 13, 1997 Winston-Salem, North Carolina Atlanta, Georgia 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 Alabama National BanCorporation, First American Bancorp, Atlanta October 29, 1997 Birmingham, Alabama Decatur, Alabama First American Bank, Decatur, Alabama Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 71 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Elfective Date Amador Merger Corporation, Amador Bancshares, Inc., Dallas November 5, 1997 Las Cruces, New Mexico Las Cruces, New Mexico Citizens Bank of Las Cruces, Las Cruces, New Mexico Builders Financial Corporation, Builders Bank, Chicago October 28, 1997 Chicago, Illinois Chicago, Illinois Capitol Bancorp Ltd., Lansing, Muskegon Commerce Bank, Chicago November 5, 1997 Michigan Muskegon, Michigan Citizens Bancshares Company, Trenton Trust Bancshares, Kansas City November 17, 1997 Chillicothe, Missouri Trenton, Missouri Citizens Effingham Bancshares, Inc., Citizens Bank of Effingham, Atlanta November 19, 1997 Springfield, Georgia Springfield, Georgia City National Corporation, Harbor Bancorp, San Francisco November 13, 1997 Beverly Hills, California Long Beach, California Harbor Bank, Long Beach California Coddle Creek Financial Corp., Mooresville Savings Bank, SSB, Richmond November 10, 1997 Mooresville, North Carolina Mooresville, North Carolina Community Bancshares of West Community First National Bank of West St. Louis October 29, 1997 Plains, Inc., Plains, West Plains, Missouri West Plains, Missouri Community Bankshares, Inc., Dove Creek State Bank, Kansas City October 27, 1997 Denver, Colorado Dove Creek, Colorado Covenant Bancgroup, Inc., Covenant Bank, Atlanta November 19, 1997 Leeds, Alabama Leeds, Alabama CSB Bancshares, Inc., Wilson Bancshares, Inc., Kansas City October 27, 1997 Ellsworth, Kansas Wilson, Kansas F & M Bancshares, Inc., Farmers and Merchants State Bank, Minneapolis November 3, 1997 Langdon, North Dakota Langdon, North Dakota FBOP Corporation, California Bank, N.A., Chicago November 3, 1997 Oak Park, Illinois Beverly Hills, California Fidelity Ban Corporation, Benton County Savings Bank, Chicago November 19, 1997 Independence, Iowa Norway, Iowa First Banks, Inc., Surety Bank, St. Louis October 20, 1997 Creve Coeur, Missouri Vallejo, California Sundowner Corporation, Reno, Nevada First Banks America, Inc., Houston, Texas First National Bancorp, Inc., The First National Bank in Green St. Louis November 7, 1997 Green Forest, Arkansas Forest, Green Forest, Arkansas First National Bank at St. James First National Agency at St. James, Minneapolis October 29, 1997 Employee Stock Ownership Plan, Minnesota, Inc., St. James, Minnesota St. James, Minnesota First State Financial Corporation, First State Bank, Atlanta November 19, 1997 Sarasota, Florida Sarasota, Florida Fisher Bancorp, Inc., The Fisher National Bank, Chicago November 10, 1997 Fisher, Illinois Fisher, Illinois George Washington Bancorp, Inc., George Washington Savings Bank, Chicago October 30, 1997 Oak Lawn, Illinois Oak Lawn, Illinois Greater Bay Bancorp, Peninsula Bank of Commerce, San Francisco November 12, 1997 Palo Alto, California Millbrae, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin • January 1998 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Greater Southern Capital Great Southern National Bank, Atlanta November 4, 1997 Corporation Employee Stock Meridian, Mississippi Ownership Trust, Meridian, Mississippi Greater Southern Capital Corporation, Meridian, Mississippi Heritage Financial Corporation, Heritage Financial Corporation MHC, San Francisco November 18, 1997 Olympia, Washington Olympia, Washington Matson Financial, Inc., State Bank of Blomkest, Minneapolis November 20, 1997 Blomkest, Minnesota Blomkest, Minnesota MBNA Corporation, MBNA America Bank (Delaware), Philadelphia November 7, 1997 Wilmington, Delaware Wilmington, Delaware Mercantile Bancorp, Inc., Golden Bancshares, Inc., St. Louis October 30, 1997 Quincy, Illinois Golden, Illinois Golden State Bank, Golden, Illinois Brown County State Bank, Mount Sterling, Illinois Midland First Financial Corporation, Midland Bank, Kansas City November 13, 1997 Lee's Summit, Missouri Lee's Summit, Missouri Montana First National Montana First National Bank, Minneapolis October 29, 1997 Bancorporation, Kalispell, Montana Kalispell, Montana National Bank of Canada, Natbank N.A., New York October 28, 1997 Montreal, Quebec, Canada Hollywood, Florida NatBC Holding Corporation, Wilmington, Delaware Owen-Curtiss Financial Corporation, Brill Bancshares, Inc., Minneapolis October 29, 1997 Rice Lake, Wisconsin Rice Lake, Wisconsin Brill State Bank, Brill, Wisconsin Penns Woods Bancorp, Inc., Columbia Financial Corporation, Philadelphia October 27, 1997 Williamsport, Pennsylvania Bloomsburg, Pennsylvania Peoples Bancorporation, Inc., Peoples Investment Corporation, St. Louis October 24, 1997 Cuba, Missouri Cuba, Missouri Peoples Bank, Cuba, Missouri Riverside Gulf Coast Banking Riverside Bank of the Gulf Coast, Atlanta October 29, 1997 Company, Cape Coral, Florida Cape Coral, Florida Roscoe Community Bankshares, Roscoe Financial Services, Inc., Minneapolis November 5, 1997 Inc., Roscoe, South Dakota Roscoe, South Dakota Security Bank Holding Company, Pacific State Bank, San Francisco October 23, 1997 Coos Bay, Oregon Reedsport, Oregon Security Bank Holding Company Employee Stock Ownership Plan, Coos Bay, Oregon Security State Bancshares, Inc., Merchants and Planters Bank of St. Louis November 4, 1997 Charleston, Missouri Hornersville, Hornersville, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 13 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date SIS Bancorp, Inc., Glastonbury Bank and Trust Company, Boston October 22, 1997 Springfield, Massachusetts Glastonbury, Connecticut Sparta Union Bancshares, Inc., Union National Bank and Trust Chicago November 6, 1997 Sparta, Wisconsin Company, Sparta, Wisconsin SWB Bancshares, Inc., SW Financial, Inc., Dallas October 28, 1997 Fort Worth, Texas Dover, Delaware Southwest Bank, Fort Worth, Texas SW Financial, Inc., Southwest Bank, Dallas October 28, 1997 Dover, Delaware Fort Worth, Texas Trust No. 3 Under the Will of Pea River Capital Corporation, Atlanta November 13, 1997 Charles Henderson, Elba, Alabama Troy, Alabama The Peoples Bank of Coffee County, Henderson Bancshares, Inc., Elba, Alabama Troy, Alabama Verona Bancshares, Limited, Bank of Verona, Chicago November 20, 1997 Verona, Wisconsin Verona, Wisconsin Virginia Bank Bankshares, Inc., Virginia Bank and Trust Company, Richmond November 12, 1997 Danville, Virginia Danville, Virginia Warwick Community Bancorp, Inc., The Warwick Savings Bank, New York October 29, 1997 Warwick, New York Warwick, New York Washington Bancorp, Rubio Savings Bank of Brighton, Chicago October 31, 1997 Washington, Iowa Brighton, Iowa Winter-Park Bancshares, Inc., Brill Bancshares, Inc., Minneapolis October 29, 1997 Cameron, Wisconsin Rice Lake, Wisconsin Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Bank of Montreal, Partners First Holdings, LLC, Chicago November 13, 1997 Montreal, Ontario, Canada Linthicum, Maryland Bankmont Financial Corp., Partners First National Bank, Chicago, Illinois Newark, Delaware Harris Bancorp, Inc., Partners First Receivables, LLC, Chicago, Illinois Newark, Delaware Partners First Finance, Inc., Newark, Delaware Boston Private Bancorp, Inc., Westfield Capital Management Boston October 29, 1997 Boston, Massachusetts Company, Inc., Boston, Massachusetts Fifth Third Bancorp, Heartland Capital Management, Inc., Cleveland October 21, 1997 Cincinnati, Ohio Indianapolis, Indiana Fleet Financial Group, Inc., Mezzanine Capital Fund I, LLC, Boston October 24, 1997 Boston, Massachusetts Boston, Massachusetts The Governor and Company of the Banclreland/First Financial, Inc., Boston November 3, 1997 Bank of Ireland, Boston, Massachusetts Dublin 2, Ireland Trade Finance Services, Inc., Boston, Massachusetts Huntington Bancshares Solutions by Design, Inc., Cleveland November 4, 1997 Incorporated, Atlanta, Georgia Columbus, Ohio Security First Network Bank, Atlanta, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin • January 1998 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Louisville Development Bancorp, Louisville Enterprise Center, Inc., St. Louis November 7, 1997 Inc., Louisville, Kentucky Louisville, Kentucky Norwest Corporation, Second National Fund Corporation, Minneapolis November 3, 1997 Minneapolis, Minnesota Bala Cynwyd, Pennsylvania Norwest Financial Services, Inc., Des Moines, Iowa Norwest Financial, Inc., Des Moines, Iowa Norwest Corporation, Smith Asset Management Group, L.P., Minneapolis November 18, 1997 Minneapolis, Minnesota Dallas, Texas Peoples Heritage Financial Group, Home Settlement Services of Maine, Boston November 19, 1997 Inc., LLC, Portland, Maine Portland, Maine Roseau Realty Co., Inc., Citizens State Bank of Roseau, Minneapolis October 28, 1997 Roseau, Minnesota Roseau, Minnesota The Toronto-Dominion Bank, Kennedy, Cabot & Co., New York November 7, 1997 Toronto, Ontario, Canada Beverly Hills, California Waterhouse Investor Services, Inc. New York, New York Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date U.S. Bancorp, Zappco, Inc., Minneapolis November 3, 1997 Minneapolis, Minnesota St. Cloud, Minnesota Zapp Data, Inc., St. Cloud, Minnesota 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 Alabama Exchange Bank, First National Bank of Ashland, Atlanta November 12, 1997 Tuskegee, Alabama Ashland, Alabama Colonial Bank, Ashville Savings Bank, Atlanta November 19, 1997 Montgomery, Alabama Ashville, Alabama Colonial Bank, Fist Central Bank, Atlanta November 19, 1997 Montgomery, Alabama St. Petersburg, Florida Colonial Bank, First National Bank of Florida at Bonita Atlanta November 19, 1997 Montgomery, Alabama Springs, Bonita Springs, Florida Community Bank and Trust First Union National Bank, Philadelphia October 24, 1997 Company, Avondale, Pennsylvania Forest City, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 Bank Merger Act—Continued Applicant(s) Bank(s) Reserve Bank Effective Date First Bank, First Bank, A Federal Savings Bank, St. Louis October 16, 1997 Creve Coeur, Missouri Clayton, Missouri First Bank, O'Fallon, Illinois First Interstate Bank, First Interstate Bank, fsb, Minneapolis October 29, 1997 Billings, Montana Hamilton, Montana Omni Bank, Farmers State Bank of Ferris Chicago October 23, 1997 Macomb, Illinois Ferris, Illinois Premier Bancorp, Inc., Premier Bank, Philadelphia October 30, 1997 Doylestown, Pennsylvania Doylestown, Pennsylvania Southern California Bank, National Bank of Southern California, San Francisco November 13, 1997 Anaheim, California Newport Beach, California PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Eliopulos v. Board of Governors, No. 97-1442 (D.C. Cir., Federal Reserve Banks in which the Board of Governors is not filed July 17, 1997). Petition for review of a Board order named a party. dated June 23, 1997, approving the application of First Bank System, Inc., Minneapolis, Minnesota, to acquire U.S. Bancorp, Portland, Oregon, and thereby acquire U.S. Ban- Patrick v. United States, No. 97-75017 (E.D. Mich., filed corp's banking and nonbanking subsidiaries. On Novem- September 30, 1997). Action for damages arising out of tax ber 10, 1997, the Court granted the Board's motion to dispute. dismiss the petition. Artis v. Greenspan, No. 97-5234 (D.C. Cir., filed September 19, 1997). Appeal of district court order dismissing Greeff v. Board of Governors, No. 97-1976 (4th Cir., filed employment discrimination action. June 17, 1997). Petition for review of a Board order dated May 19, 1997, approving the application of by Allied Irish Artis v. Greenspan, No. 97-5235 (D.C. Cir., filed Septem- Banks, pic, Dublin, Ireland, and First Maryland Bancorp, ber 19, 1997). Appeal of district court order dismissing Baltimore, Maryland, to acquire Dauphin Deposit Corporaclass complaint alleging race discrimination in employtion, Harrisburg, Pennsylvania, and thereby acquire Daument. phin's banking and nonbanking subsidiaries. Branch v. Board of Governors, No. 97-5229 (D.C. Cir., filed September 12, 1997). Appeal of district court order denying Inner City Press/Community on the Move v. Board of Govermotion to compel production of pre-decisional supervisory nors, No. 97-1394 (D.C. Cir., filed June 12, 1997). Petition documents and testimony sought in connection with an to review a Board order dated May 14, 1997, approving the action by Bank of New England Corporation's trustee in application of Banc One Corporation, Inc., Columbus, Ohio, bankruptcy against the Federal Deposit Insurance Corpora- to merge with First USA, Inc., Dallas, Texas. On June 16, tion. 1997, petitioners moved for a stay pending appeal. The Wilkins v. Reno, No. 97-2275 (4th Cir., filed September 12, motion was denied on June 27, 1997. On August 11, 1997, 1997). Appeal of district court dismissal of complaint con- the Board filed a motion to dismiss the petition. cerning customer dispute with bank. Vickery v. Board of Governors, No. 97-1344 (D.C. Cir., filed Clarkson v. Greenspan, No. 97-CV-2035 (D.D.C., filed Sep- May 9, 1997). Petition for review of a Board order dated tember 5, 1997). Freedom of Information Act case. April 14, 1997, prohibiting Charles R. Vickery, Jr., from Banking Consultants of America v. Board of Governors, further participation in the banking industry. Oral argument No. 97-2791 (W.D. Tenn., filed September 2, 1997). Action is scheduled for February 24, 1998. to enjoin investigation by the Board, the Office of the Pharaon v. Board of Governors, No. 97-1114 (D.C. Cir., filed Comptroller of the Currency, and the Department of Labor. February 28, 1997). Petition for review of a Board order Bettersworth v. Board of Governors, No. 97-CA-624 (W.D. dated January 31, 1997, imposing civil money penalties and Tex., filed August 21, 1997). Privacy Act case. an order of prohibition for violations of the Bank Holding Wilkins v. Warren, No. 97-CV-590 (E.D. Va„ filed August 4, Company Act. Oral argument is scheduled for December 8, 1997). Customer dispute with a bank. 1997. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • January 1998 Research Triangle Institute v. Board of Governors, No. 97- FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD 1282 (4th Cir., filed February 24, 1997). Appeal of district OF GOVERNORS court's dismissal of contract claim. Oral argument was held on October 30, 1997. Luis Carrizo Jones v. Board of Governors, No. CV97-0198 (W.D. Louisi- Buenos Aires, Argentina ana, filed January 30, 1997). Complaint alleging violations of the Fair Housing Act. On November 13, 1997, the Court The Federal Reserve Board announced on November 7, granted the Board's motion to dismiss the action. 1997, the issuance of an Order of Prohibition against Luis The New Mexico Alliance v. Board of Governors, No. 96- Carrizo, a former officer of the New York agency of Banco 9552 (10th Cir., filed December 24, 1996). Petition for de la Provincia de Buenos Aires, Buenos Aires, Argentina. review of a Board order dated December 16, 1996, approving the acquisition by NationsBank Corporation and NB Holdings Corporation, both of Charlotte, North Carolina, of Eric C. Dill Boatmen's Bancshares, Inc., St. Louis, Missouri. Also on New York, New York December 24, 1996, petitioners moved for an emergency stay of the Board's order. The motion for a stay was denied The Federal Reserve Board announced on November 24, by the 10th Circuit on January 3, 1997; on January 6, 1997, 1997, the issuance of an Order of Prohibition against Eric petitioners' application for emergency stay was denied by C. Dill, a former employee of the New York Branch of the the Supreme Court. Oral argument is scheduled for Janu- National Bank of Canada. ary 20, 1998. American Bankers Insurance Group, Inc. v. Board of Gover- Jose E. Romero Muniz nors, No. 96-CV-2383-EGS (D.D.C., filed October 16, Hato Rey, Puerto Rico 1996). Action seeking declaratory and injunctive relief invalidating a new regulation issued by the Board under the The Federal Reserve Board announced on November 7, Truth in Lending Act relating to treatment of fees for debt 1997, the issuance of an Order of Prohibition against Jose cancellation agreements. On October 18, 1996, the district E. Romero Muniz, a former credit card processing clerk of court denied plaintiffs' motion for a temporary restraining Banco Popular De Puerto Rico, Hato Rey, Puerto Rico. order. On January 17, 1997, the parties filed cross-motions for summary judgment. Leuthe v. Office of Financial Institution Adjudication, Putnam-Greene Financial Corporation No. 97-1826 (3d Cir., filed October 22, 1997). Appeal of Eatonton, Georgia district court dismissal of action against the Board and other Federal banking agencies challenging the constitutionality The Federal Reserve Board announced on November 17, of the Office of Financial Institution Adjudication. 1997, the issuance of a Cease and Desist Order against Board of Governors v. Pharaon, No. 91-CIV-6250 (S.D. New Putnam-Greene Financial Corporation, Eatonton, Georgia, York, filed September 17, 1991). Action to freeze assets of a bank holding company. This action was coordinated with individual pending administrative adjudication of civil the Federal Deposit Insurance Corporation and the Georgia money penalty assessment by the Board. On September 17, Commissioner of Banking and Finance, who jointly issued 1991, the court issued an order temporarily restraining the Cease and Desist Orders against Putnam-Greene's three transfer or disposition of the individual's assets. subsidiary banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance—Continued A27 Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, liquid assets, and debt A29 U.S. government securities dealers— measures Positions and financing A5 Reserves of depository institutions, Reserve Bank A30 Federal and federally sponsored credit credit agencies—Debt outstanding A6 Reserves and borrowings—Depository institutions Securities Markets and Corporate Finance A31 New security issues—Tax-exempt state and local Policy Instruments governments and corporations A7 Federal Reserve Bank interest rates A32 Open-end investment companies—Net sales A8 Reserve requirements of depository institutions and assets A9 Federal Reserve open market transactions A32 Corporate profits and their distribution A32 Domestic finance companies—Assets and Federal Reserve Banks liabilities A33 Domestic finance companies—Consumer, real estate, A10 Condition and Federal Reserve note statements and business credit A11 Maturity distribution of loan and security holdings Real Estate Monetary and Credit Aggregates A34 Mortgage markets A3 5 Mortgage debt outstanding A12 Aggregate reserves of depository institutions and monetary base A13 Money stock, liquid assets, and debt measures Consumer Credit A3 6 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks Flow of Funds A16 Domestically chartered commercial banks A37 Funds raised in U.S. credit markets A17 Large domestically chartered commercial banks A39 Summary of financial transactions A19 Small domestically chartered commercial banks A40 Summary of credit market debt outstanding A20 Foreign-related institutions A41 Summary of financial assets and liabilities Financial Markets DOMESTIC NONFINANCIAL STATISTICS A22 Commercial paper and bankers dollar acceptances outstanding Selected Measures A22 Prime rate charged by banks on short-term A42 Nonfinancial business activity— business loans Selected measures A23 Interest rates—money and capital markets A42 Labor force, employment, and unemployment A24 Stock market—Selected statistics A43 Output, capacity, and capacity utilization A44 Industrial production—Indexes and gross value Federal Finance A46 Housing and construction A25 Federal fiscal and financing operations A47 Consumer and producer prices A26 U.S. budget receipts and outlays A48 Gross domestic product and income A27 Federal debt subject to statutory limitation A49 Personal income and saving Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin • January 1998 INTERNATIONAL STATISTICS Securities Holdings and Transactions A60 Foreign transactions in securities Summary Statistics A61 Marketable U.S. Treasury bonds and A50 U.S. international transactions—Summary notes—Foreign transactions A51 U.S. foreign trade A51 U.S. reserve assets Interest and Exchange Rates A51 Foreign official assets held at Federal Reserve A61 Discount rates of foreign central banks Banks A61 Foreign short-term interest rates A52 Selected U.S. liabilities to foreign official A62 Foreign exchange rates institutions A63 GUIDE TO STATISTICAL RELEASES AND Reported by Banks in the United States SPECIAL TABLES A52 Liabilities to and claims on foreigners A53 Liabilities to foreigners SPECIAL TABLES A55 Banks' own claims on foreigners A56 Banks' own and domestic customers' claims on A64 Pro forma balance sheet and income statements for foreigners priced service operations, September 30, 1997 A56 Banks' own claims on unaffiliated foreigners A57 Claims on foreign countries— A66 INDEX TO STATISTICAL TABLES Combined domestic offices and foreign branches Reported by Nonbanking Business Enterprises in the United States A58 Liabilities to unaffiliated foreigners A59 Claims on unaffiliated foreigners 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 P Preliminary HUD Department of Housing and Urban r Revised (Notation appears on column heading Development when about half of the figures in that column IMF International Monetary Fund are changed.) IO Interest only * Amounts insignificant in terms of the last decimal IPCs Individuals, partnerships, and corporations place shown in the table (for example, less than IRA Individual retirement account 500,000 when the smallest unit given is millions) MMDA Money market deposit account 0 Calculated to be zero MSA Metropolitan statistical area Cell not applicable NOW Negotiable order of withdrawal ATS Automatic transfer service OCD Other checkable deposit BIF Bank insurance fund OPEC Organization of Petroleum Exporting Countries CD Certificate of deposit OTS Office of Thrift Supervision CMO Collateralized mortgage obligation PO Principal only FFB Federal Financing Bank REIT Real estate investment trust FHA Federal Housing Administration REMIC Real estate mortgage investment conduit FHLBB Federal Home Loan Bank Board RP Repurchase agreement FHLMC Federal Home Loan Mortgage Corporation RTC Resolution Trust Corporation 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. Minus signs are used to indicate (1) a decrease, (2) a negative "State and local government" also includes municipalities, figure, or (3) an outflow. special districts, and other political 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 NonfinancialS tatistics • January 1998 1.10 RESERVES, MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1996 1997 1997r MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q4 Q1 Q2 Q3 June July Aug. Sept. Oct. Reserves of depository institutions2 1 Total -17.2 -8.3 -14.3 -1.8 1.5 -5.7 13.5 -18.9 -5.5 2 Required -18.5 -8.4 -15.0 -2.4r .5 -3.8 12.6 -20.5 -8.4 3 Nonborrowed -16.2 -7.2 -16.0 -3.4 -1.6 -6.8 8.8 -15.0 -1.2 4 Monetary base3 5.1 5.6 3.3 6.0 4.7 7.3 5.8 7.5 6.8 Concepts of money, liquid assets, and debt4 5 Ml -7.3 -.7 -5.5 .2' .3 -1.1 8.5 -9.9 -3.7 6 M2 4.2 5.4r 3.8r 5.1r 4.2 3.4 10.8 5.9 4.9 7 M3 7.5 7.7r 6.1' 8.41 4.7 10.3 12.1 9.2 8.4 8 L 6.2 6.1r 7.8r 7.7 4.3 6.8 13.5 9.2 n.a. 9 Debt 4.7 4.3 4.5r 3.7 2.0 4.2 4.5 4.6 n.a. Nontransaction components 10 In M25 9.0 7.8r 1.4' 6.9r 5.6 5.0 11.7 11.8 8.1 11 In M3 only6 19.6 15.9 16.7 19.6r 6.2 33.3 16.1 19.8 19.5 Time and savings deposits Commercial banks 12 Savings, including MMDAs 17.0 14.0 10.7 8.6 5.7 6.7 14.4 19.2 16.1 13 Small time7 4.7 2.1' 5.5r 9.0 11.2 12.9 3.5 6.4 5.2 14 Large time8,9 22.9 12.8 23.2 28.1r 23.1 44.6 14.7 33.8 15.8 Thrift institutions 15 Savings, including MMDAs .8 2.7 5.8 -.r .0 -2.9 .6 -1.0 1.6 16 Smalltime7 3.0 -.1 -2.6r -4.9r -3.4 -12.0 -.7 -5.5 -1.0 17 Large time8 9.1 12.8 5.6 11.6 14.6 20.1 5.7 5.6 -4.2 Money market mutual funds 18 Retail 10.5 11.9' 11.4' i4.r 9.0 9.9 31.5 23.9 7.3 19 Institution-only 19.8 15.5 12.5 21.3 28.1 19.6 18.9 35.4 22.7 Repurchase agreements and Eurodollars 20 Repurchase agreements10 3.0 10.7 4.3 13.0 -34.0 55.5 17.3 -15.9 64.6 21 Eurodollars10 48.2 40.2 33.4 1.7r -42.2 .9 19.6 -2.7 -31.2 Debt components4 22 Federal 3.4 1.8 .4 -.6 -4.2 .9 1.6 1.1 n.a. 23 Nonfederal 5.2 5.1 6.0r 5.2 4.1 5.3 5.4 5.7 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- amounts held by depository institutions, the U.S. government, money market funds, and ing during preceding month or quarter. foreign banks and official institutions. Seasonally adjusted M3 is calculated by summing large 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with time deposits, institutional money fund balances, RP liabilities, and Eurodollars, each regulatory changes in reserve requirements. (See also table 1.20.) seasonally adjusted separately, and adding this result to seasonally adjusted M2. 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency securities, commercial paper, and bankers acceptances, net of money market fund holdings of component of the money stock, plus (3) (for all quarterly reporters on the "Report of these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference separately, and then adding this result to M3. between current vault cash and the amount applied to satisfy current reserve requirements. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial 4. Composition of the money stock measures and debt is as follows: sectors—the federal sector (U.S. government, not including government-sponsored enter- Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of prises or federally related mortgage pools) and the nonfederal sectors (state and local depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all governments, households and nonprofit organizations, nonfinancial corporate and nonfarm commercial banks other than those owed to depository institutions, the U.S. government, and noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and foreign banks and official institutions, less cash items in the process of collection and Federal corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of which are derived from the Federal Reserve Board's flow of funds accounts, are breakwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, adjusted (that is, discontinuities in the data have been smoothed into the series) and credit union share draft accounts, and demand deposits at thrift institutions. Seasonally month-averaged (that is, the data have been derived by averaging adjacent month-end levels). adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail OCDs, each seasonally adjusted separately. money fund balances, each seasonally adjusted separately. M2: M1 plus (1) savings (including MMDAs), (2) small-denomination time deposits (time 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and money market mutual funds (money funds with minimum initial investments of less than term) of U.S. addressees, each seasonally adjusted separately. $50,000). Excludes individual retirement accounts (IRAs) and Keogh balances at depository 7. Small time deposits—including retail RPs—are those issued in amounts of less than institutions and money market funds. Seasonally adjusted M2 is calculated by summing $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions savings deposits, small-denomination time deposits, and retail money fund balances, each are subtracted from small time deposits. seasonally adjusted separately, and adding this result to seasonally adjusted Ml. 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) booked at international banking facilities. balances in institutional money funds (money funds with minimum initial investments of 9. Large time deposits at commercial banks less those held by money market funds, $50,000 or more), (3) RP liabilities (overnight and term) issued by all depository institutions, depository institutions, the U.S. government, and foreign banks and official institutions. and (4) Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. 10. Includes both overnight and term. banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures Aug. Sept. Oct. Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 449,742 452,943 453,689 451,553 453,055 453,242 451,326 453,992 455,317 453,527 U.S. government securities2 2 Bought outright—System account3 409,254 410,759 413,890 410,918 411,338 411,645 413,220 413,270 415,085 441144,,884411 3 Held under repurchase agreements 6,571 8,724 5,321 7,608 8,509 7,645 4,106 6,152 5,986 3,683 Federal agency obligations 4 Bought outright 1,035 938 789 925 925 917 865 833 754 716 5 Held under repurchase agreements 1,333 1,102 1,157 560 725 848 1,140 1,256 976 1,313 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 205 71 33 84 17 6 90 8 34 10 8 Seasonal credit 387 372 225 374 379 340 276 232 208 190 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 398 486 454 698 458 258 279 618 466 571 11 Other Federal Reserve assets 30,559 30,490 31,821 30,387 30,705 31,583 31,350 31,623 31,808 32,202 12 Gold stock 11,051 11,050 11,050 11,051 11,050 11,050 11,050 11,050 11,050 11,051 13 Special drawing rights certificate account 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 14 Treasury currency outstanding 25,394R 25,445R 25,506 25,442R 25,456' 25,470 25,484 25,498 25,512 25,526 ABSORBING RESERVE FUNDS 15 Currency in circulation 456,702R 458,540R 460,741 458,606R 457,524' 457,212 459,145 461,751 461,486 460,573 16 Treasury cash holdings 296 260 244 260 262 255 256 242 240 239 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,855 6,303 5,386 6,807 6,949 6,687 5,402 5,110 5,527 5,868 18 Foreign 201 173 189 167 165 192 207 176 199 166 19 Service-related balances and adjustments 7,073 7,023R 6,942 6,999 7,073 7,005 6,954 7,006 6,879 6,912 70 Other 357 360 377 362 365 378 376 382 375 383 21 Other Federal Reserve liabilities and capital 15,437 16,072 16,016 15,904 16,183 16,128 16,042 15,842 16,101 16,051 22 Reserve balances with Federal Reserve Banks4 .. . 10,465 9,908R 9,551 8,140 10,241 11,104 8,678 9,231 10,272 9,113 End-of-month figures Wednesday figures Aug. Sept. Oct. Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 453,808 458,404 455,999 452,741 457,421 453,068 456,280 457,014 463,621 453,831 U.S. government securities2 2 Bought outright—System account3 409,409 411,822 410,767 411,268 411,030 413,046 413,414 414,233 415,465 414,096 3 Held under repurchase agreements 10,547 12,696 9,862 8,925 12,519 5,945 7,554 7,040 12,514 4,475 Federal agency obligations 4 Bought outright 1,030 925 711 925 925 865 865 761 746 711 5 Held under repurchase agreements 2,622 1,222 1,704 916 1,056 546 1,722 905 1,622 1,844 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 55 3 24 29 11 6 34 17 14 8 8 Seasonal credit 412 310 151 384 372 297 249 221 203 177 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float -91 -263R -114 -299 409 543 675 1,537 706 -257 11 Other Federal Reserve assets 29,823 31,689 32,894 30,593 31,099 31,819 31,767 32,301 32,351 32,778 12 Gold stock 11,050 11,050 11,050 11,050 11,050 11,050 11,050 11,050 11,050 11,051 13 Special drawing rights certificate account 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 14 Treasury currency outstanding 25,414R 25,470R 25,540 25,442' 25,456' 25,470 25,484 25,498 25,512 25,526 ABSORBING RESERVE FUNDS 15 Currency in circulation 459,479R 458,270' 461.551 458,689' 457,999' 458,827 461,051 462,806 461,559 462,108 16 Treasury cash holdings 278 255 237 263 255 258 242 240 239 237 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,700 7,692 4,616 10,987 7,328 3,703 4,858 5,174 5,585 5,091 18 Foreign 169 188 190 159 162 217 164 164 205 192 19 Service-related balances and adjustments 7,054 7,005R 6,966 6,999 7,073 7,005 6,954 7,006 6,879 6,912 20 Other 327 386 337 373 366 400 374 381 365 437 21 Other Federal Reserve liabilities and capital 16,144 16,536 16,328 15,643 15,962 15,918 15,655 15,599 15,922 15,771 22 Reserve balances with Federal Reserve Banks4 . . 11,323 13,791R 11,565 5,321 13,982 12,459 12,716 11,393 18,629 8,862 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 3. Includes compensation that adjusts for the effects of inflation on the principal of 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged inflation-indexed securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 4. Excludes required clearing balances and adjustments to compensate for float. under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • January 1998 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1994 1995 1996 1997 Dec. Dec. Dec. Apr. May June July Aug. Sept. Oct. 1 Reserve balances with Reserve Banks2 24,658 20,440 13,395 12,308 10,916 10,291 9,851 10,489 9,742 9,990 2 Total vault cash3 40,378 42,094 44,426 41,381 41,111 42,398 43,129 42,363 43,052 41,730 3 Applied vault cash4 36,682 37,460 37,848 35,571 35,081 36,319 36,529 36,156 36,314r 35,631 4 Surplus vault cash5 3,696 4,634 6,578 5,810 6,030 6,079 6,600 6,208 6,738r 6,100 5 Total reserves6 61,340 57,900 51,243 47,879 45,997 46,610 46,380 46,645 46,056 45,621 6 Required reserves 60,172 56,622 49,819 46,869 44,757 45,330 45,179 45,392 44,761r 44,222 7 Excess reserve balances at Reserve Banks1 1,168 1,278 1,424 1,010 1,240 1,280 1,201 1,253 l,295r 1,399 8 Total borrowings at Reserve Banks8 209 257 155 261 243 367 409 598 438 270 9 Seasonal borrowings 100 40 68 88 173 243 330 385 368 227 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for two week periods ending on dates indicated 1997 July 2 July 16 July 30 Aug. 13 Aug. 27 Sept. 10 Sept. 24 Oct. 8r Oct. 22 Nov. 5 1 Reserve balances with Reserve Banks2 10,639 10,560 9,003 10,226 10,754 10,417 9,201 9,883 9,756 10,452 2 Total vault cash3 41,664 42,756 43,703 43,250 41,480 42,573 43,588 42,603 41,098 41,940 3 Applied vault cash4 36,009 36,565 36,559 36,650 35,596 36,507 36,170 36,329 35,177 35,717 4 Surplus vault cash5 5,655 6,191 7,144 6,600 5,884 6,066 7,418 6,275 5,921 6,223 5 Total reserves6 46,648 47,125 45,562 46,876 46,350 46,924 45,371 46,211 44,932 46,169 6 Required reserves 45,398 45,739 44,561 45,562 45,153 45,679 44,101 44,772 43,731 44,498 7 Excess reserve balances at Reserve Banks7 1,250 1,386 1,001 1,314 1,197 1,245 1,269 1,439 1,201 1,670 8 Total borrowings at Reserve Banks8 547 314 484 426 785 503 427 356 241 238 y Seasonal borrowings 300 299 363 371 396 392 377 308 220 167 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For 5. Total vault cash (line 2) less applied vault cash (line 3). ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 2. Excludes required clearing balances and adjustments to compensate for float and (line 3). includes other off-balance-sheet "as-of' adjustments. 7. Total reserves (line 5) less required reserves (line 6). 3. Total "lagged" vault cash held by depository institutions subject to reserve 8. Also includes adjustment credit. requirements. Dates refer to the maintenance periods during which the vault cash may be used 9. Consists of borrowing at the discount window under the terms and conditions estabto satisfy reserve requirements. The maintenance period for weekly reporters ends sixteen lished for the extended credit program to help depository institutions deal with sustained days after the lagged computation period during which the vault cash is held. Before Nov. 25, liquidity pressures. Because there is not the same need to repay such borrowing promptly as 1992, the maintenance period ended thirty days after the lagged computation period. with traditional short-term adjustment credit, the money market effect of extended credit is 4. All vault cash held during the lagged computation period by "bound" institutions (that similar to that of nonborrowed reserves. is, those whose required reserves exceed their vault cash) plus the amount of vault cash applied during the maintenance period by "nonbound" institutions (that is, those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit Extended credit Federal Reserve Bank On On Previous rate On 12/12/97 12/12/97 12/12/97 Boston 2/1/96 New York. .. . 1/31/96 Philadelphia. . 1/31/96 Cleveland 1/31/96 Richmond. . .. 2/1/96 Atlanta 1/31/96 Chicago 2/1/96 St. Louis 2/5/96 Minneapolis. . 1/31/96 Kansas City . . 2/1/96 Dallas 1/31/96 San Francisco. 1/31/96 Range of rates for adjustment credit in recent years Range (or F.R. Bank Range (or F.R. Bank Range (or level)—All of level)—All of level)—All F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks In effect Dec. 31, 1977 1981—Nov. 2 13-14 13 1988—Aug. 9 6-6.5 6.5 6 13 13 11 6.5 6.5 1978—Jan. 9 6-6.5 6.5 Dec. 4 12 12 70 6.5 6.5 1989—Feb. 24 6.5-7 7 May 11 6.5-7 7 1982—July 20 11.5-12 11.5 7 7 17 7 7 23 11.5 11.5 27 July 3 7-7.25 7.25 Aug. 2 11-11.5 11 6.5 6.5 10 7.25 7.25 3 11 11 1990—Dec. 19 Aug. ?1 7.75 7.75 16 10.5 10.5 6-6.5 6 Sept. 77 8 8 27 10-10.5 10 1991—Feb. 1 6 6 Oct. 16 8-8.5 8.5 30 10 10 4 5.5-6 5.5 70 8.5 8.5 Oct. 12 9.5-10 9.5 Apr. 30 5.5 5.5 Nov. 1 8.5-9.5 9.5 13 9.5 9.5 May 2 5-5.5 5 3 9.5 9.5 Nov. 22 9-9.5 9 Sept. 13 5 5 26 9 9 1 7 4.5-5 4.5 1979—July 70 10 10 Dec. 14 8.5-9 9 Nov. 6 4.5 4.5 Aug. 17 10-10.5 10.5 15 8.5-9 8.5 7 3.5^1.5 3.5 70 10.5 10.5 17 8.5 8.5 Dec. 20 3.5 3.5 Sept. 19 10.5-11 11 24 71 11 11 1984—Apr. 9 8.5-9 9 1992—July 2 3-3.5 3 Oct. 8 11-12 12 13 9 9 7 3 3 10 12 12 Nov. 21 8.5-9 8.5 26 8.5 8.5 1994—May 17 3-3.5 3.5 1980—Feb. 15 12-13 13 Dec. 24 1 8 3.5 3.5 19 13 13 Aug. 16 3.5-4 4 May 79 12-13 13 1985—May 20 7.5-8 7.5 18 4 4 ill 12 12 24 7.5 7.5 Nov. 15 4-4.15 4.75 June n 11-12 11 17 4.75 4.75 16 11 11 1986—Mar. 7 7-7.5 7 July 78 10-11 10 10 7 7 1995—Feb. 1 4.75-5.25 5.25 79 10 10 Apr. 21 6.5-7 6.5 9 5.25 5.25 Sept. 76 11 11 23. 6.5 6.5 Nov. 17 12 12 July 11 6 6 1996—Jan. 31 5.00-5.25 5.00 Dec. 5 12-13 13 Aug. 21 5.5-6 5.5 Feb. 5 5.00 5.00 13 13 22 5.5 5.5 1981—May 5 13-14 14 In effect Dec. 12, 1997 5.00 5.00 8 14 14 1987—Sept. 4 5.5-6 11 6 1. Available on a short-term basis to help depository institutions meet temporary needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that cannot be met through reasonable alternative sources. The highest rate established flexible rate somewhat above rates charged on market sources of funds is charged. The r<ite for loans to depository institutions may be charged on adjustment credit loans of unusual size ordinarily is reestablished on the first business day of each two-week reserve maintenance that result from a major operating problem at the borrower's facility. period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis 2. Available to help relatively small depository institutions meet regular seasonal needs for points. funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 4. For earlier data, see the following publications of the Board of Governors: Banking and that cannot be met through special industry lenders. The discount rate on seasonal credit takes Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 1970into account rates charged by market sources of funds and ordinarily is reestablished on the 1979. first business day of each two-week reserve maintenance period; however, it is never less than In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit the discount rate applicable to adjustment credit. borrowings by institutions with deposits of $500 million or more that had borrowed in 3. May be made available to depository institutions when similar assistance is not successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was reasonably available from other sources, including special industry lenders. Such credit may in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed be provided when exceptional circumstances (including sustained deposit drains, impaired on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to access to money market funds, or sudden deterioration in loan repayment performance) or 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, practices involve only a particular institution, or to meet the needs of institutions experiencing and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the difficulties adjusting to changing market conditions over a longer period (particularly at times surcharge was changed from a calendar quarter to a moving thirteen-week period. The of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is surcharge was eliminated on Nov. 17, 1981. charged on extended-credit loans outstanding less than thirty days; however, at the discretion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic NonfinancialS tatistics • January 1998 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS' Type of deposit Net transaction accounts 1 $0 million-$47.8 million3 . 1/1/98 2 More than $47.8 million4 . 1/1/98 3 Nonpersonal time deposits: 12/27/90 4 Eurocurrency liabilities6.. 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve Banks succeeding calendar year by 80 percent of the percentage increase in the total reservable or vault cash. Nonmember institutions may maintain reserve balances with a Federal liabilities of all depository institutions, measured on an annual basis as of June 30. No Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For corresponding adjustment is made in the event of a decrease. The exemption applies only to previous reserve requirements, see earlier editions of the Annual Report or the Federal accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions maintenance period beginning January 1, 1998, for depository institutions that report weekly, include commercial banks, mutual savings banks, savings and loan associations, credit and with the period beginning January 15, 1998, for institutions that report quarterly, the unions, agencies and branches of foreign banks, and Edge Act corporations. exemption was raised from $4.4 million to $4.7 million. 2. Transaction accounts include all deposits against which the account holder is permitted 4. The reserve requirement was reduced from 12 percent to 10 percent on to make withdrawals by negotiable or transferable instruments, payment orders of with- Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that drawal, or telephone or preauthorized transfers for the purpose of making payments to third report quarterly. persons or others. However, accounts subject to the rules that permit no more than six 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits preauthorized, automatic, or other transfers per month (of which no more than three may be with an original maturity of less than 1 l/l years was reduced from 3 percent to 1 Vi percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1 Vi years was reduced from 3 against which the 3 percent reserve requirement applies be modified annually by 80 percent of percent to zero on Jan. 17, 1991. the percentage change in transaction accounts held by all depository institutions, determined The reserve requirement on nonpersonal time deposits with an original maturity of l'/2 as of June 30 of each year. Effective with the reserve maintenance period beginning January 1, years or more has been zero since Oct. 6, 1983. 1998, for depository institutions that report weekly, and with the period beginning January 15, 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero 1998, for institutions that report quarterly, the amount was decreased from $49.3 million to in the same manner and on the same dates as the reserve requirement on nonpersonal time $47.8 million. deposits with an original maturity of less than 1V6 years (see note 5). Under the Garn-St Germain Depository Institutions Act of 1982, the Board adjusts the amount of reservable liabilities subject to a zero percent reserve requirement each year for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS1 Millions of dollars 1997 TTyypp aa ee nn dd oo ff mm ttrr aa aa tt nn uu ss rrii aa tt cc yy tt iioonn 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 17,484 10,932 9,901 0 4,006 0 596 0 0 0 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 380,327 405,296 426,928 31,720 33,160 47,456 33,022 41,643 35,666 20,593 4 For new bills 380,327 405,296 426,928 31,720 33,160 47,456 33,022 41,643 35,666 20,593 5 Redemptions 0 900 0 0 0 0 0 0 0 0 Others within one year 6 Gross purchases 733 390 524 0 0 383 494 0 0 644 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 0 43,574 30,512 3,143 2,006 5,666 1,476 4,359 7,487 1,596 9 Exchanges -31,949 -35,407 -41,394 -1,534 -2,100 -4,229 -2,250 -1,087 -2,780 -2,382 10 Redemptions 2,337 1,776 2,015 0 376 0 0 598 0 0 One to five years 11 Gross purchases 9,916 5,366 3,898 2,861 1,924 1,102 2,797 0 0 2,697 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -6,004 -34,646 -25,022 -3,143 -2,006 -4,685 -1,476 -4,359 -5,247 -1,596 14 Exchanges 26,458 26,387 31,459 1,534 1,700 2,479 2,250 1,087 1,170 2,382 Five to ten years 15 Gross purchases 3,575 1,432 1,116 0 0 734 499 0 0 0 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -3,145 -3,093 -5,469 0 0 -981 0 0 -2,240 0 18 Exchanges 4,717 7,220 6,666 0 400 1,750 0 0 880 0 More than ten years 19 Gross purchases 3,606 2,529 1,655 1,117 0 988 906 0 0 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -918 -2,253 -20 0 0 0 0 0 0 0 22 Exchanges 775 1,800 3,270 0 0 0 0 0 730 0 All maturities 23 Gross purchases 35,314 20,649 17,094 3,978 5,930 3,206 5,292 0 0 3,341 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 2,337 2,676 2,015 0 376 0 0 598 0 0 Matched transactions 26 Gross purchases 1,700,836 2,197,736 3,092,399 288,373 303,056 287,229 293,506 307,101 317,008R 311,153 27 Gross sales 1,701,309 2,202,030 3,094,769 288,073 301,177 287,826 293,008 309,578 315,439R 312,083 Repurchase agreements 28 Gross purchases 309,276 331,694 457,568 60,425 102,578 46,552 60,286 44,503 54,561 77,109 29 Gross sales 311,898 328,497 450,359 60,718 62,685 89,477 47,070 53,217 27,204 49,923 30 Net change in U.S. Treasury securities 29,882 16,875 19,919 3,984 47,326 -40,316 19,006 -11,789 28,926R 29,597 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 0 0 0 32 Gross sales 0 0 0 0 0 0 0 0 0 0 33 Redemptions 942 1,003 409 17 24 0 474 287 179 105 Repurchase agreements 34 Gross purchases 52,696 36,851 75,354 14,300 10,178 7,954 8,401 10,437 13,131 9,796 35 Gross sales 52,696 36,776 74,842 14,830 10,285 7,096 9,131 10,811 11,252 11,196 36 Net change in federal agency obligations -942 -928 103 -547 -131 858 -1,204 -661 1,700 -1,505 37 Total net change in System Open Market Account... 28,940 15,948 20,021 3,437 47,195 -39,458 17,802 -12,450 30,626r 28,092 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 2. Transactions exclude changes in compensation for the effects of inflation on the principal Account; all other figures increase such holdings. of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic NonfinancialS tatistics • January 1998 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1997 1997 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 Aug. 31 Sept. 30 Oct. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,050 11,050 11,050 11,050 11,051 11,050 11,050 11,050 2 Special drawing rights certificate account 9,200 9,200 9,200 9,200 9,200 9,200 9,200 9,200 3 Coin 526 527 524 519 517 485 526 532 Loans 4 To depository institutions 304 283 238 217 185 468 313 175 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Federal agency obligations 1 Bought outright 865 865 761 746 711 1.030 925 711 8 Held under repurchase agreements 546 1,722 905 1,622 1,844 2,622 1,222 1,704 9 Total U.S. Treasury securities 418,991 420,968 421,273 427,979 418,571 419,956 424,518 420,629 10 Bought outright' 413,046 413,414 414,233 415,465 414,096 409,409 411,822 410,767 11 Bills 194,917 195,284 195,100 196,331 194,962 194,623 193,693 191,632 12 Notes 163,138 163,139 163,074 163,075 163,076 159,795 163,138 163,076 13 Bonds 54,991 54,991 56,059 56,059 56,059 54,991 54,991 56,059 14 Held under repurchase agreements 5,945 7,554 7,040 12,514 4,475 10,547 12,696 9,862 15 Total loans and securities 420,706 423,839 423,177 430,563 421,310 424,076 426,978 423,219 16 Items in process of collection 7,376 7,406 12,299 7,106 6,001 4,252 8,652 4,529 17 Bank premises 1,268 1,268 1,271 1,274 1,273 1,265 1,268 1,273 Other assets 18 Denominated in foreign currencies3 17,593 17,601 17,608 17,615 17,623 17,320 17,592 17,945 19 All other4 12,963 12,834 13,414 13,427 13,855 11,302 12,822 13,728 20 Total assets 480,681 483,724 488,543 490,753 480,831 478,950 488,088 481,475 LIABILITIES 21 Federal Reserve notes 434,141 436,336 438,072 436,804 437,336 434,827 433,581 436,780 22 Total deposits 23,707 25,120 24,823 31,712 22,105 23,693 30,057 23,852 23 Depository institutions 19,388 19,724 19,103 25,556 16,386 18,497 21,791 18,709 24 U.S. Treasury—General account 3,703 4,858 5,174 5,585 5,091 4,700 7,692 4,616 25 Foreign—Official accounts 217 164 164 205 192 169 188 190 26 Other 400 374 381 365 437 327 386 337 27 Deferred credit items 6,915 6,614 10,050 6,315 5,618 4,286 7,914 4,515 28 Other liabilities and accrued dividends5 4,841 4,762 4,682 4,972 4,825 5,005 4,947 4,936 29 Total liabilities 469,604 472,831 477,626 479,803 469,884 467,811 476,499 470,083 CAPITAL ACCOUNTS 30 Capital paid in 5,230 5,245 5,252 5,259 5,272 5,150 5,227 5,279 31 Surplus 4,389 4,389 4,389 4,389 4,389 4,496 4,496 4,389 32 Other capital accounts 1,459 1,260 1,277 1,303 1,286 1,493 1,866 1,724 33 Total liabilities and capital accounts 480,681 483,724 488,543 490,753 480,831 478,950 488,088 481,475 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 637,946 633,543 635,857 628,649 621,101 642,699 637,992 624,722 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 549,898 551,036 551,608 550,993 549,297 546,295 549,745 548,595 36 LESS: Held by Federal Reserve Banks 115,757 114,701 113,536 114,189 111,961 111,467 116,164 111,815 37 Federal Reserve notes, net 434,141 436,336 438,072 436,804 437,336 434,827 433,581 436,780 Collateral held against notes, net 38 Gold certificate account 11,050 11,050 11,050 11,050 11,051 11,050 11,050 11,050 39 Special drawing rights certificate account 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. Treasury and agency securities 413,891 416,086 417,822 416,554 417,086 414,577 413,331 416,530 42 Total collateral 434,141 436336 438,072 436,804 437,336 434,827 433,581 436,780 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 3. Valued monthly at market exchange rates. release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with bills maturing within ninety days. Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on 5. Includes exchange-translation account reflecting the monthly revaluation at market the principal of inflation-indexed securities. Excludes securities sold and scheduled to be exchange rates of foreign exchange commitments. bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 1997 1997 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 Aug. 31 Sept. 30 Oct. 31 1 Total loans 304 283 238 217 185 468 313 176 2 Within fifteen days' 81 67 43 177 168 294 174 96 3. Sixteen days to ninety days 223 216 195 40 16 174 139 79 4 Total U.S. Treasury securities2 418,991 420,968 421,273 427,979 418,571 419,956 420,473 420,629 5 Within fifteen days' 18,676 20,169 20,717 19,979 16,595 12,146 16,403 15,483 6 Sixteen days to ninety days 84,712 86,577 91,089 93,640 87,956 91,288 88,467 90.393 7 Ninety-one days to one year 141,248 139,867 134,293 139,186 138,846 143,510 141,248 140,643 8 One year to five years 91,956 91,956 91,356 91,357 91,357 90,614 91,956 90,291 9 Five years to ten years 37,658 37,658 38,429 38,429 38,429 37,657 37,658 38,429 10 More than ten years 44,741 44,741 45,389 45,389 45,389 44,741 44,741 45,389 11 Total federal agency obligations 1,411 2,587 1,666 2,368 2,555 3,757 1,929 2,415 12 Within fifteen days' 551 1,842 955 1,683 1,870 2,727 1,004 1,730 13 Sixteen days to ninety days 76 61 26 n.a. n.a. 106 76 n.a. 14 Ninety-one days to one year 202 202 202 202 202 154 202 202 15 One year to five years 303 203 203 203 203 351 303 203 16 Five years to ten years 255 255 255 255 255 290 255 255 17 More than ten years 25 25 25 25 25 25 25 25 1. Holdings under repurchase agreements are classified as maturing within fifteen days in 2. Includes compensation that adjusts for the elfects of inflation on the principal of accordance with maximum maturity of the agreements. inflation-indexed securities. . Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • January 1998 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1997 1993 1994 1995 1996 IItteemm Dec. Dec. Dec. Dec. Mar. Apr. May June July Aug. Sept. Oct. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 60.55 59.40 56.39 50.06 48.31 47.43 47.05 47.11 46.89 47.41 46.67 46.45 2 Nonborrowed reserves4 60.46 59.20 56.13 49.91 48.16 47.17 46.81 46.74 46.48 46.82 46.23 46.18 3 Nonborrowed reserves plus extended credit5 60.46 59.20 56.13 49.91 48.16 47.17 46.81 46.74 46.48 46.82 46.23 46.18 4 Required reserves 59.48 58.24 55.11 48.64 47.15 46.42 45.81 45.83 45.68 46.16 45.37r 45.06 5 Monetary base6 386.88 418.48 434.52 452.67 457.62 458.24 459.60 461.40 464.21 466.46 469.361 472.04 Not seasonally adjusted 6 Total reserves7 62.37 61.13 58.02 51.52 47.69 48.09 46.26 46.93 46.76 47.09 46.55 46.16 7 Nonborrowed reserves 62.29 60.92 57.76 51.37 47.53 47.83 46.02 46.56 46.35 46.49 46.11 45.89 8 Nonborrowed reserves plus extended credit5 62.29 60.92 57.76 51.37 47.53 47.83 46.02 46.56 46.35 46.49 46.11 45.89 9 Required reserves8 61.31 59.96 56.74 50.10 46.53 47.08 45.02 45.65 45.56 45.83 45.25 44.76 10 Monetary base9 390.59 422.51 439.03 456.72 455.26 458.17 458.29 461.81 465.55 467.24r 468.63r 470.68 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 62.86 61.34 57.90 51.24 47.54 47.88 46.00 46.61 46.38 46.65 46.06 45.62 12 Nonborrowed reserves 62.78 61.13 57.64 51.09 47.39 47.62 45.75 46.24 45.97 46.05 45.62 45.35 13 Nonborrowed reserves plus extended credit5 62.78 61.13 57.64 51.09 47.39 47.62 45.75 46.24 45.97 46.05 45.62 45.35 14 Required reserves 61.80 60.17 56.62 49.82 46.38 46.87 44.76 45.33 45.18 45.39 44.76r 44.22 15 Monetary base12 397.62 427.25 444.45 463.49 462.22 465.06 465.22 468.78 472.58 474.01 475.32r 477.27 16 Excess reserves'3 1.06 1.17 1.28 1.42 1.16 1.01 1.24 1.28 1.20 1.25 1.30 1.40 17 Borrowings from the Federal Reserve .08 .21 .26 .16 .16 .26 .24 .37 .41 .60 .44 .27 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly 8. To adjust required reserves for discontinuities that are due to regulatory changes in statistical release. Historical data starting in 1959 and estimates of the effect on required reserve requirements, a multiplicative procedure is used to estimate what required reserves reserves of changes in reserve requirements are available from the Money and Reserves would have been in past periods had current reserve requirements been in effect. Break- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve adjusted required reserves include required reserves against transactions deposits and nonper- System, Washington, DC 20551. sonal time and savings deposits (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus changes in reserve requirements. (See also table 1.10.) (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all adjusted required reserves (line 4) plus excess reserves (line 16). those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, difference between current vault cash and the amount applied to satisfy current reserve break-adjusted total reserves (line 1) less total borrowings of depository institutions from the requirements. Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no 5. Extended credit consists of borrowing at the discount window under the terms and adjustments to eliminate the effects of discontinuities associated with regulatory changes in conditions established for the extended credit program to help depository institutions deal reserve requirements. with sustained liquidity pressures. Because there is not the same need to repay such 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve borrowing promptly as with traditional short-term adjustment credit, the money market effect requirements. of extended credit is similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for component of the money stock, plus (3) (for all quarterly reporters on the "Report of all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve difference between current vault cash and the amount applied to satisfy current reserve requirements. Since the introduction of contemporaneous reserve requirements in February requirements. 1984, currency and vault cash figures have been measured over the computation periods 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess ending on Mondays. reserves (line 16). 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1997r IItteemm 1993 1994 1995 1996 Dec. Dec. Dec. Dec. July Aug. Sept. Oct. Seasonally adjusted Measures2 1 Ml 1,129.8 1,150.7 1,129.0 1,081.1 1,062.1 1,069.6 1,060.8 1,057.5 2 M2 3,486.6 3,502.1 3,655.0 3,819.3 3,905.3 3,940.5 3,960.0 3,976.2 3 M3 4,254.4 4,327.3 4,592.5 4,918.0 5,117.4 5,168.9 5,208.7 5,245.2 4 L 5,167.8 5,308.4 5,697.6 6,069.3 6,307.4 6,378.2 6,427.2 n.a. 5 Debt 12,457.3 13,072.1 13,768.1 14,485.7 14,832.1 14,887.3 14,943.8 n.a. MI components 6 Currency3 322.2 354.4 372.6 395.2 410.2 412.1 415.4 418.1 7 Travelers checks4 7.9 8.5 8.9 8.6 8.2 8.3 8.1 8.1 8 Demand deposits5 385.2 384.1 391.1 402.6 396.4 402.0 390.6 386.4 9 Other checkable deposits6 414.5 403.8 356.5 274.8 247.2 247.2 246.7 244.8 Nontransaction components 10 In M27 2,356.8 2,351.4 2,526.0 2,738.2 2,843.2 2,871.0 2,899.3 2,918.8 11 In M3 only8 767.8 825.3 937.5 1,098.7 1,212.1 1,228.4 1,248.7 1,269.0 Commercial banks 12 Savings deposits, including MMDAs 785.2 752.4 776.0 903.9 955.2 966.7 982.2 995.4 13 Small time deposits9 468.3 503.2 576.0 592.0 613.2 615.0 618.3 621.0 14 Large time deposits10' 11 271.9 298.4 344.7 412.3 466.3 472.0 485.3 491.7 Thrift institutions 15 Savings deposits, including MMDAs 434.0 397.2 361.1 367.1 374.6 374.8 374.5 375.0 16 Small time deposits9 314.3 314.3 357.7 353.7 347.7 347.5 345.9 345.6 17 Large time deposits10 61.5 64.7 75.1 79.2 84.8 85.2 85.6 85.3 Money market mutual funds 18 Retail 354.9 384.3 455.2 521.5 552.5 567.0 578.3 581.8 19 Institution-only 209.5 198.5 246.9 299.3 324.1 329.2 338.9 345.3 Repurchase agreements and Eurodollars 20 Repurchase agreements12 158.6 182.9 182.1 194.1 208.0 211.0 208.2 219.4 21 Eurodollars12 66.4 80.8 88.7 113.9 128.9 131.0 130.7 127.3 Debt components 22 Federal debt 3,322.9 3,491.9 3,638.5 3,780.0 3,779.4 3,784.5 3,788.0 n.a. 23 Nonfederal debt 9,134.4 9,580.2 10,129.6 10,705.7 11,052.7 11,102.8 11,155.9 n.a. Not seasonally adjusted Measures2 24 Ml 1,153.7 1,174.4 1,152.8 1,103.1 1,063.7 1,067.5 1,057.7 1,054.6 25 M2 3,506.6 3,522.5 3,675.3 3,837.7 3,910.3 3,944.0 3,952.4 3,965.7 26 M3 4,274.8 4,347.4 4,612.0 4,935.0 5,115.3 5,170.9 5,195.9 5,242.0 27 L 5,197.7 5,338.8 5,729.5 6,098.1 6,297.5 6,378.3 6,408.6 n.a. 28 Debt 12,459.4 13,073.9 13,768.5 14,485.1 14,782.8 14,843.9 14,912.3 n.a. Ml components 29 Currency3 324.8 357.5 376.2 397.9 411.3 413.4 414.2 417.3 30 Travelers checks4 7.6 8.1 8.5 8.3 8.7 8.8 8.4 8.2 31 Demand deposits5 401.8 400.3 407.3 418.9 398.2 400.6 389.6 386.5 32 Other checkable deposits6 419.4 408.6 360.8 278.0 245.5 244.8 245.5 242.6 Nontransaction components 33 In M27 2,352.9 2,348.1 2,522.6 2,734.6 2,846.6 2,876.5 2,894.7 2,911.1 34 In M3 only8 768.2 824.9 936.6 1,097.3 1,205.0 1,226.9 1,243.5 1,276.3 Commercial banks 35 Savings deposits, including MMDAs 784.3 751.7 775.3 902.9 958.6 970.0 983.2 994.8 36 Small time deposits9 466.8 501.5 573.8 589.8 613.8 615.0 617.5 620.2 37 Large time deposits10' 11 272.0 298.9 345.7 413.7 463.7 470.7 484.5 497.5 Thrift institutions 38 Savings deposits, including MMDAs 433.4 396.8 360.8 366.7 375.9 376.1 374.9 374.8 39 Small time deposits9 313.3 313.2 356.3 352.4 348.1 347.5 345.5 345.2 40 Large time deposits10 61.5 64.8 75.4 79.5 84.4 84.9 85.4 86.3 Money market mutual funds 41 Retail 355.0 385.0 456.3 522.9 550.2 568.0 573.7 576.1 42 Institution-only 210.6 199.8 248.2 300.5 321.0 328.3 333.1 341.2 Repurchase agreements and Eurodollars 43 Repurchase agreements12 156.6 179.6 178.0 188.8 208.7 213.0 210.7 222.8 44 Eurodollars12 67.6 81.8 89.4 114.7 127.2 129.9 129.8 128.5 Debt components 45 Federal debt 3,329.5 3,499.0 3,645.9 3,787.9 3,759.9 3,774.4 3,780.4 n.a. 46 Nonfederal debt 9,129.9 9,574.9 10,122.6 10,697.1 11,023.0 11,069.6 11,131.9 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • January 1998 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly these assets. Seasonally adjusted L is computed by summing U.S. savings bonds, short-term statistical release. Historical data starting in 1959 are available from the Money and Reserves Treasury securities, commercial paper, and bankers acceptances, each seasonally adjusted Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve separately, and then adding this result to M3. System, Washington, DC 20551. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial 2. Composition of the money stock measures and debt is as follows: sectors—the federal sector (U.S. government, not including government-sponsored enter- Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of prises or federally related mortgage pools) and the nonfederal sectors (state and local depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all governments, households and nonprofit organizations, nonfinancial corporate and nonfarm commercial banks other than those owed to depository institutions, the U.S. government, and noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and foreign banks and official institutions, less cash items in the process of collection and Federal corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of which are derived from the Federal Reserve Board's flow of funds accounts, are breakwithdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, adjusted (that is, discontinuities in the data have been smoothed into the series) and credit union share draft accounts, and demand deposits at thrift institutions. Seasonally month-averaged (that is, the data have been derived by averaging adjacent month-end levels). adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository OCDs, each seasonally adjusted separately. institutions. M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) Travelers checks issued by depository institutions are included in demand deposits. balances in retail money market mutual funds (money funds with minimum initial invest- 5. Demand deposits at commercial banks and foreign-related institutions other than those ments of less than $50,000). Excludes individual retirement accounts (IRAs) and Keogh owed to depository institutions, the U.S. government, and foreign banks and official institubalances at depository institutions and money market funds. Seasonally adjusted M2 is tions, less cash items in the process of collection and Federal Reserve float. calculated by summing savings deposits, small-denomination time deposits, and retail money 6. Consists of NOW and ATS account balances at all depository institutions, credit union fund balances, each seasonally adjusted separately, and adding this result to seasonally share draft account balances, and demand deposits at thrift institutions. adjusted Ml. 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) money fund balances. issued by all depository institutions, (2) balances in institutional money funds (money funds 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities with minimum initial investments of $50,000 or more), (3) RP liabilities (overnight and term) (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and issued by all depository institutions, and (4) Eurodollars (overnight and term) held by U.S. term) of U.S. addressees. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United 9. Small time deposits—including retail RPs—are those issued in amounts of less than Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. govern- $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are ment, money market funds, and foreign banks and official institutions. Seasonally adjusted subtracted from small time deposits. M3 is calculated by summing large time deposits, institutional money fund balances, RP 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those liabilities, and Eurodollars, each seasonally adjusted separately, and adding this result to booked at international banking facilities. seasonally adjusted M2. 11. Large time deposits at commercial banks less those held by money market funds, L: M3 plus the nonbank public holdings of U.S. savings bonds, short-term Treasury depository institutions, the U.S. government, and foreign banks and official institutions. securities, commercial paper, and bankers acceptances, net of money market fund holdings of 12. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A15 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1 A. All commercial banks Billions of dollars Monthly averages Wednesday figures Account 1996 1997r 1997 Oct. Apr. May June July Aug. Sept. Oct. Oct. 8 Oct. 15 Oct. 22 Oct. 29 Seasonally adjusted Assets 1 Bank credit 3,716.5 3,898.0 3,902.1 3,920.7 3,949.1 3,959.1 3,981.3 4,017.3 4,006.1 4,004.4 4,022.5 4,031.5 2 Securities in bank credit 968.9? 1,033.4 1,014.3 1,010.0 1,028.3 1,021.8 1,028.2 1,044.3 1,040.5 1,028.7 1,046.9 1,055.2 3 U.S. government securities 702.2' 723.7 723.4 726.3 726.1 713.9 722.2 730.7 733.3 719.5 729.5 737.6 4 Other securities 266.7r 309.7 290.9 283.7 302.2 307.9 306.0 313.6 307.2 309.2 317.4 317.6 5 Loans and leases in bank credit2 . .. 2,747.6 2,864.6 2,887.8 2,910.7 2,920.8 2,937.4 2,953.1 2,973.0 2,965.6 2,975.7 2,975.6 2,976.3 6 Commercial and industrial 770.5 803.5 807.8 812.6 816.5 824.5 836.3 843.8 844.9 847.5 843.2 840.8 7 Real estate 1,115.6 1,167.8 1,178.9 1,188.6 1,193.6 1,199.3 1.206.2 1,210.3 1,210.5 1,208.8 1,209.4 1,211.0 8 Revolving home equity 83.5 89.7 90.9 92.5 93.5 94.3 95.5 96.6 96.0 96.4 96.8 96.9 9 Other l,032.2r 1,078.1 1,087.9 1,096.1 1,100.2 1,105.0 1,110.7 1,113.8 1,114.5 1,112.4 1,112.5 1,114.1 10 Consumer 519.2 515.1 516.5 517.8 517.1 517.5 513.4 507.5 507.5 507.8 507.8 507.0 11 Security-1 75.8 89.4 88.3 92.6 93.6 93.5 94.8 104.7 99.1 105.2 107.4 108.4 12 Other loans and leases 266.5 288.8 296.3 299.1 299.9 302.6 302.3 306.7 303.7 306.5 307.8 309.2 13 Interbank loans 204.5 215.5 217.7 190.3 184.4 191.2 199.1 199.6 201.0 200.9 197.1 199.5 14 Cash assets4 226.1 246.4 243.7 247.8 244.5 261.4 256.7 267.3 254.6 272.8 279.8 258.5 15 Other assets5 253.0 278.5 280.7 286.9 283.0 285.4 286.0 295.3 291.0 297.7 296.5 293.1 16 Total assets6 4,3433r 4,581.9 4,587.7 4,589.0 4,604.1 4,640.2 4,666.4 4,722.8 4,6963 4,719.0 4,739.1 4,725.9 Liabilities 17 Deposits 2,803.0 2,948.5 2,934.3 2,967.0 2,988.5 3,011.5 3,026.1 3,039.3 3,021.1 3,059.0 3,032.8 3,032.2 18 Transaction 719.0 701.6 689.4 693.1 688.1 694.3 679.2 678.8 656.4 696.6 679.6 679.5 19 Nontransaction 2,084.1 2,246.9 2,244.9 2,273.9 2,300.4 2,317.2 2,346.9 2,360.5 2,364.7 2,362.4 2,353.2 2,352.7 20 Large time 490.6 567.2 561.4 577.6 596.4 602.4 618.1 616.9 620.4 613.3 611.9 619.5 21 Other 1,593.5 1,679.7 1,683.5 1,696.2 1,703.9 1,714.8 1,728.9 1,743.6 1,744.3 1,749.1 1,741.3 1,733.2 22 Borrowings 688.5 761.3 760.7 727.7 726.6 740.1 761.1 802.0 787.2 791.6 817.1 811.5 23 From banks in the U.S 288.3 310.8 299.0 266.2 262.1 273.9 281.4 291.2 289.1 296.1 297.7 280.4 24 From others 400.2 450.5 461.7 461.5 464.5 466.2 479.7 510.8 498.0 495.6 519.3 531.1 25 Net due to related foreign offices 244.1 211.6 234.1 229.5 215.0 206.7 205.6 186.7 198.2 183.0 189.4 176.2 26 Other liabilities 241.8 271.4 265.1 266.9 279.5 285.5 275.1 292.2 285.3 287.7 290.2 305.6 27 Total liabilities 3,977.3 4,192.8 4,194.1 4,191.1 4,209.6 4,243.8 4,267.9 4320.2 4,291.7 4,3213 4329.5 4325.4 28 Residual (assets less liabilities)7 365^ 389.1 393.5 397.9 394.6 396.4 398.5 402.6 404.6 397.7 409.7 400.5 Not seasonally adjusted Assets 29 Bank credit 3,718.3 3,897.5 3,906.7 3,924.5 3,944.9 3,960.3 3,982.7 4,018.8 4,007.9 4,008.9 4,016.5 4,033.0 30 Securities in bank credit 968.9 1,035.9 1,023.3 1,016.5 1,025.6 1,027.0 1,028.4 1,044.2 1,040.2 1,029.8 1,043.6 1,056.0 31 U.S. government securities 702.7r 726.4 725.9 726.2 722.1 716.6 723.3 731.4 733.0 721.0 730.5 737.4 32 Other securities 266.2r 309.5 297.5 290.3 303.5 310.4 305.1 312.8 307.2 308.7 313.1 318.6 33 Loans and leases in bank credit2 . . . 2,749.4 2,861.6 2,883.3 2,908.0 2,919.3 2,933.4 2,954.3 2,974.6 2,967.7 2,979.1 2,972.9 2,977.1 34 Commercial and industrial 766.9 810.8 814.6 816.1 817.8 820.2 830.5 839.7 840.9 842.5 838.5 837.0 35 Real estate 1,118.7 1,163.3 1,174.5 1,186.9 1,193.7 1,201.0 1,209.5 1,213.7 1,214.3 1,212.9 1,211.6 1,213.7 36 Revolving home equity 84.0 89.0 90.7 92.5 93.5 94.6 96.2 97.1 96.7 97.0 97.3 97.5 37 Other 1,034.7 1,074.3 1,083.7 1,094.4 1,100.2 1,106.3 1,113.3 1,116.5 1,117.6 1,115.9 1,114.3 1,116.2 38 Consumer 519.4 512.6 514.4 515.0 514.7 518.0 515.6 507.6 506.8 507.6 508.1 507.7 39 Security3 75.7 89.9 88.7 92.2 92.1 91.6 93.9 104.5 98.1 105.7 106.7 108.2 40 Other loans and leases 268.7 285.0 291.1 297.8 300.9 302.6 304.8 309.2 307.5 310.3 307.9 310.4 41 Interbank loans 199.3 213.9 213.2 187.8 182.2 186.8 193.5 194.4 198.1 197.5 186.8 193.0 42 Cash assets4 227.0 241.6 241.5 244.4 240.8 247.8 253.4 268.2 254.5 294.2 263.3 259.6 43 Other assets5 250.4 276.2 283.0 287.1 285.1 288.7 288.7 292.1 290.2 296.0 286.4 291.2 44 Total assets6 4,338.4 4,572.7 4,587.8 4,587.0 4,5963 4,626.6 4,661.4 4,717.0 4,694.1 4,740.0 4,696.4 4,720.4 Liabilities 45 Deposits 2,807.9 2,945.9 2,925.6 2,962.2 2,979.9 3,001.5 3,026.2 3,047.0 3,040.9 3,086.6 3,014.0 3,031.4 46 Transaction 716.7 704.8 679.5 687.4 681.9 681.8 677.7 676.7 661.7 712.7 653.9 673.3 47 Nontransaction 2,091.2 2,241.1 2,246.1 2,274.8 2,298.0 2,319.7 2,348.5 2,370.3 2,379.2 2,373.9 2,360.2 2,358.2 48 Large time 495.6 562.8 566.2 577.4 592.1 601.6 613.3 624.5 624.0 619.0 622.5 630.7 49 Other 11,,559955..66 1,678.3 1,679.9 1,697.3 1,705.9 1,718.1 1,735.1 1,745.8 1,755.2 1,754.9 1,737.6 1,727.5 50 Borrowings 668800..99 762.1 770.9 748.2 741.2 745.4 764.8 791.8 777.5 783.5 803.3 799.9 51 From banks in the U.S 281.7 309.5 307.5 280.0 271.1 279.1 283.1 283.2 284.7 288.4 284.2 272.9 52 From others 399.2 452.6 463.4 468.2 470.2 466.3 481.7 508.6 492.9 495.1 519.1 527.1 53 Net due to related foreign offices 245.7 210.0 236.5 219.8 211.4 202.5 198.3 187.2 191.2 185.4 193.5 182.6 54 Other liabilities 240.9 271.7 268.7 269.2 277.8 284.5 275.7 290.9 283.6 284.6 285.8 307.3 55 Total liabilities 3,9753 4,189.7 4,201.8 4,199.4 4,2103 4,233.8 4,264.9 4,316.9 4,2933 4340.1 4,296.6 4,3213 56 Residual (assets less liabilities)7 363.1 383.0 386.0 387.6 386.0 392.8 396.5 400.1 400.8 399.9 399.8 399.1 MEMO 57 Revaluation gains on off-balance-sheet items8 62.5 90.1 81.4 76.1 84.3 86.1 78.1 76.6 75.7 73.7 77.3 82.3 58 Revaluation losses on off-balancesheet items8 58.4 87.8 85.2 79.9 87.7 89.3 81.2 79.9 79.2 77.7 80.6 85.1 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • January 1998 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1996 1997 1997 Oct. Apr. May June July' Aug.' Sept.' Oct. Oct. 8 Oct. 15 Oct. 22 Oct. 29 Seasonally adjusted Assets 1 Bank credit 3,235.5 3,366.9r 3,367.9r 3,387.0 3,413.0 3,427.1 3,444.5 3,473.8 3,461.1 3,464.6 3,480.0 3,488.3 2 Securities in bank credit 819.9 856.5 841.3 836.6r 847.9 843.5 844.9 862.3 855.0 851.5 868.6 873.0 3 U.S. government securities 619.5 636.4r 634.8r 636.1' 634.7 627.2 632.9 643.3 640.7 634.1 645.7 650.8 4 Other securities 200.4 220.1 206.5r 200.5 213.2 216.2 212.0 219.0 214.3 217.4 222.8 222.2 5 Loans and leases in bank credit2 2,415.6 2,510.4r 2,526.6r 2,550.4' 2,565.1 2,583.7 2,599.6 2,611.5 2,606.0 2,613.1 2,611.4 2,615.3 6 Commercial and industrial 564.5 587.6r 589.8r 594.8' 598.9 605.4 614.7 620.6 619.0 622.5 620.8 620.7 7 Real estate l,082.9r l,136.5r l,148.4r 1,159.1' 1,165.3 1,171.3 1,178.9 1,183.1 1,183.5 1,181.3 1,182.0 1,184.0 8 Revolving home equity 83.5 89.7 90.9 92.5 93.5 94.3 95.5 96.6 96.0 96.4 96.8 96.9 9 Other 999.4 l,046.8r l,057.4r 1,066.6' 1,071.8 1,076.9 1,083.3 1,086.6 1,087.4 1,084.9 1,085.2 1,087.0 10 Consumer 519.2 515.lr 516.5 517.8' 517.1 517.5 513.4 507.5 507.5 507.8 507.8 507.0 11 Security3 42.9 46.5 45.6 47.8' 50.0 51.0 51.4 57.6 55.4 58.6 56.3 61.3 12 Other loans and leases 206.1 224.6r 226.4r 231.0 233.8 238.5 241.1 242.7 240.7 242.9 244.5 242.5 13 Interbank loans 183.9 196.9 197.9 171.7 166.2 173.8 182.1 180.7 183.5 183.4 178.7 175.9 14 Cash assets4 196.4 213.8 210.1 212.7 211.1 227.5 221.9 233.3 220.6 239.7 245.8 224.1 15 Other assets5 219.5 239.5 242.1 246.1 240.5 242.8 244.1 254.1 251.0 255.9 255.3 251.8 16 Total assets6 3,778.8 3,960.8R 3,961.8R 3,961.1 3,974.2 4,014.6 4,036.2 4,085.3 4,060.0 4,087.1 4,103.3 4,083.6 Liabilities 17 Deposits 2,605.6 2,691.8 2,685.0 2,712.9 2,722.0 2,744.6 2,755.5 2,772.8 2,753.6 2,794.3 2,769.4 2,763.5 18 Transaction 708.6 690.9 678.5 682.5 677.4 682.9 668.0 667.8 645.7 685.6 669.0 668.3 19 Nontransaction 1,897.0 2,000.9 2,006.5 2,030.4 2,044.6 2,061.8 2,087.6 2,105.0 2,107.9 2,108.7 2,100.4 2,095.2 20 Large time 305.8 323.8 325.5 336.7 343.3 349.6 361.2 364.0 366.1 362.1 361.5 364.4 21 Other 1,591.3 1,677.1 1,681.0 1,693.7 1,701.4 1,712.2 1,726.3 1,741.0 1,741.8 1,746.6 1,738.9 1,730.8 22 Borrowings 571.0 622.7 620.0 591.1 593.3 604.6 620.3 642.7 632.1 632.3 659.0 650.4 23 From banks in the U.S 255.9 278.9 267.7 238.2' 233.9 244.7 247.9 255.7 253.8 255.8 262.7 250.5 24 From others 315.0 343.7 352.3 352.9' 359.4 359.9 372.4 387.0 378.4 376.5 396.3 399.9 25 Net due to related foreign offices 76.5 77.3 85.7 81.1 85.6 79.5 83.5 73.2 79.3 74.6 76.2 63.0 26 Other liabilities 167.5 179.7 176.4 177.8' 184.1 189.1 180.2 198.2 192.6 195.2 196.5 209.1 27 Total liabilities 3,420.6 3,571.4 3,567.0 3,562.8R 3,585.0 3,617.9 3,639.5 3,687.0 3,657.6 3,696.4 3,701.1 3,685.9 28 Residual (assets less liabilities)7 358.2 389.4r 394.8r 398.3' 389.2 396.8 396.7 398.3 402.4 390.7 402.3 397.7 Not seasonally adjusted Assets 29 Bank credit 3,238.5 3,366.2r 3,369.9r 3,390.4 3,408.4 3,424.4 3,448.0 3,476.7 3,465.4 3,470.8 3,476.4 3,490.0 30 Securities in bank credit 819.9 858.5 845.5 842.4' 846.4 845.0 846.8 862.2 855.9 852.2 866.2 872.8 31 U.S. government securities 620.6 639.7r 636.7r 637.2' 633.4 628.4 635.1 644.7 642.1 636.2 647.3 651.3 32 Other securities 199.3 218.8r 208.7r 205.2' 213.0 216.7 211.7 217.5 213.9 216.0 218.9 221.4 33 Loans and leases in bank credit2 2,418.6r 2,507.8r 2,524.5r 2,548.0r 2,562.0 2,579.3 2,601.2 2,614.4 2,609.5 2,618.6 2,610.2 2,617.3 34 Commercial and industrial 562.1 594.2r 596.3r 597.5' 599.0 601.0 610.4 617.8 616.4 619.5 617.4 617.9 35 Real estate 1,085.8 l,132.4r l,144.2r 1,157.5' 1,165.4 1,172.9 1,182.1 1,186.3 1,187.2 1,185.3 1,184.2 1,186.4 36 Revolving home equity 84.0 89.0 90.7 92.5 93.5 94.6 96.2 97.1 96.7 97.0 97.3 97.5 3/ Other 1,001.8 l,043.4r l,053.5r 1,065.1' 1,071.9 1,078.3 1,085.9 1,089.1 1,090.5 1,088.4 1,086.9 1,088.9 38 Consumer 519.4 512.6 514.4 515.0* 514.7 518.0 515.6 507.6 506.8 507.6 508.1 507.7 39 Security3 42.8 47.0 46.0 47.4' 48.5 49.1 50.5 57.4 54.4 59.1 55.6 61.1 40 Other loans and leases 208.5 221.5 223.5r 230.6 234.3 238.3 242.7 245.3 244.6 247.1 244.8 244.2 41 Interbank loans 178.7 195.3 193.4 169.2 163.9 169.4 176.5 175.5 180.5 180.0 168.5 169.5 42 Cash assets4 197.0 209.9 207.8 208.6 207.2 214.0 219.5 233.9 220.2 260.7 229.0 224.6 43 Other assets5 217.3 238.6 243.4 246.4 243.4 245.3 246.3 251.2 250.8 254.6 245.9 249.9 44 Total assets6 3,775.0 3,953.9R 3,958.3R 3,958.0 3,966.6 3,996.4 4,033.7 4,081.0 4,060.6 4,109.7 4,063.6 4,077.8 Liabilities 45 Deposits 2,605.1 2,695.6 2,675.8 2,707.7 2,716.4 2,736.8 2,756.6 2,772.6 2,767.4 2,815.1 2,740.6 2,752.7 46 Transaction 706.2 694.6 669.1 676.9 671.1 670.6 666.0 665.7 650.9 701.6 643.5 661.9 47 Nontransaction 1,898.9 2,001.0 2,006.7 2,030.8 2,045.3 2,066.1 2,090.6 2,106.8 2,116.6 2,113.6 2,097.1 2,090.7 48 Large time 305.6 325.3 329.4 336.0 341.9 350.6 358.0 363.6 363.9 361.2 362.0 365.7 49 Other 1,593.3 1.675.8 1,677.3 1,694.8 1,703.4 1,715.5 1,732.6 1,743.2 1,752.7 1,752.4 1,735.1 1,725.0 50 Borrowings 566.7 621.0 630.5 606.5 599.0 604.7 623.0 637.2 626.9 628.0 648.3 647.0 51 From banks in the U.S 251.9 277.4 276.7 250.2 241.2 249.3 250.4 251.0 253.0 250.7 254.1 245.4 52 From others 314.9 343.6 353.8 356.3' 357.9 355.3 372.7 386.3 373.9 377.3 394.2 401.6 53 Net due to related foreign offices 78.2 78.8 92.3 79.6 83.2 77.1 79.3 74.8 75.4 74.8 81.8 69.4 54 Other liabilities 168.2 180.2 177.3 179.1' 184.6 187.6 180.9 198.9 192.8 194.3 195.5 212.2 55 Total liabilities 3,418.2 3,575.6 3,576.0 3,573.0R 3,583.2 3,606.2 3,639.8 3,683.5 3,662.5 3,712.2 3,666.2 3,681.3 56 Residual (assets less liabilities)7 356.8 378.4r 382.4r 385.1' 383.4 390.2 393.9 397.4 398.1 397.5 397.3 396.5 MEMO 57 Revaluation gains on off-balance-sheet items8 32.5 49.5 42.0 38.5 44.3 45.1 37.5 38.2 36.5 36.1 38.9 41.4 58 Revaluation losses on off-balancesheet items8 28.9 44.6 43.4 40.2 45.9 46.5 40.0 41.3 40.0 39.7 41.7 43.8 59 Mortgage-backed securities' 237.0 248.6r 248.7r 249.8' 251.3 253.1 255.4 260.7 260.9 255.6 261.0 263.3 Footnotes appear 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 IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 1996 1997r 1997 Oct.r Apr. May June July Aug. Sept. Oct. Oct. 8 Oct. 15 Oct. 22 Oct. 29 Seasonally adjusted Assets 1 Bank credit 1,886.2 1,963.9 1,955.2 1,969.1 2,005.3 2,008.0 2,019.2 2,044.9 2,035.6 2,036.2 2,051.3 2,057.2 2 Securities in bank credit 418.8 446.5 429.9 426.4 441.7 437.3 440.0 455.9 449.4 446.0 462.0 465.6 3 U.S. government securities 298.3 309.5 306.4 308.2 309.8 302.3 309.1 318.8 316.2 310.3 321.3 325.6 4 Trading account 21.3 20.3 19.4 22.9 23.7 20.6 23.3 25.5 24.6 22.6 26.8 27.8 5 Investment account 277.0 289.2 287.0 285.4 286.1 281.7 285.8 293.4 291.6 287.7 294.5 297.8 6 Other securities 120.5 137.0 123.5 118.2 131.9 134.9 130.8 137.1 133.1 135.7 140.7 140.0 7 Trading account 55.1 72.0 58.4 51.8 64.2 63.7 59.6 65.4 61.7 63.5 68.7 68.4 8 Investment account 65.4 65.0 65.1 66.4 67.7 71.3 71.2 71.8 71.4 72.2 72.0 71.6 9 State and local government. . 20.2 20.8 21.1 21.7 22.1 22.3 22.1 22.0 22.1 22.0 22.0 22.0 10 Other 45.2 44.2 44.0 44.6 45.5 49.0 49.2 49.8 49.4 50.2 50.0 49.7 11 Loans and leases in bank credit2 .. . 1,467.4 1,517.5 1,525.4 1,542.7 1,563.7 1,570.7 1,579.3 1,588.9 1,586.2 1,590.2 1,589.3 1,591.6 12 Commercial and industrial 395.0 409.9 410.2 414.1 419.3 424.1 431.9 436.4 435.9 437.5 436.7 436.4 13 Bankers acceptances 1.8 1.6 1.6 1.6 1.6 1.5 1.5 1.3 1.3 1.4 1.4 1.4 14 Other 393.1 408.3 408.7 412.5 417.7 422.6 430.4 435.1 434.6 436.3 435.4 435.1 15 Real estate 593.0 608.0 614.5 620.8 627.4 627.6 629.1 629.5 631.2 628.2 628.2 629.4 16 Revolving home equity 57.8 60.7 61.6 63.0 64.5 65.1 66.0 66.6 66.3 66.5 66.8 66.9 17 Other 535.2 547.3 552.9 557.9 562.9 562.5 563.1 562.9 564.9 561.8 561.4 562.5 18 Consumer 296.2 298.0 299.4 300.4 303.7 301.5 299.3 296.1 295.8 296.9 296.8 295.5 19 Security3 38.5 41.9 41.0 43.2 45.4 46.2 46.6 52.5 50.3 53.3 51.2 56.2 20 Federal funds sold to and repurchase agreements with broker-dealers 22.9 23.8 23.3 26.4 28.6 30.0 29.6 35.4 33.0 36.8 33.8 38.6 21 Other 15.6 18.1 17.6 16.8 16.9 16.3 16.9 17.1 17.3 16.5 17.4 17.6 22 State and local government 11.5 11.1 11.0 11.2 11.2 11.3 11.4 11.3 11.4 11.3 11.2 11.2 23 Agricultural 8.4 8.4 8.6 8.5 8.7 8.8 8.9 9.0 8.9 8.9 9.0 9.2 24 Federal funds sold to and repurchase agreements with others 6.3 7.4 5.8 6.4 7.4 6.3 6.6 8.9 8.9 8.3 10.7 8.3 25 All other loans 60.8 63.9 64.7 66.2 66.0 68.7 68.4 67.4 66.3 67.9 67.6 67.2 26 Lease-financing receivables 57.7 68.8 70.3 72.0 74.5 76.2 77.2 77.9 77.5 77.8 78.0 78.2 27 Interbank loans 140.1 148.4 149.2 121.3 115.6 121.6 128.0 124.6 128.9 123.9 124.2 120.1 28 Federal funds sold to and repurchase agreements with commercial banks 87.3 96.3 92.8 69.5 69.8 74.1 80.9 78.0 81.5 77.2 78.0 74.3 29 Other 52.7 52.2 56.3 51.8 45.8 47.4 47.2 46.6 47.4 46.7 46.3 45.7 30 Cash assets4 136.3 145.2 142.9 143.0 143.0 156.3 150.7 163.4 154.1 166.2 174.3 157.5 31 Other assets5 170.7 180.1 183.9 183.6 178.5 180.2 184.5 193.0 190.7 195.5 192.1 192.0 32 Total assets6 2,296.1 2,400.9 2,394.8 2,3803 2,405.7 2,429.5 2,446.2 2,489.5 2,473.2 2,485.4 2,505.5 2,490.4 Liabilities 33 Deposits 1,428.5 1,458.8 1,448.8 1,467.3 1,476.2 1,490.2 1,498.0 1,506.5 1,496.5 1,520.1 1,502.5 1,500.1 34 Transaction 405.1 384.6 374.1 377.8 375.0 379.3 367.8 368.7 354.9 381.2 368.6 368.2 35 Nontransaction 1,023.4 1,074.2 1,074.7 1,089.5 1,101.2 1,111.0 1,130.2 1,137.8 1,141.6 1,139.0 1,133.9 1,131.9 36 Large time 158.0 167.9 168.1 176.6 182.6 188.0 198.1 199.4 201.2 197.7 197.4 200.1 37 Other 865.4 906.3 906.6 913.0 918.7 922.9 932.1 938.4 940.5 941.3 936.5 931.8 38 Borrowings 417.9 463.9 463.2 434.6 437.2 446.1 463.9 488.3 479.7 478.2 502.2 495.5 39 From banks in the U.S 170.7 193.7 181.7 157.7 157.6 167.2 174.1 181.6 182.8 181.6 185.8 175.4 40 From others 247.2 270.2 281.5 276.9 279.6 278.9 289.8 306.6 296.9 296.6 316.4 320.1 41 Net due to related foreign offices 73.2 72.9 81.5 77.3 80.8 75.0 78.7 68.1 74.6 69.3 70.7 58.1 42 Other liabilities 143.0 154.1 150.0 150.7 158.0 162.1 152.4 170.6 164.7 167.8 169.3 181.5 43 Total liabilities 2,062.6 2,149.7 2,143.5 2,130.0 2,1523 2,173.4 2,193.0 2,233.6 2,215.5 2,235.5 2,244.6 2,235.2 44 Residual (assets less liabilities)7 233.5 251.3 251.3 250.3 253.4 256.0 253.2 255.9 257.8 249.9 260.9 255.2 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • January 1998 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks—Continued Monthly averages Wednesday figures AAAccccccooouuunnnttt 1996 I997r 1997 Oct.r Apr. May June July Aug. Sept. Oct. Oct. 8 Oct. 15 Oct. 22 Oct. 29 Not seasonally adjusted Assets 45 Bank credit 1,886.7 1,963.0 1,957.4 1,971.5 2,000.2 2,005.5 2,018.9 2,045.0 2,036.8 2,039.5 2,044.9 2,056.9 46 Securities in bank credit 419.9 445.0 432.2 430.5 440.9 440.6 441.4 456.9 451.2 447.4 460.5 466.6 47 U.S. government securities 300.5 309.5 306.8 307.5 309.3 305.0 310.8 321.2 318.5 313.2 323.7 327.5 48 Trading account 22.1 20.5 19.6 21.4 22.6 21.3 23.4 26.3 24.7 24.1 28.1 28.4 49 Investment account 278.3 289.0 287.1 286.1 286.7 283.8 287.4 294.9 293.8 289.0 295.5 299.1 50 Mortgage-backed securities. 169.9 184.5 184.4 185.2 188.5 187.8 189.6 195.1 195.0 189.8 195.2 198.2 51 Other 108.4 104.5 102.7 100.8 98.1 95.9 97.7 99.7 98.8 99.2 100.3 100.9 52 One year or less 31.5 29.0 27.5 27.5 26.2 26.2 27.0 25.7 25.1 25.0 25.2 26.8 53 Between one and five years 60.7 57.5 56.7 54.5 51.2 48.8 48.7 51.5 51.0 51.4 51.7 52.4 54 More than five years .... 16.2 17.9 18.5 18.8 20.7 20.9 22.1 22.5 22.6 22.8 23.4 21.7 55 Other securities 119.4 135.4 125.4 123.0 131.7 135.6 130.7 135.6 132.7 134.3 136.8 139.1 56 Trading account 53.5 70.8 60.6 57.0 64.9 64.8 59.4 63.3 60.7 61.7 64.3 66.9 57 Investment account 65.9 64.6 64.8 66.0 66.8 70.8 71.2 72.3 72.0 72.6 72.5 72.2 58 State and local government . . 20.2 20.9 21.2 21.8 21.7 22.0 22.0 22.0 22.0 22.0 22.0 22.0 59 Other 45.7 43.7 43.7 44.2 45.0 48.8 49.2 50.3 50.0 50.7 50.6 50.2 60 Loans and leases in bank credit2 . . 1,466.8 1,518.0 1,525.2 1,541.1 1,559.3 1,564.9 1,577.5 1,588.2 1,585.6 1,592.1 1,584.4 1,590.3 61 Commercial and industrial 393.2 415.2 415.4 415.6 419.4 420.9 428.6 434.2 433.9 435.3 433.7 434.3 62 Bankers acceptances 1.9 1.5 1.5 1.6 1.5 1.5 1.5 1.4 1.3 1.4 1.4 1.4 63 Other 391.2 413.7 413.8 414.0 417.9 419.4 427.1 432.9 432.6 433.9 432.3 432.9 64 Real estate 593.7 606.6 611.9 619.4 627.1 628.0 630.1 630.3 632.8 629.9 628.0 629.3 65 Revolving home equity 58.1 60.3 61.5 63.0 64.5 65.3 66.4 67.0 66.7 66.9 67.1 67.2 66 Other 331.9 338.8 341.3 345.0 347.9 348.7 348.5 346.7 349.9 346.3 344.5 345.2 67 Commercial 203.6 207.5 209.1 211.4 214.7 213.9 215.2 216.6 216.3 216.7 216.3 216.9 68 Consumer 295.8 295.9 297.7 299.3 301.5 302.0 300.7 295.6 295.1 296.3 296.1 295.2 69 Security3 38.4 42.4 41.6 42.9 44.1 44.4 45.7 52.4 49.2 53.9 50.8 56.2 70 Federal funds sold to and repurchase agreements with broker-dealers 22.9 24.8 24.1 25.9 27.9 28.5 29.3 35.4 32.9 37.4 33.5 38.3 71 Other 15.5 17.6 17.5 17.0 16.2 15.9 16.4 16.9 16.4 16.5 17.3 17.9 72 State and local government 11.6 11.1 11.0 11.2 11.3 11.4 11.5 11.3 11.4 11.4 11.3 11.2 73 Agricultural 8.5 8.3 8.5 8.6 9.0 9.1 9.1 9.1 9.1 9.1 9.0 9.2 74 Federal funds sold to and repurchase agreements with others 6.2 7.1 5.8 6.6 7.6 6.2 7.2 8.7 9.2 8.2 10.2 8.0 75 All other loans 61.8 62.7 63.1 65.6 65.4 67.5 68.0 68.5 67.1 70.1 67.4 68.6 76 Lease-financing receivables .... 57.7 68.7 70.1 71.8 74.0 75.3 76.5 78.0 77.8 77.9 78.0 78.2 77 Interbank loans 134.6 146.4 148.1 121.6 116.0 118.2 124.2 119.2 122.5 120.7 115.4 115.8 78 Federal funds sold to and repurchase agreements with commercial banks 82.1 96.3 93.7 70.9 69.2 71.0 77.7 72.8 75.3 73.2 69.4 71.0 79 Other 52.5 50.1 54.4 50.7 46.8 47.1 46.5 46.3 47.3 47.5 45.9 44.8 80 Cash assets4 135.8 142.6 141.0 140.3 139.6 145.1 149.8 162.9 152.1 182.3 159.8 157.2 81 Other assets5 168.7 180.2 185.7 185.9 181.5 182.7 186.3 190.4 189.0 193.0 186.8 190.5 82 Total assets6 2^88.7 2395.7 2395.7 2382.6 2,400.6 2,414.7 2,442.7 2,481-3 2,464.2 2,499-3 2,470.7 2,4843 Liabilities 83 Deposits 1,425.7 1,460.4 1,442.2 1,464.0 1,474.0 1,485.0 1,496.9 1,503.9 1,500.2 1,533.5 1,480.6 1,492.5 84 Transaction 402.2 388.0 368.1 373.8 370.9 370.2 366.6 366.1 354.4 392.6 349.3 364.7 85 Nontransaction 1,023.4 1,072.4 1,074.1 1,090.2 1,103.0 1,114.7 1,130.3 1,137.9 1,145.9 1,140.9 1,131.3 1,127.7 86 Large time 157.4 168.4 171.1 176.4 182.0 189.3 195.2 198.6 199.1 196.4 197.2 200.6 87 Other 866.0 904.0 903.1 913.9 921.0 925.4 935.1 939.2 946.8 944.5 934.1 927.1 88 Borrowings 413.5 464.7 469.8 446.3 443.0 447.7 467.2 482.8 475.2 474.9 491.5 490.4 89 From banks in the U.S 167.1 193.0 188.2 166.6 163.3 171.9 175.9 177.6 181.5 177.9 178.6 170.6 90 From nonbanks in the U.S 246.3 271.7 281.6 279.7 279.7 275.8 291.2 305.3 293.7 297.0 312.9 319.7 91 Net due to related foreign offices .... 74.8 74.4 88.1 75.8 78.4 72.6 74.5 69.7 70.6 69.5 76.4 64.6 92 Other liabilities 143.7 154.3 151.3 152.6 158.3 160.5 153.5 171.3 165.1 167.0 168.0 184.6 93 Total liabilities 2,057.7 2,153.8 2,151.4 2,M8 2,153.7 2,165.7 2,192.0 2,227.9 2,211.2 2,244.8 2,216.4 2,232.0 94 Residual (assets less liabilities)7 231.0 241.9 244.4 243.8 247.0 249.0 250.7 253.4 253.0 254.5 254.3 252.3 MEMO 95 Revaluation gains on off-balancesheet items8 32.5 49.5 42.0 38.5 44.3 45.1 37.5 38.2 36.5 36.1 38.9 41.4 96 Revaluation losses on off-balancesheet items8 28.9 44.6 43.4 40.2 45.9 46.5 40.0 41.3 40.0 39.7 41.7 43.8 97 Mortgage-backed securities9 194.4 202.2 201.7 202.1 204.6 204.1 205.8 211.3 211.4 206.2 211.7 213.9 98 Pass-through securities 130.2 139.3 139.8 140.8 142.4 141.4 142.9 147.3 147.1 142.2 147.9 151.0 99 CMOs, REMICs, and other mortgage-backed securities . .. 64.2 62.9 61.9 61.2 62.1 62.6 63.0 64.0 64.3 63.9 63.8 62.9 100 Net unrealized gains (losses) on available-for-sale securities10 .. . 2.1 1.8 2.1 2.6 3.1 3.7 3.3 3.9 4.1 3.9 3.8 3.8 101 Offshore credit to U.S. residents" .. . 30.6 33.3 33.6 33.4 33.7 34.0 34.1 34.2 34.2 34.3 33.8 34.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A19 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1996 1997R 1997 Oct. Apr. May June July Aug. Sept. Oct. Oct. 8 Oct. 15 Oct. 22 Oct. 29 Seasonally adjusted Assets 1 Bank credit 1,349.3 1,402.9 1,412.7 1,417.9 1,407.7 1,419.1 1,425.3 1,428.9 1.425.5 1,428.4 1,428.7 1,431.1 2 Securities in bank credit 401.1 410.0 411.4 410.1 406.2 406.2 405.0 406.3 405.6 405.5 406.6 407.4 3 U.S. government securities 321.2 326.9 328.4 327.8 325.0 324.9 323.8 324.5 324.5 323.8 324.4 325.2 4 Other securities 79.9 83.1 83.0 82.3 81.3 81.3 81.2 81.9 81.1 81.8 82.2 82.2 5 Loans and leases in bank credit2 948.2 992.9 1,001.3 1,007.8 1,001.5 1,012.9 1,020.3 1,022.6 1,019.8 1,022.9 1,022.1 1,023.7 6 Commercial and industrial 169.5 177.8 179.5 180.7 179.7 181.3 182.8 184.2 183.1 184.9 184.1 184.2 7 Real estate 489.9 528.5 533.8 538.3 537.9 543.7 549.8 553.6 552.3 553.1 553.8 554.6 8 Revolving home equity 25.7 29.0 29.3 29.5 29.0 29.2 29.5 30.0 29.8 29.9 30.0 30.1 9 Other 464.2 499.5 504.5 508.8 508.9 514.5 520.3 523.7 522.5 523.1 523.8 524.5 10 Consumer 223.0 217.1 217.2 217.4 213.4 216.0 214.1 211.4 211.7 210.9 211.0 211.5 11 Security3 4.4 4.6 4.6 4.6 4.6 4.7 4.9 5.2 5.1 5.4 5.1 5.1 12 Other loans and leases 61.3 64.9 66.1 66.8 65.9 67.2 68.7 68.2 67.7 68.6 68.0 68.3 13 Interbank loans 43.8 48.5 48.7 50.5 50.6 52.3 54.0 56.1 54.6 59.5 54.5 55.8 14 Cash assets4 60.1 68.7 67.1 69.7 68.1 71.2 71.3 69.8 66.5 73.6 71.6 66.6 15 Other assets5 48.8 59.4 58.2 62.5 61.9 62.6 59.6 61.1 60.3 60.4 63.2 59.7 16 Total assets6 1,482.7 1,559.9 1,567.0 1,580.8 1,568.5 1,585.1 1,590.0 1,595.8 1,586.7 1,601.7 1,597.8 1,593.2 Liabilities 17 Deposits 1,177.1 1,233.0 1,236.1 1,245.6 1,245.8 1,254.4 1,257.5 1,266.4 1,257.0 1,274.2 1,266.9 1,263.4 18 Transaction 303.5 306.4 304.4 304.7 302.4 303.6 300.1 299.2 290.8 304.5 300.4 300.1 19 Nontransaction 873.6 926.6 931.8 940.9 943.4 950.8 957.3 967.2 966.2 969.7 966.5 963.3 20 Large time 147.7 155.8 157.4 160.1 160.7 161.5 163.1 164.6 164.9 164.4 164.2 164.3 21 Other 725.9 770.8 774.3 780.7 782.7 789.3 794.2 802.6 801.3 805.3 802.4 799.0 22 Borrowings 153.0 158.7 156.7 156.5 156.1 158.5 156.4 154.4 152.4 154.1 156.8 154.9 23 From banks in the U.S 85.2 85.2 86.0 80.5 76.3 77.5 73.8 74.0 71.0 74.2 77.0 75.1 24 From others 67.8 73.5 70.8 76.0 79.8 81.0 82.6 80.4 81.5 79.9 79.8 79.9 25 Net due to related foreign offices 3.4 4.4 4.2 3.8 4.8 4.5 4.8 5.1 4.7 5.3 5.5 4.9 26 Other liabilities 24.5 25.6 26.4 27.0 26.1 27.0 27.8 27.6 27.9 27.4 27.2 27.5 27 Total liabilities 1,358.0 1,421.8 1,423.5 1,432.9 1,432.7 1,444.4 1,446.5 1,453.4 1,442.1 1,461.0 1,456.4 1,450.7 28 Residual (assets less liabilities)7 124.7 138.1 143.5 147.9 135.8 140.7 143.5 142.4 144.6 140.8 141.4 142.5 Not seasonally adjusted Assets 29 Bank credit 1,351.8 1,403.3 1,412.6 1.418.8 1,408.2 1,418.9 1,429.1 1,431.6 1,428.5 1,431.3 1,431.5 1,433.1 30 Securities in bank credit 400.0 413.5 413.2 411.9 405.5 404.4 405.4 405.4 404.7 4W.7 405.7 406.2 31 U.S. government securities 320.1 330.1 329.9 329.7 324.2 323.3 324.4 323.5 323.6 323.1 323.6 323.8 32 Other securities 79.9 83.4 83.3 82.2 81.3 81.1 81.0 81.9 81.1 81.7 82.1 82.3 33 Loans and leases in bank credit2 951.8 989.8 999.3 1,006.9 1,002.7 1,014.5 1,023.8 1,026.2 1,023.9 1,026.5 1,025.8 1,027.0 34 Commercial and industrial 168.9 179.0 181.0 181.9 179.7 180.2 181.8 183.6 182.5 184.2 183.7 183.6 35 Real estate 492.1 525.8 532.3 538.1 538.3 544.9 551.9 556.0 554.4 555.4 556.2 557.1 36 Revolving home equity 25.9 28.7 29.2 29.5 29.0 29.4 29.8 30.2 30.0 30.1 30.2 30.3 37 Other 466.2 497.1 503.1 508.6 509.3 515.5 522.1 525.8 524.3 525.3 526.0 526.8 38 Consumer 223.6 216.7 216.7 215.7 213.2 216.0 214.9 212.0 211.7 211.3 212.0 212.4 39 Security3 4.4 4.6 4.4 4.5 4.5 4.7 4.8 5.1 5.2 5.3 4.9 4.9 40 Other loans and leases 62.7 63.7 64.9 66.8 67.1 68.8 70.4 69.6 70.1 70.4 68.9 68.9 41 Interbank loans 44.1 48.9 45.3 47.6 48.0 51.3 52.3 56.4 58.0 59.3 53.1 53.6 42 Cash assets4 61.2 67.3 66.9 68.3 67.7 68.8 69.7 71.0 68.1 78.4 69.2 67.4 43 Other assets5 48.6 58.4 57.6 60.5 61.9 62.6 60.0 60.8 61.7 61.5 59.1 59.5 44 Total assets6 1,486.4 1,558.2 1,562.6 1,575.4 1,565.9 1,581.6 1,591.0 1,599.7 1,596.4 1,610.4 1,592.8 1,593.5 Liabilities 45 Deposits 1,179.4 1,235.2 1,233.6 1,243.6 1,242.4 1,251.8 1,259.7 1,268.6 1,267.2 1,281.6 1,260.0 1,260.2 46 Transaction 304.0 306.6 301.1 303.1 300.2 300.4 299.5 299.7 296.5 308.9 294.2 297.2 47 Nontransaction 875.4 928.6 932.6 940.6 942.2 951.4 960.2 969.0 970.7 972.7 965.9 963.0 48 Large time 148.2 156.9 158.3 159.6 159.9 161.3 162.8 165.0 164.8 164.8 164.8 165.1 49 Other 727.3 771.7 774.3 780.9 782.3 790.1 797.5 804.0 805.9 807.9 801.0 797.9 50 Borrowings 153.3 156.2 160.7 160.2 156.0 157.0 155.8 154.4 151.7 153.2 156.8 156.6 51 From banks in the U.S 84.7 84.4 88.5 83.6 77.9 77.4 74.4 73.4 71.5 72.8 75.5 74.8 52 From others 68.5 71.9 72.2 76.6 78.2 79.5 81.4 81.0 80.1 80.3 81.3 81.9 53 Net due to related foreign offices 3.4 4.4 4.2 3.8 4.8 4.5 4.8 5.1 4.7 5.3 5.5 4.9 54 Other liabilities 24.5 25.9 26.1 26.5 26.2 27.2 27.5 27.6 27.7 27.3 27.5 27.6 55 Total liabilities 1,360.5 1,421.8 1,424.6 1,434.2 1,4295 1,440.4 1,447.8 1,455.7 1,4513 1,467.4 1,449.8 1,4493 56 Residual (assets less liabilities)7 125.9 136.4 138.0 141.2 136.4 141.2 143.2 144.0 145.1 143.0 143.0 144.2 MEMO 57 Mortgage-backed securities9 42.6 46.3 46.9 47.7 46.8 49.0 49.6 49.4 49.5 49.4 49.3 49.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • January 1998 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued E. Foreign-related institutions Billions of dollars Monthly averages Wednesday figures Account 1996 1997 1997 Oct. Apr. May June July Aug. Sept.r Oct. Oct. 8 Oct. 15 Oct. 22 Oct. 29 Seasonally adjusted Assets 1 Bank credit 480.9" 531.2 534.2 533.7r 536.0r 532.0 536.8 543.6 545.1 539.8 542.5 543.2 2 Securities in bank credit 148.9r 176.9 173.tf 173.4r 180.4 178.3 183.2 182.0 185.5 177.2 178.3 182.2 3 U.S. government securities 82.7r 87.3r 88.6r 90.2r 91.4r 86.7r 89.3 87.4 92.6 85.4 83.7 86.8 4 Other securities 66.3r 89.6r 84.4r 83.2r 89.0" 91.7r 94.0 94.6 93.0 91.8 94.6 95.4 5 Loans and leases in bank credit2 .. . 332.0 354.3 361.1 360.3 355.7 353.7 353.5 361.5 359.6 362.7 364.2 361.0 6 Commercial and industrial 206.0 215.9r 218.11 217.9r 217.6r 219.0r 221.6 223.2 225.9 225.0 222.5 220.1 7 Real estate 32.7 31.3 30.5 29.5 28.4 28.0 27.4 27.2 27.0 27.5 27.4 27.0 8 Security3 32.9 42.8 42.7 44.8 43.6 42.5 43.4 47.1 43.7 46.6 51.1 47.1 9 Other loans and leases 60.4 64.2r 69.8r 68. lr 66.1r 64. lr 61.1 64.0 62.9 63.6 63.2 66.7 10 Interbank loans 20.6 18.6 19.8 18.6 18.3 17.4 17.0 18.9 17.5 17.5 18.3 23.6 11 Cash assets4 29.7 32.5 33.6 35.1 33.4 33.9 34.7 34.0 34.0 33.0 34.0 34.4 12 Other assets5 33.4 39.0 38.6 40.8 42.5 42.5 42.0 41.3 40.0 41.8 41.2 41.4 13 Total assets6 564Sr 621.0r 625.9 627.9r 629.9" 625.6 630.2 6375 6363 631.9 635.8 6423 Liabilities 14 Deposits 197.4 256.7 249.3 254.1 266.5 266.9 270.6 266.4 267.5 264.7 263.4 268.7 15 Transaction 10.4 10.6 10.9 10.6 10.8 11.5 11.2 10.9 10.7 11.0 10.6 11.2 16 Nontransaction 187.1 246.0 238.4 243.5 255.7 255.4r 259.4 255.5 256.8 253.7 252.8 257.6 17 Large time 184.8 243.4 235.9 240.9 253. lr 252.9 256.8 252.9 254.3 251.3 250.3 255.1 18 Other 2.2 2.6 2.5 2.5 2.6 2.6 2.6 2.6 2.5 2.5 2.4 2.4 19 Borrowings 117.5 138.6 140.7 136.6 133.3 135.5r 140.8 159.3 155.1 159.3 158.1 161.0 20 From banks in the U.S 32.3 31.8 31.3 28.1 28.2 29.1 33.5 35.5 35.4 40.2 35.0 29.9 21 From others 85.1 106.8 109.4 108.6 105.0" 106.3 107.3 123.8 119.7 119.1 123.0 131.1 22 Net due to related foreign offices 167.5 134.4 148.4 148.4 129.4 127.2 122.1 113.4 118.9 108.4 113.3 113.2 23 Other liabilities 74.3 91.7 88.7 89.1 95.4 96.4 94.9 94.0 92.7 92.5 93.7 96.5 24 Total liabilities 556.7 6213 627.1 6283r 624.6 626.0" 628.4 633.2 634.1 624.9 628.4 639.5 25 Residual (assets less liabilities)7 7.8 -0.3 -1.3r —0.4r 5.4 -0.4 1.8 4.3 2.2 7.0 7.4 2.8 Not seasonally adjusted Assets 26 Bank credit 479.8 531.2r 536.7r 534.T 536.5 536.0 534.7 542.1 542.5 538.1 540.0 543.0 27 Securities in bank credit 148.91 177.4 177.9 174.1r 179.2r 181.9 181.6 181.9 184.3 177.6 177.4 183.2 28 U.S. government securities 82. lr 86.8r 89. lr 89.0r 88.7r 88.2r 88.2 86.6 91.0 84.8 83.2 86.1 29 Trading account 18.7 18.5 18.6 18.3 17.8 18.7 17.5 13.4 18.5 13.4 12.4 15.2 30 Investment account 63.4 68.3 70.6 70.6 70.9 69.5r 70.2 70.7 72.4 71.5 70.9 71.0 31 Other securities 66.8r 90.6r 88.7r 85.1r 90.6r 93.7r 93.4 95.3 93.3 92.8 94.1 97.1 32 Trading account 45.5 60.8 58.8 56.9 59.4 60.8 59.1 54.1 61.2 59.7 60.8 65.3 33 Investment account 21.3 29.9 29.9 28.2 31.2 33.0" 32.8 32.8 32.1 33.1 33.3 31.8 34 Loans and leases in bank credit2 . . . 330.8 353.9 358.9 360.0 357.2 354.1 353.1 360.2 358.2 360.5 362.7 359.8 35 Commercial and industrial 204.8 216.6r 218.3r 218.6r 218.8r 219.2r 220.1 221.9 224.5 223.1 221.0 219.1 36 Real estate 32.9 30.9 30.2 29.3 28.3 28.0 27.5 27.4 27.1 27.6 27.5 27.3 37 Security3 32.9 42.8 42.7 44.8 43.6 42.5 43.4 47.1 43.7 46.6 51.1 47.1 38 Other loans and leases 60.2 63.5r 67.6r 67.2r 66.6r 64.3r 62.1 63.8 62.9 63.3 63.1 66.2 39 Interbank loans 20.6 18.6 19.8 18.6 18.3 17.4 17.0 18.9 17.5 17.5 18.3 23.6 40 Cash assets4 30.0 31.7 33.6 35.9 33.6 33.8 33.9 34.4 34.3 33.5 34.2 35.0 41 Other assets5 33.2 37.6 39.6 40.7 41.7 43.4 42.4 40.9 39.4 41.4 40.5 41.3 42 Total assets6 563.4 618.8 629.5 629.0 629.8 6303 627.7 636.0 633.5 6303 632.8 642.6 Liabilities 43 Deposits 202.8 250.3 249.8 254.5 263.5 264.7r 269.6 274.5 273.5 271.5 273.4 278.8 44 Transaction 10.4 10.2 10.4 10.5 10.8 11.2 11.7 11.0 10.8 11.1 10.4 11.3 45 Nontransaction 192.3 240.1 239.4 244.0 252.1' 253.5r 257.9 263.5 262.7 260.4 263.0 267.5 46 Large time 190.0 237.5 236.9 241.4 250.2 251.0 255.4 260.8 260.1 257.8 260.5 264.9 47 Other 2.3 2.6 2.6 2.5 2.5 2.5 2.5 2.6 2.5 2.5 2.5 2.5 48 Borrowings 114.2 141.1 140.5 141.6 142.2 140.7 141.8 154.6 150.7 155.4 155.0 152.9 49 From banks in the U.S 29.9 32.1 30.8 29.8 29.9 29.7 32.7 32.3 31.7 37.7 30.1 27.5 50 From others 84.3 109.0 109.6 111.9 112.3 111.0 109.1 122.3 119.0 117.8 124.8 125.5 51 Net due to related foreign offices 167.5 131.2 144.2 140.2 128.2 125.4r 119.0 112.4 115.9 110.7 111.7 113.2 52 Other liabilities 72.7 91.5 91.4 90.1 93.3 96.9 94.7 92.0 90.8 90.3 90.3 95.1 53 Total liabilities 557.1 614.2 625.9 626.4 627.2 627.r 625.1 633.4 630.8 627.9 6303 640.0 54 Residual (assets less liabilities)7 6.2r 4.6r 3.6r 2.5r 2.6r 2.6 2.6 2.6 2.7 2.4 2.5 2.6 MEMO 55 Revaluation gains on off-balance-sheet items8 30.0 40.5 39.4 37.6 40.0 41.1 40.6 38.3 39.3 37.7 38.4 40.9 56 Revaluation losses on off-balancesheet items8 29.4 43.2 41.8 39.8 41.8 42.7 41.2 38.6 39.2 38.1 38.8 41.3 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 NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 group that contained the acquired bank and put into past data for the group containing the statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, ratio procedure is used to adjust past levels. "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are 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 States, all of which are included in "Interbank loans." domestically chartered banks have been included in table 1.26, parts C and D. Data are both 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. securities. branches and agencies of foreign banks have been replaced by balance sheet estimates of all 4. Includes vault cash, cash items in process of collection, balances due from depository foreign-related institutions and are included in table 1.26, part E. These data are break- institutions, and balances due from Federal Reserve Banks. adjusted. 5. Excludes the due-from position with related foreign offices, which is included in "Net The not-seasonally-adjusted data for all tables now contain additional balance sheet items, due to related foreign offices." which were available as of October 2, 1996. 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 of 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 reflects any differences in the and 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 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and rata averages of 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 banks 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 reclassifications government-sponsored enterprises, and private entities. of assets and liabilities. 10. Difference between fair value and historical cost for securities classified as available- The data for large and small domestic banks presented on pp. A17-19 are adjusted to for-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are remove the estimated effects of mergers between these 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 commercial and industrial loans but also includes an unknown amount of credit quantities of balance sheet items acquired in mergers are removed from past data for the bank extended to other than nonfinancial businesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic NonfinancialS tatistics • January 1998 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1997 Item 1992 1993 1994 1995 1996 Apr. May June July Aug. Sept. Dec. Dec. Dec. Dec. Dec. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 545,619 555,075 595,382 674,904 775,371 838,366 855,178 864,758 889,494 885,601 908,640 Financial companies' 2 Dealer-placed paper2, total. 226,456 218,947 223,038 275,815 361,147 404,727 413,776 414,475 440,262 437,340 475,792 3 Directly placed paper3, total 171,605 180,389 207,701 210,829 229,662 248,920 252,856 256,165 253,971 253,934 235,030 4 Nonfinancial companies4 147,558 155,739 164,643 188,260 184,563 184,719 188,546 194,119 195,260 194,327 197,818 Bankers dollar acceptances (not seasonally adjusted)5 5 Total 38,194 32,348 29,835 29,242 25,754 By holder 6 Accepting banks 10,555 12,421 11,783 7 Own bills 9,097 10,707 10,462 8 Bills bought from other banks 1,458 1,714 1,321 Federal Reserve Banks6 9 Foreign correspondents 1,276 725 410 n.a. n.a. 10 Others 26,364 19,202 17,642 By basis 11 Imports into United States 12,209 10,217 10,062 12 Exports from United States 8,096 7,293 6,355 13 All other 17,890 14,838 13,417 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, 5. Data on bankers dollar acceptances are gathered from approximately 100 institutions. personal, and mortgage financing; factoring, finance leasing, and other business lending; The reporting group is revised every January. Beginning January 1995, data for Bankers insurance underwriting; and other investment activities. dollar acceptances are reported annually in September. 2. Includes all financial-company paper sold by dealers in the open market. 6. In 1977 the Federal Reserve discontinued operations in bankers dollar acceptances for 3. As reported by financial companies that place their paper directly with investors. its own account. 4. Includes public utilities and firms engaged primarily in such activities as communications, construction, manufacturing, mining, wholesale and retail trade, transportation, and services. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Date of change Rate Period Av r e a r t a e ge Period Av r e a r t a e ge Period Av r e a r t a e ge 1994—Mar 24 66..2255 11999944 77..1155 1995—Jan 88..5500 1996—July 88..2255 Apr 19 66 7755 11999955 88..8833 Feb 99..0000 88..2255 May 17 7.25 1996 8.27 Mar 9.00 Sept 8.25 Aug. 16 7.75 Apr. 9.00 Oct 8.25 Nov. 15 8.50 1994—Jan 6.00 May 9.00 Nov 8.25 Feb 6.00 June 9.00 Dec 8.25 1995—Feb. 1 9.00 Mar 6.06 July 8.80 July 7 8.75 Apr. 6.45 Aug 8.75 1997—Jan 8.25 Dec. 20 8.50 May 6.99 Sept 8.75 Feb 8.25 June 7.25 Oct 8.75 Mar. 8.30 1996—Feb. 1 8.25 July 7.25 Nov 8.75 Apr. 8.50 1997—Mar. 26 8.50 Aug 7.51 Dec 8.65 May 8.50 Sept 7.75 June 8.50 Oct 7.75 1996—Jan 8.50 July 8.50 Nov 8.15 Feb 8.25 Aug 8.50 Dec 8.50 Mar. 8.25 Sept 8.50 Apr. 8.25 Oct 8.50 May 8.25 Nov. 8.50 June 8.25 1. The prime rate is one of several base rates that banks use to price short-term business Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) loans. The table shows the date on which a new rate came to be the predominant one quoted monthly statistical releases. For ordering address, see inside front cover. by a majority of the twenty-five largest banks by asset size, based on the most recent Call Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.35 INTEREST RATES Money and Capital Markets Percent per year; figures are averages of business day data unless otherwise noted 1997 1997, week ending IItteemm 11999944 11999955 11999966 July Aug. Sept. Oct. Oct. 3 Oct. 10 Oct. 17 Oct. 24 Oct. 31 MONEY MARKET INSTRUMENTS 1 Federal funds1'2'3 4.21 5.83 5.30 5.52 5.54 5.54 5.50 5.58 5.46 5.45 5.54 5.50 2 Discount window borrowing2,4 3.60 5.21 5.02 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Commercial paper*'4'5,6 Nonfinancial 3 1-month n.a. n.a. n.a. n.a. n.a. 5.49 5.49 5.49 5.47 5.48 5.49 5.51 4 2-month n.a. n.a. n.a. n.a. n.a. 5.48 5.48 5.48 5.46 5.48 5.49 5.51 5 3-month n.a. n.a. n.a. n.a. n.a. 5.48 5.51 5.48 5.48 5.51 5.54 5.53 Financial 6 1-month n.a. n.a. n.a. n.a. n.a. 5.51 5.50 5.52 5.49 5.50 5.49 5.52 7 2-month n.a. n.a. n.a. n.a. n.a. 5.51 5.50 5.50 5.48 5.50 5.51 5.52 8 3-month n.a. n.a. n.a. n.a. n.a. 5.51 5.55 5.51 5.51 5.54 5.59 5.58 Commercial paper (historical)3'5,6,7 9 1-month 4.43 5.93 5.43 5.56 5.55 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 3-month 4.66 5.93 5.41 5.57 5.56 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 6-month 4.93 5.93 5.42 5.60 5.59 n.a. n.a. n.a. n.a. n.a. n.a. n.a. Finance paper, directly placed (historical)3,5,7,8 12 1-month 4.33 5.81 5.31 5.49 5.49 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 3-month 4.53 5.78 5.29 5.50 5.49 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 6-month 4.56 5.68 5.21 5.50 5.50 n.a. n.a. n.a. n.a. n.a. n.a. n.a. Bankers acceptances3 5,9 15 3-month 4.56 5.81 5.31 5.53 5.53 5.54 5.57 5.54 5.55 5.58 5.58 5.58 16 6-month 4.83 5.80 5.31 5.54 5.56 5.58 5.56 5.55 5.55 5.57 5.58 5.56 Certificates of deposit, secondary market3,10 17 1-month 4.38 5.87 5.35 5.54 5.54 5.56 5.55 5.56 5.54 5.54 5.55 5.56 18 3-month 4.63 5.92 5.39 5.60 5.60 5.60 5.65 5.64 5.60 5.65 5.69 5.67 19 6-month 4.96 5.98 5.47 5.70 5.71 5.71 5.72 5.71 5.69 5.74 5.77 5.71 20 Eurodollar deposits, 3-month3'11 4.63 5.93 5.38 5.61 5.58 5.59 5.63 5.63 5.61 5.64 5.66 5.63 US. Treasury bills Secondary market3,5 21 3-month 4.25 5.49 5.01 5.05 5.14 4.95 4.97 4.92 4.95 4.94 4.97 5.04 22 6-month 4.64 5.56 5.08 5.12 5.19 5.09 5.09 5.04 5.05 5.12 5.15 5.07 23 1-year 5.02 5.60 5.22 5.24 5.27 5.23 5.17 5.16 5.16 5.23 5.23 5.07 Auction average3,5,12 24 3-month 4.29 5.51 5.02 5.07 5.13 4.97 4.95 4.93 4.93 4.98 4.96 4.97 25 6-month 4.66 5.59 5.09 5.12 5.17 5.11 5.09 5.08 5.01 5.12 5.15 5.08 26 1-year 5.02 5.69 5.23 5.26 5.28 5.30 5.20 n.a. n.a. 5.20 n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities13 27 1-year 5.32 5.94 5.52 5.54 5.56 5.52 5.46 5.45 5.45 5.52 5.53 5.35 28 2-year 5.94 6.15 5.84 5.89 5.94 5.88 5.77 5.76 5.76 5.85 5.86 5.65 29 3-year 6.27 6.25 5.99 6.00 6.06 5.98 5.84 5.84 5.82 5.91 5.93 5.73 30 5-year 6.69 6.38 6.18 6.12 6.16 6.11 5.93 5.94 5.93 6.01 6.02 5.78 31 7-year 6.91 6.50 6.34 6.20 6.29 6.20 6.05 6.06 6.06 6.13 6.13 5.93 32 10-year 7.09 6.57 6.44 6.22 6.30 6.21 6.03 6.06 6.04 6.11 6.09 5.90 33 20-year 7.49 6.95 6.83 6.56 6.65 6.56 6.38 6.40 6.39 6.46 6.44 6.27 34 30-year 7.37 6.88 6.71 6.51 6.58 6.50 6.33 6.35 6.34 6.40 6.38 6.22 Composite 35 More than 10 years (long-term) 7.41 6.93 6.80 6.55 6.64 6.54 6.37 6.39 6.38 6.44 6.42 6.25 STATE AND LOCAL NOTES AND BONDS Moody's series14 36 Aaa 5.77 5.80 5.52 5.24 5.25 5.19 5.19 5.13 5.11 5.26 5.26 5.17 37 Baa 6.17 6.10 5.79 5.39 5.37 5.33 5.32 5.26 5.24 5.41 5.40 5.29 38 Bond Buyer series15 6.18 5.95 5.76 5.35 5.41 5.39 5.38 5.34 5.38 5.42 5.42 5.35 CORPORATE BONDS 39 Seasoned issues, all industries16 8.26 7.83 7.66 7.42 7.48 7.40 7.26 7.28 7.27 7.31 7.29 7.19 Rating group 40 Aaa 7.97 7.59 7.37 7.14 7.22 7.15 7.00 7.01 7.00 7.05 7.05 6.93 41 Aa 8.15 7.72 7.55 7.36 7.40 7.34 7.20 7.21 7.21 7.25 7.23 7.13 42 A 8.28 7.83 7.69 7.42 7.46 7.39 7.27 7.27 7.28 7.30 7.30 7.22 43 BBaaaa 8.63 8.20 8.05 7.75 7.82 7.70 7.57 7.61 7.60 7.64 7.57 7.49 44 AA--rraatteedd,, rreecceennttllyy ooffffeerreedd uuttiilliittyy bboonnddss1177 8.29 7.86 7.77 7.62 7.67 7.58 7.44 7.37 7.53 7.54 7.41 7.27 MEMO Dividend-price ratioli 45 Common stocks 2.82 2.56 2.19 1.66 1.65 1.65 1.61 1.61 1.58 1.60 1.59 1.68 1. The daily effective federal funds rate is a weighted average of rates on trades through 13. 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 14. General obligation bonds based on Thursday figures; Moody's Investors Service. current week; monthly figures include each calendar day in the month. 15. State and local government general obligation bonds maturing in twenty years are used 3. Annualized using a 360-day year for bank interest. in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys' 4. Rate for the Federal Reserve Bank of New York. A1 rating. Based on Thursday figures. 5. Quoted on a discount basis. 16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected 6. An average of offering rates on commercial paper placed by several leading dealers for long-term bonds. firms whose bond rating is AA or the equivalent. 17. Compilation of the Federal Reserve. This series is an estimate of the yield on recently 7. Series ended August 29, 1997. offered, A-rated utility bonds with a thirty-year maturity and five years of call protection. 8. An average of offering rates on paper directly placed by finance companies. Weekly data are based on Friday quotations. 9. Representative closing yields for acceptances of the highest-rated money center banks. 18. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in 10. An average of dealer offering rates on nationally traded certificates of deposit. the price index. 11. Bid rates for Eurodollar deposits at approximately 11:00 a.m. London time. Data are NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and for indication purposes only. G.13 (415) monthly statistical releases. For ordering address, see inside front cover. Digitized for FR12A. SAEucRtio n date for daily data; weekly and monthly averages computed on an issue-date basis. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic NonfinancialS tatistics • January 1998 1.36 STOCK MARKET Selected Statistics 1997 Feb. Mar. Apr. May June July Aug. Sept. Oct. Prices and trading volume (averages of daily figures)1 Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 254.16 291.18 357.98 418.57 416.72 401.00 433.36 457.07 480.94 482.39 489.74 499.25 2 Industrial 315.32 367.40 453.57 524.30 523.08 506.69 549.65 578.57 610.42 609.54 617.94 625.22 3 Transportation 247.17 270.14 327.30 364.15 372.37 366.67 395.50 410.93 433.75 439.71 451.63 466.04 4 Utility 104.96 110.64 126.36 142.88 132.38 126.66 140.52 140.24 144.25 143.82 145.96 157.83 5 Finance 209.75 238.48 303.94 388.75 387.19 364.25 392.32 419.12 441.59 446.93 459.86 476.70 6 Standard & Poor's Corporation (1941-43 = 10)2 460.42 541.72 670.49 798.39 792.16 763.93 833.09 876.29 925.29 927.74 937.02 951.16 7 American Stock Exchange (Aug. 31, 1973 = 50)3 449.49 498.13 570.86 593.29 593.64 554.13 584.06 619.94 635.28 645.59 678.05 702.43 Volume of trading (thousands of shares) 8 New York Stock Exchange 290,652 345,729 409,740 508,199 495,994r 473,094 479,907 516,241 543,006 506,205 541,204 606,513 9 American Stock Exchange 17,951 20,387 22,567 21,250 19,232 19,122 19,634 23,277 25,562 24,095 28,252 32,873 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers4 61,160 76,680 97,400 100,000 100,160 98,870 106,010 113,440 116,190 119,810 126,050 128,190 Free credit balances at brokers5 11 Margin accounts6 14,095 16,250 22,540 22,200 22,930 22,700 22,050 23,860 24,290 23,375 23,630 26,950 12 Cash accounts 28,870 34,340 40,430 40,090 41,050 37,560 39,400 41,840 43,985 42,960 43,770 47,465 Margin requirements (percent of market value and eifective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Daily data on prices are available upon request to the Board of Governors. For ordering 6. Series initiated in June 1984. address, see inside front cover. 7. Margin requirements, stated in regulations adopted by the Board of Governors pursuant 2. In July 1976 a financial group, composed of banks and insurance companies, was added to the Securities Exchange Act of 1934, limit the amount of credit that can be used to to the group of stocks on which the index is based. The index is now based on 400 industrial purchase and carry "margin securities" (as defined in the regulations) when such credit is stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and collateralized by securities. Margin requirements on securities are the difference between the 40 financial. market value (100 percent) and the maximum loan value of collateral as prescribed by the 3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, previous readings in half. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971. 4. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the included credit extended against stocks, convertible bonds, stocks acquired through the initial margin required for writing options on securities, setting it at 30 percent of the current exercise of subscription rights, corporate bonds, and government securities. Separate report- market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the ing of data for margin stocks, convertible bonds, and subscription issues was discontinued in required initial margin, allowing it to be the same as the option maintenance margin required April 1984. by the appropriate exchange or self-regulatory organization; such maintenance margin rules 5. Free credit balances are amounts in accounts with no unfulfilled commitments to must be approved by the Securities and Exchange Commission. brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A25 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1997 11999944 11999955 11999966 May June July Aug. Sept. Oct. U.S. budget1 1 Receipts, total 1,258,627 1,351,830 1,453,062 94,493 173,361 109,178 103,483 174,770 114,898 2 On-budget 923,601 1,000,751 1,085,570 63,146 135,922 79,599 70,902 138,847 87,083 3 Off-budget 335,026 351,079 367,492 31,347 37,439 29,579 32,581 35,923 27,815 4 Outlays, total 1,461,731 1,515,729 1,560,330 142,988 118,726 134,802 138,672 125,210 150,486 5 On-budget 1,181,469 1,227,065 1,259,872 112,625 105,267 107,049 109,810 91,404 123,863 6 Off-budget 279,372 288,664 300,458 30,362 13,459 27,753 28,862 33,805 26,623 7 Surplus or deficit (-), total -203,104 -163,899 -107,268 -48,494 54,635 -25,624 -35,189 49,560 -35,588 8 On-budget -258,758 -226,314 -174,302 -49,479 30,655 -27,450 -38,908 47,443 -36,780 9 Off-budget 55,654 62,415 67,034 985 23,980 1,826 3,719 2,118 1,192 Source of financing (total) 10 Borrowing from the public 185,344 171,288 129,712 -19,054 -11,147 -1,408 30,348 -18,318 6,315 11 Operating cash (decrease, or increase (—)) 16,564 -2,007 -6,276 72,532 -34,387 23,748 15,435 -31,545 23,360 12 Other2 1,196 -5,382 -16,168 -4,984 -9,101 3,284 -10,594 303 5,913 MEMO 13 Treasury operating balance (level, end of period) 35,942 37,949 44,225 16,872 51,259 27,511 12,076 43,621 20,261 14 Federal Reserve Banks 6,848 8,620 7,700 5,174 16,368 5,014 4,700 7,692 4,616 15 Tax and loan accounts 29,094 29,329 36,525 11,698 34,891 22,496 7,376 35,930 15,645 1. Since 1990, off-budget items have been the social security trust funds (federal old-age net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loansurvivors insurance and federal disability insurance) and the U.S. Postal Service. valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; Receipts and Outlays of the US. Government; fiscal year totals: U.S. Office of Management accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous and Budget, Budget of the U.S. Government. liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • January 1998 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1995 1996 1997 1997 11999955 11999966 H2 HI H2 HI Aug. Sept. Oct. RECEIPTS 1 All sources 1,351,830 1,453,062 656,865 767,099 707,551 845,552 103,483 174,770 114,898 2 Individual income taxes, net 590,244 656,417 292,393 347,285 323,884 400,435 45,669 78,199 60,680 3 Withheld 499,927 533,080 256,916 264,177 279,988 292,252 43,156 44,442 55,270 4 Nonwithheld 175,855 212,168 45,521 162,782 53,491 191,050 4,244 36,230 6,299 5 Refunds 85,538 88,897 10,058 79,735 9,604 82,926 1,732 22,,447744 889 Corporation income taxes 6 Gross receipts 174,422 189.055 88,302 96,480 95,364 106,451 3,854 39,133 6,357 7 Refunds 17,418 17,231 7,518 9,704 10,053 9,635 1,575 1,795 3,103 8 Social insurance taxes and contributions, net . . . 484,473 509,414 224,269 277,767 240,326 288,251 46,201 47,601 38,784 9 Employment taxes and contributions" 451,045 476,361 211,323 257,446 227,777 268,357 41,861 47,013 36,928 10 Unemployment insurance 28,878 28,584 10,702 18,068 10,302 17,709 4,002 247 1,443 11 Other net receipts3 4,550 4,469 2,247 2,254 2,245 2,184 338 342 414 12 Excise taxes 57,484 54,014 30,014 25,682 27,016 28,084 4,593 5,719 5,082 13 Customs deposits 19,301 18,670 9,849 8,731 9,294 8,619 1,749 1,590 1,802 14 Estate and gift taxes 14,763 17,189 7,718 8,775 8,835 10,477 1,655 1,849 2,198 15 Miscellaneous receipts4 28,561 25,534 11,839 12,087 12,888 12,866 1,338 2,474 3,097 OUTLAYS 16 All types 1,515,729 1,560,330 752,856 785,368 800,184 797,443 138,672 125,210r 150,486 17 National defense 272,066 265,748 132,887 132,599 138,702 131,525 24,259 21,076 26,374 18 International affairs 16,434 13,496 6,908 8,076 8,596 5,779 494 l,270r 724 19 General science, space, and technology 16,724 16,709 7,970 8,897 8,260 8,939 1,643 1,543 1,586 20 Energy 4,936 2,836 1,992 1,356 704 801 48 598 -163 21 Natural resources and environment 22,078 21,614 11,392 10,254 10,309 9,688 1,555 2,071 1,710 22 Agriculture 9,778 9,159 3,065 73 10,977 1,433 121 3,202r 2,983 23 Commerce and housing credit -17,808 -10,646 -3,947 -6,885 -5,899 -7,575 -1,917 l,293r -629 24 Transportation 39,350 39,565 20,725 18,290 22,211 18,046 3,730 3,818 3,913 25 Community and regional development 10,641 10,685 5,569 5,245 5,497 5,699 865 1,116r 1,014 26 Education, training, employment, and social services 54,263 52,001 26,212 25,979 27,548 25,227 4,055 5,804 4,289 27 Health 115,418 119,378 57,128 59,989 61,596 61,808 10,024 10,773r 11,905 28 Social security and Medicare 495,701 523,901 251,388 264,647 269,411 278,817 48,683 43,731 49,471 29 Income security 220,493 225,989 104,847 121,186 107,602 123,874 19,702 13,735' 20,292 30 Veterans benefits and services 37,890 36,985 18,678 18,140 21,109 17,697 4,806 1,833 5,234 31 Administration of justice 16,216 17,548 8,091 9,015 9,584 10,643 1,484 1,467' 1,584 32 General government 13,835 11,892 7,601 4,641 6,547 6,574 747 1,440 1,460 33 Net interest5 232,169 241,090 119,348 120,576 122,571 122,701 21,636 17,061 21,805 34 Undistributed offsetting receipts6 -44,455 -37,620 -26,995 -16,716 -25,142 -24,234 -3,262 -6,630 -3,067 1. Functional details do not sum to total outlays for calendar year data because revisions to 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. monthly totals have not been distributed among functions. Fiscal year total for receipts and 5. Includes interest received by trust funds. outlays do not correspond to calendar year data because revisions from the Budget have not 6. Rents and royalties for the outer continental shelf, U.S. government contributions for been fully distributed across months. employee retirement, and certain asset sales. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the U.S. 3. Federal employee retirement contributions and civil service retirement and Government, Fiscal Year 1998\ monthly and half-year totals: U.S. Department of the Treadisability fund. sury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A25 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1995 1996 1997 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 5,001 5,017 5,153 5,197 5,260 5,357 5,415 5,410 5,446 2 Public debt securities 4,974 4,989 5,118 5,161 5,225 5,323 5,381 5,376 5,413 3 Held by public 3,653 3,684 3,764 3,739 3,778 3,826 3,874 3,805 n.a. 4 Held by agencies 1,321 1,305 1,354 1,422 1,447 1,497 1,507 1,572 n.a. 5 Agency securities 27 28 36 36 35 34 34 34 33 6 Held by public 27 28 28 28 27 27 26 26 n.a. 7 Held by agencies 0 0 8 8 8 8 8 7 n.a. 8 Debt subject to statutory limit 4,885 4,900 5,030 5,073 5,137 5,237 5,294 5,290 5,328 9 Public debt securities 4,885 4,900 5,030 5,073 5,137 5,237 5,294 5,290 5,328 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,900 4,900 5,500 5,500 5,500 5,500 5,500 5,500 5,950 1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified SOURCE. U.S. Department of the Treasury, Monthly Statement of the Public Debt of the participation certificates, notes to international lending organizations, and District of Colum- United States and Treasury Bulletin. bia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1996 1997 TTyyppee aanndd hhoollddeerr 11999933 11999944 11999955 11999966 Q4 Ql Q2 Q3 1 Total gross public debt 4,535.7 4,800.2 4,988.7 5,323.2 5,323.2 5,380.9 5,376.2 5,413.2 By type 2 Interest-bearing 4,532.3 4,769.2 4,964.4 5,317.2 5,317.2 5,375.1 5,370.5 5,407.5 3 Marketable 2,989.5 3,126.0 3,307.2 3,459.7 3,459.7 3,504.4 3,433.1 3,439.6 4 Bills 714.6 733.8 760.7 777.4 777.4 785.6 704.1 701.9 5 Notes 1,764.0 1,867.0 2,010.3 2,112.3 2,112.3 2,131.0 2,132.6 2,122.2 6 Bonds 495.9 510.3 521.2 555.0 555.0 565.4 565.4 576.2 7 Inflation-indexed notes1 n.a. n.a. n.a. n.a. n.a. 7.4 15.9 24.4 8 Nonmarketable2 1,542.9 1,643.1 1,657.2 1,857.5 1,857.5 1,870.8 1,937.4 1,967.9 9 State and local government series 149.5 132.6 104.5 101.3 101.3 104.8 107.9 111.9 10 Foreign issues3 43.5 42.5 40.8 37.4 37.4 36.8 35.4 34.9 11 Government 43.5 42.5 40.8 47.4 47.4 36.8 35.4 34.9 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 169.4 177.8 181.9 182.4 182.4 182.6 182.7 182.7 14 Government account series4 1,150.0 1,259.8 1,299.6 1,505.9 1,505.9 1,516.6 1,581.5 1,608.5 15 Non-interest-bearing 3.4 31.0 24.3 6.0 6.0 5.8 5.7 5.6 By holder 5 16 U.S. Treasury and other federal agencies and trust funds 1,153.5 1,257.1 1,304.5 1,497.2 1,497.2 1,506.8 1,571.6 17 Federal Reserve Banks 334.2 374.1 391.0 410.9 410.9 405.6 426.4 18 Private investors 3,047.4 3,168.0 3,294.9 3,411.2 3,411.2 3,451.7 3,361.7 19 Commercial banks 322.2 290.4 278.7 261.7" 261.7" 282.3 290.0 20 Money market funds 80.8 67.6 71.5" 91.6" 91.6" 84.0 76.3 21 Insurance companies 234.5 240.1 241.5 235.9" 235.9" 238.2 239.0 22 Other companies 213.0 224.5r 228.8 258.5 258.5 262.5 261.0 n a. 23 State and local treasuries6,7 609.2r 540.2" 421.5" 358.0" 358.0" 360.7 358.0 Individuals 24 Savings bonds 171.9 180.5 185.0 187.0 187.0 186.5 186.3 25 Other securities 137.9 150.7 162.7 169.6 169.6 168.9 169.1 26 Foreign and international8 623.0 688.6 862.2 1,131.8" 1,131.8" 1,204.1 1,240.2 27 Other miscellaneous investors7'9 655.0" 785.5" 843.0" 717.1" 717.1" 664.5 541.8 1. The U.S. Treasury first issued inflation-indexed notes during the first quarter of 1997. 8. Consists of investments of foreign balances and international accounts in the United 2. Includes (not shown separately) securities issued to the Rural Electrification Administra- States. tion, depository bonds, retirement plan bonds, and individual retirement bonds. 9. Includes savings and loan associations, nonprofit institutions, credit unions, mutual 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur- savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury rency held by foreigners. deposit accounts, and federally sponsored agencies. 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual Public Debt of the United States; data by holder, Treasury Bulletin. holdings; data for other groups are Treasury estimates. 6. Includes state and local pension funds. 7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable federal securities was removed from "Other miscellaneous investors" and added to "State and local treasuries." The data shown here have been revised accordingly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic NonfinancialS tatistics • January 1998 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1997 1997, week ending Item July Aug. Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 34,285 38,732 40,266 41,910 41,856 48,625 34,415 34,322 35,718 45,390 35,301 47,054 Coupon securities, by maturity 2 Five years or less 102,092 117,232 110,548 113,755 101,097 118,731 108,945 112,531 120,504 110,289 100,156 192,569 3 More than five years 61,251 67,685 59,117 52,488 54,177 64,616 56,952 64,437 81,120 63,199 54,719 104,578 4 Federal agency 39,871 42,563 40,258 45,712 35,021 41,857 38,997 43,654 40,472 46,661 44,925 41,962 5 Mortgage-backed 50,317 47,848 48,520 37,308 65,574 47,327 37,121 48,547 74,356 66,377 38,808 54,051 By type of counterparty With interdealer broker 6 U.S. Treasury 110,830 127,179 120,687 114,415 112,560 132,755 118,644 121,448 136,848 128,397 114,862 199,706 7 Federal agency 1,460 1,299 1,513 1,627 1,712 1,851 909 1,540 1,497 1,474 980 1,445 8 Mortgage-backed 15,503 15,481 15,920 12,688 18,202 17,024 13,644 16,147 19,651 22,976 12,567 1177,,552299 With other 9 U.S. Treasury 86,798 96,471 89,244 93,737 84,571 99,216 81,668 89,842 100,494 90,480 75,315 144,494 10 Federal agency 38,411 41,264 38,745 44,085 33,309 40,006 38,089 42,114 38,974 45,187 43,945 40,517 11 Mortgage-backed 34,815 32,367 32,600 24,620 47,372 30,303 23,476 32,400 54,705 43,401 26,241 36,522 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 188 202 291 327 578 165 114 n.a. n.a. n.a. 73 316 Coupon securities, by maturity 13 Five years or less 1,399 2,220 2,358 3,200 2,077 3,514 1,789 1,552 1,802 1,893 1,492 2,280 14 More than five years 14,693 18,859 16,939 19,641 13,610 20,346 15,485 17,306 23,141 18,984 15,405 29,308 15 Federal agency 0 0 0 0 0 0 0 0 0 0 0 0 16 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 0 OPTIONS TRANSACTIONS4 By type of underlying security 17 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 18 Five years or less 2,231 2,150 1,768 1,791 2,598 1,999 922 1,489 2,266 2,436 2,640 2,365 19 More than five years 6,038 6,122 5,063 4,209 3,940 6,103 5,963 4,467 7,905 5,273 5,410 9,631 20 Federal agency 0 0 0 0 0 0 n.a. 0 n.a. 0 0 n.a. 21 Mortgage-backed 576 548 898 171 390 935 1,128 1,561 941 316 224 527 1. Transactions are market purchases and sales of securities as reported to the Federal Forward transactions are agreements made in the over-the-counter market that specify Reserve Bank of New York by the U.S. government securities dealers on its published list of delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt primary dealers. Monthly averages are based on the number of trading days in the month. securities are included when the time to delivery is more than five business days. Forward Transactions are assumed to be evenly distributed among the trading days of the report week. contracts for mortgage-backed agency securities are included when the time to delivery is Immediate, forward, and futures transactions are reported at principal value, which does not more than thirty business days. include accrued interest; options transactions are reported at the face value of the underlying 3. Futures transactions are standardized agreements arranged on an exchange. All futures securities. transactions are included regardless of time to delivery. Dealers report cumulative transactions for each week ending Wednesday. 4. Options transactions are purchases or sales of put and call options, whether arranged on 2. Outright transactions include immediate and forward transactions. Immediate delivery an organized exchange or in the over-the-counter market, and include options on futures refers to purchases or sales of securities (other than mortgage-backed federal agency securi- contracts on U.S. Treasury and federal agency securities. ties) for which delivery is scheduled in five business days or less and "when-issued" NOTE, "n.a." indicates that data are not published because of insufficient activity. securities that settle on the issue date of offering. Transactions for immediate delivery of mortgage- Major changes in the report form filed by primary dealers induced a break in the dealer data backed agency securities include purchases and sales for which delivery is scheduled in thirty business series as of the week ending July 6, 1994. days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A25 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1997 1997, week ending July Aug. Sept. Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills -2,696 4,548 1,089 9,063 2,601 5,882 -5,860 -2,149 3,269 7,029 9,187 Coupon securities, by maturity 2 Five years or less -15,429 -27,559 -35,923 -30,087 -35,368 -38,435 -30,219 -43,213 -33,684 -40,931 -41,684 3 More than five years -21,652 -16,447 -15,703 -15,681 -18,089 -17,565 -15,201 -11,342 -14.619 -20,535 -25,981 4 Federal agency 36,617 31,886 32,961 29,868 29,156 31,229 37,834 35,281 37,509 35,318 34,486 5 Mortgage-backed 33,661 32,497 37,016 29,275 35,783 38,762 41,155 35,459 37,480 41,619 40,072 NET FUTURES POSITIONS4 By type of deliverable security 6 U.S. Treasury bills 303 -841 -626 -511 -717 n.a. -569 -642 -666 -992 -1,294 Coupon securities, by maturity 7 Five years or less 3,187 7,431 5,650 8,390 9,447 5,173 3,160 3,313 2,323 2,947 4,426 8 More than five years -17,588 -16,452 -22,372 -14,064 -15,048 -19,183 -30,700 -29,076 -29,699 -21,858 -19,609 9 Federal agency 0 0 0 0 0 0 0 0 0 0 0 10 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 NET OPTIONS POSITIONS By type of deliverable security 11 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 12 Five years or less 2,361 -433 2,026 -392 797 3,018 3,005 2,371 2,829 2,265 2,925 13 More than five years 4,960 5,444 5,368 3,805 3,606 5,335 6,636 6,764 5,079 4,022 3,600 14 Federal agency 0 0 0 0 0 n.a. n.a. n.a. n.a. n.a. n.a. 15 Mortgage-backed 470 1,000 361 835 63 -64 161 1,200 168 474 260 Financing5 Reverse repurchase agreements 16 Overnight and continuing 296,334 298,973 303,186 307,125 299,000 296,749 287,794 331,565 327,762 310,889 327,978 17 Term 601,067 622,314 619,579 555,503 600,818 618,882 660,530 626,544 670,973 691,697 728,492 Securities borrowed 18 Overnight and continuing 213,183 210,814 203,445 207,461 206,281 203,010 201,012 201,473 210,014 213,559 210,245 19 Term 91,863 93,092 92,992 80,651 89,112 94,908 97,931 95,694 97,084 96,843 96,604 Securities received as pledge 20 Overnight and continuing 8,712 7,865 6,934 6,976 7,082 7,227 6,653 6,726 7,429 7,695 7,896 21 Term 121 102 78 95 77 79 77 70 68 94 98 Repurchase agreements 22 Overnight and continuing 642,431 651,055 647,675 652,288 634,565 644,996 640,900 671,691 680,737 682,785 686,513 23 Term 550,542 569,029 540,310 476,014 526,804 542,843 575,921 543,715 596,159 614,047 659,224 Securities loaned 24 Overnight and continuing 7,843 8,020 6,673 7,768 7,116 6,771 5,534 6,824 7,281 7,839 7,685 25 Term 4,688 5,014 3,314 3,800 3,114 3,186 3,193 3,594 3,647 3,344 3,286 Securities pledged 26 Overnight and continuing 54,921 53,321 54,253 53,803 53,704 54,135 56,031 53,184 53,883 52,296 49,444 27 Term 1,904 2,332 5,818 2,340 5,039 6,682 6,903 6,193 4,334 4,147 4,166 Collateralized loans 28 Overnight and continuing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 29 Term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 30 Total 14,547 16,343 13,724 13,984 15,994 13,175 12,517 12,996 15,241 17,759 16,891 MEMO: Matched book6 Securities in 31 Overnight and continuing 291,783 281,860 276,476 279,257 276,218 273,443 262,682 295,019 308,483 295,768 306.061 32 Term 587,039 602,540 602,147 528,602 582,161 598,536 642,118 619,814 654,977 671,487 706,074 Securities out 33 Overnight and continuing 381,031 383,828 382,054 379.346 380,443 377,293 375,137 398,913 397,565 386,604 402,693 34 Term 474,771 483,264 462,807 400,905 447,452 464,253 495,706 471,605 518,013 535,353 573,882 1. Data for positions and financing are obtained from reports submitted to the Federal 4. Futures positions reflect standardized agreements arranged on an exchange. All futures Reserve Bank of New York by the U.S. government securities dealers on its published list of positions are included regardless of time to delivery. primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar 5. Overnight financing refers to agreements made on one business day that mature on the days of the report week are assumed to be constant. Monthly averages are based on the next business day; continuing contracts are agreements that remain in effect for more than one number of calendar days in the month. business day but have no specific maturity and can be terminated without advance notice by 2. Securities positions are reported at market value. either party; term agreements have a fixed maturity of more than one business day. Financing 3. Net outright positions include immediate and forward positions. Net immediate posi- data are reported in terms of actual funds paid or received, including accrued interest. tions include securities purchased or sold (other than mortgage-backed agency securities) that 6. Matched-book data reflect financial intermediation activity in which the borrowing and have been delivered or are scheduled to be delivered in five business days or less and lending transactions are matched. Matched-book data are included in the financing break- "when-issued" securities that settle on the issue date of offering. Net immediate positions for downs given above. The reverse repurchase and repurchase numbers are not always equal mortgage-backed agency securities include securities purchased or sold that have been because of the "matching" of securities of different values or different types of collateralizadelivered or are scheduled to be delivered in thirty business days or less. tion. Forward positions reflect agreements made in the over-the-counter market that specify NOTE, "n.a." indicates that data are not published because of insufficient activity. delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt Major changes in the report form filed by primary dealers induced a break in the dealer data securities are included when the time to delivery is more than five business days. Forward series as of the week ending July 6, 1994. contracts for mortgage-backed agency securities are included when the time to delivery is more than thirty business days. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic NonfinancialS tatistics • January 1998 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1997 AAggeennccyy 11999933 11999944 11999955 11999966 Apr. May June July Aug. 1 Federal and federally sponsored agencies 570,711 738,928 844,611 925,823 960,491 974,331 972,731 977,877 980,501 2 Federal agencies 45,193 39,186 37,347 29,380 27,762 28,011 27,646 27,738 27,484 3 Defense Department1 6 6 6 6 6 6 6 6 6 4 Export-Import Bank2-3 5,315 3,455 2,050 1,447 1,357 1,357 1,357 1,326 1,326 5 Federal Housing Administration4 255 116 97 84 31 32 37 43 46 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. V Postal Service6 9,732 8,073 5,765 n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 29,885 27,536 29,429 27,853 27,756 28,005 27,640 27,732 27,478 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 523,452 699,742 807,264 896,443 932,729 946,320 945,085 950,139 953,017 11 Federal Home Loan Banks 139,512 205,817 243,194 263,404 277,880 284,861 290,028 291,931 292,174 12 Federal Home Loan Mortgage Corporation 49,993 93,279 119,961 156,980 162,872 167,407 161,900 161,476 165,690 13 Federal National Mortgage Association 201,112 257,230 299,174 331,270 341,789 344,350 345,462 348,599 348,115 14 Farm Credit Banks8 53,123 53,175 57,379 60,053 60,945 61,384 62,075 61,874 61,091 15 Student Loan Marketing Association9 39,784 50,335 47,529 44,763 48,515 47,620 44,841 45,536 45,211 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation" 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 128,187 103,817 78,681 58,172 n.a. 51,866 50,962 50,119 48,625 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 5,309 3,449 2,044 1,431 1,357 1,357 1,357 1,326 1,326 21 Postal Service6 9,732 8,073 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 States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Other lending14 25 Farmers Home Administration 38,619 33,719 21,015 18,325 16,675 16,505 15,455 18,700 14,300 26 Rural Electrification Administration 17,578 17,392 17,144 16,702 15,696 15,674 15,679 15,564 15,568 27 Other 45,864 37,984 29,513 21,714 23,919 18,330 18,471 14,529 17,431 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 10. The Financing Corporation, established in August 1987 to recapitalize the Federal under family housing and homeowners assistance programs. Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to 3. On-budget since Sept. 30, 1976. provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 4. Consists of debentures issued in payment of Federal Housing Administration insurance 12. The Resolution Funding Corporation, established by the Financial Institutions Reform, claims. Once issued, these securities may be sold privately on the securities market. Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989. 5. Certificates of participation issued before fiscal year 1969 by the Government National 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations Mortgage Association acting as trustee for the Farmers Home Administration, the Department issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the of Health, Education, and Welfare, the Department of Housing and Urban Development, the purpose of lending to other agencies, its debt is not included in the main portion of the table to Small Business Administration, and the Veterans Administration. avoid double counting. 6. Off-budget. 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans 7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally Federal Agricultural Mortgage Corporation; therefore details do not sum to total. Some data being small. The Farmers Home Administration entry consists exclusively of agency assets, are estimated. whereas the Rural Electrification Administration entry consists of both agency assets and 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is guaranteed loans. shown on line 17. 9. Before late 1982, the association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A31 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1997 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11999944 11999955 11999966 oorr uussee Mar. Apr. May June July Aug. Sept. Oct. 1 All issues, new and refunding' 153,950 145,657 171,222 13,701 15,741 15,447 19,376 16,740 16,580r 20,464r 18,617 By type of issue 2 General obligation 54,404 56,980 60,409 5,491 6,224 5,741 6,145 7,679 5,083 3,526 7,570 3 Revenue 99,546 88,677 110,813 8,210 9,517 9,706 13,231 9,061 11,552 16,938 11,047 By type of issuer 4 State 19,186 14,665 13,651 4,037 1,126 1,219 1,197 1,984 1,352 1,278 n.a. 5 Special district or statutory authority 95,896 93,500 113,228 7,206 11,124 9,666 13,810 10,715 10,480 15,557 n.a. 6 Municipality, county, or township 38,868 37,492 44,343 2,458 3,491 4,562 4,369 4,041 4,803 3,629 n.a. 7 Issues for new capital 105,972 102,390 112,298 8,736 11,835 10,507 14,536 9,279 9,038 9,450 11,541 By use of proceeds 8 Education 21,267 23,964 26,851 2,330 3,264 2,844 3,498 2,701 2,741 1,976 9 Transportation 10,836 11,890 12,324 393 1,873 1,225 638 666 1,276 2,651 1 10 Utilities and conservation 10,192 9,618 9,791 954 425 1,608 1,615 1,182 583 1,168 n.a. 11 Social welfare 20,289 19,566 24,583 2,644 1,929 1,291 4,438 1,789 1,654 1,509 1 12 Industrial aid 8,161 6,581 6,287 317 765 462 637 334 793 423 I 13 Other purposes 35,227 30,771 32,462 2,098 3,220 3,077 3,710 2,607 2,024 1,723 t 1. Par amounts of long-term issues based on date of sale. SOURCE. Securities Data Company beginning January 1990; Investment Dealer's 2. Includes school districts. Digest before then. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars Type of issue, offering, or issuer Apr. May July Aug. Sept. 1 All issues' 583,240 673,779 n.a. 53,027 62,411 43,956 54,750 83,890r 66,919r 50,758r 80,394 2 Bonds2 498,039 573,206 n.a. 44,980 54,632 37,672 46,738 72,638r 57,500r 45,218r 70,704 By type of offering 3 Public, domestic 365,222 408,804 386,280 35,245 45,886 38,594 60,979r 46,029r 40,328r 4 5 P S r o i l v d a t a e b r p o la ad ce ment, domestic3 . 7 5 6 6 , , 0 7 6 5 5 5 7 8 6 7 , , 9 4 1 9 0 2 7 n 4 . , a 7 . 9 3 9 n , . 7 a 3 . 5 8 n , . 7 a 4 . 6 7,875 8 n , . 1 a 4 . 4 11 n ,6 .a 6 . 0r 11 n ,4 .a 7 . 1r 4 n ,8 .a 9 . 0 By industry group 6 Manufacturing 43,423 61,070 41,959 4,791 3,060 2,276 2,355 3,748 7,780 5,175 3,534 7 Commercial and miscellaneous 40,735 50,689 34,076 2,004 1,641 6,201 2,104 2,771r 4,429 3,354 4,137 8 Transportation 6,867 8,430 5,111 100 324 257 6,566 424 544 406 296 9 Public utility 13,322 13,751 8,161 1,476 1,185 47 653 1,377 3,674 1,407 1,357 10 Communication 13,340 22,999 13,320 405 2,802 500 300 576 1,304 278 1,831 11 Real estate and financial 380,352 416,269 358,446 36,204 45,619 28,391 34,761 63,743r 39,769r 34,599r 59,550 12 Stocks2 85,155 100,573 8,047 7,779 6,284 8,012 11,252 9,419r 5,541r 9,835 By type of offering 13 Public preferred 12,570 10,917 33,208 1,510 2,740 1,952 2,055 3,846 678 1,878 14 Common 47,828 57,556 83,052 6,537 5,039 4,332 5,957 7,406 8,741r 7,957 15 Private placement 24,800 32,100 By industry group 16 Manufacturing 17,798 21,545 2,008 1,136 847 1,594 1,627 1,056 1,044 1,294 17 Commercial and miscellaneous 15,713 27,844 3,041 1,923 1,181 1,912 2,938 2,804 1,943 3,714 18 Transportation 2,203 804 258 0 0 35 272 563 94 302 19 Public utility 2,214 1,936 96 841 570 200 1,046 483 29 405 20 Communication 494 1,077 28 0 25 0 374 120 59 235 21 Real estate and financial 46,733 47,367 2,575 3,879 3,661 4,219 5,384 3,875 2,371 3,885 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data cover only public offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data are not available. exclude secondary offerings, employee stock plans, investment companies other than closed- SOURCE. Beginning July 1993, Securities Data Company and the Board of Governors of end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include the Federal Reserve System. ownership securities issued by limited partnerships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • January 1998 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1997 IItteemm 11999955 11999966 Mar. Apr. May June July Aug.r Sept. Oct. 1 Sales of own shares2 871,415 1,149,918 101,390 110,721 103,470 112,318 125,710 114,358 116,021 126,714 2 Redemptions of own shares 699,497 853,460 79,976 100,188 76,337 86,759 90,095 84,366 86,449 97,870 3 Net sales3 171,918 296,458 21,413 10,532 27,133 25,559 35,615 29,992 29,572 28,844 4 Assets4 2,067,337 2,637,398 2,700,474 2,782,077 2,952,609 3,067,565 3,279,535 3,199,534 3,386,547 3,296,768 5 Cash5 142,572 139,396 160,570 177,979 182,004 180,552 182,122 180,152 180,159 182,087 6 Other 1,924,765 2,498,002 2,539,906 2,604,098 2,770,606 2,887,013 3,097,413 3,019,382 3,206,388 3,114,681 1. Data on sales and redemptions exclude money market mutual funds but include 4. Market value at end of period, less current liabilities. limited-maturity municipal bond funds. Data on asset positions exclude both money market 5. Includes all U.S. Treasury securities and other short-term debt securities. mutual funds and limited-maturity municipal bond funds. SOURCE. Investment Company Institute. Data based on reports of membership, which 2. Includes reinvestment of net income dividends. Excludes reinvestment of capital gains comprises substantially all open-end investment companies registered with the Securities and distributions and share issue of conversions from one fund to another in the same group. Exchange Commission. Data reflect underwritings of newly formed companies after their 3. Excludes sales and redemptions resulting from transfers of shares into or out of money initial offering of securities. market mutual funds within the same fund family. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1995 1996 1997 AAccccoouunntt 11999944 11999955 11999966 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Profits with inventory valuation and capital consumption adjustment 570.5 650.0 735.9 685.7 717.7 738.5 739.6 747.8 779.6 795.1 816.2 2 Profits before taxes 535.1 622.6 676.6 634.1 664.9 682.2 679.1 680.0 708.4 719.8 740.8 3 Profits-tax liability 186.6 213.2 229.0 215.3 226.2 232.2 231.6 226.0 241.2 244.5 257.4 4 Profits after taxes 348.5 409.4 447.6 418.8 438.7 450.0 447.5 454.0 467.2 475.3 483.4 5 Dividends 216.2 264.4 304.8 274.4 300.7 303.7 305.7 309.1 326.8 333.0 339.1 6 Undistributed profits 132.3 145.0 142.8 144.5 138.0 146.4 141.8 144.9 140.3 142.3 144.3 7 Inventory valuation -16.1 -24.3 -2.5 .4 -5.1 -5.4 -2.7 3.3 3.5 5.9 4.9 8 Capital consumption adjustment 51.4 51.6 61.8 51.1 57.9 61.6 63.2 64.4 67.7 69.4 70.4 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1996 1997 AAccccoouunntt 11999944 11999955 11999966 Ql Q2 Q3 Q4 Ql Q2R Q3 ASSETS 1 Accounts receivable, gross2 543.7 607.0 637.1 613.7 626.7 628.1 637.1 647.2 650.7 656.8 2 Consumer 201.9 233.0 244.9 235.9 240.6 244.4 244.9 248.6 254.3 255.0 3 Business 274.9 301.6 309.5 303.5 305.7 301.4 309.5 315.2 311.7 313.1 4 Real estate 66.9 72.4 82.7 74.3 80.4 82.2 82.7 83.4 84.8 88.7 5 LESS: Reserves for unearned income 52.9 60.7 55.6 58.9 57.2 54.8 55.6 51.3 57.1 58.0 6 Reserves for losses 11.3 12.8 13.1 12.8 12.7 12.9 13.1 12.8 13.3 13.7 7 Accounts receivable, net 479.5 533.5 568.3 542.0 556.7 560.5 568.3 583.1 580.4 585.1 8 All other 216.8 250.9 290.0 255.0 258.7 268.7 290.0 289.9 307.1 310.5 9 Total assets 696.3 784.4 858.3 796.9 815.4 829.2 858.3 873.0 887.5 895.6 LIABILITIES AND CAPITAL 10 Bank loans 14.8 15.3 19.7 15.4 17.7 18.3 19.7 18.4 18.8 19.3 11 Commercial paper 171.6 168.6 177.6 168.2 169.6 173.1 177.6 185.3 193.7 190.2 Debt 12 Owed to parent 41.8 51.1 60.3 50.5 56.3 57.9 60.3 61.0 60.0 61.7 13 Not elsewhere classified 247.4 300.0 332.5 307.5 319.0 322.3 332.5 324.4 345.0 348.5 14 All other liabilities 146.2 163.6 174.7 165.6 163.2 164.8 174.7 189.1 171.3 177.2 15 Capital, surplus, and undivided profits 74.6 85.9 93.5 89.7 89.7 92.8 93.5 94.8 98.7 98.7 16 Total liabilities and capital 696.3 784.4 858.3 796.9 815.4 829.2 858.3 873.0 887.5 895.6 1. Includes finance company subsidiaries of bank holding companies but not of retailers 2. Before deduction for unearned income and losses, and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown, as they are not on the books. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Market and Corporate Finance A33 1.52 DOMESTIC FINANCE COMPANIES Owned and Managed Receivables1 Billions of dollars, amounts outstanding 1997 TTyyppee ooff ccrreeddiitt 11999944 11999955 11999966 Apr. May June July Aug. Sept. Seasonally adjusted 1 Total 607.3 682.4 762.4 775.6 775.9 782.9 786.1r 791.6r 795.8 2 Consumer 244.4 281.9 306.6 318.2 318.5 320.8 323.2r 323.4r 323.1 3 Real estate 66.9 72.4 111.9 116.9 118.0 120.1 121.8 123.7r 122.9 4 Business 295.9 328.1 343.8 340.5 339.3 342.0 341.1 344.5r 349.7 Not seasonally adjusted 5 Total 613.5 689.5 769.7 776.6 777.8 786.9 780.3r 786.2r 792.1 6 Consumer 248.0 285.8 310.6 315.6 317.5 320.9 322. r 323.2r 323.8 7 Motor vehicles loans 70.2 81.1 86.7 83.2 85.1 87.0 88.3 88.4 88.6 8 Motor vehicle leases 67.5 80.8 92.5 96.7 97.3 98.5 99.4 98.8 96.7 9 Revolving2 25.9 28.5 32.5 34.3 34.4 34.0 33.1 33.6 33.1 10 Other3 38.4 42.6 33.2 34.3 34.7 34.8 34.7 35.4 36.6 Securitized assets4 11 Motor vehicle loans 32.8 34.8 36.8 38.3 36.8 37.8 38.1r 38.3r 39.7 12 Motor vehicle leases 2.2 3.5 8.7 9.4 9.3 9.2 9.0 8.9 10.0 13 Revolving n.a. n.a. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 14 Other 11.2 14.7 20.1 19.3 19.9 19.7 19.5 19.7 19.0 15 Real estate 66.9 72.4 111.9 116.9 118.0 120.1 121.8 123.7r 122.9 16 One- to four-family n.a. n.a. 52.1 55.0 54.9 54.5 56.8 59. lr 58.1 17 Other n.a. n.a. 30.5 30.3 30.3 30.3 30.3 30.4 30.6 Securitized real estate assets4 18 One- to four-family n.a. n.a. 28.9 31.3 32.5 35.0 34.4 33.9 34.0 19 Other n.a. n.a. 0.4 0.3 0.3 0.3 0.3 0.3 0.3 20 Business 298.6 331.2 347.2 344.1 342.2 345.9 336.4 339.3r 345.4 21 Motor vehicles 62.0 66.5 67.1 71.7 70.4 70.7 63.6 65.2 67.6 22 Retail loans 18.5 21.8 25.1 24.6 24.4 25.2 24.4 25.3 26.0 23 Wholesale loans5 35.2 36.6 33.0 37.9 36.6 36.3 29.8 30.5 32.0 24 Leases 8.3 8.0 9.0 9.2 9.3 9.3 9.3 9.4 9.6 25 Equipment 8.3 8.0 9.0 189.9 188.0 188.8 188.3 189.0 191.6 26 Loans 8.3 8.0 9.0 53.8 52.3 52.6 51.7 51.3 53.0 27 Leases 8.3 8.0 9.0 136.1 135.6 136.2 136.6 137.6 138.6 28 Other business receivables6 8.3 8.0 9.0 49.6 50.3 52.2 51.6 52.6r 53.9 Securitized assets4 29 Motor vehicles 8.3 8.0 9.0 20.3 21.1 21.3 19.9 19.8 19.3 30 Retail loans 8.3 8.0 9.0 2.1 2.6 2.5 2.4 2.3 2.2 31 Wholesale loans 8.3 8.0 9.0 18.2 18.5 18.7 17.4 17.5 17.1 32 Leases 8.3 8.0 9.0 0.0 0.0 0.0 0.0 0.0 0.0 33 Equipment 8.3 8.0 9.0 9.9 9.9 10.4 10.6 10.3 10.1 34 Loans 8.3 8.0 9.0 3.8 4.0 3.9 4.2 4.1 4.0 35 Leases 8.3 8.0 9.0 6.2 5.9 6.5 6.4 6.2 6.0 36 Other business receivables6 8.3 8.0 9.0 2.6 2.5 2.5 2.5 2.4 2.9 NOTE. This table has been revised to incorporate several changes resulting from the before deductions for unearned income and losses. Components may not sum to totals benchmarking of finance company receivables to the June 1996 Survey of Finance Compa- because of rounding. nies. In that benchmark survey, and in the monthly surveys that have followed, more detailed 2. Excludes revolving credit reported as held by depository institutions that are subsidiarbreakdowns have been obtained for some components. In addition, previously unavailable ies of finance companies. data on securitized real estate loans are now included in this table. The new information has 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of resulted in some reclassification of receivables among the three major categories (consumer, consumer goods such as appliances, apparel, boats, and recreation vehicles. real estate, and business) and in discontinuities in some component series between May and 4. Outstanding balances of pools upon which securities have been issued; these balances June 1996. are no longer carried on the balance sheets of the loan originator. Includes finance company subsidiaries of bank holding companies but not of retailers and 5. Credit arising from transactions between manufacturers and dealers, that is, floor plan banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For financing. ordering address, see inside front cover. 6. Includes loans on commercial accounts receivable, factored commercial accounts, and 1. Owned receivables are those carried on the balance sheet of the institution. Managed receivable dealer capital; small loans used primarily for business or farm purposes; and receivables are outstanding balances of pools upon which securities have been issued; these wholesale and lease paper for mobile homes, campers, and travel trailers. balances are no longer carried on the balance sheets of the loan originator. Data are shown Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic NonfinancialS tatistics • January 1998 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1997 IItteemm 11999944 11999955 11999966 Apr. May June July Aug. Sept. Oct. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 170.4 175.8 182.4 172.5 177.6 181.4 181.4 191.2 190.6 183.4 2 Amount of loan (thousands of dollars) 130.8 134.5 139.2 134.8 137.7 140.6 142.7 148.2 147.0 142.4 3 Loan-to-price ratio (percent) 78.8 78.6 78.2 81.1 80.0 79.9 81.2 79.8 79.3 80.1 4 Maturity (years) 27.5 27.7 27.2 27.8 28.2 28.0 28.7 28.2 28.3 28.1 5 Fees and charges (percent of loan amount)2 1.29 1.21 1.21 1.04 1.00 1.04 1.05 1.06 1.12 0.94 Yield (percent per year) 6 Contract rate1 7.26 7.65 7.56 7.86 7.85 7.79 7.62 7.42 7.43 7.39 7 Effective rate1,3 7.47 7.85 7.77 8.03 8.01 7.95 7.78 7.59 7.61 7.54 8 Contract rate (HUD series)4 8.58 8.05 8.03 8.19 8.08 7.82 7.62 7.67 7.51 7.48 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.68 8.18 8.19 8.56 8.05 8.02 7.61 8.02 7.52 7.53 10 GNMA securities6 7.96 7.57 7.48 7.80 7.59 7.37 7.04 7.16 7.10 6.90 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 222,057 253,511 287,052 295,804 297,023 297,471 300,439 304,528 307,256 310,421 1?, FHA/VA insured 27,558 28,762 30,592 30,839 31,437 31,198 31,065 31,193 31,847 32,080 13 Conventional 194,499 224,749 256,460 264,965 265,586 266,273 269,374 273,335 275,409 278,341 14 Mortgage transactions purchased (during period) 62,389 56,598 68,618 6,683 4,148 3,594 6,417 7,606 6,544 7,619 Mortgage commitments (during period) 15 Issued7 54,038 56,092 65,859 3,898 1,704 6,196 6,956 5,960 7,573 9,190 16 To sell8 1,820 360 130 0 23 115 75 219 215 300 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 72,693 107,424 137,755 147,190 148,698 149,250 151,582 155,169 157,165 159,801 18 FHA/VA insured 276 267 220 205 202R 198R 194R 200R 200' 200 19 Conventional 72,416 107,157 137,535 146,985 148,496R 149,052R 151,388R 154,969R 156,965R 159,601 Mortgage transactions (during period) 20 Purchases 124,697 98,470 128,566 8,981 8,195 8,884 8,374 9,917 10,496 12,648 21 Sales 117,110 85,877 119,702 8,269 7,596 8,321 7,757 9,187 9,727 11,712 22 Mortgage commitments contracted (during period)9 136,067 118,659 128,995 9,746 7,408 9,099 9,053R 9,913 10,877 11,986 1. Weighted averages based on sample surveys of mortgages originated by major institu- 6. Average net yields to investors on fully modified pass-through securities backed by tional lender groups for purchase of newly built homes; compiled by the Federal Housing mortgages and guaranteed by the Government National Mortgage Association (GNMA), Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mortgages; from U.S. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Department of Housing and Urban Development (HUD). Based on transactions on the first Mortgage Corporation's mortgage commitments and mortgage transactions include activity day of the subsequent month. under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured exclude swap activity. by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A35 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1996 1997 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999933 11999944 11999955 Q2 Q3 Q4 Q1 Q2P 1 All holders 4,261,151 4,462,816 4,691,812 4,861,363 4,940,700 5,022,445 5,080,199 5,162,447 By type of property 2 One- to four-family residences 3,225,011 3,424,018 3,616,440 3,719,650 3,792,425 3,850,579 3,898,042 3,955,964 3 Multifamily residences 270,380 275,287 287,593 301,063 305,081 312,984 315,578 321,955 4 Nonfarm, nonresidential 685,021 680,540 703,218 754,457 756,462 771,749 778,940 795,708 5 80,739 82,971 84,561 86,193 86,732 87,134 87,639 88,821 By type of holder 6 Major financial institutions 1,763,410 1,811,018 1,884,714 1,919,622 1,945,088 1,968,859 1,983,813 2,021,318 7 Commercial banks2 940,603 1,003,923 1,080,483 1,099,643 1,112,914 1,135,133 1,149,721 1,186,255 8 One- to four-family 556,660 611,092 663,715 670,756 678,565 692,180 702,553 727,211 9 Multifamily 38,657 39,346 43,837 45,368 46,410 46,676 47,620 48,752 10 Nonfarm, nonresidential 324,420 330,934 349,101 358,956 363,124 371,394 374,317 384,232 11 Farm 20,866 22,551 23,830 24,563 24,815 24,883 25,231 26,060 12 Savings institutions' 598,435 596,191 596,763 611,735 628,037 628,335 627,564 629,045 13 One- to four-family 470,000 477,626 482,353 498,219 513,794 513,712 514,575 516,699 14 Multifamily 67,366 64,343 61,987 60,680 61,308 61,570 60,645 60,102 15 Nonfarm, nonresidential 60,764 53,933 52,135 52,522 52,614 52,723 52,007 51,906 16 Farm 305 289 288 315 320 331 336 338 17 Life insurance companies 224,372 210,904 207,468 208,244 204,138 205,390 206,529 206,018 18 One- to four-family 8,593 7,018 7,316 7,270 6,190 6,772 6,799 6,684 19 Multifamily 25,376 23,902 23,435 23,534 23,155 23,197 23,320 23,251 20 Nonfarm, nonresidential 180,934 170,421 167,095 167,800 165,096 165,399 166,277 165,779 21 Farm 9,469 9,563 9,622 9,640 9,697 10,022 10,133 10,304 22 Federal and related agencies 326,040 315,580 306,774 305,963 302,793 300,935 295,203 292,966 23 Government National Mortgage Association 22 6 2 2 2 2 6 7 24 One- to four-family 15 6 2 2 2 2 6 7 25 Multifamily 7 0 0 0 0 0 0 0 26 Farmers Home Administration4 41,386 41,781 41,791 41,547 41,575 41,596 41,485 41,400 27 One- to four-family 18,030 18,098 17,705 17,396 17,374 17,303 17,175 17,239 28 Multifamily 10,940 11,319 11,617 11,645 11,652 11,685 11,692 11,706 29 Nonfarm, nonresidential 5,406 5,670 6,248 6,552 6,681 6,841 6,969 7,135 30 Farm 7,012 6,694 6,221 5,954 5,869 5,768 5,649 5,321 31 Federal Housing and Veterans' Administrations 12,215 10,964 9,809 8,052 6,627 6,244 4,330 4,200 32 One- to four-family 5,364 4,753 5,180 3,861 3,190 3,524 2,335 2,299 33 Multifamily 6,851 6,211 4,629 4,191 3,438 2,719 1,995 1,900 34 Resolution Trust Corporation 17,284 10,428 1,864 0 0 0 0 0 35 One- to four-family 7,203 5,200 691 0 0 0 0 0 36 Multifamily 5,327 2,859 647 0 0 0 0 0 37 Nonfarm, nonresidential 4,754 2,369 525 0 0 0 0 0 38 Farm 0 0 0 0 0 0 0 0 39 Federal Deposit Insurance Corporation 14,112 7,821 4,303 5,016 4,025 2,431 2,217 1,816 40 One- to four-family 2,367 1,049 492 840 675 365 333 272 41 Multifamily 1,426 1,595 428 955 766 413 377 309 42 Nonfarm, nonresidential 10,319 5,177 3,383 3,221 2,584 1,653 1,508 1,235 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 165,668 174,312 176,824 176,692 175,472 174,556 172,829 170,386 45 One- to four-family 150,336 158,413 161,322 161,407 160,541 160,205 159,056 157,167 46 Multifamily 15,332 15,899 15,502 15,285 14,931 14,351 13,773 13,219 47 Federal Land Banks 28,460 28,555 28,428 29,362 29,579 29,602 29,668 29,963 48 One- to four-family 1,675 1,671 1,673 1,728 1,740 1,742 1,746 1,763 49 Farm 26,785 26,885 26,755 27,634 27,839 27,860 27,922 28,200 50 Federal Home Loan Mortgage Corporation 46,892 41,712 43,753 45,292 45,513 46,504 44,668 45,194 51 One- to four-family 44,345 38,882 39,901 41,095 41,149 41,758 39,640 40,092 52 Multifamily 2,547 2,830 3,852 4,197 4,364 4,746 5,028 5,102 53 Mortgage pools or trusts5 1,570,691 1,726,365 1,861,489 1,963,345 2,008,356 2,056,276 2,099,448 2,134,311 54 Government National Mortgage Association 414,066 450,934 472,283 485,316 497,018 506,340 513,471 520,938 55 One- to four-family 404,864 441,198 461,438 473,825 485,073 494,158 500,591 507,618 56 Multifamily 9,202 9,736 10,845 11,491 11,945 12,182 12,880 13,320 57 Federal Home Loan Mortgage Corporation 447,147 490,851 515,051 536,671 545,608 554,260 562,894 567,187 58 One- to four-family 442,612 487,725 512,238 534,238 543,341 551,513 560,369 564,445 59 Multifamily 4,535 3,126 2,813 2,433 2,267 2,747 2,525 2,742 60 Federal National Mortgage Association 495,525 530,343 582,959 621,285 636,362 650,780 663,668 673,931 61 One- to four-family 486,804 520,763 569,724 606,271 619,869 633,210 645,324 654,826 62 Multifamily 8,721 9,580 13,235 15,014 16,493 17,570 18,344 19,105 63 Farmers Home Administration4 28 19 11 9 7 3 3 2 64 One- to four-family 5 3 2 1 0 0 0 0 65 Multifamily 0 0 0 0 0 0 0 0 66 Nonfarm, nonresidential 13 9 5 4 4 0 0 0 67 Farm 10 7 4 4 3 3 3 2 68 Private mortgage conduits 213,925 254,218 291,185 320,064 329,360 344,894 359,413 372,253 69 One- to four-family6 179,755 202,519 222,526 238,715 244,884 247,740 256,834 259,950 70 Multifamily 8,701 14,925 21,279 26,809 28,141 33,689 35,498 39,461 71 Nonfarm, nonresidential 25,469 36,774 47,380 54,541 56,336 63,464 67,081 72,842 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 601,010 609,853 638,836 672,433 684,462 696,375 701,735 713,853 74 One- to four-family 446,383 448,002 470,163 464,027 476,038 486,395 490,708 499,692 75 Multifamily 65,393 69,615 73,486 79,462 80,212 81,438 81,880 82,987 76 Nonfarm, nonresidential 72,943 75,253 77,345 110,862 110,023 110,275 110,781 112,579 77 16,292 16,983 17,841 18,083 18,190 18,268 18,366 18,595 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • January 1998 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1997r Apr. May June July Aug. Sept. Seasonally adjusted 1 Total 964,568 1,100,712 1,184,022 1,212,762 1,213,720 1,213,329 1,219,292 1,223,520 1,225,464 2 Automobile 326,356 362,097 390,308 393,951 394,378 398,004 400,449 399,758 400,151 3 Revolving 364,616 441,862 497,977 512,787 514,327 514,551 521,013 524,069 526,052 4 Other2 273,596 296,753 295,738 306,024 305,015 300,774 297,830 299,693 299,261 Not seasonally adjusted 5 Total 988,079 1,128,618 1,214,882 1,200,882 1,203,571 1,207,731 1,212,295 1,223,769 1,228,987 By major holder 6 Commercial banks 462,923 507,753 529,417 515,542 515,526 513,036 516,749 518,345 509,557 7 Finance companies 134.421 152,123 152,391 151,897 154,177 155,805 156,137 157,466 158.247 8 Credit unions 119,594 131,939 144,148 145,601 146,691 147,640 148,973 150,176 151,016 9 Savings institutions 38,468 40,106 44,711 46,243 46,626 47,009 47,392 47,400 47,883 10 Nonfinancial business3 86,621 85,061 77,745 69,356 67,749 67,994 67,606 68,556 68,531 11 Pools of securitized assets4 146,052 211,636 266,470 272,243 272,802 276,247 275,438 281,826 293,753 By major type of credit5 12 Automobile 328,576 364,726 393,189 389,539 391,239 397,112 400,533 402,090 403,785 13 Commercial banks 141,895 149,094 153,983 151,150 151,842 152,535 154,299 154,971 153,367 14 Finance companies 70,157 81,073 86,690 83,230 85,106 86,979 88,323 88,428 88,554 15 Pools of securitized assets4 36,689 44,635 52,363 53,504 51,505 53,731 53,389 53,156 55,466 16 Revolving 383,187 464,134 522,860 505,316 509,406 511,313 515,875 522,194 524,500 17 Commercial banks 182,021 210,298 228,615 209,273 212,796 213,318 218,992 217,466 209,380 18 Finance companies 25,880 28,460 32,493 34,345 34,411 34,011 33,076 33,626 33,054 19 Nonfinancial business3 56,790 53,525 44,901 38,953 37,078 37,283 36,791 37,578 37,685 20 Pools of securitized assets4 96,130 147,934 188,712 193,798 195,800 196,746 196,618 202,528 213,009 21 Other 276,316 299,758 298,833 306,027 302,926 299,306 295,887 299,485 300,702 22 Commercial banks 139,007 148,361 146,819 155,119 150,888 147,183 143,458 145,908 146,810 23 Finance companies 38,384 42,590 33,208 34,322 34,660 34,815 34,738 35,412 36,639 24 Nonfinancial business3 29,831 31,536 32,844 30,403 30,671 30,711 30,815 30,978 30,846 25 Pools of securitized assets4 13,233 19,067 25,395 24,941 25,497 25,770 25,431 26,142 25,278 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 3. Includes retailers and gasoline companies. extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 4. Outstanding balances of pools upon which securities have been issued; these balances statistical release. For ordering address, see inside front cover. are no longer carried on the balance sheets of the loan originator. 2. Comprises mobile home loans and all other loans that are not included in automobile or 5. Totals include estimates for certain holders for which only consumer credit totals are revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be available. secured or unsecured. 1.56 TERMS OF CONSUMER CREDIT1 Percent per year except as noted 1997 IItteemm 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept. INTEREST RATES Commercial banks2 1 48-month new car 8.12 9.57 9.05 n.a. n.a. 9.20 n.a. n.a. 8.99 n.a. 2 24-month personal 13.19 13.94 13.54 n.a. n.a. 13.81 n.a. n.a. 13.84 n.a. Credit card plan 3 All accounts 15.69 16.02 15.63 n.a. n.a. 15.75 n.a. n.a. 15.78 n.a. 4 Accounts assessed interest 15.77 15.79 15.50 n.a. n.a. 15.72 n.a. n.a. 15.79 n.a. Auto finance companies 5 New car 9.79 11.19 9.84 8.08 8.56 7.80 7.64 6.71 5.93 6.12 6 Used car 13.49 14.48 13.53 13.18 13.29 13.48 13.55 13.51 13.38 13.29 OTHER TERMS3 Maturity (months) 7 New car 54.0 54.1 51.6 53.5 52.8 53.2 53.3 54.6 55.5 55.4 8 Used car 50.2 52.2 51.4 51.1 51.2 51.3 51.3 51.4 51.2 50.8 Loan-to-value ratio 9 New car 92 92 91 90 91 93 93 94 93 93 10 Used car 99 99 100 99 99 99 99 99 99 99 Amount financed (dollars) 11 New car 15,375 16,210 16,987 17,198 17,620 18,060 18,171 18,281 18,329 18,520 12 Used car 10,709 11,590 12,182 12,194 12,195 12,261 12,239 12,307 12,204 12,190 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1995 1996 1997 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors.... 539.9 619.6 594.0 698.2 715.3 586.6 855.1 694.0 680.8 631.2 686.2 544.7 By sector and instrument 2 Federal government 304.0 256.1 155.9 144.4 145.0 64.9 227.3 62.7 163.2 126.9 81.2 -97.1 3 Treasury securities 303.8 248.3 155.7 142.9 146.6 59.7 229.6 60.5 166.3 130.2 82.6 -97.3 4 Budget agency securities and mortgages .2 7.8 .2 1.5 -1.6 5.1 -2.3 2.2 -3.1 -3.3 -1.4 .2 5 Nonfederal 235.9 363.4 438.1 553.7 570.3 521.7 627.8 631.3 517.6 504.4 605.0 641.7 By instrument 6 Commercial paper 8.6 10.0 21.4 18.1 -.9 14.1 25.7 9.1 -14.2 -24.4 7.8 21.4 7 Municipal securities and loans 30.5 74.8 -35.9 -48.2 1.3 -38.9 -4.1 30.2 -65.2 44.2 23.2 76.5 8 Corporate bonds 67.6 75.2 23.3 73.3 72.5 82.0 60.9 71.5 67.8 89.9 79.4 86.1 9 Bank loans n.e.c -12.3 5.1 75.0 100.4 69.9 89.6 41.5 69.7 132.2 36.3 142.0 125.2 10 Other loans and advances 5.7 -18.9 37.3 46.5 22.0 53.5 20.4 38.0 45.6 -15.8 1.2 -7.1 11 Mortgages 131.5 155.3 191.9 223.1 319.2 201.3 359.9 323.7 261.6 331.6 265.4 287.2 12 Home 189.1 184.1 199.0 192.4 267.8 171.6 316.1 255.4 248.3 251.6 240.3 203.9 13 Multifamily residential -10.7 -6.0 1.7 10.4 17.9 13.3 14.7 18.3 11.8 26.9 5.1 20.9 14 Commercial -47.4 -23.9 -11.0 18.8 30.9 15.2 27.5 45.1 -.6 51.5 18.0 57.7 15 Farm .5 1.0 2.2 1.6 2.6 1.0 1.6 4.9 2.2 1.6 2.0 4.7 16 Consumer credit 4.2 62.0 125.1 140.5 86.3 120.1 123.5 89.0 89.9 42.6 85.9 52.4 By borrowing sector 17 Household 191.2 246.2 343.7 354.9 363.8 329.7 443.0 376.5 348.8 286.8 335.5 291.1 18 Nonfinancial business 23.6 54.9 140.8 241.8 193.9 226.3 177.2 216.8 219.7 161.8 234.5 266.4 19 Corporate 39.6 49.1 135.3 213.7 148.1 200.8 132.9 172.1 192.9 94.4 179.3 190.9 20 Nonfarm noncorporate -16.4 3.2 2.2 26.6 43.4 26.4 44.2 38.5 29.2 61.5 54.4 72.0 21 Farm .5 2.6 3.3 1.5 2.4 -.9 .1 6.2 -2.5 6.0 .8 3.6 22 State and local government 21.1 62.3 -46.4 -42.9 12.7 -34.2 7.7 38.0 -50.8 55.8 35.0 84.2 23 Foreign net borrowing in United States 23.7 70.4 -15.2 71.2 70.1 81.3 53.2 35.4 106.0 85.7 27.2 50.7 24 Commercial paper 5.2 -9.0 -27.3 13.6 10.9 -3.9 -5.4 8.9 37.8 2.2 16.2 10.0 25 Bonds 16.8 82.9 12.2 49.7 49.4 76.1 47.7 11.2 60.2 78.5 11.0 29.7 26 Bank loans n.e.c 2.3 .7 1.4 8.5 9.1 11.9 8.7 15.1 4.7 7.8 -.6 11.0 27 Other loans and advances -.6 -4.2 -1.5 -.5 .8 -2.8 2.3 .1 3.4 -2.7 .7 .1 28 Total domestic plus foreign 563.6 690.0 578.7 769.3 785.4 667.9 908.3 729.4 786.8 716.9 713.4 595.4 Financial sectors 29 Total net borrowing by financial sectors 241.4 293.4 465.9 449.0 530.6 598.4 341.2 707.1 432.7 641.4 281.9 629.4 Bv instrument 30 Federal government-related 155.8 165.3 287.5 204.1 231.5 306.8 148.8 301.4 222.9 252.8 105.7 286.2 31 Government-sponsored enterprise securities 40.3 80.6 176.9 105.9 90.4 132.1 31.4 126.9 80.0 123.3 -8.9 198.1 32 Mortgage pool securities 115.6 84.7 115.4 98.2 141.1 174.7 117.4 174.5 142.9 129.6 114.6 88.1 33 Loans from U.S. government .0 .0 -4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 85.6 128.2 178.4 244.9 299.2 291.6 192.4 405.7 209.9 388.6 176.2 343.2 35 Open market paper -.7 -6.2 41.6 42.6 92.7 57.0 16.1 106.1 84.2 164.3 175.4 78.1 36 Corporate bonds 85.6 122.8 118.1 188.8 151.1 196.3 150.6 219.6 76.3 157.8 -6.1 173.9 37 Bank loans n.e.c .7 -14.4 -13.7 4.2 16.8 -1.5 23.4 20.6 2.6 20.4 7.0 10.4 38 Other loans and advances -.6 22.4 22.6 3.4 27.2 32.0 -5.5 48.6 33.9 31.8 -16.1 66.8 39 Mortgages .6 3.6 9.8 5.9 11.4 7.7 7.7 10.8 12.9 14.3 16.0 14.0 By borrowing sector 40 Commercial banking 10.0 13.4 20.1 22.5 11.7 -7.9 -34.2 40.5 14.7 25.7 1166..11 8833..00 41 Savings institutions -7.0 11.3 12.8 2.6 26.0 31.5 11.0 42.1 26.4 24.7 -14.6 33.9 42 Credit unions .0 .2 .2 -.1 .1 .0 -.1 -.2 .3 .3 -.2 .2 43 Life insurance companies .0 .2 .3 -.1 1.1 -.4 2.5 .3 -.4 2.0 .8 .1 44 Government-sponsored enterprises 40.2 80.6 172.1 105.9 90.4 132.1 31.4 126.9 80.0 123.3 -8.9 198.1 45 Federally related mortgage pools 115.6 84.7 115.4 98.2 141.1 174.7 117.4 174.5 142.9 129.6 114.6 88.1 46 Issuers of asset-backed securities (ABSs) 57.3 82.8 68.8 132.9 132.4 186.7 138.9 162.8 88.2 139.6 58.1 86.3 47 Finance companies -2.3 -.8 49.1 50.8 43.2 61.7 41.5 56.8 30.7 43.8 6.4 124.3 48 Mortgage companies 8.0 .0 -11.5 .4 12.4 -10.0 20.0 16.0 1.7 12.1 5.9 10.0 49 Real estate investment trusts (REITs) .3 3.4 13.7 6.0 12.8 8.3 8.2 11.5 13.7 17.7 19.1 18.6 50 Brokers and dealers 2.7 12.0 .5 -5.0 -2.0 7.7 -31.8 13.2 5.7 4.9 -2.9 42.4 51 Funding corporations 16.6 5.7 24.2 34.9 61.5 13.9 36.3 62.9 28.8 118.0 87.5 -55.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic NonfinancialS tatistics • January 1998 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1995 1996 1997 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999922 11999933 11999944 11999955 11999966 Q4 Q1 Q2 Q3 Q4 Ql Q2 All sectors 55552222 TTTToooottttaaaallll nnnneeeetttt bbbboooorrrrrrrroooowwwwiiiinnnngggg,,,, aaaallllllll sssseeeeccccttttoooorrrrssss 805.0 983.4 1,044.7 1,218.3 1,316-0 1,266.3 1,249.5 1,436.5 1,219.6 1,358.4 995.3 1,224.7 55553333 OOOOppppeeeennnn mmmmaaaarrrrkkkkeeeetttt ppppaaaappppeeeerrrr 13.1 -5.1 35.7 74.3 102.6 67.2 36.4 124.2 107.7 142.1 199.4 109.4 55554444 UUUU....SSSS.... ggggoooovvvveeeerrrrnnnnmmmmeeeennnntttt sssseeeeccccuuuurrrriiiittttiiiieeeessss 459.8 421.4 448.1 348.5 376.5 371.7 376.1 364.1 386.1 379.7 186.9 189.1 55555555 MMMMuuuunnnniiiicccciiiippppaaaallll sssseeeeccccuuuurrrriiiittttiiiieeeessss 30.5 74.8 -35.9 -48.2 1.3 -38.9 -4.1 30.2 -65.2 44.2 23.2 76.5 55556666 CCCCoooorrrrppppoooorrrraaaatttteeee aaaannnndddd ffffoooorrrreeeeiiiiggggnnnn bbbboooonnnnddddssss 169.9 280.8 153.6 311.8 273.0 354.4 259.3 302.4 204.2 326.2 84.3 289.7 55557777 BBBBaaaannnnkkkk llllooooaaaannnnssss nnnn....eeee....cccc -9.3 -8.6 62.8 113.0 95.7 100.1 73.5 105.4 139.5 64.5 148.3 146.6 55558888 OOOOtttthhhheeeerrrr llllooooaaaannnnssss aaaannnndddd aaaaddddvvvvaaaannnncccceeeessss 4.6 -.8 53.6 49.3 50.0 82.7 17.2 86.7 82.9 13.2 -14.2 59.8 55559999 MMMMoooorrrrttttggggaaaaggggeeeessss 132.1 158.9 201.7 229.0 330.6 209.0 367.6 334.5 274.5 346.0 281.4 301.2 66660000 CCCCoooonnnnssssuuuummmmeeeerrrr ccccrrrreeeeddddiiiitttt 4.2 62.0 125.1 140.5 86.3 120.1 123.5 89.0 89.9 42.6 85.9 52.4 Funds raised through mutual funds and corporate equities 66661111 TTTToooottttaaaallll nnnneeeetttt iiiissssssssuuuueeeessss 293.9 422.1 124.8 145.1 241.3 223.4 319.1 386.6 78.4 181.2 194.4 205.7 66662222 CCCCoooorrrrppppoooorrrraaaatttteeee eeeeqqqquuuuiiiittttiiiieeeessss 103.4 130.1 24.1 -2.3 3.8 -4.7 21.5 82.1 -93.5 4.9 -59.0 -36.1 66663333 NNNNoooonnnnffffiiiinnnnaaaannnncccciiiiaaaallll ccccoooorrrrppppoooorrrraaaattttiiiioooonnnnssss 27.0 21.3 -44.9 -58.3 -64.2 -58.4 -73.6 .4 -127.6 -56.0 -86.2 -83.6 66664444 FFFFoooorrrreeeeiiiiggggnnnn sssshhhhaaaarrrreeeessss ppppuuuurrrrcccchhhhaaaasssseeeedddd bbbbyyyy UUUU....SSSS.... rrrreeeessssiiiiddddeeeennnnttttssss 32.4 63.4 48.1 50.4 58.8 55.9 90.1 70.1 32.7 42.3 47.0 55.6 66665555 FFFFiiiinnnnaaaannnncccciiiiaaaallll ccccoooorrrrppppoooorrrraaaattttiiiioooonnnnssss 44.0 45.4 20.9 5.6 9.2 -2.2 5.1 11.6 1.5 18.6 -19.8 -8.1 66666666 MMMMuuuuttttuuuuaaaallll ffffuuuunnnndddd sssshhhhaaaarrrreeeessss 190.5 292.0 100.6 147.4 237.6 228.1 297.6 304.5 171.9 176.3 253.4 241.8 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1995 1996 1997 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999922 11999933 11999944 11999955 11999966 Q4 Ql Q2 Q3 Q4 Ql Q2 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 805.0 983.4 1,044.7 1,218.3 1,316.0 1,266.3 1,249.5 1,436.5 1,219.6 1,358.4 995.3 1,224.7 2 Domestic nonfederal nonfinancial sectors 117.2 80.0 257.1 -86.5 -8.9 -167.4 -40.9 305.7 -183.8 -116.7 -300.7 -90.2 3 Household 87.8 39.3 293.9 -2.1 31.7 -79.4 -76.5 277.9 -43.3 -31.5 -241.2 -63.8 4 Nonfinancial corporate business 27.8 9.1 17.7 -2.4 15.3 -5.2 29.2 31.7 9.5 -9.4 42.3 -14.4 5 Nonfarm noncorporate business -.1 -1.1 .6 .3 .4 .3 .4 .4 .4 .4 .5 .5 6 State and local governments 1.7 32.6 -55.0 -82.4 -56.2 -83.1 6.0 -4.4 -150.4 -76.2 -102.2 -12.5 7 Federal government -10.4 -17.2 -22.6 -20.4 -20.9 -22.7 -19.9 -14.3 -25.0 -24.3 -18.7 -12.9 8 Rest of the world 98.4 129.3 132.3 273.9 409.1 160.2 350.0 268.9 485.4 532.2 366.3 306.3 9 Financial sectors 599.8 791.3 677.9 1,051.3 936.7 1,296.2 960.3 876.2 943.0 967.1 948.4 1,021.6 10 Monetary authority 27.9 36.2 31.5 12.7 12.3 23.2 17.5 11.7 11.5 8.4 37.4 47.2 11 Commercial banking 95.3 142.2 163.4 265.9 187.8 176.5 126.0 179.7 196.1 249.4 319.6 330.1 12 U.S.-chartered banks 69.5 149.6 148.1 186.5 119.6 126.0 78.3 121.9 119.5 158.9 212.3 321.9 13 Foreign banking offices in United States 16.5 -9.8 11.2 75.4 63.3 38.5 50.8 50.7 71.1 80.5 97.3 1.1 14 Bank holding companies 5.6 .0 .9 -.3 3.9 4.6 -5.1 5.4 4.8 10.5 2.2 5.1 15 Banks in U.S.-affiliated areas 3.7 2.4 3.3 4.2 1.0 7.4 2.1 1.7 .7 -.6 7.8 2.0 16 Savings institutions -79.0 -23.3 6.7 -7.6 19.9 -68.4 34.1 44.7 49.7 -48.8 -3.0 21.1 17 Credit unions 17.7 21.7 28.1 16.2 25.5 19.0 23.6 33.0 21.1 24.3 14.0 18.9 18 Bank personal trusts and estates 8.0 9.5 7.1 -18.8 3.9 -20.2 -3.5 4.2 7.8 7.2 8.2 8.9 19 Life insurance companies 79.5 100.9 66.7 99.2 72.5 51.7 47.6 .9 123.2 118.1 94.3 84.4 20 Other insurance companies 6.7 27.7 24.9 21.5 21.5 22.3 13.6 30.5 14.2 27.7 3.9 11.4 21 Private pension funds 37.5 49.5 47.7 63.1 46.6 81.3 69.5 45.4 41.9 29.5 57.5 57.8 22 State and local government retirement funds 5.9 21.1 30.7 22.7 34.5 20.1 54.9 47.9 19.0 16.1 38.7 21.1 23 Money market mutual funds 4.7 20.4 30.0 86.5 88.8 130.4 164.1 27.0 83.0 81.3 65.2 19.7 24 Mutual funds 126.2 159.5 -7.1 52.5 48.9 146.0 88.5 54.3 27.5 25.3 61.9 108.1 25 Closed-end funds 18.2 14.4 -3.3 13.3 9.3 13.2 10.9 9.8 9.0 7.5 6.7 5.3 26 Government-sponsored enterprises 68.8 87.8 117.8 84.7 92.0 185.1 33.9 114.7 81.2 138.1 45.1 119.0 27 Federally related mortgage pools 115.6 84.7 115.4 98.2 141.1 174.7 117.4 174.5 142.9 129.6 114.6 88.1 28 Asset-backed securities issuers (ABSs) 53.1 80.2 61.7 111.1 102.1 137.1 119.7 135.7 62.0 91.1 34.5 71.3 29 Finance companies .4 -20.9 48.3 49.9 18.4 45.1 30.4 36.3 13.1 -6.3 41.4 1.8 30 Mortgage companies .1 .0 -24.0 -3.4 8.2 -36.4 51.8 -26.8 3.4 4.1 -8.2 .0 31 Real estate investment trusts (REITs) 1.1 .6 4.7 2.2 3.0 3.4 3.4 3.4 3.4 2.0 2.0 3.4 32 Brokers and dealers -1.3 14.8 -44.2 90.1 -17.1 189.3 -109.0 -72.0 35.5 77.0 -12.8 23.0 33 Funding corporations 13.3 -35.6 -28.4 -8.6 17.5 3.0 65.9 21.1 -2.4 -14.5 27.2 -19.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 805.0 983.4 1,044.7 1,218.3 1,316.0 1,266.3 1,249.5 1,436.5 1,219.6 1,358.4 995.3 1,224.7 Other financial sources 35 Official foreign exchange -1.6 .8 -5.8 8.8 -6.3 -1.9 -.9 1.6 --2266..66 .7 --1177..66 ..44 36 Special drawing rights certificates -2.0 .0 .0 2.2 -.5 .0 .0 .0 -1.8 .0 -2.1 .0 37 Treasury currency .2 .4 .7 .6 .0 .0 .0 .0 2.3 -2.3 .4 .2 38 Foreign deposits -3.4 -18.5 52.9 35.3 82.0 21.1 100.8 3.0 119.7 104.5 188.6 79.0 39 Net interbank transactions 49.4 50.5 89.8 9.9 -52.6 57.0 -78.6 -51.8 -102.5 22.3 -85.2 -33.9 40 Checkable deposits and currency 113.5 117.3 -9.7 -12.8 15.8 -40.4 6.8 3.9 105.9 -53.4 81.3 54.0 41 Small time and savings deposits -57.2 -70.3 -40.0 96.5 97.1 110.2 207.7 -3.2 92.7 91.2 165.0 30.2 42 Large time deposits -73.2 -23.5 19.6 65.6 113.9 -1.5 57.4 83.1 181.8 133.2 48.1 177.4 43 Money market fund shares 4.5 20.2 43.3 142.3 145.8 148.9 227.6 23.1 145.1 187.5 182.4 58.5 44 Security repurchase agreements 43.1 71.2 78.3 110.7 38.7 56.7 -4.7 98.5 -15.9 77.0 51.8 217.3 45 Corporate equities 103.4 130.1 24.1 -2.3 3.8 -4.7 21.5 82.1 -93.5 4.9 -59.0 -36.1 46 Mutual fund shares 190.5 292.0 100.6 147.4 237.6 228.1 297.6 304.5 171.9 176.3 253.4 241.8 47 Trade payables 46.6 52.0 93.7 105.2 75.4 93.6 77.7 120.4 -4.3 107.6 90.3 66.3 48 Security credit 4.6 61.4 -.1 26.7 52.4 42.8 114.0 -34.8 5.3 125.1 117.6 114.4 49 Life insurance reserves 28.0 36.0 34.5 44.9 43.6 38.3 19.0 32.5 56.6 66.3 44.0 66.4 50 Pension fund reserves 230.3 254.7 253.2 241.2 235.7 189.5 236.1 196.2 231.9 278.5 287.0 278.9 51 Taxes payable 9.7 5.2 1.5 1.6 3.2 -7.2 4.5 4.7 -.1 3.5 -9.3 -11.4 52 Investment in bank personal trusts -7.1 .9 17.8 -49.7 12.5 -39.2 -.6 11.8 19.2 19.8 23.5 26.3 53 Noncorporate proprietors' equity 37.7 14.2 43.7 28.0 5.7 26.9 2.2 6.4 27.5 -15.6 -12.3 -6.7 54 Miscellaneous 246.3 336.6 243.1 466.0 454.8 765.1 506.5 431.0 348.0 533.7 604.8 631.1 55 Total financial sources 1,768.0 2,314.6 2,086.0 2,686.4 2,874.4 2,949.4 3,044.1 2,749.4 2,482.8 3,219.1 2,948.0 3,179.0 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.2 -.2 -.5 -1.0 -1.0 -1.1 -1.0 1.3 -3.1 -.3 -.6 57 Foreign deposits -2.7 -5.7 43.0 25.7 58.1 18.0 73.2 26.6 91.3 41.3 179.0 54.5 58 Net interbank liabilities -4.9 4.2 -2.7 -3.1 -3.3 -32.5 9.3 -22.5 -4.4 4.2 26.5 -24.9 59 Security repurchase agreements 4.7 46.1 57.3 55.1 24.2 29.9 27.7 124.8 -133.3 77.6 -102.1 166.7 60 Taxes payable 11.9 9.6 15.6 14.8 5.5 9.4 -14.6 20.4 7.7 8.5 -27.5 15.1 61 Miscellaneous -68.8 -201.7 -178.8 -98.2 -99.2 104.4 -149.4 -134.8 -156.2 43.6 -112.4 -378.1 Floats not included in assets (—) 62 Federal government checkable deposits .7 -1.5 -4.8 -6.0 .5 -13.9 2.7 -6.6 27.1 -21.4 -9.4 16.1 63 Other checkable deposits 1.6 -1.3 -2.8 -3.8 -4.0 -4.7 -2.8 -5.0 -4.7 -3.7 -2.6 -4.8 64 Trade credit 11.8 -4.1 .7 -30.5 -32.0 -114.4 6.5 -9.8 -101.5 -23.4 28.4 -57.4 65 Total identified to sectors as assets 1,814.1 2,469.1 2,158.7 2,732.9 2,925.8 2,954.2 3,092.6 2,757.3 2,755.7 3,095.5 2,968.5 3,392.3 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F.l and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • January 1998 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1995 1996 1997 Q4 Ql Q2 Q3 Q4 Ql Q2 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 12,486.9 13,087.1 13,785.2 14,500.5 13,785.2 13,980.9 14,134.3 14,308.4 14,500.5 14,658.4 14,769.2 By- sector and instrument 2 Federal government 3,336.5 3,492.3 3,636.7 3,781.8 3,636.7 3,717.2 3,693.8 3,733.1 3,781.8 3,829.8 3,760.6 3 Treasury securities 3,309.9 3,465.6 3,608.5 3,755.1 3,608.5 3,689.6 3,665.5 3,705.7 3,755.1 3,803.5 3,734.3 4 Budget agency securities and mortgages 26.6 26.7 28.2 26.6 28.2 27.6 28.2 27.4 26.6 26.3 26.3 5 Nonfederal 9,150.4 9,594.8 10,148.5 10,718.8 10,148.5 10,263.7 10,440.6 10,575.3 10,718.8 10,828.6 11,008.6 Bv instrument 6 Commercial paper 117.8 139.2 157.4 156.4 157.4 174.2 181.7 173.0 156.4 168.7 179.3 / Municipal securities and loans 1,377.5 1,341.7 1,293.5 1,294.8 1,293.5 1,290.3 1,296.1 1,279.8 1,294.8 1,298.8 1,315.5 8 Corporate bonds 1,229.7 1,253.0 1,326.3 1,398.8 1,326.3 1,341.5 1,359.4 1,376.4 1,398.8 1,418.7 1,440.2 y Bank loans n.e.c 680.8 755.7 856.1 926.0 856.1 864.4 887.0 915.5 926.0 962.1 998.4 10 Other loans and advances 629.3 673.0 719.4 741.4 719.4 728.8 737.4 745.1 741.4 746.2 743.3 ii Mortgages 4,252.2 4,444.1 4,667.2 4,986.4 4,667.2 4,744.0 4,832.2 4,908.3 4,986.4 5,040.2 5,118.9 12 Home 3,225.0 3,424.0 3,616.4 3,850.6 3,616.4 3,682.3 3,719.7 3,792.4 3,850.6 3,898.0 3,956.0 13 Multifamily residential 267.4 269.1 279.5 301.1 279.5 283.2 291.4 294.4 301.1 302.4 307.6 14 Commercial 679.0 668.0 686.8 747.6 686.8 693.6 734.9 734.7 747.6 752.1 766.6 15 Farm 80.7 83.0 84.6 87.1 84.6 85.0 86.2 86.7 87.1 87.6 88.8 16 Consumer credit 863.0 988.1 1,128.6 1,214.9 1,128.6 1,120.5 1,146.9 1,177.3 1,214.9 1,193.9 1,213.0 Bv borrowing sector 17 Household 4,203.5 4,550.0 4,910.1 5,244.7 4,910.1 4,969.5 5,043.5 5,148.5 5,244.7 5,275.0 5,362.8 18 Nonfinancial business 3,785.0 3,929.4 4,165.9 4,388.9 4,165.9 4,221.2 4,316.5 4,358.9 4,388.9 4,460.7 4,534.5 19 Corporate 2,528.6 2,667.5 2,875.9 3,053.1 2,875.9 2,922.9 3,003.6 3,038.7 3,053.1 3,113.8 3,165.3 20 Nonfarm noncorporate 1,118.5 1,120.7 1,147.3 1,190.7 1,147.3 1,158.3 1,167.9 1,174.6 1,190.7 1,204.2 1,222.2 21 Farm 137.9 141.2 142.7 145.1 142.7 140.0 145.0 145.5 145.1 142.7 147.0 22 State and local government 1,161.8 1,115.4 1,072.5 1,085.1 1,072.5 1,073.1 1,080.6 1,068.0 1,085.1 1,093.0 1,111.3 23 Foreign credit market debt held in United States 385.7 370.6 441.7 511.8 441.7 452.7 461.5 489.1 511.8 516.4 528.8 24 Commercial paper 68.7 41.4 55.0 65.8 55.0 51.5 53.4 64.8 65.8 67.9 69.8 25 Bonds 230.1 242.3 291.9 341.3 291.9 303.8 306.7 321.7 341.3 344.1 351.5 26 Bank loans n.e.c 24.6 26.1 34.6 43.7 34.6 36.8 40.5 41.7 43.7 43.5 46.2 27 Other loans and advances 62.3 60.8 60.2 61.0 60.2 60.6 60.9 61.0 61.0 61.0 61.2 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 12,872.6 13,457.6 14,227.0 15,012.3 14,227.0 14,433.6 14,595.9 14,797.5 15,012.3 15,174.8 15,298.0 Financial sectors 29 Total credit market debt owed by financial sectors 3,327.0 3,800.7 4,252.3 4,782.9 4,252.3 4,333.0 4,511.9 4,623.1 4,782.9 4,848.5 5,008.7 By instrument 30 Federal government-related 1,885.2 2,172.7 2,376.8 2,608.3 2,376.8 2,414.0 2,489.4 2,545.1 2,608.3 2,634.7 2,706.2 31 Government-sponsored enterpnse securities 523.7 700.6 806.5 896.9 806.5 814.4 846.1 866.1 896.9 894.7 944.2 32 Mortgage pool securities 1,356.8 1,472.1 1,570.3 1,711.4 1,570.3 1,599.7 1,643.3 1,679.0 1,711.4 1,740.0 1,762.1 33 Loans from U.S. government 4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 1,441.8 1,627.9 1,875.4 2,174.6 1,875.4 1,919.0 2,022.5 2,078.1 2,174.6 2,213.8 2,302.5 35 Open market paper 393.5 442.8 488.0 580.7 488.0 491.9 518.5 539.6 580.7 624.5 644.0 36 Corporate bonds 867.9 985.9 1,174.7 1,325.8 1,174.7 1,208.5 1,265.2 1,287.6 1,325.8 1,319.9 1,365.8 37 Bank loans n.e.c 62.6 48.9 53.1 69.8 53.1 58.6 63.9 64.2 69.8 71.3 74.3 38 Other loans and advances 108.9 131.6 135.0 162.2 135.0 133.6 145.8 154.2 162.2 158.2 174.9 39 Mortgages 8.9 18.7 24.6 36.0 24.6 26.5 29.2 32.4 36.0 40.0 43.5 By borrowing sector 40 Commercial banks 84.6 94.5 102.6 112.3 102.6 100.5 103.6 106.7 112.3 114.5 125.2 41 Bank holding companies 123.4 133.6 148.0 150.0 148.0 141.4 148.4 149.1 150.0 151.7 161.7 42 Savings institutions 99.6 112.4 115.0 141.1 115.0 117.8 128.3 134.9 141.1 137.4 145.9 43 Credit unions .2 .5 .4 .4 .4 .4 .3 .4 .4 .4 .4 44 Life insurance companies .2 .6 .5 1.6 .5 1.1 1.2 1.1 1.6 1.8 1.8 45 Government-sponsored enterprises 528.5 700.6 806.5 896.9 806.5 814.4 846.1 866.1 896.9 894.7 944.2 46 Federally related mortgage pools 1,356.8 1,472.1 1,570.3 1,711.4 1,570.3 1,599.7 1,643.3 1,679.0 1,711.4 1,740.0 1,762.1 47 Issuers of asset-backed securities (ABSs) 485.3 554.1 687.0 819.5 687.0 717.3 756.7 781.3 819.5 829.0 849.5 48 Brokers and dealers 33.7 34.3 29.3 27.3 29.3 21.4 24.6 26.1 27.3 26.6 37.2 49 Finance companies 386.7 435.8 486.6 529.8 486.6 493.8 506.3 513.7 529.8 528.2 557.7 50 Mortgage companies 30.2 18.7 19.1 31.5 19.1 24.1 28.1 28.5 31.5 33.0 35.5 51 Real estate investment trusts (REITs) 17.4 31.1 37.1 49.9 37.1 39.1 42.0 45.4 49.9 54.6 59.3 52 Funding corporations 180.3 212.3 249.8 311.3 249.8 262.2 283.0 290.7 311.3 336.7 328.2 All sectors 53 Total credit market debt, domestic and foreign.... 16,199.6 17,258.3 18,479.2 19,795.2 18,479.2 18,766.6 19,107.8 19,420.7 19,795.2 20,023.4 20,306.7 54 Open market paper 580.0 623.5 700.4 803.0 700.4 717.6 753.6 777.4 803.0 861.1 893.1 55 U.S. government securities 5,216.9 5,665.0 6,013.6 6,390.0 6,013.6 6,131.2 6,183.1 6,278.2 6,390.0 6,464.5 6,466.8 56 Municipal securities 1,377.5 1,341.7 1,293.5 1,294.8 1,293.5 1,290.3 1,296.1 1,279.8 1,294.8 1,298.8 1,315.5 5/ Corporate and foreign bonds 2,327.6 2,481.2 2,793.0 3,066.0 2,793.0 2,853.8 2,931.3 2,985.7 3,066.0 3,082.6 3,157.5 58 Bank loans n.e.c 768.0 830.8 943.8 1,039.5 943.8 959.7 991.4 1,021.3 1,039.5 1,076.9 1,118.9 59 Other loans and advances 805.3 865.3 914.6 964.6 914.6 923.0 944.1 960.3 964.6 965.3 979.4 60 MMoorrttggaaggeess 4,261.2 4,462.8 4,691.8 5,022.4 4,691.8 4,770.5 4,861.4 4,940.7 5,022.4 5,080.2 5,162.4 bl CCoonnssuummeerr ccrreeddiitt 863.0 988.1 1,128.6 1,214.9 1,128.6 1,120.5 1,146.9 1,177.3 1,214.9 1,193.9 1,213.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1995 1996 1997 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999933 11999944 11999955 11999966 Q4 QL Q2 Q3 Q4 QL Q2 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 16,199.6 17,258.3 18,479.2 19,795.2 18,479.2 18,766.6 19,107.8 19,420.7 19,795.2 20,023.4 20,306.7 2 Domestic nonfederal nonfinancial sectors 2,795.8 3,085.7 2,964.1 3,000.3 2,964.1 2,928.4 3,013.5 2,982.4 3,000.3 2,899.1 2,855.3 3 Household 1,702.4 2,029.1 1,991.8 2,068.6 1,991.8 1,970.0 2,040.5 2,047.5 2,068.6 2,007.8 1,961.4 4 Nonfinancial corporate business 271.5 289.2 286.8 302.1 286.8 273.6 285.7 286.8 302.1 289.6 291.6 5 Nonfarm noncorporate business 37.0 37.6 37.9 38.3 37.9 38.0 38.1 38.2 38.3 38.4 38.6 6 State and local governments 784.9 729.9 647.5 591.3 647.5 646.8 649.1 609.9 591.3 563.3 563.7 7 Federal government 234.7 212.0 191.6 170.7 191.6 186.6 183.0 176.8 170.7 166.0 162.8 8 Rest of the world 1,147.8 1,254.8 1,563.1 1,953.5 1,563.1 1,656.5 1,722.0 1,844.6 1,953.5 2,050.7 2,125.8 9 Financial sectors 12,021.3 12,705.7 13,760.4 14,670.7 13,760.4 13,995.1 14,189.3 14,416.8 14,670.7 14,907.5 15,162.9 10 Monetary authority 336.7 368.2 380.8 393.1 380.8 379.6 386.3 386.2 393.1 397.1 412.4 11 Commercial banking 3,090.8 3,254.3 3,520.1 3;707.9 3,520.1 3,541.6 3,590.8 3,643.3 3,707.9 3,780.5 3,866.8 12 U.S.-chartered banks 2,721.5 2,869.6 3,056.1 3,175.8 3,056.1 3,068.8 3,101.3 3,135.3 3,175.8 3,222.2 3,304.5 13 Foreign banking offices in United States 326.0 337.1 412.6 475.8 412.6 422.2 437.1 454.2 475.8 499.5 501.8 14 Bank holding companies 17.5 18.4 18.0 22.0 18.0 16.8 18.1 19.3 22.0 22.5 23.8 15 Banks in U.S.-affiliated areas 25.8 29.2 33.4 34.4 33.4 33.9 34.3 34.5 34.4 36.3 36.8 16 Savings institutions 914.1 920.8 913.3 933.2 913.3 921.8 933.0 945.4 933.2 932.4 937.7 17 Credit unions 218.7 246.8 263.0 288.5 263.0 267.0 276.9 282.6 288.5 290.1 296.4 18 Bank personal trusts and estates 240.9 248.0 229.2 233.1 229.2 228.3 229.4 231.3 233.1 235.2 237.4 19 Life insurance companies 1,416.0 1,482.6 1,581.8 1,654.3 1,581.8 1,596.2 1,596.7 1,627.0 1,654.3 1,680.2 1,701.5 20 Other insurance companies 422.7 446.4 468.7 490.2 468.7 472.1 479.7 483.2 490.2 491.2 494.0 21 Private pension funds 611.4 659.2 722.3 768.8 722.3 739.6 751.0 761.4 768.8 783.2 797.7 22 State and local government retirement funds 423.4 454.1 476.8 511.3 476.8 491.9 505.0 506.3 511.3 522.5 529.1 23 Money market mutual funds 429.0 459.0 545.5 634.3 545.5 595.6 594.7 606.6 634.3 659.0 656.5 24 Mutual funds 725.9 718.8 771.3 820.2 771.3 795.9 809.0 818.3 820.2 838.3 864.7 25 Closed-end funds 82.0 78.7 92.0 101.3 92.0 94.8 97.2 99.5 101.3 103.0 104.3 26 Government-sponsored enterprises 545.5 663.3 748.0 813.6 748.0 755.8 758.9 779.3 813.6 824.3 854.8 27 Federally related mortgage pools 1,356.8 1,472.1 1,570.3 1,711.4 1,570.3 1,599.7 1,643.3 1,679.0 1,711.4 1,740.0 1,762.1 28 Asset-backed securities issuers (ABSs) 455.1 516.8 627.9 730.0 627.9 653.3 686.0 704.1 730.0 733.7 750.5 29 Finance companies 427.9 476.2 526.2 544.5 526.2 530.3 539.9 538.3 544.5 551.6 552.3 30 Mortgage companies 60.4 36.5 33.0 41.2 33.0 46.0 39.3 40.2 41.2 39.2 39.2 31 Real estate investment trusts (REITs) 8.6 13.3 15.5 18.5 15.5 16.3 17.2 18.0 18.5 19.0 19.9 32 Brokers and dealers 137.5 93.3 183.4 166.3 183.4 156.2 138.2 147.1 166.3 163.1 168.9 33 Funding corporations 117.9 97.3 91.3 108.8 91.3 113.2 116.8 119.8 108.8 124.1 116.9 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 16,199.6 17,258.3 18,479.2 19,795.2 18,479.2 18,766.6 19,107.8 19,420.7 19,795.2 20,023.4 20,306.7 Other liabilities 35 Official foreign exchange 53.4 53.2 63.7 53.7 63.7 62.1 61.4 54.3 53.7 46.3 46.7 36 Special drawing rights certificates 8.0 8.0 10.2 9.7 10.2 10.2 10.2 9.7 9.7 9.2 9.2 37 Treasury currency 17.0 17.6 18.2 18.2 18.2 18.2 18.2 18.8 18.2 18.3 18.3 38 Foreign deposits 271.8 324.6 359.2 438.1 359.2 384.4 385.2 415.1 438.1 485.2 505.0 39 Net interbank liabilities 189.3 280.1 290.7 239.7 290.7 266.0 249.1 223.6 239.7 210.1 199.4 40 Checkable deposits and currency 1,251.7 1,242.0 1,229.3 1,245.1 1,229.3 1,183.3 1,212.3 1,220.8 1,245.1 1,219.0 1,261.8 41 Small time and savings deposits 2,223.2 2,183.3 2,279.7 2,376.8 2,279.7 2,342.3 2,340.1 2,357.4 2,376.8 2,428.7 2,435.3 42 Large time deposits 391.7 411.2 476.9 590.7 476.9 493.6 511.1 557.6 590.7 605.4 646.4 43 Money market fund shares 559.6 602.9 745.3 891.1 745.3 816.9 809.5 838.1 891.1 950.8 952.4 44 Security repurchase agreements 471.1 549.4 660.1 698.8 660.1 666.1 692.1 687.6 698.8 716.6 774.3 45 Mutual fund shares 1,375.4 1,477.3 1,852.8 2,342.4 1,852.8 1,997.0 2,129.9 2,211.6 2,342.4 2,411.5 2,731.1 46 Security credit 279.0 279.0 305.7 358.0 305.7 326.9 318.6 317.8 358.0 380.0 409.1 47 Life insurance reserves 470.8 505.3 550.2 593.8 550.2 555.0 563.1 577.2 593.8 604.8 621.4 48 Pension fund reserves 4,663.3 4,871.8 5,597.3 6,257.7 5,597.3 5,753.0 5,874.0 5,989.4 6,257.7 6,339.9 6,789.1 49 Trade payables 1,047.8 1,141.5 1,246.7 1,322.1 1,246.7 1,235.5 1,271.5 1,267.7 1,322.1 1,313.8 1,336.1 50 Taxes payable 84.8 86.3 88.0 91.1 88.0 93.0 89.2 91.1 91.1 93.0 85.0 51 Investment in bank personal trusts 691.3 699.4 767.4 872.0 767.4 793.7 811.7 829.0 872.0 890.4 969.7 52 Miscellaneous 5,109.8 5,379.1 5,783.0 6,135.1 5,783.0 5,951.7 5,948.9 6,027.7 '6,135.1 6,327.6 6,267.5 5533 3377,,337700..55 40,803.4 4444,,332299..33 4400,,880033..44 4411,,771155..44 4422,,440033..77 4433,,111155..33 4444,,332299..33 4455,,007744..00 46,364.4 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 20.1 21.1 22.1 21.4 22.1 22.1 22.0 21.2 21.4 20.9 21.1 55 Corporate equities 6,257.6 6,237.9 8,331.3 10,061.1 8,331.3 8,809.7 9,105.0 9,340.5 10,061.1 10,072.3 11,719.8 56 Household equity in noncorporate business 3,219.2 3,416.3 3,620.8 3,850.3 3,620.8 3,664.6 3,731.0 3,797.3 3,850.3 3,908.2 3,901.6 Liabilities not identified as assets (—) 57 Treasury currency -5.1 -5.4 -5.8 -6.8 -5.8 -6.1 -6.3 -6.0 -6.8 -6.9 -7.0 58 Foreign deposits 233.2 276.2 301.2 356.4 301.2 319.5 326.1 348.9 356.4 401.1 414.7 59 Net interbank transactions -4.7 -6.5 -9.0 -10.6 -9.0 -2.6 -8.0 -11.6 -10.6 -1.7 -8.3 60 Security repurchase agreements -1.6 55.7 110.9 135.1 110.9 121.7 149.2 126.5 135.1 110.8 150.3 61 Taxes payable 26.8 33.7 42.8 44.3 42.8 22.6 36.9 40.9 44.3 30.5 28.6 62 Miscellaneous -887.6 -988.6 -1,081.0 -1,354.7 -1,081.0 -1,098.4 -1,213.2 -1,246.8 -1,354.7 -1,295.8 -1,364.8 Floats not included in assets (—) 63 Federal government checkable deposits 5.6 3.4 3.1 -1.6 3.1 .0 -3.4 -1.7 -1.6 -9.7 -6.8 64 Other checkable deposits 40.7 38.0 34.2 30.1 34.2 29.6 31.8 23.1 30.1 25.6 27.9 65 Trade credit -247.5 -247.7 -278.2 -310.2 -278.2 -332.0 -343.4 -383.6 -310.2 -361.2 -381.5 66 Total identified to sectors as assets 45,695.7 47,887.0 53,659.6 59,380.2 53,659.6 55,157.5 56,292.1 57,384.6 59,380.2 60,182.7 63,153.8 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. L.l 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 • January 1998 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1997 MMeeaassuurree 11999944 11999955 11999966 Feb. Mar. Apr. May June July Aug/ Sept.1 Oct. 1 Industrial production1 108.6 112.1 115.2 118.4 118.8 119.3 119.5 119.9 120.8r 121.5 122.1 122.7 Market groupings 2 Products, total 106.8 109.3 112.0 114.8 115.3 115.4 115.9 116.0 116.4r 117.4 117.6 118.2 3 Final, total 107.1 109.9 112.8 115.6 116.3 116.6 117.1 117.4 117.8 119.1 119.1 119.9 4 Consumer goods 107.4 108.9 110.5 111.6 112.1 112.1 112.6 112.3 112.5r 113.3 113.5 114.2 5 Equipment 106.6 111.6 116.8 122.6 123.5 124.3 124.9 126.2 126.9r 129.1 128.8 129.5 6 Intermediate 106.1 107.5 109.4 112.0 112.1 112.0 112.2 112.0 112.0r 112.2 113.0 113.2 7 Materials 111.3 116.6 120.3 124.1 124.5 125.5 125.2 126.0 127.9r 128.2 129.3 129.9 Industry groupings 8 Manufacturing 109.4 113.2 116.3 120.1 120.6 120.9 121.0 121.6 122.6r 123.5 123.8 124.6 9 Capacity utilization, manufacturing (percent)2. . 83.1 83.1 82.1 82.6 82.7 82.6 82.4 82.5 82.9 83.2 83.1 83.3 10 Construction contracts3 117.6 122.0r 130.6r 133.0r 135.0 140.0r 143.0r 142.0r 137.0r 137.0 134.0 131.0 11 Nonagricultural employment, total4 112.0 115.0 117.3 118.8 119.0 119.3 119.5 119.7 120.1 120.1 120.4 120.7 12 Goods-producing, total 96.9 98.1 98.3 99.9 100.0 100.0 100.1 100.2 100.2 100.4 100.3 100.6 13 Manufacturing, total 96.4 97.2 96.2 97.2 97.3 97.4 97.4 97.5 97.5 97.7 97.6 97.9 14 Manufacturing, production workers 97.5 98.7 97.5 98.5 98.6 98.6 98.7 98.8 98.8 98.9 98.9 99.3 15 Service-producing 116.8 120.3 123.3 124.9 125.1 125.5 125.7 126.0 126.5 126.5 126.8 127.1 16 Personal income, total 148.9 158.2 167.0 173.6 174.6 174.9 175.5 176.5 176.8r 177.8 178.5 n.a. 17 Wages and salary disbursements 142.6 150.9 159.8 167.2 168.1 168.2 168.7 170.2 170.3 171.7 172.3 n.a. 18 Manufacturing 124.9 130.4 135.7 139.5 140.5 140.7 140.9 141.0 141.1 142.3 142.8 n.a. 19 Disposable personal income5 149.7 158.7 166.2 171.7 172.5 172.8 173.2 174.1 174.3r 175.3 176.0 n.a. 20 Retail sales5 144.6 151.2 158.6 166.1 165.6 163.7 163.3 164.5 166.5 167.2 167.0 166.6 Prices6 21 Consumer (1982-84=100) 148.2 152.4 156.9 159.6 160.0 160.2 160.1 160.3 160.5 160.8 161.2 161.6 22 Producer finished goods (1982=100) 125.5 127.9 131.3 132.2 132.1 131.6 131.6 131.6 131.3 131.7 131.8 132.4 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For 4. Based on data from U.S. Department of Labor, Employment and Earnings. Series covers the ordering address, see the inside front cover. The latest historical revision of the industrial employees only, excluding personnel in the armed forces. production index and the capacity utilization rates was released in January 1997. See 5. Based on data from U.S. Department of Commerce, Survey of Current Business. "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. The article contains a indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, description of the new aggregation system for industrial production and capacity utilization. Monthly Labor Review. For a detailed description of the industrial production index, see "Industrial Production: 1989 NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. mentioned in notes 3 and 6, can also be found in the Survey of Current Business. 187-204. Figures for industrial production for the latest month are preliminary, and many figures for 2. Ratio of index of production to index of capacity. Based on data from the Federal the three months preceding the latest month have been revised. See "Recent Developments in Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources. Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. 3. Index of dollar value of total construction contracts, including residential, nonresiden- 411-35. See also "Industrial Production Capacity and Capacity Utilization since 1987," tial, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605. Division. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 1997 CCaatteeggoorryy 11999944 11999955 11999966 Mar. Apr. May June July Aug.r Sept.r Oct. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 131,056 132,304 133,943 136,319 136,098 136,173 136,200 136,290 136,480 136,467 136,361 Employment 2 Nonagricultural industries3 119,651 121,460 123,264 125,789 125,887 126,209 125,973 126,226 126,421 126,265 126,591 3 Agriculture 3,409 3,440 3,443 3,386 3,497 3.430 3,391 3,482 3,383 3,450 3,303 Unemployment 4 Number 7,996 7,404 7,236 7,144 6,714 6,534 6,836 6,583 6,677 6,752 6,467 5 Rate (percent of civilian labor force) 6.1 5.6 5.4 5.2 4.9 4.8 5.0 4.8 4.9 4.9 4.7 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 114,172 117,203 119,549 121,344 121,671 121,834 122,056 122,440 122,492 122,761 123,045 7 Manufacturing 18,321 18,468 18,282 18,489 18,495 18,498 18,518 18,514 18,555 18,543 18,597 8 Mining 601 580 570 572 573 576 574 574 573 576 573 9 Contract construction 4,986 5,158 5,405 5,609 5,599 5,628 5,622 5,625 5,637 5,637 5,657 10 Transportation and public utilities 5,993 6,165 6,318 6,405 6,421 6,431 6,434 6,443 6,289 6,459 6,488 11 Trade 26,670 27,585 28,178 28,556 28,651 28,656 28,713 28,823 28,864 28,896 28,955 12 Finance 6,896 6,830 6,977 6,992 7.019 7,029 7,034 7,058 7,068 7,079 7,102 13 Service 31,579 33,107 34,360 35,176 35,334 35,451 35,522 35,684 35,702 35,828 35,928 14 Government 19,128 19,310 19,459 19,545 19,579 19,565 19,639 19,719 19,804 19,743 19,745 1. Beginning January 1994, reflects redesign of current population survey and population 4. Includes all full- and part-time employees who worked during, or received pay for, the controls from the 1990 census. pay period that includes the twelfth day of the month; excludes proprietors, self-employed 2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly persons, household and unpaid family workers, and members of the armed forces. Data are figures are based on sample data collected during the calendar week that contains the twelfth adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this day; annual data are averages of monthly figures. By definition, seasonality does not exist in time. population figures. SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings. 3. Includes self-employed, unpaid family, and domestic service workers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A43 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1996 1997 1996 1997 1996 1997 SSeerriieess Q4 Ql Q2 Q3r Q4 Ql Q2 Q3 Q4 Ql Q2 Q3r Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 117.0 118.3 119.6 121.5 140.5 141.8 143.2 144.6 83.3 83.5 83.5 84.0 2 Manufacturing 118.4 120.0 121.2 123.3 143.9 145.3 146.9 148.5 82.3 82.5 82.5 83.1 3 Primary processing3 113.9 114.7 115.7 116.5 131.5 132.2 132.9 133.7 86.6 86.8 87.0 87.1 4 Advanced processing4 120.7 122.6 123.9 126.7 150.0 151.9 153.8 155.8 80.4 80.7 80.5 81.3 5 Durable goods 128.1 130.7 133.0 136.9 156.9 159.3 161.8 164.5 81.7 82.0 82.2 83.2 6 Lumber and products 110.1 111.3 114.0 113.1 130.0 131.0 132.0 133.1 84.7 84.9 86.4 85.0 7 Primary metals 119.8 119.7 122.2 124.0 131.0 132.1 133.3 134.5 91.5 90.6 91.7 92.2 8 Iron and steel 118.6 118.3 121.1 121.1 133.5 134.9 136.0 137.2 88.9 87.7 89.0 88.3 9 Nonferrous 121.1 121.3 123.5 127.2 127.8 128.6 129.8 130.9 94.8 94.3 95.2 97.2 10 Industrial machinery and equipment 161.5 166.2 171.3 179.4 181.3 186.5 192.3 198.2 89.1 89.1 89.1 90.5 11 Electrical machinery 167.2 172.1 178.9 187.6 208.5 216.3 224.2 232.4 80.2 79.6 79.8 80.7 12 Motor vehicles and parts 126.0 130.2 125.4 132.6 177.3 178.2 178.7 179.3 71.0 73.0 70.1 74.0 13 Aerospace and miscellaneous transportation equipment . . . 90.4 93.5 96.4 99.1 119.8 119.7 120.5 121.4 75.5 78.1 80.0 81.6 14 Nondurable goods 108.1 108.6 108.6 109.0 130.1 130.6 131.1 131.6 83.0 83.1 82.8 82.8 15 Textile mill products 107.4 107.1 108.3 110.9 130.8 131.3 131.4 131.6 82.1 81.6 82.4 84.3 16 Paper and products 109.8 111.2 112.2 114.1 123.3 123.6 123.9 124.2 89.0 89.9 90.6 91.9 17 Chemicals and products 112.4 112.8 112.7 112.4 140.3 141.5 142.6 143.7 80.1 79.8 79.1 78.2 18 Plastics materials 125.3 127.0 127.8 134.0 136.2 138.1 93.5 93.3 92.6 19 Petroleum products 107.7 108.1 111.4 109.8 113.8 113.9 114.2 114.5 94.6 94.9 97.5 95.9 20 Mining 103.8 105.8 107.3 106.7 113.7 113.8 114.3 114.8 91.3 93.0 93.9 92.9 21 Utilities 113.0 110.9 112.5 114.1 125.9 126.5 127.0 127.4 89.8 87.7 88.7 89.5 22 Electric 112.4 111.5 111.8 114.6 124.4 125.1 125.6 126.1 90.4 89.1 89.0 90.9 1973 1975 Previous cycle5 Latest cycle6 1996 1997 High Low High Low High Low Oct. May June July1 Aug.r Sept. Oct.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.3 78.1 83.0 83.5 83.5 83.9 84.1 84.2 84.3 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 82.0 82.4 82.5 82.9 83.2 83.1 83.3 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.8 86.7 87.1 86.9 87.2 87.1 87.1 87.2 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.9 80.3 80.6 81.0 81.5 81.3 81.6 5 Durable goods 89.2 68.9 87.7 63.9 84.5 73.2 81.5 82.0 82.4 82.8 83.6 83.3 83.4 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 84.2 86.3 86.5 85.4 84.9 84.6 84.0 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 93.5 92.5 92.1 92.0 92.0 92.6 92.3 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 92.6 90.8 88.2 88.4 87.1 89.3 88.8 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 94.7 94.8 97.0 96.7 98.2 96.7 96.7 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.4 89.1 88.7 88.6 90.0 91.5 90.1 90.2 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.1 80.5 79.4 80.1 80.9 81.0 80.2 80.5 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 68.5 69.2 71.0 70.7 75.1 76.1 75.9 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 74.6 80.0 80.6 81.2 81.6 82.1 82.6 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 82.7 82.9 82.6 83.0 82.7 82.8 83.1 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 82.4 81.7 82.8 84.6 83.8 84.6 84.7 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 87.4 91.1 90.1 92.5 91.8 91.3 92.3 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 79.5 79.0 78.5 78.4 77.8 78.3 78.4 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 94.0 92.5 92.0 94.4 92.4 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 95.3 98.2 97.4 95.0 96.1 96.6 97.6 20 Mining 94.3 88.2 96.0 80.3 86.8 86.1 91.0 94.6 94.2 93.7 92.9 92.2 91.1 21 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 89.0 88.5 87.9 88.9 88.3 91.3 91.4 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 90.2 88.0 88.4 90.0 89.3 93.3 93.4 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic the ordering address, see the inside front cover. The latest historical revision of the industrial materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; production index and the capacity utilization rates was released in January 1997. See primary metals; and fabricated metals. "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. The article contains a and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather description of the new aggregation system for industrial production and capacity utilization. and products; machinery; transportation equipment; instruments; and miscellaneous manufac- For a detailed description of the industrial production index, see "Industrial Production: 1989 tures. Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 5. Monthly highs, 1978-80; monthly lows, 1982. 187-204. 6. Monthly highs, 1988-89; monthly lows, 1990-91. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted index of industrial production to the corresponding index of capacity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • January 1998 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1996 1997 pprroo-- 1996 aavvgg.. tion Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Julyr Aug/ Sept. Oct.p Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 115.2 116.2 117.2 117.7 117.8 118.4 118.8 119.3 119.5 119.9 120.8 121.5 122.1 122.7 2 Products 60.5 112.0 112.8 114.1 114.3 114.2 114.8 115.3 115.4 115.9 116.0 116.4 117.4 117.6 118.2 3 Final products 46.3 112.8 113.6 114.8 115.3 115.1 115.6 116.3 116.6 117.1 117.4 117.8 119.1 119.1 119.9 4 Consumer goods, total 29.1 110.5 110.8 112.3 112.7 111.7 111.6 112.1 112.1 112.6 112.3 112.5 113.3 113.5 114.2 5 Durable consumer goods 6.1 126.2 124.5 127.1 128.4 127.3 129.2 131.0 126.9 128.4 130.6 128.5 133.0 132.2 133.0 61 Automotive products 2.6 125.8 122.0 127.4 127.2 129.6 131.0 131.7 124.4 126.4 128.4 123.1 133.3 134.4 135.3 Autos and trucks 1.7 132.6 125.7 133.8 135.5 138.7 138.9 138.9 127.1 130.0 132.6 123.5 140.5 143.4 143.9 8 Autos, consumer .9 120.2 112.3 123.5 115.9 120.1 122.3 123.3 116.0 117.7 114.9 118.0 124.5 125.1 122.1 y Trucks, consumer .7 147.2 147.4 152.4 164.9 167.0 165.0 163.8 146.1 150.5 159.5 135.8 165.8 171.7 176.1 to Auto parts and allied goods .9 114.5 114.4 116.4 114.0 115.5 118.1 119.7 118.0 118.8 120.1 119.2 121.5 120.6 121.8 ii Other 3.5 126.3 126.2 126.8 129.1 125.5 127.8 130.4 128.6 129.7 132.0 132.1 132.6 130.5 131.2 12 Appliances, televisions, and air conditioners 1.0 173.0 176.5 176.9 181.1 171.2 179.5 183.6 179.0 181.1 187.3 189.9 195.3 186.9 189.4 13 Carpeting and furniture .8 109.9 108.6 110.7 109.3 106.0 106.9 111.6 108.6 111.7 114.2 108.3 110.1 110.7 111.9 14 Miscellaneous home goods 1.6 107.9 106.5 106.4 109.6 109.2 109.2 109.9 110.0 109.6 109.7 111.9 109.5 109.0 108.6 15 Nondurable consumer goods 23.0 106.5 107.3 108.5 108.7 107.8 107.2 107.4 108.3 108.6 107.8 108.5 108.4 108.9 109.6 16 Foods and tobacco 10.3 106.1 106.6 107.2 108.2 107.7 108.0 108.7 107.8 107.6 106.9 108.1 108.1 107.7 108.3 17 Clothing 2.4 95.5 95.5 95.0 94.9 94.0 93.8 94.2 94.4 94.8 94.1 94.5 94.2 94.6 94.2 18 Chemical products 4.5 112.7 115.5 117.3 118.8 117.9 116.2 114.9 117.2 118.0 117.3 116.3 116.5 117.3 118.3 iy Paper products 2.9 101.1 102.9 102.9 103.0 101.1 101.5 102.3 102.6 103.4 104.5 105.4 104.2 104.3 105.9 20 Energy 2.9 112.0 110.7 115.3 111.8 110.4 107.6 107.5 113.0 113.5 110.4 111.9 112.4 115.2 115.8 21 Fuels .8 106.6 108.1 107.8 106.0 105.1 106.2 108.5 110.1 111.9 111.8 108.9 111.3 111.6 113.0 22 Residential utilities 2.1 114.3 111.7 118.5 114.2 112.6 108.0 106.8 114.1 114.0 109.5 113.0 112.6 116.5 116.9 23 Equipment 17.2 116.8 118.4 119.0 119.6 120.8 122.6 123.5 124.3 124.9 126.2 126.9 129.1 128.8 129.5 24 Business equipment 13.2 126.6 128.8 129.8 130.7 132.1 133.8 134.3 135.5 136.1 137.4 139.2 142.1 142.0 143.2 23 Information processing and related 5.4 143.2 147.4 147.1 148.5 149.6 152.4 153.6 155.1 156.5 159.9 162.4 164.8 166.7 169,0 26 Computer and office equipment 1.1 292.0 318.8 323.5 327.1 335.7 343.0 349.9 358.6 366.5 378.4 394.7 410.5 422.4 433.0 27 Industrial 4.0 126.9 127.0 127.1 127.3 127.9 128.2 127.5 130.3 129.3 129.2 131.9 134.3 132.4 133.2 28 Transit 2.5 100.0 101.9 106.6 107.2 109.8 111.8 113.1 110.1 112.1 112.1 112.3 117.8 118.4 118.0 29 Autos and trucks 1.2 115.3 109.4 115.9 113.7 117.2 118.7 118.3 110.0 111.7 110.1 108.8 117.9 118.0 116.9 30 Other 1.3 116.4 118.7 119.9 121.4 123.4 124.4 125.1 128.8 128.2 129.2 129.6 130.1 128.0 129.5 31 Defense and space equipment 3.3 77.0 77.0 76.1 76.2 74.7 75.4 75.6 75.2 75.6 76.1 75.0 75.8 75.5 75.7 32 Oil and gas well drilling .6 120.5 120.2 120.7 123.6 130.8 140.7 153.4 152.5 154.2 161.4 149.8 147.3 141.7 136.8 33 Manufactured homes .2 162.0 165.3 159.8 146.2 156.3 163.5 160.9 168.0 166.4 163.1 166.3 164.4 161.2 34 Intermediate products, total 14.2 109.4 110.2 111.9 111.3 111.6 112.0 112.1 112.0 112.2 112.0 112.0 112.2 113.0 113.2 35 Construction supplies 5.3 116.8 117.7 120.7 117.8 117.0 120.0 121.8 120.1 120.6 120.6 119.8 121.1 121.0 120.7 36 Business supplies 8.9 105.1 105.8 106.8 107.4 108.4 107.3 106.5 107.2 107.3 106.9 107.5 107.0 108.4 108.7 37 Materials 39.5 120.3 121.7 122.2 123.1 123.4 124.1 124.5 125.5 125.2 126.0 127.9 128.2 129.3 129.9 38 Durable goods materials 20.8 134.0 135.8 136.5 137.8 138.4 139.2 140.2 141.7 141.7 143.3 145.8 147.2 148.1 149.2 39 Durable consumer parts 4.0 128.8 126.6 129.7 130.3 132.1 129.7 129.8 130.5 127.2 130.1 134.5 135.7 135.9 136.0 40 Equipment parts 7.6 159.2 163.4 165.3 167.9 169.4 172.6 175.6 178.1 180.4 183.2 187.3 190.2 192.4 195.9 41 Other 9.2 118.2 120.0 119.1 119.9 119.3 119.8 120.0 121.0 121.0 121.2 122.0 122.5 122.8 122.9 42 Basic metal materials 3.1 113.1 117.2 114.4 115.7 114.9 116.4 116.4 116.7 118.4 118.7 118.3 119.0 118.8 118.9 43 Nondurable goods materials 8.9 106.4 108.0 108.4 109.5 109.6 110.5 110.6 111.3 109.8 109.9 111.3 110.0 110.8 111.1 44 Textile materials 1.1 106.3 108.4 108.5 105.9 106.8 107.7 104.9 109.5 105.4 107.8 112.8 108.4 111.2 111.5 45 Paper materials 1.8 107.4 108.0 110.9 112.5 111.5 113.2 113.8 114.4 114.8 111.7 116.3 115.8 113.9 115.9 46 Chemical materials 3.9 105.9 109.3 107.7 110.2 111.1 111.2 111.2 111.7 109.7 109.4 110.4 109.3 109.9 109.9 47 Other 2.1 106.1 103.9 106.8 106.3 105.3 107.5 108.4 107.8 107.4 109.7 108.0 107.1 109.3 109.0 48 Energy materials 9.7 103.9 103.9 104.0 103.9 103.8 104.0 103.5 103.8 104.1 103.9 105.0 104.4 106.3 106.1 4y Primary energy 6.3 102.6 102.0 101.6 102.6 101.6 102.8 102.3 101.7 102.5 101.9 103.1 103.0 104.2 103.8 50 Converted fuel materials 3.3 106.2 107.5 108.5 106.3 108.0 106.2 105.9 107.6 107.0 107.6 108.6 107.0 110.2 110.5 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 114.9 116.1 116.9 117.4 117.4 118.0 118.5 119.3 119.4 119.8 120.9 121.3 121.8 122.4 52 Total excluding motor vehicles and parts 95.1 114.6 115.9 116.6 117.2 117.1 117.8 118.3 119.0 119.3 119.5 120.5 120.9 121.4 122.0 53 Total excluding computer and office equipment 98.2 112.9 113.7 114.6 115.1 115.1 115.6 116.0 116.4 116.5 116.8 117.6 118.2 118.6 119.1 54 Consumer goods excluding autos and trucks . 27.4 109.2 109.9 111.0 111.4 110.3 110.1 110.7 111.1 111.5 111.1 111.8 111.8 111.9 112.7 55 Consumer goods excluding energy 26.2 110.2 110.8 111.8 112.8 111.9 112.1 112.7 111.9 112.4 112.6 112.6 113.4 113.2 114.0 56 Business equipment excluding autos and trucks 12.0 127.7 130.7 131.2 132.4 133.6 135.3 135.9 138.0 138.5 140.1 142.3 144.6 144.5 145.8 57 Business equipment excluding computer and office equipment 12.1 115.8 116.6 117.5 118.2 119.2 120.5 120.7 121.5 121.7 122.4 123.6 125.9 125.3 126.0 58 Materials excluding energy 29.8 125.4 127.1 127.8 129.0 129.4 130.3 131.0 132.2 131.8 132.8 135.0 135.5 136.3 137.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 Group SIC pro- 1996 code por- avg. Apr. May Julyr Aug.r Sept. Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 115.2 116.2 117.2 117.7 117.8 118.4 118.8 119.3 119.5 119.9 120.8 121.5 122.1 122.7 60 Manufacturing 85.4 116.3 117.6 118.5 119.2 119.3 120.1 120.6 120.9 121.0 121.6 122.6 123.5 123.8 124.6 61 Primary processing 26.5 112.2 113.8 113.8 114.0 113.8 114.8 115.6 115.6 115.8 115.7 116.3 116.4 116.8 117.0 62 Advanced processing 58.9 118.4 119.5 120.8 121.7 122.0 122.6 123.0 123.5 123.6 124.5 125.7 127.0 127.3 128.3 63 Durable goods 45.0 125.7 127.1 128.4 128.8 129.5 130.8 131.7 132.3 132.7 134.1 135.4 137.5 137.8 138.7 64 Lumber and products 24 2.0 109.7 109.2 113.1 108.0 108.6 112.0 113.3 113.6 114.0 114.6 113.4 113.1 112.9 112.4 65 Furniture and fixtures 25 1.4 108.9 110.4 110.5 110.5 109.7 110.3 111.0 112.7 113.9 114.5 112.4 110.6 112.5 112.6 66 Stone, clay, and glass products 32 2.1 111.0 111.7 111.8 111.3 112.7 112.5 113.5 113.8 112.8 113.5 114.0 113.7 113.7 114.1 67 Primary metals 33 3.1 117.2 122.1 118.5 118.8 117.8 120.0 121.3 120.2 123.4 123.1 123.4 123.7 124.8 124.8 68 Iron and steel 331,2 1.7 116.4 123.2 115.9 116.7 118.0 118.2 118.7 119.3 123.6 120.3 120.9 119.6 122.9 122.6 69 Raw steel 331PT .1 112.2 111.5 108.7 112.5 111.7 112.3 114.2 115.5 115.8 115.1 115.4 116.3 119.0 118.3 70 Nonferrous 333-6,9 1.4 118.0 120.7 121.4 121.2 117.6 122.1 124.2 121.3 123.1 126.2 126.2 128.5 126.9 127.3 71 Fabricated metal products.. . 34 5.0 118.6 119.3 119.1 119.5 119.2 119.5 120.4 120.8 121.1 120.8 121.1 121.7 121.9 121.9 72 Industrial machinery and equipment 35 8.0 156.4 159.9 161.7 162.9 164.7 166.6 167.4 171.3 170.5 172.2 176.6 181.2 180.4 182.4 73 Computer and office equipment 357 1.8 296.9 323.6 328.3 332.5 340.3 347.8 354.7 363.8 371.8 383.9 400.4 416.4 428.4 439.2 74 Electrical machinery 36 7.3 163.3 165.6 167.2 168.8 168.6 172.5 175.2 176.7 178.1 181.7 185.9 188.2 188.7 191.6 75 Transportation equipment.. . 37 9.5 106.1 105.3 109.5 109.6 111.9 111.5 111.9 110.6 110.2 112.4 112.6 116.9 118.2 118.6 76 Motor vehicles and parts . 371 4.9 126.9 121.2 128.9 127.9 132.0 129.6 128.9 125.3 123.7 127.1 126.7 134.6 136.6 136.4 77 Autos and light trucks . 371PT 2.6 124.6 117.3 125.7 125.6 128.8 129.4 129.5 119.1 121.6 123.1 116.9 131.0 133.3 133.0 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 85.6 89.4 90.3 91.5 92.2 93.5 94.8 95.5 96.4 97.4 98.3 99.1 99.9 100.7 79 Instruments 38 5.4 102.8 103.4 103.0 104.1 103.3 104.6 104.7 104.4 105.2 105.9 105.9 107.0 106.1 107.2 80 Miscellaneous 39 1.3 112.9 113.0 114.1 116.6 116.3 117.1 116.3 116.9 117.0 117.5 118.9 118.4 117.8 118.1 81 Nondurable goods 40.4 106.3 107.4 107.9 108.8 108.5 108.6 108.7 108.7 108.7 108.4 109.1 108.8 109.2 109.7 82 Foods 20 9.4 106.3 107.1 107.6 108.2 108.2 108.4 109.2 108.3 108.1 107.9 108.8 108.4 108.1 108.6 83 Tobacco products 21 1.6 105.6 104.0 105.4 108.9 104.6 105.7 106.9 105.5 104.2 101.8 103.3 104.8 104.7 106.3 84 Textile mill products 22 1.8 106.6 107.6 108.2 106.3 106.3 106.9 108.2 108.6 107.3 108.9 111.3 110.2 111.3 111.6 85 Apparel products 23 2.2 98.2 97.8 97.3 97.2 96.2 95.8 96.3 96.1 96.4 96.4 96.5 95.7 96.0 96.1 86 Paper and products 26 3.6 108.0 107.6 110.1 111.6 110.3 111.1 112.1 112.2 112.8 111.7 114.8 114.0 113.5 114.8 87 Printing and publishing 27 6.7 98.4 99.7 100.0 99.8 100.5 100.6 99.7 99.6 99.8 99.7 100.2 99.5 100.1 100.7 88 Chemicals and products .... 28 9.9 108.9 111.3 111.8 114.0 113.7 112.8 112.0 113.3 112.7 112.3 112.4 111.9 112.9 113.3 89 Petroleum products 29 1.4 106.5 108.4 107.4 107.3 107.4 108.6 108.1 110.7 112.1 111.3 108.7 110.1 110.8 112.0 90 Rubber and plastic products . 30 3.5 120.5 121.4 121.7 122.6 121.1 123.1 124.0 122.3 123.4 124.0 124.2 126.5 126.3 126.5 91 Leather and products 31 .3 80.0 78.4 77.3 80.1 78.3 77.6 78.4 78.8 77.0 75.6 75.3 73.2 72.8 72.0 92 Mining 6.9 102.9 103.4 103.5 104.5 103.6 106.3 107.5 106.0 108.1 107.8 107.4 106.7 105.9 104.8 93 Metal 10 .5 102.0 105.6 102.5 106.3 105.7 105.7 104.8 103.5 104.2 107.4 103.4 104.5 102.9 101.5 94 Coal 12 1.0 105.9 107.5 108.8 109.5 106.4 109.6 105.2 104.1 115.9 107.4 114.1 109.8 109.3 108.5 95 Oil and gas extraction 13 4.8 100.3 100.0 100.2 100.7 100.8 103.1 105.4 104.5 105.0 105.8 104.8 103.9 103.3 102.0 96 Stone and earth minerals 14 .6 118.7 120.0 120.2 122.9 117.2 125.0 128.8 122.3 121.3 123.7 119.8 123.3 122.1 122.2 97 Utilities 7.7 112.8 111.9 114.5 112.6 112.7 110.2 109.9 113.6 112.4 111.7 113.2 112.6 116.5 116.8 98 Electric 491.493PT 6.2 112.7 112.0 112.7 112.6 113.2 110.9 110.3 113.6 110.5 111.1 113.4 112.6 117.8 118.1 99 Gas 492.493PT 1.6 113.2 111.3 120.9 112.7 110.9 107.6 108.7 113.2 119.0 113.5 112.5 112.4 112.0 112.1 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 115.7 117.3 117.9 118.6 118.6 119.5 120.0 120.6 120.8 121.2 122.3 122.8 123.1 123.9 101 Manufacturing excluding office and computing machines ... 83.6 113.7 114.7 115.5 116.1 116.2 116.9 117.3 117.5 117.6 118.0 118.8 119.6 119.8 120.4 Gross value (billions of 1992 dollars, annual rates) MAJOR MARKETS 102 Products, total 2,001.9 2,258.7 2,270.7 2,303.5 2,301.1 2,302.9 2,315.3 2,327.5 2,324.7 2,337.5 2,338.5 2,339.6 2,371.0 2,374.1 2,386.2 103 Final 1,552.1 1,760.9 1,771.8 1,795.1 1,796.8 1,798.4 1,808.8 1,819.6 1,816.4 1,827.8 1,830.4 1,832.4 1,863.2 1,862.4 1,874.5 104 Consumer goods 1,049.6 1,162.2 1,164.7 1,182.2 1,182.3 1,176.3 1,177.7 1,184.7 1,179.4 1,187.3 1,184.6 1,182.6 1,197.6 1,198.6 1,206.9 105 Equipment 502.5 598.0 606.3 612.1 613.7 621.4 630.4 634.2 636.4 639.9 645.1 649.3 665.2 663.3 667.2 106 Intermediate 449.9 498.2 499.3 508.6 504.9 505.1 507.2 508.7 508.9 510.5 509.1 508.2 509.6 513.1 513.4 1. Data in this table also appear in the Board's G.17 (419) monthly statistical release. For ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For a detailed the ordering address, see the inside front cover. The latest historical revision of the industrial description of the industrial production index, see "Industrial Production: 1989 Developproduction index and the capacity utilization rates was released in January 1997. See ments and Historical Revision," Federal Reserve Bulletin, vol. 76, (April 1990), pp. 187-204. "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- 2. Standard industrial classification. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • January 1998 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1996 1997 Dec. Jan. Feb. Mar. Apr. May June Julyr Aug/ Sept. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,372 1,333 1,426 1,405 1,395 1,438 1,457 1,442 1,432 1,402 1,414 1,397 1,460 2 One-family 1,069 997 1,070 999 1,052 1,069 1,034 1,060 1,053 1,049 1,030 1,027 1,065 3 Two-family or more 303 335 356 406 343 369 423 382 379 353 384 370 395 4 Started 1,457 1,354 1,477 1,353 1,375 1,554 1,479 1,483 1,402 1,503 1,465 1,395 1,507 5 One-family 1,198 1,076 1,161 1,024 1,125 1,237 1,142 1,133 1,098 1,134 1,149 1,091 1,187 6 Two-family or more 259 278 316 329 250 317 337 350 304 369 316 304 320 7 Under construction at end of period1 755 775 819 815 818 821 814 812 815 829 837 834 840 8 One-family 584 554 584 571 573 574 566 563 564 566 571 568 570 9 Two-family or more 171 221 235 244 245 247 248 249 251 263 266 266 270 10 Completed 1,346 1,319 1,407 1,484 1,362 1,572 1,471 1,460 1,388 1,318 1,320 1,321 1,436 11 One-family 1,161 1,073 1,124 1,177 1,109 1,267 1,156 1,158 1,101 1,096 1,069 1,052 1,149 12 Two-family or more 185 246 283 307 253 305 315 302 287 222 251 269 287 13 Mobile homes shipped 305 341 362 338 339 353 353 372 356 356 358 357 372 Merchant builder activity in one-family units 14 Number sold 670 667 757 794 822 826 825 765 764 802r 821 802 800 15 Number for sale at end of period1 340 374 326 322 308 300 287 291 288 288r 288 286 286 Price of units sold (thousands of dollars)2 16 Median 130.0 133.9 140.0 144.9 145.0 143.0 148.0 150.0 141.0 145.0r 146.0 143.9 142.0 17 Average 154.5 158.7 166.4 171.8 171.9 171.1 172.7 179.5 170.7 179.4r 175.2 168.0 176.9 EXISTING UNITS (one-family) 18 Number sold 3,967 3,812 4,087 3,950 3,910 4,230 4,160 4,060 4,250 4,150 4,180 4,310 4,320 Price of units sold (thousands of dollars)2 19 Median 109.9 113.1 118.2 118.8 120.6 117.5 120.0 120.7 123.1 127.2 126.5 127.5 125.6 20 Average 136.8 139.1 145.5 147.1 149.6 144.7 147.5 150.4 153.1 158.4 157.6 159.1 155.0 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 518,644 534,463 567,179 579,109 577,116 592,365 593,908 596,907 595,763 594,195 602,322 602,303 595,786 22 Private 398,646 407,370 435,929 447,045 444,391 452,037 452,728 457,604 459,882 456,927 463,510 464,091 457,996 23 Residential 238,423 231,230 246,659 247,899 246,661 251,402 253,974 259,917 259,662 257,277 258,843 259,655 262,207 24 Nonresidential 160,223 176,140 189,271 199,146 197,730 200,635 198,754 197,687 200,220 199,650 204,667 204,436 195,789 25 Industrial buildings 28,893 32,505 31,997 30,752 31,871 32,161 30,520 29,331 30,501 31,046 31,952 32,837 30,590 26 Commercial buildings 59,480 68,223 74,593 78,395 81,979 83,107 81,015 76,545 78,670 79,009 82,536 79,886 75,200 27 Other buildings 26,988 27,089 30,525 34,409 34,257 35,561 36,012 38,229 37,738 35,775 36,673 37,785 36,785 28 Public utilities and other 44,862 48,323 52,156 55,590 49,623 49,806 51,207 53,582 53,311 53,820 53,506 53,928 53,214 29 Public 119,998 127,092 131,250 132,064 132,725 140,328 141,180 139,304 135,882 137,268 138,813 138,212 137,790 30 Military 2,310 2,983 2,541 2,241 2,542 2,564 2,232 2,408 2,548 2,580 2,743 2,775 2,479 31 Highway 36,933 36,319 37,898 39,585 37,869 41,060 41,473 42,356 40.694 41,531 41,056 41,896 41,115 32 Conservation and development 6,459 6,391 5,807 5,223 5,807 5,727 6,114 5,134 5.242 4,952 4,989 5,384 5,739 33 Other 74,297 81,399 85,005 85,015 86,507 90,977 91,361 89,406 87.398 88,205 90,025 88,157 88,457 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) Index level, Item 1996 1997r 1997 Oct. 1996 1997 1997 1 Oct. Oct. Dec. Mar. June Sept. June July Aug. Sept. Oct. CONSUMER PRICES2 (1982-84=100) 1 3.0 22..11 3.3 1.8 1.0 2.5 .1 .2 .2 .2 .2 161.6 -> 4.0 11..88 3.4 .3 1.5 3.4 .2 .3 .4 .1 .2 158.2 3 5.7 .9 16.2 -2.8 -14.7 11.9 ..00 -.1 1.7 1.3 .1 111.5 4 2.6 2.3 2.4 2.4 2.4 1.7 ..11 .2 .1 .2 .2 170.8 1.1 .5 .9 1.1 .6 -.6 -.2 -.1 -.3 .2 .1 142.7 6 33..22 33..00 33..11 22..77 33..55 22..44 .3 ..33 .2 .2 .3 186.7 PRODUCER PRICES (1982=100) 7 3.1 -.2 4.3 -3.3 -3.6 2.8 -.2 -.1 .3 .5 .1 132.4 5.2 -1.2 2.4 -2.0 -3.2 .3 -,9r -,3r .3 .1 .4 135.0 Q 9.8 -1.5 26.2 -16.9 -15.1 12.4 ..55 .1 1.4 1.5 .1 83.5 in 1.1 .6 .6 .6 -.6 1.7 ..11 -.1 .1 .5 .1 145.9 iiii ..77 -.1 --..66 ..00 --..99 ..66 .R -.1 .0 ..33 -.1 138.7 Intermediate materials p .0 -.1 2.2 -1.9 -1.9 1.0 .1 -.2 .2 .2 .1 125.7 1133 --11..66 .6 --..33 ..66 .3 .3 .0 .0 .1 .0 .1 134.4 Crude materials 14 9.1 --88..55 -28.5 -2.8 -11.1 .7 -5.6r ,5r -.1 -.3 .0 109.4 IS 23.6 99..99 235.2 -75.5 11.3 15.5 — 2.0r -,6r 1.7 2.6 10.7 90.9 1166 Other --88..00 22..22 -1.3 15.7 -4.9 -1.5 -,3r -.R .8 -1.0 .3 155.6 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • January 1998 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1996 1997 AAccccoouunntt 11999944 11999955 11999966 Q3 Q4 Ql Q2 Q3 GROSS DOMESTIC PRODUCT 1 Total 6,947.0 7,265.4 7,636.0 7,676.0 7,792.9 7,933.6 8,034.3 8,131.7 By source 2 Personal consumption expenditures 4,717.0 4,957.7 5,207.6 5,227.4 5,308.1 5,405.7 5,432.1 5,527.7 i Durable goods 579.5 608.5 634.5 634.5 638.2 658.4 644.5 665.0 4 Nondurable goods 1,428.4 1,475.8 1,534.7 1,538.3 1,560.1 1,587.4 1,578.9 1,602.3 5 Services 2,709.1 2,873.4 3,038.4 3,054.6 3,109.8 3,159.9 3,208.7 3,260.5 6 Gross private domestic investment 1,007.9 1,038.2 1,116.5 1,149.2 1,151.1 1,193.6 1,242.0 1,253.6 7 Fixed investment 946.6 1,008.1 1,090.7 1,112.0 1,119.2 1,127.5 1,160.8 1,200.6 8 Nonresidential 660.6 723.0 781.4 798.6 807.2 811.3 836.3 871.1 y Structures 184.5 200.6 215.2 217.7 227.0 227.4 226.8 234.6 10 Producers' durable equipment 476.1 522.4 566.2 580.9 580.2 583.9 609.5 636.5 II Residential structures 286.0 285.1 309.2 313.5 312.0 316.2 324.6 329.5 12 Change in business inventories 61.2 30.1 25.9 37.1 31.9 66.1 81.1 53.0 13 Nonfarm 50.5 38.1 23.0 31.3 28.7 62.2 74.9 45.3 14 Net exports of goods and services -90.9 -86.0 -94.8 -114.0 -88.6 -98.8 -88.7 -107.3 15 Exports 721.2 818.4 870.9 863.7 904.6 922.2 960,3 968.9 16 Imports 812.1 904.5 965.7 977.6 993.2 1,021.0 1,049.0 1,076.3 17 Government consumption expenditures and gross investment 1,313.0 1,355.5 1,406.7 1,413.5 1,422.3 1,433.1 1,449.0 1,457.8 18 Federal 510.2 509.6 520.0 521.6 517.6 516.1 526.1 525.3 iy State and local 802.8 846.0 886.7 891.9 904.7 917.0 923.0 932.4 By major type of product 20 Final sales, total 6,885.7 7,235.3 7,610.2 7,638.9 7,761.0 7,867.4 7,953.2 8,078.7 21 Goods 2,520.2 2,637.9 2,759.3 2,760.7 2,795.0 2,838.4 2,854.9 2,905.9 22 Durable 1,072.5 1,133.9 1,212.0 1,216.3 1,233.5 1,248.0 1,275.3 1,303.8 23 Nondurable 1,447.6 1,503.9 1,547.3 1,544.4 1,561.5 1,590.4 1,579.6 1,602.1 24 Services 3,772.4 3,980.7 4,187.3 4,208.1 4,282.7 4,338.2 4,400.1 4,461.4 25 Structures 593.2 616.8 663.6 670.1 683.3 690.8 698.2 711.4 26 Change in business inventories 61.2 30.1 25.9 37.1 31.9 66.1 81.1 53.0 27 Durable goods 33.6 29.1 16.9 33.3 -1.1 31.8 46.8 24.8 28 Nondurable goods 27.7 1.1 9.0 3.9 33.0 34.3 34.4 28.3 MEMO 29 Total GDP in chained 1992 dollars 6,610.7 6,742.1 6,928.4 6,943.8 7,017.4 7,101.6 7,159.6 7,221.8 NATIONAL INCOME 30 Total 5,590.7 5,912.3 6,254.5 6,303.3 6,376.5 6,510.0 6,599.0 n.a. 31 Compensation of employees 4,012.0 4,215.4 4,426.9 4,461.0 4,520.7 4,606.3 4,663.4 4,725.4 32 Wages and salaries 3,254.0 3,442.6 3,633.6 3,664.0 3,718.0 3,792.7 3,842.7 3,897.2 33 Government and government enterprises 602.2 623.0 642.6 645.5 648.9 657.8 662.0 667.4 34 Other 2,651.8 2,819.6 2,991.0 3,018.4 3,069.0 3,134.9 3,180.8 3,229.8 35 Supplement to wages and salaries 758.0 772.9 793.3 797.0 802.7 813.6 820.7 828.1 36 Employer contributions for social insurance 353.0 366.0 385.7 388.6 393.6 401.3 405.6 410.2 37 Other labor income 405.0 406.8 407.6 408.4 409.1 412.3 415.1 418.0 38 Proprietors' income' 471.6 489.0 520.3 523.8 528.3 534.6 543.6 547.3 39 Business and professional1 434.7 465.5 483.1 483.7 487.9 494.4 500.0 506.1 40 Farm1 36.9 23.4 37.2 40.1 40.4 40.2 43.6 41.2 41 Rental income of persons2 124.4 132.8 146.3 148.0 149.2 149.0 148.7 147.9 42 Corporate profits' 570.5 650.0 735.9 739.6 747.8 779.6 795.1 n.a. 43 Profits before tax3 535.1 622.6 676.6 679.1 680.0 708.4 719.8 n.a. 44 Inventory valuation adjustment —16.1 -24.3 -2.5 -2.7 3.3 3.5 5.9 7.8 45 Capital consumption adjustment 51.4 51.6 61.8 63.2 64.4 67.7 69.4 70.4 46 Net interest 412.3 425.1 425.1 430.9 430.6 440.5 448.1 n.a. 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1996 1997 AAccccoouunntt 11999944 11999955 11999966 Q3 Q4 Ql Q2 Q3 PERSONAL INCOME AND SAVING 1 Total personal income 5,791.8 6,150.8 6,495.2 6,541.9 6,618.4 6,746.2 6,829.1 6,909.8 2 Wage and salary disbursements 3,240.7 3,429.5 3,632.5 3,662.8 3,716.9 3,791.5 3,841.6 3,896.1 3 Commodity-producing industries 824.4 864.4 909.1 917.2 927.8 942.9 952.8 961.8 4 Manufacturing 620.8 648.4 674.7 680.1 685.6 694.1 700.3 706.3 Distributive industries 741.4 783.1 823.3 829.0 840.6 856.8 867.0 879.6 6 Service industries 1,072.7 1,159.0 1,257.5 1,271.1 1,299.5 1,334.1 1,359.8 1,387.3 7 Government and government enterprises 602.2 623.0 642.6 645.5 648.9 657.8 662.0 667.4 8 Other labor income 405.0 406.8 407.6 408.4 409.1 412.3 415.1 418.0 9 Proprietors' income1 471.6 489.0 520.3 523.8 528.3 534.6 543.6 547.3 10 Business and professional' 434.7 465.5 483.1 483.7 487.9 494.4 500.0 506.1 11 Farm1 36.9 23.4 37.2 40.1 40.4 40.2 43.6 41.2 12 Rental income of persons 124.4 132.8 146.3 148.0 149.2 149.0 148.7 147.9 13 Dividends 204.8 251.9 291.2 292.0 295.2 312.5 318.3 324.5 14 Personal interest income 668.1 718.9 735.7 742.7 749.8 757.2 766.1 775.6 15 Transfer payments 954.7 1,015.0 1,068.0 1,072.4 1,081.5 1,107.2 1,117.0 1,125.2 16 Old-age survivors, disability, and health insurance benefits 473.0 507.8 537.6 540.0 545.6 558.9 564.4 569.1 17 LESS: Personal contributions for social insurance 277.5 293.1 306.3 308.2 311.5 318.2 321.3 324.8 18 EQUALS: Personal income 5,791.8 6,150.8 6,495.2 6,541.9 6,618.4 6,746.2 6,829.1 6,909.8 19 LESS: Personal tax and nontax payments 739.1 795.1 886.9 897.3 922.6 955.7 979.2 997.4 20 EQUALS: Disposable personal income 5,052.7 5,355.7 5,608.3 5,644.6 5,695.8 5,790.5 5,849.9 5,912.4 21 LESS: Personal outlays 4,842.1 5,101.1 5,368.8 5,390.6 5,475.4 5,574.6 5,602.8 5,701.2 22 EQUALS: Personal saving 210.6 254.6 239.6 254.0 220.4 215.9 247.0 211.1 MEMO Per capita (chained 1992 dollars) 7.3 Gross domestic product 25,357.0 25,615.9 26,085.8 26,114.4 26,331.6 26,597.8 26,765.0 2266,,992266..88 24 Personal consumption expenditures 17,207.2 17,459.3 17,748.9 17,744.2 17,847.8 18,045.2 18,053.9 18,259.2 25 Disposable personal income 18,431.0 18,861.0 19,116.0 19,161.0 19,152.0 19,331.0 19,439.0 19,532.0 26 Saving rate (percent) 4.2 4.8 4.3 4.5 3.9 3.7 4.2 3.6 GROSS SAVING 27 Gross saving 1,079.2 1,165.5 1,267.8 1,295.9 1,303.0 1,332.9 1,396.9 n.a. 28 Gross private saving 1,030.2 1,093.1 1,125.5 1,145.1 1,131.4 1,134.0 1,178.1 n.a. 79 Personal saving 210.6 254.6 239.6 254.0 220.4 215.9 247.0 211.1 30 Undistributed corporate profits' 167.6 172.4 202.1 202.3 212.6 211.5 217.6 nn..aa.. 31 Corporate inventory valuation adjustment -16.1 -24.3 -2.5 -2.7 3.3 3.5 5.9 77..88 Capital consumption allowances 37. Corporate 412.3 428.9 452.3 455.5 462.0 467.4 447722..66 447788..66 33 Noncorporate 226.3 224.1 230.5 232.2 235.2 238.0 239.7 242.4 34 Gross government saving 49.0 72.4 142.3 150.8 171.6 198.9 218.8 n.a. 35 Federal -117.2 -103.6 -39.3 -28.3 -5.9 15.9 34.7 n.a. 36 Consumption of fixed capital 69.5 70.9 71.2 71.2 71.3 71.4 71.5 71.6 37 Current surplus or deficit (-), national accounts -186.7 -174.4 -110.5 -99.5 -77.1 -55.5 -36.8 n.a. 38 State and local 166.2 176.0 181.5 179.1 177.5 182.9 184.1 n.a. 39 Consumption of fixed capital 69.4 72.9 76.2 76.5 77.2 78.2 79.2 79.7 40 Current surplus or deficit (—), national accounts 96.8 103.1 105.3 102.6 100.4 104.7 104.9 n.a. 41 Gross investment 1,093.8 1,137.2 1,207.9 1,216.4 1,243.5 1,268.6 1,323.4 n.a. 47, Gross private domestic investment 1,007.9 1,038.2 1,116.5 1,149.2 1,151.1 1,193.6 1,242.0 1,253.6 43 Gross government investment 206.0 213.4 224.3 223.6 225.3 223.3 227.4 226.3 44 Net foreign investment -120.0 -114.4 -132.9 -156.4 -132.9 -148.4 -146.0 n.a. 45 Statistical discrepancy 14.6 -28.2 -59.9 -79.5 -59.5 -64.3 -73.5 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • January 1998 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1996 1997 IItteemm ccrreeddiittss oorr ddeebbiittss 11999944 11999955 11999966 Q2 Q3 Q4 Ql Q2P 1 Balance on current account -133,538 -129,095 -148,184 -35,585 -42,833 -36,874 -39,972 -39,030 2 Merchandise trade balance2 -166,192 -173,560 -191,170 -47,562 -52,493 -48,190 -49,787 -46,903 3 Merchandise exports 502,398 575,871 612,069 153,411 150,764 157,846 162,527 171,489 4 Merchandise imports -668,590 -749,431 -803,239 -200,973 -203,257 -206,036 -212,314 -218,392 5 Military transactions, net 1,874 3,866 3,786 1,214 792 1,295 437 782 6 Other service transactions, net 59,902 67,837 76,344 18,569 19,185 20,697 20,050 19,708 7 Investment income, net 9.723 6,808 2,824 883 -1,370 1,250 -1,990 -3,554 8 U.S. government grants -15,671 -11,096 -14,933 -2,423 -2,690 -5,499 -2,109 -2,255 9 U.S. government pensions and other transfers -4,544 -3,420 -4,331 -1,081 -1,064 -1,050 -1,083 -1,128 10 Private remittances and other transfers -18,630 -19,530 -20,704 -5,185 -5,193 -5,377 -5,490 -5,680 11 Change in U.S. government assets other than official reserve assets, net (increase, —) -352 -549 -690 -358 162 -284 -21 -238 12 Change in U.S. official reserve assets (increase, —) 5,346 -9,742 6,668 -523 7,489 -315 4,480 -236 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -441 -808 370 -133 848 -146 72 -133 15 Reserve position in International Monetary Fund 494 -2,466 -1,280 -220 -183 -28 1,055 54 16 Foreign currencies 5,293 -6,468 7,578 -170 6,824 -141 3,353 -157 17 Change in U.S. private assets abroad (increase, -) -165,510 -296,916 -358,422 -48,817 -85,193 -153,837 -132,428 -95,018 18 Bank-reported claims3 -4,200 -75,108 -98,186 192 -33,589 -66,657 -62,026 -29,612 19 Nonbank-reported claims -31,739 -34,997 -64,234 -5,047 -17,294 -26,115 -29,466 20 U.S. purchases of foreign securities, net -60,309 -100,074 -108,189 -20,328 -23,206 -30,200 -14,510 —21,325 21 U.S. direct investments abroad, net -69,262 -86,737 -87,813 -23,634 -11,104 -30,865 -26,426 -29,081 22 Change in foreign official assets in United States (increase, +) 40,385 110,729 122,354 13,154 24,089 33,097 28,891 -3,719 23 U.S. Treasury securities 30,750 68,977 111,253 -3,383 25,472 33,564 23,289 -8,444 24 Other U.S. government obligations 6,077 3,735 4,381 1,258 1,217 1,854 651 644 25 Other U.S. government liabilities4 2,366 744 720 -204 907 160 478 804 26 Other U.S. liabilities reported by U.S. banks3 3,665 34,008 4,722 14,198 -1,922 -4,270 7,698 2,346 27 Other foreign official assets5 -2,473 3,265 1,278 1,285 -1,585 1,789 -3,225 931 28 Change in foreign private assets in United States (increase, +) 256,952 340,505 425,201 92,960 134,540 161,482 153,347 155,368 29 U.S. bank-reported liabilities3 104,338 30,176 9,784 2,319 2,040 38,960 17,387 27,143 30 U.S. nonbank-reported liabilities -7,710 34,588 31,786 7,288 20,610 -2,912 15,210 31 Foreign private purchases of U.S. Treasury securities, net 57,674 111,848 172,878 36,152 50,798 75,326 51,289 50,816 32 Foreign purchases of other U.S. securities, net 56,971 96,367 133,798 29,761 35,115 32,447 38,820 51,537 33 Foreign direct investments in United States, net 45,679 67,526 76,955 17,440 25,977 17,661 30,641 28,872 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy -3,283 -14,931 -46,927 -20,831 -38,254 -3,269 -14,297 -17,127 36 Due to seasonal adjustment -1,076 -7,830 2,669 7,059 -1,768 37 Before seasonal adjustment -3,284 -14,931 -46,926 -19,755 -30,424 -5,938 -21,356 -15,359 MEMO Changes in official assets 38 U.S. official reserve assets (increase, —) 5,346 -9,742 6,668 -523 7,489 -315 4,480 -236 39 Foreign official assets in United States, excluding line 25 (increase, +) 38,019 109,985 121,634 13,358 23,182 32,937 28,413 -4,523 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -1,529 4,239 12,278 5,239 5,263 3,315 9,272 2,563 t. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38-40. 4. Associated primarily with military sales contracts and other transactions arranged with 2. Data are on an international accounts basis. The data differ from the Census basis data, or through foreign official agencies. shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from 5. Consists of investments in U.S. corporate stocks and in debt securities of private merchandise trade data and are included in line 5. corporations and state and local governments. 3. Reporting banks include all types of depository institutions as well as some brokers and SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current dealers. Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A51 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1997 IItteemm 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept.p 1 Goods and services, balance -104,416 -101,857 -111,040 -7,831 -8,794 -9.557 -8.293 -10.018 -9,457 -11.068 2 Merchandise -166,192 -173,560 -191,170 -14.877 -15,527 -16,363 -15,244 -16,848 -16,559 -18.142 3 Services 61,776 71,703 80,130 7,046 6,733 6,806 6,951 6,830 7,102 7.074 4 Goods and services, exports 699,646 794,610 848,833 78,124 77,791 77,742 78,515 77.787 78,578 77,999 5 Merchandise 502,398 575,871 612,069 57,155 57,162 56.871 57,378 56.745 57,326 56,508 6 Services 197,248 218,739 236,764 20,969 20,629 20,871 21,137 21,042 21.252 21,491 7 Goods and services, imports -804,062 -896,467 -959,873 -85,955 -86,585 -87.299 -86,808 -87.805 -88,035 -89.067 8 Merchandise -668,590 -749,431 -803,239 -72,032 -72,689 -73,234 -72,622 -73,593 -73,885 -74,650 9 Services -135,472 -147,036 -156,634 -13,923 -13,896 -14,065 -14.186 -14,212 -14,150 -14.417 1. Data show monthly values consistent with quarterly figures in the U.S. balance of SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of payments accounts. Economic Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1997 AAsssseett 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept. Oct.P 1 Total 74,335 85,832 75,090 67,222 65,873 68,054 67,813 66,120 66,640 67,148 68,036 2 Gold stock, including Exchange Stabilization Fund1 11,051 11,050 11,049 11.050 11,051 11,051 11,050 11,051 11.050 11,050 11,050 3 Special drawing rights2'3 10,039 11,037 10,312 9,879 9,726 10,050 10,023 9,810 9,985 9,997 10.132 4 Reserve position in International Monetary Fund2 12,030 14,649 15,435 13,846 13,660 13,805 13,805 13,677 13,959 14.042 14,243 5 Foreign currencies4 41,215 49,096 38,294 32,447 31,436 32,935 32,935 31,582 31.646 32,059 32.611 1. Gold held "under earmark" at Federal Reserve Banks for foreign and international SDR holdings and reserve positions in the IMF also have been valued on this basis since July accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold 1974. stock is valued at $42.22 per fine troy ounce. 3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the year 2. Special drawing rights (SDRs) are valued according to a technique adopted by the indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979— International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of $1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs. exchange rates for the currencies of member countries. From July 1974 through December 4. Valued at current market exchange rates. 1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 1997 AAsssseett 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept. Oct.P 1 Deposits 250 386 167 16 169 176 178 175 169 188 190 Held in custody 2 U.S. Treasury securities" 441,866 522,170 638,049 672,059 668,536 662,747 652,077 653.157 660,461 655,406 638,100 3 Earmarked gold3 12,033 11,702 11,197 11,034 10,944 10,868 10,794 10,793 10,793 10,793 10,793 1. Excludes deposits and U.S. Treasury securities held for international and regional 3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not organizations. included in the gold stock of the United States. 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury securities, in each case measured at face (not market) value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 International Statistics • January 1998 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1997 IItteemm 11999955 11999966 Mar.r Apr.r Mayr Juner Julyr Aug. Sept.P 1 Total1 630,918 758,351 785,877 780,795 784,977 779,905 780,210 792,870 802,386 By type 2 Liabilities reported by banks in the United States 107,394 113,098 120,594 118,838 127,073 125,130 129,388 128,457 137,835 3 U.S. Treasury bills and certificates3 168,534 198,921 196,219 186,432 178,366 163,950 161,270 165,453 116611,,661100 U.S. Treasury bonds and notes 4 Marketable 293,690 379,851 405,041 412,143 415,520 425,575 423,076 431,582 434,287 5 Nonmarketable4 6,491 5,968 6,084 5,692 5,730 5,767 5,804 5,841 5,879 6 U.S. securities other than U.S. Treasury securities5 54,809 60,513 57,939 57,690 58,288 59,483 60,672 61,537 62,775 By area 7 Europe1 222,406 257,480 269,214 268,337 268,536 272,973 270,794 271,474 274,922 8 Canada 19,473 21,343 21,997 19,677 20,196 20,577 21,009 20,856 21,130 9 Latin America and Caribbean 66,721 81,173 80,631 76,632 81,926 89,186 93,765 95,098 95,650 10 Asia 311,016 385,048 401,331 403,814 402,475 382,281 380,318 390,265 394,186 11 Africa 6,296 7,379 7,908 7,765 8,643 8,890 8,882 8,934 10,218 12 Other countries 5,004 5,926 4,794 4,568 3,199 5.996 5,440 6,241 6,278 1. Includes the Bank for International Settlements. Venezuela, beginning December 1990, 30-year maturity issue; Argentina, beginning April 2. Principally demand deposits, time deposits, bankers acceptances, commercial paper, 1993, 30-year maturity issue. negotiable time certificates of deposit, and borrowings under repurchase agreements. 5. Debt securities of U.S. government corporations and federally sponsored agencies, and 3. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official U.S. corporate stocks and bonds. institutions of foreign countries. SOURCE. Based on U.S. Department of the Treasury data and on data reported to the 4. Excludes notes issued to foreign official nonreserve agencies. Includes current value of department by banks (including Federal Reserve Banks) and securities dealers in the United zero-coupon Treasury bond issues to foreign governments as follows: Mexico, beginning States, and on the 1989 benchmark survey of foreign portfolio investment in the United March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue; States. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1 Payable in Foreign Currencies Millions of dollars, end of period 1996 1997 IItteemm 11999933 11999944 11999955 Sept. Dec. Mar. June 1 Banks' liabilities 78,259 89,258 109,713 111,140 103,383 109,238 109,433 2 Banks' claims 62,017 60,711 74,016 68,120 66,018 72,589 84,665 3 Deposits 20,993 19,661 22,696 24,026 22,467 24,542 26,503 4 Other claims 41,024 41,050 51,320 44,094 43,551 48,047 58,162 5 Claims of banks' domestic customers" 12,854 10,878 6,145 7,390 10,978 9,357 11,292 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A53 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1997 IItteemm 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,014,996 1,099,549 1,161,993 1,173,099 1,181,419 1,193,134 l,183,736r l,199,601r 1,191,903 1,197,299 2 Banks' own liabilities 718,591 753,461 758,998 782,633 796,344 812,513 801,237r 806,686r 788,093 796,297 3 Demand deposits 23,386 24,448 27,034 27,675 29,252 26,204 29,548r 27,658 27,090 28,316 4 Time deposits2 186,512 192,558 187,956 189,873 183,860 184,347 187,766r 190,144 191,039 188,650 5 Other3 113,215 140,165 142,464 151,545 161,607 162,470 165,333r 176,087r 160,986 169,206 6 Own foreign offices4 395,478 396,290 401,544 413,540 421,625 439,492 418,590 412,797 408,978 410,125 7 Banks' custodial liabilities5 296,405 346,088 402,995 390,466 385,075 380,621 382,499 392,915 403,810 401,002 8 U.S. Treasury bills and certificates6 162,938 197,355 236,874 223300,,007744 222211,,338877 220077,,889944 220055,,779922 220022,,663300 220099,,112211 220055,,994466 9 Other negotiable and readily transferable instruments7 42,539 52,200 72,011 63,102 67,074 72,716 75,235 88,057 89,375 90,686 10 Other 90,928 96,533 94,110 97,290 96,614 100,011 101,472 102,228 105,314 104,370 11 Nonmonetary international and regional organizations8.. . 8,606 11,039 13,972 12,227 13,059 12,547 13,952 11,796 10,259 11,806 12 Banks' own liabilities 8,176 10,347 13,355 11,808 12,787 12,332 13,496 11,384 9,758 11,524 13 Demand deposits 29 21 29 49 30 16 775 86 217 771 14 Time deposits2 3,298 4,656 5,784 6,952 5,238 4,857 6,669 4,726 4,569 6,017 15 Other3 4,849 5,670 7,542 4,807 7,519 7,459 6,052 6,572 4,972 4,736 16 Banks' custodial liabilities5 430 692 617 419 272 215 456 412 501 282 17 U.S. Treasury bills and certificates6 281 350 352 246 174 122 65 47 166 53 18 Other negotiable and readily transferable instruments7 149 341 265 158 98 88 383 365 314 229 19 Other 0 1 0 15 0 5 8 0 21 0 20 Official institutions9 212,957 275,928 312,019 316,813 305,270 305,439 289,080r 290,658 293,910 299,445 21 Banks' own liabilities 59,935 83,447 79,406 90,679 86,808 92,845 97,025r 101,957 98,940 105,013 22 Demand deposits 1,564 2,098 1,511 2,368 2,341 1,855 1,482r 1,711 2,181 1,745 23 Time deposits2 23,511 30,717 33,336 32,691 33,428 36,627 39,694 41,936 40,147 40,073 24 Other3 34,860 50,632 44,559 55,620 51,039 54,363 55,849 58,310 56,612 63,195 25 Banks' custodial liabilities5 153,022 192,481 232,613 226,134 218,462 212,594 192,055 188,701 194,970 194,432 26 U.S. Treasury bills and certificates6 139,571 168,534 198,921 196,219 186,432 178,366 163,950 161,270 165,453 161,610 27 Other negotiable and readily transferable instruments7 13,245 23,603 33,266 29,532 31,883 33,976 27,676 26,878 29,349 32,315 28 Other 206 344 426 383 147 252 429 553 168 507 29 Banks10 678,532 691,412 694,835 696,864 710,231 718,282 727,606r 734,444r 730,291 722,525 30 Banks' own liabilities 563,617 567,834 562,898 567,501 579,775 591,027 575,768r 573,804r 566,335 561,822 31 Unaffiliated foreign banks 168,139 171,544 161,354 153,961 158,150 151,535 157,178r 161,007r 157,357 151,697 32 Demand deposits 10,633 11,758 13,692 13,014 14,451 12,686 14,800r 13,700 13,323 13,851 33 Time deposits2 111,171 103,471 90,811 88,786 83,542 81,587 80,291 81,126 82,929 77,503 34 Other3 46,335 56,315 56,851 52,161 60,157 57,262 62,087r 66,181r 61,105 60,343 35 Own foreign offices4 395,478 396,290 401,544 413,540 421,625 439,492 418,590 412,797 408,978 410,125 36 Banks' custodial liabilities5 114,915 123,578 131,937 129,363 130,456 127,255 151,838 160,640 163,956 160,703 37 U.S. Treasury bills and certificates6 11,264 15,872 23,106 19,088 19,567 14,127 27,115 28,642 30,629 30,012 38 Other negotiable and readily transferable instruments7 14,506 13,035 17,027 15,318 16,693 18,918 28,866 35,522 33,960 32,886 39 Other 89,145 94,671 91,804 94,957 94,196 94,210 95,857 96,476 99,367 97,805 40 Other foreigners 114,901 121,170 141,167 147,195 152,859 156,866 153,098r 162,703r 157,443 163,523 41 Banks' own liabilities 86,863 91,833 103,339 112,645 116,974 116,309 114,948r 119,541r 113,060 117,938 42 Demand deposits 11,160 10,571 11,802 12,244 12,430 11,647 12,491r 12,161 11,369 11,949 43 Time deposits2 48,532 53,714 58,025 61,444 61,652 61,276 61,112r 62,356 63,394 65,057 44 Other3 27,171 27,548 33,512 38,957 42,892 43,386 41,345r 45,024r 38,297 40,932 45 Banks' custodial liabilities5 28,038 29,337 37,828 34,550 35,885 40,557 38,150 43,162 44,383 45,585 46 U.S. Treasury bills and certificates6 11,822 12,599 14,495 14,521 15,214 15,279 14,662 12,671 12,873 14,271 47 Other negotiable and readily transferable instruments7 14,639 15,221 21,453 18,094 18,400 19,734 18,310 25,292 25,752 25,256 48 Other 1,577 1,517 1,880 1,935 2,271 5,544 5,178 5,199 5,758 6,058 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 17,895 9,103 14,573 13,927 15,130 15,030 15,771 16,453 16,040 15,872 1. Reporting banks include all types of depository institutions as well as some brokers and 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official dealers. Excludes bonds and notes of maturities longer than one year. institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in "Other negotia- 7. Principally bankers acceptances, commercial paper, and negotiable time certificates of ble and readily transferable instruments." deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the Inter- 4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiar- American Development Bank, and the Asian Development Bank. Excludes "holdings of ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory dollars" of the International Monetary Fund. agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists 9. Foreign central banks, foreign central governments, and the Bank for International principally of amounts owed to the head office or parent foreign bank, and to foreign Settlements. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. 10. Excludes central banks, which are included in "Official institutions." 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks for foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • January 1998 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1997 IItteemm 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept.P AREA 50 Total, all foreigners 1,014,996 1,099,549 1,161,993 1,173,099 1,181,419 1,193,134 l,183,736r 1,199,601" 1,191,903" 1,197,299 51 Foreign countries 1,006,390 1,088,510 1,148,021 1,160,872 1,168,360 1,180,587 l,169,784r 1,187,805" 1,181,644" 1,185,493 52 Europe 390,869 362,819 376,590 381,716 380,617 382,253 395,718r 411,680" 407,700" 401,155 53 Austria 3,588 3,537 5,128 4,606 3,003 3,231 3,252 3,257 3,404 2,711 54 Belgium and Luxembourg 21,877 24,792 24,084 22,318 19,243 21,256 41,286 45,291 46,063 43,416 53 Denmark 2,884 2,921 2,565 1,827 1,782 2,112 2,098 2,289 1,736 2,867 36 Finland 1,436 2,831 1,958 2,422 3,149 1,868 1,851 1,814 1,751 2,163 57 France 44,365 39,218 35,078 35,337 40,702 38,742 41,211 43,464 41,213 43,006 38 Germany 27,109 24,035 24,660 25,458 25,793 26,081 26,086' 24,978" 22,626 24,672 39 Greece 1,400 2,014 1,835 2,419 1,740 2,296 1,701 1,726 1,592" 2,086 60 Italy 10,885 10,868 10,946 8,844 9,499 9,691 10,191 9,490 9,179" 9,852 61 Netherlands 16,033 13,745 11,110 11,076 11,758 8,702 8,292 8,440 7,823" 8,388 62 Norway 2,338 1,394 1,288 1,896 1,357 1,121 841 846 604 1,321 63 Portugal 2,846 2,761 3,562 3,022 3,010 2,712 2,582 2,075 1,931 1,958 64 Russia 2,726 7,948 7,623 7,859 7,863 9,582 12,302 13,604 13,216 12,784 63 Spain 14,675 10,011 17,707 18,847 17,697 15,027 16,274 15,158 15,203" 17,796 66 Sweden 3,094 3,246 1,623 2,113 2,216 1,658 1,514 1,925 2,317 2,024 67 Switzerland 40,724 43,625 44,538 43,614 42,128 44,028 39,124 44,283 41,076" 36,862 6688 Turkey 3,341 4,124 6,738 7,191 6,585 6,757 6,545 6,594 5,933" 4,736 6699 United Kingdom 163,733 139,183 153,420 155,843 158,258 163,227 156,127r 161,672" 167,914" 158,529 70 Yugoslavia" 245 177 206 248 266 324 228 267 244 243 71 Other Europe and other former U.S.S.R.12 27,770 26,389 22,521 26,776 24,568 23,838 24,213r 24,507 23,875 25,741 72 24,768 30,468 38,920 38,053 40,331 38,441 37,970 30,444 27,628" 29,542 73 Latin America and Caribbean 423,847 440,213 467,374 467,352 479,595 494,607 495,710" 500,309 496,336" 502,533 74 Argentina 17,203 12,235 13,877 16,907 14,224 16,486 18,229 17,100 18,033" 16,643 73 Bahamas 104,014 94,991 88,895 90,075 105,465 100,935 90,166 92,136 86,271" 86,914 76 Bermuda 8,424 4,897 5,527 8,417 7,450 6,358 5,358 5,919 7,786 6,084 // Brazil 9,145 23,797 27,701 23,822 23,408 25,452 26,058 28,340 31,567" 33,575 78 British West Indies 229,599 239,083 251,310 254,809 251,752 268,284 272,142 264,986 268,180" 273,484 79 Chile 3,127 2,826 2,915 3,309 3,117 3,239 3,371 3,440 3,353" 3,327 80 Colombia 4,615 3,659 3,256 2,807 3,165 2,776 2,836 2,652 2,587" 2,657 81 Cuba 13 8 21 18 52 54 55 54 60" 55 82 Ecuador 875 1,314 1,767 1,484 1,469 1,608 1,466 1,640 1,512" 1,508 83 Guatemala 1,121 1,276 1,282 1,378 1,514 1,457 1,497 1,455 1,389" 1,449 84 Jamaica 529 481 628 585 525 472 465 532 534 523 83 Mexico 12,227 24,560 31,240 27,299 27,855 28,223 32,611 34,579 30,804" 32,640 86 Netherlands Antilles 5,217 4,673 6,099 3,590 5,486 3,755 6,134 10,986 8,286" 7,566 87 Panama 4,551 4,264 4,099 3,868 3,711 4,026 3,976 4,424 3,805" 3,835 88 Peru 900 974 834 926 881 1,117 919 958 1,006" 904 89 Uruguay 1,597 1,836 1,890 1,842 1,753 2,062 2,153 2,392 2,070 1,997 90 Venezuela 13,986 11,808 17,363 18,456 18,968 18,899 19,187 19,114 20,159 20,570 91 Other 6,704 7,531 8,670 7,760 8,800 9,404 9,087r 9,602 8,934" 8,802 92 Asia 154,346 240,595 249,083 225577,,777799 225500,,007700 224499,,113311 222222,,669988"" 222277,,555555 223311,,111100"" 223344,,337700 China 93 Mainland 10,066 33,750 30,438 31,366 28,575 29,429 7,283 9,480 10,450 12,652 94 Taiwan 9,844 11,714 15,995 15,803 14,664 12,442 12,363 13,464 11,803 13,331 93 Hong Kong 17,104 20,197 18,789 20,107 18,941 19,397 20,236 18,737 17,647 18,528 96 India 2,338 3,373 3,930 5,428 4,755 4,367 4,241 4,555 4,474 4,451 97 Indonesia 1,587 2,708 2,298 2,679 2,430 2,770 2,531 2,817 3,737" 2,810 9988 Israel 5,157 4,041 6,051 5,963 6,097 6,416 5,751 5,180 5,202 4,534 9999 Japan 62,981 109,193 117,316 122,760 122,194 118,921 118,413 118,410 119,549 118,261 100 Korea (South) 5,124 5,749 5,949 6,555 7,158 7,866 7,657 8,928 9,646 9,590 101 Philippines 2,714 3,092 3,378 2,389 2,340 2,387 2,469 2,908 2,541 2,409 102 Thailand 6,466 12,279 10,912 9,394 10,361 7,808 6,159 5,262 4,956 6,545 103 Middle Eastern oil-exporting countries13 15,494 15,582 16,285 13,671 14,214 14,425 12,946 14,112 15,480 14,277 104 Other 15,471 18,917 17,742 21,664 18,341 22,903 22,649r 23,702 25,625 26,982 105 Africa 6,524 7,641 8,116 8,564 8,986 9,821 9,970r 9,734 9,731" 10,379 106 Egypt 1,879 2,136 2,012 2,010 2,056 2,257 1,986 1,921 1,973 2,050 10/ Morocco 97 104 112 107 130 91 65 112 94 99 108 South Africa 433 739 458 819 780 1,985 1,758 11,,669977 1,694" 2,046 109 Zaire 9 10 10 9 4 9 17 88 7 14 110 Oil-exporting countries14 1,343 1,797 2,626 2,945 3,344 2,731 3,153 2,981 3,211 3,280 111 Other 2,763 2,855 2,898 2,674 2,672 2,748 2,99 lr 3,015 2,752 2,890 112 Other 6,036 6,774 7,938 7,408 8,761 6,334 7,718 8,083 9,139 7,514 113 Australia 5,142 5,647 6,479 6,066 7,546 4,991 6,433 6,782 7,917 6,391 114 Other 894 1,127 1,459 1,342 1,215 1,343 1,285 1,301 1,222 1,123 115 Nonmonetary international and regional organizations... 8,606 11,039 13,972 12,227 13,059 12,547 13,952 11,796 10,259" 11,806 116 International15 7,537 9,300 12,099 10,307 11,691 10,873 12,297 10,341 9,124" 10,634 117 Latin American regional16 613 893 1,339 1,459 1,050 1,435 1,071 794 579 708 118 Other regional17 456 846 534 461 318 239 584 661 556 464 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 15. Principally the International Bank for Reconstruction and Development. Excludes 12. Includes the Bank for International Settlements. Since December 1992, has "holdings of dollars" of the International Monetary Fund. included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 17. Asian, African, Middle Eastern, and European regional organizations, except the Bank Emirates (Trucial States). for International Settlements, which is included in "Other Europe." 14. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-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 1997 AArreeaa oorr ccoouunnttrryy 11999944 11999955 11999966 Mar. Apr. May June July Aug. Sept.P 1 Total, all foreigners 485,432 532,444 599,685 636,478 640,974 632,547 651,435r 646,597r 650,427 655,806 2 Foreign countries 480,841 530,513 597,081 634,972 638,686 630,215 649,505r 645,444r 648,010 653,763 3 Europe 124,124 132,150 165,555 204,661 183,035 196,157 192,392r 186,365r 189,751 198.676 4 Austria 692 565 1,662 1,911 1,541 1,440 1,394 1,690 1,739 1,371 5 Belgium and Luxembourg 6,923 7,624 6,727 8,439 8,054 8,017 8,159 8,089 8,117 7,840 6 Denmark 1,129 403 492 546 888 924 981 806 811 1,077 7 Finland 512 1,055 971 1,684 1,194 1,121 1,414 1,247 1,773 1,889 8 France 12,149 15,033 15,246 24,780 14,933 17,296 16,764 18,694 16,239 17,533 9 Germany 7,623 9,263 8,472 11,971 9,532 9,054 10,024r 8,35 lr 8,685 11.195 10 Greece 604 469 568 755 453 477 630 461 481 499 11 Italy 6,044 5,370 6,457 6,427 6,166 6,478 7,865 7,443 8,015 7.669 12 Netherlands 2,960 5,346 7,080 7,612 8,866 8,190 10,687 12,050 11,074 11,474 13 Norway 504 665 808 1,226 846 1,199 750 745 849 1.713 14 Portugal 938 888 418 421 326 306 468 439 732 562 15 Russia 973 660 1,669 2,028 1,799 1,881 2,020 2,098 2,192 1,924 16 Spain 3,536 2,166 3,211 6,633 6,301 5,854 6,811 6,496r 6,176 5,428 17 Sweden 4,098 2,080 1,739 2,311 1,942 1,870 2,539 1,740 1.639 1,659 18 Switzerland 55,,774477 7,474 19,798 20,851 21,301 24,574 22.523 24,883 24,338 25.392 19 Turkey 887788 803 1,109 1,240 1,216 1,306 1,392 1,362 1,305 1,398 20 United Kingdom 66,863 67,784 85,057 99,153 91,217 101,629 94,070 84,162r 90,226 93,899 21 Yugoslavia2 265 147 115 87 78 79 75 75 76 75 22 Other Europe and other former U.S.S.R.3 1,686 4,355 3,956 6,586 6,382 4,462 3,826 5,534 5,284 6,079 23 Canada 18,490 20,874 26,436 35,782 33,727 31,613 35,916 26,289 24,441 23,347 24 Latin America and Caribbean 224,229 256,944 274,127 261,159 282,478 264,378 281,253r 300,449r 298,790 302,435 25 Argentina 5,854 6,439 7,400 6,995 6,884 7,251 7,293 7,088 7,277 7.255 26 Bahamas 66,410 58,818 71,871 67,728 68,219 65,546 66,804 69,819 70,031 66,051 27 Bermuda 8,533 5,741 4,103 6,216 8,132 6,603 7,112r 8,252r 9,829 9,297 28 Brazil 9,583 13,297 17,259 17,752 17,590 18,588 18,757 18,882 19,251 19.428 29 British West Indies 96,373 124,037 105,510 98,778 111,276 106,898 122,088 134,435 128.370 133,737 30 Chile 3,820 4,864 5,136 5,784 5,636 5,745 5,599 5,801 5,919 6,235 31 Colombia 4,004 4,550 6,247 6,099 6,026 6,041 6,324 6,419 6,609 6,540 32 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 682 825 1,031 1,155 995 1,092 1,132 1,165 1,199 1,217 34 Guatemala 366 457 620 629 633 619 651 679 690 764 35 Jamaica 258 323 345 366 325 328 336 359 375 374 36 Mexico 17,749 18,024 18,425 19,516 20,292 19,168 19,201 19,585 18,680 18,770 37 Netherlands Antilles 1,404 9,229 25,209 18,926 25,235 14,759 14,016 15,759 18,408 20,324 38 Panama 2,198 3,008 2,786 3,110 3,243 3,347 3,183 3,272 3,482 3,567 39 Peru 997 1,829 2,720 2,510 2,473 2,580 2,597 2,697 2,851 3.060 40 Uruguay 503 466 589 741 682 735 705 778 702 728 41 Venezuela 1,832 1,661 1,702 1,520 1,561 1,710 1,801 1,734 1,750 1.720 42 Other 3,663 3,376 3,174 3,334 3,276 3,368 3,654 3,725 3,367 3,368 43 107,800 115,336 122,478 124,292 129,326 128,708 129,744 122,500 124,907 120,783 China 44 Mainland 836 1,023 1,401 1,456 2,201 2,168 2,023 2,370 2,588 2,786 45 Taiwan 1,448 1,713 1,894 1,709 1,532 1,500 1,851 1,523 1,521 1.250 46 Hong Kong 9,222 12,821 12,802 14,143 13,389 14,969 16,014 12,247 13,188 13,569 47 India 994 1,846 1,946 2,194 2,147 2,257 2,342 2,184 2,110 2,086 48 Indonesia 1,472 1,696 1,762 2,081 2,206 2.435 2,536 2,521 2,576 2,710 49 Israel 688 739 633 612 586 909 631 855 749 907 50 Japan 59,569 61,468 59,967 56,483 58,872 56,484 59,679 55,592 54,427 52,480 51 Korea (South) 10,286 13,975 18,901 19,901 20,802 20,864 20,606 21,274 21,690 19.972 52 Philippines 663 1,318 1,697 1,600 1,746 1,937 2,119 1,723 1,834 1,669 53 Thailand 2,902 2,612 2,679 3,429 3,233 3,069 3,187 2,825 2,641 2.479 54 Middle Eastern oil-exporting countries4 13,982 9,639 10,424 10,078 11,315 10,590 9,115 9,750 9,470 8,031 55 Other 5,738 6,486 8,372 10,606 11,297 11,526 9,641 9,636 12,113 12,844 56 Africa 3,053 2,742 2,776 2,735 3,282 2,847 3,273 3,125 3,280 3,462 57 Egypt 225 210 247 244 231 270 312 267 288 251 58 Morocco 429 514 524 473 478 463 465 463 554 547 59 South Africa 674 465 584 470 452 569 602 493 489 654 60 Zaire 2 1 0 0 1 0 0 0 0 0 61 Oil-exporting countries5 856 552 420 605 1,177 679 1,129 1,134 1,178 1,123 62 Other 867 1,000 1,001 943 943 866 765 768 771 887 63 Other 3,145 2,467 5,709 6,343 6,838 6,512 6,927 6,716 6,841 5,060 64 Australia 2,192 1,622 4,577 4,101 4,918 4,088 5,042 4,934 5,266 4,314 65 Other 953 845 1,132 2,242 1,920 2,424 1,885 1,782 1,575 746 66 Nonmonetary international and regional organizations6 . . . 4,591 1,931 2,604 1,506 2,288 2,332 1,930 1.153 2,417 2.043 1. Reporting banks include all types of depository institutions as well as some brokers and 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab dealers. Emirates (Trucial States). 2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 5. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Includes the Bank for International Settlements. Since December 1992, has included all 6. Excludes the Bank for International Settlements, which is included in "Other Europe." parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • January 1998 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1997 TTyyppee ooff ccllaaiimm 11999944 11999955 11999966 Mar. Apr. May June Julyr Aug. Sept.p 1 Total 601,814 655,211 743,700 798,450 813,672r 2 Banks' claims 485,432 532,444 599,685 636,478 640,974 632,547 651,435r 646,597 650,427 655,806 3 Foreign public borrowers 23,416 22,518 22,241 28,864 29,176 27,264 29,394 26,918 28,258 29,745 4 Own foreign offices2 283,015 307,427 341,574 360,340 362,790 367,977 379,425r 370,505 370,593 374,443 5 Unaffiliated foreign banks 110,410 101,595 113,505 118,444 116,071 113,013 119,527 117,674 115,318 104,635 6 Deposits 59,368 37,771 33,826 37,284 34,592 34,581 35,789 36,001 35,430 29,623 7 Other 51,042 63,824 79,679 81,160 81,479 78,432 83,738 81,673 79,888 75,012 8 All other foreigners 68,591 100,904 122,365 128,830 132,937 124,293 123,089r 131,500 136,258 146,983 9 Claims of banks' domestic customers3 116,382 122,767 144,015 161,972 162,237 10 Deposits 64,829 58,519 77,673 95,147 94,591 11 Negotiable and readily transferable instruments4 36,111 44,161 51,207 49,518 50,301 12 Outstanding collections and other claims 15,442 20,087 15,135 17,307 17,345 MEMO 13 Customer liability on acceptances 8,427 8,410 10,372 11,202 1 l,437r 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 32,796 30,717 42,679 38,815 42,719 44,870 38,358 41,604 47,552 n.a. 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are principally of amounts due from the head office or parent foreign bank, and from foreign for quarter ending with month indicated. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. Reporting banks include all types of depository institution as well as some brokers and 3. Assets held by reporting banks in the accounts of their domestic customers. dealers. 4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial 2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiar- paper. ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory 5. Includes demand and time deposits and negotiable and nonnegotiable certificates of agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists deposit denominated in U.S. dollars issued by banks abroad. 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States' Payable in U.S. Dollars Millions of dollars, end of period 1996 1997 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999933 11999944 11999955 Sept. Dec. Mar. June 1 Total 202,566 202,282 224,932 232,945 257,866 275,945 271,863 By borrower 2 Maturity of one year or less 172,662 170,411 178,857 188,995 211,682 223,686 211,121 3 Foreign public borrowers 17,828 15,435 14,995 15,983 15,411 19,876 17,974 4 All other foreigners 154,834 154,976 163,862 173,012 196,271 203,810 193,147 5 Maturity of more than one year 29,904 31,871 46,075 43,950 46,184 52,259 60,742 6 Foreign public borrowers 10,874 7,838 7,522 6,922 6,815 8,861 11,220 7 All other foreigners 19,030 24,033 38,553 37,028 39,369 43,398 49,522 By area Maturity of one year or less 8 Europe 57,413 56,381 55,622 58,527 55,513 74,886 69,233 9 Canada 7,727 6,690 6,751 8,811 8,339 10,404 10,320 10 Latin America and Caribbean 60,490 59,583 72,504 79,622 103,254 96,891 87,056 11 41,418 40,567 40,296 37,165 38,078 36,465 38,418 12 Africa 1,820 1,379 1,295 1,320 1,316 1,451 1,899 13 All other3 3,794 5,811 2,389 3,550 5,182 3,589 4,195 Maturity of more than one year 14 Europe 5,310 4,358 4,995 7,117 6,928 9,474 11,835 15 Canada 2,581 3,505 2,751 3,533 2,645 2,953 3,154 16 Latin America and Caribbean 14,025 15,717 27,681 21,382 24,917 26,771 30,999 17 5,606 5,323 7,941 9,808 9,392 10,773 12,510 18 Africa 1,935 1,583 1,421 1,349 1,361 1,204 1,264 19 All other3 447 1,385 1,286 761 941 1,084 980 1. Reporting banks include all types of depository institutions as well as some brokers and 2. Maturity is time remaining until maturity. dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1995 1996 1997 AArreeaa oorr ccoouunnttrryy 11999933 11999944 June Sept. Dec. Mar. June Sept. Dec. Mar. June 1 Total 409.5 499.5 531.9 535.3 551.9 574.6 614.9r 587.6r 646.7r 649.3r 680.5 2 G-10 countries and Switzerland 161.9 191.2 206.5 203.0 206.0 203.4 229.0r 221.6r 229.7' 233.T 251.6 3 Belgium and Luxembourg 7.4 7.2 9.7 11.0 13.6 11.0 11.4 11.3 11.7 14.1 9.3 4 France 12.0 19.1 19.9 18.0 19.4 17.9 18.0 17.4 16.6 19.9 17.9 5 Germany 12.6 24.7 30.0 27.5 27.3 31.5 33.5r 35.5r 31.4r 33.7r 35.9 6 Italy 7.7 11.8 10.7 12.6 11.5 13.2 14.9 15.2 16.0 14.4 20.2 7 Netherlands 4.7 3.6 4.3 4.5 3.7 3.0 4.7 5.9 3.9 4.5 6.4 8 Sweden 2.7 2.7 3.1 2.9 2.7 3.3 2.7 3.0 2.6 3.4 3.6 9 Switzerland 5.9 5.1 6.2 6.6 6.7 5.2 6.3 6.3 5.3 6.0 5.4 10 United Kingdom 84.4 85.8 87.1 80.4 82.4 84.7 101.6 90.5 104.6 99.2 109.7 11 Canada 6.9 10.0 11.3 12.9 10.3 10.8 12.2 14.8 14.0 16.3 15.8 12 Japan 17.6 21.1 24.4 26.6 28.5 22.7 23.6 21.7 23.7r 21.7 27.4 13 Other industrialized countries 26.5 45.7 43.3 50.5 50.2 61.3 55.5 62.1 65.7 66.4 71.8 14 Austria .7 1.1 .7 1.2 .9 1.3 1.2 1.0 1.1 1.9 1.5 15 Denmark 1.0 1.3 1.1 1.8 2.6 3.4 3.3 1.7 1.5 1.7 2.8 16 Finland .4 .9 .5 .7 .8 .7 .6 .6 .8 .7 1.4 17 Greece 3.2 4.5 5.0 5.1 5.7 5.6 5.6 6.1 6.7 6.3 6.1 18 Norway 1.7 2.0 1.8 2.3 3.2 2.1 2.3 3.0 8.0 5.3 4.7 19 Portugal .8 1.2 1.2 1.9 1.3 1.6 1.6 1.4 .9 1.0 1.1 20 Spain 9.9 13.6 13.0 13.3 11.6 17.5 13.6 16.1 13.2 14.4 15.4 21 Turkey 2.1 1.6 1.4 2.0 1.9 2.0 2.3 2.8 2.7 2.7 3.5 22 Other Western Europe 3.2 3.2 2.9 3.3 4.7 3.8 3.4 4.8 4.7 6.3 5.5 23 South Africa 1.1 1.0 1.4 1.3 1.2 1.7 2.0 1.7 2.0 1.9 1.9 24 Australia 2.3 15.4 14.3 17.4 16.4 21.7 19.6 22.8 24.0 24.4 27.8 25 OPEC2 17.6 24.1 20.3 22.7 22.1 21.2 20.1 19.2 19.7 21.8 22.2 26 Ecuador .5 .5 .7 .7 .7 .8 .9 .9 1.1 1.1 .9 27 Venezuela 5.1 3.7 3.5 3.0 2.7 2.9 2.3 2.3 2.4 1.9 2.1 28 Indonesia 3.3 3.8 4.1 4.4 4.8 4.7 4.9 5.4 5.2 4.9 5.6 29 Middle East countries 7.6 15.3 11.5 13.9 13.3 12.3 11.5 10.2r 10.7r 13.2 12.4 30 African countries 1.2 .9 .6 .6 .6 .6 .5 .4 .4 .7 1.2 31 Non-OPEC developing countries 83.2 96.0 103.7 104.1 112.6 118.6 126.5r 124.2r 130.3r 128.1 140.7 Latin America 32 Argentina 7.7 11.2 12.3 10.9 12.9 12.7 14.1 15.0 14.3 14.3 16.4 33 Brazil 12.0 8.4 10.0 13.6 13.7 18.3 21.7 17.8 20.7 22.0 27.6 34 Chile 4.7 6.1 7.1 6.4 6.8 6.4 6.7 6.6 7.0 6.8 7.6 35 Colombia 2.1 2.6 2.6 2.9 2.9 2.9 2.8 3.1 4.1 3.7 3.3 36 Mexico 17.9 18.4 17.6 16.3 17.3 16.1 15.4 16.1 16.2 17.2 16.6 37 .4 .5 .8 .7 .8 .9 1.2 1.3 1.6 1.6 1.4 38 Other 3.1 2.7 2.6 2.6 2.8 3.1 3.0 3.0 3.3 3.4 3.4 Asia China 39 Mainland 2.0 1.1 1.4 1.7 1.8 3.3 2.9 2.6 2.5 2.7 3.6 40 Taiwan 7.3 9.2 9.0 9.0 9.4 9.7 9.8 10.4r 10.3r 10.5 10.6 41 3.2 4.2 4.0 4.4 4.4 4.7 4.2 3.8 4.3 4.9 5.3 42 .5 .4 .7 .5 .5 .5 .6 .5 .5 .6 .8 43 Korea (South) 6.7 16.2 18.7 18.0 19.1 19.3 21.7 21.9 21.5 14.6 16.3 44 Malaysia 4.4 3.1 4.1 4.3 4.4 5.2 5.3 5.5 6.0r 6.5 6.2 45 Philippines 3.1 3.3 3.6 3.3 4.1 3.9 4.7 5.4 5.8 6.0 7.0 46 Thailand 3.1 2.1 3.8 3.9 4.9 5.2 5.4 4.8 5.7 6.8 7.3 47 Other Asia 3.1 4.7 3.5 3.7 4.5 4.3 4.8 4.1 4.1 4.3 4.7 Africa 48 Egypt .4 .3 .4 .4 .4 .5 .5 .6 .7 .9 1.1 49 Morocco .7 .6 .9 .9 .7 .7 .8 .7 .7 .6 .6 50 .0 .0 .0 .0 .0 .0 .0 .0 .1 .0 .0 51 Other Africa3 .8 .8 .6 .8 .9 .8 .8 1.0 .9 .9 .9 52 Eastern Europe 3.2 2.7 1.8 3.4 4.2 6.3 5.1 5.3 6.9 8.9 7.1 53 Russia4 1.6 .8 .4 .6 1.0 1.4 1.0 1.8 3.7 3.5 4.2 54 Other 1.6 1.9 1.3 2.8 3.2 4.9 4.1 3.5 3.2 5.4 2.9 55 Offshore banking centers 73.5 72.9 83.8 87.5 99.2 101.3 106.1r 105.2r 134.7r 131.3 129.5 56 Bahamas 10.9 10.2 8.4 12.6 11.0 13.9 17.3 14.2 20.3 20.9 16.0 57 Bermuda 8.9 8.4 8.4 6.1 6.3 5.3 4.1 4.0 4.5 6.7 7.7 58 Cayman Islands and other British West Indies 18.4 21.4 25.3 25.1 32.4 28.8 26.1 32.0 37.2 32.8 35.2 59 Netherlands Antilles 2.8 1.6 2.8 5.7 10.3 11.1 13.2 11.7 26.1 19.9 15.8 60 Panama5 2.4 1.3 1.2 1.3 1.4 1.6 1.7 1.7 2.0 2.0 2.6 61 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 62 Hong Kong, China 18.8 20.0 23.1 23.7 25.0 25.3 21.6' 26.0r 27.9r 30.8 35.3 63 Singapore 11.2 10.1 14.8 13.3 13.1 15.4 15.9 15.5r 16.7 17.9 16.6 64 Other® .1 .1 .0 .1 .1 .1 .1 .1 .1 .1 .3 65 Miscellaneous and unallocated7 43.6 66.9 72.6 64.2 57.6 62.6 72.7 50.0 59.6r 59.6 57.6 1. The banking offices covered by these data include US. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Soviet Union. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 5. Includes Canal Zone. branch of the same banking institution. 6. Foreign branch claims only. These data are on a gross claims basis and do not necessarily reflect the ultimate country 7. Includes New Zealand, Liberia, and international and regional organizations. risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • January 1998 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1996 1997 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999933 11999944 11999955 Mar. June Sept. Dec. Mar. Junep 1 Total 50,597 54,309 46,448 49,907 48,990 51,651 54,822 54,616 52,699 2 Payable in dollars 38,728 38,298 33,903 36,273 35,385 36,421 39,003 39,361 37,842 3 Payable in foreign currencies 11,869 16,011 12,545 13,634 13,605 15,230 15,819 15,255 14,857 By type 4 Financial liabilities 29,226 32,954 24,241 26,570 24,844 25,492 26,089 25,499 24,379 5 Payable in dollars 18,545 18,818 12,903 13,831 12,212 11,319 11,374 11,264 10,551 6 Payable in foreign currencies 10,681 14,136 11,338 12,739 12,632 14,173 14,715 14,235 13,828 7 Commercial liabilities 21,371 21,355 22,207 23,337 24,146 26,159 28,733 29,117 28,320 8 Trade payables 8,802 10.005 11,013 10,815 11,081 11,791 12,720 11,515 11,122 y Advance receipts and other liabilities 12,569 11,350 11,194 12,522 13,065 14,368 16,013 17,602 17,198 10 Payable in dollars 20,183 19,480 21,000 22,442 23,173 25,102 27,629 28,097 27,291 ii Payable in foreign currencies 1,188 1,875 1,207 895 973 1,057 1,104 1,020 1,029 By area or country Financial liabilities 12 Europe 18,810 21,703 15,622 16,950 16,434 16,133 16,242 15,970 16,099 13 Belgium and Luxembourg 175 495 369 483 498 547 632 769 238 14 France 2,539 1,727 999 1,679 1,011 1,220 1,091 1,205 1,280 15 Germany 975 1,961 1,974 2,161 1,850 2,276 1,834 1,589 1,765 16 Netherlands 534 552 466 479 444 519 556 507 466 17 Switzerland 634 688 895 1,260 1,156 830 699 694 591 18 United Kingdom 13,332 15,543 10,138 10,246 10,790 9,884 10,224 9,752 10,537 19 Canada 859 629 632 1,166 951 973 1,401 602 456 20 Latin America and Caribbean 3,359 2,034 1,783 1,876 969 1,169 1,668 1,876 1,279 21 Bahamas 1,148 101 59 78 31 50 236 293 124 22 Bermuda 0 80 147 126 28 25 50 27 55 23 Brazil 18 207 57 57 8 52 78 75 97 24 British West Indies 1,533 998 866 946 826 764 1,030 965 769 25 Mexico 17 0 12 16 11 13 17 16 15 26 Venezuela 5 5 2 2 1 1 1 1 1 27 Asia 5,956 8,403 5,988 6,390 6,351 6,969 6,400 6,347 5,961 28 Japan 4,887 7.314 5,436 5,980 6,051 6,602 5,846 5,771 5,412 29 Middle Eastern oil-exporting countries' 23 35 27 26 26 25 25 72 39 30 Africa 133 135 150 131 72 153 38 29 29 31 Oil-exporting countries' 123 123 122 122 61 121 0 0 0 32 All other3 109 50 66 57 67 95 340 675 555 Commercial liabilities 33 Europe 6,827 6,773 7,700 8,425 7,916 8,680 9,767 9,551 8,711 34 Belgium and Luxembourg 239 241 331 370 326 427 479 643 738 35 France 655 728 481 648 678 657 680 680 709 36 Germany 684 604 767 867 839 949 1,002 1,047 852 3/ Netherlands 688 722 500 659 617 668 766 553 290 38 Switzerland 375 327 413 428 516 405 624 481 430 39 United Kingdom 2,039 2,444 3,568 3,525 3,266 3,663 4,303 4,165 3,827 40 Canada 879 1,037 1,040 959 998 1,144 1,090 1,068 1,136 41 Latin America and Caribbean 1,658 1,857 1,740 2,110 2,301 2,386 2,574 2,563 2,501 42 Bahamas 21 19 1 28 35 33 63 43 33 43 Bermuda 350 345 205 570 509 355 297 479 397 44 Brazil 214 161 98 128 119 198 196 201 225 45 British West Indies 27 23 56 10 10 15 14 14 26 46 Mexico 481 574 416 468 475 446 665 633 594 47 Venezuela 123 276 221 243 283 341 328 318 304 48 Asia 10,980 10,741 10,421 10,474 11,389 12,227 13,422 13,968 13,926 49 Japan 4,314 4,555 3,315 3,725 3,943 4,149 4,614 4,502 4,440 50 Middle Eastern oil-exporting countries' 1,534 1,576 1,912 1,747 1,784 1,951 2,168 2,495 2,420 51 Africa 453 428 619 708 924 1,020 1,040 1,037 941 52 Oil-exporting countries" 167 256 254 254 462 490 532 479 423 53 Other3 574 519 687 661 618 702 840 930 1,105 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 2. Comprises Algeria, Gabon, Libya, and Nigeria. Emirates (Trucial States). 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1996 1997 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999933 11999944 11999955 Mar. June Sept. Dec. Mar. Junep 1 Total 49,159 57,888 52,509 55,406 60,195 59,092 63,642 64,343 65,542 2 Payable in dollars 45,161 53,805 48,711 51,007 55,350 55,014 58,630 60,177 60,817 3 Payable in foreign currencies 3,998 4,083 3,798 4,399 4,845 4,078 5,012 4,166 4,725 By type 4 Financial claims 27,771 33,897 27,398 30,772 35,251 34,200 35,268 36,788 38,006 5 Deposits 15,717 18,507 15,133- 17,595 19,507 19,877 21,404 19,628 22,385 6 Payable in dollars 15,182 18,026 14,654 17,044 19,069 19,182 20,631 18,548 21,474 7 Payable in foreign currencies 535 481 479 551 438 695 773 1,080 911 8 Other financial claims 12,054 15,390 12,265 13,177 15,744 14,323 13,864 17,160 15,621 9 Payable in dollars 10,862 14,306 10,976 11,290 13,347 12,234 12,069 15,383 13,243 10 Payable in foreign currencies 1,192 1,084 1,289 1,887 2,397 2,089 1,795 1,777 2,378 11 Commercial claims 21,388 23,991 25,111 24,634 24,944 24,892 28,374 27,555 27,536 12 Trade receivables 18,425 21,158 22,998 22,123 22,353 22,454 25,751 24,801 24,853 13 Advance payments and other claims 2,963 2,833 2,113 2,511 2,591 2,438 2,623 2,754 2,683 14 Payable in dollars 19,117 21,473 23,081 22,673 22,934 23,598 25,930 26,246 26,100 15 Payable in foreign currencies 2,271 2,518 2,030 1,961 2,010 1,294 2,444 1,309 1,436 By area or country Financial claims 16 Europe 7,299 7,936 7,609 8,929 10,498 9,777 9,282 9,317 10,189 17 Belgium and Luxembourg 134 86 193 159 151 126 185 119 203 18 France 826 800 803 1,015 679 733 694 761 681 19 Germany 526 540 436 320 296 272 276 324 281 20 Netherlands 502 429 517 486 488 520 493 567 519 21 Switzerland 530 523 498 470 461 432 474 570 447 22 United Kingdom 3,585 4,649 4,303 5,568 7,426 6,603 6,119 6,075 7,112 23 Canada 2,032 3,581 2,851 5,269 4,773 4,502 3,445 4,917 6,422 24 Latin America and Caribbean 16,224 19,536 14,500 13,827 17,644 17,241 19,577 19,742 18,725 ?5 Bahamas 1,336 2,424 1,965 1,538 2,168 1,746 1,452 1,894 2,064 76 Bermuda 125 27 81 77 84 113 140 157 188 27 Brazil 654 520 830 1,019 1,242 1,438 1,468 1,404 1,617 28 British West Indies 12,699 15,228 10,393 10,100 13,024 12,809 15,182 15,166 13,442 29 Mexico 872 723 554 461 392 413 457 517 498 30 Venezuela 161 35 32 40 23 20 31 22 21 31 Asia 1,657 1,871 1,579 1,890 1,571 1,834 2,221 2,068 1,938 32 Japan 892 953 871 1,171 852 1,001 1,035 831 770 33 Middle Eastern oil-exporting countries1 3 141 3 13 9 13 22 12 20 34 Africa 99 373 276 277 197 177 174 182 179 35 Oil-exporting countries2 1 0 5 5 5 13 14 14 15 36 All other3 460 600 583 580 568 669 569 562 553 Commercial claims 37 Europe 9,105 9,540 9,824 9,776 9,842 9,288 10,443 9,863 9,601 38 Belgium and Luxembourg 184 213 231 247 239 213 226 364 327 39 France 1,947 1,881 1,830 1,803 1,659 1,532 1,644 1,514 1,377 40 Germany 1,018 1,027 1,070 1,410 1,335 1,250 1,337 1,364 1,234 41 Netherlands 423 311 452 442 481 424 562 582 613 42 Switzerland 432 557 520 579 602 594 642 418 385 43 United Kingdom 2,377 2,556 2,656 2,607 2,658 2,516 2,946 2,626 2,836 44 Canada 1,781 1,988 1,951 2,045 2,074 2,083 2,165 2,381 2,464 45 Latin America and Caribbean 3,274 4,117 4,364 4,151 4,347 4,409 5,276 5,067 5,230 46 Bahamas 11 9 30 30 28 14 35 40 28 47 Bermuda 182 234 272 273 264 290 275 159 197 48 Brazil 460 612 898 809 838 968 1,303 1,216 1,134 49 British West Indies 71 83 79 106 103 119 190 127 97 50 Mexico 990 1,243 993 870 1,021 936 1,128 1,102 1,138 51 Venezuela 293 348 285 308 313 316 357 330 450 52 6,014 6,982 7,312 7,100 6,939 7,289 8,376 8,348 8,456 53 Japan 2,275 2,655 1,870 2,010 1,877 1,919 2,003 2,065 2,059 54 Middle Eastern oil-exporting countries1 704 708 974 1,024 903 945 971 1,078 1,014 55 Africa 493 454 654 667 688 731 746 718 618 56 Oil-exporting countries 72 67 87 107 83 142 166 100 81 57 Other3 721 910 1,006 895 1,054 1,092 1,368 1,178 1,167 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 2. Comprises Algeria, Gabon, Libya, and Nigeria. Emirates (Trucial States). 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • January 1998 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1997 1997 Transaction, and area or country 1995 1996 Jan.- Sept. Mar. Apr. May June July Aug. Sept.P U.S. corporate securities STOCKS 1 Foreign purchases 462,950 623,760 718,267 68,468 70,267 82,604 87,060 89,271 91,332 451,710 611,832 664,241 68,166 64,454 75,674 76,826 78,435 83,260 2 Foreign sales 11,240 11,928 54,026 302 5,813 6,930 10,234 10,836 8,072 3 Net purchases, or sales (—) 11,445 12,002 54,106 294 5,833 6,949 10,245 10,825 8,115 4 Foreign countries 4,912 5,046 41,401 2,120 6,686 2,440 5,571 6,121 4,389 5 Europe -1,099 -2,354 2,860 -308 679 238 -602 1,188 465 6 France -1,837 1,104 6,887 699 648 601 857 1,080 583 7 Germany 3,507 1,389 2,044 378 378 382 126 80 -108 8 Netherlands -2,283 2,710 4,488 310 810 184 1,036 920 546 9 Switzerland 8,066 4,119 16,249 488 3,274 218 2,565 1,180 2,145 10 United Kingdom -1,517 2,221 -25 374 141 27 35 -482 -291 11 Canada 5,814 5,563 11,152 -1,433 -1,987 2,912 2,380 4,363 2,399 1 1 2 3 M La i t d in d le A m Ea e s r t i 1 c a and Caribbean . . , - 2 3 ,5 3 0 7 3 -1,5 9 9 0 8 6 59 7 2 5 -89 1 4 0 7 2 1 0 3 3 - 1 2 ,5 4 4 6 1 2,2 1 4 6 6 4 -51 1 - ,5 6 4 2 6 14 Other Asia -2,725 -372 3,290 -253 1,294 1,763 1,121 888 1 1 6 5 Af J ri a c p a a n 2 - -5 8 5 1 4 49 1 2 9 9 2 6 1 - 8 7 4 271 4 -23 8 2 1 13 2 2 17 Other countries 18 Nonmonetary international and -205 regional organizations BONDS2 19 Foreign purchases 2 20 9 6 3 , , 9 5 5 3 1 3 4 2 2 9 3 4 , , 1 6 4 3 9 6 4 3 6 6 7 6 , , 0 0 0 1 5 0 4 3 3 8 , , 6 1 4 0 9 4 4 3 2 1 , ,7 6 4 6 1 3 4 3 4 6 , , 7 35 4 8 9 4 5 7 8 , , 6 9 7 0 3 4 4 6 6 3 , , 7 8 7 1 4 lr r 6 50 4 , , 2 9 8 5 2 3 20 Foreign sales 86,582 128,513 100,995 5,545 10,922 8,391 11,231 17,043r 14,671 21 Net purchases, or sales (—) 87,036 128,342 100,853 5,531 10,926 8,483 11,099 17,029r 14,603 22 Foreign countries 70,318 76,767 61,944 4,766 5,362 5,601 7,117 10,241r 7,643 23 Europe 1,143 5,124 3,123 511 602 -4 90 520 740 5,938 5,164 2,657 493 30 145 -250 1,842 -123 24 France 1,463 2,470 2,316 105 67 978 154 -140 702 25 Germany 494 1,063 -1,475 98 189 -54 4 -378 -418 2 2 2 2 3 3 3 3 3 6 7 8 9 2 3 4 0 1 C L A O M a a f t i J N h S t U r n d i a i e w n a d e c n p r d a t l i i a h e A t a t A n e z e m d e E s r i r l a e a a l K a s r n t i n i d 1 c n d s a g d a o n m d Caribbean .. . 57 5 2 2 6 1 , , , , , , 5 2 2 6 1 5 2 8 9 4 4 5 5 3 6 6 1 1 6 0 9 4 9 9 2 5 2 1 2 4 - 8 2 3 1 3 , , , , , , 5 5 1 6 9 4 6 3 9 0 9 0 7 9 3 0 5 1 7 0 0 9 7 5 1 1 1 0 4 7 0 3 1 , , , , , , 9 2 8 1 9 6 4 4 7 9 2 8 3 7 8 5 1 1 8 1 4 0 2 0 -2 2 2 1 , , , , 4 1 4 8 2 3 1 3 6 4 7 8 1 9 1 4 5 7 2 0 3 0 7 4 2 2 1 , , , , 2 1 5 5 2 1 1 9 8 1 5 2 9 1 1 8 5 2 0 9 0 1 6 3 - 1 1 , , 8 3 8 4 5 1 7 4 8 7 9 4 6 2 9 4 8 4 9 6 9 8 6 1 1 1 , - , , , 5 2 9 6 8 9 2 3 6 6 1 0 1 8 2 9 1 4 8 0 6 2 6 3 1 , , , , 6 9 5 8 3 1 1 - 9 8 8 7 1 0 0 9 9 5 4 9 3 2 4 r r r 3 6 2 2 , , , - , 9 3 9 4 5 1 4 2 0 8 2 1 6 0 4 4 0 0 3 6 0 5 3356 NOtohnemr oconuentatrriye si nternational and regional organizations -454 171 Foreign securities 37 Stocks, net purchases, or sales (—) -50,291 -57,122 -40,867 -3,827 -4,089 -3,684 -5,529 -7,576 -8,016 -147 38 Foreign purchases 345.540 456,826 509,029 47,780 49,725 57,647 64,388 69,677 62,071 60,518 39 Foreign sales 395,831 513,948 549,896 51,607 53,814 61,331 69,917 77,253 70,087 60,665 40 Bonds, net purchases, or sales (—) -48,405 -48,793 -36,740 -2,978 5,720 -1,328 -13,006 -1 l,245r -3,839 -7,728 41 Foreign purchases 889.541 1,118,678 1,120,653 131,454 117,761 127,985 123,406 139,887r 129,977 130,106 42 Foreign sales 937,946 1,167,471 1,157,393 134,432 112,041 129,313 136,412 151,132r 133,816 137,834 43 Net purchases, or sales (—), of stocks and bonds -98,696 -105,915 -77,607 -6,805 1,631 -5,012 -18,535 —18,821r -11,855 -7,875 44 Foreign countries -97,891 -105,044 -77,850 -6,871 1,617 -5,069 -18,551 — 18,858r -11,784 -7,869 45 Europe -48,125 -55,948 -20,563 -3,004 5,732 377 -2,001 -10.4231 -4,555 -5,399 46 Canada -7,812 -6,279 -4,683 -110 -239 -841 -1,356 - l,816r -1,448 -1,253 47 Latin America and Caribbean -7,634 -9,503 -19,824 -1,574 -1,240 -1,286 -8,473 -2,374r 621 183 48 Asia -34,056 -27,745 -29,140 -1,517 -3,650 -3,549 -5,865 -3,925r -4,773 -747 49 Japan -25,072 -5,888 -15,876 -674 -2,349 -2,878 -4,945 -2,350 104 -183 50 Africa -327 -1,529 -1,793 -74 -121 15 -588 —74r -705 -273 51 Other countries 63 -4,040 -1,847 -592 1,135 215 -268 -246 -924 -380 52 Nonmonetary international and regional organizations -805 -871 243 66 14 57 16 37 -71 -6 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, 2. Includes state and local government securities and securities of U.S. government Saudi Arabia, and United Arab Emirates (Trucial States). agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions/Interest and Exchange Rates A61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions' Millions of dollars; net purchases, or sales ( —) during period 1997 1997 AArreeaa oorr ccoouunnttrryy 11999955 11999966 Jan.- Mar. Apr. May June July Aug. Sept.p Sept. 1 Total estimated 134,115 244,010 174,830 22,357 25,307 7,752 24,795 4,622r 22,831 15,889 2 Foreign countries 133,676 245,852 172,883 22,667 24,847 7,909 23,845 4,25 r 23,026 15,503 3 Europe 49,976 118,345 115,641 13,473 10,625 9,688 10,393 11,72 lr 19,323 19,898 4 Belgium and Luxembourg 591 1,486 2,532 83 944 309 -37 298r 92 138 5 Germany 6,136 17,647 10,060 -3,124 -1,480 721 1,417 6,433r 4,050 2,714 6 Netherlands 1,891 -582 2,663 343 1,412 194 -408 368 882 -3 7 Sweden 358 2,343 -436 -581 -86 90 141 2 583 16 8 Switzerland -472 327 1,199 -1,431 1,029 -223 329 141 12 109 9 United Kingdom 34,754 65,381 77,683 14,242 6,482 6,951 4,922 2,723r 13,130 13,874 10 Other Europe and former U.S.S.R 6,718 31,743 21,940 3.941 2,324 1,646 4,029 1,756 574 3,050 11 Canada 252 2,389 1,055 -317 17 348 1,278 717r -839 -414 1? Latin America and Caribbean 48,609 24,664 -5,862 -3.135 1,101 -9,494 1,266 -3,555r -384 -769 13 Venezuela -2 -69 187 10 -8 93 635 57 25 -691 14 Other Latin America and Caribbean 25,152 12.311 6.428 3,964 -2,937 2,005 2,787 527r -4,703 -2,880 15 Netherlands Antilles 23,459 12,422 -12,477 -7,109 4,046 -11,592 -2,156 -4,139 4,294 2.802 16 32,467 98,001 61,134 12,227 13,200 7,536 8,406 -3,266 4,867 -4,646 17 Japan 16,979 41,390 28,942 1,747 6,604 7,657 5,972 2,612 -3,458 -2,782 18 Africa 1,464 1,085 1,287 -22 -16 27 340 193 218 461 19 Other 908 1,368 -372 441 -80 -196 2,162 -1,559 -159 973 20 Nonmonetary international and regional organizations 439 -1,842 1,947 -310 460 -157 950 371 -195 386 71 International 9 -1,390 1,293 -384 467 -172 1,068 117 -190 341 22 Latin American regional 261 -779 250 80 24 -2 -145 70 -117 -21 MEMO 73 Foreign countries 133,676 245,852 172,883 22,667 24,847 7,909 23,845 4,25 r 23,026 15,503 74 Official institutions 39,631 86,161 54,436 7,387 7,102 3,377 10,055 -2,499 8,506 2,705 25 Other foreign 94,045 159,691 118,447 15,280 17,745 4,532 13,790 6,750r 14,520 12,798 Oil-exporting countries 76 Middle East2 3,075 10,227 9,392 2,533 2,879 541 -1,735 -2,251 3,455 59 27 2 1 -13 0 1 -6 0 0 -7 0 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS' Percent per year, averages of daily figures Rate on Nov. 28, 1997 Rate on Nov. 28, 1997 Country Country Month Month effective effective Austria. .. 2.5 Apr. 1996 Germany . . . 2.5 Apr. 1996 Belgium. 2.75 Oct. 1997 Italy 6.25 June 1997 Canada. . 4.0 Nov. 1997 Japan .5 Sept. 1995 Denmark 3.5 Oct. 1997 Netherlands . 2.5 Apr. 1996 France2 . 3.3 Oct. 1997 Switzerland . 1.0 Sept. 1996 1. Rates shown are mainly those at which the central bank either discounts or makes 2. Since February 1981, the rate has been that at which the Bank of France discounts advances against eligible commercial paper or government securities for commercial banks or Treasury bills for seven to ten days. brokers. For countries with more than one rate applicable to such discounts or advances, the rate shown is the one at which it is understood that the central bank transacts the largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES' Percent per year, averages of daily figures 1997 TTyyppee oorr ccoouunnttrryy 11999944 11999955 11999966 May June July Aug. Sept. Oct. Nov. 1 Eurodollars 4.63 5.93 5.38 5.69 5.66 5.61 5.58 5.59 5.63 5.71 2 United Kingdom 5.45 6.63 5.99 6.41 6.63 6.93 7.12 7.19 7.24 7.52 3 Canada 5.57 7.14 4.49 3.35 3.30 3.57 3.67 ' 3.66 3.83 4.02 4 Germany 5.25 4.43 3.21 3.09 3.05 3.06 3.19 3.24 3.51 3.68 5 Switzerland 4.03 2.94 1.92 1.51 1.25 1.43 1.39 1.36 1.73 1.91 6 Netherlands 5.09 4.30 2.91 3.15 3.14 3.17 3.33 3.35 3.50 3.65 7 France 5.72 6.43 3.81 3.37 3.30 3.27 3.31 3.29 3.47 3.57 8 Italy 8.45 10.43 8.79 6.82 6.85 6.87 6.85 6.65 6.63 6.49 9 Belgium 5.65 4.73 3.19 3.22 3.23 3.39 3.55 3.55 3.76 3.72 10 Japan 2.24 1.20 .58 .58 .60 .67 .58 .55 .52 .53 1. Rates are for three-month interbank loans, with the following exceptions: Canada, finance company paper; Belgium, three-month Treasury bills; and Japan, CD rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • January 1998 3.28 FOREIGN EXCHANGE RATES1 Currency units per dollar except as noted 1997 CCoouunnttrryy//ccuurrrreennccyy uunniitt 11999944 11999955 11999966 June July Aug. Sept. Oct. Nov. 1 Australia/dollar" 73.161 74.073 78.283 75.422 74.199 74.036 72.310 71.971 69.526 2 Austria/schilling 11.409 10.076 10.589 12.158 12.620 12.946 12,568 12.360 12.182 3 Belgium/franc 33.426 29.472 30.970 35.651 37.040 38.011 36.876 36.266 35.737 4 Canada/dollar 1.3664 1.3725 1.3638 1.3843 1.3775 1.3905 1.3872 1.3869 1.4128 5 China. P.R./yuan 8.6397 8.3700 8.3389 8.3224 8.3162 8.3187 8.3171 8.3135 8.3109 6 Denmark/krone 6.3561 5.5999 5.8003 6.5804 6.8317 7.0109 6.8001 6.6922 6.5937 7 Finland/markka 5.2340 4.3763 4.5948 5.1794 5.3164 5.5046 5.3455 5.2674 5.2217 8 France/franc 5.5459 4.9864 5.1158 5.8293 6.0511 6.2010 6.0031 5.8954 5.8001 9 Germany/deutsche mark 1.6216 1.4321 1.5049 1.7277 1.7939 1.8400 1.7862 1.7575 1.7323 10 Greece/drachma 242.50 231.68 240.82 273.83 281.43 288.41 281.69 276.84 271.87 11 Hong Kong/dollar 7.7290 7.7357 7.7345 7.7445 7.7454 7.7436 7.7440 7.7373 7.7314 12 India/rupee 31.394 32.418 35.506 35.820 35.747 36.009 36.476 36.302 37.289 13 Ireland/pound" 149.69 160.35 159.95 150.60 149.45 145.34 148.06 146.92 150.30 14 Italy/lira 1,611.49 1,629.45 1,542.76 1,694.54 1,745.91 1,797.12 1,743.22 1,721.09 1,697.08 15 Japan/yen 102.18 93.96 108.78 114.29 115.38 117.93 120.89 121.06 125.38 16 Malaysia/ringgit 2.6237 2.5073 2.5154 2.5167 2.5815 2.7589 3.0254 3.2972 3.3791 17 Netherlands/guilder 1.8190 1.6044 1.6863 1.9438 2.0201 2.0709 2.0116 1.9800 1.9524 18 New Zealand/dollar 59.358 65.625 68.765 68.713 66.097 64.211 63.604 63.556 62.420 19 Norwav/krone 7.0553 6.3355 6.4594 7.2240 7.4545 7.6224 7.3008 7.0807 7.0588 20 Portugal/escudo 165.93 149.88 154.28 174.56 181.20 186.50 181.49 179.07 176.84 21 Singapore/dollar 1.5275 1.4171 1.4100 1.4271 1.4521 1.4977 1.5164 1.5597 1.5820 22 South Africa/rand 3.5526 3.6284 4.3011 4.5005 4.5611 4.6856 4.6890 4.7145 4.8394 23 South Korea/won 806.93 772.69 805.00 891.40 893.09 898.71 912.50 929.42 1,035.22 24 Spain/peseta 133.88 124.64 126.68 145.98 151.33 155.51 150.75 148.32 146.30 25 Sri Lanka/rupee 49.170 51.047 55.289 58.531 58.732 59.189 59.713 59.723 60.132 26 Sweden/krona 7.7161 7.1406 6.7082 7.7506 7.8188 7.9886 7.6887 7.5765 7.5589 27 Switzerland/franc 1.3667 1.1812 1.2361 1.4424 1.4824 1.5128 1.4702 1.4516 1.4069 28 Taiwan/dollar 26.465 26.495 27.468 27.903 28.032 28.824 28.731 29.696 31.794 29 Thailand/baht 25.161 24.921 25.359 24.534 30.274 32.399 35.256 37.543 39.092 30 United Kingdom/pound" 153.19 157.85 156.07 164.49 166.94 160.35 160.13 163.30 168.89 MEMO 31 United States/dollar1 91.32 84.25 87.34 95.42 97.48 99.96 98.29 97.07 96.37 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 3. Index of weighted-average exchange value of U.S. dollar against the currencies of ten table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, industrial countries. The weight for each of the ten countries is the 1972-76 average world see inside front cover. trade of that country divided by the average world trade of all ten countries combined. Series 2. Value in U.S. cents. revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), p. 700). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 December 1997 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks September 30, 1996 February 1997 A64 December 31, 1996 May 1997 A64 March 31, 1997 September 1997 A64 June 30, 1997 November 1997 A64 Terms of lending at commercial banks November 1996 February 1997 A68 February 1997 May 1997 A68 May 1997 October 1997 A64 August 1997 November 1997 A68 Assets and liabilities of U.S. branches and agencies of foreign banks September 30, 1996 February 1997 A72 December 31,1996 May 1997 A72 March 31, 1997 August 1997 A64 June 30, 1997 November 1997 A72 Pro forma balance sheet and income statements for priced service operations September 30, 1996 January 1997 A64 March 31, 1997 July 1997 A64 June 30, 1997 October 1997 A68 September 30, 1997 January 1998 A64 Residential lending reported under the Home Mortgage Disclosure Act 1994 September 1995 A68 1995 September 1996 A68 1996 September 1997 A68 Disposition of applications for private mortgage insurance 1996 September 1997 A76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Special Tables • January 1998 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES A. Pro forma balance sheet Millions of dollars Item Sept. 30, 1997 Sept. 30, 1996 Short-term assets (Note 1) Imputed reserve requirement on clearing balances 646.3 590.0 Investment in marketable securities 5,816.7 5,310.0 Receivables 66.2 63.1 Materials and supplies 2.9 11.4 Prepaid expenses 28.7 29.1 Items in process of collection 3,097.4 1,207.9 Total short-term assets 9,658.2 7,211.6 Long-term assets (Note 2) Premises 389.1 386.0 Furniture and equipment 132.5 149.9 Leases and leasehold improvements 33.7 22.1 Prepaid pension costs 334.5 276.0 Total long-term assets 889.8 834.0 Total assets 10,548.0 8,045.6 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 6,899.9 6,212.3 Deferred-availability items 2,660.6 895.6 Short-term debt 97.8 103.7 Total short-term liabilities 9,658.2 7,211.6 Long-term liabilities Obligations under capital leases .7 2.3 Long-term debt 187.8 184.4 Postretirement/postemployment benefits obligation 203.8 187.7 Total long-term liabilities 392.3 374.4 Total liabilities 10,050.5 7,586.0 Equity 497.5 459.6 Total liabilities and equity (Note 3) 10,548.0 8,045.6 NOTE. Components may not sum to totals because of rounding. The priced services (2) LONG-TERM ASSETS financial statements consist of these tables and the accompanying notes. Consists of long-term assets used solely in priced services, the priced-services portion of (1) SHORT-TERM ASSETS long-term assets shared with nonpriced services, and an estimate of the assets of the Board of Governors used in the development of priced services. Effective Jan. 1, 1987, the Reserve The imputed reserve requirement on clearing balances held at Reserve Banks by depository Banks implemented the Financial Accounting Standards Board's Statement of Financial institutions reflects a treatment comparable to that of compensating balances held at corre- Accounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly, spondent banks by respondent institutions. The reserve requirement imposed on respondent the Federal Reserve Banks recognized credits to expenses of $15.8 million in the third quarter balances must be held as vault cash or as nonearning balances maintained at a Reserve Bank; of 1997, $15.6 million in the second quarter of 1997, $15.6 million in the first quarter of 1997, thus, a portion of priced services clearing balances held with the Federal Reserve is shown as $9.6 million in the third quarter of 1996, $12 million in the second quarter of 1996, and $12.2 required reserves on the asset side of the balance sheet. The remainder of clearing balances is million in the first quarter of 1996, and corresponding increases in this asset account. assumed to be invested in three-month Treasury bills, shown as investment in marketable securities. Receivables are (1) amounts due the Reserve Banks for priced services and (2) the share of (3) LIABILITIES AND EQUITY suspense-account and difference-account balances related to priced services. Materials and supplies are the inventory value of short-term assets. Under the matched-book capital structure for assets that are not "self-financing," short-term Prepaid expenses include salary advances and travel advances for priced-service personnel. assets are financed with short-term debt. Long-term assets are financed with long-term debt Items in process of collection is gross Federal Reserve cash items in process of collection and equity in a proportion equal to the ratio of long-term debt to equity for the fifty largest (CIPC) stated on a basis comparable to that of a commercial bank. It reflects adjustments for bank holding companies, which are used in the model for the private-sector adjustment factor intra-System items that would otherwise be double-counted on a consolidated Federal (PSAF). The PSAF consists of the taxes that would have been paid and the return on capital Reserve balance sheet; adjustments for items associated with non-priced items, such as those that would have been provided had priced services been furnished by a private-sector firm. collected for government agencies; and adjustments for items associated with providing fixed Other short-term liabilities include clearing balances maintained at Reserve Banks and availability or credit before items are received and processed. Among the costs to be deposit balances arising from float. Other long-term liabilities consist of obligations on capital recovered under the Monetary Control Act is the cost of float, or net CIPC during the period leases. (the difference between gross CIPC and deferred-availability items which is the portion of gross CIPC that involves a financing cost), valued at the federal funds rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A65 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES B. Pro forma income statement Millions of dollars Item Quarter ending Sept. 30, 1997 Quarter ending Sept. 30, 1996 Revenue from services provided to depository institutions (Note 4) 197.8 196.8 Operating expenses (Note 5) 166.6 167.5 Income from operations 31.1 29.4 Inputed costs (Note 6) Interest on float 2.8 2.7 Interest on debt 4.4 4.3 Sales taxes 2.1 3.1 FDIC insurance 2.9 12.3 0.0 10.1 Income from operations after imputed costs 18.9 19.4 Other income and expenses (Note 7) Investment income on clearing balances 93.5 82.2 Earnings credits 85.9 7.6 72.9 9.2 Income before income taxes 26.5 28.6 Inputed income taxes (Note 8) 8.5 9.2 Net income 18.0 20.0 MEMO Targeted return on equity (Note 9) 13.5 10.1 Six months ending Sept. 30, 1997 Six months ending Sept. 30, 1996 Revenue from services provided to depository institutions (Note 4) 586.6 586.9 Operating expenses (Note 5) 494.8 490.7 Income from operations 91.9 96.1 Imputed costs (Note 6) Interest on float 8.9 14.5 Interest on debt 13.1 13.0 Sales taxes 7.1 8.5 FDIC insurance 4.0 33.1 0.0 35.8 Income from operations after imputed costs 58.8 60.2 Other income and expenses (Note 7) Investment income on clearing balances 273.6 229.4 Earnings credits (251.6) 22.0 206.9 22.4 Income before income taxes 80.8 82.6 Imputed income taxes (Note 8) 25.9 24.7 Net income 54.9 57.9 MEMO Targeted return on equity (Note 9) 40.5 31.1 NOTE. Components may not sum to totals because of rounding. The priced services Unrecovered float includes float generated by services to government agencies and by other financial statements consist of these tables and the accompanying notes. central bank services. Float recovered through income on clearing balances is the result of the increase in investable clearing balances; the increase is produced by a deduction for float for (4) REVENUE cash items in process of collection, which reduces imputed reserve requirements. The income on clearing balances reduces the float to be recovered through other means. As-of adjustments Revenue represents charges to depository institutions for priced services and is realized from and direct charges are mid-week closing float and interterritory check float, which may be each institution through one of two methods: direct charges to an institution's account or recovered from depositing institutions through adjustments to the institution's reserve or charges against its accumulated earnings credits. clearing balance or by valuing the float at the federal funds rate and billing the institution directly. Float recovered through per-item fees is valued at the federal funds rate and has been (5) OPERATING EXPENSES added to the cost base subject to recovery in the third quarters of 1997 and 1996. Operating expenses consist of the direct, indirect, and other general administrative expenses (7) OTHER INCOME AND EXPENSES of the Reserve Banks for priced services plus the expenses for staff members of the Board of Governors working directly on the development of priced services. The expenses for Board Consists of investment income on clearing balances and the cost of earnings credits. staff members were $.7 million per quarter in the first three quarters of 1997 and 1996. The Investment income on clearing balances represents the average coupon-equivalent yield on credit to expenses under SFAS 87 (see note 2) is reflected in operating expenses. three-month Treasury bills applied to the total clearing balance maintained, adjusted for the effect of reserve requirements on clearing balances. Expenses for earnings credits granted to depository institutions on their clearing balances are derived by applying the average federal (6) IMPUTED COSTS funds rate to the required portion of the clearing balances, adjusted for the net effect of Imputed costs consist of interest on float, interest on debt, sales taxes, and the FDIC reserve requirements on clearing balances. assessment. Interest on float is derived from the value of float to be recovered, either (8) INCOME TAXES explicitly or through per-item fees, during the period. Float costs include costs for checks, book-entry securities, noncash collection, ACH, and funds transfers. Imputed income taxes are calculated at the effective tax rate derived from the PSAF model Interest is imputed on the debt assumed necessary to finance priced-service assets. The (see note 3). sales taxes and FDIC assessment that the Federal Reserve would have paid had it been a (9) RETURN ON EQUITY private-sector firm are among the components of the PSAF (see note 3). The following list shows the daily average recovery of float by the Reserve Banks for the Represents the after-tax rate of return on equity that the Federal Reserve would have earned third quarter of 1997 and 1996 in millions of dollars: had it been a private business firm, as derived from the PSAF model (see note 3). This amount is adjusted to reflect the recovery of automation consolidation costs of $2.0 million for the 1997 1996 third quarter of 1997, $1.9 million for the second quarter of 1997, $2.3 million for the first quarter of 1997, $.9 million for the third quarter of 1996, $1.6 million for the second quarter Total float 480.8 476.2 of 1996, and $1.2 million for the first quarter of 1996. The Reserve Banks plan to recover Unrecovered float 39.1 1.0 these amounts, along with a finance charge, by the end of the year 2001. Float subject to recovery 441.7 475.2 Sources of float recovery Income on clearing balances 44.4 47.5 As-of adjustments 242.2 277.1 Direct charges 99.6 69.8 Per-item fees 55.5 80.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Index to Statistical Tables References are to pages A3-A65 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Federal credit agencies, 30 Assets and liabilities (See also Foreigners) Federal finance Commercial banks, 15-21 Debt subject to statutory limitation, and types and ownership Domestic finance companies, 32, 33 of gross debt, 27 Federal Reserve Banks, 10 Receipts and outlays, 25, 26 Foreign-related institutions, 20 Treasury financing of surplus, or deficit, 25 Automobiles Treasury operating balance, 25 Consumer credit, 36 Federal Financing Bank, 30 Production, 44, 45 Federal funds, 23, 25 Federal Home Loan Banks, 30 BANKERS acceptances, 5, 10, 22, 23 Federal Home Loan Mortgage Corporation, 30, 34, 35 Bankers balances, 15-21. (See also Foreigners) Federal Housing Administration, 30, 34, 35 Bonds (See also U.S. government securities) Federal Land Banks, 35 New issues, 31 Federal National Mortgage Association, 30, 34, 35 Rates, 23 Federal Reserve Banks Business activity, nonfinancial, 42 Condition statement, 10 Business loans (See Commercial and industrial loans) Discount rates (See Interest rates) U.S. government securities held, 5, 10, 11, 27 Federal Reserve credit, 5,6, 10, 12 CAPACITY utilization, 43 Federal Reserve notes, 10 Capital accounts Federal Reserve System Commercial banks, 15-21 Federal Reserve Banks, 10 Balance sheet for priced services, 64, 65 Central banks, discount rates, 61 Condition statement for priced services, 64, 65 Certificates of deposit, 23 Federally sponsored credit agencies, 30 Commercial and industrial loans Finance companies Commercial banks, 15-21 Assets and liabilities, 32 Weekly reporting banks, 17, 18 Business credit, 33 Commercial banks Loans, 36 Paper, 22, 23 Assets and liabilities, 15-21 Float, 5 Commercial and industrial loans, 15-21 Consumer loans held, by type and terms, 36 Flow of funds, 37—41 Real estate mortgages held, by holder and property, 35 Foreign currency operations, 10 Time and savings deposits, 4 Foreign deposits in U.S. banks, 5 Commercial paper, 22, 23, 32 Foreign exchange rates, 62 Condition statements (See Assets and liabilities) Foreign-related institutions, 20 Construction, 42, 46 Foreign trade, 51 Consumer credit, 36 Foreigners Consumer prices, 42 Claims on, 52, 55, 56, 57, 59 Consumption expenditures, 48, 49 Liabilities to, 51, 52, 53, 58, 60, 61 Corporations Profits and their distribution, 32 GOLD Security issues, 31, 61 Certificate account, 10 Cost of living (See Consumer prices) Stock, 5, 51 Credit unions, 36 Government National Mortgage Association, 30, 34, 35 Currency in circulation, 5, 13 Gross domestic product, 48, 49 Customer credit, stock market, 24 DEBT (See specific types of debt or securities) HOUSING, new and existing units, 46 Demand deposits, 15-21 Depository institutions INCOME and expenses, Federal Reserve System, 64, 65 Reserve requirements, 8 Income, personal and national, 42, 48, 49 Reserves and related items, 4, 5, 6, 12 Industrial production, 42, 44 Deposits (See also specific types) Insurance companies, 27, 35 Commercial banks, 4, 15-21 Interest rates Federal Reserve Banks, 5, 10 Bonds, 23 Discount rates at Reserve Banks and at foreign central banks and Consumer credit, 36 foreign countries (See Interest rates) Federal Reserve Banks, 7 Discounts and advances by Reserve Banks (See Loans) Foreign central banks and foreign countries, 61 Dividends, corporate, 32 Money and capital markets, 23 Mortgages, 34 EMPLOYMENT, 42 Prime rate, 22 Eurodollars, 23, 61 International capital transactions of United States, 50-61 International organizations, 52, 53, 55, 58, 59 FARM mortgage loans, 35 Inventories, 48 Federal agency obligations, 5, 9, 10, 11, 28, 29 Investment companies, issues and assets, 32 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 Investments (See also specific types) SAVING Commercial banks, 4, 15-21 Flow of funds, 37-41 Federal Reserve Banks, 10, 11 National income accounts, 48 Financial institutions, 35 Savings institutions, 35, 36, 37^11 Savings deposits (See Time and savings deposits) LABOR force, 42 Securities (See also specific types) Life insurance companies (See Insurance companies) Federal and federally sponsored credit agencies, 30 Loans (See also specific types) Foreign transactions, 60 Commercial banks, 15-21 New issues, 31 Federal Reserve Banks, 5, 6, 7, 10, 11 Prices, 24 Federal Reserve System, 64, 65 Special drawing rights, 5, 10, 50, 51 Financial institutions, 35 State and local governments Insured or guaranteed by United States, 34, 35 Holdings of U.S. government securities, 27 New security issues, 31 MANUFACTURING Rates on securities, 23 Capacity utilization, 43 Stock market, selected statistics, 24 Production, 43, 45 Stocks (See also Securities) Margin requirements, 24 New issues, 31 Member banks (See also Depository institutions) Prices, 24 Reserve requirements, 8 Student Loan Marketing Association, 30 Mining production, 45 Mobile homes shipped, 46 TAX receipts, federal, 26 Monetary and credit aggregates, 4, 12 Thrift institutions, 4. (See also Credit unions and Savings Money and capital market rates, 23 institutions) Money stock measures and components, 4, 13 Time and savings deposits, 4, 13, 15-21 Mortgages (See Real estate loans) Trade, foreign, 51 Mutual funds, 13, 32 Treasury cash, Treasury currency, 5 Mutual savings banks (See Thrift institutions) Treasury deposits, 5, 10, 25 Treasury operating balance, 25 NATIONAL defense outlays, 26 National income, 48 UNEMPLOYMENT, 42 U.S. government balances OPEN market transactions, 9 Commercial bank holdings, 15-21 Treasury deposits at Reserve Banks, 5, 10, 25 PERSONAL income, 49 U.S. government securities Prices Bank holdings, 15-21, 27 Consumer and producer, 42, 47 Dealer transactions, positions, and financing, 29 Stock market, 24 Federal Reserve Bank holdings, 5, 10, 11, 27 Prime rate, 22 Foreign and international holdings and Producer prices, 42, 47 transactions, 10, 27, 61 Production, 42, 44 Open market transactions, 9 Profits, corporate, 32 Outstanding, by type and holder, 27, 28 Rates, 23 REAL estate loans U.S. international transactions, 50-62 Banks, 15-21, 35 Utilities, production, 45 Terms, yields, and activity, 34 Type of holder and property mortgaged, 35 VETERANS Administration, 34, 35 Reserve requirements, 8 Reserves WEEKLY reporting banks, 17, 18 Commercial banks, 15-21 Wholesale (producer) prices, 42, 47 Depository institutions, 4, 5, 6, 12 Federal Reserve Banks, 10 YIELDS (See Interest rates) U.S. reserve assets, 51 Residential mortgage loans, 34, 35 Retail credit and retail sales, 36, 42 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman EDWARD W. KELLEY, JR. ALICE M. RIVLIN, Vice Chair SUSAN M. PHILLIPS OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE JOSEPH R. COYNE, Assistant to the Board EDWIN M. TRUMAN, Staff Director DONALD J. WINN, Assistant to the Board LARRY J. PROMISEL, Senior Adviser THEODORE E. ALLISON, Assistant to the Board for Federal CHARLES J. SIEGMAN, Senior Adviser Reserve System Affairs LEWIS S. ALEXANDER, Associate Director LYNN S. FOX, Deputy Congressional Liaison DALE W. HENDERSON, Associate Director WINTHROP P. HAMBLEY, Special Assistant to the Board PETER HOOPER III, Associate Director BOB STAHLY MOORE, Special Assistant to the Board KAREN H. JOHNSON, Associate Director DIANE E. WERNEKE, Special Assistant to the Board DAVID H. HOWARD, Senior Adviser DONALD B. ADAMS, Assistant Director THOMAS A. CONNORS, Assistant Director LEGAL DIVISION J. VIRGIL MATTINGLY, JR., General Counsel DIVISION OF RESEARCH AND STATISTICS SCOTT G. ALVAREZ, Associate General Counsel MICHAEL J. PRELL, Director RICHARD M. ASHTON, Associate General Counsel EDWARD C. ETTIN, Deputy Director OLIVER IRELAND, Associate General Counsel DAVID J. STOCKTON, Deputy Director KATHLEEN M. O'DAY, Associate General Counsel MARTHA BETHEA, Associate Director ROBERT DEV. FRIERSON, Assistant General Counsel WILLIAM R. JONES, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel MYRON L. KWAST, Associate Director PATRICK M. PARKINSON, Associate Director THOMAS D. SIMPSON, Associate Director OFFICE OF THE SECRETARY LAWRENCE SLIFMAN, Associate Director WILLIAM W. WILES, Secretary MARTHA S. SCANLON, Deputy Associate Director JENNIFER J. JOHNSON, Deputy Secretary PETER A. TINSLEY, Deputy Associate Director BARBARA R. LOWREY, Associate Secretary and Ombudsman DAVID S. JONES, Assistant Director STEPHEN A. RHOADES, Assistant Director CHARLES S. STRUCKMEYER, Assistant Director DIVISION OF BANKING ALICE PATRICIA WHITE, Assistant Director SUPERVISION AND REGULATION JOYCE K. ZICKLER, Assistant Director RICHARD SPILLENKOTHEN, Director GLENN B. CANNER, Senior Adviser STEPHEN C. SCHEMERING, Deputy Director JOHN J. MINGO, Senior Adviser HERBERT A. BIERN, Associate Director ROGER T. COLE, Associate Director DIVISION OF MONETARY AFFAIRS WILLIAM A. RYBACK, Associate Director DONALD L. KOHN, Director GERALD A. EDWARDS, JR., Deputy Associate Director DAVID E. LINDSEY, Deputy Director STEPHEN M. HOFFMAN, JR., Deputy Associate Director BRIAN F. MADIGAN, Associate Director JAMES V. HOUPT, Deputy Associate Director RICHARD D. PORTER, Deputy Associate Director JACK P. JENNINGS, Deputy Associate Director VINCENT R. REINHART, Assistant Director MICHAEL G. MARTINSON, Deputy Associate Director NORMAND R.V. BERNARD, Special Assistant to the Board SIDNEY M. SUSSAN, Deputy Associate Director MOLLY S. WASSOM, Deputy Associate Director DIVISION OF CONSUMER HOWARD A. AMER, Assistant Director NORAH M. BARGER, Assistant Director AND COMMUNITY AFFAIRS BETSY CROSS, Assistant Director GRIFFITH L. GARWOOD, Director RICHARD A. SMALL, Assistant Director GLENN E. LONEY, Associate Director WILLIAM SCHNEIDER, Project Director, DOLORES S. SMITH, Associate Director National Information Center MAUREEN P. ENGLISH, Assistant Director IRENE SHAWN MCNULTY, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A69 LAURENCE H. MEYER EDWARD M. GRAMLICH ROGER W. FERGUSON, JR. OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS S. DAVID FROST, Staff Director CLYDE H. FARNSWORTH, JR., Director GEORGE E. LIVINGSTON, Senior Adviser to the Board DAVID L. ROBINSON, Deputy Director (Finance and Control) DAVID L. SHANNON, Senior Adviser to the Board LOUISE L. ROSEMAN, Associate Director SHEILA CLARK, EEO Programs Director PAUL W. BETTGE, Assistant Director FRED HOROWITZ, Adviser JACK DENNIS, JR., Assistant Director JOHN R. WEIS, Adviser EARL G. HAMILTON, Assistant Director JOSEPH H. HAYES, JR., Assistant Director MANAGEMENT DIVISION JEFFREY C. MARQUARDT, Assistant Director S. DAVID FROST, Director FLORENCE M. YOUNG, Assistant Director STEPHEN J. CLARK, Assistant Director, Finance OFFICE OF THE INSPECTOR GENERAL DARRELL R. PAULEY, Assistant Director, Human Resources BRENT L. BOWEN, Inspector General DIVISION OF SUPPORT SERVICES DONALD L. ROBINSON, Assistant Inspector General BARRY R. SNYDER, Assistant Inspector General 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

A70 Federal Reserve Bulletin • January 1998 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman ROGER W. FERGUSON, JR. JERRY L. JORDAN SUSAN M. PHILLIPS EDWARD M. GRAMLICH EDWARD W. KELLEY, JR. W. LEGRANDE RIVES THOMAS M. HOENIG LAURENCE H. MEYER ALICE M. RIVLIN CATHY E. MINEHAN ALTERNATE MEMBERS EDWARD G. BOEHNE MICHAEL H. MOSKOW GARY H. STERN ROBERT D. MCTEER, JR. ERNEST T. PATRIKIS 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 STEPHEN G. CECCHETTI, 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 WILLIAM M. CROZIER, JR., First District NORMAN R. BOBINS, Seventh District DOUGLAS A. WARNER, III, Second District THOMAS H. JACOBSEN, Eighth District WALTER E. DALLER, JR., Third District RICHARD A. ZONA, Ninth District ROBERT W. GILLESPIE, Fourth District C. Q. CHANDLER, Tenth District KENNETH D. LEWIS, Fifth District CHARLES T. DOYLE, Eleventh District STEPHEN A. HANSEL, Sixth District DAVID A. COULTER, 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

A71 CONSUMER ADVISORY COUNCIL WILLIAM N. LUND, Augusta, Maine RICHARD S. AMADOR, Los Angeles, California MARILYN ROSS, Omaha, Nebraska WAYNE-KENT A. BRADSHAW, Los Angeles, California MARGOT SAUNDERS, Washington, D.C. HERIBERTO FLORES, Springfield, Massachusetts GAIL SMALL, Lame Deer, Montana FRANCINE C. JUSTA, New York, New York YVONNE S. SPARKS, St. Louis, Missouri JANET C. KOEHLER, Jacksonville, Florida GREGORY D. SQUIRES, Milwaukee, Wisconsin ERROL T. LOUIS, Brooklyn, New York GEORGE P. SURGEON, Chicago, Illinois CAROL PARRY, New York, New York THEODORE J. WYSOCKI, JR., Chicago, Illinois PHILIP PRICE, JR., Philadelphia, Pennsylvania 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

A72 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, 1996. additional airmail costs. ANNUAL REPORT: BUDGET REVIEW, 1995-96. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 COUNTRY MODEL, May 1984. 590 pp. $14.50 each. each in the United States, its possessions, Canada, and INDUSTRIAL PRODUCTION —1986 EDITION. December 1986. Mexico. Elsewhere, $35.00 per year or $3.00 each. 440 pp. $9.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, num- FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. ber of pages, and price. December 1986. 264 pp. $10.00 each. 1981 October 1982 239 pp. $ 6.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1982 December 1983 266 pp. $ 7.50 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1983 October 1984 264 pp. $11.50 RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A 1984 October 1985 254 pp. $12.50 JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996. 1985 October 1986 231 pp. $15.00 578 pp. $25.00 each. 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 EDUCATION PAMPHLETS 1980-89 March 1991 712 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1990 November 1991 185 pp. $25.00 available without charge. 1991 November 1992 215 pp. $25.00 1992 December 1993 215 pp. $25.00 1993 December 1994 281 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1994 December 1995 190 pp. $25.00 Consumer Handbook to Credit Protection Laws 1990-95 November 1996 404 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small Businesses Series on the Structure of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF CHARTS. Weekly. $30.00 per year or $.70 each in the United The Board of Governors of the Federal Reserve System States, its possessions, Canada, and Mexico. Elsewhere, The Federal Open Market Committee $35.00 per year or $.80 each. Federal Reserve Bank Board of Directors Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Organization and Advisory Committees RESERVE SYSTEM. A Consumer's Guide to Mortgage Lock-Ins ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Settlement Costs Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. A Consumer's Guide to Mortgage Refinancings Vol. II (Irregular Transactions). 1969. 116 pp. Each volume Home Mortgages: Understanding the Process and Your Right $5.00. to Fair Lending 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

A73 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 166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, by to be added to the mailing list for the series may be sent to 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 21 pp. 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

A74 Maps of the Federal Reserve System TON EW YORK ADELPHIA LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 2-B 3-C 4-D 5-E _. Pittsburgh I Baltimore MD #1 VIVcinnati Buffalo DE wv F ^ ^ RI / NY BOSTON PHILADELPHIA CLEVELAND NEW YORK V 6-F 7-G 8-H RICHMOND J> KY B irminghanuJ|M I S H P Q I^ TN II ^g^jj^^^Remphis New Orleans ATLJ VNTA CHICAGO ST. LOUIS 9-1 FC^^FC^ MINNEAPOLIS 1122--LL KA NSAS CITY 11— K BMBMJ «« ,, ""——MMll AAhh hhWWHH ••**»» ^^ggaammffiinnssTTCC HHAAWWAAIIII ^^ ^^ HH HH HHHH DALLAS SSAANN FFRRAANNCCIISSCCOO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 William C. Brainard Cathy E. Minehan William O. Taylor 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 Joan Carter Edward G. Boehne Charisse R. Lillie William H. Stone, Jr. CLEVELAND* 44101 G. Watts Humphrey, Jr. Jerry L. Jordan David H. Hoag Sandra Pianalto Cincinnati 45201 George C. Juilfs Charles A. Cerino1 Pittsburgh 15230 John T. Ryan III Robert B. Schaub RICHMOND* 23219 Claudine B. Malone J. Alfred Broaddus, Jr. Robert L. Strickland Walter A. Varvel Baltimore 21203 Daniel R. Baker William J. Tignanelli1 Charlotte 28230 Dennis D. Lowery Dan M. Bechter1 ATLANTA 30303 David R. Jones Jack Guynn John F. Wieland Patrick K. Barron James M. Mckee Birmingham 35283 To be announced Fred R. Herr1 Jacksonville 32231 To be announced James D. Hawkins1 Miami 33152 To be announced James T. Curry III Nashville 37203 To be announced Melvyn K. Purcell New Orleans 70161 To be announced Robert J. Musso CHICAGO* 60690 Lester H. McKeever, Jr. Michael H. Moskow Arthur C. Martinez William C. Conrad Detroit 48231 Florine Mark David R. Allardice1 ST. LOUIS 63166 John F. McDonnell Thomas C. Melzer Susan S. Elliott W. LeGrande Rives Little Rock 72203 To be announced Robert A. Hopkins Louisville 40232 To be announced Thomas A. Boone Memphis 38101 To be announced Martha L. Perine MINNEAPOLIS 55480 David A. Koch Gary H. Stern James J. Howard Colleen K. Strand Helena 59601 To be announced John D.Johnson KANSAS CITY 64198 Jo Marie Dancik Thomas M. Hoenig Terrence P. Dunn Richard K. Rasdall Denver 80217 Peter I. Wold Carl M. Gambs1 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. James A. Martin Helen E. Holcomb El Paso 79999 To be announced Sammie C. Clay Houston 77252 To be announced Robert Smith, III1 San Antonio 78295 To be announced James L. Stull1 SAN FRANCISCO .... 94120 Gary G. Michael Robert T. Parry Cynthia A. Parker John F. Moore Los Angeles 90051 Anne L. Evans Mark L. Mullinix1 Portland 97208 Carol A. Whipple Raymond H. Laurence1 Salt Lake City 84125 Richard E. Davis Andrea P. Wolcott Seattle 98124 Richard R. Sonstelie Gordon R. G. Werkema2 * Additional offices of these Banks are located at 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. 2. Executive Vice President Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS The Federal Reserve Board publishes a series of pam- Shop . . . The Card You Pick Can Save You Money is phlets covering individual credit laws and topics, as designed to help consumers comparison shop when pictured below. looking for a credit card. It contains the results of the Three booklets on the mortgage process are available: Federal Reserve Board's survey of the terms of credit A Consumer's Guide to Mortgage Lock-Ins, A Consum- card plans offered by credit card issuers throughout the er's Guide to Mortgage Refinancings, and A Consumer's United States. Because the terms can affect the amount Guide to Mortgage Settlement Costs. These booklets an individual pays for using a credit card, the booklet were prepared in conjunction with the Federal Home lists the annual percentage rate (APR), annual fee, grace Loan Bank Board and in consultation with other federal period, type of pricing (fixed or variable rate), and a agencies and trade and consumer groups. The Board telephone number for each card issuer surveyed. also publishes the Consumer Handbook to Credit Pro- Copies of consumer publications are available free tection Laws, a complete guide to consumer credit pro- of charge from Publications Services, Mail Stop 127, tections. This forty-four-page booklet explains how to Board of Governors of the Federal Reserve System, shop and obtain credit, how to maintain a good credit Washington, DC 20551. Multiple copies for classroom rating, and how to dispute unfair credit transactions. use are also available free of charge. A Guide to Business Credit for Women, Minorities, and Small Businesses m Consumer Handbook SHOP ^ \ \ to Credit Protection W Laws The Card You Pick Can Save You Money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory func- The Payment System Handbook deals with expedited tions, the Board publishes the Federal Reserve Regu- funds availability, check collection, wire transfers, and latory Service, a four-volume loose-leaf service con- risk-reduction policy. It includes Regulations CC, J, and taining all Board regulations as well as related statutes, EE, related statutes and commentaries, and policy interpretations, policy statements, rulings, and staff statements on risk reduction in the payment system. opinions. For those with a more specialized interest in For domestic subscribers, the annual rate is $200 for the Board's regulations, parts of this service are pub- the Federal Reserve Regulatory Service and $75 for lished separately as handbooks pertaining to monetary each Handbook. For subscribers outside the United policy, securities credit, consumer affairs, and the pay- States, the price including additional air mail costs is ment system. $250 for the Service and $90 for each Handbook. These publications are designed to help those who The Federal Reserve Regulatory Service is also availmust frequently refer to the Board's regulatory materi- able on diskette for use on personal computers. For a als. They are updated monthly, and each contains cita- standalone PC, the annual subscription fee is $300. For tion indexes and a subject index. network subscriptions, the annual fee is $300 for 1 con- The Monetary Policy and Reserve Requirements current user, $750 for a maximum of 10 concurrent Handbook contains Regulations A, D, and Q, plus users, $2,000 for a maximum of 50 concurrent users, related materials. and $3,000 for a maximum of 100 concurrent users. The Securities Credit Transactions Handbook con- Subscribers outside the United States should add $50 tains Regulations G, T, U, and X, dealing with exten- to cover additional airmail costs. For further informasions of credit for the purchase of securities, together tion, call (202) 452-3244. with related statutes, Board interpretations, rulings, All subscription requests must be accompanied by a and staff opinions. Also included are the Board's list check or money order payable to the Board of Goverof marginable OTC stocks and its list of foreign margin nors of the Federal Reserve System. Orders should be stocks. addressed to Publications Services, mail stop 127, Board The Consumer and Community Affairs Handbook of Governors of the Federal Reserve System, Washingcontains Regulations B, C, E, M, Z, AA, BB, and DD, ton, DC 20551. and associated materials. GUIDE TO THE FLOW OF FUNDS ACCOUNTS A recent Federal Reserve publication, Guide to the Flow dures as seasonal adjustment, extrapolation, and of Funds Accounts, explains in detail how the U.S. interpolation. financial flow accounts are prepared. The accounts, The balance of the Guide contains explanatory tables which are compiled by the Division of Research and corresponding to the tables of financial flows data that Statistics, are published in the Board's quarterly Z.l appeared in the September 1992 Z.l release. These statistical release, "Flow of Funds Accounts, Flows and tables give, for each data series, the source of the data or Outstandings." The Guide updates and replaces Intro- the methods of calculation, along with annual data for duction to Flow of Funds, published in 1980. 1991 that were published in the September 1992 release. The 670-page Guide begins with an explanation of Guide to the Flow of Funds Accounts is available for the organization and uses of the flow of funds accounts $8.50 per copy from Publications Services, Board of and their relationship to the national income and Governors of the Federal Reserve System, Washington, product accounts prepared by the U.S. Department of DC 20551. Orders must include a check or money order, Commerce. Also discussed are the individual data in U.S. dollars, made payable to the Board of Governors series that make up the accounts and such proce- of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve Sys- For further information regarding a subscription to tem makes some of its statistical releases available to the economic bulletin board, please call (202) 482the public through the U.S. Department of Com- 1986. The releases transmitted to the economic bullemerce's economic bulletin board. Computer access tin board, on a regular basis, are the following: to the releases can be obtained by subscription. Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z. 1 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis