Federal Reserve Bulletin, 1998-05

VOLUME 84 • NUMBER 5 • MAY 1998 FEDERAL RESERVE BULLETIN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, WASHINGTON, D.C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 309 U.S. INTERNATIONAL TRANSACTIONS IN payment of interest on demand deposits and on 1997 the required reserve balances of depositories at the Federal Reserve and says that the Federal The U.S. current account deficit widened further Reserve strongly supports these measures and in 1997, reaching $166 billion. U.S. imports of that eliminating price distortions on demand goods continued to exceed exports by a substandeposits and on required and excess reserve tial margin. However, goods trade accounted balances would spare the economy wasteful for only a small part of the deterioration in expenditure, increase the efficiency of our finanthe current account balance last year. The shift cial markets, and facilitate the conduct of moneof investment income from positive to negative tary policy, before the Senate Committee on (the first time since 1914) was the major contrib- Banking, Housing, and Urban Affairs, March 3, uting factor; it reflected the cumulative effect of 1998. deficits in the current account that have persisted since 1982 and the balancing net capital inflows. 330 Chairman Greenspan briefly reviews the outlook The financial crises in Asia in the second half of for the economy and discusses the coming bud- 1997 visibly affected U.S. capital flows but influ- getary challenges and says that projections of enced the U.S. current account in only a limited budgetary surpluses are based on an extrapolaway in that year. Their effect on the U.S. current tion of steady economic growth and subdued account is likely to be more apparent in 1998. inflation in coming years and that achieving such a performance in these uncertain times, 322 INDUSTRIAL PRODUCTION AND CAPACITY with the U.S. economy now subject to a fine UTILIZATION FOR MARCH 1998 balance of powerful forces of expansion and restraint, will provide policymakers with a con- Industrial production increased 0.2 percent in siderable challenge, before the House Commit- March, to 127.7 percent of its 1992 average; tee on the Budget, March 4, 1998. revised estimates of output now show declines of 0.2 percent in both January and February. The 332 Governor Meyer comments further on S. 1405, rate of industrial capacity utilization decreased the Financial Regulatory Relief and Economic 0.1 percentage point in March, to 82.2 percent. Efficiency Act of 1997, and says that the Board supports several sections of this bill that elimi- 325 STATEMENTS TO THE CONGRESS nate unnecessary regulatory burdens but believes that several other provisions appear inad- Alan Greenspan, Chairman, Board of Goververtently to have gone beyond the goal of nors, discusses the global financial system and regulatory relief and may result in changes to the current Asian crisis and says that he fully the law that were neither intended nor desired; backs the Administration's request to augment these include the elimination of a number of the financial resources of the International important limitations that have been applied to Monetary Fund by approving as quickly as posnonbank banks, expansion of the mixing of comsible U.S. participation in the New Arrangemerce and banking by owners of savings assoments to Borrow and an increase in the U.S. ciations, the Federal Reserve's making available quota in the IMF; hopefully neither will turn out intraday credit in the form of daylight overto be needed and no funds will be drawn, before drafts to the Federal Home Loan Banks, allowthe Subcommittee on Foreign Operations of the ing banks to discount the price of products and Senate Committee on Appropriations, March 3, services that are offered in bundles to con- 1998. sumers, and allowing bank affiliations with 326 Laurence H. Meyer, Member, Board of Gover- government-sponsored enterprises, before the nors, testifies on behalf of the Federal Reserve Senate Committee on Banking, Housing, and Board on proposals in S. 1405 to allow the Urban Affairs, March 10, 1998. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

337 ANNOUNCEMENTS 341 LEGAL DEVELOPMENTS Shift from a contemporaneous system of reserve Various bank holding company, bank service requirements to a lagged basis. corporation, and bank merger orders; and pending cases. Issuance of an interim rule to Regulation E permitting depository institutions to deliver dis- 377 DIRECTORS OF THE FEDERAL RESERVE closures electronically. BANKS AND BRANCHES Publication of a revision to the official staff List of Directors, by Federal Reserve District. commentary to Regulation Z. Issuance of a final rule on the expansion of the AI FINANCIAL AND BUSINESS STATISTICS examination frequency cycle for certain finan- These tables reflect data available as of cial institutions. March 27,1998. Clarification of operating standards relating to customer disclosures of section 20 subsidiaries. A3 GUIDE TO TABULAR PRESENTATION Revisions to the cash access policy on ship- A4 Domestic Financial Statistics ments and deposits in an interstate branching A42 Domestic Nonfinancial Statistics environment. A50 International Statistics Request for comments on a comprehensive A63 GUIDE TO STATISTICAL RELEASES review of Regulations B and C; proposal to AND SPECIAL TABLES permit the electronic delivery of disclosures for four consumer protection regulations; request A74 INDEX TO STATISTICAL TABLES for comments on the benefits and drawbacks associated with the Board's same-day settlement A76 BOARD OF GOVERNORS AND STAFF rule; request for comments on the implications of potential further rule changes to reduce legal A78 FEDERAL OPEN MARKET COMMITTEE AND disparities between the Federal Reserve Banks STAFF; ADVISORY COUNCILS and private-sector banks in the presentment and settlement of checks; and an extension of time A80 FEDERAL RESERVE BOARD PUBLICATIONS to receive public comments on the advance notice of proposed rulemaking concerning A82 MAPS OF THE FEDERAL RESERVE SYSTEM Regulations T, U, and X. Availability of the transcripts of the 1992 meet- A84 FEDERAL RESERVE BANKS, BRANCHES, ings of the Federal Open Market Committee. AND OFFICES Publication of the December 1997 update of the Bank Holding Company Supervision Manual. Issuance of the 1998 Trading and Capital- Markets Activities Manual. Changes in Board staff. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 Resen'e 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 Multimedia Technologies Center under the direction of Christine S. Griffith, and Publications Services supervised by Linda C. Kyles. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1997 Lois E. Slekler, of the Board's Division of Interna- ments, the financial crises affecting many developing tional Finance, prepared this article. Virginia Carper economies in Asia, and rates of economic growth in and Clarke Fauver provided research assistance. other developing and industrial countries. The U.S. current account deficit widened further in 1997, reaching $166 billion. U.S. imports of goods U.S. Economic (iiowth and Exchange Rate continued to exceed exports by a substantial margin Developments (table 1). However, goods trade accounted for only a small part of the deterioration in the current account The U.S. economy grew at a robust pace in 1997 balance last year. The shift of investment income (table 2). Aggregate demand (including the demand from positive to negative (the first time since 1914) for imports of goods and services) was strong, was the major contributing factor; it reflected the and corporate profits (including the profits of U.S. cumulative effect of deficits in the current account affiliates of foreign companies) were high. Inflation that have persisted since 1982 and the balancing net nonetheless remained subdued, partly because of capital inflows. The financial crises in Asia in the decreases in the prices of imported goods as a result second half of 1997 visibly affected U.S. capital flows of the appreciation of the dollar against many currenbut influenced the U.S. current account in only a cies and because of declines in prices on international limited way in that year. Their effect on the U.S. commodity markets. current account is likely to be more apparent in 1998. From December 1996 to December 1997 the dollar The current account deficit in 1997 was almost as gained 12 percent in nominal terms against an averlarge as the record deficit in 1987; relative to the size age (weighted by multilateral trade weights) of the of the U.S. economy, however, it was substantially currencies of the other Group of Ten (G-10) countries smaller (2 percent of gross domestic product in 1997 (chart 1). The dollar appreciated in terms of the other versus 3.6 percent in 1987). G-10 currencies during the first half of 1997, as the continuing strength of U.S. economic activity raised expectations of further tightening of U.S. monetary MAJOR ECONOMIC I\:I-U:H\:CLS av conditions. Also, the dollar tended to rise in terms of L'.S. INTER\A II ON \I 7R.\AS.\(7l()NS the German mark and other continental European currencies because of concerns about the implica- The U.S. current and capital accounts in 1997 were tions of the transition to the European Economic and shaped by a wide variety of factors. These included Monetary Union and perceptions that monetary pol- U.S. economic growth and exchange rate develop- icy was not likely to tighten significantly in prospec- 1. l!..N. ciincnl ;un>inu balance. hKP LIT Billions of dollars Item 1992 1993 1994 1995 1996 1997 1996to1i»7 Current account Balance -56.4 -90.8 -1335 -I29J -148-2 -18J Trade la goods and services, net .. .... -39.2 -72.3 -104.4 -101.9 -111.0 -2.6 -96.1 -132.6 -16&2 -173.6 -191.2 Services, net 56.9 603 61.8 71.7 80.1 18.0 19.7 9.7 6.8 2,8 -143 -m Portfolio investment, net -33.6 -36.0 -41.0 -53,2 Direct investment, net 51.6 55.7 50.8 60.0 66.8 67,7 Unilateraltransfers.net -35.2 -38.1 -38.8 -34.0 -40.0 -38.5 1.5 NOTE. In this and the tables that follow, components may not sum to totals SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, US. because of rounding. international transactions accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

310 Federal Reserve Bulletin • May 1998 in rcil (IDP in tin- railed Sink's and ;tl>rnjil. appreciated strongly against the currencies of developing countries in the second half of 1997. Percentage change, year over year Robust U.S. economic growth and tax collections moved the federal government budget close to bal- Country 1996 1997' ance in 1997. In general, reducing government United States u 2.8 3.8 dissaving would tend to move the current account Total foreign. 3.6 4.2 toward balance as well; however, the current account 2.7 Industrial countries' index *... %,$ 2.9 deficit has been widening. In terms of national C W a e n s a te d r a n Europe 2 1 4 7 2 1 . . 2 2 2 3 . . 9 8 income accounting identities, the growing U.S. cur- Japan U 4.1 .9 rent account deficit (and the related national income Developing countries' index i. 34 6.0 62 concept, negative net foreign investment) must reflect A La s t i i a n America , -3 7 . . 4 7 4 6 . . 5 9 6 6 . . 4 0 a growing gap between domestic investment and Mexico * 5,1 7.0 saving (chart 2). However, the statistical discrepancy Other Latin America Z.4 3.2 5,0 in the national income accounts has shifted from a NOTE. Aggregate measures are chain-weighted by moving bilateral shares in large positive value to a large negative value in recent US. exports of nonagricultural merchandise. 1. Data for 1997 are partly estimated. years, obscuring whether increases in investment, or 2. The industrial countries' index covers Australia and New Zealand in reductions in private savings, or both have been the addition to Canada, Japan, and Western Europe. The index for Western Europe comprises Austria, Belgium, Denmark, Finland, France, Germany, Greece, counterpart to the growing current account deficits. In Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. any case, the inflow of foreign savings, which has 3. The developing countries in the index for Asia are the Peoples Republic financed part of U.S. investment over the past decade of China. Hong Kong, Indonesia, Korea, Malaysia, the Philippines, Singapore, and a half, has raised productive capacity relative to Taiwan, and Thailand. The countries in "Other Latin America" are Argentina, Brazil, Chile, and Venezuela. what it would have been but has required ongoing SOURCE. Various national sources. payments of investment income to foreigners. tive member countries. In the first half of the year, the dollar fluctuated against the Japanese yen in response Asian I•'inaiicial Crises to varying indicators of the strength of the Japanese In July, strong downward pressure on the Thai baht expansion. But in the second half, the yen depremarked the beginning of a series of Asian financial ciated in response to evidence of faltering economic crises. Severe financial market pressures spread to activity and perceptions of fragility in the Japanese other East Asian countries—most notably Indonesia financial sector. The perceptions of fragility were and South Korea. These pressures appeared to have heightened by concerns about the negative effect on been triggered mainly by market concerns over Japan of the financial crises elsewhere in Asia. As substantial external deficits, possibly overvalued will be discussed in greater detail, the dollar also exchange rates, weak financial systems, sizable foreign-currency-denominated indebtedness, and \\vi^lik'il-;i\cra^c CNLII.IM^L' I.IIC utlhc i ac;iinst government policy responses that were widely .. uia'iit ics nl ilk" (imiip iil'Ten. I'•M0 l)7 viewed as inadequate. The financial market pressures Index. December 1996 = 100 persisted despite the initiation of several financial assistance agreements led by the International Mone- — HO tary Fund. Several countries experienced sharp depreciations in their currencies. Between the end of June and the end of December, the Thai baht, Korean won, and Indonesian rupiah lost about half their value; the Indonesian rupiah continued to fall sharply in early 1998 (chart 3). The financial market turmoil in East Asia spread to Hong Kong and, to a lesser extent, — 90 Taiwan. However, the peg of the Hong Kong currency to the U.S. dollar has been successfully maintained, and the depreciation of the Taiwan dollar has 1990 IH92 1994 1998 been relatively small. NOTE. The weight for each of the ten countries is the 1972-76 average world trade of that country divided by the average world trade of all ten countries The turmoil in Asian financial markets was accomcombined. Besides the United States, the Group of Ten consists of Belgium, panied by sharp declines in stock prices, increases in Canada, France, Germany, Italy, Japan, the Netherlands. Sweden, Switzerland, and the United Kingdom. The data are monthly. interest rates, sharply reduced credit availability, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1997 31'. L'.S. iitVL'siiiiciil. savings, ;mj cLinenl CIUCIHIIII b.il.mi-v ;i>. ,i |K'iwni.r."-' ul'fiDI' P'SI' ''7 Curwm account Imlnnce I I I I 1981 1983 1985 1987 1989 1991 1993 1995 NOTE. The statistical discrepancy is from the national income and product SOURCE. US, Department of Commerce, Bureau of Economic Analysis, accounts (NIPA). The data are quarterly. NIPA, and US. international transaction accounts. heightened uncertainty, and, in some cases, some- ened the outlook for external demand and heightened what tighter fiscal policies in connection with interna- concerns about the fragility of Japan's financial tional support packages. As a consequence, economic sector. activity slowed markedly in several Asian developing economies in the second half of 1997; growth between the second and fourth quarters of 1997 for I>1.\ IJ.OPMI MS l\ IX GlH)l.)S AM) these economies as a group averaged only about .S'/.A'l ICI..S 2% percent at a seasonally adjusted annual rate, or less than half the 6 percent or more of earlier periods In 1997 the overall U.S. trade deficit rose slightly in (table 2). This slowdown is expected to continue into nominal terms from its 1996 level (table 1). A small 1998. increase in the deficit in trade in goods was almost matched by the increase in the surplus in services trade. However, because of differing price developheonontie Growth in Other Developing and ments among the trade components, the trade deficit Industrial Countries in terms of chained (1992) dollars continued to grow, and net exports subtracted about 0.6 percentage point Financial markets in some Latin American countries from the growth of U.S. GDP between the fourth also came under pressure as the Asian crises led quarter of 1996 and the fourth quarter of 1997. investors to reassess the riskiness of their exposures. However, despite considerable pressure, both the Brazilian exchange rate regime and the peg of the Argentine peso to the dollar held. In Brazil, high domestic i. Dnll.il L-» lnl MjloLld ln|,-|-l[ i-111-IVIlL-H.'s hum.ii) 1 interest rates and the tightening of macroeconomic policy to support the exchange rate weakened domes- bidfS.Xune3O.l997 tic demand toward the end of the year. In Mexico, the no recovery of economic activity from the recession South Korean won following the 1994—95 crisis continued, although the — .... ."_ 95 peso weakened. On average, economic growth in k Latin America (weighted by shares in U.S. exports) so was robust in 1997 (table 2). : 65 Economic growth in the industrial countries finned Thaibaht in 1997 (table 2). Growth in Canada was particularly — 50 robust, and most of the European countries also — 35 showed some improvement. Japan was a notable Indnnniun rupiah \t a. exception, as the growth of real GDP stalled partly in — 20 response to sizable fiscal contraction. In addition, as i i i i 1 1 1 1 1 1 1 1 1 1 1 1 mentioned earlier, crises in many of Japan's Asian 1997 trading partners in the second half of the year weak- NOTE. Dollars per unit of foreign currency. The data are daily. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

312 Federal Reserve Bulletin • May 1998 '. I'.S. inlrnuitumal Intilc1 in L;I»KK mid servkw Billions of dollars Dollar change Hem 1995 1996 1997 1996 1996 to 1997 Balance on good* aid *ervfees -Ul -114 -94 -2.7 Exports or goods and services 795 849 932 54.2 82.7 Services 219 237 253 18.1 16.4 Goods 576 612 678 36.2 66.2 Agricultural products 57 62 4.3 -3.1 Noiugricoltoral.goods ..-.,... ,.... 519 551 3L9 69.3 Capital goods 234 253 294 19.0 41.1 Aircraft and parts... r.*. ..•••»-«.. 26 31 41 5.0 10.4 Computers, peripherals, and parts. 40 44 49 4.0 5.6 Semioondueiore 34 36 39 1.6 la Otber capital goods 134 143 165 8.4 22.1 Consumer goods >...,. 64 70 77 6.0 7.4 Automotive product* , 62 65 73 3.0 8.4 Industrial supplies 146 148 158 2.0 10.1 Other nonagjicultutal exports 13 15 17 1.9 2.3 Imports of goods and services 897 960 1,045 63.4 85.3 Services m147 157 168 9.6 11.3 Good* , 803 877 53.8 74J Oil and products 56 73 72 16.7 -.6 Noo-oilgoods «93 731 805 37.1 74,7 Capital goods 221 229 254 8.0 25.2 Aircraft and parts 11 13 17 2,0 3.6 Computers, peripherals, and pans. 56 62 70 6.0 8.1 Semiconductors 39 37 37 -2.0 -.1 Other capital goods 115 117 131 2.0 13.6 Consumer goods im 171 193 11.0 21.9 Automotive products ft* 129 141 5.0 11.7 Industrial supplies 129 137 145 8.3 8.0 Foods and other non-oil imparts 59 64 72 4.8 7.9 NOTE. Changes in this and subsequent tables may differ from those calcu- SOURCE. US. Department of Commerce, Bureau of Economic Analysis, U.S. lated from the dala shown in the tables because of rounding. international transactions accounts. Exports cultural prices fell from elevated levels reached early in the year. The value of U.S. exports of goods and services grew Given the loss of export price competitiveness $83 billion in 1997, or about 10 percent, an accelera- associated with the appreciation of the dollar against tion from the 7 percent gain in 1996 (table 3). many currencies over the past two years (chart 4), Exports of goods grew more rapidly than exports of the strength of U.S. exports of goods in 1997 was services. somewhat surprising. Sustained economic growth -t. I'.S. exports i>i uimds lo hs iiKijoi u.idui'j piumciv Goods Billions of dollars Exports of goods to Latin America rose more than 20 percent, and the growth to Canada and Western Percentage Importing region 1995 1996 1997 change, Europe was also strong (table 4). In contrast, exports 1996 to 1997 to Japan declined slightly, and those to developing Total S7« 612 678 10.8 countries in Asia grew moderately, although more Industrial countries' 33S 351 383 9.1 rapidly than in 1996. The financial crises in Asian Canada ,. 128 135 152 12.8 Western Europe .. 132 13? 153 11.4 developing economies had little noticeable effect on 63 66 65 -2.0 U.S. exports of goods in 1997. Developing countries2 ... 241 261 295 13.1 Capital goods accounted for substantially more Asia.. 130 135 145 6$ Latin America 96 109 134 22.7 than half of the increase in the value of U.S. exports Mexico 46 57 71 25.6 of goods in 1997 (table 3). Smaller increases were Other Latin America. 50 52 62 19.8 reported for a broad range of other products, includ- 1. The industrial countries include Australia and New Zealand in addition to Canada, Western Europe, and Japan. ing industrial supplies, automotive products, and con- 2. The developing countries include Eastern Europe and Africa in addition to sumer goods. Although the quantity of agricultural Asia and Latin America. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S. exports remained high, their value declined, as agri- international transactions accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1997 313 4. Rcl;i[i\c [II'ILVS nl t'.xpons Liml imports. I1W—M7 Growth in quantity was rapid not just for computers and semiconductors (for which price indexes tades, 1989:QI = 1.0 adjusted for technological change and quality improvements—hedonic price indexes—declined rapidly) but also for other nonagricultural exports. Services Exports Exports of private services grew $16 billion, or about 7 percent (table 6). The largest dollar increase was in "other private services," a catchall category' that included particularly large increases in U.S. receipts J I j L 1 L for business, professional, and technical services, and 1995 financial services. U.S. receipts of royalties and NOTE. For exports, the index is Ihe ratio of foreign prices to U.S. export license fees and exports of "other private services" prices of nonagricultural products, excluding computers and semiconductors. largely reflect the U.S. comparative advantage in For imports, the index is the ratio of U.S. import prices of non-oil imports. excluding computers and semiconductors, 10 the U.S. GDP deflator. The data are services that depend heavily on technological experquarterly. tise and contribute significantly to the net surplus in services trade enjoyed by the United States. Exports of traditional services like travel, passenger fares, and in important U.S. export markets, particularly Latin transportation continued to account for more than America, Canada, and Western Europe, partly counhalf of U.S. services exports in 1997, but the growth tered the loss of price competitiveness. However, of these traditional exports was moderated by the even taking strong foreign economic growth into appreciation of the dollar and the resulting decline in account, U.S. exports increased more than would U.S. price competitiveness. have been expected based on estimated income and price elasticities. U.S. exporters probably benefited from the trend in Mexico and other Latin American Imports countries away from policies that sheltered domestic producers from international competition. The value of U.S. imports of goods and services grew The growth in the value of U.S. exports was largely $85 billion in 1997 (about 9 percent), somewhat the result of the rapid growth in the quantity of goods faster than the rate in 1996 (table 3). As on the export exported rather than increases in prices (table 5). side, imports of goods grew more rapidly than imports of services. Imports were spurred by strong economic growth in the United States in 1997 ?. Clumtic in the i|iijnni> <>l I !.S. o\pniK ami ir together with a decline in the price competitiveness of U.S. goods (chart 4), largely as the result of the Percentage change, year over year appreciation of the dollar against many currencies. T^ft 6f efcpett or impart 199S 1996 1997 Ail exports 8.3 12.4 Oil Imports Service* 5.5 5.1 (ksafo .. 9.5 15.4 113 -1.8 1.6 12.1! 10.8 16.9 Although the volume of oil imports increased about im a 4 4 6 7. . 1 2 3 4 0 O .1 5 5 percent from 1996 to 1997, their value fell slightly Jtr nonagriculrural goods,. •5.7 12.7 because of a 5 percent decline in the average price. AM imports 9.1 14.2 Several factors contributed to the fall in oil prices Service. 6.1 5.5 and, at the time of this writing, have induced a further Goods 9.5 9.9 15.1 decline from levels prevailing at the end of 1997. Oil and products -1.6 7.6 5.1 NoiS-oil goods 10.5 JW 16.2 Changes in the prices of imported oil have tended , peripherals, and parts 4Z5 33.4 44,0 74.4 &S 57.1 to mirror changes in spot oil prices (West Texas Other non-oil goods 5.3 5.4 12.0 intermediate) with a lag of several weeks (chart 5). NOTE. Quantities are measured in chained (1992) dollars. Spot prices had risen quite sharply during the second SOURCE. U.S. Department of Commerce, national income and product accounts. half of 1996, from $ 18.54 per barrel in June to $25.39 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

314 Federal Reserve Bulletin • May 1998 (t SLT\ k.v lr;iiis;n.' Billions of dollars Item 1994 1995 1996 198? 1996lol Service transactions, net 63 n 80 Exports of private services 204 58 63 * Passenger fares 17 19 I Other transportation 25 27 n 1 Royalties and license fees 23 27 II 0 Olher private services 61 67 Imports of private services , (23 135 143 11 Travel...... , 44 46 W 13 14 I "»• Olher transportation . 27 28 1 Royalties and license fees 6 7 0 Other private services .'... 33 39 7 5 43 U.S. government and military services, net SOURCE. U.S. Department of Commerce. Bureau of Economic Analysis, U.S. international transactions accounts. in December. Refiners—uncertain about the availabil- stronger than anticipated—drove oil prices up. Once ity of crude oil supplies from Iraq and concerned Iraq began producing oil for export at the beginning about the effect that such supplies might have on the of 1997, spot oil prices fell sharply, from an average price of oil—tended to keep their stocks low. of $25.17 per barrel in January to $19.72 in April. With the oil industry operating at minimal, just-in- Spot prices traded in a range of $19 to $20 per barrel time inventory levels, oil prices reacted quite strongly during the remainder of the year. Oil import prices to unanticipated shocks. Two such events in 1996— averaged about $18.63 per barrel in 1997, about a the delay in the startup of several North Sea fields dollar below the average for 1996. Spot prices fell and economic activity in the United States that was during January and February of 1998 as a result of several developments: Saudi Arabia, Kuwait, and the United Arab Emirates raised production in line with increases in their OPEC quota; warmer-than-normal < III pnio per KITH-I. IW^ '>' weather from El Nino softened demand for home Dollars heating oil; and the economic turmoil in East Asia reduced shipments to those emerging economies. West Texas intermediate The quantity of oil imports rose from an average of 9.4 million barrels per day in 1996 to 9.9 million in 1997 (table 7). An increase in U.S. consumption in the range of 0.4 million barrels per day accounted for most of the increase in the quantity of imports, as U.S. production has been little changed over the past — 20 four years. — 15 I I I I I I Non-Oil Imports 1985 1987 1989 1991 1993 1995 1997 NOTE. The data are monthly. The value of non-oil imports of goods increased SOURCE. Petroleum Intelligence Weekly, various issues; and U.S. Department of Commerce, Bureau of Economic Analysis. $75 billion in 1997 (about 10 percent), up substan- 1 ..s. oil owiMiinpiioii. pioduL'lion. .nul impiiri.s. ick'utcil >c:n I'JKll ')7 Millions of barrels per day Item 198ft 1985 1994 (995 ; \m tm Consumption 17,1 15.7 17.7 fef 18.2 im Production 10.8 1U 9.4 94 9-.S 9:4 6.3 3.1 9.0 m 9A 9S SOURCE. U.S. Department of Energy, Energy Information Administration. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1997 315 U.S. imports oi non-oil iiooils Irotn 1!v nuijor than higher prices (table 5). Rapid quality improve- Iradinj: parltiL-iv I'tMS-Aj; ments in computers and semiconductors continued to Billions of dollars push down their hedonic price indexes. However, the Percentage prices of core imports (goods imports excluding oil, Exporting region 1995 1996 1997 change, computers, and semiconductors) also fell—about 1996 to 1997 3A percent between the fourth quarter of 1996 and the Tblal 693 731 80S 10.2 fourth quarter of 1997; declines in world commodity Indusirial countries' 408 421 456 8.2 prices played a role, but appreciation of the dollar Canada 137 146 159 8.5 Western Europe 142 155 170 9.7 was also a factor. The nominal exchange rate of the jama 123 US 121 5.5 dollar against the currencies of thirteen developing Developing countries1 286 309 349 12.9 economies (weighted by bilateral import shares Asia , 189 199 222 11.5 Latin America 87 99 115 15.6 excluding oil, computers, and semiconductors) appre- Mexico 57 67 78 16.7 ciated 14 percent between the fourth quarter of 1996 Other Latin America. 30 32 36 13.0 and the fourth quarter of 1997; against the currencies 1. See table 4. note 1. 2. See table 4, note 2. of sixteen industrial countries, the dollar appreciated SOURCE. US. Department of Commerce, Bureau of Economic Analysis, U.S. almost 9 percent during the same period (chart 6). international transactions accounts. tially from 1996 (table 3). Large increases in imports Scivii.cs Imports of consumer goods as well as capital goods accounted for much of the increase; imports of automotive Imports of private services rose $11 billion in 1997, products also rose more than they had in 1996. an increase of more than 7 percent (table 6). Although The industrial countries continued to account for imports of services that depend on technical expertise more than half of U.S. non-oil imports in 1997. are much smaller than exports of such services, However, imports from developing countries con- "other private services" accounted for about half the tinued to grow much faster than average (table 8). increase in value of service imports. U.S. expendi- Growth of imports from Mexico was particularly tures on travel abroad also increased. strong, a development perhaps reflecting the continuing effect of the North American Free Trade Agreement on the pattern of U.S. trade. 1)1 \ l.l.OI'Ml-.N'IS l\ IIIL C7,A'A7.\/ As with exports, the increase in the value of non- ACCOl-'XT oil imports largely reflected growth in quantity rather The two major components of the current account other than trade in goods and services are net unilat- (), Nominal dolkn oxduimo r;iu- nuU'Vv IW> V7 eral transfers and net investment income (table 1). t Index. I996.Q4's|00 U.S. dollar appreciation . /Vt7 UniUitci ill Irtinsfcrs -—- Dollar against / — 110 sixteen industrial countries ^Jr0* — 105 Net unilateral transfers include government grant and pension payments as well as net private transfers — 100 to foreigners. The deficit on unilateral transfers fell slightly from the 1996 level, to $39 billion. The 1996 ^ ^^ Dollar again*! 95 level had been unusually large because of the deferjrf thirteen developing countries ring of transfers to 1996 during the budget impasse 90 and government shutdown at the end of 1995 (table 1). 1 1 1 1 1995 1996 1997 NOTE, The indexes are weighted by bilateral import shares, excluding oil, computers, and semiconductors. The industrial countries are Australia, Austria, Net Income Belgium, Canada, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Portugal. Spain, Sweden, Switzerland, and the United Kingdom. The developing countries are Argentina, Brazil, Chile, Mexico, China, Hong Kong. Net investment income is the difference between the Indonesia, Korea, Malaysia, the Philippines, Singapore. Taiwan, and Thailand. The data are quarterly. amount that U.S. residents earn on their direct and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

316 Federal Reserve Bulletin • May 1998 U.S. in?I ink'mauonul investment; U..S. iiiM-sUiK-n Position and inciiinc. ll)X(M)7 Billions of dollars Biniwu.itfAiil.rt Item 1994 1993 1996 1997 Net income 200 — — 20 Investment income, net......... 10 -M + + Direct investroem income, nei 51 60 67 Receipts 71 90 99 109 280 — 20 Payments 20 30 32 42 400 — Net position — 40 Po R rt e fo ce li i o p t i s ncome, net -4 8 1 4 - 1 5 0 3 ? - 1 6 0 * 8 127 Payments.,,.,.... 125 160 (71 209 M0 — — 60 SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S. — 80 international transactions accounts. 1.000 100 I 1 I I I I I I I 1 I I I I I [ I I I 1981 1985 1993 1997 nomic growth in many of the countries where the United States has substantial investments and con- NOTE. The nel position for each year is the average of Ihe year-end positions for the current and previous years. The year-end position for 1997 was con- tinued large additions to holdings by U.S. investors. structed by adding the recorded net portfolio and direct investment flows during Direct investment receipts have tended to increase 1997 to the recorded year-end position for 1996. The net position excludes U.S. gold holdings and foreign holdings of U.S. currency. along with the growth of U.S. investments (chart 8), SOURCE, U.S. Department of Commerce, Bureau of Economic Analysis; and although they have varied with economic conditions Federal Reserve Board. abroad. Economic growth was strong in Latin America, Canada, and Western Europe in 1997, areas portfolio investments abroad (receipts) and the that account for the largest shares of U.S. direct amount that foreigners earn on their direct and port- investment abroad (table 10). In contrast, economic folio investments in the United States (payments).1 growth in Japan was anemic, and growth in the Asian Revised data indicate that net investment income developing economies fell sharply toward the end of turned negative in 1997 for the first time since 1914 the year. However, these Asian economies (including (table 9). The data on investment income were Japan) accounted for less than 15 percent of the stock revised in light of the results of the Benchmark of U.S. direct investment abroad at the end of 1996. Survey of U.S. Ownership of Foreign Long-Term Whereas income on investments in these Asian Securities, discussed later. As a result of large and economies declined, particularly in the last half of persistent U.S. current account deficits over the past 1997, favorable developments in the rest of the world decade and a half, foreign assets in the United States kept receipts on direct investment up for the year. have grown more rapidly than U.S. assets abroad. Payments on foreign direct investment in the However, net investment income remained positive United States also increased substantially in 1997 as (chart 7) long after the net investment position became negative because foreign direct investment in the United States has earned a far lower rate of return S, U.S. direct in\cMnic'nl abmail: than U.S. direct investment abroad. Position and rcLvipts, lc)S0 47 Billions of dollars Nul Direct Investment Income Net direct investment income reported by U.S. and foreign corporations on Department of Commerce surveys rose little in 1997, as the dollar increase in payments about matched the increase in receipts (table 9). The growth of income on U.S. direct investment abroad in 1997 was the product of both strong eco- I 1 I I t I 1 11 1 11 I I I l ll l l 1981 1585 198? im im NOTE. The position for each year is the average of the year-end position for the current and previous years valued at current cost. The year-end position for 1. An investment is considered direct if a single owner acquires 1997 was constructed by adding the recorded direct investment flows during 10 percent or more of the voting equity in a company. All other U.S. 1997 10 the recorded year-end position for 1996. claims on foreigners or foreign claims on the United States are SOURCE. US. Department of Commerce, Bureau of Economic Analysis; and included in the other category—portfolio investment. Federal Reserve Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1997 317 10. U.S. direct iii\e\Miii.liil position ahncul. by ;nv;i. l' l-nK'ILIN tllli/iM nni/Mlik'lH 111 llli- 1 IHU'ii NUHL'V 1'nsilii'ii Jiiil ji.r. IIICHIN. I'WH-ty? Hen Billions of Percent % uf il<- Billions of dollars US. dollar* ToUd 79&S 100 KIM — 80 Ciradtt... 91.6 11 399.6 50 h(HI 60 United Kingdom 142.6 13 •MM) — 40 Latin America and the Caribbean 144.2 18 21HJ — 20 AiJa 106.1 13 Japan .. 39.6 5 OawAsta 66.5 8 — o AustralUaod New Zealand 34.3 4 Payments —•• I I I I I I I I 1 I I I I I I I I I I I Other 20.7 3 1981 1985 1989 1993 1997 NOTE. Valued ai historical cost. NOTE. See note to chart 8. SOURCE. Department of Commerce, Bureau of Economic Analysis. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis; and Federal Reserve Board. a result of strong U.S. growth and high corporate estimate changes in the value of assets are imprecise profits. Direct investment payments have not always and do not take into account developments that may kept pace with the growth of foreign direct invest- be important to the value of specific investments. ment in the United States; between 1980 and 1993 As noted previously, the differential in rates of the direct investment position increased sharply, but return between U.S. direct investment abroad and payments showed no upward trend (chart 9). foreign direct investment in the United States has The rate of return on foreign direct investment in mitigated the effect of the negative U.S. net investthe United States remains low by any measure—far ment position on net investment income. Two imporbelow the rate of return earned by U.S. direct inves- tant issues are whether these reported differentials tors abroad. Three measures of rates of return can are accurate and whether they are likely to persist. be calculated. In each measure (shown in table 11), Numerous factors have probably contributed to the receipts or payments reported by direct investors are differential in reported rates of return. First, investdivided by estimates of the value of direct investment ments in many places overseas are more risky than assets outstanding during the year. Historical cost is investments in the United States, so some differential the price at which the assets were purchased; current in rates of return should be expected. Moreover, many foreign investors who participated in the rapid cost adjusts the historical accounting values for increase in direct investment in the United States in inventories and plant and equipment to reflect movethe late 1980s had limited experience with foreign ments in current replacement cost indexes; and marinvestments and made serious errors of judgment. ket value adjusts the ownership position using gen- Particularly ill-fated were Japanese investments in eral indexes of stock market prices. All attempts to II. R.Hcs ul rciuni .MI tiiiccl iinc^tincnl. Percent Measure used in calculating the rale of return 1990 1991 1992 1993 1994 1995 1996 1997 US. investment abroad Historical cost • 14.5 11.6 10.7 11.5 11.8 13.3 13.1 12.8 Current cott, 10.0 8.3 8.0 8.9 9.4 10.7 10.7 10.6 Market value 7.5 6.7 6.4 6.7 6.7 7.6 6.9 6.9 Foreign imesiment in ike United States illrtnriiiil JWULM* .8 -.8 1.3 4.2 5.7 5.4 6.1 .6 -.7 1 1.1 3.5 4.9 4.6 5.3 Market value .5 -.6 .0 .8 2.6 3.4 2.8 3.2 NOTE. The rates of return are calculated as follows: The numerator is direct For a discussion of the BEA's measure of "current cost" and "market value," investment receipts or payments, from the U.S. international transactions see 1. Steven Landefeld and Ann M. Lawson, "Valuation of the US. Net accounts. The denominator is the average of year-end figures for the current and International Investment Position," Survey of Current Business, vol. 7] (May previous year for the particular measure of the value of direct investment 1991), pp. 40-49. position shown. The positions for year-end 1997 are constructed by adding (he SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S. recorded direct investment flows during 1997 to the recorded year-end positions international transactions accounts and U.S. international investment position. for 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

318 Federal Reserve Bulletin • May 1998 U.S. commercial real estate. In addition, both U.S. 10. Not portfolio iinvslriR'ni: I'oMliun Liiul iiiLiiuii-'. ll)M) l)7 and foreign corporations may succeed in using transmiliMunTdoUun Billion! of dollars fer prices to shift reported profits to countries with lower tax rates despite efforts by the Internal Revenue Service to limit this practice. Net Portfolio Investment Income Portfolio investment income consists of dividends and interest paid on a wide range of claims and liabilities. Receipts and payments are estimated by I t I I I I I I I I I I I I I I the Bureau of Economic Analysis (BEA) of the 1981 im 1989 1993 Department of Commerce based on estimates of hold- NOTE. The net position for each year is the average of year-end positions for the current and previous years. The year-end position for 1997 was constructed ings, dividend-payout ratios, and interest rates. Net by adding the recorded net portfolio investment flows during 1997 to the portfolio income fell sharply in 1997, largely because recorded year-end position for 1996. SOURCE. U.S. Department of Commerce. Bureau of Economic Analysis: and of growing U.S. net international indebtedness Federal Reserve Board. (table 9). Over the past decade, the decline of net income has closely mirrored the growth of the nega- The survey was long overdue. The previous survey tive net portfolio investment position (chart 10). of U.S. holdings of foreign securities was conducted during World War II. The data on international capital flows that are gathered regularly by the Treasury Results of the Benchmark Survey of U.S. International Capital (or TIC) Reports cover only Ownership of Foreign Lon^-lerni Securities purchases and sales of securities, not holdings. For the past fifty years, the BEA has had to rely on The data on net portfolio investment income were estimates of the value of U.S. holdings based on revised in 1997 to take into account the newly avail- cumulative capital flows since World War II and able results of the Treasury Department's Benchmark estimates of changes in values. Estimates of holdings Survey of U.S. Ownership of Foreign Long-Term made by this method are likely to be increasingly Securities. These results indicated that official statis- inaccurate as time elapses. tics had been significantly underestimating U.S. port- The results of the recent survey indicate that, at the folio holdings of foreign equities and debt instru- end of March 1994, U.S. residents held $304 billion ments with maturities longer than one year. As a in foreign bonds and $567 billion in foreign equities result, the U.S. net international investment posi- (table 12). Issuers from Canada and the other industion was correspondingly less negative, and U.S. trial countries accounted for most of the bonds held investment income slightly larger, than previously by U.S. residents. Holdings of bonds issued by develindicated. oping countries were very small, except for those \Z. l.'.N. liMi-j-kTin si-'unrila's. In count! v o\ issuer, MLIJVII 31. 1W I Equities All securities Couniry or area US B . I i M MB i W an U B S il . l io d n o s ll a o r f s Percent 100 m we 870 100 23 40 •r 108 12 Buwpe s?e 48 399 46 Bailed Kingdom •«* 103 **, 120 14 Lilta America ,..., II s? 10 92 3 4 31 13 151 27 191 22 1... ,. ...,.*„ ^..,,., 10 99 18 131 15 rAsia., ...'•-«.••»' •3' 9 60 7 Australia , ...s,....,,,.^ 3 1.7 3 27 3 4 9 i 23 3 SOURCE. U.S. Department of the Treasury. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1997 319 issued by four Latin American countries: Mexico, Second, the BEA's estimate of price changes may Argentina, Venezuela, and Brazil. About half of the be inaccurate because the TIC Reports do not provide long-term debt securities were denominated in U.S. adequate information to identify with certainty the dollars. Much smaller shares were accounted for by country of issue, currency, or term of the securities the yen, deutsche mark, and Canadian dollar, and the purchased. Moreover, the weights of various equities rest was spread across a wide variety of currencies. in U.S. portfolios may not mirror stock market price However, these results are of limited use in assessing indexes that are readily available and used by the the exchange rate exposure of U.S. investors because BEA. exposures may be hedged. Analysis of bond holdings The BEA raised its estimates of U.S. holdings of by sector of issuer indicates that governments and foreign securities at the end of 1994 more than international organizations constituted the largest $330 billion (about 60 percent) in light of the results category by far, accounting for more than 60 per- of the benchmark survey. The BEA also revised its cent of the total. About one-third of reported hold- estimates of U.S. holdings from 1985 forward. The ings involved bonds issued by foreigners in the revisions to holdings of equities were much larger United States. (both in dollar and percentage terms) than the revi- Industrial countries also accounted for the bulk of sions to holdings of bonds. Moreover, the benchmark U.S. holdings of foreign equities. Two countries, the survey results indicate that the BEA's methodology United Kingdom and Japan, together accounted for had produced large errors in the estimated distribumore than one-third of total U.S. holdings. However, tion of bond holdings by country and currency. In holdings of equities issued by entities in developing particular, holdings of Japanese bonds were much economies were not negligible. Both Mexico and larger than estimated, as were holdings of foreign- Hong Kong were among the top ten issuers. More currency-denominated bonds. than one-fourth of U.S. holdings was accounted for Both the revision to the level of holdings and the by American Depository Receipts (ADRs)—stocks change in composition had implications for the that were specifically marketed to U.S. investors. BEA's estimates of investment income for the period Comparison of the benchmark survey results for 1985 to the present. The BEA's revisions to investthe end of March 1994 with the BEA's earlier end-of- ment income receipts in 1994 as a result of the year estimates for 1993 and 1994 indicate that the benchmark survey amounted to an increase of about BEA had been underestimating U.S. holdings by sub- $10 billion. The revision to income was small relastantial amounts (table 13). Possible explanations for tive to the revision to holdings for two reasons. First, these errors are numerous. First, TIC reporting of the bulk of the revision in the estimated posipurchases and sales of securities may have contained tion involved estimated holdings of equities, and errors and omissions. Over time, U.S. investors and dividend-payout ratios for foreign stocks tend to be their fund managers have increasingly transacted low. (Capital gains are excluded from investment directly in foreign markets, thus bypassing the U.S. income in these accounts.) Second, the survey financial intermediaries that form the core of the TIC indicated larger holdings of foreign-currencyreporting system. To ensure adequate coverage, the denominated bonds than the BEA had previ- TIC reporting system has had to continually expand ously estimated, particularly low-yielding, yenits list of reporters, and at times, Treasury has been denominated bonds. slow to do so. Even if the TIC Reports covered The BEA made no revisions to the published data 95 percent of net purchases, the omitted investments on capital flows as a result of the benchmark survey. would cumulate to substantial sums over an extended The BEA could not determine whether the errors in period. the estimates of holdings were the result of unreported net purchases of foreign securities or errors in l.v IS. liolilinys of foreign securities: Rarlier RF.A its estimates of valuation changes over the previous estimates and benchmark survey results. 1443-94 half a century; moreover, the BEA had no basis Billions of dollars for determining the dates of unreported securities Earlier BEA estimates, Benchmark transactions. yeawmd survey results, Item end of \m March 1994 AO fo«lgnsecurities SSI m CAPITAI, ACCOUNT TRANSACTIONS Bonds 248 332. m Equities 303 32* Foreign ownership of assets in the United States and SOURCE. U.S. Department of Commerce and Department of (he Tr S ea S s 7 ury. U.S. ownership of assets abroad both rose signifi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

320 Federal Reserve Bulletin • May 1998 cantly in 1997, an increase reflecting the continuing some foreign private holdings of U.S. Treasury secutrend toward the globalization of financial markets as rities were liquidated. In addition, foreign direct well as goods markets. Direct investment flows (both investment in the United States amounted to a new inward and outward) and private purchases of U.S. high of $108 billion, as the strong pace of mergers securities were particularly strong. Evidence of the and acquisitions across national borders continued. gathering financial storm in Asia was apparent in U.S. U.S. direct investment abroad in 1997 also reached capital flows mainly during the last quarter. a record net outflow—$119 billion. U.S. net pur- In 1997, in contrast to earlier years, increases in chases of foreign securities in the first three quarters foreign official holdings in the United States did not were $76 billion, a little below the pace for 1996; play a major role in the capital flows that are the however, net purchases fell sharply in the fourth counterpart to the current account deficit (table 14). quarter, probably in reaction to the perceptions of Foreign official assets in the United States rose higher risk arising from financial turmoil in Asia. $45 billion in the first three quarters of 1997, below Banks in the United States reported a large increase the pace for 1996; the increases were concentrated in in net claims on foreigners in the first three quarters the assets of certain industrial countries and members of the year, but these outflows were largely reversed of OPEC. In the fourth quarter, foreign official assets toward the end of the year. declined sharply; the declines were concentrated in With net recorded capital inflows to the United assets of Asian countries and of several develop- States exceeding the large U.S. current account deficit ing countries outside Asia that were experiencing in 1997, the U.S. international accounts recorded a exchange market pressures. For the year as a whole, large negative statistical discrepancy for the second foreign official holdings in the United States rose year in a row (table 14). This negative discrepancy only $18 billion. indicates that net payments in the current account or In contrast, increases in the assets of other foreign- net outflows in the capital account have been unreers in the United States in 1997 about equaled or corded. For example, illegal drug imports would surpassed previous records. Net purchases of U.S. contribute to a negative discrepancy, as would unrestocks were particularly strong—a record $67 billion. corded investments abroad by U.S. residents or Net purchases of U.S. Treasury bonds by private overstated capital inflows. Although the statistical foreigners remained robust; more than $30 billion of discrepancy in the U.S. accounts tended to be positive U.S. Treasury securities were purchased in October in the years before 1990, large negative discrepancies alone, when developments in Asia led to a flight to have become more common since then for reasons quality. As the end of the year approached, however, that are not well understood. 14. Composition n[ I'.S. capital tlnws, IW3 -l>7 Billions of dollars Change, Item 1994 1995 1996 1997 1996 to 1997 Current account balance. ^91 -134 -129 -1*8 -166 -48 OSd*l capital, net 70 45 «0 128 17 -111 Foreign official mete in the United States. 72 40 til 122 18 -104 1 US. officiaiitserve assets 5 -10 7 -1 -8 OtherUS, government assets 0 -I -I 0 1 Privatecapitai.net 15 91 44 m 246 179 Neiinffiowf.nqmrtedby US. banking offices .,... 56 100 -45 -9 79 Securities tranMetkma, net -44 31 95 lgl 273 92 Mvfcle foreign net purchases of US. securities . 102 91 196 iw 352 62 24 34 OT 156 163 7 59 •J4 82 121 122 1 stock* 19 14 13 67 54 urities -M -60 -100 -108 -79 29 Stocks -© -48 -30 -38 21 Bonds -«3 -12 -80 -41 8 OtrectktwslniBntfset ,,....,.. >.. -27 -24 -19 -12 -1 Foceigi direct investment in the United States... 49 46 m 77 108 31 US. direct invettment abroad -76 -69 -87 -88 -119 -31 Foreign holdinip of VS. currency _ 19 23 12 17 25 7 Other n -39 0 -12 -32 0 Statistical discrepancy -3 -15 -47 -97 -50 SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, U.S. international transactions accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1997 321 PROSPECTS FOR demand for U.S. exports as well. The recent appreciation of the dollar and the associated loss in competi- The fallout from the Asian crises is likely to have tiveness of U.S. goods and services is also likely to further consequences for U.S. international transac- continue to have a negative effect on the U.S. trade tions in 1998. Until the economies of the countries balance in 1998. On the other hand, continued strong directly affected begin to rebound, U.S. transactions growth in Latin America, Canada, and Western with them, including exports of goods and services Europe, which account for the bulk of U.S. exports and the profits of direct investors, are likely to be and direct investment, would tend to counteract the depressed. The negative ramifications of the Asian negative repercussions of Asian developments. • crises for other trading partners may depress their Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 Industrial Production and Capacity Utilization for March 1998 Released for publication April 17 manufacturing slipped 0.2 percent for the second consecutive month. At 127.7 percent of its 1992 Industrial production increased 0.2 percent in March; average, total industrial production in March was revised estimates of output now show declines of 4.3 percent higher than it was in March 1997. For the 0.2 percent in both January and February. The output first quarter as a whole, output grew about 1 percent of utilities jumped in March as temperatures through- at an annual rate. The rate of industrial capacity out the country returned to more normal levels. The utilization decreased 0.1 percentage point in March, output of mines rose 0.2 percent, while production in to 82.2 percent. Industrial production indexes Ratio scale, 1992 = 100 Ralio scale, 1992= 100 _ Consumer goods - 130 _ Intermediate products 130 /~-v\yA 120 120 Durable / Construction supplies 110 110 Nondurable - 100 Business supplies — 100 - 90 - 90 i ii 1 1 1 1 1 1 1 1 1 1 1 1 _ Equipment _ Materials 150 ^^ 150 Business ^ ^ -^ - - 130 130 110 — Durable goods y^ ____, ^ -~ - 110 Nondurable goods -- 90 - and energy —- 90 Defense andspace N\x- ^ ^_ I II I II 1 1 1 1 II 1990 1992 1994 1996 1998 1990 1992 1994 1996 1998 Capacity utilization Percent of capacity Percent of capacity - 85 - 85 - 75 - 75 1984 1986 1988 1990 1992 1994 1996 1998 1984 1986 1988 1990 1992 1994 1996 1998 All series are seasonally adjusted. Latest series, March. Capacity is an index of potential industrial producLion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

323 Industrial production and capacity utilization, March 1998 Industrial production, index. 1992=101) Category Tolal . 4.3 Previous estimale .. Major marker groups Products, total' 121.0 121.2 120.9 120.9 -.1 .2 -.3 .0 3.4 Consumer goods 115.9 116.6 115.6 115.7 -.6 .6 -.9 .1 2.0 Business equipment 148.6 147.6 147.0 146.8 .8 -.7 -.4 -.1 6.R Construction supplies 123.2 124 0 125.3 124.0 -.3 .6 1.1 -1.0 1.4 Materials 138.9 138.1 138.0 138.7 .9 -.6 .0 .5 5.6 Major induslrv groups Manufacturing 130.9 131.0 130.7 130.4 .4 .0 _2 4.4 Durable 148.6 148.2 148.2 147.9 .6 -.3 .0 6.6 Nondurable 112.9 113.3 112.8 112.5 .2 .4 -.4 __ 2 1.9 Minins 105.7 107.4 107.3 107.5 -.4 1.7 .7 Utilities 114.3 110.0 110.1 115.4 -.9 -3.8 4.8 5.3 MF.MO Capacity utilization, percent Capacity. percentage 1997 1997 1998 change. Average, Low. High, Mar. 1997 1967-97 1982 1988-89 to Mar. Dec. Jan.' Feb.r Mar. P Mar. 1998 Total 82.1 71.1 85.4 82.5 8.1.3 82.8 82J 82.2 4.7 Previous estimate 83.2 83.0 82.7 Manufacturing 81.1 69.0 85.7 81.6 82.3 82.0 81.5 80.9 5.4 Advanced processing 80.5 70.4 84.2 79.7 80.5 80.2 79.5 79.1 6.3 Primary processing .. 82.4 66.2 88.9 86.1 86.3 86.0 85.7 85.2 3.4 Mining 87.5 80.3 S8.0 90.6 89.4 90.8' 90.6 90.8 .6 Utilities 87.3 75.9 92.6 87.0 89.9 86.4 86.4 90.5 1.2 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 ness equipment was still 6.8 percent above the level of a year ago. In March, continued strength in the production of computer and office equipment was The production of consumer goods remained flat, as more than offset by decreases in the assemblies of declines of 0.4 percent in the output of durable con- motor vehicles and aircraft and in the output of sumer goods and of non-energy nondurable goods communications equipment. were offset by an increase of 3.3 percent in the output The production of construction supplies declined of energy goods, most notably sales of residential 1.0 percent after having increased 1.1 percent in electricity and gas. The falloff was widespread within February; output remains well above its level at the durable consumer goods. The output of automotive end of last year. The output of materials increased products and furniture declined again, and the pro- 0.5 percent after two months of weakness, but the duction of household appliances dropped somewhat level of output in March was still slightly below the from the high level in February. Among non-energy December level. While the production of durable and nondurable consumer goods, the production of nondurable goods materials edged down, the output both clothing and paper products dropped more than of energy materials increased sharply. Among dura- 1 percent. ble goods materials, the output of parts for consumer The output of business equipment slowed in the goods, which had spiked up in the fourth quarter, first quarter, edging down 0.1 percent in March after dropped back, on balance, in the first quarter. Growth having dropped 0.7 percent in January and 0.4 per- in the output of equipment parts, which include parts cent in February. Nonetheless, the production of busi- for high-technology equipment, has slowed recently. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

324 Federal Reserve Bulletin • May 1998 INDUSTRY GROUPS every major industry, except petroleum and chemical products. The output at durable and nondurable goods produc- The operating rate in manufacturing declined to ers declined 0.2 percent. Within durables, increases 80.9 percent. Utilization rates in advanced-processing in computer and office equipment, semiconductors, and primary-processing industries fell for the third and instruments were offset by weakness elsewhere. consecutive month. The operating rate in advanced- In particular, the output of primary metals; stone, processing industries in March was 1.4 percentage clay, and glass products; furniture and fixtures; and points below its long-run average, whereas the utilitransportation equipment posted significant losses. zation rate in primary-processing industries was still Among nondurable industries, production fell in significantly above its long-run average. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

325 Statements to the Congress Statement by Alan Greenspan, Chairman, Board of eastern and central Europe that, in turn, could have Governors of the Federal Reserve System, before the repercussions elsewhere, including the United States. Subcommittee on Foreign Operations of the Commit- Thus, while the probability of such an outcome may tee on Appropriations, U.S. Senate, March 3,1998 be small, its consequences, in my judgment, should not be left solely to chance. We have observed that The global financial system has been evolving rap- global financial markets, as currently organized, do idly in recent years. New technology has radically not always achieve an appropriate equilibrium, or at reduced the costs of borrowing and lending across least require time to stabilize. traditional national borders, facilitating the develop- Opponents of IMF support for member countries ment of new instruments and drawing in new players. facing international financial difficulties also argue Information is transmitted instantaneously around the that such substantial financial backing, by cushioning world, and huge shifts in the supply and demand for the losses of imprudent investors, could encourage funds naturally follow, resulting in a massive increase excessive risk-taking. There doubtless is some truth in capital flows. in that, though arguably it has been the expectation of This burgeoning global system has been demon- governments' support of their financial systems that strated to be a highly efficient structure that has has been the more obvious culprit, at least in the significantly facilitated cross-border trade in goods Asian case. In any event, any expectations of broad and services and, accordingly, has made a substantial bailouts have turned out to have been disappointed. contribution to standards of living worldwide. Its Many if not most investors in Asian economies have efficiency exposes and punishes underlying economic to date suffered substantial losses. Asian equity imprudence swiftly and decisively. Regrettably, it losses, excluding Japanese companies, since June also appears to have facilitated the transmission of 1997, worldwide, are estimated to have exceeded financial disturbances far more effectively than ever $700 billion, at the end of January, of which more before. than $30 billion had been lost by U.S. investors. Three years ago, the Mexican crisis was the first Substantial further losses have been recorded in such episode associated with our new high tech inter- bonds and real estate. national financial system. The current Asian crisis is Moreover, the policy conditionally, associated the second. principally with IMF lending, which dictates eco- We do not as yet fully understand the new system's nomic and financial discipline and structural change, dynamics. We are learning fast and need to update helps to mitigate some of the inappropriate riskand modify our institutions and practices to reduce taking. Such conditionality is also critical to the the risks inherent in the new regime. Meanwhile, we success of the overall stabilization effort. At the root have to confront the current crisis with the institu- of the problems is poor public policy that has resulted tions and techniques we have. in misguided investments and very weak financial Many argue that the current crisis should be sectors. Convincing a sovereign nation to alter allowed to run its course without support from the destructive policies that impair its own performance International Monetary Fund (IMF) or the bilateral and threaten contagion to its neighbors is best financial backing of other nations. They assert that handled by an international financial institution, such allowing this crisis to play out, while doubtless hav- as the IMF. What we have in place today to respond ing additional negative effects on growth in Asia, and to crises should be supported even as we work to engendering greater spillovers onto the rest of the improve those mechanisms and institutions. world, is not likely to have a large or lasting impact Some observers have also expressed concern about on the United States and the world economy. whether we can be confident that IMF programs for They may well be correct in their judgment. There countries, in particular the countries of East Asia, are is, however, a small but not negligible probability likely to alter their economies significantly and perthat the upset in East Asia could have unexpectedly manently. My sense is that one consequence of this large negative effects on Japan, Latin America, and Asian crisis is an increasing awareness in the region Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Federal Reserve Bulletin • May 1998 that market capitalism, as practiced in the West, the government, financial institutions, and private especially in the United States, is the superior model; companies. that is, it provides greater promise of producing ris- It is a reasonable question to ask how long this ing standards of living and continuous growth. conversion to embracing market capitalism in all Although East Asian economies have exhibited its details will last in countries once temporary IMF considerable adherence to many aspects of free support is no longer necessary. We are, after all, market capitalism, there has nonetheless been a dealing with sovereign nations with long traditions pronounced tendency toward government-directed not always consonant with market capitalism. There investment, using the banking system to finance that can be no guarantees, but my sense is that there is a investment. Given a record of real growth rates growing understanding and appreciation of the beneof close to 10 percent per annum over an extended fits of market capitalism as we practice it—that what period of time, it is not surprising that it has been is being prescribed in IMF programs fosters their difficult to convince anyone that the economic system own interests. practiced in East Asia could not continue to produce The just-inaugurated president of Korea, from what positive results indefinitely. After the breakdown, an I can judge, is unquestionably aware of the faults of increasing awareness, bordering in some cases on the Korean system that contributed to his country's shock, that their economic model was incomplete, or crisis; he appears to be very strenuously endeavoring worse, has arguably emerged in the region. to move his economy and society in the direction of As a consequence, many of the leaders of these freer markets and a more flexible economy. In these countries and their economic advisers are endeavor- efforts, he and other leaders in the region with similar ing to move their economies much more rapidly views have the support of many younger people, a toward the type of economic system that we have in large proportion educated in the West, who see the the United States. The IMF, whatever one might say advantages of market capitalism and who will soon about its policy advice in the past, is trying to play a assume the mantle of leadership. critical role in this process, providing advice and Accordingly, I fully back the Administration's incentives that promote sound money and long-term request to augment the financial resources of the IMF stability. The IMF's current approach in Asia is fully by approving as quickly as possible U.S. participation supportive of the views of those in the West who in the New Arrangements to Borrow and an increase understand the importance of greater reliance on mar- in the U.S. quota in the IMF. Hopefully, neither will ket forces, reduced government controls, scaling back turn out to be needed, and no funds will be drawn. of government-directed investment, and embracing But it is better to have it available if that turns out not greater transparency—the publication of all the data to be the case and quick response to a pending crisis that are relevant to the activities of the central bank. is essential. Statement by Laurence H. Meyer, Member; Board of balances distort market prices and lead to economi- Governors of the Federal Reserve System, before the cally wasteful efforts to circumvent them. Committee on Banking, Housing, and Urban Affairs, Because of recent financial market innovations, the U.S. Senate, March 3, 1998 proposals are also important for monetary policy. Balances that depository institutions must hold at I welcome the opportunity to testify on behalf of the Federal Reserve Banks to meet reserve requirements Federal Reserve Board on proposals in S. 1405 to pay no interest. Reserve requirements are now 10 perallow the payment of interest on demand deposits and cent of all transaction deposits above a threshold on the required reserve balances of depositories at the level. Requirements may be satisfied either with vault Federal Reserve. The Federal Reserve strongly sup- cash or with balances held in accounts at Federal ports these measures. We have commented favorably Reserve Banks. Depositories have naturally always on such proposals on a number of previous occasions attempted to reduce such non-interest-bearing balover the years, and the reasons for those positions ances to the minimum. For more than two decades, still hold today. We also believe the legislation should some commercial banks have done so in part by include a provision to allow the Federal Reserve to sweeping the reservable transaction deposits of busipay interest on excess reserves. nesses into nonreservable instruments. These busi- These legislative proposals are important for ness sweeps not only avoid reserve requirements but economic efficiency: Unnecessary restrictions on the also allow firms to earn interest on instruments that payment of interest on demand deposits and reserve are, effectively, equivalent to demand deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 327 In recent years, developments in computer technol- of such systems over time. However, the expenses are ogy have allowed depositories to begin sweeping not trivial, particularly when substantial efforts are consumer transaction deposits into nonreservable needed to upgrade such automation systems or to accounts. In consequence, the balances that deposi- integrate the diverse systems of merging banks. Such tories hold at Reserve Banks to meet reserve require- expenses waste the economy's resources—they ments have fallen to quite low levels. These con- would be unnecessary if interest were paid on both sumer sweep programs are expected to spread further, demand deposits and the reserve balances that must threatening to lower required reserve balances to be held against them. levels that may begin to impair the implementation The prohibition of interest on demand deposits also of monetary policy. Should this occur, the Federal distorts the pricing of other bank products. Because Reserve would need to adapt its monetary policy banks cannot attract demand deposits through the instruments, which could involve disruptions and payment of explicit interest, they often try to attract costs to private parties as well as to the Federal these deposits, aside from compensating balances, Reserve. However, if interest were allowed to be paid through the provision of services at little or no cost. on required reserve balances and on demand deposits, When services are offered below cost, they tend to be changes in the procedures used for implementing overused—an additional waste of resources attributmonetary policy might not be needed. able partly to the prohibition of interest on demand The prohibition of the payment of interest on deposits. demand deposits was enacted in the depression atmo- However, the potential gains in economic effisphere of the mid-1930s. At that time, the Congress ciency cannot be fully realized by paying interest on was concerned that large money center banks might demand deposits alone. As has been demonstrated have earlier been bidding deposits away from country in the case of the consumer checking accounts, on banks to make loans to stock market speculators, in which interest is paid, the absence of interest on the the process depriving rural areas of financing. It is reserve balances that must be held against such transunclear whether the rationale for this prohibition was action deposits has in itself provided strong enough ever valid, and it is certainly no longer applicable incentive for banks to start sweep programs. The today. Funds flow freely around the country, and costs that banks incur to design and maintain the among banks of all sizes, to find the most profitable automation systems needed to implement such sweep lending opportunities, using a wide variety of market programs are another instance of economic waste. mechanisms, including the federal funds market. The payment of interest on required reserve bal- The absence of interest on demand deposits is no ances could remove the incentives to engage in such bar to the movement of funds from depositories reserve avoidance practices. with surpluses—whatever their size or location—to In light of depositories' use of resources to try to the markets where the funding can be profitably circumvent reserve requirements, the reason for havemployed. In fact, small firms in rural areas are able ing such requirements might be questioned. Indeed, to bypass their local banks and invest in money reserve requirements have been eliminated in a nummarket mutual funds with transaction capabilities. ber of other industrialized countries. Let me review Indeed, smaller banks complain that they are unable with you for a few moments the historical and current to compete for the deposits of businesses precisely purposes served by reserve requirements. because of their inability to offer interest on demand Although the English word "reserves" might deposits. imply an emergency store of liquidity, required The prohibition of interest on demand deposits reserves cannot actually be used for this purpose distorts the pricing of transaction deposits and associ- because they represent a small and fixed fraction of ated bank services. In order to compete for the liquid a bank's transaction deposits. Reserve requirements assets of businesses, banks set up complicated pro- have at times been employed as a means of controlcedures to pay implicit interest on what are called ling the growth of money. In the early 1980s, for compensating balance accounts. These accounts, example, the Federal Reserve used a reserve quantity which represent a sizable fraction of demand depos- procedure to control the growth of Ml. For the most its, earn credits that can be used to pay for a firm's part, however, the Federal Reserve has looked to the use of other bank services. Banks also spend price of reserves—the federal funds rate—rather than resources—and charge fees—for sweeping the excess the quantity of reserves, as its key focus in impledemand deposits of businesses into money market menting monetary policy. investments on a nightly basis. To be sure, the Although reserve requirements no longer serve the progress of computer technology has reduced the cost primary purpose of monetary control, they continue Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin • May 1998 to play an important role in the implementation of a range of about 8 percentage points and missed the monetary policy in the United States. They do so by target for the average of daily rates by Vi percentage helping to keep the federal funds rate close to the point. After a couple of months, stability returned to target rate set by the Federal Open Market Commit- the federal funds market because depositories made tee. They perform this function in two ways: First, improvements in their reserve management and they provide a predictable demand for the total because strong growth in deposits again boosted the reserves that the Federal Reserve needs to supply level of required reserve balances above precautionthrough open market operations in order to achieve ary demands for many institutions. a given federal funds rate target. Second, because Since that time, depositories have become much required reserve balances must be maintained only on more adept at managing their reserve positions, and an average basis over a two-week period, deposi- their need for precautionary balances on a typical day tories have some scope to adjust the daily balances has declined considerably. In fact, they are now manthey hold in a manner that helps stabilize the federal aging to operate with lower aggregate required balfunds rate. For instance, if the funds rate were higher ances at Reserve Banks than they had in early 1991, than usual on a particular day, depositories could and the federal funds rate is nevertheless much more choose to hold lower reserve balances, and their stable. A number of measures taken by the Federal reduced demand would help to damp the upward Reserve have helped to foster stability, including pressure on the funds rate. Later in the two-week improvements in the timeliness of account informaperiod, they could make up the shortfall in their tion provided to depositories, more frequent open average holdings of reserve balances. market operations geared to daily payment needs, Depositories hold balances in their accounts at and improved procedures for estimating reserve Federal Reserve Banks for reasons other than satisfy- demand. Another measure now being considered by ing their two-week average requirements. Some bal- the Federal Reserve Board is a shift to lagged reserve ances are needed as a precaution against the chance requirements, which would also contribute to some that payment orders late in the day might leave a reduction in uncertainty about reserve demand. depository with an overdraft on its account, and the The additional improvements in reserve manage- Federal Reserve strongly discourages overdrafts. On ment in recent years have been needed because redays when payment flows are particularly heavy and quired reserve balances have dropped substantially— uncertain, or when the distribution of reserves is from about $28 billion in late 1993 to about substantially displaced from normal, depositories $9 billion in late 1997. This decline has not occurred tend to hold balances for precautionary purposes well because of further cuts in required reserve ratios by above required levels. the Federal Reserve but because of the new retail Unlike the two-week average demands, these daily sweep programs implemented by depositories. These precautionary demands cannot help smooth the funds programs use computerized systems to sweep conrate from one day to the next. They are also difficult sumer transaction deposits, which are subject to to predict, making it harder for the Federal Reserve to reserve requirements, into personal savings accounts, determine the appropriate daily quantity of reserves which are not. The spread of such retail sweep proto supply to the market. In the absence of reserve grams has not yet fully run its course, and considerrequirements, or if reserve requirements were very able uncertainty shrouds its eventual outcome. We low, the daily demand for balances at Reserve Banks expect that the effects of future declines in required would be dominated by these precautionary demands, reserve balances on the volatility of the federal funds and as a result, the federal funds rate could often rate will not necessarily proceed gradually; the rather diverge markedly from its intended level. modest effects on volatility seen so far may not An example of the volatility that can arise in the preclude a more outsized reaction as reserve balances federal funds market because of a low level of fall even lower. required reserve balances occurred in early 1991. The Heightened volatility in the federal funds rate is Federal Reserve had reduced certain reserve require- of concern for a number of reasons. To be sure, the ments in late 1990 as a means of easing funding costs transmission of volatility in the funds rate to volatilto banks during the credit crunch period. The cut in ity in longer-term rates is likely to be muted because requirements reduced required balances at Reserve of the averaging out of upticks and downticks in the Banks for many depositories to below the balances overnight rate. However, even in the absence of much needed for precautionary purposes, and the federal transmission to longer-term rates, increased volatility funds rate consequently became very volatile. On a in the federal funds rate would affect other overnight typical day in that period, the funds rate strayed over interest rates, raising funding risks for most large Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 329 banks, securities dealers, and other money market available on investments of greater risk and longer participants. Suppliers of funds to the overnight mar- maturities. kets, including many small banks and thrift institu- Because of the uncertainties involved, the Federal tions, would face greater uncertainty about the returns Reserve needs to be able to pay interest on excess they would earn. Market participants concerned about reserves as well as on required reserve balances, and unexpected losses would incur additional costs in at differential rates to be set by the Federal Reserve. managing their funding to limit the heightened risks. The ability to pay interest on excess reserves would Countries that have eliminated reserve require- provide an additional tool that could be used for ments do not generally experience a great deal of monetary policy implementation, but one that might volatility in overnight interest rates because they are not need to be used, if interest on required reserve able to use alternative procedures for the implementa- balances and demand deposits resulted in a sufficient tion of monetary policy. One type of procedure, for boost to the level of those balances. Even if not used instance, establishes a ceiling and a floor to contain immediately, it is important that the Federal Reserve movements of the overnight interest rate. The ceiling have the full range of tools available to other central is set by a penalty interest rate on loans provided banks, given the inventiveness of our financial marfreely by the central bank through what is called a kets and the need for the Federal Reserve to be Lombard facility. The floor is established, in effect, prepared for potential developments that may not be by the payment of interest on excess reserves because immediately visible. no bank would lend to a private party at an interest The payment of interest on reserve balances would rate below the rate it could earn on a risk-free deposit tend to reduce the revenues received by the Treasury at the central bank. For the Federal Reserve to be able from the Federal Reserve, while the payment of to set a similar interest rate floor, it would need interest on demand deposits would increase those authority to pay interest on excess reserves. As revenues. Treasury revenues would be directly regards a ceiling on the funds rate, a change in the reduced by the payment of interest on existing reserve Federal Reserve's approach to the discount window balances. However, there would be some offset to this would be necessary because we have no penalty direct revenue loss. The level of reserve balances interest rate and instead subject borrowing applica- would rise because of the interest payments, and the tions to an administrative review. Alternative means Federal Reserve would therefore be able to increase of establishing a ceiling could be considered. its holdings of government securities. The Federal If interest were allowed to be paid on both demand Reserve, on average, would earn a higher yield on deposits and required reserve balances, adjustments those securities than the rate it would pay on required in the procedures for implementing monetary policy reserve balances. On net, Treasury revenues are still might not be needed. Such interest payments would likely to fall with the payment of interest on required likely boost the level of transaction deposits substan- reserve balances, but the recent declines in such tially, as some business and household sweep pro- balances have reduced that revenue loss to a historic grams were unwound, and as banks became more low, roughly $100 million anually starting next able to compete for the liquid funds of businesses. year, according to a recent estimate by the Congres- The increased transaction deposits could ensure that sional Budget Office. Similarly, interest payments on required reserve balances would remain above the demand deposits would increase the level of demand level of daily precautionary needs for many institu- deposits, as well as the reserve balances held against tions, thus helping to stabilize the federal funds rate, them on which the Federal Reserve would also while also improving economic efficiency as previ- earn a positive interest rate spread. The size of ously noted. this further offset to the Treasury's revenue loss on The magnitude of the prospective responses to required reserve balances is subject to considerable these measures is uncertain, however. Some corpora- uncertainty. tions may not find the interest paid on demand depos- In the long run, the benefits of the proposed legislaits high enough to induce them to shift out of other tion will likely be distributed rather widely among liquid instruments. Also, some banks may retain con- bank customers. The biggest winners should be small sumer sweep programs in order to seek higher invest- businesses that currently earn no interest on their ment returns than the Federal Reserve would pay on checking accounts. They will gain from the interest reserve balances. If interest were allowed on required earned and from being able to relax procedures used reserve balances, the Federal Reserve would likely to hold to a minimum the size of their checking pay a rate close to the rate available on an overnight account deposits. Larger firms will benefit as well, in repurchase agreement. Higher yields are, of course, part by saving on some sweep fees. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin • May 1998 For banks, interest on demand deposits will they offer and by the elimination of unnecessary costs increase costs, at least in the short run. Larger banks associated with sweeps and other procedures curand securities firms may also lose some of the fees rently used to try to minimize the level of reserves. they currently earn on sweeps of business demand In the early 1980s, the Congress decided to deregudeposits. The higher costs to banks will be partially late interest rates on all household deposits and offset by interest on reserve balances, and over time, to allow money market deposit accounts for busithese measures should help the banking sector attract nesses. It is now time to extend the benefits of deposit liquid funds in competition with nonbank institutions interest rate deregulation to the ordinary checking and direct market investments by businesses. Small accounts of businesses. Eliminating price distortions banks, in particular, should be able to bid for busi- on demand deposits and on required and excess ness demand deposits on a more level playing field reserve balances would spare the economy wasteful vis-a-vis both nonbank competition and large bank expenditure, increase the efficiency of our finansweep programs. Moreover, large and small banks cial markets, and facilitate the conduct of monetary will be strengthened by fairer prices on the services policy. Statement by Alan Greenspan, Chairman, Board of With the crisis curtailing the financing available in Governors of the Federal Reserve System, before the foreign currencies, many Asian economies have had Committee on the Budget, U.S. House of Representa- no choice but to cut back their imports sharply from tives, March 4, 1998 the United States and elsewhere, a situation made worse by disruptions to their financial systems and Just last week I presented the Federal Reserve's economies more generally. American exports should semiannual report on economic conditions and the be held down further by the appreciation of the conduct of monetary policy. This morning, I will dollar, which will make the prices of competing briefly review some aspects of that outlook before I goods produced abroad more attractive, just as turn to a more detailed discussion of coming budget- foreign-produced goods will be relatively more ary challenges. attractive to buyers here at home. As a result, we can The exemplary performance of the U.S. economy expect a worsening net export position to exert a in 1997 will be hard to match. Last year's combina- discernible drag on total output in the United States tion of robust expansion of activity, healthy creation and the dollar prices of our non-oil imports to extend of new jobs, and a decline in inflation generated their recent declines. These lower import prices are widespread benefits for our citizens. Many of those apparently already making domestic producers hesibenefits have the promise to be long-lived: Our tant to raise their own prices for fear of losing market nation has been experiencing a higher growth rate of share, further contributing to the restraint on overall productivity—output per hour worked—in recent prices. years, which is the ultimate source of rising standards The key question going forward is whether the of living. restraint building from the turmoil in Asia will be There can be no doubt that domestic demand sufficient to check inflationary tendencies that might retained some of its considerable momentum going otherwise result from continued strength of domestic into this year. Production and employment have been spending and tightening labor markets. The depth of on a strong uptrend in recent months. Confident the adjustment abroad will depend on the extent of households, enjoying gains in income and wealth and weakness in the financial sectors of Asian economies benefiting from the reductions in intermediate- and and the speed with which structural inefficiencies in longer-term interest rates to date, should continue to the financial and nonfinancial sectors of those econoincrease their spending. Firms should find financing mies are corrected. If, as we suspect, the restraint available on relatively attractive terms to fund profit- coming from Asia is sufficient to bring the demand able opportunities to enhance efficiency by investing for American labor back into line with the growth of in new capital equipment. By itself, this strength in the working-age population desirous of working, spending would seem to presage intensifying preslabor markets will remain unusually tight, but any sures in labor markets and on prices. Yet, the outlook intensification of inflation should be delayed, very for total spending on goods and services produced in gradual, and readily reversible. However, we cannot the United States is less assured of late because of rule out two other, more worrisome possibilities. On storm clouds massing over the Western Pacific and the one hand, should the momentum to domestic heading our way. spending not be offset significantly by Asian or other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 331 developments, the U.S. economy would be on a track CBO and the OMB were overestimating that year's along which spending could press too strongly deficit by about $100 billion. against available resources to be consistent with con- In retrospect, much of the error in last winter's tained inflation. On the other, we also need to be alert deficit estimates fell on the inflow side, largely to the possibility that the forces from Asia might reflecting a surge in tax receipts that far exceeded damp activity and prices by more than is desirable by estimates. This "tax surprise", which helped lift the exerting a particularly forceful drag on the volume of receipts share of gross domestic product to a historinet exports and the prices of imports. cal high, was not a new phenomenon. In the early The robust economy has facilitated the efforts 1990s, growth of receipts consistently fell short of of the Congress and the Administration to restore expectations based on the trends in aggregate income balance in the unified federal budget. The deficit and the tax laws then in place. Even after the fact, our dropped to its lowest level in more than two decades knowledge about the sources of such surprises has in fiscal 1997, and both the Administration and the not always been definitive. As a result, we must Congressional Budget Office (CBO) now expect the remain cautious about extrapolating recent favorable budget to remain essentially in balance over the next tax inflows into the future. We cannot rule out the few years before moving to moderate surpluses possibility that the next few years will see a more by the middle of the next decade. I should caution, rapid dissipation of the strength in receipts than either though, that while receipt growth remained robust the OMB and the CBO have assumed, implying through January, the prospects for fiscal 1998 as a renewed deficits. Indeed, all else equal, had the 1997 whole remain uncertain until we have a tally of the surprise fallen on the other side—downward instead final payments that will be included in April's tax of upward—we would be confronted by nontrivial returns. budget deficits at least through the beginning of the As I have indicated to the Congress on numerous coming decade. occasions, putting the unified budget into significant Moreover, the baseline projections assume that dissurplus would be the surest and most direct way of cretionary spending will be held to the statutory caps, increasing national saving. In turn, higher national which allow almost no growth in nominal outlays saving, by promoting lower real long-term interest through fiscal 2002. Given the declining support for rates, helps spur spending to outfit American firms further reductions in defense spending, keeping overand their workers with the modern equipment they all discretionary spending within the caps is likely to need to compete successfully on world markets. We require sizable, as yet unspecified, real declines in have seen a partial down payment of the benefits of nondefense programs from current levels. Not surbetter budget balance already: It seems reasonable prisingly, many observers are skeptical that the caps to assume that the decline in longer-term Treasury will hold, and battles over appropriations in coming yields last year owed, in part, to reduced years may well expose deep divisions that could competition—current and prospective—from the make the realization of the budget projections less federal government for scarce private saving. likely. In addition, although last year's legislation But much hard work remains to be done to ensure cut Medicare spending substantially, experience has that these projected surpluses actually materialize highlighted the difficulty of controlling this program, and that the appropriate budgetary strategy is in place raising the possibility that the savings will not be so to deal with the effects on federal entitlement spend- great as anticipated—especially if resistance develing of the looming shift in the nation's retirement ops among beneficiaries or providers. demographics. The baseline projections from the These uncertainties underscore the need for cau- Office of Management and Budget (OMB) and the tion as you move ahead on your work on the 1999 CBO provide a good starting point for assessing budget. There is no guarantee that projected surthe budget outlook over the medium term: They are pluses over the next few years will actually materialbased on sensible economic and technical assump- ize. However, we can be more certain that, absent tions and thus offer a reasonable indication of how action, the budgetary position will erode after the the budget is likely to evolve if economic conditions next decade as the baby boom generation moves into remain favorable and current budgetary policies retirement, putting massive strains on the social securemain in place. However, the experience of the past rity and Medicare programs. Without question, the few years amply demonstrates that such forecasts are task of stemming that erosion will become increassubject to considerable error. For evidence on that ingly difficult the longer it is postponed. Indeed, score, we need only look back to last winter. Even especially in light of these inexorable demographic with fiscal 1997 already well under way, both the trends, I have always emphasized that we should Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin • May 1998 be aiming for budgetary surpluses and using the ing of proposals that, if adopted, do not bode well for proceeds to retire outstanding federal debt. In that the maintenance of fiscal discipline. Although many regard, one measure of how much progress has been of the individual budget proposals may have merit, made in dealing with the nation's fiscal affairs is that they must be considered only in the context of a serious discussion of such paydowns has begun to responsible budget strategy for the longer run. surface. Working down the stock of the federal debt In closing, I want to commend Chairman Kasich would put further downward pressure on long-term and the members of the committee for your insistence interest rates, which would enhance private capital on fiscal responsibility and persistent efforts to bring investment, labor productivity, and economic growth, the budget under control. The shrinking budget defipreparing us to better confront the looming changes cit and the prospect of surplus stand as testimony to in retirement demographics. your endeavors. But we must remember that projec- Over the decades, our budgetary processes have tions of surpluses are based on an extrapolation of been biased toward deficit spending. Indeed, those steady economic growth and subdued inflation in processes are strewn with initiatives that were viewed coming years. Achieving such a performance in these as having only a small projected budgetary cost at uncertain times, with the U.S. economy now subject inception but which produced a sizable drain on the to a fine balance of powerful forces of expansion and Treasury's coffers over time. As you are well aware, restraint, will provide policymakers with a considerprograms can be easy to initiate or expand but able challenge. And, on your part, not succumbing extraordinarily difficult to trim or shut down once a to the temptation to commit prematurely future surconstituency develops that has a stake in maintaining pluses that exist only on paper, while, in addition, them. Thus far, the President and the Congress have addressing the adverse effects of ongoing demobeen quite successful, contrary to expectations, in graphic changes to the budget over the longer run, placing, and especially holding, caps on discretionary will not be easy. However, if we meet these chalspending. More recently, they have started to confront lenges, the increase in national saving and investment the budget implications of the surge in retirements will almost surely pay off handsomely in the form of that will occur early in the next century. But the good a more rapidly expanding standard of living for all news of late on the budget has unleashed an outpour- Americans. Statement by Laurence H. Meyer, Member, Board of tory relief and may result in changes to the law that Governors of the Federal Reserve System, before the were neither intended nor desired. In this testimony, I Committee on Banking, Housing, and Urban Affairs, would like to highlight some of the provisions that U.S. Senate, March 10, 1998 the Board supports and some of the areas with which the Board has concerns. (Attached to this statement is The Board of Governors appreciates this opportunity an appendix containing several technical suggestions to comment further on S. 1405, the Financial Regula- and comments on other provisions of the bill that are tory Relief and Economic Efficiency Act of 1997. not discussed directly in my testimony.)' The members of this committee, and in particular Senators Shelby and Mack, are to be commended for the leadership role you have taken over the past THE COMMITTEE'S PAST SUCCESSES several years in reducing unnecessary burdens on our nation's banking system. This committee has recog- This committee has twice approved comprehensive nized that unnecessary regulatory burdens hinder the legislation to ease regulatory burdens for financial ability of banking organizations to compete effec- institutions. As the Board stated at the time the comtively in the broader financial services marketplace mittee was considering these prior legislative initiaand, ultimately, adversely affect the availability and tives, the banking industry badly needed the type of prices to consumers of banking services and credit regulatory burden relief embodied in the Community products. Development and Regulatory Improvement Act of This bill represents a further effort by this committee to eliminate unnecessary regulatory burdens. The Board believes that a number of sections of this bill accomplish that purpose, and it recommends their 1. The attachment to this statement is available from Publications Services, Mail Stop 127, Board of Governors of the Federal Reserve adoption. Several other provisions, however, appear System, Washington, DC 20551, or the Board's World Wide Web site, inadvertently to have gone beyond the goal of regula- http://www.bog.frb.fed.us/ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 333 1994 (1994 Act) and in the Economic Growth and positions, preserve solid management, and serve the Paperwork Reduction Act of 1996 (1996 Act). needs of their communities. Before the passage of these two acts, the aggregate The efforts of the Board, coupled with the manregulatory burden on our nation's banking organiza- dates of this committee, have had a bottom-line, tions had become substantial. The Board supported practical effect: Fewer applications need to be filed the efforts of the committee and voiced its concern with the Board; and banking organizations have that obsolete and dysfunctional regulations were saved substantial regulatory, legal, compliance, and handicapping the ability of U.S. banking institutions other costs. In short, these changes have enhanced the to operate in increasingly competitive financial mar- competitiveness of banking organizations that are kets, both domestic and global. Taking heed of the regulated by the Board and have benefited the cuscalls for regulatory reform from the Board and tomers of these financial institutions. others, this committee fashioned important legislation to revise anachronistic banking statutes that were imposing costs without providing commensurate The Provisions of This Bill benefits to the safety and soundness of financial institutions, consumer protection, or credit availability. S. 1405 contains some important additional reform In the 1994 Act, the committee alleviated the provisions. As I stated before the committee last paperwork burden for banking organizations seeking week, the Board strongly supports the provision in to gain federal approval to engage in certain trans- section 101 of this bill that would permit the Fedactions, enhanced the efficiency of the regulatory eral Reserve to pay interest on reserve balances that process by eliminating applications and other filing depository institutions are required to maintain at requirements, and streamlined examination and audit Federal Reserve Banks. Because required reserve procedures. Two years later, with the support of balances do not earn interest, banks and other deposithe Board, the committee passed the 1996 Act, which, tory institutions employ sweeps and other costly proamong other steps, permitted well-capitalized and cedures to reduce such balances to a minimum. These well-managed institutions to commence previously reserve avoidance techniques represent a waste of approved nonbanking activities without filing an resources for the economy and could also potentially application. In the 1996 Act, the committee also complicate the implementation of monetary policy. passed important reforms to consumer protection stat- Allowing the Board to pay interest on required utes that alleviated the burdens imposed by these reserve balances would not only eliminate economic statutory provisions on financial institutions without inefficiencies but also alleviate risks that could affect undercutting the goals of the consumer protection the future implementation of monetary policy. In laws. addition, as I mentioned last week, the Board would support allowing the Federal Reserve the option to make payment of interest on "excess" reserves, OUR EFFORTS AT THE BOARD which could be a useful tool for monetary policy. The Board also strongly endorses the provision in The Board has long recognized that regulatory bur- section 102 that would permit all depository institudens on our nation's financial institutions must be tions to pay interest on demand deposits, including reduced. Consistent with the mandate of the Con- deposits made by businesses. As I explained more gress and this committee, the Board has sought to fully last week, the prohibition of interest on the ensure that regulatory requirements are imposed only demand accounts of businesses is an anachronism when they are needed to accomplish the statutory that no longer serves any public policy purpose. On responsibilities of the Board. For example, within the the other hand, this prohibition imposes a burden past two years, the Board has substantially revised its both on banks and on those holding demand deposits, Regulation Y (which primarily governs bank holding especially small businesses, which frequently do not companies) and has proposed comprehensive revi- have the resources to implement sophisticated cash sions to its Regulation H (which governs membership management programs. Repeal of the prohibition of state banks in the Federal Reserve System) and its would remove an unnecessary regulatory burden, Regulation K (which governs international banking enhance the competitiveness of depository instituoperations). These changes will make the Board's tions, and benefit bank depositors. regulations simpler, less burdensome, and more trans- There are other parts of this bill, as well, that parent while still providing banking organizations would relieve regulatory burden without giving rise with powerful incentives to maintain strong capital to safety and soundness, supervisory, consumer pro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

334 Federal Reserve Bulletin • May 1998 tection, or other policy concerns. For example, sec- effects that the committee may not desire. Some of tion 203 would eliminate the outdated and largely these changes may give certain entities unfair comredundant requirement in section 11 (m) of the Fed- petitive advantages; other provisions appear to extend eral Reserve Act, which currently sets a rigid ceiling taxpayer subsidies in a manner that would not seem on the percentage of bank capital and surplus that warranted. may be represented by loans collateralized by securities. Current national and state bank lending limits address concerns regarding concentrations of credit Nonbank Banks more comprehensively than section ll(m) but do so without the unnecessary constraining effects of this Several provisions of S. 1405 would eliminate a section of the Federal Reserve Act. number of important limitations that have been In another area, the alternative consumer credit applied to nonbank banks. For example, section 208 disclosure mechanisms permitted by sections 401 and would greatly enhance the ability of nonbank banks 402 will be less burdensome to creditors and just as to expand their banking operations by allowing them helpful to consumers as the disclosure requirements to acquire any undercapitalized bank. Section 116 embodied in current law. The Congress has already would allow nonbank banks to permit their affiliates eliminated the requirement that creditors disclose a to incur overdrafts at the nonbank bank and would historical table for closed-end variable rate loans. allow nonbank banks to incur overdrafts at the Fed- Taking similar action with respect to open-end vari- eral Reserve on behalf of affiliates. This section also able rate home-secured loans, and permitting credi- would remove restrictions in current law on the crosstors to make alternative disclosures to meet their marketing of products by nonbank banks and their obligations with regard to credit advertising under the commercial affiliates. Section 205 would allow non- Truth in Lending Act. would reduce regulatory bur- bank banks to offer business credit cards even where dens without sacrificing consumer protections. these business loans are funded by insured demand The Board supports other sections of the bill as deposits. Finally, section 117 would liberalize the well. Section 304, which would eliminate the bank- divestiture requirements that apply when companies ing agency report on differences in capital and violate the nonbank bank operating limitations. accounting standards, is a provision that would termi- Eliminating restrictions on nonbank banks, at first nate a reporting requirement that is no longer neces- glance, may have intuitive appeal. However, there are sary in light of the considerable progress the agencies important reasons why the Board is concerned about have made (at this committee's direction in the 1994 these provisions. Nonbank banks—which, despite Act) in conforming their capital and accounting stan- their popular name, are federally insured, national dards. Section 109 would provide a uniform limit on or state-chartered banks—came into existence by loans by banks to their executive officers, thereby exploiting a loophole in the law. By means of this diminishing confusion among regulated institutions loophole, industrial, commercial, and other compaand reducing regulatory burden across institutions nies were able to acquire insured banks and to mix with different regulators. Section 306, which would banking and commerce in a manner that was then, eliminate the Thrift Depositor Protection Oversight and remains today, statutorily prohibited for banking Board, would save the government money by termi- organizations. These companies also have avoided nating an administrative board whose primary func- the comprehensive framework of prudential stantion, oversight of the Resolution Trust Coiporation dards and supervisory examination and review under (RTC), ceased when the RTC closed in 1995. More- the Bank Holding Company Act that governs all over, as discussed in the appendix, section 502 would other corporate owners of insured banks. make an important change in the health benefits In 1987, in the Competitive Equality Banking Act available to Federal Deposit Insurance Corporation (CEBA), the Congress closed the nonbank bank and Board retirees. loophole. At that time, the Congress chose not to A few other provisions of this bill, however, appear require the fifty-seven companies operating nonbank to go beyond the committee's goal of regulatory banks to divest these institutions. Instead, the Conrelief or represent such fundamental changes in the gress permitted the companies owning these banks to federal regulatory system as to warrant a fuller debate retain their ownership as long as they complied with in the context of broad financial modernization legis- a carefully crafted set of limitations on the activities lation. The Board is concerned that these provisions, of nonbank banks and their parents. In a unique as currently drafted, may result in changes to the law statutory explanation of legislative purpose, the Conthat the committee did not intend and will have gress stated in the CEBA that these limitations were Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 335 necessary to prevent the owners of nonbank banks tionally broadened and advocates retaining the curfrom competing unfairly with bank holding compa- rent proscription against allowing multiple SLHCs nies and independent banks. In addition, the Con- to acquire a significant interest in a commercial gress found that the restrictions were needed to company. address potential adverse effects, including conflicts of interest, that could result from the ownership of Daylight Overdrafts these insured banks by companies that, unlike bank holding companies, are not subject to federal super- Section 118 would require the Federal Reserve to vision or regulation or to the federal proscription make intraday credit, in the form of daylight overagainst mixing banking and commerce. drafts, available to the Federal Home Loan Banks. Fewer than twenty-five nonbank banks currently As it did in the last Congress, the Board strongly claim the grandfather rights accorded in the CEBA. opposes this proposal, which would provide special The Board is concerned that removal of the limitatreatment to the Federal Home Loan Banks over tions and restrictions that apply to nonbank banks other government-sponsored enterprises (GSEs) and would enhance advantages that this relative handful other lending institutions as well as over all deposiof organizations already possess over other owners tory institutions with access to central bank credit. of banks and would give rise to the potential adverse Section 118 would represent the first time that the effects about which the Congress has in the past Congress has mandated the availability and price of expressed concern. In addition, removal of these limicentral bank credit. As such, this bill would serve as tations would permit the increased combination of precedent for other GSEs to meet intraday liquidity banking and commerce for a select group of commerneeds with Federal Reserve credit at an administered cial companies, creating potential disadvantages and interest rate instead of with the proceeds of obligainequities for all other companies, including banks tions issued in the markets at competitive rates as and bank holding companies. contemplated by their statutory funding schemes. As this committee is aware, there is significant In addition, section 118 would serve as a precedent debate in the context of broader efforts to modernize for regularly extending Federal Reserve credit to our financial laws regarding whether it is prudent to institutions that are not subject to reserve requireremove the existing separations between banking and ments and therefore would grant the Federal Home commerce. Because reform of the nonbank bank pro- Loan Banks access to that credit on terms more visions raises fundamental questions regarding the attractive than those available to depository institumixing of banking and commerce, the Board believes tions. For these reasons, the Board opposes extending that reform of the provisions governing nonbank the availability of routine daylight overdrafts to the banks should be considered within the framework of Federal Home Loan Banks. broad financial modernization rather than in the context of efforts to reduce regulatory burden. Price Discounts Thrift Powers Section 204 is intended to allow banks to discount the price of products and services that are offered in S. 1405, as drafted, also would appear to expand the bundles to consumers. Current law prohibits banks mixing of commerce and banking by owners of sav- from offering price discounts in most situations, even ings associations. In particular, section 107, which though this is a common practice in other industries appears to have been intended to allow a savings and and even though consumers benefit from receiving a loan holding company (SLHC) to acquire a noncon- price discount on the purchase of a combination of trolling interest in a savings association, would also products and services. permit multiple SLHCs, with the approval of the In the past several years, the Board has utilized Office of Thrift Supervision, to acquire more than authority granted to it by the Congress to craft a 5 percent of the shares of any company, including number of exceptions to current law that allow banks any commercial firm. This would seem to expand the to offer price discounts on bundled products. For ability of multiple SLHCs to mix banking and com- example, the Board has allowed banks to offer dismerce to an unlimited degree, a result that the spon- counts to customers that maintain a certain level sors of this bill may not have intended. The Board of deposits at the bank so long as both the deposit supports clarifying the language in the bill to ensure accounts and the other bundled products are also that the powers of multiple SLHCs are not uninten- separately available to the public. This type of price Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin • May 1998 discounting both saves money for consumers who These and other questions are raised by a statutory desire the bundled products and allows consumers change that would affect all GSEs, but the Board who are not interested in purchasing the entire bundle understands that the provision in section 113 is of discounted services to purchase individual prod- intended to address an existing relationship involving ucts or services separately at competitive prices. a banking organization's ownership of shares of a Section 204, as currently drafted, would appear to single GSE. This situation may be better addressed go further than is necessary to allow this type of price with a narrower provision that does not raise condiscounting. The Board would support efforts to cerns regarding control of GSEs more broadly. allow banks to offer price discounts to customers that choose to acquire multiple products or services from banks and their affiliates where the bundled products CLOSING THOUGHTS and services are also made available separately to customers at competitive prices. The Board applauds the efforts of the committee to continue to eliminate unnecessary governmentimposed burdens. The committee's past successes in Affiliations with Government-Sponsored regulatory reform and relieving regulatory burdens Enterprises on banking organizations, coupled with the efforts of the bank regulatory agencies, necessarily make the A provision in section 113 would remove the current committee's task today a difficult one. The commitrestriction on bank affiliations with GSEs. As worded, tee's substantial previous efforts have left fewer areas the section would appear to permit a bank or bank in banking law that require reexamination outside the holding company to acquire control of any GSE and context of comprehensive financial modernization. to permit any GSE to acquire an insured bank. This As a consequence, in some areas, S. 1405 attempts broad change, involving all GSEs, raises significant to resolve issues that are better addressed in broader policy issues that the Board believes go beyond the legislation that would reform the financial services scope of regulatory burden relief. For example, this industry. change raises the questions: Is it desirable to allow a The Board has long endorsed financial modernizabanking organization to exercise control over a GSE? tion strategies that ensure regulatory equity for all Would a banking organization that affiliates with a participants in the financial services industry, that GSE gain competitive advantages over its peers from minimize the chances that federal safety net subsidies the special tax and quasi-governmental status of the will be expanded into new activities and beyond the GSE? Would the secondary markets that rely on confines of insured depository institutions, and that GSEs be affected if a single banking organization guarantee adequate federal supervision of financial acquires control of a GSE? Conversely, is it appropri- organizations. The Board would be pleased to work ate to allow any GSE to acquire control of an insured with the committee and its able staff to reach these bank? goals. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

337 Announcements SHIFT FROM CONTEMPORANEOUS RESERVE Regulation Z (Truth in Lending). The official staff REQUIREMENTS TO A LAGGED BASIS commentary applies and interprets the requirements of the regulation. The revisions are effective The Federal Reserve Board on March 26, 1998, voted March 31. Compliance is optional until October 1, to move from a system of contemporaneous reserve 1998. requirements to one in which reserves are maintained The revisions provide guidance for open-end credit on a lagged basis. The change will go into effect with plans that increase rates triggered by late payments or the reserve maintenance period beginning July 30, by exceeding credit limits and that have deferred 1998. payment features. Proposed changes on how creditors The switch will make it easier for depositories to may determine whether credit is an open-end plan or calculate their required reserve balances for the cur- a closed-end transaction have been substantially rent maintenance period and will increase the accu- modified in the final revisions. racy of information on aggregate required reserve Also, the update discusses issues such as the treatbalances, which is needed by the Open Market Trad- ment of annuity costs in reverse mortgage transacing Desk to carry out its operations. tions and transaction fees imposed on checking Under the lagged system, the reserve maintenance accounts with overdraft protection. period for weekly reporting institutions will begin thirty days after the beginning of the two-week reserve computation period. Under the current sys- ISSUANCE OF FINAL RULE ON EXPANSION OF tem, the reserve maintenance period begins only two THE EXAMINATION FREQUENCY CYCLE FOR days after the beginning of the computation period. CERTAIN FINANCIAL INSTITUTIONS The Federal Reserve Board along with the Office of REGULATION E: INTERIM RULE the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift The Federal Reserve Board on March 13, 1998, pub- Supervision on March 30, 1998, issued a final rule to lished an interim rule to its Regulation E (Electronic expand the examination frequency cycle for certain Fund Transfers) that permits depository institutions financial institutions. The rule is effective April 2, to deliver disclosures electronically if the consumer 1998. agrees. Implementation of this final rule expands the eligi- The interim rule is similar to a proposed rule that bility for the eighteen-month examination cycle for the Board published in May 1996, except that instituwell-managed banks that are rated 1 or 2 from the tions need not provide paper copies of disclosures current asset size limit of $100 million to a new limit delivered electronically. Electronic disclosures of $250 million. remain subject to applicable timing, format, and other The ruling implements section 306 of the Riegle requirements of the regulation. Community Development and Regulatory Improve- The Board is also publishing a proposed amendment Act of 1994 and section 2221 of the Economic ment to Regulation E that would reduce the time Growth and Regulatory Paperwork Reduction Act of period for investigating errors that involve debit cards 1996. used in point-of-sale and foreign transactions. Comments are requested by May 15. CLARIFICATION OF OPERATING STANDARDS REGULATION Z: REVISIONS TO THE OFFICIAL RELATING TO CUSTOMER DISCLOSURES OF STAFF COMMENTARY SECTION 20 SUBSIDIARIES The Federal Reserve Board on March 31, 1998, pub- The Federal Reserve Board on March 24, 1998, lished revisions to its official staff commentary to announced a clarification of the operating standards Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin • May 1998 relating to customer disclosures of section 20 subsid- electronic delivery of disclosures for four of its iaries of bank holding companies. The clarification consumer protection regulations. Comments are was effective March 27, 1998. requested by May 15. The Board is modifying the customer disclosure The regulations affected are Regulation B (Equal operating standard to make clear that a section 20 Credit Opportunity), Regulation M (Consumer Leassubsidiary operating off bank premises may satisfy ing), Regulation Z (Truth in Lending), and Regulathe standard by providing a one-time disclosure in tion DD (Truth in Savings). These proposals to perwriting when an investment account is opened. mit electronic disclosures correspond in approach to The clarification requires a section 20 subsidiary to an interim rule that the Board also published on provide in writing to each of its retail customers at March 13, amending Regulation E (Electronic Fund the time an investment account is opened the same Transfers). The Board also requested comment on minimum disclosures and to obtain the same cus- proposed technical amendments to Regulations M tomer acknowledgment as described in the Inter- and DD. agency Statement on Retail Sales of Nondeposit The Federal Reserve Board on March 10, 1998, Investment Products. requested comment on the benefits and drawbacks This clarification will relieve section 20 subsidi- associated with its 1994 same-day settlement rule. aries operating off the premises of depository institu- The Board is also requesting comment on the implitions from providing oral disclosures to retail custom- cations of potential further rule changes to reduce ers on a continuing basis. legal disparities between the Federal Reserve Banks and private-sector banks in the presentment and settlement of checks. Comments are requested by REVISIONS TO THE CASH ACCESS POLICY ON July 17, 1998. SHIPMENTS AND DEPOSITS IN AN INTERSTATE The Federal Reserve Board on March 31, 1998, BRANCHING ENVIRONMENT announced an extension of time to receive public comments on its advance notice of proposed rulemak- The Federal Reserve Board on March 6, 1998, ing concerning its margin regulations, Regulations T announced revisions in its cash access policy on how (Credit by Brokers and Dealers), U (Credit by Banks cash shipments and deposits will be handled in an for Purchasing or Carrying Margin Stocks), and X interstate branching environment. The revised policy (Borrowers of Securities Credit). The comment provides flexibility to depository institutions to obtain period is being extended from April 1, 1998, to cash services from any Reserve Bank office. The May 1, 1998. policy is effective May 4, 1998. The original policy adopted in 1996 mandates greater consistency in Reserve Bank cash service levels than currently exists by providing a base level AVAILABILITY OF TRANSCRIPTS OF THE 1992 of free currency access to all depository institutions MEETINGS OF THE FEDERAL OPEN MARKET but with restrictions on the frequency and number of COMMITTEE offices served. Offices of depository institutions that meet mini- The Federal Reserve on March 11, 1998, made availmum volume thresholds will be able to obtain more able for public inspection transcripts of meetings of frequent access. Fees will be charged for additional the Federal Open Market Committee (FOMC) that access beyond the base service level. were held during 1992. The package includes transcripts of eight regularly scheduled meetings and four telephone conference calls. PROPOSED ACTIONS Procedures adopted by the FOMC provide for the public release of transcripts for an entire year with a The Federal Reserve Board on March 13, 1998, five-year lag. Minutes of each meeting are issued requested comment on a comprehensive review with an approximate six-week lag, while decisions of two of its consumer protection regulations— made at each meeting are announced on the day of Regulation B (Equal Credit Opportunity), and Regu- the meeting. lation C (Home Mortgage Disclosure). Comments are The 1992 transcripts have been lightly edited to requested by May 29. enhance readability and to redact confidential mate- The Federal Reserve Board on March 13, 1998, rial such as information pertaining to individual forrequested public comment on a proposal to permit the eign central banks and private businesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 339 Copies of the transcripts are available from the from Publications Services, Mail Stop 127, Board of Board's Freedom of Information Office, Room MP- Governors of the Federal Reserve System, Washing- 500, Mail Stop 132, Board of Governors of the ton, DC 20551 (or by FAX at 202-728-5886). Federal Reserve System, Washington, DC 20551 (telephone at 202-452-3684). ISSUANCE OF THE 1998 TRADING AND PUBLICATION OF THE DECEMBER 1997 UPDATE CAPITAL-MARKETS ACTIVITIES MANUAL OF THE BANK HOLDING COMPANY SUPERVISION MANUAL The Federal Reserve Board on March 9, 1998, issued its 1998 Trading and Capital-Markets Activities The December 1997 update of the Bank Holding Manual for examiners and banking organizations. Company Supervision Manual, Supplement No. 13, The new manual represents a substantive revision is now available. The manual comprises the Federal and expansion of the Trading Activities Manual Reserve System's bank holding company inspection issued in March 1994. procedures and supervisory guidance. The supervi- The new manual compiles the latest Federal sory information includes the following. Reserve supervisory guidance on trading operations and related capital-markets banking activities. It details both sound management practices and key Control and Ownership examination and review considerations for these operations and activities. • Revisions to the general control and ownership The manual provides in-depth discussions of a section for the repeal of section 2(g)(3) of the Bank wide range of risk management issues encountered in Holding Company Act that originated from the Eco- trading and dealer operations, including revised and nomic Growth and Regulatory Paperwork Reduction expanded presentations on market risk, counterparty Act of 1996. This act also provided a limited new credit risk, legal risk, financial reporting, accounting, exemption, "qualified family partnerships," from the and ethics. definition of "company." Chapters on capital adequacy and settlement risk and a comprehensive subject index have also been added. A new section of the manual presents existing guidance on other capital-markets-related activities, Nonbanking Activities including whole-bank interest rate risk management, investment and end-user activities, and secondary • Changes to the "laundry list" of nonbanking market credit activities and products such as securitiactivities for the revised Regulation Y (Bank Holding zation and credit derivatives. Companies and Change in Bank Control), effective The manual also includes profiles of thirty-five April 21, 1997. The Regulation Y changes are also specific financial instruments commonly encountered reflected in the sections on nonbank depository instiin trading and capital-markets-related activities. Each tutions and savings associations, leasing of personal profile contains a basic description of the instrument or real property, community development advisory and discussions on topics such as the risks encounand related services, EDP servicing, payment instrutered, pricing conventions, accounting treatment, ment services, and the arranging of real estate equity risk-based capital considerations, and bank-eligibility financing. requirements. Copies of the manual may be obtained for $50 from Publications Services, Mail Stop 127, Board of Management Information Systems Governors of the Federal Reserve System, Washington, DC 20551. • Limited revisions to the inspection guidelines Updates and supplements will be issued as needed and procedures for management information systems. in the spring and fall of each year. The price will be $20 annually. The manual was produced by staff The revision supplement includes a more detailed members at the Board of Governors and at the Fedlist of changes to the manual. The manual and eral Reserve Banks of New York, Chicago, Minneupdates, including pricing information, are available apolis, and San Francisco. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

340 Federal Reserve Bulletin • May 1998 CHANGES IN BOARD STAFF Also, in the Division of Reserve Bank Operations and Payment Systems, the Board announced on The Board of Governors announced that Florence M. April 6, 1998, the appointment of Marsha Reidhill Young, Assistant Director in the Division of Reserve as Assistant Director. Ms. Reidhill has been at the Bank Operations and Payment Systems, would retire Board since November 1992. She received her B.S. on April 3. Ms. Young had served the Board since in finance from Georgetown University and an M.A. 1972. in economics from the University of Texas. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

341 Legal Developments JOINT FINAL RULE—EXPANDED EXAMINATION CYCLE each 12-month period as provided in paragraph (a) of this FOR CERTAIN SMALL INSURED INSTITUTIONS section, if the following conditions are satisfied: (1) The bank has total assets of $250 million or less; The Board of Governors of the Federal Reserve System (2) The bank is well capitalized as defined in Part 6 of ("Board"), the Office of the Comptroller of the Currency this chapter; ("OCC"), the Federal Deposit Insurance Corporation (3) At the most recent examination, the OCC found the ("FDIC"), and the Office of Thrift Supervision ("OTS") bank to be well managed; (collectively, the "Agencies"), are adopting as a final rule (4) At the most recent examination, the OCC assigned their joint interim rule implementing section 306 of the the bank a composite rating of 1 or 2 under the Uniform Riegle Community Development and Regulatory Improve- Financial Institutions Rating System (copies are availment Act of 1994 ("CDRI") and section 2221 of the able at the addresses specified in section 4.14); Economic Growth and Regulatory Paperwork Reduction (5) The bank currently is not subject to a formal enforce- Act of 1996 ("EGRPRA"). Together, section 306 of CDRI ment proceeding or order by the FDIC, OCC, or Federal and section 2221 of EGRPRA authorize the Agencies to Reserve System; and increase the asset size of certain financial institutions that (6) No person acquired control of the bank during the may be examined once in every 18-month period, rather preceding 12-month period in which a full-scope, on-site than once in every 12-month period, from $100 million to a examination would have been required but for this secrevised limit of $250 million. This final rule makes certain tion. institutions that have $250 million or less in assets eligible for the 18-month examination schedule. (c) Authority to conduct more frequent examinations. This Effective April 2, 1998, 12 C.F.R. Parts 4, 208, 337, and section does not limit the authority of the OCC to examine 563 are amended as follows: any national bank as frequently as the agency deems necessary. Part 4—Organization and Functions, Availability and Release of Information, Contracting Outreach Part 208—Membership of State Banking Program Institutions in the Federal Reserve System (Regulation H) 1. The authority citation for Part 4 continues to read as follows: 1. The authority citation for Part 208 continues to read as follows: Authority: 12 U.S.C. 93a. Subpart A also issued under 5 U.S.C. 552; 12 U.S.C. 481, 1820(d). Subpart B also Authority: 12 U.S.C. 24, 36, 92(a), 93(a), 248(a), 248(c), issued under 5 U.S.C. 552; E.O. 12600 (3 C.F.R., 1987 321-338a, 37Id, 461, 481-486, 601, 611, 1814, 1816, Comp., p. 235). Subpart C also issued under 5 U.S.C. 301, 1818, 1820(d)(9), 1823(j), 1828(o), 1831, 1831o, 1831p-l, 552; 12 U.S.C. 481, 482, 1821(o), 1821(t); 18 U.S.C. 641, 1831r-l, 1835(a), 1882, 2901-2907, 3105, 3310,3331- 1905, 1906; 31 U.S.C. 9701. Subpart D also issued under 3351, and 3906-3909; 15 U.S.C. 78b, 781(b), 78I(g), 781(i), 12 U.S.C. 1833e. 78o-4(c)(5), 78q, 78q-l and 78w; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b, 4106 and 4128. 2. In Subpart A, section 4.6 is revised to read as follows: 2. In Subpart A, section 208.26 is revised to read as follows: Section 4.6—Frequency of examination. (a) General. The OCC examines national banks pursuant to Section 208.26—Frequency of examination. authority conferred by 12 U.S.C. 481 and the requirements of 12 U.S.C. 1820(d). The OCC is required to conduct a (a) General. The Federal Reserve examines insured memfull-scope, on-site examination of every national bank at ber banks pursuant to authority conferred by 12 U.S.C. 325 least once during each 12-month period. and the requirements of 12 U.S.C. 1820(d). The Federal (b) 18-month rule for certain small institutions. The OCC Reserve is required to conduct a full-scope, on-site examimay conduct a full-scope, on-site examination of a national nation of every insured member bank at least once during bank at least once during each 18-month period, rather than each 12-month period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Federal Reserve Bulletin • May 1998 (b) 18-month rule for certain small institutions. The Fed- (2) The bank is well capitalized as defined in section eral Reserve may conduct a full-scope, on-site examination 325.103(b)(l); of an insured member bank at least once during each (3) At the most recent FDIC or applicable State banking 18-month period, rather than each 12-month period as agency examination, the FDIC found the bank to be well provided in paragraph (a) of this section, if the following managed; conditions are satisfied: (4) At the most recent FDIC or applicable State banking (1) The bank has total assets of $250 million or less; agency examination, the FDIC assigned the insured state (2) The bank is well capitalized as denned in subpart B nonmember bank a composite rating of 1 or 2 under the of this part (section 208.33); Uniform Financial Institutions Rating System (copies (3) At the most recent examination conducted by either are available at the addresses specified in section 309.4 the Federal Reserve or applicable State banking agency, of this chapter); the Federal Reserve found the bank to be well managed; (5) The bank currently is not subject to a formal enforce- (4) At the most recent examination conducted by either ment proceeding or order by the FDIC, OCC, or Federal the Federal Reserve or applicable State banking agency, Reserve System; and the Federal Reserve assigned the bank a composite rat- (6) No person acquired control of the bank during the ing of 1 or 2 under the Uniform Financial Institutions preceding 12-month period in which a full-scope, on-site Rating System (copies are available at the address speci- examination would have been required but for this secfied in section 216.6 of this chapter); tion. (5) The bank currently is not subject to a formal enforcement proceeding or order by the FDIC, OCC, or Federal (c) Authority to conduct more frequent examinations. This Reserve System; and section does not limit the authority of the FDIC to examine (6) No person acquired control of the bank during the any insured state nonmember bank as frequently as the preceding 12-month period in which a full-scope, on-site agency deems necessary. examination would have been required but for this section. Part 563—Operations (c) Authority to conduct more frequent examinations. This 1. The authority citation for Part 563 continues read as section does not limit the authority of the Federal Reserve follows: to examine any insured member bank as frequently as the agency deems necessary. Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468, 1817, 1820, 1828, 3806; 42 U.S.C. 4106. Part 337—Unsafe and Unsound Banking Practices 2. Section 563.171 is revised to read as follows: 1. The authority citation for Part 337 continues to read as follows: Section 563.171—Frequency of examination. (a) General. The OTS examines savings associations pur- Authority: 12 U.S.C. 375a(4), 375b, 1816, 1818(a), 1818(b), 1819, 1820(d)(10), 1821(f), 1828(j)(2), 183 If, suant to authority conferred by 12 U.S.C. 1463 and the 1831f-l. requirements of 12 U.S.C. 1820(d). The OTS is required to conduct a full-scope, on-site examination of every savings 2. Section 337.12 is revised to read as follows: association at least once during each 12-month period. (b) 18-month rule for certain small institutions. The OTS may conduct a full-scope, on-site examination of a savings Section 337.12—Frequency of examination. association at least once during each 18-month period, rather than each 12-month period as provided in paragraph (a) General. The Federal Deposit Insurance Corporation (a) of this section, if the following conditions are satisfied: examines insured state nonmember banks pursuant to au- (1) The savings association has total assets of thority conferred by section 10 of the Federal Deposit $250 million or less; Insurance Act (12 U.S.C. 1820). The FDIC is required to (2) The savings association is well capitalized as defined conduct a full-scope, on-site examination of every insured in section 565.4 of this Chapter; state nonmember bank at least once during each 12-month (3) At its most recent examination, the OTS found the period. savings association to be well managed; (b) 18-month rule for certain small institutions. The FDIC (4) At its most recent examination, the OTS assigned the may conduct a full-scope, on-site examination of an in- savings association a composite rating of 1 or 2, as sured state nonmember bank at least once during each defined in section 516.3(c) of this chapter; 18-month period, rather than each 12-month period as (5) The savings association currently is not subject to a provided in paragraph (a) of this section, if the following formal enforcement proceeding or order; and conditions are satisfied: (6) No person acquired control of the savings associa- (1) The bank has total assets of $250 million or less; tion during the preceding 12-month period in which a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 343 full-scope, on-site examination would have been re- Authority: 15 U.S.C. 1691-1691f. quired but for this section. 2. Appendix A is amended by revising the second para- (c) Authority to conduct more frequent examinations. This graph to read as follows: section does not limit the authority of the OTS to examine any savings association as frequently as the agency deems necessary. APPENDIX A TO PART 202—FEDERAL ENFORCEMENT AGENCIES FINAL RULE—AMENDMENT TO REGULATION B National Banks, and Federal Branches and Federal Agencies of Foreign Banks The Board of Governors is amending 12 C.F.R. Part 202, its Regulation B (Equal Credit Opportunity). The Board is Office of the Comptroller of the Currency, Customer Assisamending certain model forms in its Regulation B to reflect tance Unit, 1301 McKinney Avenue, Suite 3710, Houston, statutory amendments to the Fair Credit Reporting Act Texas 77010. ("FCRA") disclosures contained in those forms. Creditors have the option of including the FCRA disclosures with the notice of action taken required under Regulation B. In 3. Appendix C is amended as follows: addition, a technical revision has been made to Appendix A. a. By revising the second paragraph; Effective April 30, 1998, 12 C.F.R. Part 202 is amended b. By revising Form C-l; as follows: c. By revising Form C-2; d. By revising Form C-3; Part 202—Equal Credit Opportunity (Regulation B) e. By revising Form C-4; f. By revising Form C-5. 1. The authority citation for Part 202 continues to read as follows: The revisions read as follows: (Sample forms C-l through C-5 begin on page 344.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

344 Federal Reserve Bulletin • May 1998 FORM C-l -- SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF REASONS Statement of Credit Denial, Termination, or Change Date: Applicant's Name: Applicant's Address: Description of Account, Transaction, or Requested Credit: Description of Action Taken: PART I - PRINCIPLE REASON(S) FOR CREDIT DENIAL, TERMINATION, OR OTHER ACTION TAKEN CONCERNING CREDIT. This section must be completed in all instances. -Credit application incomplete -Length of residence -Insufficient number of credit -Temporary residence references provided .Unable to verify residence -Unacceptable type of credit references provided No credit file -Unable to verify credit references Limited credit experience -Temporary or irregular employment Poor credit performance with us -Unable to verify employment Delinquent past or present credit obligations with others -Length of employment Garnishment, attachment, foreclosure, come insufficient for amount repossession, collection action, or of credit requested judgment Excessive obligations in Bankruptcy relation to income -Value or type of collateral Unable to verify income not sufficient -Other, specify: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 345 FORM C-l, page 2 PART II DISCLOSURE OF USE OF INFORMATION OBTAINED FROM AN OUTSIDE SOURCE. This section should be completed if the credit decision was based in whole or in part on information that has been obtained from an outside source. Our credit decision was based in whole or in part on information obtained in a report from the consumer reporting agency listed below. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency. Name: Address: [Toll-free] Telephone number: Our credit decision was based in whole or in part on information obtained from an affiliate or from an outside source other than a consumer reporting agency. Under the Fair Credit Reporting Act, you have the right to make a written request, no later than 60 days after you receive this notice, for disclosure of the nature of this information. If you have any questions regarding this notice, you should contact: Creditor's name: Creditor's address: Creditor's telephone number: NOTICE The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is (name and address as specified by the appropriate agency listed in appendix A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin • May 1998 FORM C-2-SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF REASONS Date Dear Applicant: Thank you for your recent application. Your request for [a loan/a credit card/an increase in your credit limit] was carefully considered, and we regret that we are unable to approve your application at this time, for the following reason(s): Your Income: is below our minimum requirement. is insufficient to sustain payments on the amount of credit requested. could not be verified. Your Employment: is not of sufficient length to qualify. could not be verified. Your Credit History: of making payments on time was not satisfactory. could not be verified. Your Application: lacks a sufficient number of credit references. lacks acceptable types of credit references. reveals that current obligations are excessive in relation to income. Other: The consumer reporting agency contacted that provided information that influenced our decision in whole or in part was [name, address and [toll-free] telephone number of the reporting agency]. The reporting agency is unable to supply specific reasons why we have denied credit to you. You do, however, have a right under the Fair Credit Reporting Act to know the information contained in your credit file. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency. Any questions regarding such information should be directed to [consumer reporting agency]. If you have any questions regarding this letter, you should contact us at [creditor's name, address and telephone number]. NOTICE: The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (Provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is (name and address as specified by the appropriate agency listed in Appendix A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 347 FORM C-3 — SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF REASONS (CREDIT SCORING) Date Dear Applicant: Thank you for your recent application for We regret that we are unable to approve your request. Your application was processed by a credit scoring system that assigns a numerical value to the various items of information we consider in evaluating an application. These numerical values are based upon the results of analyses of repayment histories of large numbers of customers. The information you provided in your application did not score a sufficient number of points for approval of the application. The reasons why you did not score well compared with other applicants were: • Insufficient bank references • Type of occupation • Insufficient credit experience In evaluating your application the consumer reporting agency listed below provided us with information that in whole or in part influenced our decision. The reporting agency played no part in our decision other than providing us with credit information about you. Under the Fair Credit Reporting Act, you have a right to know the information provided to us. It can be obtained by contacting: [name, address, and [toll-free] telephone number of the consumer reporting agency]. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency. If you have any questions regarding this letter, you should contact us at Creditor's Name: Address: Telephone: Sincerely, NOTICE: The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (with certain limited exceptions); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is (name and address as specified by the appropriate agency listed in Appendix A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin • May 1998 FORM C-4 -- SAMPLE NOTICE OF ACTION TAKEN AND STATEMENT OF REASONS AND COUNTEROFFER Date Dear Applicant: Thank you for your application for We are unable to offer you credit on the terms that you requested for the following reason(s): We can, however, offer you credit on the following terms: If this offer is acceptable to you, please notify us within [amount of time] at the following address: Our credit decision on your application was based in whole or in part on information obtained in a report from [name, address and [toll-free] telephone number of the consumer reporting agency]. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency. You should know that the federal Equal Credit Opportunity Act prohibits creditors, such as ourselves, from discriminating against credit applicants on the basis of their race, color, religion, national origin, sex, marital status, age because they receive income from a public assistance program, or because they may have exercised their rights under the Consumer Credit Protection Act. If you believe there has been discrimination in handling your application you should contact the [name and address of the appropriate federal enforcement agency listed in Appendix A.] Sincerely, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 349 FORM C-5 - SAMPLE DISCLOSURE OF RIGHT TO REQUEST SPECIFIC REASONS FOR CREDIT DENIAL Date Dear Applicant: Thank you for applying to us for After carefully reviewing your application, we are sorry to advise you that we cannot [open an account for you/grant a loan to you/increase your credit limit] at this time. If you would like a statement of specific reasons why your application was denied, please contact [our credit service manager] shown below within 60 days of the date of this letter. We will provide you with the statement of reasons within 30 days after receiving your request. Creditor's Name Address Telephone number If we obtained information from a consumer reporting agency as part of our consideration of your application, its name, address, and [toll-free] telephone number is shown below. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. [You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency.] You have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency. You can find out about the information contained in your file (if one was used) by contacting: Consumer reporting agency's name Address [Toll-free] Telephone number Sincerely, NOTICE The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is (name and address as specified by the appropriate agency listed in Appendix A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin • May 1998 (c) Computation of required reserves for institutions that APPENDIX C TO PART 202—SAMPLE NOTIFICATION report on a weekly basis. FORMS (1) Required reserves are computed on the basis of daily average balances of deposits and Eurocurrency liabilities Form C-1 contains the Fair Credit Reporting Act disclosure during a 14-day period ending every second Monday as required by sections 615(a) and (b) of that act. Forms (the computation period). Reserve requirements are C-2 through C-5 contain only the section 615(a) disclosure computed by applying the ratios prescribed in sec- (that a creditor obtained information from a consumer tion 204.9 to the classes of deposits and Eurocurrency reporting agency that played a part in the credit decision). liabilities of the institution. In determining the reserve A creditor must provide the 615(a) disclosure when ad- balance that is required to be maintained with the Fedverse action is taken against a consumer based on informa- eral Reserve, the average daily vault cash held during tion from a consumer reporting agency. A creditor must the computation period is deducted from the amount of provide the section 615(b) disclosure when adverse action the institution's required reserves. is taken based on information from an outside source other (2) The reserve balance that is required to be maintained than a consumer reporting agency. In addition, a creditor with the Federal Reserve shall be maintained during a must provide the 615(b) disclosure if the creditor obtained 14-day period (the "maintenance period") that begins information from an affiliate other than information in a on the third Thursday following the end of a given consumer report or other than information concerning the computation period. affiliate's own transactions or experiences with the consumer. Creditors may comply with the disclosure requirements for adverse action based on information in a con- FINAL RULE—AMENDMENT TO REGULATION Y sumer report obtained from an affiliate by providing either the 615(a) or 615(b) disclosure. The Board of Governors is amending 12 C.F.R. Part 225, its Regulation Y (Bank Holding Companies and Change in Bank Control; Clarification to the Board's Section 20 Orders). The Board is clarifying one of the operating standards established in its decisions under the Bank Holding Company Act and section 20 of the Glass-Steagall Act FINAL RULE—AMENDMENT TO REGULATION D permitting a nonbank subsidiary of a bank holding com- The Board of Governors is amending 12 C.F.R. Part 204, pany to underwrite and deal in securities. The Board is its Regulation D (Reserve Requirements of Depository modifying the customer disclosure operating standard to Institutions), in order to move from the current system of make clear that a section 20 subsidiary operating off bank contemporaneous reserve maintenance for institutions that premises may satisfy the standard by providing a one-time are weekly deposits reporters to a system under which disclosure in writing when an investment account is reserves are maintained on a lagged basis by such institu- opened. tions. Under a lagged reserve maintenance system, the Effective March 27, 1998, 12 C.F.R. Part 225 is amended reserve maintenance period for a weekly deposits reporter as follows: will begin thirty days after the beginning of a reserve computation period. Under the current system, the reserve Part 225—Bank Holding Companies and Change in maintenance period begins only two days after the begin- Bank Control (Regulation Y) ning of a reserve computation period. Effective July 30, 1998, 12 C.F.R. Part 204 is amended 1. The authority citation for Part 225 continues to read as as follows: follows: Authority: 12 U.S.C. 1817(j)(13), 1818, 18311, 1831p-l, Part 204—Reserve Requirements of Depository 1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331- Institutions (Regulation D) 3351,3907, 3908, and 3909. 1. The authority citation for Part 204 continues to read as follows: 2. Section 225.200 is amended by revising paragraph (b)(4)(i) to read as follows: Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, and 3105. Section 225.200—Conditions to Board's Section 20 Orders 2. In section 204.3, paragraph (c) is revised to read as * * * ** follows: (b) Conditions. * * * (4) Customer disclosure. Section 204.3—Computation and maintenance. (i) Disclosure to section 20 customers. A section 20 * * * ** subsidiary shall provide, in writing, to each of its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 351 retail customers,1 at the time an investment account is institution in Massachusetts, controlling $630.7 million in opened, the same minimum disclosures, and obtain deposits, representing less than 1 percent of state deposits.3 the same customer acknowledgment, described in the CFX is the fourth largest depository institution in New Interagency Statement on Retail Sales of Nondeposit Hampshire, controlling $1.6 billion in deposits, represent- Investment Products (Statement) as applicable in such ing approximately 11.8 percent of state deposits, and the situations. These disclosures must be provided regard- 47th largest depository institution in Massachusetts, conless of whether the section 20 subsidiary is itself trolling $348.4 million in deposits, representing less than engaged in activities through arrangements with a 1 percent of state deposits. On consummation of the probank that are covered by the Statement. posal, and accounting for the proposed divestitures, Peoples would become the largest depository institution in New Hampshire and the 11th largest depository institution ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT in Massachusetts. Orders Issued Under Section 3 of the Bank Holding Interstate Analysis Company Act Section 3(d) of the BHC Act, as amended by Section 101 Peoples Heritage Financial Group, Inc. of the Riegle-Neal Interstate Banking and Branching Effi- Portland, Maine ciency Act of 1994 ("Riegle-Neal Act"),4 allows the Board to approve an application by a bank holding company to Order Approving Merger of Bank Holding Companies acquire control of a bank located in a state other than the home state of such bank holding company, if certain condi- Peoples Heritage Financial Group, Inc., Portland, Maine tions are met. For purposes of the BHC Act, the home state ("Peoples"), a bank holding company within the meaning of Peoples is Maine, and CFX controls banks in New of the Bank Holding Company Act ("BHC Act"), has Hampshire and Massachusetts.5 All of the conditions for an requested the Board's approval under section 3 of the BHC interstate acquisition enumerated in section 3(d) are met in Act (12U.S.C. § 1842) to merge with CFX Corporation, this case.6 In view of all the facts of record, the Board is Keene, New Hampshire ("CFX"), and to acquire CFX's permitted to approve the proposal under section 3(d) of the subsidiary banks: CFX Bank, Keene, New Hampshire BHC Act. ("CFX Bank"); Orange Savings Bank, Orange, Massachusetts ("Orange Savings Bank"); and Safety Fund National Competitive Considerations Bank, Fitchburg, Massachusetts ("Safety Bank").1 Notice of the proposal, affording interested persons an The BHC Act prohibits the Board from approving a proopportunity to submit comments, has been published (63 posal if it would result in a monopoly or if the effect of the Federal Register 2980 (1998)). The time for filing com- proposal may be substantially to lessen competition in any ments has expired, and the Board has considered the pro- relevant market, unless the Board finds that the anticomposal and all comments received in light of the factors set petitive effects of the proposed transaction are clearly forth in section 3 of the BHC Act. Peoples operates depository institutions2 in Maine, New Hampshire, and Massachusetts, and CFX operates banks in 3. All state deposit data are as of June 30, 1997. 4. Pub. L. No. 103-328, 108 Stat. 2338 (1994). New Hampshire and Massachusetts. Peoples is the third 5. A bank holding company's home state is that state in which the largest depository institution in New Hampshire, control- operation of the bank holding company's banking subsidiaries are ling $1.6 billion in deposits, representing approximately principally conducted on July 1, 1966, or the date on which the 12.3 percent of total deposits in depository institutions in company became a bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). the state ("state deposits"), and the 20th largest depository 6. See 12 U.S.C. §§ 1842(d)(l)(A) and (B) and 1842(d)(2)(A) and (B). Peoples is adequately capitalized and adequately managed, as defined by the Riegle-Neal Act, and CFX's banks have been in 1. For purposes of this operating standard, a retail customer is any existence and operated for the minimum periods of time necessary to customer that is not an "accredited investor" as defined in 17 C.F.R. satisfy age requirements established by applicable state law. See N.H. 230.501(a). Rev. Stat. Ann. ch. 384 (1997) (5 years); Mass. Ann. Laws ch. 167A § 2 (Law. Co-op. 1997) (3 years). Massachusetts imposes a 28 percent 1. Peoples would merge CFX Bank with and into its bank in New limitation on the amount of deposits in insured depository institutions Hampshire, Bank of New Hampshire, Manchester, New Hampshire that a banking organization may control through acquisition and New ("Manchester Bank"), and Orange Savings Bank and Safety Bank Hampshire imposes a 20 percent limitation, but permits state action to with and into its savings bank in Massachusetts, Family Bank, FSB, waive this maximum, up to 30 percent. On consummation of the Haverhill, Massachusetts ("Family Bank"). Peoples's subsidiaries proposal, accounting for all proposed divestitures, Peoples would have requested approval for the proposed mergers from the Federal control less than 10 percent of the total amount of deposits of insured Deposit Insurance Corporation ("FDIC") and the Office of Thrift depository institutions in the United States. Peoples also would not Supervision ("OTS") under section 18(c) of the Federal Deposit exceed applicable state law deposit limitations as calculated under Insurance Act (12 U.S.C. 1828(c)) (the "Bank Merger Act"), and the state law, and state banking authorities in New Hampshire and Massachusetts have advised the Board that the proposal is consistent with appropriate state bank regulators. state law. All other requirements of section 3(d) of the BHC Act also 2. In this context, depository institutions include commercial banks, would be met on consummation of the proposal. savings banks, and savings associations. 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352 Federal Reserve Bulletin • May 1998 outweighed in the public interest by the probable effect of banking market, Peoples would divest CFX's only branch the transaction in meeting the convenience and needs of to an out-of-market competitor, and the concentration in the community to be served.7 this market, as measured by the HHI, would remain un- Peoples and CFX compete in the following banking changed. In the Manchester banking market, Peoples promarkets: the Hillsborough, Manchester, and Concord bank- poses to divest two CFX branches with total deposits of ing markets, all in New Hampshire; the Boston, Massachu- $51.3 million to an out-of-market competitor. Accounting setts, banking market; and the Portsmouth/Dover/Rochester for the proposed divestiture, consummation of the proposal banking market.8 Consummation of the proposal would be would be consistent with the DOJ Guidelines and Board consistent with the Department of Justice Merger Guide- precedent in this market.12 lines ("DOJ Guidelines")9 and prior Board precedent in In the Concord banking market, Peoples proposes to the Boston and Portsmouth/Dover/Rochester banking mar- divest two branches controlling $104 million in deposits to kets.10 an out-of-market competitor. Accounting for the proposed In order to mitigate the potential anticompetitive effects divestiture, Peoples would become the largest depository of the proposal in the Hillsborough, Manchester, and Con- institution in the Concord market, controlling $380.7 milcord banking markets, Peoples has committed to divest lion in deposits, representing 34.3 percent of market deposcertain branches in those markets.11 In the Hillsborough its. The HHI would increase 210 points to 1841. Fourteen competitors would remain in the market after consummation, including three competitors other than Peoples that 7. 12 U.S.C. § 1842(c)(l)(B). Market share data used to analyze the would each control more than 10 percent of market deposcompetitive effects of the proposal are as of June 30, 1997. These data its and four additional competitors that would each control are based on calculations in which the deposits of thrift institutions are more than 5 percent of market deposits. Three de novo included at 50 percent. The Board has previously indicated that thrift entries into the Concord banking market since 1992 also institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 indicate that the market has characteristics that make it Federal Reserve Bulletin 386 (1989); National City Corporation, 70 attractive for entry. Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly The Board believes that the proposed divestitures and included thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal the considerations discussed above mitigate the potentially Reserve Bulletin 52 (1991). adverse effects of the proposal. The Department of Justice 8. The Hillsborough banking market is defined as the Hillsborough also has reviewed the proposal and advised the Board that, County towns of Deering, Hillsborough, and Windsor, and the town of in light of the proposed divestitures, consummation of the Washington in Sullivan County, all in New Hampshire. The Manchesproposal would not likely have a significantly adverse ter banking market is defined as the Manchester RMA and the towns of Chester, Deerfield, New Boston, Raymond, Raymond and Weare, competitive effect in the Hillsborough, Manchester, or Conall in New Hampshire. The Concord banking market consists of the cord banking markets, or in any other relevant banking Concord RMA and the towns of Andover, Barnstead, Bradford, Can- market. terbury, Dunbarton, Henniker, Hill, Salisbury, Warner, Webster and For the reasons discussed in this order, and based on all Loudon, and the city of Franklin, all in New Hampshire. The Boston banking market is defined as the Boston MSA. The Portsmouth/Dover/ the facts of record, the Board concludes that consummation Rochester banking market is defined as the Portsmouth/Dover/ of the proposal is not likely to result in any significantly Rochester RMA and the towns of Brookfield, Epping, Fremont, adverse effects on competition or on the concentration of Hampton Falls, Kensington, Middleton, New Durham, Northwood, banking resources in the Hillsborough, Manchester, and Nottingham, Strafford, and Wakefield in New Hampshire, and the town of Lebanon, Maine. Concord banking markets, or any other relevant banking 9. Under the revised DOJ Guidelines, 49 Federal Register 26,823 market. Accordingly, the Board believes that competitive (June 29, 1984), a market in which the post-merger Herfindahl- factors are consistent with approval of this proposal. Hirschman Index ("HHI") exceeds 1800 is considered highly concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the postmerger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limitedpurpose lenders and other non-depository financial entities. tion of the acquisition. Peoples also has committed that, in the event it 10. On consummation of the proposal. Peoples would remain the is unsuccessful in completing any divestiture within 180 days of eighth largest depository institution in the Boston banking market and consummation of the proposal, it will transfer the unsold branch(es) to control $1.35 billion in deposits, representing approximately 1.6 per- an independent trustee acceptable to the Board. The trustee will be cent of total deposits in depository institutions in the market ("market instructed to sell the branches promptly to competitively suitable deposits"). The HHI would increase by 1 point to 1447. Peoples purchasers. BankAmerica Corporation, 78 Federal Reserve Bulletin would become the largest depository institution in the Portsmouth/ 338 (1992). Dover/Rochester banking market and control $835.6 million in depos- 12. The HHI in the Manchester banking market would increase by its, representing 32.6 percent of market deposits. The HHI would 194 points to 3081, and Peoples would remain the third largest increase by 265 points to 1680. depository institution in the banking market, controlling deposits of 11. With respect to each market in which Peoples would divest $492.3 million, representing 22.4 percent of market deposits. Nine branches, Peoples has committed to execute sales agreements with an competitors would remain in the banking market after consummation out-of-market competitor prior to consummation of the acquisition of of the proposal, including three competitors, other than Peoples, that CFX, and to complete the divestitures within 180 days of consumma- would each control more than 10 percent of market deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 353 Other Considerations nicipal financial services. Peoples also intends to provide $3 million through its Community Mortgage Outreach The BHC Act requires the Board, in acting on an applica- Program for mortgage loans to LMI and minority families tion, to consider the financial and managerial resources and in the communities served by Orange Savings Bank, which future prospects of the companies and banks involved, the includes the North Quabbin area, and Safety Bank, and to convenience and needs of the communities to be served, provide $1 million to establish a loan pool to be adminisand certain supervisory factors. The Board has reviewed tered by an advisory board composed of North Quabbin these factors in light of the record, including supervisory community representatives. reports of examination assessing the financial and manage- The Board has long held that consideration of the converial resources of the organizations and financial informa- nience and needs factor includes a review of the records of tion provided by Peoples. Based on all the facts of record, the relevant depository institutions under the Community the Board concludes that the financial and managerial Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). As resources and future prospects of Peoples, CFX, and their provided in the CRA, the Board has evaluated this factor in respective subsidiary banks are consistent with approval, light of examinations by the primary federal supervisors of as are the other supervisory factors the Board must con- the CRA performance records of the relevant institutions. sider under section 3 of the BHC Act. As noted, Peoples intends to merge CFX's banks into its depository institutions after consummation of the proposal. Convenience and Needs Considerations In this light, the Board has given substantial consideration to the existing record of Peoples as reflected in the CRA The Board has carefully reviewed the effect of the proposal examinations of its subsidiaries, and the current programs on the convenience and needs of the communities to be and policies of Peoples that help meet the credit needs of served in light of all the facts of record, including com- all its service communities, including LMI neighborhoods. ments on the effects the proposal would have on the CRA Performance Examinations. The Board has recommunities to be served by the combined organization. viewed the examinations by the primary federal supervisor The Board has received a number of comments in favor of of the CRA performance records of the relevant instituthe proposal. Commenters supporting the proposal com- tions. An institution's most recent CRA performance evalmended Peoples's participation in community and eco- uation is a particularly important consideration in the applinomic development efforts in northern central Massachu- cations process because it represents a detailed on-site setts. In particular, commenters noted that, since 1991, evaluation of the institution's overall record of perfor- Family Bank has played an active role in supporting and mance under the CRA by its primary federal supervisor.14 financing many community development projects that help Peoples's lead bank, Peoples Heritage Savings Bank, meet the credit needs of low- and moderate-income Portland, Maine, received an "outstanding" rating from its ("LMI") individuals in the community of Haverhill, Mas- primary federal supervisor, the FDIC, at its most recent sachusetts. CRA examination, as of April 1996.15 Family Bank, which Several other commenters expressed concern that the would serve North Quabbin after consummation of the proposal would have an adverse effect on an economically proposal, also received an "outstanding" rating at its most depressed area served by Orange Savings Bank in Massa- recent CRA examination from the OTS, as of July 1997.l6 chusetts that is known as North Quabbin. Some of All of CFX's banks were rated "satisfactory" or better at the commenters contended that the lending activities of their most recent CRA performance evaluations by their Orange Savings Bank were inadequate to serve the credit primary federal supervisors. needs of North Quabbin, particularly the credit needs of CRA Performance Record of Family Bank. Examiners local small businesses.13 found that Family Bank's record of residential and com- In reviewing the convenience and needs of the communi- mercial lending reflected a strong responsiveness to the ties to be served, the Board notes that Peoples provides a credit needs of its communities. In addition to originating full range of financial services through its depository insti- residential mortgages throughout its service communities, tutions. Peoples has indicated that it intends to enhance and Family Bank offers the Community Mortgage Outreach expand the banking services available to all of its CFX's customers through increased commercial and residential housing lending activities, and access to a larger network 14. The Statement of the Federal Financial Supervisory Agencies of banking offices with extended banking hours, a full-ser- Regarding the Community Reinvestment Act provides that a CRA vice commercial real estate department, and expanded mu- examination is an important and often controlling factor in the consideration of an institution's CRA record and that reports of these examinations will be given great weight in the applications process. 54 Federal Register 13,742 and 13,745 (1989). 13. One commenter expressed concern that grants to the comment- 15. The bank has retained an "outstanding" CRA performance er's community organization from Orange Savings Bank would not be rating since 1978 when federal supervisors began examining insured continued after consummation of the proposal. Such agreements are depository institutions for CRA performance. matters governed by private negotiations between the parties and are 16. Manchester Bank's most recent CRA performance rating as of not required by the CRA. Accordingly, the Board's review of the January 1995 was "satisfactory." Peoples acquired Manchester Bank proposal has focused on the programs and policies that Peoples has in in April 1996, and established a goal of improving its rating to place to serve the credit needs of its communities. "outstanding" in 1998. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin • May 1998 Program specifically to assist LMI and minority borrowers the Federal Reserve Bank of Boston, acting pursuant to in obtaining mortgage loans. The program features flexible delegated authority. underwriting criteria and Family Bank has made more than By order of the Board of Governors, effective March 18, $6 million in loans since the program was established in 1998. 1994. In addition, Family Bank assists in meeting the small Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and business credit needs of its communities. Examiners noted Governors Meyer and Gramlieh. Absent and not voting: Governors Kelley, Phillips, and Ferguson. that 23.8 percent of the volume of small business loans made by the savings bank during the period covered by the JENNIFER J. JOHNSON examination were originated in LMI census tracts. Family Deputy Secretary of the Board Bank originated $84.4 million in small business loans during this period which represented 61 percent of the total Regions Financial Corporation dollar amount of its outstanding commercial loans. The Birmingham, Alabama savings bank has been designated as a "Preferred Lender" by the Small Business Administration and has participated Order Approving Merger of Bank Holding Companies as a member of several loan pools designed to assist small and Acquisition of Banks businesses, including the minority micro-loan pool of Lawrence and the Cambodian-American League of Lowell, Regions Financial Corporation ("Regions"), Birmingham, both in Massachusetts. Family Bank also has indicated that Alabama, a bank holding company within the meaning of it intends to assign two experienced commercial lending the Bank Holding Company Act ("BHC Act"), has reofficers with primary responsibility for North Quabbin, quested the Board's approval under section 3 of the BHC consistent with its approach of permitting lending deci- Act (12 U.S.C. § 1842) to merge with First State Corporasions to be made locally. tion, Albany, Georgia ("FSC"), and thereby acquire FSC's Examiners also found that Family Bank actively supsubsidiary banks: First Bank & Trust Company, Albany, ports community development activities. The bank made Georgia ("FB&T-Albany"), and First Bank & Trust Com- $5.2 million in loans to organizations involved in affordpany, Cordele, Georgia ("FB&T-Cordele"). able housing, economic and community development, and Notice of the proposal, affording interested persons an neighborhood stabilization activities during the period covopportunity to submit comments, has been published (63 ered by the examination. Federal Register 5805 (1998)). The time for filing com- Conclusion on Convenience and Needs. The Board has ments has expired, and the Board has considered the applicarefully considered all the facts of record, including the cation and all comments received in light of the factors set comments received, responses to those comments, and the forth in the BHC Act. CRA performance records of the insured depository institu- Regions, with total consolidated assets of approximately tions of Peoples and CFX, including relevant reports of $24 billion, operates banks in Alabama, Florida, Georgia, examination and other supervisory information. Based on a Louisiana, South Carolina, and Tennessee.1 Regions is the review of the entire record and for the reasons discussed largest commercial banking organization in Alabama, conabove, the Board concludes that convenience and needs trolling deposits of approximately $8.8 billion, representconsiderations, including the CRA records of performance ing approximately 19.4 percent of total deposits in comof the institutions, are consistent with approval of the mercial banking organizations in the state ("state proposal. deposits"). It is the sixth largest commercial banking organization in Georgia, controlling deposits of approximately Conclusion $3.8 billion, representing approximately 5.3 percent of Georgia state deposits. FSC is the 17th largest commercial Based on all the facts of record, and for the reasons banking organization in Georgia, controlling deposits of discussed above, the Board has determined that the applica- $373.7 million, representing less than 1 percent of Georgia tion should be, and hereby is, approved. The Board's state deposits. On consummation of the proposal, Regions decision is specifically conditioned on compliance with all would remain the sixth largest commercial banking organithe commitments made in the application, including the zation in Georgia. proposed divestiture commitments discussed in this order. The commitments relied on in reaching this decision shall Interstate Analysis be deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and, as Section 3(d) of the BHC Act, as amended by Section 101 such, may be enforced in proceedings under applicable of the Riegle-Neal Interstate Banking and Branching Effilaw. ciency Act of 1994 ("Riegle-Neal Act"),2 allows the Board The acquisition of CFX may not be consummated before to approve an application by a bank holding company to the fifteenth calendar day after the effective date of this order, and the proposal may not be consummated later that three months after the effective date of this order, unless 1. All banking data are as of September 30, 1997. such period is extended for good cause by the Board or by 2. Pub. L. No. 103-328, 108 Stat. 2338 (1994). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 355 acquire control of a bank located in a state other than the CRA Performance Examinations. As provided in the home state of such bank holding company, if certain condi- CRA, the Board has evaluated the convenience and needs tions are met. For purposes of the BHC Act, the home state factor in light of examinations of the CRA performance of Regions is Alabama, and FSC controls banks in Geor- records of the relevant institutions by their primary federal gia.3 All of the conditions for an interstate acquisition supervisors. An institution's most recent CRA perforenumerated in section 3(d) are met in this case.4 In view of mance evaluation is a particularly important consideration all the facts of record, the Board is permitted to approve in the application process, because it represents a detailed, the proposal under section 3(d) of the BHC Act. on-site evaluation of the institution's overall record of performance under the CRA by its primary federal supervi- Competitive, Financial and Managerial Considerations sor.5 The Board has reviewed the records of performance of the subsidiary banks of Regions and FSC in light of all Regions and FSC do not compete in any banking market. the facts of record. Based on all the facts of record, the Board concludes that Regions's lead bank, which accounts for approximately consummation of the proposal would not have a signifi- 65 percent of the company's consolidated assets, received cantly adverse effect on competition in any relevant bank- an "outstanding" rating from its primary federal superviing market. sor, the Federal Deposit Insurance Corporation ("FDIC"), The Board also has considered the financial and manage- at its most recent evaluation for CRA performance, as of rial resources and future prospects of Regions, FSC, and September 1996. Regions's other banks each received a their respective subsidiary banks in light of all the facts of "satisfactory" or better rating from their primary federal record, including supervisory reports of examination as- supervisor at their most recent evaluation for CRA perforsessing the financial and managerial resources of the orga- mance. In addition, FB&T-Albany and FB&T-Cordele renizations and financial information provided by Regions. ceived "outstanding" CRA performance ratings from the The Board notes that Regions is in satisfactory financial FDIC as of July 1996 ("July 1996 Examination") and January 1996, respectively. condition and would remain so after consummation of the proposal. Reports of examination assessing the managerial Comments on Performance Record of FB&T-Albany. resources of Regions and its subsidiaries indicate that this The Board did not receive comments on the CRA perforfactor is consistent with approval. Based on all the facts of mance records of Regions's banks. The Board received record, the Board concludes that considerations related to comments generally contending that FB&T-Albany was the financial and managerial resources and future prospects inadequately serving the credit needs of low- to moderateof Regions, FSC, and their respective subsidiary banks are income ("LMI") census tracts and the credit needs of consistent with approval under the BHC Act, as are other small businesses owned by African Americans.6 Comsupervisory factors the Board must consider under the menter also indicated that FB&T-Albany did not have a BHC Act. branch in an Albany census tract with a predominately minority population. Convenience and Needs Considerations In the July 1996 Examination, examiners concluded that FB&T-Albany effectively assisted in meeting the credit In acting on a proposal under section 3 of the BHC Act, the needs of its communities by originating residential, small Board is required to consider the effect of the proposal on business and small farm loans, and that the bank's loans the convenience and needs of the community to be served. were reasonably dispersed throughout its delineated com- The Board has long held that consideration of the conve- munities, including LMI neighborhoods. Examiners particnience and needs factor includes a review of the records of ularly commended the bank's efforts in assisting the credit the relevant depository institutions under the Community needs of small businesses. As of July 1996, FB&T-Albany Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). had $63 million outstanding in small business loans, including eight loans under programs sponsored by the Small Business Administration that totalled approximately $1.1 million. The bank also allocated $1 million for a loan 3. A bank holding company's home state is that state in which the program administered by the Albany Dougherty Inner City operation of the bank holding company's banking subsidiaries were Authority for the purpose of providing loans at belowprincipally conducted on July 1, 1966, or the date on which the market rates to improve inner city businesses. company became a bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). 4. See 12 U.S.C. §§ 1842(d)(l)(A) and (B) and 1842(d)(2)(A) and (B). Regions is adequately capitalized and adequately managed, as 5. The Statement of the Federal Financial Supervisory Agencies defined by the Riegle-Neal Act. FSC's banks have been in existence Regarding the Community Reinvestment Act provides that a CRA and continuously operated for the minimum period required under examination is an important and often controlling factor in the consid- Georgia law. See Ga. Code Ann. § 7-1-628.3 (1997) (5 years). On eration of an institution's CRA record and that reports of these consummation of the proposal, Regions would control less than examinations will be given great weight in the applications process. 10 percent of the total amount of deposits of insured depository See 54 Federal Register 13.742 and 13.745 (1989). institutions in the United States and less than 30 percent of the total 6. An individual ("Commenter") submitted comments on behalf of amount of deposits of insured depository institutions in Georgia. All Business Research and Development & Associates and the Albanyother requirements of section 3(d) of the BHC Act also would be met Dougherty National Association for the Advancement of Colored on consummation of the proposal. People. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin • May 1998 Examiners found no evidence of practices under the conditions relied on in reaching this decision are deemed to bank's loan policies and procedures that discouraged appli- be conditions imposed in writing by the Board and, as cations for the types of credit set forth in the CRA state- such, may be enforced in proceedings under applicable ment and no evidence of discriminatory or other illegal law. credit practices.7 FB&T-Albany's branches also were found The proposal shall not be consummated before the fifto be readily accessible to all areas of its delineated com- teenth calendar day following the effective date of this munities. Examiners favorably noted that the bank had six order, or later than three months after the effective date of full-service branches in Albany and that four of the this order, unless such period is extended for good cause by branches were in or near LMI areas. the Board or by the Federal Reserve Bank of Atlanta, Conclusion on Convenience and Meeds. The Board has acting pursuant to delegated authority. carefully considered the entire record in its review of the By order of the Board of Governors, effective March 11, convenience and needs factor under the BHC Act.8 Based 1998. on all the facts of record, including Commenter's submission and the relevant reports of examination, the Board Voting for this action: Chairman Greenspan, and Governors concludes that considerations relating to convenience and Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting: needs, including the CRA performance records of the Vice Chair Rivlin and Governor Kelley. relevant institutions, are consistent with approval. JENNIFER J. JOHNSON Deputy Secretary of the Board Conclusion Orders Issued Under Section 4 of the Bank Holding Based on the foregoing and all the facts of record, the Company Act Board has determined that the application should be, and hereby is, approved.9 The Board's approval of the proposal Banco Bilbao Vizcaya, S.A. is specifically conditioned on compliance by Regions with Bilbao, Spain all the commitments made in connection with this application. For purposes of this action, the commitments and Order Approving Notice to Engage in Certain Nonbanking Activities 7. Although examiners noted technical violations of the Fair Hous- Banco Bilbao Vizcaya, S.A., Bilbao, Spain ("BBV"), a ing Act, they concluded that the violations did nol indicate any discriminatory practices and that bank was in compliance with the foreign bank subject to the provisions of the Bank Holding substantive provisions of anti-discrimination laws and regulations. Company Act ("BHC Act"), has requested the Board's Bank has initiated steps to correct the violations. approval under section 4(c)(8) of the BHC Act (12 U.S.C. 8. Commenter also alleges that FB&T-Albany does not have a § 1843(c)(8)) and section 225.24 of the Board's Regulasufficient number of African Americans on its board of directors and in management. The BHC Act does not authorize the Board to tion Y (12 C.F.R. 225.24) to engage in the following adjudicate disputes that arise in areas of employment discrimination. nonbanking activities through its wholly owned subsidiary, Under the regulations of the Department of Labor. FSC and FB&T- BBV Latlnvest Securities Inc., New York, New York Albany are required to file reports with the Equal Employment Oppor- ("Company"):1 tunity Commission ("EEOC") covering all employees, and the EEOC has jurisdiction for determining whether companies are in compliance (1) Underwriting and dealing in, to a limited extent, all with equal employment opportunity statutes. See 41 C.F.R. 60-1.7(a), types of debt and equity securities, other than ownership 60-1.40. interests in open-end investment companies; 9. Commenter has requested that the Board hold a public hearing or (2) Extending credit and servicing loans, in accordance meeting on the application. Section 3(b) of the BHC Act does not with section 225.28(b)(l) of Regulation Y (12 C.F.R. require the Board to hold a public hearing on an application unless the appropriate supervisory authority for the bank to be acquired makes a 225.28(b)(l)); timely written recommendation of denial. The Board has not received (3) Providing financial and investment advisory sersuch a recommendation from the FDIC or any state supervisory vices, in accordance with section 225.28(b)(6) of Reguauthority. lation Y (12 C.F.R. 225.28(b)(6)); Under its rules, the Board also may, in its discretion, hold a public hearing or meeting on an application to acquire a bank if necessary or (4) Providing securities brokerage services, in accorappropriate to clarify factual issues related to the application and to dance with section 225.28(b)(7)(i) of Regulation Y provide an opportunity for testimony, if appropriate. 12 C.F.R. (12 C.F.R. 225.28(b)(7)(i)); 225.16(e). The Board has carefully considered Commenter's request (5) Buying and selling all types of securities on the order in light of all the facts of record. In the Board's view, Commenter has had ample opportunity to submit his views, and has submitted written of customers as a "riskless principal," in accordance comments that have been carefully considered by the Board in acting on the application. Commenter's request fails to demonstrate why his written presentation does not adequately present his evidence, allegations, or views. Commenter also fails to indicate why a public meeting or hearing is necessary for the proper presentation or consideration of 1. BBV previously received approval under section 4(c)(9) of the his views. For these reasons, and based on all the facts of record, the BHC Act to acquire Company and to engage temporarily in various Board has determined that a public hearing or meeting is not required nonbanking activities through Company. See Letter dated October 15, or warranted in this case. Accordingly, the request for a hearing or 1995, from Jennifer J. Johnson, Deputy Secretary of the Board, to meeting on the proposal is hereby denied. Eileen P. Matthews, Esq. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 357 with section 225.28(b)(7)(ii) of Regulation Y (12 C.F.R. also has determined that underwriting and dealing in bank- 225.28(b)(7)(ii); ineligible securities is consistent with section 20 of the (6) Acting as agent in the private placement of all types Glass-Steagall Act (12 U.S.C. § 377), provided that the of securities, in accordance with section 225.28(b)(7)(iii) company engaged in the activity derives no more than of Regulation Y (12 C.F.R. 225.28(b)(7)(iii)); 25 percent of its gross revenues from underwriting (7) Providing other transactional services, in accordance and dealing in bank-ineligible securities over a two-year with section 225.28(b)(7)(v) of Regulation Y (12 C.F.R. period.4 225.28(b)(7)(v)); and BBV has committed that Company will conduct its (8) Underwriting and dealing in obligations of the United underwriting and dealing activities using the methods and States and Canada, general obligations of U.S. states, procedures and subject to the prudential limitations estab- Canadian provinces, and their political subdivisions, and lished by the Board in the Section 20 Orders. BBV also has other obligations in which state member banks may committed that Company will conduct its bank-ineligible underwrite and deal under 12 U.S.C. §§ 335 and 24(7) securities underwriting and dealing activities subject to the ("bank-eligible securities"), in accordance with section Board's revenue restriction. As a condition of this order, 225.28(b)(8)(i) of Regulation Y (12 C.F.R. BBV is required to conduct its bank-ineligible securities 225.28(b)(8)(i)). activities subject to the revenue restrictions and Operating Standards established for section 20 subsidiaries ("Operat- Notice of the proposal, affording interested persons an ing Standards").5 opportunity to submit comments, has been published (62 Federal Register 7231 (1997)). The time for filing com- Activities Approved by Regulation ments has expired, and the Board has considered the notice and all comments received in light of the factors set forth As noted above, BBV proposes that Company engage in in section 4(c)(8) of the BHC Act. providing credit and servicing loans; financial and invest- BBV, with total consolidated assets of approximately ment advisory activities; securities brokerage, riskless prin- $129.6 billion, is the second largest banking organization cipal, private placement, and other transactional activities; in Spain.2 In the United States, BBV operates a branch and and bank-eligible securities underwriting and dealing activa representative office in New York, New York; two agen- ities. The Board has determined by regulation that each of cies in Miami, Florida; and a branch and an insured non- these activities is closely related to banking for purposes of member bank in San Juan, Puerto Rico. Company is regis- section 4(c)(8) of the BHC Act.6 BBV has committed that tered as a broker-dealer with the Securities and Exchange Company will conduct these activities in accordance with Commission ("SEC") under the Securities Exchange Act the limitations set forth in Regulation Y and the Board's of 1934 (15 U.S.C. § 78a et seq.) and is a member of the orders and interpretations relating to each of the activities. National Association of Securities Dealers, Inc. ("NASD"). Accordingly, Company is subject to the re- Proper Incident to Banking Standard cordkeeping and reporting obligations, fiduciary standards, and other requirements of the Securities Exchange Act of In order to approve this notice, the Board also must con- 1934, the SEC, and the NASD. sider whether performance of the proposed activities is a proper incident to banking, that is, whether the activities Underwriting and Dealing in Bank-Ineligible Securities proposed "can reasonably be expected to produce benefits The Board has determined that—subject to the framework of prudential limitations established in previous decisions lion 20 Subsidiary and an Affiliated Bank or Thrift, 61 Federal to address the potential for conflicts of interests, unsound Register 57,679 (1996), and Amendments to Restrictions in the Board's Section 20 Orders, 62 Federal Register 45,295 (1997) (collecbanking practices, or other adverse eifects—underwriting tively, "Section 20 Orders"). and dealing in bank-ineligible securities is so closely re- 4. Compliance with the revenue limitation shall be calculated in lated to banking as to be a proper incident thereto within accordance with the method stated in the Section 20 Orders, as the meaning of section 4(c)(8) of the BHC Act.3 The Board modified by the Order Approving Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989); 10 Percent Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies Engage in Underwriting and Dealing in Securities, 61 2. Asset data are as of September 30, 1997, and are based on Federal Register 48,953 (1996); and Revenue Limit on Bank-Ineligible exchange rates then applicable. Ranking data are as of June 30, 1997. Activities of Subsidiaries of Bank Holding Companies Engaged in 3. See Canadian Imperial Bank of Commerce, et al, 76 Federal Underwriting and Dealing in Securities. 61 Federal Register 68,750 Reserve Bulletin 158 (1990); J.P. Morgan & Co. Inc.. el. al, 75 (1996) (collectively, "Modification Orders"). Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities Indus- 5. Company may provide services that are necessary incidents to the try Ass'n v. Board of Governors of the Federal Reserve System, 900 proposed underwriting and dealing activities. Unless Company re- F.2d 360 (D.C. Cir. 1990); Citicorp, 73 Federal Reserve Bulletin 473 ceives specific approval under section 4(c)(8) of the BHC Act to (1987), aff'd sub nom. Securities Industry Ass'n v. Board of Gover- conduct the activities independently, any revenues from the incidental nors of the Federal Reserve System, 839 F.2d 47 (2d Cir.). cert, activities must be treated as ineligible revenues subject to the Board's denied, 486 U.S. 1059 (1988), as modified by Review of Restrictions revenue limitation. on Director, Officer and Employee Interlocks, Cross-Marketing Activi- 6. See 12 C.F.R. 225.28(b)(l), (b)(6), (b)(7)(i), (b)(7)(ii). (b)(7)(iii), ties, and the Purchase and Sale of Financial Assets Between a Sec- (b)(7)(v), and (b)(8)(i). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin • May 1998 to the public . . . that outweigh possible adverse effects, benefits of the proposal. Accordingly, the Board has detersuch as undue concentration of resources, decreased or mined that performance of the proposed activities by BBV unfair competition, conflicts of interests, or unsound bank- can reasonably be expected to produce public benefits that ing practices."7 As part of its evaluation of these factors, outweigh possible adverse effects under the proper incident the Board considers the financial condition and managerial to banking standard of section 4(c)(8) of the BHC Act. resources of the notificant and its subsidiaries and the effect the transaction would have on such resources.8 The Board Conclusion notes that BBV's capital ratios satisfy applicable riskbased standards under the Basle Accord and are considered Based on all the facts of record, and subject to the commitequivalent to the capital levels that would be required of a ments made by BBV, as well as the terms and conditions U.S. banking organization. The Board also has reviewed set forth in this order and in the Board's orders and the capitalization of BBV and Company in accordance regulations noted above, including the Operating Stanwith the standards set forth in the Section 20 Orders and dards, the Board has determined that the notice should be, finds the capitalization of each to be consistent with ap- and hereby is, approved. Underwriting and dealing in any proval of the proposal. The Board has reviewed these manner other than as approved in this order and the Secfactors in light of all the facts of record, including BBV's tion 20 Orders, as modified by the Modification Orders, is projection of the volume of Company's underwriting and not authorized. dealing activities in bank-ineligible securities. The Board's determination also is subject to all the terms On the basis of its supervisory experience with BBV, the and conditions set forth in Regulation Y, including those in results of a recent infrastructure review of Company, the sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and commitments provided in this case, and the proposed man- 225.25(c)), and to the Board's authority to require modifiagement of Company, the Board has determined that BBV cation or termination of the activities of a bank holding and Company have established policies and procedures to company or any of its subsidiaries as the Board finds ensure compliance with this order and the Section 20 necessary to assure compliance with, and to prevent eva- Orders, including computer, audit, and accounting systems, sion of, the provisions of the BHC Act and the Board's internal risk management controls, and the necessary oper- regulations and orders issued thereunder. In approving the ational and managerial infrastructure. The Board also has proposal, the Board has relied on all the facts of record and reviewed other aspects of the managerial resources of the all the representations and commitments made by BBV. entities involved in the proposal, including the expected These commitments and conditions shall be deemed to be effect of the proposal on such resources. On the basis of the conditions imposed in writing by the Board in connection foregoing and all the facts of record, the Board concludes with its findings and decisions, and may be enforced in that financial and managerial considerations are consistent proceedings under applicable law. with approval of the notice. This transaction shall not be consummated later than The Board expects, moreover, that consummation of the three months after the effective date of this order, unless proposal would provide added convenience to BBV's cus- such period is extended for good cause by the Board or by tomers and increase the level of competition among exist- the Federal Reserve Bank of New York, acting pursuant to ing providers of these services. As noted above, BBV has delegated authority. committed that Company will conduct its bank-ineligible By order of the Board of Governors, effective March 23, securities underwriting and dealing activities in accordance 1998. with the prudential framework established by the Board's Section 20 Orders, including the Operating Standards. Un- Voting for this action; Chairman Greenspan, Vice Chair Rivlin, and der the framework and conditions established in this order Governors Kelley, Phillips, Meyer, and Ferguson. Absent and not voting: Governor Gramlich. and the Section 20 Orders, the Board concludes that Company's proposed limited conduct of bank-ineligible securi- JENNIFER J. JOHNSON ties underwriting and dealing activities is not likely to Deputy Secretary of the Board result in significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices that Commerce Bancorp, Inc. would outweigh the public benefits of the proposal. Simi- Cherry Hill, New Jersey larly, the Board finds no evidence that Company's private placement, riskless principal, and other activities— Order Approving Notice to Engage in Nonbanking conducted under the framework and conditions established Activities in this order and Regulation Y—would likely result in any significantly adverse effects that would outweigh the public Commerce Bancorp, Inc. ("Commerce"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's ap- 7. 12U.S.C. § 1843(c)(8). proval under section 4(c)(8) of the BHC Act (12U.S.C. 8. See 12 C.F.R. 225.24; see also The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 § 1843(c)(8)) and section 225.24 of the Board's Regula- Federal Reserve Bulletin 155 (1987). tion Y (12 C.F.R. 225.24) to acquire A.H. Williams & Co., Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 359 Inc., Philadelphia, Pennsylvania ("Company"), and Underwriting and Dealing Activities thereby engage de novo in the following activities:1 (1) Underwriting and dealing in, to a limited extent, The Board has determined—subject to the framework of certain municipal revenue bonds (including certain un- prudential limitations to address the potential for conflicts rated municipal revenue bonds and private ownership of interests, unsound banking practices, or other adverse industrial development bonds issued for traditional gov- effects—that underwriting and dealing in bank-ineligible ernment services), 1-4 family mortgage-related securi- securities are so closely related to banking as to be a proper ties, consumer receivable-related securities, and com- incident thereto within the meaning of section 4(c)(8) of mercial paper (collectively, "bank-ineligible the BHC Act.3 securities"); The Board also has determined that conduct of these (2) Providing services that are usual in connection with activities is consistent with section 20 of the Glass-Steagall making, acquiring, brokering, or servicing loans or other Act (12 U.S.C. § 377), provided that the company engaged extensions of credit, pursuant to section 225.28(b)(l) of in underwriting and dealing activities derives no more than Regulation Y (12 C.F.R. 225.28(b)(l)); 25 percent of its gross revenues from underwriting and (3) Leasing personal or real property or acting as agent, dealing in bank-ineligible securities over a two-year peribroker, or adviser in leasing such property, pursuant to od.4 Commerce has committed that Company will conduct section 225.28(b)(3) of Regulation Y (12 C.F.R. its bank-ineligible securities underwriting and dealing ac- 225.28(b)(3)); tivities subject to the Board's 25-percent revenue limit.5 As (4) Providing financial and investment advisory ser- a condition of this order, Commerce also would be required vices, pursuant to section 225.28(b)(6) of Regulation Y to conduct its bank-ineligible securities activities subject to (12 C.F.R. 225.28(b)(6)); the Operating Standards for section 20 subsidiaries.6 (5) Providing securities brokerage, private placement, and riskless principal services, pursuant to section Other Activities Approved by Regulation 225.28(b)(7) of Regulation Y (12 C.F.R. 225.28(b)(7)); (6) Underwriting and dealing in government obligations The Board previously has determined by regulation that and money market instruments in which state member activities related to extending credit; leasing personal or banks may underwrite and deal under 12 U.S.C. §§ 335 real property; financial and investment advisory activities; and 24(7) ("bank-eligible securities") and engaging in investing and trading activities as a principal, pursuant to section 225.28(b)(8)(i) and (ii) of Regulation Y 3. See Citicorp, et at, 73 Federal Reserve Bulletin 473 (1987), aff'd (12 C.F.R. 225.28(b)(8)(i) and (ii)); and sub norm. Securities Industry Ass'n v. Board of Governors of the (7) Providing management consulting and employee Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 benefits counseling services, pursuant to sec- U.S. 1059 (1988); as modified by Review of Restrictions on Director, tion 225.28(b)(9) of Regulation Y (12 C.F.R. Officer and Employee Interlocks, Cross-Marketing Activities, and the Purchase and Sale of Financial Assets between a Section 20 Subsid- 225.28(b)(9)). iary and an Affiliated Bank or Thrift, 61 Federal Register 57,679 (1996), and Amendments to Restrictions in the Board's Section 20 Notice of the proposal, affording interested persons an Orders, 62 Federal Register 45,295 (1997) (collectively, "Section 20 opportunity to submit comments, has been published (63 Orders"). Federal Register 4267 (1998)). The time for filing com- 4. Compliance with the revenue limitation shall be calculated in accordance with the method stated in the Section 20 Orders, as ments has expired, and the Board has considered the notice modified by the Order Approving Modifications to the Section 20 and all comments received in light of the factors set forth Orders, 75 Federal Reserve Bulletin 751 (1989), and JO Percent in section 4(c)(8) of the BHC Act. Revenue Limit on Bank-Ineligible Activities of Subsidiaries of Bank Commerce, with total consolidated assets of approxi- Holding Companies Engaged in Underwriting and Dealing in Securities, 61 Federal Register 48,953 (1996), and Revenue Limit on Bankmately $4 billion, operates subsidiary banks in New Jersey Ineligible Activities of Subsidiaries of Bank Holding Companies Enand Pennsylvania.2 Company is and, following consumma- gaged in Underwriting and Dealing in Securities, 61 Federal Register tion of the proposal, will continue to be registered as a 68,750 (1996) (collectively, "Modification Orders"). broker-dealer with the Securities and Exchange Commis- 5. Company may provide services that are necessary incidents to the sion ("SEC") under the Securities Exchange Act of 1934 proposed underwriting and dealing activities. Unless Commerce receives specific approval under section 4(c)(8) of the BHC Act to (15 U.S.C. § 78a et seq.) ("1934 Act"), and is a member of conduct the activities independently. Company must treat any revethe National Association of Securities Dealers, Inc. nues from the incidental activities as ineligible revenues subject to the ("NASD"). Accordingly, Company is and will remain Board's revenue limitation. subject to the recordkeeping and reporting obligations, 6. 12 C.F.R. 225.200. Company proposes to complete the underwritfiduciary standards, and other requirements of the 1934 ing of five issues of securities that are not within the scope of activities for which Commerce is seeking approval. Company agreed Act, the SEC, and the NASD. to perform these five underwritings prior to agreeing to be acquired under the proposal, and the underwriting of all these securities is expected to be completed within 120 days after consummation of the proposal. Company may complete these underwritings and must treat 1. After consummation of the proposal, Commerce would change all revenue derived from any of these underwritings that are comthe name of Company to Commerce Capital Markets, Inc. pleted after consummation of the proposal as bank-ineligible revenue 2. Asset data are as of December 31, 1997. subject to the Board's revenue limitations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin • May 1998 securities brokerage, riskless principal, and private place- unsound banking practices that would outweigh the public ment services; underwriting and dealing in bank-eligible benefits of the proposal. Similarly, the Board finds no securities; investment and trading as a principal; and man- evidence that Company's riskless principal, private placeagement consulting are closely related to banking within ment, and other nonbanking activities—conducted under the meaning of section 4(c)(8) of the BHC Act.7 Com- the framework and conditions established in this order and merce has committed that it will conduct each of these Regulation Y—would likely result in any significantly activities in accordance with the BHC Act, Regulation Y, adverse effects that would outweigh the public benefits of and the relevant Board interpretations and orders. the proposal. Accordingly, the Board has determined that performance of the proposed activities by Commerce is a Proper Incident to Banking Standard proper incident to banking for purposes of section 4(c)(8) of the BHC Act. In order to approve the proposal, the Board also must determine that the proposed activities are a proper incident Conclusion to banking, that is, that the proposed transaction "can reasonably be expected to produce benefits to the public ... On the basis of all the facts of record, the Board has that outweigh possible adverse effects, such as undue condetermined that the notice should be, and hereby is, apcentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."8 As proved, subject to all the terms and conditions described in this order. The Board's approval of the proposal extends part of its evaluation of these factors, the Board considers only to activities conducted within the limitations of this the financial condition and managerial resources of the order, including the Board's reservation of authority to notificant and its subsidiaries and the effect the transaction would have on such resources.9 The Board has carefully establish additional limitations to ensure that Commerce's activities are consistent with safety and soundness, avoidexamined the financial resources, management expertise, ance of conflicts of interests, and other relevant considerand risk management policies of Commerce and its subsidations under the BHC Act. Underwriting and dealing in iaries. Based on all the facts of record, the Board concludes any manner other than as approved in this order is not that financial and managerial considerations are consistent within the scope of the Board's approval and is not authowith approval. rized for Commerce. The Board has carefully considered the competitive ef- The Board's determination is subject to all the terms and fects of the proposal. To the extent that Commerce and conditions set forth in Regulation Y, including those in Company offer different types of products and services, the sections 225.7 and 225.25(c) of Regulation Y (12 C.F.R. proposal would result in no loss of competition. In those 225.7 and 225.25(c)), and to the Board's authority to markets in which Commerce's and Company's products require such modification or termination of the activities of and services overlap, such as municipal finance underwrita bank holding company or any of its subsidiaries as the ing, there are numerous existing and potential competitors. Board finds necessary to ensure compliance with, and to Consummation of the proposal, therefore, would have a de prevent evasion of, the provisions of the BHC Act and the minimis effect on competition in the market for these Board's regulations and orders issued thereunder. The services, and the Board has concluded that the proposal Board's decision is specifically conditioned on compliance would not result in any significantly adverse competitive with all the commitments made in connection with this effects in any relevant market. notice, including the commitments discussed in this order, The Board expects that the proposal would provide and the conditions set forth in this order and the aboveadded convenience and efficiency to customers of Comnoted Board regulations and orders. These commitments merce and Company by expanding the range of products and conditions are deemed to be conditions imposed in and services available to states and municipalities in the writing by the Board in connection with its findings and region Company would serve. As noted above, Commerce decisions, and, as such, may be enforced in proceedings has committed that Company will conduct its bankunder applicable law. ineligible securities underwriting and dealing activities in The proposal shall not be consummated later than three accordance with the prudential framework described above. months after the effective date of this order, unless such Under the framework and conditions described in this period is extended for good cause by the Board or by the order, the Board concludes that the acquisition of Company Federal Reserve Bank of Philadelphia, acting pursuant to by Commerce and the conduct by Commerce of the prodelegated authority. posed limited bank-ineligible securities underwriting and dealing activities is not likely to result in significantly By order of the Board of Governors, effective March 23, adverse effects, such as undue concentration of resources, 1998. decreased or unfair competition, conflicts of interests, or Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Governors Kelley, Phillips, Meyer, and Ferguson. Absent and not voting: Governor Gramlich. 7. See 12 C.F.R. 225.28(b)(l), (3), (6), (7). (8)(i) and (ii), and (9). 8. See 12 U.S.C. § 1843(c)(8). JENNIFER J. JOHNSON 9. See 12 C.F.R. 225.26. Deputy Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 361 Dresdner Bank AG would be registered as commodity trading advisors with Frankfurt, Germany the Commodity Futures Trading Commission ("CFTC") and the National Futures Association ("NFA"). Because Oechsle International Advisors, L.P. Partnerships would hold positions in commodity futures Boston, Massachusetts contracts and would be controlled by Companies, Companies also must register as CPOs with the CFTC and the RCM Capital Management, L.L.C. NFA. Companies would be subject to the record keeping, San Francisco, California reporting, fiduciary standards, and other requirements of the Commodity Exchange Act (7 U.S.C. § 2 et seq.), the Order Approving Notice to Engage in Nonbanking CFTC, and the NFA. Activities The Board previously has determined by order that acting as a CPO for and controlling a private limited partner- Dresdner Bank AG, Frankfurt, Germany ("Dresdner"), a ship that invests solely in investments that a bank holding foreign bank subject to the provisions of the Bank Holding company is permitted to make directly are activities that Company Act ("BHC Act"), has requested the Board's are closely related to banking and therefore permissible for approval under section 4(c)(8) of the BHC Act (12 U.S.C. bank holding companies.5 Dresdner has stated that all the § 1843(c)(8)) and section 225.24 of the Board's Regula- investments of Partnerships would be permissible for a tion Y (12 C.F.R. 225.24) to engage de novo through its bank holding company to make directly. nonbanking subsidiaries, Oechsle International Advisors, In order to approve this proposal, the Board must deter- L.P., Boston, Massachusetts, and RCM Capital Manage- mine that the proposed transaction "can reasonably be ment, L.L.C, San Francisco, California (together, "Com- expected to produce benefits to the public . . . that outpanies"), in acting as commodity pool operators ("CPOs") weigh possible adverse effects, such as undue concentrafor private limited partnerships organized as commodity tion of resources, decreased or unfair competition, conflicts pools investing in assets in which a bank holding company of interests, or unsound banking practices."6 Previously, is permitted to invest ("Partnerships"). the Board has relied on a number of commitments that Notice of the proposal, affording interested persons an were offered by bank holding companies to address potenopportunity to submit comments, has been published (63 tial adverse effects that could arise from acting as general Federal Register 229 (1998)). The time for filing com- partner to private investment partnerships.7 The Board has ments has expired, and the Board has considered the pro- reviewed these commitments in the context of this notice. posal and all comments received in light of the factors set Several of the commitments relied on by the Board in forth in section 4(c)(8) of the BHC Act. the past were offered to mitigate potential adverse financial Dresdner, with consolidated assets of approximately effects associated with the proposed activities by limiting $358.8 billion, is the second largest banking organization the exposure of the bank holding company to financial in Germany.1 In the United States, Dresdner operates risks associated with the partnerships' activities and by branches in New York, New York, and Chicago, Illinois, requiring the maintenance of corporate separateness beand an agency in Los Angeles, California.2 Dresdner also tween the partnership and the bank holding company and controls several subsidiaries that engage in various non- its affiliates. To address these concerns, the Board has banking activities in the United States. determined that in the event that a bank holding company Dresdner proposes that Companies provide administra- reports its investment in a partnership on other than a tive services and serve as investment advisor and sole consolidated basis, the bank holding company is required general partner to Partnerships.3 Companies would pri- to include, when calculating its consolidated regulatory vately place Partnership interests with "accredited inves- capital ratios, an amount of the assets in the denominator tors," as that term is denned in the rules of the Securities that is equal to all liabilities reported by the partnership. and Exchange Commission ("SEC").4 In connection with The Board also has determined that bank holding compaproviding investment advice to Partnerships, Companies nies may not directly or indirectly guarantee the obligations of a subsidiary acting as general partner to the partnerships or enter into any guarantee, indemnity, or loss- 1. Asset and ranking data are as of December 31, 1996, and use sharing agreement or any similar arrangement intended to exchange rates then in effect. 2. Dresdner Bank Lateinamerika AG, Hamburg, Germany, a wholly protect an investor in any partnership from any type of loss owned subsidiary of Dresdner, also operates an agency in Miami, associated with an interest in the partnership. Florida. The Board notes, furthermore, that transactions between 3. Dresdner previously has received approval to engage in private Dresdner's subsidiary banks and Partnerships would conplacement, investment advisory, and other transnational activities. See Letter dated June 23, 1997, from Jay Bernstein, Bank Supervision tinue to be governed by sections 23A and 23B of the Officer, to Hartmut Grossman; Dresdner Bank AG, 82 Federal Reserve Bulletin 850 (1996). Dresdner also has received approval to provide administrative services to closed-end investment companies. 5. See The Bessemer Group, Inc., 82 Federal Reserve Bulletin 569 See Dresdner Bank AG, 82 Federal Reserve Bulletin 676 (1996). (1996) ("Bessemer"); Meridian Bancorp, Inc., 80 Federal Reserve 4. SEC Regulation D, 17 C.F.R. 230.501. Partnerships would not be Bulletin 736(1994). registered as investment companies under the Investment Company 6. See 12 U.S.C. § 1843(c)(8). Act of 1940 (15 U.S.C. § 80a-l et seq.). 7. See Bessemer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin • May 1998 Federal Reserve Act.8 In addition, to ensure compliance formance of the proposed activities by Dresdner is a proper with the Glass-Steagall Act, the Board will continue to incident to banking for purposes of section 4(c)(8) of the rely on the restriction prohibiting partnerships controlled BHC Act. by bank holding companies from offering interests more than four times a year.9 Conclusion In this case, the Board also has reviewed Dresdner's risk management systems and has concluded that they are ade- Based on the foregoing and all the facts of record, includquate to address the financial risks associated with the ing the commitments discussed in this order and all other proposed activities. The Board expects Dresdner to apply commitments and representations made by Dresdner in prudent risk and financial management policies to the connection with this notice, and subject to the terms and proposed activities and maintain the legal separateness of conditions set forth in this order, the Board has determined the general partner from its bank holding company affili- that the notice should be, and hereby is, approved. The ates. Examinations of Dresdner would continue to check Board's determination is subject to all the terms and condithe adequacy of its systems for monitoring and assessing tions set forth in Regulation Y, including those in secthe financial risks associated with this activity. tions 225.7 and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), As part of its evaluation of the public interest factors, the and to the Board's authority to require modification or Board considers the financial condition and managerial termination of the activities of a bank holding company or resources of the notificant and its subsidiaries and the effect any of its subsidiaries as the Board finds necessary to the proposed transaction would have on such resources.10 assure compliance with and to prevent evasion of the The Board also has reviewed other aspects of the financial provisions of the BHC Act and the Board's regulations and condition and resources of Dresdner, including the effect of orders issued thereunder. The Board's decision specifically this proposal on the financial condition and resources of is conditioned on Dresdner's compliance with the commit- Dresdner. The Board notes that Dresdner's capital ratios ments and representations made in connection with this meet applicable risk-based capital standards under the notice, including the commitments and conditions dis- Basle Accord and are equivalent to the capital levels that cussed in this order. The commitments and conditions shall would be required of a U.S. banking organization. Based be deemed to be conditions imposed in writing by the on all the facts of record, the Board concludes that financial Board in connection with its findings and decisions and and managerial considerations are consistent with ap- may be enforced in proceedings under applicable law. proval. This transaction shall not be consummated later than The Board expects that the conduct by Dresdner of the three months after the effective date of this order unless proposed activities de novo would enhance market compe- such period is extended for good cause by the Board or by tition and provide greater convenience to Dresdner's cus- the Federal Reserve Bank of New York, acting pursuant to tomers. The Board also expects that the proposed transac- delegated authority. tion would benefit the public by increasing the number of By order of the Board of Governors, effective March 11, commodity pools available to investors. 1998. For the reasons discussed above, and in reliance on all the facts of record, including the commitments made by Voting for this action: Chairman Greenspan and Governors Phil- Dresdner and subject to the conditions in this order, the lips, Meyer, Ferguson, and Gramlich. Absent and not voting: Board concludes that the conduct of the proposed activities Vice Chair Rivlin and Governor Kelley. by Dresdner is not likely to result in significantly adverse JENNIFER J. JOHNSON effects that would outweigh the public benefits of the Deputy Secretary of the Board proposal. Accordingly, the Board has determined that per- Appendix 8. A number of the commitments offered by bank holding companies in past cases are addressed by applicable statutes and regulations, Commitments provided by Dresdner in connection with such as the limitations on inter-affiliate transactions set out in sec- acting as general partner of private limited partnerships. tions 23A and 23B of the Federal Reserve Act and the standards (1) Dresdner, directly or indirectly, will not guarantee the governing control or the definition of the activities under the BHC Act and Regulation Y. These commitments are unnecessary because they obligations of Partnerships or a subsidiary acting as general restate certain statutory and regulatory obligations and confirm Board partner or commodity pool operator of Partnerships, and, interpretations that, by force of law, govern the activities of Dresdner directly or indirectly, will not enter into any guarantee, and Partnerships. Many other commitments previously relied on by indemnity, or loss-sharing agreement or any similar arthe Board in similar cases were restrictions that governed private placement activities. In connection with its recent revision to Regula- rangement intended to protect an investor in any Partnertion Y, the Board removed those restrictions from all bank holding ship from any type of loss associated with an interest in the companies conducting private placement activities. Partnership. 9. The commitments relied on by the Board in this case are listed in (2) In the event that Dresdner reports its investment in the Appendix. Partnerships on other than a consolidated basis, Dresdner 10. See 12 C.F.R. 225.26; see also The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 will include, when calculating its consolidated regulatory Federal Reserve Bulletin 155 (1987). capital ratios, an amount of assets in the denominator equal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 363 to all liabilities reported by the Partnership(s). The amount CoBancorp is the 28th largest depository institution in of this adjustment will be risk-weighted at 100 percent for Ohio, controlling $571.7 million in deposits, representing purposes of calculating the risk-based capital ratios. less than 1 percent of state deposits. On consummation of (3) Partnerships shall not offer interests more than four the proposal, FirstMerit would become the seventh largest times per year unless the Board determines that more depository institution in Ohio, controlling $4.8 billion in frequent issuances are consistent with the Glass-Steagall deposits, representing approximately 3.3 percent of state Act. deposits. Orders Issued Under Sections 3 and 4 of the Bank Competitive Considerations Holding Company Act The BHC Act prohibits the Board from approving an FirstMerit Corporation application under section 3 of the BHC Act if the proposal Akron, Ohio would result in a monopoly, or if the proposal would substantially lessen competition in any relevant banking Order Approving the Merger of Bank Holding market and the Board has not found that the anticompeti- Companies tive effects of the proposal are clearly outweighed in the public interest by the probable effect of the proposal in FirstMerit Corporation, Akron, Ohio ("FirstMerit"), a meeting the convenience and needs of the community to be bank holding company within the meaning of the Bank served. Holding Company Act ("BHC Act"), has requested the FirstMerit and CoBancorp compete directly in the Ohio Board's approval under section 3 of the BHC Act banking markets of Cleveland and Sandusky.4 Consumma- (12 U.S.C. § 1842) to merge with CoBancorp, Inc., Elyria, tion of the proposal would be consistent with the Depart- Ohio ("CoBancorp"), and thereby acquire CoBancorp's ment of Justice Merger Guidelines5 and Board precedent in subsidiary bank, PremierBank & Trust, Elyria, Ohio ("Pre- both banking markets.6 Based on all the facts of record, the mierBank"). FirstMerit also has requested the Board's Board concludes that consummation of the proposal would approval under section 4(c)(8) of the BHC Act (12 U.S.C. not have a significantly adverse effect on competition or on § 1843(c)(8)) and section 225.24 of the Board's Regulation the concentration of banking resources in the Cleveland Y (12 C.F.R. 225.24) to acquire Jefferson Savings Bank, West Jefferson, Ohio ("Savings Bank"), and thereby engage in savings association activities.1 100 percent in the calculation of the pro forma market shares. See Notice of the proposal, affording interested persons an Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First opportunity to submit comments, has been published (63 Banks, Inc., 76 Federal Reserve Bulletin 669 (1990). Federal Register 2980 (1998)). The time for riling com- 4. The Cleveland, Ohio, banking market is denned as Cuyahoga, Lake, Lorain, and Geauga Counties and the northern third of Summit ments has expired, and the Board has considered the pro- County, including the townships of Sagamore Hills, Northfield Center, posal and all comments received in light of the factors set Twinsburg, Richfield, Boston, and Hudson Townships and the municforth in sections 3 and 4 of the BHC Act. ipalities circumscribed by those townships; all of Medina County, FirstMerit is the tenth largest depository institution in except the townships of Homer, Harrisville, Westfield, Guilford, Ohio, controlling $4.3 billion in deposits,2 representing Wadsworth, and Sharon; the townships of Aurora and Streetsboro in Portage County; and the city of Vermillion in Erie County, all in Ohio. approximately 2.9 percent of total deposits in insured de- The Sandusky, Ohio, banking market is defined as all of Erie County, pository institutions in the state ("state deposits").3 except the city of Vermillion. 5. Under the revised Department of Justice Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984). a market in which the 1. FirstMerit proposes to merge PremierBank and Savings Bank post-merger Herfindahl-Hirschman Index ("HHI") is between 1000 with and into its wholly owned subsidiary bank, FirstMerit Bank, and 1800 is considered moderately concentrated, and a market in National Association, Akron, Ohio ("FirstMerit Bank"). The merger which the post-merger HHI is above 1800 is considered highly conis subject to approval by the Office of the Comptroller of the Currency centrated. The Justice Department has informed the Board that a bank ("OCC") under section 18(c) of the Federal Deposit Insurance Act merger or acquisition generally will not be challenged (in the absence (12 U.S.C. § 1828(c)). FirstMerit also has requested approval of of other factors indicating anticompetitive effects) unless the postan option to purchase up to 19.9 percent of the voting stock of merger HHI is at least 1800 and the merger or acquisition increases CoBancorp if certain events occur. The option would expire on the HHI by at least 200 points. The Justice Department has stated that consummation of the proposal. the higher than normal threshold for an increase in the HHI when 2. State deposit data are as of June 30, 1997, and market share data screening bank mergers and acquisitions for anticompetitive effects are as of June 30, 1996. implicitly recognizes the competitive effect of limited-purpose lenders 3. In this context, depository institutions include commercial banks, and other nondepository financial entities. savings banks, and savings associations. Market share data before 6. FirstMerit would become the fifth largest depository institution in consummation are based on calculations in which the deposits of thrift the Cleveland banking market, controlling deposits of approximately institutions are included at 50 percent. The Board previously has $1.8 billion, representing approximately 6.0 percent of total deposits indicated that thrift institutions have become, or have the potential to in depository institutions in the market ("market deposits"). The HHI become, significant competitors of commercial banks. See WM Ban- for the market would increase by 14 points to 1363. In the Sandusky corp, 76 Federal Reserve Bulletin 788 (1990); National City Corpora- market, FirstMerit would remain the fourth largest depository institution, 70 Federal Reserve Bulletin 743 (1984). Because the deposits of tion, controlling deposits of approximately $48.7 million, representing Savings Bank would be acquired by a commercial banking organiza- approximately 7.7 percent of market deposits. The HHI for the market tion under the proposal, Savings Bank's deposits are included at would increase by 13 points to 2371. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

364 Federal Reserve Bulletin • May 1998 and Sandusky banking markets or any other relevant bank- mance evaluation is a particularly important consideration ing market. in the applications process because it represents a detailed, on-site evaluation of the institution's overall record of Financial, Managerial, and Other Supervisory Factors performance under the CRA by its primary federal supervisor.8 In addition, the BHC Act requires the Board, in acting on The predecessor banks to FirstMerit Bank received "outan application, to consider the financial and managerial standing" CRA performance ratings from the OCC at their resources and future prospects of the companies and banks most recent examinations.9 FirstMerit's remaining banks involved in a proposal and certain other supervisory fac- received "satisfactory" ratings from the OCC at their most tors. The Board has carefully considered the financial and recent examinations for CRA performance. In addition, managerial resources and future prospects of FirstMerit, PremierBank and Savings Bank received "outstanding" CoBancorp, and their respective subsidiary banks, in light and "satisfactory" ratings, respectively, from their primary of all the facts of record, including supervisory reports of federal supervisors at their most recent examinations for examination assessing the financial and managerial re- CRA performance. Examiners found no evidence of prosources of the organizations and financial information pro- hibited discrimination or other illegal credit practices vided by FirstMerit. The Board notes that the bank holding at the subsidiary depository institutions of FirstMerit or companies and their subsidiary banks are well capitalized CoBancorp in these examinations. and are expected to remain so after consummation of the Lending Record of FirstMerit Bank. FirstMerit Bank proposal. Based on all the facts of record, the Board offers several programs to assist in meeting the housingconcludes that the financial and managerial resources and related credit needs of LMI and minority borrowers, infuture prospects of FirstMerit, CoBancorp, and their sub- cluding two affordable home mortgage products (the BEST sidiary banks are consistent with approval, as are the other I and BEST III programs) designed specifically for LMI supervisory factors the Board must consider under sec- borrowers and residences in LMI census tracts. Both protion 3 of the BHC Act. grams feature flexible underwriting guidelines, closing cost assistance, and down payments as low as 5 percent.10 Convenience and Needs Considerations FirstMerit also has invested $1 million in the Ohio Equity Fund for Housing, which financially supports the construc- The Board also has carefully considered the effect of the tion, rehabilitation and preservation of affordable housing proposal on the convenience and needs of the communities throughout Ohio, including a family housing project in to be served in light of all the facts of record, including a Lorain County.11 In 1997, the bank committed $221,000 in comment by the Legal Aid Society of Lorain County, Inc., financing for a group home for low-income individuals. In on behalf of a client ("Commenter"), contending that addition, FirstMerit Bank intends to participate with the FirstMerit has made inadequate efforts to help meet the City of Lorain in programs designed to provide home housing-related credit needs of low- and moderate-income purchase and home improvement loans to LMI individuals. ("LMI") individuals in Lorain County, Ohio, and that FirstMerit Bank also engages in small business lending. FirstMerit's proposed branch closings in Lorain County In 1996, the bank originated 291 small business loans would adversely affect LMI and minority neighborhoods. in Lorain County, totalling $28.5 million. Approximately As noted, PremierBank and Savings Bank would be 22 percent of the total dollar amount of these small busimerged with and into FirstMerit Bank in connection with ness loans were made to businesses in LMI census tracts. the proposal. In this light, the Board has given substantial consideration to the existing record of FirstMerit Bank, as reflected in its CRA performance evaluations and the poli- 8. The Statement of the Federal Financial Supervisory Agencies cies and programs of FirstMerit Bank that help meet the Regarding the Community Reinvestment Act ("Agency CRA Statement") provides that a CRA examination is an important and often credit needs of all its service communities, including LMI controlling factor in the consideration of an institution's CRA record neighborhoods. and that reports of these examinations will be given great weight in CRA Performance Examinations. The Board has long the applications process. See 54 Federal Register 13,742 and 13,745 held that consideration of the convenience and needs factor (1989). includes a review of the records of the relevant depository 9. First National Bank of Ohio, Akron, Ohio, and EST National Bank, Elyria, Ohio, each received an "outstanding" rating from the institutions under the Community Reinvestment Act OCC, as of April 1996. EST National Bank primarily served the (12 U.S.C. § 2901 et seq.) ("CRA").7 As provided in the Lorain County area. CRA, the Board evaluates the convenience and needs 10. Data in 1996 show that FirstMerit Bank's predecessor, EST factor in light of examinations of the CRA performance National Bank, made approximately 21 percent of the loans it reported under the Home Mortgage Disclosure Act (12 U.S.C. 2801 et seq.) records of the relevant institutions by their primary federal ("HMDA") in Lorain County to low-income individuals and approxisupervisors. An institution's most recent CRA performately 25 percent to moderate-income individuals. Preliminary data for 1997 cited by FirstMerit show that approximately 38 percent of the bank's HMDA loans in Lorain County were to low-income individu- 7. The Board also has traditionally considered records of perfor- als and approximately 19 percent were to moderate-income individumance under the CRA in proposals involving the acquisition of als. savings associations. See Bane One Corporation, 83 Federal Reserve 11. FirstMerit Bank also has provided $2.6 million in permanent Bulletin 602 (1997). financing to this project. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 365 FirstMerit Bank also participates in federal and state reports of examination. Based on a review of the entire government-sponsored small business loan programs, in- record, and for the reasons discussed in this order, the cluding programs offered by the Small Business Adminis- Board has concluded that convenience and needs considertration, and the Ohio Link Deposit and Ohio Mini-Loan ations, including the CRA performance records of the programs. The bank currently has outstanding 48 loans, subsidiary banks of FirstMerit and CoBancorp, are consistotalling $4.4 million, under these government-sponsored tent with approval.14 loan programs in Lorain County. FirstMerit Bank also has provided financing to the Women's Development Center Nonbanking Activities and the Elyria Downtown Development Fund. FirstMerit has formed a Community Development Cor- FirstMerit also has filed notice under section 4(c)(8) of the poration ("CDC") that has made approximately $4 million BHC Act to acquire Savings Bank and thereby engage in in loans and investments in LMI communities over the last savings association activities. The Board previously has two years. The CDC also has participated in numerous determined by regulation that the operation of a savings community outreach programs and has provided interest- association by a bank holding company is closely related to free financing to the Community Housing Corporation in banking for purposes of section 4(c)(8) of the BHC Act, Elyria, Ohio. and FirstMerit has committed to conduct this activity in Branch Closings. FirstMerit has indicated that 20 accordance with Regulation Y and relevant Board interprebranches would be closed or consolidated as a result of the tations and orders.15 In making this determination, the proposal. Two of the branches to be closed or consolidated Board requires that savings associations acquired by bank are in LMI census tracts and are operated by Premier- holding companies conform their direct and indirect activi- Bank.12 One of the LMI branches is across the street from a ties to those permissible for bank holding companies under FirstMerit branch that would continue to operate. section 4 of the BHC Act. The other LMI branch would be merged with a First- In order to approve the proposal, the Board also must Merit branch that is within approximately 1.5 miles of the determine that the performance of the proposed activity is PremierBank branch to be closed. FirstMerit contends that a proper incident to banking, that is, that the proposed this branch has significantly fewer transactions and a sig- transaction, "can reasonably be expected to produce benenificantly smaller deposit base than the average for transac- fits to the public . . . that outweigh possible adverse effects, tions and deposits at all other FirstMerit branches in Lorain such as undue concentration of resources, decreased or County. FirstMerit notes, moreover, that the customers of unfair competition, conflicts of interests, or unsound bankthe PremierBank branch to be closed would be able to ing practices."16 As part of the Board's evaluation of these obtain information on their accounts and apply for loans by factors, the Board considers the financial and managerial telephone. The Board also notes that the branch closing resources of the notificant and its subsidiaries, including policies of FirstMerit and PremierBank require consider- any company to be acquired, and the effect the transaction ation of community concerns before deciding to close a would have on such resources.17 Based on all the facts of branch. record, the Board has concluded that financial and managerial considerations are consistent with approval of the In addition to these factors, the Board has considered notice under section 4 of the BHC Act for the reasons that federal banking law provides a specific mechanism for discussed above. addressing branch closings. Federal law requires an insured depository institution to provide notice to the public The Board also has carefully considered the competitive and to the appropriate regulatory agency at least 30 days effects of the proposed acquisition of Savings Bank and, as prior to closing a branch. The law does not authorize discussed above, has concluded that consummation of the federal regulators to prevent the closing of any branch.13 proposal would not have a significantly adverse effect on Conclusion on Convenience and Needs Considerations. competition or on the concentration of banking resources The Board has carefully considered all the facts of record, including the public comment received, responses to the comment, and the CRA performance records of the subsidiary banks of FirstMerit and CoBancorp, including relevant 14. The Board has carefully reviewed Commenter's contentions that high fees discourage LMI individuals from using FirstMerit's banking products and services. As discussed above, FirstMerit provides a full range of credit products and banking services that assist in meeting the 12. FirstMerit has indicated that the LMI branch discussed by credit and banking needs of LMI individuals and these products Commenter would remain open after consummation of the transac- include a "lifeline" checking product with no monthly fee for LMI tion. individuals. In addition, there is no evidence in the record that the fees 13. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. charged by FirstMerit are based on any factor that would be prohibited § 1831r-l, as implemented by the Joint Policy Statement Regarding under law. Although the Board has recognized that banks help serve Branch Closings (see 58 Federal Register 49,083 (1993)), requires the banking needs of their communities by making basic services that a bank provide the public with at least 30 days notice and the available at nominal or no charge, the CRA does not impose any primary federal supervisor with at least 90 days notice before the date limitation on the fees or surcharges for services. of the proposed branch closing. The bank also is required to provide 15. See 12 C.F.R. 225.28(b)(4). reasons and other supporting data for the closure, consistent with the 16. See 12 U.S.C. § 1843(c)(8). institution's written policy for branch closings. 17. See 12 C.F.R. 225.26. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 Federal Reserve Bulletin • May 1998 in any relevant banking market. The Board expects, more- WesBanco, Inc. over, that the acquisition of CoBancorp by FirstMerit Wheeling, West Virginia would provide added convenience to CoBancorp's customers and to FirstMerit's customers. Consummation of the Order Approving Acquisition of Bank Holding proposal also is likely to result in increased operating Companies, Merger of Banks and Establishment of efficiencies for the combined organization. Additionally, Branches there are public benefits to be derived from permitting capital markets to operate so that bank holding companies WesBanco, Inc., Wheeling, West Virginia ("WesBanco"), may make potentially profitable investment in nonbanking a bank holding company within the meaning of the Bank companies when, as in this case, those investments are Holding Company Act ("BHC Act"), has requested the consistent with the relevant considerations under the BHC Board's approval under sections 3 and 4 of the BHC Act Act, and from permitting banking organizations to allocate (12 U.S.C. §§ 1842 and 1843(c)(8)) to acquire Commercial their resources in the manner they believe is most efficient. BancShares, Inc., Parkersburg, West Virginia ("Commer- Based on all the facts of record, the Board has determined cial"), and Gateway Bancshares, Inc., McMechen, West that consummation of the proposal can reasonably be ex- Virginia ("Gateway"), and thereby acquire their banking pected to produce public benefits that would outweigh any and nonbanking subsidiaries listed in the Appendix.1 Weslikely adverse eifects under the proper incident to banking Banco's lead bank, WesBanco Bank Wheeling, Wheeling, standard of section 4(c)(8) of the BHC Act. West Virginia ("WesBanco Wheeling"), also has requested the Board's approval under section 18(c) of the Federal Deposit Insurance Act (the "Bank Merger Act") (12 U.S.C. § 1828(c)) to merge with Commercial's subsidiary bank, Conclusion The Bank of Paden City, Paden City, West Virginia, and Gateway's subsidiary bank, Bank of McMechen, McMechen, West Virginia, and under section 9 of the Based on the foregoing and all the other facts of record, the Federal Reserve Act ("FRA") (12 U.S.C. § 321) to estab- Board has determined that this transaction should be, and lish branches at the current offices of these banks listed in hereby is, approved subject to all the terms and conditions the Appendix. in this order. The Board's approval is specifically conditioned on compliance by FirstMerit with all the commit- Notice of the proposal, affording interested persons an ments made in connection with the proposal. opportunity to submit comments, has been published (63 The Board's determination on the nonbanking activities Federal Register 2393 (1998)) and has been given in also is subject to all the terms and conditions set forth in accordance with the Bank Merger Act and the Board's Regulation Y, including those in sections 225.7 and Rules of Procedure (12 C.F.R. 262.3(b)). As required by 225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)), the Bank Merger Act, reports on the competitive effects of and to the Board's authority to require such modification or the bank mergers were requested from the United States termination of the activities of a bank holding company or Attorney General, the Office of the Comptroller of the any of its subsidiaries as the Board finds necessary to Currency ("OCC"), and the Federal Deposit Insurance ensure compliance with, and to prevent evasion of, the Corporation ("FDIC"). The time for filing comments has provisions of the BHC Act and the Board's regulations and expired, and the Board has considered the proposal and all orders issued thereunder. The commitments and conditions comments received in light of the factors set forth in the relied on by the Board in reaching this decision are deemed BHC Act, the Bank Merger Act, and the FRA. to be conditions imposed in writing by the Board in con- WesBanco operates six banks in West Virginia and one nection with its findings and decision and, as such, may be bank in Ohio. WesBanco is the fifth largest commercial enforced in proceedings under applicable law. banking organization in West Virginia, controlling approx- The acquisition of CoBancorp's PremierBank shall not imately $1.3 billion in deposits, representing approxibe consummated before the fifteenth calendar day follow- mately 6.7 percent of total deposits in depository instituing the effective date of this order, and the proposal shall tions in the state ("state deposits").2 Commercial controls not be consummated later than three months after the seven banks in West Virginia and one bank in Ohio.3 effective date of this order, unless such period is extended Commercial is the tenth largest depository institution in for good cause by the Board or by the Federal Reserve Bank of Cleveland, acting pursuant to delegated authority. By order of the Board of Governors, effective March 11, 1. WesBanco would merge Commercial and Gateway with and into 1998. its wholly owned subsidiary, CBI Holding Company ("CBI"), that would be formed solely for the purpose of effecting the acquisitions. In connection with this proposal CBI has applied to become a bank Voting for this action: Chairman Greenspan and Governors holding company. Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting: 2. State deposit data are as of June 30, 1997. In this context, Vice Chair Rivlin and Governor Kelley. depository institutions include commercial banks, savings banks, and savings associations. 3. In December 1997, the Federal Reserve Bank of Richmond, JENNIFER J. JOHNSON acting under delegated authority, approved Commercial's application Deputy Secretary of the Board to acquire Gateway. Although Commercial has not consummated the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 367 West Virginia, controlling approximately $348.7 million in finds that the anticompetitive effects of the proposed transdeposits, representing approximately 1.8 percent of state action are clearly outweighed in the public interest by the deposits. On consummation of the proposal, and taking probable effect of the transaction in meeting the conveinto account all proposed divestitures, WesBanco would nience and needs of the community to be served.7 remain the fifth largest commercial banking organization in WesBanco and Commercial compete directly in three West Virginia, controlling deposits of $1.6 billion, repre- West Virginia banking markets: Parkersburg/Marietta, senting approximately 8.3 percent of state deposits. Wheeling, and Tyler/Wetzel.8 Consummation of the pro- WesBanco is the 107th largest commercial banking orga- posal would be consistent with the Department of Justice nization in Ohio, controlling approximately $129.9 million Merger Guidelines ("DOJ Guidelines")9 and prior Board in deposits, representing less than 1 percent of total depos- precedent in the Wheeling and Marietta/Parkersburg bankits in commercial banking organizations in the state. Com- ing markets.10 mercial is the 88th largest commercial banking organiza- In order to mitigate the potential anticompetitive effects tion in Ohio, controlling approximately $166.7 million in in the Tyler/Wetzel banking market, WesBanco has comdeposits, representing less than 1 percent of state deposits. mitted to divest one of Commercial's subsidiary banks in On consummation of the proposal, WesBanco would be- the market, Union Bank of Tyler County, which controls come the 54th largest depository institution in Ohio, con- approximately $33.3 million in deposits, to an out-oftrolling $296.6 million in deposits, representing less than market purchaser.11 After accounting for the proposed di- 1 percent of deposits in Ohio. vestiture, WesBanco would become the largest depository Interstate Analysis 7. 12 U.S.C. §§ 1842(c)(l)(B) and 1828(c)(5)(B). Market share data used to analyze the competitive effects of the proposal are as of Section 3(d) of the BHC Act, as amended by Section 101 June 30, 1996. These data are based on calculations in which the of the Riegle-Neal Interstate Banking and Branching Effi- deposits of thrift institutions are included at 50 percent. The Board ciency Act of 1994 ("Riegle-Neal Act"),4 allows the Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. to approve an application by a bank holding company to See Midwest Financial Group, 75 Federal Reserve Bulletin 386 acquire control of a bank located in a state other than the (1989); National City Corporation, 70 Federal Reserve Bulletin 743 home state of such bank holding company, if certain condi- (1984). Thus, the Board has regularly included thrift deposits in the tions are met. For purposes of the BHC Act, the home state calculation of market share on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). of WesBanco is West Virginia, and it proposes to acquire a 8. The Parkersburg/Marietta banking market is approximated by subsidiary bank of Commercial in Ohio.5 All of the condi- Wood, Pleasants, Ritchie, and Win Counties in West Virginia; and tions for an interstate acquisition enumerated in sec- Washington County, Ohio. The Wheeling banking market is approxition 3(d) are met in this case.6 In view of all the facts of mated by Marshall and Ohio Counties in West Virginia; and Colerain, record, the Board is permitted to approve the proposal Pease, Pultney, Mead, York townships and the eastern two-thirds of Richland township in Belmont County, in Ohio. The Tyler/Wetzel under section 3(d) of the BHC Act. banking market is defined as Tyler and Wetzel Counties in West Virginia. Competitive Considerations 9. Under the revised DOJ Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger Herfindahl- Hirschman Index ("HHI") is above 1800 is considered highly concen- The BHC Act and the Bank Merger Act prohibit the Board trated. The Department of Justice has informed the Board that a bank from approving a proposal if it would result in a monopoly merger or acquisition generally will not be challenged (in the absence or if the effect of the proposal may be substantially to of other factors indicating anticompetitive effects) unless the postlessen competition in any relevant market unless the Board 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 higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limitedacquisition, the deposits of Gateway have been attributed to Commer- purpose lenders and other non-depository financial entities. cial in the deposit data. 10. On consummation of the proposal, WesBanco would become 4. Pub. L. No. 103-328, 108 Stat. 2338 (1994). the largest depository institution in the Parkersburg/Marietta banking 5. A bank holding company's home state is that state in which the market and control $343.5 million in deposits, representing operations of the bank holding company's banking subsidiaries were 18.7 percent of total deposits in depository institutions in the market principally conducted on July 1, 1966, or the date on which the ("market deposits"). The HHI would increase 145 points to 1122. company became a bank holding company, whichever is later. WesBanco would remain the largest depository institution in the 12U.S.C. §1841(o)(4)(C). Wheeling banking market and control $362.4 million in deposits, 6. See 12 U.S.C. §§ 1842(d)( 1 )(A) and (B) and 1842(d)(2)(A) and representing 21.7 percent of market deposits. The HHI would increase (B). WesBanco is adequately capitalized and adequately managed, as 69 points to 1096. defined by the Riegle-Neal Act. Ohio law imposes no minimum 11. WesBanco has committed to execute a sales agreement with an period of existence and operation for an acquired bank. See generally out-of-market commercial banking organization prior to consumma- Ohio Rev. Ann. § 1115.05 (Anderson 1996). On consummation of the tion of the proposal and to complete the divestiture within 180 days proposal, WesBanco would control less than 10 percent of the total after consummation of the proposal. WesBanco also has committed amount of deposits of insured depository institutions in the United that, in the event it is unsuccessful in completing the divestiture within States and less than 30 percent of the total amount of deposits of 180 days of consummation, WesBanco will transfer any unsold insured depository institutions in West Virginia and Ohio. All other office(s) to an independent trustee that is acceptable to the Board and requirements of section 3(d) of the BHC Act also would be met on that will be instructed to sell the office(s) promptly. See BankAmerica consummation of the proposal. Corporation, 78 Federal Reserve Bulletin 338 (1992). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin • May 1998 institution in the Tyler/Wetzel banking market, controlling dance with Regulation Y.12 In order to approve the prodeposits of approximately $82.6 million, representing posal, the Board also must determine that the performance 36 percent of market deposits. Concentration in the market, of the proposed activities is a proper incident to banking, as measured by the HHI, would increase by 225 points to that is, that the proposed transaction "can reasonably be 2077. expected to produce benefits to the public . . . that out- Several mitigating considerations offset the proposal's weigh possible adverse effects, such as undue concentraeffect on competition in the Tyler/Wetzel banking market. tion of resources, decreased or unfair competition, conflicts The proposal would not reduce the number of competitors of interests, or unsound banking practices."13 As part of its in the market, and nine competitors would remain in the evaluation of these factors, the Board considers the finanmarket after consummation. Two of the nine institutions cial and managerial resources of the notificant and its subsidiaries, including any company to be acquired, and are large regional banking organizations, and three of the the effect the transaction would have on such resources.14 nine institutions, including WesBanco, each would have a As noted above, based on all the facts of record, the Board market share of at least 10 percent. Although measures of has concluded that financial and managerial considerations attractiveness of the Tyler/Wetzel market are mixed, the are consistent with approval of the notice. Board notes that there recently has been de novo entry by a commercial bank. The Board believes that these factors Each of the markets for the nonbanking services affected mitigate the potentially adverse effects of the proposal. by the proposal is unconcentrated, and there are numerous The Justice Department reviewed the proposal and ad- providers of each service. As a result, consummation of the vised the Board that, in light of the proposed divestiture, proposal is expected to have a de minimis effect on compeconsummation of the proposal would not likely have any tition for the services. significantly adverse competitive effects in the Tyler/ The Board expects, moreover, that the acquisition of Wetzel banking market or any other relevant banking mar- Commercial by WesBanco would provide added conveket. The OCC and FDIC also have not objected to the nience to Commercial's customers, and to the public by proposal. increasing operating efficiencies, improving convenience, Based on all the facts of record, and for the reasons and expanding the services available to customers of Comdiscussed in this order, the Board concludes that consum- mercial. Additionally, there are public benefits to be demation of the proposal is not likely to result in any signifi- rived from permitting capital markets to operate so that cantly adverse effects on competition or on the concentra- bank holding companies may make potentially profitable tion of banking resources in the Tyler/Wetzel banking investments in nonbanking companies when those investmarket or any other relevant banking market. ments are consistent, as in this case, with the relevant considerations under the BHC Act, and from permitting Other Considerations banking organizations to allocate their resources in the manner they believe is most efficient. Accordingly, based on all the facts of record, the Board has determined that the The BHC Act and the Bank Merger Act require the Board, proposal can reasonably be expected to produce public in acting on an application, to consider the financial and benefits that outweigh any adverse effects under the proper managerial resources and future prospects of the compaincident to banking standard of section 4(c)(8) of the BHC nies and banks involved, the convenience and needs of the Act. communities to be served, and certain supervisory factors. The Board has reviewed these factors in light of the record, The Board also has considered the factors it is required including supervisory reports of examination assessing the to consider when reviewing applications for establishing financial and managerial resources of the organizations and branches under section 9 of the FRA and concludes that financial information provided by WesBanco. Based on all these factors are consistent with approval of WesBanco the facts of record, the Board concludes that the financial Wheeling's application to establish branches at the locaand managerial resources and the future prospects of Wes- tions listed in the Appendix. Banco, Commercial and their respective subsidiary banks are consistent with approval, as are the other supervisory Conclusion factors the Board must consider under section 3 of the BHC Act. In addition, considerations related to the conve- Based on the foregoing, and in light of all the facts of nience and needs of the communities to be served, includ- record, the Board has determined that the applications and ing the records of performance of the institutions under the notice should be, and hereby are, approved. The Board's Community Reinvestment Act, are consistent with ap- approval is specifically conditioned on compliance by Wesproval of the proposal. Banco with all the commitments made in connection with WesBanco also has filed notice under section 4(c)(8) of these applications. For the purpose of this action, the the BHC Act to acquire the nonbanking subsidiaries of commitments and conditions relied on by the Board in Commercial listed in the Appendix. The Board previously has determined by regulation that each of the activities described in the Appendix is closely related to banking 12. See 12 C.F.R. 225.28(b)(l), (6), (7) and (11). within the meaning of section 4(c)(8) of the BHC Act, and 13. 12U.S.C. § 1843(c)(8). WesBanco proposes to conduct these activities in accor- 14. See 12 C.F.R. 225.26. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 369 reaching its decisions are deemed to be conditions imposed — Ohio in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings The Dime Bank, Marietta. under applicable law. The acquisition of the banks shall not be consummated B. Subsidiary Bank of Gateway before the fifteenth calendar day following the effective date of this order, or later than three months after the Bank of McMechen, McMechen, West Virginia. effective date of this order, unless such period is extended for good cause by the Board or by the Federal Reserve C. Nonbanking Subsidiaries of Commercial Bank of Cleveland, acting pursuant to delegated authority. By order of the Board of Governors, effective March 2, 1998. Commbanc Investment, Inc., Marietta, Ohio, engaging in financial and investment advisory activities pursuant to Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and section 225.28(b)(6) of Regulation Y (12 C.F.R. Governors Kelley, Phillips, Meyer, Ferguson, and Gramlich. 225.28(b)(6)) and securities brokerage activities pursuant to section 225.28(b)(7)(i) of Regulation Y (12 C.F.R. JENNIFER J. JOHNSON 225.28(b)(7)(i)); and Deputy Secretary of the Board Hometown Financial Co., Inc., Parkersburg, West Virginia, engaging in consumer lending pursuant to section Appendix 225.28(b)(l) of Regulation Y (12 C.F.R. 225.28(b)(l)) and the sale of credit-related insurance pursuant to section A. Subsidiary Banks of Commercial 225.28(b)(ll)(i) of Regulation Y (12 C.F.R. — West Virginia Commercial Banking and Trust Company, Parkersburg; D. New West Virginia Branches of WesBanco Wheeling Jackson County Bank, Ravenswood; Farmers & Mechanics Bank of Ritchie County, Harris- 4th and Main Streets, Paden City; ville; 285 N. State Route 2, New Martinsville; Union Bank of Tyler County, Middlebourne; 700 Marshall Street, McMechen; Community Bank, Pennsboro; and 613 Marshall Street, McMechen; and The Bank of Paden City, Paden City. 43 Marshall Street, Benwood. APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) Effective Date Deposit Guaranty Corp., Victory Bancshares, Inc., March 6, 1998 Jackson, Mississippi Cordova, Tennessee Victory Bank and Trust Company, Cordova, Tennessee First American Corporation, Victory Bancshares, Inc., March 23, 1998 Nashville, Tennessee Cordova, Tennessee Victory Bank and Trust Company, Cordova, Tennessee Section 4 Applicant(s) Bank(s) Effective Date Norwest Corporation, Automotive Financial Services, Inc.. March 31, 1998 Minneapolis, Minnesota White Bear Lake, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 Federal Reserve Bulletin • May 1998 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 BancFirst Corporation, Lawton Security Bancshares, Inc., Kansas City March 25, 1998 Oklahoma City, Oklahoma Lawton, Oklahoma Cache Bank Financial Corporation, Cache Bank, Kansas City February 23, 1998 Greeley, Colorado Greeley, Colorado Chambers Bancshares, Inc., Community Investment, Inc., St. Louis March 18, 1998 Danville, Arkansas Elkins, Arkansas Bank of Elkins, Elkins, Arkansas Citizens Financial Corporation, Citizens Bank & Trust Company of Chicago February 27, 1998 Chicago, Illinois Chicago, Chicago, Illinois Community Banks, Inc., The Peoples State Bank, Philadelphia February 23, 1998 Millersburg, Pennsylvania East Berlin, Pennsylvania Community First Bankshares, Inc., Community Bancorp, Inc., Minneapolis March 18, 1998 Fargo, North Dakota Thornton, Colorado Community First National Bank, Thornton, Colorado Community First Bankshares, Inc.. FNB, Inc., Minneapolis March 17, 1998 Fargo, North Dakota Greeley, Colorado First National Bank of Greeley, Greeley, Colorado Poudre Valley Bank, Fort Collins, Colorado Community First Bankshares, Inc.. Pioneer Bank of Longmont, Minneapolis March 16, 1998 Fargo, North Dakota Longmont, Colorado The Community Group, Inc., The Delaware Community Group, Inc., Dallas, Texas Wilmington, Delaware Dallas February 26, 1998 United Community Bank, N.A., Highland Village, Texas CountryBanc Holding Company, First State Holding Company, Edmond, Oklahoma Elkhart, Kansas Kansas City February 24, 1998 The First State Bank of Elkhart, Elkhart, Kansas Countryside Bancshares, Inc., Countryside Bank, Republic, Missouri Republic, Missouri St. Louis March 2, 1998 Dakota Bancshares, Inc., Olivia Bancorporation, Inc., Mendota Heights, Minnesota Olivia, Minnesota Minneapolis March 2, 1998 American State Bank of Olivia, Olivia, Minnesota The Delaware Community Group, United Community Bank, N.A., Dallas February 26, 1998 Inc., Highland Village, Texas Wilmington, Delaware First Azle Bancshares, Inc., First Azle Bancshares, Inc., Dallas March 24, 1998 Employees Stock Ownership Azle, Texas Plan, First Bank, Azle, Texas Azle, Texas First Capital Bancshares, Inc., Citizens National Bank, Cleveland February 26, 1998 Chillicothe, Ohio Chillicothe, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 371 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date The First Jermyn Corp., Upper Valley Bancorp, Philadelphia March 10, 1998 Jermyn, Pennsylvania Olyphant, Pennsylvania First Place Financial Corporation, Capital Bank, Kansas City March 4, 1998 Farmington, New Mexico Albuquerque, New Mexico First Savings Bank of Washington Towne Bancorp, San Francisco February 25, 1998 Bancorp, Inc., Woodinville, Washington Walla Walla, Washington First United Bancshares, Inc., Republic Bancshares, Inc., St. Louis February 27, 1998 El Dorado, Arkansas Rayville, Louisiana First Republic Bank, Rayville, Louisiana F&M Bancorporation, Inc., BancSecurity Corporation, Chicago February 19, 1998 Kaukauna, Wisconsin Marshalltown, Iowa Security Bank, Marshalltown, Iowa Security Bank Jasper-Poweshiek, Kellogg, Iowa Story County Bank & Trust, Story City, Iowa F&M Bancorporation, Inc., Financial Management Services of Chicago March 5, 1998 Kaukauna, Wisconsin Jefferson, Inc., F&M Merger Corporation, Jefferson, Wisconsin Kaukauna, Wisconsin Farmers & Merchants Bank of Jefferson, Jefferson, Wisconsin FMCB Holdings, Inc., Farmers and Merchants Community Atlanta February 20, 1998 Senoia, Georgia Bank, Senoia, Georgia Forstrom Bancorporation, Inc., First Valley Bankcorp, Minneapolis February 19, 1998 Clara City, Minnesota Seeley Lake, Montana First Valley Bank, Seeley Lake, Montana Glacier Bancorp, Inc., HUB Financial Corporation, Minneapolis March 19, 1998 Kalispell, Montana Helena, Montana Valley Bank of Helena, Helena, Montana G V Bancorp Employee Stock G V Bancorp, Inc., San Francisco March 5, 1998 Ownership Plan, Gunnison, Utah Gunnison, Utah G V Bancorp, Inc., Gunnison Valley Bank, San Francisco March 5, 1998 Gunnison, Utah Gunnison, Utah Hibernia Corporation, Firstshares of Texas, Inc., Atlanta February 20, 1998 New Orleans, Louisiana Marshall, Texas Firstshares Intermediate Holding Company, Inc., Marshall, Texas First National Bank, Marshall, Texas Hometown Bancshares, Inc., Hometown Bank, N.A., Kansas City March 2, 1998 Carthage, Missouri Carthage, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin D May 1998 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date International Brotherhood of Brotherhood Bancshares, Inc., Kansas City March 19, 1998 Boilermakers, Iron Ship Builders Kansas City, Kansas Blacksmiths, Forgers and Helpers, Brotherhood Bank & Trust Company, Kansas City, Kansas Kansas City, Kansas J, J & B Capital, L.P., Founders National Bank of Los San Francisco March 12, 1998 Los Angeles, California Angeles, Busby Holdings, Inc., Los Angeles, California Los Angeles, California James River Bankshares, Inc., First Colonial Bank, Richmond March 10, 1998 Suffolk, Virginia Hopewell, Virginia Krum Holdings, L.L.C., Farmers and Merchants State Bank, Dallas March 19, 1998 Krum, Texas Krum, Texas Porter Holdings, Ltd., Krum, Texas Little Sioux Bancshares, Inc., First State Bank, Chicago March 18, 1998 Sioux Rapids, Iowa Sioux Rapids, Iowa MainBancorp, Inc., First National Bancorporation, Dallas February 20, 1998 Austin, Texas Ennis, Texas Maincorp Intermediate Holding First National Bank of Ennis, Company, Inc., Ennis, Texas Wilmington, Delaware Marshall Community Bancshares, Community Bank of Marshall, Kansas City February 26, 1998 Inc., Marshall, Missouri Marshall, Missouri MBT Bancshares, Inc., Missouri Bank and Trust Company, Kansas City February 26, 1998 Kansas City, Missouri Kansas City, Missouri National City Bancshares, Inc., Illinois One Bancorp, Inc., St. Louis March 12, 1998 Evansville, Indiana Shawneetown, Illinois Illinois One Bank, National Association, Shawneetown, Illinois National City Bancshares, Inc., Vernois Bancshares, Inc., St. Louis February 17, 1998 Evansville, Indiana Mount Vernon, Illinois Bank of Illinois, Mount Vernon, Illinois Ohnward Bancshares, Inc., Gateway State Bank, Chicago March 4, 1998 Maquoketa, Iowa Clinton, Iowa The Peoples BancTrust Company, Merchants & Planters Bancshares, Inc., Atlanta February 19, 1998 Inc., Montevallo, Alabama Selma, Alabama Merchants & Planters Bank, Montevallo, Alabama PSB BancGroup, Inc., Peoples State Bank, Atlanta March 5, 1998 Lake City, Florida Lake City, Florida Shamrock Bancshares, Inc., The First National Bank of Shamrock, Dallas March 11, 1998 Shamrock, Texas Shamrock, Texas Shamrock Delaware Financial, Inc., Dover, Delaware Southern Bancshares, Inc., The Claxton Bank, Atlanta March 17, 1998 Claxton, Georgia Claxton, Georgia TransPecos Financial Corp., Iraan State Bank, Dallas March 4, 1998 Iraan, Texas Iraan, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 373 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Union Planters Corporation, First National Bancshares of Wetumpka, St. Louis March 11, 1998 Memphis, Tennessee Inc., Wetumpka, Alabama First National Bank of Wetumpka, Wetumpka, Alabama Union Planters Corporation, Merchants Bancshares, Inc., St. Louis March 18, 1998 Memphis, Tennessee Houston, Texas Union Planters Holding Corporation, Gulf Southwest Nevada Bancorp, Inc., Memphis, Tennessee Houston, Texas Merchants Bank, Houston, Texas Unity Bancshares, L.L.C., St. Johns Bancshares, Inc., St. Louis February 26, 1998 St. John, Missouri St. John, Missouri St. Johns Bank & Trust Company, St. John, Missouri Zions Bancorporation, FP Bancorp, San Francisco March 12, 1998 Salt Lake City, Utah Escondido, California First Pacific National Bank, Escondido, California Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date 1st Choice Financial Corporation, Choice Investment Corporation, Kansas City March 25, 1998 Greeley, Colorado Greeley, Colorado City Holding Company, Del Amo Savings Bank, F.S.B., Richmond March 17, 1998 Charleston, West Virginia Torrance, California Community Trust Financial Services Piedmont Loan Company, Atlanta March 16, 1998 Corporation, Gainesville, Georgia Hiram, Georgia Concord EFS, Inc., Digital Merchant Systems, Inc., et. al., St. Louis March 2, 1998 Memphis, Tennessee Northfield, Illinois Cornhusker Growth Corporation, Johnston Growth Corporation, Kansas City February 20, 1998 Lincoln, Nebraska Johnston, Iowa Johnston Charter Bank, Johnston, Iowa DeWitt First Bankshares To engage in the activities of extending St. Louis February 24, 1998 Corporation, credit and servicing loans DeWitt, Arkansas First Union Corporation, Mentor Investment Group, LLC, Richmond March 13, 1998 Charlotte, North Carolina Richmond, Virginia First United Bancshares, Inc., EFT Network Services, L.L.C., St. Louis February 17, 1998 El Dorado, Arkansas Little Rock, Arkansas Greater Community Bancorp, 1st Bergen Bancorp, New York February 19, 1998 Totowa, New Jersey Wood-Ridge, New Jersey Inland Northwest Bancorporation, Hege Company, Inc., San Francisco February 27, 1998 Inc., Spokane, Washington Spokane, Washington Magna Group, Inc., Charter Financial, Inc., St. Louis March 2, 1998 St. Louis, Missouri Sparta, Illinois Charter Bank, S.B., Sparta, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 Federal Reserve Bulletin • May 1998 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Midwest Bankers' Bancorporation, Missouri Trust Company, St. Louis February 25, 1998 Inc., Jefferson City, Missouri Jefferson City, Missouri One Valley Bancorp, Inc., FFVA Financial Corporation, Richmond March 5, 1998 Charleston, West Virginia Lynchburg, Virginia Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Flag Financial Corporation, Middle Georgia Bankshares, Inc., Atlanta March 13, 1998 LaGrange, Georgia Unadilla, Georgia First Federal Savings Bank of LaGrange, LaGrange, Georgia Piedmont Mortgage Service, Inc., LaGrange, Georgia Pro Image, Macon, Georgia Zions Bancorporation, SBT Bankshares, Inc., San Francisco March 24, 1998 Salt Lake City, Utah Colorado Springs, Colorado Val Cor Bancorporation, Inc., State Bank and Trust of Colorado Cortez, Colorado Springs, Colorado Springs, Colorado SBT Mortgage, LLC, Colorado Springs, Colorado 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 Community First Bank and Trust, The Union State Bank, Cleveland March 4, 1998 Celina, Ohio Payne, Ohio F&M Bank-Blakeley, Inc., F&M Bank-Keyser, Inc., Richmond February 25, 1998 Ranson, West Virginia Keyser, West Virginia F&M Bank-Martinsburg, Martinsburg, West Virginia F&M Bank-Richmond, Peoples Bank of Virginia, Richmond March 11, 1998 Richmond, Virginia Chesterfield, Virginia First Banking Center-Burlington, First Banking Center-Albany, Chicago March 20, 1998 Burlington, Wisconsin Albany, Wisconsin First Farmers Bank & Trust National City Bank of Indiana, Chicago February 26, 1998 Company, Indianapolis, Indiana Converse, Indiana Isabella Bank and Trust, Old Kent Bank, Chicago February 27, 1998 Mt. Pleasant, Michigan Grand Rapids, Michigan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments Applications Approved Under Bank Merger Act—Continued Applicant(s) Bank(s) Reserve Bank Effective Date M&I Bank of Burlington, Advantage Burlington Interim Bank, Chicago February 25, 1998 Burlington, Wisconsin FSB, Kenosha, Wisconsin M&I Bank of Racine, Advantage Bank, FSB, Chicago February 25, 1998 Racine, Wisconsin Kenosha, Wisconsin M&I Marshall & llsley Bank, Advantage Wisconsin Interim Bank, Chicago February 25, 1998 Milwaukee, Wisconsin FSB, Kenosha, Wisconsin M&I Marshall & llsley Bank, M&l Bank South, Chicago February 25, 1998 Milwaukee, Wisconsin Janesville, Wisconsin M&I Marshall & llsley Bank, M&I Bank of Burlington, Chicago February 25, 1998 Milwaukee, Wisconsin Burlington, Wisconsin The Peoples Bank and Trust Merchants & Planters Bank, Atlanta March 24, 1998 Company, Montevallo, Alabama Selma, Alabama Triangle Bancorp, Inc., Guaranty State Bancorp, Richmond February 23, 1998 Raleigh, North Carolina Durham, North Carolina Triangle Bank, Guaranty State Bank, Richmond February 23, 1998 Raleigh, North Carolina Durham, North Carolina Valley Independent Bank, Palm Desert National Bank, San Francisco March 12, 1998 El Centra, California Palm Desert, California PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Leuthe v. Office of Financial Institution Adjudication, No. Federal Reserve Banks in which the Board of Governors is not 97-1826 (3d Cir., filed October 22,1997). Appeal of district named a party. court dismissal of action against the Board and other Federal banking agencies challenging the constitutionality of the Office of Financial Institution Adjudication. Oral argu- Inner City Press/Community on the Move v. Board of Goverment is scheduled for May 23, 1998. nors, No. 97-1514 (U.S. Supreme Court, filed March 12, Patrick v. United States, No. 97-75017 (E.D. Mich., filed 1998). Petition for writ of certiorari to review dismissal by September 30, 1997). Action for damages arising out of tax the United States Court of Appeals for the District of dispute. Columbia Circuit of a petition for review of a Board order dated May 14, 1997, approving the application of Bane One Artis v. Greenspan, No. 97-5234 (D.C. Cir., filed Septem- Corporation, Inc., Columbus, Ohio, to merge with First ber 19, 1997). Appeal of district court order dismissing USA, Inc., Dallas, Texas. employment discrimination action. On January 29, 1998, the Court of Appeals granted the Board's motion for sum- Logan v. Greenspan, No. l:98CV00049 (D.D.C., filed Janumary affirmance of the District Court's dismissal of the ary 9, 1998). Employment discrimination complaint. complaint. Goldman v. Department of the Treasury, No. 1-97-CV-3798 Artis v. Greenspan, No. 97-5235 (D.C. Cir., filed Septem- (N.D. Ga., filed December 23, 1997). Declaratory judgment ber 19, 1997). Appeal of district court order dismissing action challenging Federal Reserve notes as lawful money. employment discrimination class action. On March 2, 1998, the Board filed a motion to dismiss the Towe v. Board of Governors, No. 97-71143 (9th Cir., filed action. September 15, 1997). Petition for review of a Board order Kerr v. Department of the Treasury, No. CV-S-97-01877- dated August 18, 1997, prohibiting Edward Towe and DWH (S.D. Nev., filed December 22, 1997). Challenge to Thomas E. Towe from further participation in the banking income taxation and Federal Reserve notes. industry. Allen v. Indiana Western Mortgage Corp., No. 97-7744 RJK Branch v. Board of Governors, No. 97-5229 (D.C. Cir., filed (CD. Cal., filed November 12, 1997). Customer dispute September 12, 1997). Appeal of district court order denying with a bank. motion to compel production of pre-decisional supervisory Patrick v. United States, No. 97-75564 (E.D. Mich., filed documents and testimony sought in connection with an November 7, 1997). Action for damages arising out of tax action by Bank of New England Corporation's trustee in dispute. bankruptcy against the Federal Deposit Insurance Corpora- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 Federal Reserve Bulletin • May 1998 tion. On November 10, 1997, the court denied appellant's cancellation agreements. On October 18, 1996, the district request for expedited consideration of the appeal. Oral court denied plaintiffs' motion for a temporary restraining argument is scheduled for May 4, 1998. order. On January 17, 1997, the parties filed cross-motions Clarkson v. Greenspan, No. 97-CV-2035 (D.D.C., filed Sep- for summary judgment. tember 5, 1997). Freedom of Information Act case. On Board of Governors v. Pharaon, No. 91-CIV-6250 (S.D. New January 20, 1998, the Board filed a motion to dismiss the York, filed September 17, 1991). Action to freeze assets of action. individual pending administrative adjudication of civil Banking Consultants of America v. Board of Governors, No. money penalty assessment by the Board. On September 17, 97-2791 (W.D. Tenn., filed September 2, 1997). Action to 1991, the court issued an order temporarily restraining the enjoin investigation by the Board, the Office of the Comptransfer or disposition of the individual's assets. On troller of the Currency, and the Department of Labor. On March 16, 1998, the district court granted in part and denied January 23, 1998, the court granted the Board's motion to in part the Board's motion for summary judgment. dismiss the action. Bettersworth v. Board of Governors, No. 97-CA-624 (W.D. Tex., filed August 21, 1997). Privacy Act case. FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD Wilkins v. Warren, No. 98-1320 (4th Cir. 1998). Appeal of OF GOVERNORS District Court dismissal of action involving customer dispute with a bank. Habib Bank AG Zurich Zurich, Switzerland Greeff v. Board of Governors, No. 97-1976 (4th Cir., filed June 17, 1997). Petition for review of a Board order dated The Federal Reserve Board announced on March 25, 1998, May 19, 1997, approving the application of by Allied Irish the issuance of an Order of Assessment of a Civil Money Banks, pic, Dublin, Ireland, and First Maryland Bancorp, Penalty against the Habib Bank AG Zurich, Zurich, Switzer- Baltimore, Maryland, to acquire Dauphin Deposit Corporaland, and Habib Bank's Branch in Los Angeles, California. tion, Harrisburg, Pennsylvania, and thereby acquire Dauphin's banking and nonbanking subsidiaries. OmniBank Maunsell v. Greenspan, No. 97-6131 (2d Cir., filed May 22, River Rouge, Michigan 1997). Appeal of district court dismissal of action for compensatory and punitive damages for alleged violations of The Federal Reserve Board announced on March 16, 1998, civil rights by federal savings bank. the issuance of a Prompt Corrective Action Directive Vickery v. Board of Governors, No. 97-1344 (D.C. Cir., filed against OmniBank, River Rouge, Michigan. May 9, 1997). Petition for review of a Board order dated April 14, 1997, prohibiting Charles R. Vickery, Jr., from Pan American Bank further participation in the banking industry. Oral argument Miami, Florida was heard on February 24, 1998, and on March 3, 1998, the court of appeals affirmed the Board's order. The Federal Reserve Board announced on March 9, 1998, Pharaon v. Board of Governors, No. 97-1114 (D.C. Cir., filed the issuance of a Cease and Desist Order against the February 28, 1997). Petition for review of a Board order PanAmerican Bank, Miami, Florida. dated January 31, 1997, imposing civil money penalties and an order of prohibition for violations of the Bank Holding TERMINATION OF ENFORCEMENT ACTIONS Company Act. Oral argument was held on December 8, 1997, and on February 10, 1998, the court of appeals The Federal Reserve Board announced on March 20, 1998, affirmed the Board's order. On March 26, 1998, petitioner the termination of the following enforcement actions: filed a motion for rehearing and rehearing en bane. The New Mexico Alliance v. Board of Governors, No. 98- The Bank of Versailles 1049 (D.C. Cir., transferred as of January 21, 1998). Peti- Versailles, Missouri tion for review of a Board order dated December 16, 1996, Cease and Desist Order dated December 6, 1994— approving the acquisition by NationsBank Corporation and terminated February 26, 1998. NB Holdings Corporation, both of Charlotte, North Carolina, of Boatmen's Bancshares, Inc., St. Louis, Missouri. On The Security State Bank of Pecos January 21, 1998, the United States Court of Appeals for Pecos, Texas the Tenth Circuit ordered the petition transferred to the United States Court of Appeals for the District of Columbia Cease and Desist Order dated October 17, 1995— Circuit. On March 23, 1998, the Board moved to dismiss terminated February 23, 1998. the petition. American Bankers Insurance Group, Inc. v. Board of Gover- Millennium Bank nors, No. 96-CV-2383-EGS (D.D.C., filed October 16, San Francisco, California 1996). Action seeking declaratory and injunctive relief invalidating a new regulation issued by the Board under the Written Agreement dated June 8, 1992—terminated Febru- Truth in Lending Act relating to treatment of fees for debt ary 11, 1998. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

377 Directors of Federal Reserve Banks and Branches Regional decentralization and a combination of govern- Directors are chosen without discrimination as to race, mental and private characteristics are important hallmarks creed, color, sex, or national origin. of the uniqueness of the Federal Reserve System. Under Class A directors of each Reserve Bank represent the the Federal Reserve Act, decentralization was achieved by stockholding member banks of the Federal Reserve Disdivision of the country into twelve regions called Federal trict. Class B and Class C directors represent the public and Reserve Districts and the establishment in each District of are chosen with due, but not exclusive, consideration to the a separately incorporated Federal Reserve Bank with its interests of agriculture, commerce, industry, services, labor, own board of directors. The blending of governmental and and consumers; they may not be officers, directors, or private characteristics is provided through ownership of the employees of any bank. In addition, Class C directors may stock of the Reserve Bank by member banks in its District, not be stockholders of any bank. The Board of Governors which also elect the majority of the board of directors, and designates annually one Class C director as chairman of by the general supervision of the Reserve Banks by the the board of directors of each District Bank and designates Board of Governors, an agency of the federal government. another Class C director as deputy chairman. The Board also appoints a minority of each board of Each of the twenty-five Branches of the Federal Reserve directors. Thus, there are essential elements of regional Banks has a board of either seven or five directors, a participation and counsel in the conduct of the System's majority of whom are appointed by the parent Federal affairs for which the Federal Reserve relies importantly on Reserve Bank; the others are appointed by the Board of the contributions of the directors of the Federal Reserve Governors. One of the Board's appointees is designated Banks and Branches. annually as chairman of the board of that Branch in a The following list of directors of Federal Reserve Banks manner prescribed by the parent Federal Reserve Bank. and Branches shows for each director the class of director- The names of the chairman and deputy chairman of the ship, the principal business affiliation, and the date the board of directors of each Reserve Bank and of the chaircurrent term expires. Each Federal Reserve Bank has nine man of each Branch are published monthly in the Federal members on its board of directors: The member banks elect Reserve Bulletin.l the three Class A and three Class B directors, and the Board of Governors appoints the three directors in Class C. 1. The current list appears on page A84 of this Bulletin. Term expires DISTRICT 1—BOSTON December 31 Class A Marshall N. Carter Chairman and Chief Executive Officer, State Street Bank and Trust 1998 Company, Boston, Massachusetts G. Kenneth Perine President and Chief Executive Officer, National Bank of Middlebury, 1999 Middlebury, Vermont Edwin N. Clift President and Chief Executive Officer, Merrill Merchants Bank, 2000 Bangor, Maine Class B Adjunct Lecturer, John F. Kennedy School of Government, Harvard 1998 Robert R. Glauber University, Cambridge, Massachusetts Chairman and Chief Executive Officer, John Hancock Mutual Life 1999 Stephen L. Brown Insurance Company, Boston, Massachusetts President and Chief Executive Officer, UNC Ventures, Inc., 2000 Edward Dugger III Boston, Massachusetts Class C William C. Brainard Professor of Economics, Yale University, New Haven, Connecticut 1998 William O. Taylor Chairman and Chief Executive Office, Globe Newspaper Company, 1999 Boston, Massachusetts James J. Norton President, Graphic Communications International Union, Washington, D.C. 2000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 Federal Reserve Bulletin • May 1998 Term Expires DISTRICT 2—NEW YORK December 31 Class A Chairman and Chief Executive Officer, Manufacturers and Traders Trust 1998 Robert G. Wilmers Company, Buffalo, New York President and Chief Executive Officer, The Canandaigua National Bank 1999 George W. Hamlin IV and Trust Company, Canandaigua, New York Chairman and Chief Executive Officer, The Chase Manhattan Corporation, 2000 Walter V. Shipley New York, New York Class B Ronay Menschel President, Phipps Houses, New York, New York 1998 Ann Marie Fudge Executive Vice President, Kraft Foods, Inc., and President, Coffee & 1999 Cereals Division, Tarrytown, New York Eugene R. McGrath Chairman, President, and Chief Executive Officer, Consolidated Edison 2000 Company of New York, Inc., New York, New York Class C Peter G. Peterson Chairman, The Blackstone Group, New York, New York 1998 John C. Whitehead Former Chairman, Goldman, Sachs & Co., Inc., New York, New York 1999 Thomas W. Jones Vice Chairman, Travelers Group, and Chairman and Chief Executive 2000 Officer, Smith Barney Asset Management, New York, New York BUFFALO BRANCH Appointed by the Federal Reserve Bank Kathleen R. Whelehan Regional President, Marine Midland Bank, Rochester, New York 1998 Louise C. Woerner Chairman and Chief Executive Officer, HCR, Rochester, New York 1999 William E. Swan President and Chief Executive Officer, Lockport Savings Bank, 2000 Lockport, New York Mark W. Adams Owner and Operator, Adams Poultry Farm, Naples, New York 2000 Appointed by the Board of Governors Bal Dixit President and Chief Executive Officer, Newtex Industries, Inc., 1998 Victor, New York Patrick P. Lee Chairman and Chief Executive Officer, International Motion Control, Inc., 1999 Buffalo, New York Louis J. Thomas Director, District 4, United Steelworkers of America, Cheektowaga, 2000 New York DISTRICT 3—PHILADELPHIA Class A President and Chief Executive Officer, Lebanon Valley National Bank, 1998 Albert B. Murry Lebanon, Pennsylvania President and Chief Executive Officer, Omega Bank, N.A., 1999 David B. Lee State College, Pennsylvania President and Chief Executive Officer, First National Bank of Absecon, 2000 Harry Elwell III Absecon, New Jersey Class B Chairman and Chief Executive Officer, Conectiv (Delmarva Power and 1998 Howard E. Cosgrove Light Company), Wilmington, Delaware President and Chief Executive Officer, Jackson-Cross Company, 1999 J. Richard Jones Philadelphia, Pennsylvania President and Chief Executive Officer, Burris Foods, Inc., 2000 Robert D. Burris Milford, Delaware Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 379 Term Expires DISTRICT 3—PHILADELPHIA—Continued December 31 Class C Charisse R. Lillie Partner, Ballard Spahr Andrews & Ingersoll, Philadelphia, Pennsylvania 1998 Joan Carter President and Chief Operating Officer, UM Holdings Ltd., Haddonfield, 1999 New Jersey Glenn A. Schaeffer President, Pennsylvania Building and Construction Trades Council, 2000 Harrisburg, Pennsylvania DISTRICT 4—CLEVELAND Class A David A. Daberko Chairman and Chief Executive Officer. National City Corporation, 1998 Cleveland, Ohio Tiney M. McComb Chairman and President, Heartland BancCorp, Gahanna, Ohio 1999 David S. Dahlmann President and Chief Executive Officer, Southwest National Corporation, 2000 Greensburg, Pennsylvania Class B President and Chief Executive Officer, American Micrographics Company, 1998 I.N. Rendall Harper, Jr. Inc., Monroeville, Pennsylvania Chairman and Chief Executive Officer, Mercantile Stores Inc., 1999 David L. Nichols Fairfield, Ohio President, Denison University, Granville, Ohio 2000 Michele Tolela Myers Class C David H. Hoag Chairman and Chief Executive Officer, The LTV Corporation, 1998 Cleveland, Ohio Robert Y. Farrington Executive Secretary-Treasurer, Ohio State Building and Construction 1999 Trades Council, Columbus, Ohio G. Watts Humphrey, Jr. President, GWH Holdings, Inc., Pittsburgh, Pennsylvania 2000 CINCINNATI BRANCH Appointed by the Federal Reserve Bank Jean R. Hale President and Chief Executive Officer, Community Trust Bank, N.A., 1998 Pikeville, Kentucky Judith G. Clabes President and Chief Executive Officer, Scripps Howard, Cincinnati, Ohio 1999 Phillip R. Cox President, Cox Financial Corporation, Cincinnati, Ohio 1999 Stephen P. Wilson President and Chief Executive Officer, Lebanon Citizens National Bank, 2000 Lebanon, Ohio Appointed by the Board of Governors Thomas Revely III President and Chief Executive Officer, Cincinnati Bell Supply Co., 1998 Cincinnati, Ohio George C. Juilfs President and Chief Executive Officer, SENCORP, Newport, Kentucky 1999 Wayne Shumate Chairman and Chief Executive Officer, Kentucky Textiles, Inc., 2000 Paris, Kentucky PITTSBURGH BRANCH Appointed by the Federal Reserve Bank Edward V. Randall, Jr. President and CEO/Pittsburgh, PNC Bank, N.A., Pittsburgh, Pennsylvania 1998 Georgia Berner President, Berner International Corp., New Castle, Pennsylvania 1999 Peter N. Stephans Chairman and Chief Executive Officer, Trigon Incorporated, 1999 McMurray, Pennsylvania Thomas J. O'Shane Chairman, President, and Chief Executive Officer, First Western Bancorp, 2000 Inc., New Castle, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

380 Federal Reserve Bulletin • May 1998 Term Expires DISTRICT 4—CLEVELAND—Continued December 31 PITTSBURGH BRANCH—Continued Appointed by the Board of Governors Gretchen R. Haggerty Vice President-Accounting and Finance, U.S. Steel Group, USX, 1998 Pittsburgh, Pennsylvania Charles E. Bunch Senior Vice President, Strategic Planning and Corporate Services, PPG 1999 Industries, Inc., Pittsburgh, Pennsylvania John T. Ryan III Chairman, President, and Chief Executive Officer, Mine Safety Appliances 2000 Company, Pittsburgh, Pennsylvania DISTRICT 5—RICHMOND Class A George A. Didden III Chairman and Chief Executive Officer, The National Capital Bank of 1998 Washington, Washington, D.C. J. Walter McDowell President-North Carolina Banking, Wachovia Bank, N.A., Winston-Salem, 1999 North Carolina Elizabeth A. Duke President and Chief Executive Officer, Bank of Tidewater, 2000 Virginia Beach, Virginia Class B Craig A. Ruppert President and Owner, The Ruppert Companies, Ashton, Maryland 1998 Wesley S. Williams, Jr. Partner, Covington & Burling, Washington, D.C. 1999 James E. Haden President and Chief Executive Officer, Martha Jefferson Hospital, 2000 Charlottesville, Virginia Class C Robert L. Strickland Retired Chairman, Lowe's Companies, Inc., Winston-Salem, 1998 North Carolina Jeremiah J. Sheehan Chairman and Chief Executive Officer, Reynolds Metals Company, 1999 Richmond, Virginia Claudine B. Malone President, Financial & Management Consulting, Inc., McLean, Virginia 2000 BALTIMORE BRANCH Appointed by the Federal Reserve Bank Jeremiah E. Casey Chairman, First Maryland Bancorp, Baltimore, Maryland 1998 Morton I. Rapoport President and Chief Executive Officer, University of Maryland Medical 1999 System, Baltimore, Maryland William L. Jews President and Chief Executive Officer, Blue Cross Blue Shield of 2000 Maryland, Owings Mills, Maryland Virginia W. Smith President and Chief Executive Officer, Union National Bank, 2000 Westminster, Maryland Appointed by the Board of Governors Daniel R. Baker President and Chief Executive Officer, Tate Access Floors, Inc., 1998 Jessup, Maryland George L. Russell, Jr. Partner, Piper & Marbury L.L.P., Baltimore, Maryland 1999 Betty Bednarczyk International Secretary-Treasurer, Service Employees International Union, 2000 Washington, D.C. CHARLOTTE BRANCH Appointed by the Federal Reserve Bank William H. Nock President and Chief Executive Officer, Sumter National Bank, 1998 Sumter, South Carolina Laura M. Fleming President and Chief Executive Officer, Founders Federal Credit Union, 1999 Lancaster, South Carolina Katharine W. McKee Associate Director, Self-Help, Durham, North Carolina 2000 Cecil W. Sewell, Jr. Chairman and Chief Executive Officer, Centura Bank, Rocky Mount, 2000 Digitized for FRASER North Carolina http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 381 Term Expires DISTRICT 5—RICHMOND—Continued December 31 CHARLOTTE BRANCH—Continued Appointed by the Board of Governors James O. Roberson President and Chief Executive Officer, Research Triangle Foundation of 1998 North Carolina, Research Triangle Park, North Carolina Dennis D. Lowery Chief Executive Officer and Chairman, Continental Industrial 1999 Chemicals, Inc., Charlotte, North Carolina Joan H. Zimmerman President, Southern Shows, Inc., Charlotte, North Carolina 2000 DISTRICT 6—ATLANTA Class A Chairman and Chief Executive Officer, First Farmers and Merchants 1998 Waymon L. Hickman National Bank, Columbia, Tennessee President and Chief Operating Officer, Deposit Guaranty National Bank, 1999 Howard L. McMillan, Jr. Jackson, Mississippi Chairman and Chief Executive Officer, Compass Bancshares, Inc., 2000 D. Paul Jones, Jr. Birmingham, Alabama Class B Suzanne E. Boas President, Consumer Credit Counseling Service of Greater Atlanta, 1998 Atlanta, Georgia Juanita P. Baranco Executive Vice President, Baranco Automotive Group, Lilburn, Georgia 1999 Maria Camila Leiva Executive Vice President, Miami Free Zone Corporation, Miami, Florida 2000 Class C David R. Jones Chairman, AGL Resources Inc., Atlanta, Georgia 1998 John Wieland President, John Wieland Homes, Inc., Atlanta, Georgia 1999 Paula Lovell President, Lovell Communications, Inc., Nashville, Tennessee 2000 BIRMINGHAM BRANCH Appointed by the Federal Reserve Bank J. Stephen Nelson Chairman and Chief Executive Officer, First National Bank of Brewton, 1998 Brewton, Alabama W. Charles Mayer III Senior Executive Vice President, AmSouth Bancorporation, and President, 1999 Alabama Banking Group, AmSouth Bank, Birmingham, Alabama Roland Pugh Chairman, Roland Pugh Construction, Inc., Northport, Alabama 2000 Hundley Batts, Sr. Managing Agent, Hundley Batts & Associates Insurance Agency, 2000 Huntsville, Alabama Appointed by the Board of Governors Patricia B. Compton President, Patco, Inc., Georgiana, Alabama 1998 V. Larkin Martin Managing Partner, Martin Farm, Courtland, Alabama 1999 D. Bruce Carr Labor-Relations Liaison, Laborers' District Council of Alabama, 2000 Gadsden, Alabama JACKSONVILLE BRANCH Appointed by the Federal Reserve Bank Royce B. Walden President, Walden Enterprises, Inc., Orlando, Florida 1998 William G. Smith, Jr. President, Capital City Bank Group, Tallahassee, Florida 1999 Terry R. West President and Chief Executive Officer, Jax Navy Federal Credit Union, 2000 Jacksonville, Florida Digitized for FRASER http://fraMseirc.shtaloeul isWfe.d P.oorog/l e Principal, Poole Carbone Capital Partners, Inc., Winter Park, Florida 2000 Federal Reserve Bank of St. Louis

382 Federal Reserve Bulletin • May 1998 Term Expires DISTRICT 6—ATLANTA—Continued December 31 JACKSONVILLE BRANCH—Continued Appointed by the Board of Governors Judy Jones President, J.R. Jones and Associates, Tallahassee, Florida 1998 Marsha G. Rydberg Partner, Foley & Lardner, Tampa, Florida 1999 William E. Flaherty Chairman and Chief Executive Officer, Blue Cross and Blue Shield of 2000 Florida, Inc., Jacksonville, Florida MIAMI BRANCH Appointed by the Federal Reserve Bank E. Anthony Newton Past President and Chief Executive Officer, Island National Bank and Trust 1998 Company, Palm Beach, Florida D. Keith Cobb Former Vice Chairman and Chief Executive Officer, Alamo 1999 Rent-A-Car, Inc., Ft. Lauderdale, Florida James W. Moore President, Gulf Utility Company, Fort Myers, Florida 1999 Carlos A. Migoya President, Dade/Monroe Counties, First Union National Bank of Florida, 2000 Miami, Florida Appointed by the Board of Governors R. Kirk Landon Chairman, American Bankers Insurance Group, Miami, Florida 1998 Mark T. Sodders President, Lakeview Farms, Inc., Pahokee, Florida 1999 Kaaren Johnson-Street Vice President of Minority Business Development and Urban Initiatives, 2000 Enterprise Florida, Coral Gables, Florida NASHVILLE BRANCH Appointed by the Federal Reserve Bank Dale W. Polley President, First American National Bank, Nashville, Tennessee 1998 Leonard A. Walker, Jr. Chairman, President, and Chief Executive Officer, First National Bank 1999 and Trust Company, Athens, Tennessee James E. Dalton, Jr. President and Chief Executive Officer, Quorum Health Group, Inc., 2000 Brentwood, Tennessee John E. Seward, Jr. President and Chief Executive Officer, Paty Lumber Company, Inc., 2000 Piney Flats, Tennessee Appointed by the Board of Governors Frances F. Marcum Chairman and Chief Executive Officer, Micro Craft, Inc., Tullahoma, 1998 Tennessee Michael E. Bennett UAW Manufacturing Advisor, UAW Local 1853, Saturn Corporation, 1999 Spring Hill, Tennessee N. Whitney Johns Chairman and Chief Executive Officer, Whitney Johns & Company, 2000 Nashville, Tennessee NEW ORLEANS BRANCH Appointed by the Federal Reserve Bank Howell N. Gage Chairman and Chief Executive Officer, Merchants Bank, Vicksburg, 1998 Mississippi Howard C. Gaines Chairman, First National Bank of Commerce, New Orleans, Louisiana 1999 Teri G. Fontenot President and Chief Executive Officer, Woman's Health 2000 Foundation/Woman's Hospital, Baton Rouge, Louisiana David Guidry President and Chief Executive Officer, Guico Machine Works, Inc., 2000 Digitized for FRASER Harvey, Louisiana http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 383 Term Expires DISTRICT 6—ATLANTA—Continued December 31 NEW ORLEANS BRANCH—Continued Appointed by the Board of Governors Lucimarian Roberts Community Advocate, Biloxi, Mississippi 1998 Glenn Pumpelly President and Chief Executive Officer, Pumpelly Oil Inc., Westlake, 1999 Louisiana Jackie Ducote President, Public Affairs Research Council of Louisiana, Baton Rouge, 2000 Louisiana DISTRICT 7—CHICAGO Class A Arnold C. Schultz Chairman and Chief Executive Officer, Grundy National Bank, Grundy 1998 Center, Iowa Verne G. Istock Chairman, President, and Chief Executive Officer, First Chicago NBD 1999 Corporation, Chicago, Illinois Robert R. Yohanan Managing Director and Chief Executive Officer, First Bank & Trust of 2000 Evanston, Evanston, Illinois Class B Donald J. Schneider President, Schneider National, Inc., Green Bay, Wisconsin 1998 Migdalia Rivera Executive Director, Latino Institute, Chicago, Illinois 1999 Jack B. Evans President, The Hall-Perrine Foundation, Cedar Rapids, Iowa 2000 Class C Chairman and Chief Executive Officer, Sears, Roebuck & Co., 1998 Arthur C. Martinez Hoffman Estates, Illinois Chairman, President, and Chief Executive Officer, Inland Steel 1999 Robert J. Darnall Industries, Inc., Chicago, Illinois Managing Partner, Washington, Pittman & McKeever, Chicago, Illinois 2000 Lester H. McKeever, Jr. DETROIT BRANCH Appointed by the Federal Reserve Bank Richard M. Bell President and Chief Executive Officer, The First National Bank of 1998 Three Rivers, Three Rivers, Michigan Denise Hitch Lites Vice Chairwoman, Little Caesars Enterprises, and President, Olympia 1999 Development, Inc., Detroit, Michigan Irma B. Elder President, Troy Motors, Inc., Troy, Michigan 1999 David J. Wagner Chairman, President, and Chief Executive Officer, Old Kent Financial 2000 Corporation, Grand Rapids, Michigan Appointed by the Board of Governors Stephen R. Polk Chairman and Chief Executive Officer, R.L. Polk & Co., Detroit, Michigan 1998 Florine Mark President and Chief Executive Officer, The WW Group, Inc., 1999 Farmington Hills, Michigan Timothy D. Leuliette President and Chief Operating Officer, Penske Corporation, Detroit, 2000 Michigan DISTRICT 8—ST. LOUIS Class A Douglas M. Lester President and Chief Executive Officer, Sea Change Corp., Bowling Green, 1998 Kentucky W.D. Glover Chairman and Chief Executive Officer, First National Bank of Eastern 1999 Arkansas, Forrest City, Arkansas Michael A. Alexander Chairman and President, The First National Bank of Mount Vernon, 2000 Digitized for FRASER Mount Vernon, Illinois http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 Federal Reserve Bulletin • May 1998 Term Expires DISTRICT 8—ST. LOUIS—Continued December 31 Class B Richard E. Bell President and Chief Executive Officer, Riceland Foods, Inc., Stuttgart, 1998 Arkansas Joseph E. Glassner, Jr. Executive Director, New Directions Housing Corp., Louisville, Kentucky 1999 Robert L. Johnson Chairman and Chief Executive Officer, Johnson Bryce, Inc., Memphis, 2000 Tennessee Class C John F. McDonnell Former Chairman, McDonnell Douglas Corporation, St. Louis, Missouri 1998 Veo Peoples, Jr. Peoples, LLC, St. Louis, Missouri 1999 Susan S. Elliott President and Chief Executive Officer, Systems Service Enterprises, Inc., 2000 St. Louis, Missouri LITTLE ROCK BRANCH Appointed by the Federal Reserve Bank Mark A. Shelton III President, M.A. Shelton Farming Company, Wabbaseka, Arkansas 1998 Mark Simmons Chairman, Simmons Foods, Inc., Siloam Springs, Arkansas 1999 Ross M. Whipple Chairman and Chief Executive Officer, Horizon Bancorp, Inc., 1999 Arkadelphia, Arkansas Lunsford W. Bridges President and Chief Executive Officer, Metropolitan National Bank, 2000 Little Rock, Arkansas Appointed by the Board of Governors Betta M. Carney Chairman and Chief Executive Officer, World Wide Travel Service, Inc., 1998 Little Rock, Arkansas Janet M. Jones President, The Janet Jones Company, Little Rock, Arkansas 1999 Diana T. Hueter President and Chief Executive Officer, St. Vincent Health Systems, 2000 Little Rock, Arkansas LOUISVILLE BRANCH Appointed by the Federal Reserve Bank Orson Oliver President, Mid-America Bank of Louisville & Trust Co., Louisville, 1998 Kentucky Larry E. Dunigan Chairman and Chief Executive Officer, Holiday Management Corp., 1999 Evansville, Indiana Ronald R. Cyrus Executive Secretary-Treasurer, Kentucky State AFL-CIO, Frankfort, 1999 Kentucky Aubrey W. Lippert Chairman and Chief Executive Officer, Peoples First Corporation, 2000 Paducah, Kentucky Appointed by the Board of Governors Roger Reynolds President and Chief Executive Officer, The Reynolds Group, Inc., 1998 Louisville, Kentucky Joseph W. Prather Chairman, Service First Warehouse and Distribution, Inc., Elizabethtown, 1999 Kentucky Debbie Scoppechio Chairman and Chief Executive Officer, Creative Alliance, Inc., Louisville, 2000 Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 385 Term Expires DISTRICT 8—ST. LOUIS—Continued December 31 MEMPHIS BRANCH Appointed by the Federal Reserve Bank Anthony M. Rampley President and Chief Executive Officer, Arkansas Glass Container 1998 Corporation, Jonesboro, Arkansas Katie S. Winchester President and Chief Executive Officer, First Citizens National Bank, 1999 Dyersburg, Tennessee John C. Kelley, Jr. President, Memphis Banking Group, First Tennessee Bank, Memphis, 1999 Tennessee E.C. Neelly III Chief Executive Officer, First American National Bank, Iuka, Mississippi 2000 Appointed by the Board of Governors John V. Myers President, Better Business Bureau, Memphis, Tennessee 1998 Mike P. Sturdivant, Jr. Partner, Due West Plantation, Glendora, Mississippi 1999 Carol G. Crawley Vice President & Regional Manager, Mid-America Apartment 2000 Communities, Memphis, Tennessee DISTRICT 9—MINNEAPOLIS Class A Dale J. Emmel President, First National Bank of Sauk Centre, Sauk Centre, Minnesota 1998 Lynn M. Hoghaug President, Ramsey National Bank and Trust Co., Devils Lake, 1999 North Dakota Bruce Parker President, Norwest Bank Montana, Billings, Montana 2000 Class B Dennis W. Johnson President, TMI Systems Design Corporation, Dickinson, North Dakota 1998 Rob L. Wheeler Vice President, Wheeler Mfg. Co., Inc., Lemmon, South Dakota 1999 Kathryn L. Ogren Owner, Bitterroot Motors, Missoula, Montana 2000 Class C James J. Howard Chairman, President, and Chief Executive Officer, Northern States Power 1998 Company, Minneapolis, Minnesota David A. Koch Chairman, Graco, Inc., Plymouth, Minnesota 1999 Ronald N. Zwieg President, United Food & Commercial Workers, Local 653, Plymouth, 2000 Minnesota HELENA BRANCH Appointed by the Federal Reserve Bank Emil W. Erhardt Chairman and President, Citizens State Bank, Hamilton, Montana 1998 Sandra M. Stash Vice President, Environmental Services, ARCO Environmental 1998 Remediation L.L.C., Anaconda, Montana Richard E. Hart President, Mountain West Bank, Great Falls, Montana 1999 Appointed by the Board of Governors William P. Underriner General Manager, Selover Buick Inc., Billings, Montana 1998 Thomas O. Markle President and Chief Executive Officer, Markle's Inc., Glasgow, Montana 1999 DISTRICT 10—KANSAS CITY Class A William L. McQuillan President, Chief Executive Officer, and Director, City National Bank, 1998 Greeley, Nebraska Dennis E. Barrett President, FirstBank Holding Company of Colorado, Lakewood, Colorado 1999 Bruce A. Schriefer President, Bankers' Bank of Kansas, N.A., Wichita, Kansas 2000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 Federal Reserve Bulletin O May 1998 Term Expires DISTRICT 10—KANSAS CITY—Continued December 31 Class B Frank A. Potenziani M & T Trust, Albuquerque, New Mexico 1998 Charles W. Nichols Managing Partner, Davison & Sons Cattle Company, Arnett, Oklahoma 1999 Hans Helmerich President and Chief Executive Officer, Helmerich & Payne, Inc., Tulsa, 2000 Oklahoma Class C Jo Marie Dancik Office Managing Partner, Ernst & Young LLP, Denver, Colorado 1998 Colleen D. Hernandez Executive Director, Kansas City Neighborhood Alliance, Kansas City, 1999 Missouri Terrence P. Dunn President and Chief Executive Officer, J.E. Dunn Construction Company, 2000 Kansas City, Missouri DENVER BRANCH Appointed by the Federal Reserve Bank Albert C. Yates President, Colorado State University, Ft. Collins, Colorado 1998 C.G. Mammel President and Chief Executive Officer, The Bank of Cherry Creek, N.A., 1999 Denver, Colorado Robert M. Murphy Chairman and Chief Executive Officer, Sandia Companies, Albuquerque, 2000 New Mexico John W. Hay III President, Rock Springs National Bank, Rock Springs, Wyoming 2000 Appointed by the Board of Governors Peter I. Wold Partner, Wold Oil & Gas Company, Casper, Wyoming 1998 Teresa N. McBride President and Chief Executive Officer, McBride and Associates, Inc., 1999 Albuquerque, New Mexico Kathryn A. Paul President, Kaiser Permanente, Denver, Colorado 2000 OKLAHOMA CITY BRANCH Appointed by the Federal Reserve Bank Betty Bryant Shaull President-Elect and Director, Bank of Cushing and Trust Company, 1998 Cushing, Oklahoma Dennis M. Mitchell Vice Chairman, Citizens Bank of Ardmore, Ardmore, Oklahoma 1998 William H. Braum President, Braum Ice Cream Co., Oklahoma City, Oklahoma 1999 Michael S. Samis President and Chief Executive Officer, Macklanburg-Duncan Co., 2000 Oklahoma City, Oklahoma Appointed by the Board of Governors Barry L. Eller Senior Vice President and General Manager, MerCruiser, Stillwater, 1998 Oklahoma Larry W. Brummett Chairman, President, and Chief Executive Officer, ONEOK, Inc., Tulsa, 1999 Oklahoma Patricia B. Fennell Executive Director, Latino Community Development Agency, 2000 Oklahoma City, Oklahoma OMAHA BRANCH Appointed by the Federal Reserve Bank Robert L. Peterson Chairman, President, and Chief Executive Officer, IBP, Inc., Dakota City, 1998 Nebraska Bruce R. Lauritzen President, First National Bank of Omaha, Omaha, Nebraska 1999 Frank L. Hayes President, Hayes & Associates, L.L.C., Omaha, Nebraska 2000 H. H. Kosman Chairman, President, and Chief Executive Officer, Platte Valley National 2000 Bank, Scottsbluff, Nebraska Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 387 Term Expires DISTRICT 10—KANSAS CITY—Continued December 31 OMAHA BRANCH—Continued Appointed by the Board of Governors Gladys Styles Johnston Chancellor, University of Nebraska at Kearney, Kearney, Nebraska 1998 Bob L. Gottsch Vice President, Gottsch Feeding Corporation, Hastings, Nebraska 1999 Arthur L. Shoener Management Consultant, Omaha, Nebraska 2000 DISTRICT 11—DALLAS Class A President and Chief Executive Officer, The Security State Bank of Pecos, 1998 Dudley K. Montgomery Pecos, Texas President and Chief Executive Officer, Texas Independent Bank, 1999 Gayle M. Earls Dallas, Texas President and Chief Executive Officer, Security Bank, Rails, Texas 2000 Kirk A. McLaughlin Class B Vice President, Semiconductor Group, Texas Instruments, Dallas, Texas 1998 Julie S. England President, Stephen F. Austin State University, Nacogdoches, Texas 1999 Dan Angel Chairman and Chief Executive Officer, Cogen Technologies Energy Group, 2000 Robert C. McNair Houston, Texas Class C Chairman and Chief Executive Officer, Ultramar Diamond Shamrock 1998 Roger R. Hemminghaus Corp., San Antonio, Texas Second General Vice President, International Association of Bridge, 1999 James A. Martin Structural & Ornamental Iron Workers, Austin, Texas Chairman, President, and Chief Executive Officer, Hunt Consolidated, Inc., 2000 Ray L. Hunt Dallas, Texas EL PASO BRANCH Appointed by the Federal Reserve Bank Lester L. Parker President and Chief Operating Officer, Bank of the West, El Paso, Texas 1998 James D. Renfrow President and Chief Executive Officer, The Carlsbad National Bank, 1999 Carlsbad, New Mexico Melissa W. O'Rourke President, Charlotte's Inc., El Paso, Texas 1999 Cecil E. Nix Business Manager, IBEW, Local 460, Midland, Texas 2000 Appointed by the Board of Governors Beauregard Brite White Rancher, J.E. White, Jr. & Sons, Marfa, Texas 1998 Patricia Z. Holland-Branch President and Chief Executive Officer, HB/PZH Commercial 1999 Environments, Inc., El Paso, Texas Gail S. Darling Chief Executive Officer, Gail Darling, Inc., El Paso, Texas 2000 HOUSTON BRANCH Appointed by the Federal Reserve Bank J. Michael Solar Principal Attorney, Solar & Fernandes L.L.P., Houston, Texas 1998 Judith B. Craven President, United Way of the Texas Gulf Coast, Houston, Texas 1999 Ray B. Nesbitt President, Exxon Chemical Company, Houston, Texas 1999 John L. Adams Chairman and Chief Executive Officer, Chase Bank of Texas, N.A., 2000 Houston, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

388 Federal Reserve Bulletin • May 1998 Term Expires DISTRICT 11—DALLAS—Continued December 31 HOUSTON BRANCH—Continued Appointed by the Board of Governors Edward O. Gaylord Chairman, EOTT Energy Corp. and General Partner, EOTT Energy 1998 Partners L.P., Houston, Texas Peggy Pearce Caskey Chief Executive Officer, Laboratories for Genetic Services, Inc., 1999 Houston, Texas Malcolm Gillis President, Rice University, Houston, Texas 2000 SAN ANTONIO BRANCH Appointed by the Federal Reserve Bank Richard W. Evans, Jr. Chairman and Chief Executive Officer, Frost National Bank, 1998 San Antonio, Texas Juliet V. Garcia President, The University of Texas at Brownsville, Brownsville, Texas 1999 Douglas G. Macdonald President, South Texas National Bank, Laredo, Texas 1999 Arthur Emerson Vice President and General Manager, KVDA-TV 60 Telemundo, 2000 San Antonio, Texas Appointed by the Board of Governors Carol L. Thompson President, The Thompson Group, Austin, Texas 1998 Patty P. Mueller Vice President/Finance, Mueller Energetics, Corpus Christi, Texas 1999 H.B. Zachry, Jr. Chairman and Chief Executive Officer, H.B. Zachry Company, 2000 San Antonio, Texas DISTRICT 12—SAN FRANCISCO Class A Warren K.K. Luke Vice Chairman, President, and Chief Executive Officer, Hawaii National 1998 Bank, Honolulu, Hawaii E. Lynn Caswell Vice Chairman, Monarch Bancorp, Laguna Hills, California 1999 John V. Rindlaub Group Executive Vice President, Bank of America Northwest Group, 2000 Seattle, Washington Class B Stanley T. Skinner Chairman and Chief Executive Officer (Retired), Pacific Gas and Electric 1998 Co., San Francisco, California Robert S. Attiyeh Senior Vice President and Chief Financial Officer, Amgen, Inc., 1999 Thousand Oaks, California Krestine Corbin President and Chief Executive Officer, Sierra Machinery, Inc., 2000 Sparks, Nevada Class C Cynthia A. Parker Executive Director, Anchorage Neighborhood Housing Services, Inc., 1998 Anchorage, Alaska Gary G. Michael Chairman and Chief Executive Officer, Albertson's, Inc., Boise, Idaho 1999 Nelson C. Rising President and Chief Executive Officer, Catellus Development Corporation, 2000 San Francisco, California Los ANGELES BRANCH Appointed by the Federal Reserve Bank Stephen G. Carpenter Director, California United Bank, Encino, California 1998 John H. Gleason Senior Vice President, Del Webb Corporation, Phoenix, Arizona 1999 Liam E. McGee Group Executive Vice President, Bank of America, Los Angeles, 2000 California Linda Griego Managing General Partner, Engine Co. No. 28, Los Angeles, California 2000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 389 Term Expires DISTRICT 12—SAN FRANCISCO—Continued December 31 Los ANGELES BRANCH—Continued Appointed by the Board of Governors Anne L. Evans Chairman, Evans Hotels, San Diego, California 1998 Lori R. Gay President, Los Angeles Neighborhood Housing, Los Angeles, California 1999 Lonnie Kane President, Karen Kane, Inc., Los Angeles, California 2000 PORTLAND BRANCH Appointed by the Federal Reserve Bank Gary T. Duim Vice Chairman, U.S. Bancorp, Portland, Oregon 1998 Phyllis A. Bell President, Oregon Coast Aquarium, Newport, Oregon 1999 Martin Brantley President and General Manager, KPTV-12, Oregon Television, Inc., 1999 Portland, Oregon Thomas C. Young President, Chairman, and Chief Executive Officer, Northwest National 2000 Bank, Vancouver, Washington Appointed by the Board of Governors Carol A. Whipple Proprietor, Rocking C Ranch, Elkton, Oregon 1998 Nancy Wilgenbusch President, Marylhurst College, Marylhurst, Oregon 1999 Patrick Borunda Executive Director, ONABEN—A Native American Business Network, 2000 Portland, Oregon SALT LAKE CITY BRANCH Appointed by the Federal Reserve Bank Roy C. Nelson President, Bank of Utah, Ogden, Utah 1998 J. Pat McMurray President, First Security Bank, N.A., Boise, Idaho 1999 Maria Garciaz Executive Director, Salt Lake Neighborhood Housing Services, 1999 Salt Lake City, Utah R.D. Cash Chairman, President, and Chief Executive Officer, Questar Corporation, 2000 Salt Lake City, Utah Appointed by the Board of Governors Richard E. Davis President and Chief Executive Officer, Salt Lake Convention & Visitors 1998 Bureau, Salt Lake City, Utah Nancy S. Mortensen Vice President-Marketing Services, ZCMI, Salt Lake City, Utah 1999 Barbara L. Wilson Regional Vice President, U.S. West, Boise, Idaho 2000 SEATTLE BRANCH Appointed by the Federal Reserve Bank Constance L. Proctor Partner, Alston Courtnage Proctor & Bassetti, LLP, Seattle, Washington 1998 Tomio Moriguchi Chairman and Chief Executive Officer, Uwajimaya, Inc., Seattle, 1999 Washington James C. Hawkanson Managing Director and Chief Executive Officer, The Commerce Bank of 2000 Washington, N.A., Seattle, Washington Betsy Lawer Vice Chair and Chief Operating Officer, First National Bank of Anchorage, 2000 Anchorage, Alaska Appointed by the Board of Governors Helen M. Rockey President and Chief Executive Officer, Brooks Sports, Inc., Bothell, 1998 Washington Boyd E. Givan Senior Vice President and Chief Financial Officer, The Boeing Company, 1999 Seattle, Washington Richard R. Sonstelie Chairman, Puget Sound Energy, Inc., Bellevue, Washington 2000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance—Continued All 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 and Reserve Bank A30 Federal and federally sponsored credit credit agencies—Debt outstanding A6 Reserves and borrowings—Depository institutions Securities Markets and Corporate Finance Policy Instruments A31 New security issues—Tax-exempt state and local governments and corporations A7 Federal Reserve Bank interest rates A32 Open-end investment companies—Net sales A8 Reserve requirements of depository institutions and assets A9 Federal Reserve open market transactions A32 Corporate profits and their distribution A32 Domestic finance companies—Assets and Federal Reserve Banks liabilities A33 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A35 Mortgage debt outstanding and monetary base A13 Money stock, liquid assets, and debt measures Consumer Credit A36 Total outstanding Commercial Banking Institutions— A36 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A42 Nonfinancial business activity 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 • May 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 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 Banks A61 Discount rates of foreign central banks A52 Selected U.S. liabilities to foreign official A61 Foreign short-term interest rates institutions A62 Foreign exchange rates Reported by Banks in the United States A63 GUIDE TO STATISTICAL RELEASES AND A52 Liabilities to, and claims on, foreigners SPECIAL TABLES A53 Liabilities to foreigners A55 Banks' own claims on foreigners A56 Banks' own and domestic customers' claims on SPECIAL TABLES foreigners A56 Banks' own claims on unaffiliated foreigners A64 Assets and liabilities of commercial banks, A57 Claims on foreign countries—Combined December 31, 1997 domestic offices and foreign branches A66 Terms of lending at commercial banks, February, 1998 Reported by Nonbanking Business A70 Assets and liabilities of U.S. branches and agencies of foreign banks, December 31, 1997 Enterprises in the United States A58 Liabilities to unaffiliated foreigners A59 Claims on unaffiliated foreigners A74 INDEX TO STATISTICAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected G-10 Group of Ten e Estimated GNMA Government National Mortgage Association n.a. Not available GDP Gross domestic product 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 Fanners 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 Department of Veterans Affairs G-7 Group of Seven VA 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 Financial Statistics • May 1998 1.10 RESERVES, MONEY STOCK. LIQUID ASSETS, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1998 Monetary or credit aggregate Ql Q2 Q3 Q4 Oct. Jan.' Reserves of depository institutions 1 Total .' -8.3 -14.3 -1.8 -1.3 -5.5 10.6 8.5 21.2 -14.2 2 Required -8.4 -15.0 -2.4 -4.1 -8.3 5.1 7.0 24.5 -7.7 3 Nonborrowed -7.2 -16.0 -3.4 .7 -1.2 13.7 4.1 18.4 -10.3 4 Monetary base1 5.3 3.7 6.3 8.1 6.8 10.9 9.9 5.8 3.5 Concepts of money, liquid assets, and debt* 5 Ml ' -1.4 -4.5 .3 -1.9 8.2 7.6 -3.0 2.8 6 M2 5.1 4.4 5.4 6.8 5.9 7.3 6.8 72 9.3 7 M3 8.0 7.7 9.9' 8.5 11.7' 11.2' 10.7 8.5 IL 7.0 8.4 7.1 9.5' 1.(1 13.2' 12.1' 13.6 n.a. 9 Debt 4.4r 5.0' 4.2' 5.8' 6.0' 6.5' 6.2' 5.9 n.a. Nonlransaction components 10 In M25 7.7 7.9 7.3 9.0 8.7' 7.0 6.5 10.9 11.6 11 In M3 only6 18.0 18.9 16.9 19.6' 16.9' 25.4' 24.9' 21.2 6.2 Time and savings deposits Commercial banks 12 Savings, including MMDAs... 12.8 11.0 9.6' 16.3 17.3' 11.9 13.6 14.3 13.1 13 Smalltime7 2.9 5.6 7.1 3.1 2.5 5.6 1.0 .2 14 Large time8'9 19.4 24.1 17.2 14.0 6.6 22.6 19.9 8.7 29^8 Thrift institutions 15 Savings, including MMDAs. . . .7 6.0 1.0 1.3 2.2 -.6 5.1 6.7 13.3 16 Small time7 .0 -2.9 -5.2 -3.5' -1.0 -9.01 .0' 4.2 -2.8 17 Large time8 13.5 4.3 9.8 5.3 1.4 11.5 11.4 29.6 2.7 Money market mutual funds 18 Retail 14.7 13.5 16.0 15.6 10.2 14.4 4.8 22.9 28.0 19 Institution-only 18.4 18.0 19.7 22.0 22.9 7.6 34.5 14.7 12.3 Repurchase agreements and Eurodollars 20 Repurchase agreements'' 6.2 6.8 13.4 38.3' 55 1' 77.9' 9.3' 52.6 -25.9 21 Eurodollars'" 35.8 32.2 19.5 12.4' -9.6' 6.1' 51.5' 25.1 -34.4 Debt componentsi 22 Federal 1.8 .4 .6 .9 .5 2.2 .0 n.a. 23 Nonfederal 5.4' 6.6' 5.9' 7.4' 7.8' 7.6' 7.9 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 deponiK, and O) retail OCDs, each seasonally adjusted separately. money fund balances, each seasonally adjusted separately. M2: Ml plus (1) savings (including MMDAsj. (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 CREDIT' Millions of dollars Average of daily figures Average of daily figures for week ending on date indicated 1998 1998 Feb. Jan. 14 Jan. 21 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 469,563 468,720' 463,965 468,283 466,439' 465,383' 463,079 461,269 464,620 466,130 U.S. government securities 2 Bought outright—System account3 427,860 429,845 427,988 430,981 429,718 428,462 427,804 427,093 428,138 428,618 3 Held under repurchase agreements 7,197 4,155 2,720 3,433 1,920 2,896 739 274 2,799 5,743 Federal agency obligations 4 Bought outright 685 685 678 685 685 685 685 682 675 675 5 Held under repurchase agreements .... 1,156 833 573 826 403 422 743 163 617 442 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 252 188 51 22 364 87 91 25 78 15 8 Seasonal credit 79 18 II 20 16 16 9 9 12 13 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 931 1,228' 440 690 1,792' 587' 949 937 368 134 11 Other Federal Reserve assets 31,404 31,769 31,505 31,626 31,543 32,228 32,060 32,087 31,934 30,489 12 Gold stock 11,049 11,046 11,047 11,046 11,046 11,044 11,046 11,046 11,047 11,049 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 25,602 25,644 25,703 25,634 25,648 25,662 25,676 25,690 25,704 25,718 ABSORBING RESERVE FUNDS 15 Currency in circulation 475,661 474,085 471,834 475,243 472,553 470,160 469,301 470,576 473,053 472,853 16 Treasury cash holdings 230 224 227 228 227 219 221 223 227 229 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,107 6,507 4,969 5,253 9,148 6,976 5,696 5,062 4,969 4,400 18 Foreign 177 188 178 177 161 166 200 163 164 172 19 Service-related balances and adjustments .. 6,922 7,198 7,067 7,007 7,377 7,584 7,276 7,117 7,030 6,953 20 Other 354 421 395 252 329 343 374 422 404 371 21 Other Federal Reserve liabilities and capital . 16,025 16,016 16,114 16,240 16,127 16.083 15,932 16,140 16,154 16.139 22 Reserve balances with Federal Reserve Banks 10,938 9,971' 9,131 9,762 6,411' 9.759' 10,000 7.501 8,571 10,979 End-of-month figures Wednesday figures Jan. 28 Feb. 4 Feb. 11 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 490,034 463,567' 465,614 472,252 472,863' 473,654' 461,785 466,801 467,625 476,128 U.S. government securities2 2 Bought outright—System account3 430,736 428,043 428,619 431,714 429,553 427.975 427,516 429.481 428,001 429,189 3 Held under repurchase agreements 21,188 800 3,645 5,465 6,271 8,978 0 1,915 4,302 12,080 Federal agency obligations 4 Bought outright 685 685 675 685 685 685 685 675 675 675 5 Held under repurchase agreements 2,652 1,268 2,107 2,216 1,356 760 0 1,140 1,070 1,610 6 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 7 Adjustment credit 2,001 0 20 367 14 305 2 3 4 8 Seasonal credit 35 12 20 15 13 6 14 12 13 9 Extended credit 0 0 0 0 0 0 0 0 0 0 10 Float 719 671' -202 -245 2,446' 2,215' 1,404 1.053 3,379 1,116 11 Other Federal Reserve assets 32,020 32,077' 30,757 32,377 32,171 33,014 31,869 32,522 30,184 31,442 12 Gold stock 11,047 11.046 11,050 11,046 11,046 11,044 11,045 11.047 11,048 11,050 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 25,606 25,676 25,732 25,634 25,648 25,662 25,676 25,690 25,704 25,718 ABSORBING RESERVE FUNDS 15 Currency in circulation 482,390 468,337 472,029 473,960 472,384 470,034 470,813 472,372 474,118 473,257 16 Treasury cash holdings 225 220 241 229 219 220 222 227 227 241 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,444 5.552 5,037 4,644 15,430 6,846 4,792 4,401 4,699 4,398 18 Foreign 457 215 243 157 161 158 164 152 170 194 19 Service-related balances and adjustments . .. 6,954 7,276' 7,029 7,007 7,377 7,584 7,276 7,117 7,030 6,953 20 Other 900 343 349 337 330 334 411 402 405 374 21 Other Federal Reserve liabilities and capital . . 15,500 15,969 16,256 15,971 15,929 15,853 15,605 15,972 15,933 15,931 22 Reserve balances with Federal Reserve Banks 24,017 11,576' 10,410 15,826 6,926' 18,531' 8,422 12,095 10,995 20,749 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 Financial Statistics • May 1998 1.12 RESERVES AND BORROWINGS Depository Institutions' Millions of dollars Prorated monthly averages of biweekly averages Reserve classification 1995 1996 1997 1997 1998 Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan.' Feb. 1 Reserve balances with Reserve Banks2 20.440 13,395 10.673 10,489 9,742 9.990 10,559 10,673 9,733 9,390 2 Total vault cash3 42,094 44,379 43.970 42,379 43,056 41,730 42,114 43,970 46,672 42,562 3 Applied vault cash4 37,460 37,848 37.206 36,156 36,314 35,631 35.892 37,206 37.762 35,580 4 Surplus vault cash5 4,634 6,532 6.763 6,224 6,742 6,099 6,222 6,763 8,910 6,981 5 Total reserves6 57,900 51,243 47,880 46.645 46,056 45,621 46,451 47,880 47,495 44,970 6 Required reserves 56,622 49,819 46,196 45,392 44,761 44,225 44,834 46,196 45,714 43,452 7 Excess reserve balances at Reserve Banks7 1,278 1,424 1,683 1,253 1,295 1,396 1,617 1,683 1,780 1,518 8 Total borrowings at Reserve Banks8 257 155 324 598 438 270 153 324 210 58 9 Seasonal borrowings 40 68 79 385 368 227 115 79 18 12 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for two week periods ending Qn dates indicated 1997 1998 Nov. 5 Nov. 19 Dec. 3 Dec. 17 Dec. 31 Jan. 14 Jan. 28r Feb. 1 lr Feb. 25 Mar. 11 1 Reserve balances with Reserve Banks" 10,451 10,234 11,022 9,678 11,595 11,500 8,176 8.750 9,726 10,175 2 Total vault cash 41,941 42,129 42,175 44,267 44,058 44.958 48,839 44,560 41,199 41.597 3 Applied vault cash4 35,718 35,817 36,068 36,965 37,692 37,976 37.827 36,462 34,892 35,558 4 Surplus vault cash 6,224 6,312 6,108 7,302 6.366 6,982 11,012 8.098 6,307 6,039 5 Total reserves6 46,168 46,051 47.090 46,643 49,286 49,476 46,003 45,212 44,618 45,733 6 Required reserves 44,507 44,540 45.357 45,170 47,403 47,659 44,213 43,648 43,132 44,229 7 Excess reserve balances at Reserve Banks7 1,661 1,510 1,733 1,473 1,883 1,817 1,790 1,563 1.485 1,504 8 Total borrowings at Reserve Banks 238 149 119 240 454 209 242 67 59 19 9 Seasonal borrowings 167 112 95 85 71 22 16 9 13 17 10 Extended credit' 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. widi 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 mat of nonborrowed reserves. is, those whose required reserves exceed their vault cash) plus the amount of vault cash applied dunng 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 On Effective date Previous rate 4/3/98 4/3/98 4/3/98 Boston . ... 2/1/96 5.50 5.55 6.00 3/26/98 New York. . . . 1/31/96 Philadelphia . . 1/31/96 Cleveland.. . 1/31/96 Richmond.. .. 2/1/96 Atlanta 1/31/96 Chicago 2/1/96 St. Louis 2/5/96 Minneapolis . . 1/31/96 Kansas City . . 2/1/96 Dallas 1/31/96 San Francisco. 1/31/96 5.25 5.50 3/26/98 Range of rates for adjustment credit in recent years4 Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank Effective date level)—All of Effective date level)—All of level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1977 1981—Nov. 2 13-14 13 1988—Aug. 9 . 6-6.5 6.5 6 13 13 6.5 6.5 1978—Jan. 9 6-6.5 6.5 Dec. 4 12 12 20 6.5 6.5 1989—Feb. 24 6.5-7 7 May 11 6.5-7 7 1982—July 20 11.5-12 11.5 7 7 12 7 7 23 11.5 11.5 27 July 3 7-7.25 7.25 Aug. 2 11-11.5 6.5 6.5 10 7.25 7.25 11 1990—Dec. 19 Aug. 21 7.75 7.75 16 . 10.5 10.5 6-6.5 6 Sept. 22 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 20 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 Sep't. 13 ... . 5 5 26 9 9 17 4.5-5 4.5 1979—July 20 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 3.5-4.5 3.5 20 10.5 10.5 17 8.5 8.5 Dec. 20 3.5 3.5 Sept. 19 10.5-11 11 24 21 II 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 8 3.5 3.5 19 13 13 Aug. 16 3.5^1 4 May 29 12-13 13 1985—May 20 7.5-8 7.5 18 4 4 30 12 12 24 7.5 7.5 Nov. 15 4-4.75 4.75 June 13 11-12 11 17 4.75 4.75 16 11 11 1986—Mar. 7 7-7.5 7 July 28 10-11 10 10 7 7 1995—Feb. 1 4.75-5.25 5.25 29 10 10 Apr. 21 6.5-7 6.5 9 5.25 5.25 Sept. 26 II 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 5.5-6 5.5 Feb. 5 5.00 5.00 8 13 13 A!! 5.5 5.5 1981—May 5 13-14 14 In effect Apr. 3, 1998 14 14 1987—Sept. 4 5.5-6 6 11 6 6 1. Available on a short-term basis to help depository institutions meet temporary needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that cannot be met through reasonable alternative sources. The highest rate established flexible rate somewhat above rates charged on market sources of funds is charged. The rate for loans to depository institutions may be charged on adjustment credit loans of unusual size ordinarily is reestablished on the first business day of each two-week reserve maintenance that result from a major operating problem at the borrower's facility. period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis 2. Available to help relatively small depository institutions meet regular seasonal needs for points. funds that arise from a clear pattern of inlrayearly 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 disintermedialion). The discount rate applicable to adjustment credit ordinarily is surcharge was eliminated on Nov 17, 1981. charged on extended-credit loans outstanding less than thirty days; however, at the discretion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics • May 1998 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement Type of deposit Percentage of Effective date deposits Net transaction accounts^ 1 $0 raiUion-$47.8 million3 3 1/1/98 2 More than $47.8 million4 10 1/1/98 3 Nonpersonal time deposits5 0 12/27/90 4 Eurocurrency liabilities6 0 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 Vi years was reduced from 3 percent to 1'/> percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period thai 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 11/2 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/i 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 mannei and on the same dates as the reserve requirement on nonpersona) time $47.8 million. deposits with an original maturity of less than 1 V^ 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 Type of transaction 1997 and maturity July Aug. Sept. Oct. Nov. Jan. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 10,932 9,901 9,147 0 0 0 0 0 4,545 0 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 405,296 426,928 419,347 35,948 35,666 28,328 39,313 33,485 26,905 41,731 4 For new bills 405,296 426.928 418,997 35,948 35,666 28,328 39,313 33,485 26,905 41,731 5 Redemptions 900 0 0 0 0 0 0 0 0 2.000 Others within one year 6 Gross purchases 390 524 5,748 0 0 644 0 1,462 1,947 0 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 43.574 30,512 43,473 4,359 7,487 1,596 3,193 5.231 1,748 3,447 9 Exchanges -35,407 -41,394 -27,499 -1,087 -2,780 -2,382 -1,267 -4,126 -2,329 -400 10 Redemptions 1,776 2,015 0 598 0 • 0 416 0 0 478 One to five years 11 Gross ppurchases. 5,366 3,898 20,299 0 0 2,697 0 3.323 4,471 0 12 Gross sales 0 0 0 0 0 0 0 0 0 0 Maturity shifts -34.646 -25,022 -39,744 -4,359 -5,247 -1,596 -3,193 -4,883 -1,748 -3,447 Exchanges 26,387 31,459 20,274 1,087 1,170 2,382 1,267 1,651 2,329 0 Five to ten years Gross purchases 1,432 1,116 3,101 0 0 0 770 485 613 0 Gross sales 0 0 0 0 0 0 0 0 0 0 Maturity shifts -3,093 -5,469 -1,954 0 -2,240 0 0 31 0 0 Exchanges 7,220 6,666 5,215 0 0 0 1.295 0 400 More than len years Gross purchases 2,529 1,655 5,827 0 0 0 648 954 1,214 0 Gross sales 0 0 0 0 0 0 0 0 0 0 Maturity shifts -2,253 -20 -1,775 0 0 0 0 -379 0 0 Exchanges 1,800 3,270 2,360 0 730 0 0 1,180 0 0 All maturities Gross purchases 20,649 17,094 44,122 0 0 3,341 1.418 6,224 12,790 0 Gross sales 0 0 0 0 0 0 0 0 0 0 Redemptions 2,676 2,015 1,996 598 0 0 416 0 0 2,478 Matched transactions 26 Gross purchases 2,197,736 3.092,399 3,586,584 307,101 317,008 311,153 316,425 272,474 353,726 332.581 27 Gross sales 2,202,030 3,094.769 3,588.905 309,578 315,439 312.083 318,485 269,586 355,668 332,795 Repurchase agreements 28 Gross purchases 331,694 457,568 810.485 44,087 54,561 77,109 75,323 73,618 97,932 45,543 29 Gross sales 328,497 450.359 809,268 53,217 50,340 74,960 78,157 73,064 87,160 65,932 30 Net change in U.S. Treasury securities 16.875 41,022 -12,205 4,560 -3,893 9,666 21,620 -23,080 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 32 Gross sales 0 0 0 0 0 0 0 33 Redemptions 1,003 409 1,540 287 179 105 215 Repurchase agreements 34 Gross purchases 36,851 75,354 160,409 10,437 13,131 9,796 15,639 23,054 20,056 13,107 35 Gross sales 36,776 74,842 159,369 10,811 11,252 11,196 15,157 20,976 21,186 13,232 36 Net change in federal agency obligations -928 103 -500 -661 1,700 -1,505 267 2,052 -1,130 -125 37 Total net change in System Open Market Account. 15,948 20,021 40,522 -12,866 7,490 3,055 -3,626 11,718 20,490 -23,204 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 2. Transactions exclude changes in compensation for the effects of inflation on the principal Account; all other figures increase such holdings. of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • May 1998 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements' Millions of dollars Wednesday End of month Account Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 Dec. 31 Jan. 31 Feb. 28 Consolidated condition stalement 1 Gold certificate account 11,044 11,045 11,047 11,048 11,050 11.047 11,046 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 532 560 578 580 569 460 556 Loans 4 To depository institutions 27 311 16 15 17 2,035 24 13 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Federal agency obligations 7 Bought outright 685 685 675 675 675 685 685 675 8 Held under repurchase agreements 760 0 1,140 1,070 1,610 2,652 1,268 2,107 9 Total U.S. Treasury securities 436,953 427,516 431,396 432,303 441,269 451,924 428,843 432.264 10 Bought outright 427,975 427,516 429,481 428,001 429,189 430,736 428,043 428,619 11 Bills 194,841 194,382 196.348 194,869 196,057 197.123 194,909 195,488 12 Notes 173,727 173,727 173,726 172,401 172,400 174,206 173.727 172,400 13 Bonds 59,407 59,407 59,407 60,732 60,732 59,407 59.407 60,732 14 Held under repurchase agreements . . 8,978 0 1,915 4,302 12,080 21,188 800 3,645 15 Total loans and securities 438,425 428,512 433,226 434,063 443,571 457,295 430,820 435,058 16 Items in process of collection. . . 8,180 8,235 8,000 14.170 7,199 7,800 5,185 4,488 17 Bank premises 1,274 1,274 1,277 1,277 1,276 1,272 1,273 1,275 Other assets 18 Denominated in foreign currencies* . 17,076 17,025 17.033 17,041 17,048 17,046 17.019 17,203 19 Allofher' 15,084 13,523 14,142 11,742 13,006 13.726 13,693 12,327 20 Total asset? 500,816 489,374 494,502 499,119 502,918 517,847 488,792 491,188 LIABILITIES 21 Federal Reserve notes 445,125 445,920 447,487 449,221 448,349 457,469 443,438 447,126 22 Total deposits 33,767 20,985 24,700 24,226 32,440 37,639 24,937 23,155 23 Depositary institutions 26,426 15,618 19,746 18,951 27,475 30,838 18,826 17,525 24 U.S. Treasury—General account.. 6,846 4,792 4,401 4,699 4,398 5,444 5,552 5,037 25 Foreign—Official accounts 158 164 152 170 194 457 215 243 26 Other 334 411 402 405 374 900 343 349 27 Deferred credit items 6,071 6,864 6,343 9,740 6,198 7.239 4.449 4,652 28 Other liabilities and accrued dividends 4,635 4,476 4,759 4,715 4,716 4,846 4,635 4,696 29 Total liabilities . 489,598 478,244 483,289 487,902 491,704 507,193 477,458 479,628 CAPITAL ACCOUNTS 30 Capita! paid in 5,476 5,478 5,472 5,474 5,478 5.433 5,477 5,478 31 Surplus 5,220 5,220 5,220 5,220 5,220 5.220 5,220 5,220 32 Other capital accounts.. 522 431 521 524 517 0 636 861 33 Total liabilities and capital accounts 500,816 489,374 494,502 499,119 502,918 517,847 488.792 491,188 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts 605,315 602,478 600,485 606,710 606,419 602,834 607,873 605,360 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) . 548,150 547,757 548,318 549,015 548,745 549,600 547,998 549,260 36 LESS: Held by Federal Reserve Banks 103,025 101,837 100,831 99,794 100,395 92,131 104,561 102,133 37 Federal Reserve notes, net 445,125 445,920 447,487 449,221 448,349 457,469 443,438 447,126 Collateral held against notes, net 38 Gold certificate account 11,044 11,045 11,047 11,048 11,050 11,047 11,046 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 424,881 425,674 427,240 428.974 428,099 437.222 423,192 426,876 42 Total collateral 445,125 445,920 447,487 449.221 448,349 457,469 443,438 447,126 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 Type of holding and maturity Jan. 28 Feb. 18 Feb. 25 Dec. 31 Jan. 31 1 Total loans 27 311 24 62 2 Within fifteen days1 25 307 5 10 12 734 21 56 2 4 11 5 5 3 2 6 3. Sixteen days to ninety days 436,953 427,516 431,396 432,303 441,269 451,924 428,843 432.264 4 Total US. Treasury securities2 21,566 18,670 13,830 17,291 26,410 34,147 9,133 12,674 5 Within fifteen days' 92,750 92,094 94,304 92,274 91,811 95,648 104,808 103,213 6 Sixteen days to ninety days 138.887 132,653 139,163 138,959 139,269 137,886 131,151 132,599 7 Ninety-one days to one year 94,136 94,484 94,484 94,305 94,305 95,028 94,136 94,305 8 One year to five years 41,306 41,306 41,306 39,841 39.841 40,906 41,306 39,841 9 Five years to ten years 48,308 48.308 48.308 49,633 49,633 47,094 48.308 49,633 10 More than ten years 11 Total federal agency obligations 1,445 685 1,815 1,745 2,285 3337 1,953 2,782 12 Within fifteen days1 770 10 1,140 1,070 1,660 2,652 1,278 2,157 13 Sixteen days to ninety days 94 94 94 94 44 60 94 44 14 Ninety-one days to one year 150 150 150 150 150 192 150 150 15 One year to five years 151 151 151 151 151 153 151 151 16 Five years to ten years 255 255 255 255 255 55 255 255 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 ljusts for the effects 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 • May 1998 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1997 1998 1994 1995 1996 1997 Dec. Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS- 59.40 56.39 50 06 47.20 46.89 47 41 46.67 46.45 46.87 47.20 46.36' 45.82 2 Nonborrowed reserves4 59.20 56.13 49.91 46.87 46.48 46.82 46.23 46.18 46.71 46 87 46.15' 45.76 3 Nonbonowed reserves plus extended credit3 59.20 56.13 49.91 46.87 46.48 46.82 46.23 46.18 46.71 46.87 46.15' 45.76 58 24 55 11 48.64 45 51 45.68 46 16 45.37 45 06 45 25 45 51 44.58' 44.30 5 Monetary base6 418.18 434.23 452.47 480.58 464.46 467.02 469.68 472.35 476.64 480.58 482.91' 484.32 Not seasonally adjusted 61.13 58.02 51.52 48.56 46.76 47.09 46.55 46.16 47.05 48.56 47.50 45.00 60.92 57.76 51.37 48.23 46.35 46.49 46.11 45.89 46.90 48.23 47.29 44.94 8 Nonborrowed reserves plus extended credit5 60.92 57.76 51.37 48.23 46.35 46.49 46.11 45.89 46.90 48.23 47.29 44.94 9 Required reserves" 59.96 56.74 50.10 46.87 45.56 45.83 45.25 44.77 45.44 46.87 45.72 43.48 422.51 439.03 456.72 485.47 465.55 467.24 468.63 470.70 476.94 485.47 484.42' 481.36 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS'0 11 Total reserves" 61.34 57.90 51.24 47.88 46.38 46.65 46.06 45.62 46.45 47.88 47.50 44.97 61.13 57.64 51.09 47.56 45.97 46.05 45.62 45.35 46.30 47.56 47.29 44.91 13 Nonborrowed reserves plus extended credit5 61.13 57.64 51.09 47.56 45.97 46.05 45.62 45.35 46.30 47.56 47.29 44.91 14 Required reserves 60 17 56.62 49.82 46.20 45.18 45.39 44.76 44.23 44.83 46.20 45.71' 43.45 4^7 25 •1-11 15 463.49 491 92 472 58 474 01 475.32 477.28 483.50 491.92 491.62 488.43 16 Excess reserves" 1.17 1.28 1.42 1.68 1.20 1.25 1.30 1.40 1.62 1.68 1.78 1.52 .21 .26 .16 .32 .41 .60 .44 .27 .15 .32 .21 .06 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 beiween current vault cash and the amount applied to satisfy current reserve break-adjusted total reserves (line 1) less total borrowings of depository institutions from ine 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 Transaciion 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-adjusled required reserve* (line 9) plus excess ending on Mondays. reserves (line 16). 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 1.21 MONEY STOCK, LIQUID ASSETS, AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1996 1997 Dec. Dec. Feb. Seasonally adjusted Measures' 1 Ml 1,150.7 1,128.7 1,082.8 1,076.0 1.069.2 1,076.0 1.073.3 1,075.8 2 M2 3,503.0 3,651.2 3,826.1 4,040.2 4,017.5 4,040.2 4,064.6' 4.096.1 3 M3 4.333.6 4,595.6 4,935.5 5,375.7' 5,325.8' 5,375.7' 5,423.7' 5,462.2 4 L 5,315.8 5,702.2 6,088.3' 6,619.6' 6,553.7' 6,619.6' 6,694.4 5 Debt 12,998.7' 13,699.2' 14,419.9' 15,153.5' 15,075.0' 15,153.5' 15,228.1 Ml components 6 Currency3 354.3 372.4 394.9 425.5 421.9 425.5 427.5 431.0 7 Travelers checks4 8.5 8.9 8.6 8.2 8.1 8.2 8.2 8.1 384.0 391.0 403.6 397.1 394.5 397.1 392.7 391.8 403.9 356.4 275.9 245.1 244.6 245.1 244.9 245.0 Nonlransaction components 10 In M27 2.352.3 2,522.6 2,743.2 2,964.2 2,948.3 2,964.2 2,991.2' 3.020.2 11 In M3 only8 830.6 944.4 1,109.4 1,335.5' 1,308.3' 1,335.5' 1,359.1' 1.366.1 Commercial banks 12 Savings deposits, including MMDAs. 752.6 775.0 904.8 1,020.9 1,009.5 1,020.9 1.033.1' 1,044.4 13 Small time deposits9 503.2 575.8 594.5 621.6 621.1 621.6 621.7' 621.6 14 Large time deposits10' " 298.7 345.4 413.2 495.8 487.7 495.8 499.4' 511.8 Thrift institutions 15 Savings deposits, including MMDAs . 397.3 359.7 366.9 376.5 374.9 376.5 378.6' 382.8 16 Small time deposits9 314.2 357.2 354.3 343.6 343.6' 343.6 344.8 344.0 17 Large time deposits10 64.7 74.2 78.0 85.2 84.4 85.2 87.3 87.5 Monev market mutual funds 18 Retail 385.0 454.9 522.8 601.6 599.2 601.6 613.1 627.4 19 Institution-only 203.1 253.9 310.3 376.2 365.7 376.2 380.8 384.7 Repurchase agreements and Eurodollars 20 Repurchase agreements12 182.4 194.2 234.8' 233.0' 234.8' 245.1' 239.8 21 Eurodollars12 88.6 113.7 143.4' 137.5' 143.4' 146.4' 142.2 Debt components 22 Federal debt 3,491.9 3,638.5 3,780.0 3,797.3 3,790.4 3,797.3 3,797.4 23 Nonfederal debt. . 9,506.7' 10,060.7' 10,639.9' 11,356.2' 11,284.6' 11,356.2' 11,430.7 Not seasonally adjusted Measures' 24 Ml 1.174.4 1,152.4 1,104.9 1,097.5 1,074.3 1,097.5 1,078.7' 1,063.3 25 M2 3.523.4 3,672.0 3,845.4 4,059.1 4,019.9 4,059.1 4,066.4' 4,082.7 26 M3 4.353.2 4,615.2 4,953.4 5,392.9' 5.331.7' 5,392.9' 5,427.6' 5,459.9 27 L 5,344.6 5,732.7 6,116.3' 6,645.4' 6,564.8' 6,645.4' 6,696.1 n.a. 28 Debt 13,000.6' 13.699.8' 14,419.3' 15,153.5' 15,057.2' 15,153.5' 15,208.8 n.a. Ml components 29 Currency1 357.5 376.2 397.9 429.0 422.4 429.0 426.4 428.9 30 Travelers checks4 8.1 8.5 8.3 7.9 8.0 7.9 7.9 7.8 31 Demand deposits5 400.3 407.2 419.9 413.0' 399.8 413.0' 396.2 382.9 32 Other checkable deposits6.. . 408.6 360.5 278.8 247.6 244.2 247.6 248.2 243.6 NonlransacHon components 33 In M27 2.349.0 2,519.6 2,740.5 2,961.6 2.945.6' 2,961.6 2,987.7' 3,019.5 34 In M3 only8 829.7 943.2 1.108.0 1.333.8' 1.311.8' 1.333.8' 1,361.2' 1.377.2 Commercial banks 35 Savings deposits, including MMDAs . . 751.7 774.1 903.3 1,019.0 1.009.2 1,019.0 1,028.9' 1,039.9 36 Small time deposits9 501.5 573.8 592.7 620.0 620.2 620.0 621.2 621.8 37 Large time deposits' • 298.9 345.8 413.6 496.3 493.4 496.3 491.9' 508.3 Thrift institutions 38 Savings deposits, including MMDAs. . 396.8 359.2 366.4 375.8 374.8 375.8 377.01 381.2 39 Small time deposits 313.2 355.9 353.2 342.7 343.1 342.7 344.6 344.2 40 Large time deposits10 64.8 74.3 78.1 85 3 85.3 85.3 86.0 86.9 Money market mutual funds 41 Retail 385.9 4564 524.8 604.1 598.3 604.1 616.0 632 4 42 Institution-only 204.6 255.8 312.7 378.9 365.2 378.9 389.8 397.7 Repurchase agreements and Eurodollars 43 Repurchase agreements12 179.6 178.0 188.8 228.2' 231.5' 228.2' 243.9' 239.8 44 Eurodollars12 81.8 89.4 114.7 145.0' 136.3' 145.0' 149.6' 144.5 Debt components 45 Federal debt 3.499.0 3,645.9 3,787.9 3,805.8 3,792.1 3.805.8 3,792.5 46 Nonfederal debt.. 9,501.6' 10,053.9' 10,631.3' 11,347.8' 11,265.1' 11.347.8' 11,416.3 Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • May 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 US. 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 ihe 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 debl 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, ihe 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 ts 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 ai depository institutions and money market funds. Seasonally adjusted M2 ts 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 (I) 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 wilh 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 lime deposits at commercial banks less those held by money market funds, L: M3 plus (he 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 1997 1997 Sept. Dec' Jan.1 Feb. 4 Feb. 11 Seasonally adjusted Assets 1 Bank credit 3,839.4 3,970.9 3.995.91 4,031.4' 4,077.4 4,111.9 4,159.5 4.188.4 4.174.3 4,175.7 4.187.4 4,199.1 2 Securities in bank credit 1,020.6 1,025.2 1,031.9 1,046.6 1,081.4 1,101.9 1,118.6 1,120.1 1,125.5 1,111.6 1.117.9 1,124.2 3 U.S. government securities . . 703.5 715.5 724.5 732.3 746.1 752.3 762.4 768.1 772.7 760.7 762.3 769.6 4 Other securities 317.1 309.6 307.4 314.3 335.3 349.7 356.2 352.0 352.8 350.9 355.6 354.5 5 Loans and leases in bank credit' 2,818.8 2,945.7 2.964.O1 2,984.8' 2,996.0 3,010.0 3,040.9 3,068.3 3,048.8 3,064.1 3.069.5 3,074.9 6 Commercial and industrial . . 793.2 825.6 837.6 843.7' 846.9 856.6 865.5 873.7 869.8 868.9 873.9 877.4 7 Real estate 1,141.1 1,205.5 1,214.1 1.220.1 1.227.6 1.227.8 1,230.3 1.244.5 1,235.5 1,244.6 1.243.8 1,245.8 8 Revolving home equity . . . 85.9 94.3 95.5 96.4 97.3 98.3 98.7 99.1 99.1 99.2 99.1 99.0 9 Other 1.055.2 1.111.2 1,118.6 1.123.7 1.130.3 1.1296 1,131.6 1.145.4 1,136.4 1.145.4 1.144.7 1,146.8 10 Consumer 520.5 518.8 515.1 509.3 509.3 508.6 505.4 502.2 502.6 502.0 500.7 502.4 11 Security1 82.8 93.3 94.5 104.1 97.5 97.2 117.2 117.4 115.6 120.8 119.0 116.4 12 Other loans and leases 281.2 302.6 302.7' 307.6' 314.6 319.8 322.5 330.5 325.2 327.7 332.2 332.9 13 Interbank loans 204.1 191.5 199.6 201.5 206.4 214.3 201.4 198.1 191.0 194.5 198.8 202.2 14 Cash assets4 230.0 259.0 255.0' 2M.6' 274.5 263.2 262.1 265.4 257.8 267.6 275.4 256.4 15 Other assetss 262.5 278.8 278.8 288.9' 301.3 303.8 311.4 301.8 309.8 316.8 312.8 16 Total assets' 4,479.9 4.643J 4,672.7 4,800.2 4.833.8 4,870.0 4,906.4 4*68.1 4,890.7 4,921.6 4,913.5 Liabilities 17 Deposits 2,892.4 3.029.8 3.045.8 3,061.0 3,107.3 3,117.5 3,120.1 3.155.9 3,138.1 3,143.5 3.171.6 3,149.0 18 Transaction 704.8 697.2 683.0 682.5 692.6 687.5 677.2 682.5 672.8 671.0 697.6 682.8 19 Nontransaction 2,187.6 2332.6 2,362.9 2.378.5 2.414.7 2.430.0 2,442.8 2,473.5 2,465.4 2,472.5 2.474.1 2,466.2 20 Large time 542.8 603.1 618.4 617.1 636.3 646.2 645.4 660.2 649.3 656.1 662.0 665.5 21 Olher 1,644.8 1,729.5 1,744.5 1,761.5' 1.778.4 1,783.8 1.797.4 1.813.2 1,816.1 1.816.4 1,812.1 1.8007 22 Borrowings 737.5 744.9 767.2 806.6 826.4 830.0 841.1 847.6 837.4 853.8 847.9 838.0 23 From banks in the US 305.6 277.8 285.5 293.8 304.3 311.6 296.9 301.5 294.8 312.2 299.0 292.0 24 From others 432.0 467.1 481.7 512.8 522.1 518.5 544.2 546.2 542.6 541.7 548.9 546.0 25 Net due to related foreign offices. .. . 218.3 210.5 212.0 193.0 193.7 203.6 219.3 206.7 216.9 213.2 211.2 195.3 26 Olher liabilities 278.5' 273.8' 261.8' 287.9 299.3 310.3 309.5 3054 310.3 311.2 309.8 27 Total liabilities 4,126.7' 4,259.0' 4,286.8' 4338.6' 4,415.2 4/450.4 4,490.8 4^19.8 4/»97.9 4,520.9 4^42.0 4,492.2 28 Residual (assets less liabilities)7 353.2' 3S5.9F 391.ty 384.9 383.4 379.2 386.5 370.2 369.9 379.6 421.4 Not seasonally adjusted Assets 29 Bank credit 3,832.2 3,972.1 3,997.5' 4,032.9' 4,080.9 4,106.8 4,1560 4.180.3 4,173.5 4,171.0 4,178.1 4,179.6 30 Securities in bank credit 1,017.1 1,030.3 1,032.2' 1,046.5 1,079.9 1,083.8 1,107.8 1.116.1 1,120.7 1,108.9 1,113.0 1,115.5 31 U.S. government securities 702.2 718.2 725.7' 733.0 746.6 746.9 754.9 766.4 768.5 758.7 760.7 766.7 32 Other securities 315.0 312.1 306.5 313.5 333.3 336.9 352.9 349.7 352.2 350.1 352.3 348.8 33 Loans and leases in bank credit2 .. . 2,815.1 2,941.8 2,9653' 2,986.4' 3,001.0 3,023.0 3,048.2 3.064.2 3,052.8 3,062.2 3.065.1 3,064.1 34 Commercial and industrial 792.9 821.4 831.8 839.7' 844.7 853.0 862.9 873.4 869.8 868.2 872.8 876.6 35 Real estate 1,138.0 1.207.2 1.217.4' 1.223.4' 1.232.1 1.233.2 1.232.6 1.241.2 1,235.2 1.244.1 1.239.9 1,239.8 36 Revolving home equity 85.5 94.6 96.2 97.0 97.8 98.4 98.7 98.6 98.8 98.9 98.7 98.3 37 Other 1,052.5 1.112.6 1,121.2' 1.126.4' 1,134.2 1.134.9 1,133.8 1,142.6 1,136.4 1,145.2 1,141.1 1,141.5 38 Consumer 521.2 519.2 517.3' 509.4 509.7 513.4 511.1 502.7 505.6 503.8 501.6 501.6 39 Security' 83.9 91.4 93.6 103.9 99.5 98.6 115.8 118.7 115.9 121.1 120.8 117.8 40 Other loans and leases 279.1 302.6 305.2' 310.0" 315.0 324.8 325.9 328.2 326.4 325.0 330.0 328.2 41 Interbank loans 208.5 187.1 194.1 196.3 211.0 223.5 210.9 202.2 200.9 200.9 203.5 199.5 42 Cash assets4 231.1 245.6 251.7' 265.5' 282.5 281.3 274.4 267.2 258.0 254.9 291.1 262.2 43 Other assets5 262.4 282.0 281.3 285.8' 297.3 301.4 304.4 310.9 307.2 309.2 315.1 310.2 44 Total assets' 4.478J 4.629.8 4,667.6 4,724.0' 4,814.7 4,856.0 4,889.2 4^03.8 4,882.8 4,8793 4,931.0 4,894.5 Liabilities 45 Deposits 2,877.4 3,019.7 3.046.0 3,068.7' 3,125.1 3,147.8 3,122.8 3,140.5 3.129.2 3,122.1 3.161.2 3,125.4 46 Transaction 697.9 684.7 681.5 680.4 702.0 719.2 688.0 675.8 672.8 656.6 698.0 670.5 47 Nontransaction 2,179.6 2,335.0 2,364.5 2,388.2 2.423.1 2,428.6 2,434.7 2.464.7 2,456.4 2,465.5 2.463.2 2.454.9 48 Large time 542.3 602.2 613.7 624.5 640.8 644.4 644.0 659.8 648.7 657.4 659.3 665.7 49 Other 1,637.2 1,732.8 1,750.8 1,763.8' 1,782.3 1,784.2 1,790.8 1,804.9 1.807.8 1.803.9 1.789.3 50 Borrowings 722.1 749.7 770.5 796.8' 813.4 820 2 835.6 831.2 828.8 823.7 833.7 830 2 51 From banks in the US 293.8 282.6 286.8 286.1 297.6 305.4 290.3 289.4 283.1 286.4 287.4 294.7 52 From others 428.3 467.2 483.7' 510.7' 515.7 514.8 545.2 541.8 545.7 537.3 546.2 535.5 53 Net due to related foreign offices 229.1 206.2 204.3 193.6 188.3 200.1 231.0 219.5 220.6 220.1 224.7 222.6 54 Other liabilities 280.5' 272.9' 262.2' 276.5' 292.0 294.5 306.9 311.2 306.7 313.2 311.9 311.3 55 Total liabilities 4,109.1' 4,248.6' 4^82.9' 4,335.6' 4.41&8 4.462.5 4,4963 4,502.4 4,485.3 4,479.0 4431.5 4.489.6 56 Residual (assets less liabilities)7 369.1' 381.2' 384.7' 388.4' 395.9 393.5 392.9 401.4 397.5 400.2 399.6 404.9 MEMO 57 Revaluation gains on off-balance-sheet items" 102.2 86.5 78.7 78.0 83.3 82.2 92.2 87.4 89.8 87.0 87.3 58 Revaluation losses on ofF-balancesheet items8 98.9 89.6 81.8 81.4 85.5 95.4 90.0 92.9 89.6 89.7 91.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • May 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 1997 1997 1998 Aug. Sept. Oct. Nov.r Dec.' Jan/ Feb. Seasonally adjusted Asseis 1 Bank credit 3,308.4 3,438.3 3,458.5r 3,487.5' 3.525.3 3,552.1 3,581.7 3,609.0 3,592.9 3,598.2 3,611.7 3,617.1 2 Securities in bank credit 843.2 847.3 849.5 865.3 885.6 902.0 919.3 922.6 921.9 915.5 922.5 929.0 3 U.S. government securities .. 618.8 629.8 636.7 646.0' 660.0 668.0 681.8 682.1 683.3 677.5 681.2 683.2 4 Other securities 224.4 217.5 212.8 219.4 225.6 234.0 237.5 240.5 238.5 238.0 241.3 245.8 5 Loans and leases in bank credit2.. 2,465.2 2,591.0 2,609.0' 2,622.2' 2,639.7 2.650.1 2.662.4 2,686.4 2,671.0 2,682.7 2,689.3 2,688.1 6 Commercial and industrial .. 576.1 605.9 615.5' 620.2' 624.3 632.9 639.1 647.0 643.2 644.3 647.5 649.7 7 Real estate 1,109.0 1,177.1 1,186.2' 1,192.4 1.200.7 1.201.4 1.203.2 1.217.7 1,208.4 1,217.7 1,216.9 1,219.0 8 Revolving home equity. .. 85.9 94.3 95.5 96.4 97.3 98.3 98.7 99.1 99.1 99.2 99.1 99.0 9 Other 1,023.1 1,082.9 1,090.7 1,096.0 1,103.4 1,103.1 1,104.5 1,118.6 1,109.3 1,118.5 1,117.7 1,120.1 10 Consumer 520.5 518.8 515.1 509.3 509.3 508.6 505.4 502.2 502.6 502.0 500.7 502.4 11 Security3 43.1 51.0 51.5 57.8' 56.4 52.6 62.7 62.9 63.4 64.0 65.4 60.1 12 Other loans and leases 216.5 238.2 240.7' 242.5' 249.0 254.7 252.0 256.7 253.4 254.6 258.7 256.9 13 Interbank loans 183.2 173.5 181.7 181.5 183.2 183.6 174.0 173.8 167.3 167.9 173.3 177.6 14 Cash assets4 197.2 224.6 219.4' 229.7' 238.3 228.6 229.3 232.3 225.9 233.7 242.3 223.2 15 Other assets5 221.3 236.2 236.8 247.5' 253.9 259.5 259.3 269.3 260.0 267.8 274.9 270.1 16 Total assets6 3,854.3 4,015.9 4,040.0 4,089.8' 4,144.1 4,167.2 4,187.8 4,227.6 4,189.5 4,211.1 4,245.5 4,231.1 Liabilities 17 Deposits 2,654.5 2,766.4 2,780.3 2,800.2' 2,835.2 2,839.5 2,844.1 2,864.7 2,860.0 2,853.9 2,877.5 2,853.2 18 Transaction 695.1 686.0 672.2 672.1 681.9 677.0 666.2 671.8 662.4 660.5 687.0 672.0 19 Nontransaction 1,959.3 2,080.4 2,108.1 2,128.1' 2.153.3 2,162.5 2,177.8 2,192.9 2,197.5 2,193.3 2,190.5 2,181.2 20 Large time 318.4 353.4 366.1 369.0 377.3 381.2 382.8 383.5 384.0 382.2 383.3 382.9 21 Other 1,640.9 1,727.0 1,742.0 1,759.1' 1,776.0 1,781.3 1,795.0 1,809.5 1,813.6 1,811.1 1,807.2 1,798.3 22 Borrowings 593.9 607.4 623.9 644.8 661.4 672.8 682.0 690.4 673.8 705.2 691.3 677.6 23 From banks in the U.S 271.2 246.6 249.6 256.2' 273.8 283.9 271.7 274.5 265.5 288.7 272.4 263.5 24 From others 322.7 360.8 374.3' 388.6 387.6 388.9 410.3 415.9 408.2 416.4 418.9 414.1 25 Net due lo related foreign offices . 78.2 79.8 84.7 74.4 74.3 77.7 84.1 81.5 81.0 79.7 90.3 81.0 26 Other liabilities 178.2' m.f 167.7' 184.6' 190.9 201.0 212.3 212.8 209.9 211.4 213.6 214.2 27 Total liabilities 3,504.8' 3,631.6' 3,656.6' 3,704.0r 3,761.8 3,791.0 3,822.4 3,849.5 3,824.6 3,850.1 3,872.7 3,826.0 28 Residual (assets less liabilities)7. . 349.5' 384.3' 383.4' 385.8' 382.3 376.2 365.4 378.1 364.9 360.9 372.8 405.1 Not seasonally adjusted Asseis 29 Bank credii 3,300.7 3,435.5 3,462.1' 3,490.4' 3,529.7 3.552.2 3,581.8 3,600.8 3,591.1 3.591.4 3,603.4 3,601.2 30 Securities in bank credit 838.9 848.9 851.4 865.3 884.8 891.8 913.4 918.1 917.1 911.6 917.3 922.2 31 U.S. government securities 615.7 630.9 638.9 647.4 660.9 665.2 673.3 678.8 677.0 673.9 678.5 679.9 32 Other securities 223.1 218.0 212.5 217.9 223.9 226.6 240.2 239.2 240.1 237.7 238.8 242.3 33 Loans and leases in bank credit2 2,461.8 2,586.7 2,610.6' 2,625.1' 2,644.9 2,660.5 2,668.4 2,682.8 2,674.0 2,679.9 2,686.1 2,679.0 34 Commercial and industrial 575.8 601.5 611.1 617.4' 622.3 628.8 636.6 646.7 643.0 642.9 647.0 649.3 35 Real estate 1,105.9 1,178.8 1,189.5 1,195.6 1,204.8 1,206.6 1,205.5 1,214.4 1,208.0 1,217.1 1,212.9 1,213.2 36 Revolving home equity 85.5 94.6 96.2 97.0 97.8 98.4 98.7 98.6 98.8 98.9 98.7 98.3 37 Other 1.020.4 1,084.2 1,093.3 1,098.6 1,106.9 1,108.2 1,106.8 1,115.8 1,109.2 1,118.2 1.114.2 1.114.8 38 Consumer 521.2 519.2 517.3' 509.4 509.7 513.4 511.1 502.7 505.6 503.8 501.6 501.6 39 Security1 44.2 49.1 50.6 57.6' 58.4 54.0 61.2 64.2 63.6 64.2 67.3 61.6 40 Other loans and leases 214.7 238.0 242.2' 245.1' 249.8 257.7 253.9 254.8 253.8 251.9 257.4 253.4 41 Interbank loans 187.6 169.1 176.1 176.3 187.8 192.9 183.5 177.9 177.1 174.3 177.9 174.8 42 Cash assets4 199.0 211.3 217.0' 230.4' 246.0 245.3 241.2 234.8 226.2 221.7 259.2 229.8 43 Other assets5 220.4 238.6 238.9 244.8 252.1 258.7 260.9 267.9 265.0 265.8 272.7 266.5 44 Total assets6 3,851.9 3,997.8' 4,037.5' 4,085.6" 4.1S9.0 4,192.4 4.211.1 4,224.9 4,202.9 4,196.7 4,256.7 4,215.7 Liabilities 45 Deposits 2,642.6 2,758.5 2,781.4 2,799.9' 2,849.5 2,866.7 2,846.6 2,853.2 2,853.4 2,835.3 2,873.8 2,832.7 46 Transaction 687.9 673.8 670.2 670.0 691.4 707.9 677.0 6649 662.1 645.9 687.1 659.5 47 Nontransaction 1,954.7 2,084.7 2,111.2 2,129.9 2,158.1 2.158.8 2,169.6 2,188.3 2,191.3 2.189.4 2,186.7 2,173.3 48 Large time 321.3 354.4 362.8 368.6 378.2 377.0 381.3 387.1 386.0 386.7 387.6 386.4 49 Other 1,633.4 1,730.3 1.748.3 1,761.3 1,779.9 1,781.8 1,788.3 1,801.2 1.805.3 1,802.8 1,799.1 1,786.8 50 Borrowings 585.0 607.1 626.3' 639.7 653.6 665.0 680.0 680.7 668.0 678.7 685.7 681.3 51 From banks in the U.S 261.7 250.9 251.9 251.7' 267.2 277.2 264.2 264.3 253.6 263.8 263.2 269.8 52 From others 323.3 356.2 374.4 388.1' 386.5 387.8 415.8 416.4 414.4 415.0 422.5 411.5 53 Net due to related foreign offices 79.9 77.4 80.1 76.0 70.6 73.8 86.1 83.3 79.1 77.7 90.9 89.7 54 Other liabilities 177.7' 176.5' 168.3' 185.2' 194.3 197.7 209.9 212.1 209.2 211.0 213.0 213.1 55 Total liabUities 3,485.2' 3,619.5' 3,656.1' 3,700.8r 3,768.0 3,803.2 3,822.5 3,829.4 3,809.7 3,802.7 3,863.4 3,816.8 56 Residual (assets less liabilities;7 366.7' 378.2' 381.3' 384.8' 391.0 389.2 388.5 395.5 393.1 394.0 393.3 398.9 MEMO 57 Revaluation gains on off-balance-sheet items8 55.9 45.1 37.5 50.1 47.3 48.9 46.8 46.9 58 Revaluation losses on off-balancesheet items8 50.9 46.5 40.0 41.3 43.6 44.2 52.9 49.5 51.6 48.8 48.8 51.2 59 Mortgage-backed securities9 243.6 256.4 2S9.3 265.0 273.8 279.1 287.5 291.9 292.5 292.2 288.5 292.9 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 Account 1997 1997' 1998 1998 Feb.' Aug. Sept. Oct. Nov. Dec. Jan.' Feb. Feb. 4 Feb. 11 Feb. 18 Feb. 25 Seasonally adjusted Assets 1 Bank credit 1,984.2 2,039.7 2,051.1 2.076.2 2,097.2 2,113.1 2,140.5 2.161.8 2,150.7 2,153.6 2,164.3 2,169.2 2 Securities in bank credit 450.0 441.8 444.6 460.4 477.8 492.0 511.0 516.4 517.0 510.6 516.5 522.9 3 U.S. government securities 305.1 306.8 313.7 323.3 336.5 343.3 358.9 361.8 363.4 357.8 361.1 363.4 4 Trading account 162 20.6 214 25.2 26.5 29.4 29.6 28.0 28.3 Til 28.9 27.3 5 Investment account 288.9 286.1 290.3 298.1 310.1 314.0 329.3 333.8 335.1 330.1 332.2 336.1 6 Other securities 144.9 135.0 130.9 137.2 141.3 148.6 152.0 154.6 153.6 152.8 155.4 159.5 7 Trading account 800 63.7 59.6 65.4 68.8 72.2 74.3 75.7 74.7 74.1 76.2 79.9 8 Investment account 64.9 71.4 71.3 71.8 72.5 76.5 77.7 78.9 78.9 78.7 79.1 79.6 9 State and local government.. 21.2 22.4 22.3 22.4 22.2 22.1 22.5 22.7 22.7 22.7 22.7 22.7 10 Other 43.7 48.9 49.0 49.4 50.3 54.4 55 2 56.2 56 2 55.9 564 56.9 11 Loans and leases in bank credit2 .. . 1,534.2 1,598.0 1,606.5 1.615.8 1,619.4 1.621.1 1,629.6 1,645.4 1,633.7 1.643.0 1.647.8 1,646.3 12 Commercial and industrial 407.4 426.8 434.6 438.3 439.9 446.7 451.5 457.0 454.4 454.5 457.2 459.4 13 Bankers acceptances 1.7 1.5 1.5 1.3 1.3 1.3 1.2 1.2 1.2 1.2 1.2 1.2 14 Other . 405.7 425.3 433.1 437.0 438.7 445.4 450.3 455.8 454.3 454.4 457.1 459.2 15 Real estate 625.9 647.3 648 9 649.7 650.4 646.9 645.0 652.7 647.1 654.0 651.3 652.5 16 Revolving home equity 61.0 66.1 67.1 67.6 68.0 68.8 69.2 69.3 69.2 69.4 69.4 69.2 17 Other 564.9 581.1 581 8 582.1 582.4 578.2 575.8 583.5 577.9 584.6 581.9 583.3 18 Consumer 307.6 305.1 302.9 299.7 297.2 294.6 293.4 291.9 291.3 291.9 290.6 293.0 19 Security1 38.4 46.3 46.6 52.6 51.3 47.3 57.5 57.6 58.0 58.8 60.2 54.7 20 Federal funds sold to and repurchase agreements with broker-dealers 23.0 30.0 29.7 35.4 35.1 31.1 41.2 42.1 42.6 43.7 45.8 37.7 21 Other 15.4 16.3 16.9 17.1 16.2 16.3 16.4 15.5 15.4 15.1 14.4 17.0 22 State and local government 11.6 11.3 11.3 11.2 11.1 11.1 111 11.0 11.1 11.1 11.1 10.7 23 Agricultural 9.1 9.2 9.3 9.5 9.7 9.8 9.5 9.4 9.5 9.5 9.5 9.3 24 Federal funds sold to and repurchase agreements with others 5.5 6.4 6.7 9.0 10.8 12.5 7.5 5.2 4.8 4.3 5.8 5.3 25 All other loans 62.6 69.3 68.9 67.6 69.5 71.0 71.0 75.6 73.5 74.8 76.8 75.6 26 Lease-financing receivables 66.1 76.3 77.3 78.2 79.4 81.3 83.1 85.0 83.9 84.0 85.4 85.7 27 Interbank loans 134.0 122.5 129.0 125.5 128.0 IZ5.5 116.3 113.7 106.4 109.8 113.2 118.1 28 Federal funds sold to and repurchase agreements with commercial banks 84.6 74.9 81.7 78.8 82.3 81.4 74.4 66.0 63.1 62.0 65.7 69.1 29 Other 49.3 47.6 47.3 46.6 45.7 44.1 41.8 47.7 43.4 47.8 47.5 49.0 30 Cash assets4 133.8 153.5 148.1 160.4 166.5 158.3 159.7 160.1 155.6 161.1 167.3 153.0 31 Other assets5 172.7 173.2 175.7 184.1 187.7 195.1 195.5 203.0 196.2 201.4 205.9 205.7 32 Total assets6 23*7.7 2,451.9 1467.2 1509.4 2342.6 15553 1575.4 16010 15714 15893 2.614.0 2,6093 Liabilities 33 Deposits 1,481.3 1,517.4 1,525.5 1,534.4 1,554.6 1,557.5 1.551.5 1,561 1 1,560.0 1,550.9 1.569.0 1.555.0 34 Transaction 401.2 385.5 373.9 375.0 381.2 379.5 371.5 373.8 368.2 365.4 385.5 372.9 35 Nontransaction 1,080.1 1,132.0 1,151.5 1,159.4 1.173.5 1,178.0 1,180.1 1,187.3 1,191.8 1,185.5 1,183.5 1.182.1 36 Large time 167.8 191.8 202.1 203.4 209.8 211.8 212.1 212.8 213.2 211.6 211.9 213.0 37 Other 912.2 940.2 949.4 955.9 963.7 9661 967 9 9746 978 6 973.9 971.5 9690 38 Borrowings 444.8 450.7 468.2 490.9 506.2 514.2 525.4 532.4 516.0 544.2 534.1 523.7 39 From banks in the US 185.9 168.7 175.5 182.6 2(10.7 209.7 199.8 202.4 193.7 213.8 200.6 195.5 40 From others 259.0 282.1 292.7 308.2 305.5 304.5 325.6 330.0 322.3 330.4 333.5 328.2 41 Net due to related foreign offices 74.2 75.3 79.9 69.2 69.3 73.4 79.9 75.4 76.9 76.1 77.2 774 42 Other liabilities 154.3 150.8 139.6 156.8 162.4 172.2 184.7 185.1 182.2 183.7 186.7 186.0 43 Total liabilities 2,154.7 2,1943 2,213.2 12513 1292.6 2317.2 13413 2354.0 2335.1 2354.9 2367.1 23411 44 Residual (assets less liabilities)7 233.0 257.6 254.0 258.1 250.0 238.1 233.9 248.0 2J7.3 234 5 246.9 267.2 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • May 1998 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks—Continued Monthly averages Wednesday figures Account 1997 1997' 1998 1998 Feb.1 Aug. Sept. Oct. Nov. Dec. Jan.r Feb. Feb. 4 Feb. 11 Feb. 18 Feb. 25 Nol seasonally adjusted Assets 45 Bank credit 1,982.0 2,037.3 2,050.7 2.0764 2,100.0 2.110.3 2,142.7 2,159.4 2,154.0 2,151.7 2,162.5 2,159.4 46 Securities in bank credit 447.3 445.1 446.0 461.3 478.5 482.1 506.5 513.5 5147 507.7 513.4 517.2 47 U.S. government securities 303.4 309.5 315.3 325.7 339.1 341.0 351.6 359.8 359.2 354.8 360.2 361.1 48 Trading account 16.4 21.3 23.4 26.1 28.0 26.9 28.2 28.4 27.4 27.4 30.6 26.9 49 Investment account 287.0 288.2 292.0 299.6 311.1 314.0 323.5 331.4 331.8 327.4 329.6 334.1 50 Mortgage-backed securities. 185.7 190.0 191.8 197.4 205.9 210.7 218.6 221.2 221.6 221.7 217.8 222.5 51 Other 101.3 98.2 100.1 102.1 105.2 103.3 104.9 110.2 110.1 105.7 111.8 111.6 52 One year or less 27.3 26.8 27.6 26.3 28.9 27.6 26.4 28.3 28.7 27.6 28.2 28.4 53 Between one and five years 58.4 50.0 49.8 52.7 53.5 53.3 52.2 51.4 53.4 50.9 51.8 50.2 54 More than five years .... 15.6 21.4 22.7 23.1 22.8 22.5 26.3 30.5 28.0 27.2 31.8 33.1 55 Other securities 143.9 135.7 130.7 135.7 139.4 141.2 154.9 153.7 155.6 152.9 153.2 156 2 56 Trading account 78.8 64.8 59.4 63.3 65.9 63.9 76.6 74.6 76.1 74.0 74.0 76.6 57 Investment account 65.0 70.9 71.3 72.3 73.5 77.2 78.3 79.1 79.4 78.9 79.2 79.5 58 State and local government .. 21.2 22.2 22.3 22.4 22.3 22.2 22.5 22.7 22.7 22.7 22.7 22.7 59 Other 43.8 48.7 49.0 50.0 51.2 55.1 55.8 56.4 56.8 56.2 56.5 56.8 60 Loans and leases in bank credit2 .. 1.534.7 1,592.1 1,604.7 1,615.0 1,621.4 1,628.2 1.636.2 1,645.9 1,639.2 1,644.0 1,649.2 1,642.2 61 Commercial and industrial 407.4 423.6 431.2 436.2 438.6 443.1 449.0 457.0 454.5 453.7 457.0 459 1 62 Bankers acceptances .... 17 15 1 5 1.4 1.4 1.3 12 1.2 1.2 1.2 1.2 1.2 63 Other 405.7 422.1 429.7 434.8 437.3 441.8 447.8 455.8 453.3 452.5 455.8 457.9 64 Real estate 625.3 647.7 649.9 650.5 6522 6500 647.7 652.1 648.6 6557 650.4 649 5 65 Revolving home equity 60.8 66.3 67.4 68.0 68.4 68.8 69.3 69.0 69.2 69.3 69.1 68.8 66 Other 347.9 361.4 361.1 359.2 359.2 356.6 356.3 360.1 356.8 363.6 358.4 357.5 67 Commercial 216.6 220.1 221.4 223.3 224.5 224.6 222.1 222.9 222.7 222.8 222.8 223.1 68 Consumer 307.5 305.6 304 3 299.2 2969 2986 298.2 291.7 293.1 2923 2906 291.8 69 Security3 39.4 44.5 45.8 52.4 53.0 48.5 56.0 58.7 58.0 58.8 61.9 56.3 70 Federal funds sold to and repurchase agreements with broker-dealers 23.3 28.5 29.3 35.5 36.5 31.3 39.5 42.5 42.4 43.2 46.5 38.1 71 Other 16.2 16.0 16.5 17.0 16.5 17.3 16.4 16.3 15.6 15.6 15.4 18.2 72 State and local government 11.6 11.4 11.4 11.3 11.1 11.1 10.9 10.9 11.0 11.0 11.0 10.7 73 Agricultural 8.9 9.5 9.6 9.6 9.7 9.7 9.4 9.1 9.3 92 9.2 8.9 74 Federal funds sold to and repurchase agreements with others 6.3 6.3 7.3 8.8 8.8 11.0 7.6 6.1 5.8 5.6 6.7 5.9 75 All other loans 61.6 68.1 68.5 68.7 71.7 74.6 73.0 74.4 74.2 72.9 76.2 73.4 76 Lease-financing receivables .... 66.8 75.4 76.6 78.2 79.4 81.5 84.4 85.8 84.8 84.9 86.3 86.5 77 Interbank loans 136.3 119.1 125.2 120.1 127.7 131.5 124.5 115.7 112.5 112.5 116.6 115.9 78 Federal funds sold to and repurchase agreements with commercial banks 86.6 71.8 78.6 73.7 82.4 85.1 79.5 67.7 67.7 64.2 68.4 67.4 79 Other 49.6 47.3 46.7 46.4 45.3 46.4 45.0 48.0 44.9 48.4 48.2 48.5 80 Cash assets4 136.4 142.7 147.3 159.9 171.4 171.2 169.4 163.4 156.4 153.0 183.0 159.4 81 Other assets5 170.4 175.5 177.4 181.7 185.2 193.5 196.0 200.2 197.6 198.8 201.8 201.1 82 Total assets6 2388.1 2^373 2*3.6 2301.4 23474 2369JS 23963 2^02.1 2383.9 2379.3 2,627.4 23993 Liabilities 83 Deposits 1,479.3 1,512.2 1,524.3 1,531.8 1361.2 1,571.7 1.557.3 1,559.4 1.559.7 1,545.1 1,575.2 1,546.2 84 Transaction 397.9 376.4 372.7 372.4 387.3 399.9 378.9 370.5 367.3 355.8 389.1 366.5 85 Nonlransaclion 1,081.4 1,135.7 1,151.6 1,159.4 1,173.9 1,171.8 1.178.4 1,188.9 1.192 4 1,189.3 1,186.1 1.179.7 86 Large time 170.0 193.1 199.1 202.6 210.3 208.7 212.0 215.7 215.3 215.3 215.5 215.4 87 Other 911.4 942.7 952.5 956.8 963.6 963.1 966.3 973.2 977.1 974.1 970.6 964.3 88 Borrowings 437.3 451.9 471.2 485.7 500.1 507.0 521.6 523.9 512.4 522.6 528.9 523.3 89 From banks in the US 178.3 173.0 177.1 178.8 195.8 203.7 192.7 194.0 184.5 193.8 193.1 198.5 90 From nonbanks in the US 259.0 278.9 294.1 306.9 304.3 303.3 329.0 329.9 328.0 328.7 335.9 324.7 91 Net due to related foreign offices .... 76.0 72.9 75.3 70.8 65.6 69.5 81.8 77.2 75.0 74.1 77.8 86.1 92 Other liabilities 153.4 149.3 140.6 157.5 166.0 169.5 182.1 184.0 181.1 182.6 185.8 184.5 93 Total liabilities 2,145.9 2,1863 2J1L5 2045.8 2^92.9 2317.6 2342.8 23444 2328J 23243 2367.7 2340.1 94 Residual (assets less liabilities)7 242.2 251.0 252.2 255.6 254.5 252.1 253.4 257.6 255.7 255.0 259.7 259.2 MEMO 95 Revaluation gains on off-balancesheet items8 55.9 45.1 37.5 38.2 41.5 41.3 50.1 47.3 48.9 46.8 46.9 48.7 96 Revaluation losses on off-balancesheet items8 50.9 46.5 40.0 41.3 43.6 44.2 52.9 49.5 51.6 48.8 48.8 51.2 97 Mortgage-backed securities9 206.5 208.2 210.0 215.7 224.1 228.9 237.2 240.9 241.4 241.1 237.7 242.1 98 Pass-through securities 139.7 143.1 144.6 149.3 154.2 157.2 162.1 164.4 164.8 164.1 161.6 166.3 99 CMOs, REMICs, and other mortgage-backed securities. . . 66.8 65.1 65.4 66.4 70.0 71.7 75.1 76.5 76.7 77.0 76.1 75.8 100 Net unrealized gains (losses) on available-for-sale securities1 ... 2.0 3.0 2.5 2.5 2.4 2.2 3.0 3.3 3.5 3.4 3.4 3.3 101 Offshore credit to U.S. residents' ... 32.1 34.0 34.1 34.2 34.4 34.2 35.5 36.2 37.4 365 36.3 35.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A19 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesd*y figures Account 1997 1997' 1998 1998 Feb.' Aug. Sept. Oct. Nov. Dec. Jan.' Feb. Feb. 4 Feb. 11 Feb. 18 Feb. 25 Seasonally adjusted Assets 1 Bank credit 1,324.2 1,398.6 1,407.4 1,411.3 1,428.1 1,439.0 1,441.2 1.447.2 1,442.3 1,444.6 1.447.5 1,447.9 2 Securities in bank credit 393.2 405.5 405.0 404.9 407.8 410.0 408.3 406.2 404.9 404.9 406.0 406.1 3 US government securities 313.7 323.0 323.0 322.7 323.4 324.6 322.8 320.3 319.9 319.6 320.0 319.8 4 Other securities 79.5 82.5 81.9 82.2 84.4 85.4 85.5 85.9 85.0 85.2 85.9 86.3 5 Loans and leases in bank credit2 931.0 993.0 1,002.5 1,006.4 1,020.3 1,028.9 1,032.9 1,041.0 1,037.4 1.039.7 1,041.5 1,041.8 6 Commercial and industrial 168.7 179.1 180.9 181.8 184.4 186.2 187.6 190.0 188.8 189.8 190.4 190.3 7 Real estate 483.2 529.9 537.4 542.7 550.3 554.4 558.3 564.9 561.3 563.8 565.6 566.5 8 Revolving home equity 24.9 28.1 28.4 28.8 29.3 29.5 29.5 29.8 29.8 29.8 29.8 29.8 9 Other 458.3 501.7 508.9 513.9 521.0 524.9 528.7 535.1 531.4 534.0 535.8 536.8 10 Consumer 212.9 213.7 212.2 209.6 212.1 214.0 212.0 210.3 211.3 2102 210.1 209.4 11 Security3 4.6 4.7 4.9 5.2 5.1 5.2 5.1 5.3 5.4 52 5.3 5.4 12 Other loans and leases 61.6 65.7 67.1 67.1 68.4 69.1 69.8 70.5 70.6 70.8 70.2 70.1 13 Interbank loans 49.3 51.0 52.6 560 55.2 58.1 57 7 60.1 60.8 58.1 60.1 59.4 14 Cash assets4 63.3 71.0 71.3 69.3 71.8 70.4 69.7 72.2 70.3 72.7 75.0 702 15 Other assets5 48.6 63.1 61.1 63.4 66.3 64.4 63.8 66.2 63.8 66.4 68.9 64.4 16 Total assets6 1466.6 1364.0 1,572^ 1,5803 1.601.5 1,611.9 1,6124 1,625.6 1,617.1 1,621.7 1,631.5 1,621.8 Liabilities 17 Deposits 1,173.2 1.249.0 1254.8 1,265.8 1,280.6 1.282.0 1,292.5 1,303.7 1,300.0 1,303.0 1.308.5 1,2982 18 Transaction 293.9 300.6 298.2 297.1 300.7 297.5 294.7 298.1 294.3 2952 301.5 299.1 19 Nontransaction 879.2 948.4 956.6 968.7 979.8 984.6 997.8 1,005.6 1,005.7 1,007.8 1.007.1 999.1 20 Large lime 150.6 161.6 164.1 165.5 167.5 169.4 170.7 170.7 170.8 170.6 171.4 169.9 21 Other 728.6 786.8 792.5 8032 812.3 815.2 827.1 834.9 835.0 8372 835.7 8292 22 Borrowings 149.1 156.7 155.7 154.0 155.2 158.6 156.6 158.0 157.8 161.0 157.1 153.9 23 From banks in the U S 85.4 78.0 74.1 73 5 73 1 74.2 71 9 72.1 71.9 74.9 71.8 68.0 24 From others 63.7 78.7 81.5 80.4 82.1 84.4 84.7 85.9 85.9 86.0 85.3 85.9 25 Net due to related foreign offices 4.0 4.5 4.8 5.2 5.0 4.3 4.2 6.1 4.1 3.6 13.1 3.6 26 Other liabilities 23.9 27.1 28.0 27.7 28.4 28.8 27.5 27.7 27.6 27.7 26.9 28.2 27 Total liabilities 1350.1 1437.2 1,443.4 1452.6 1,4692 1,473.8 1480.9 1495.5 1489.5 1,4953 1,505.6 1483.9 28 Residual (assets less liabilities)7 116.5 126.8 129.4 127.7 132.3 138.1 131.5 1302 127.6 126.5 125.9 137.9 Not seasonally adjusted Assets 29 Bank credit 1,318.7 1,398.3 1,411.4 1,414.1 1,429.7 1,441.9 1,439.1 1,441.4 1,4372 1,439.8 1,440.9 1,441.8 30 Securities in bank credit 391.6 403.7 405.4 403.9 406.3 409.6 406.9 404.6 402.4 403.9 403.9 404.9 31 U.S. government securities 312.3 321.4 323.6 321.7 321.8 3242 321.6 319.0 317.8 319.1 318.3 318.8 32 Olher securities 79.3 82.3 81.8 82.2 84.4 85.4 85.3 85.6 84.6 84.8 85.6 86.1 33 Loans and leases in bank credit2 927.2 994.6 1,006.0 1,010.1 1,023.5 1,032.3 1,032.2 1,036.8 1,034.8 1,035.9 1.037.0 1.036.9 34 Commercial and industrial 168.4 177.9 179.9 181.2 183.7 185.7 187.6 189.7 188.5 1892 189.9 190.1 35 Real estate 480.6 531.1 539.6 545.0 552.6 556.6 557.9 562.3 559.4 561.5 562.6 563.7 36 Revolving home equity 24.7 28.3 28.8 29.0 29.4 29.6 29.4 29.6 29.6 29.7 29.6 29.5 37 Other 455.9 502.8 510.8 516.0 523.2 527.0 528.4 532.7 529.8 531.8 533.0 534.2 38 Consumer 213.7 213.6 213.0 210.2 212.8 214.8 212.9 211.0 212.5 211.5 211.0 209.8 39 Security1 4.7 4.6 4.8 5.1 5.3 5.4 5.3 5.5 5.6 5.4 5.4 5.3 40 Other loans and leases 59.7 67.3 68.8 68.5 69.2 69.8 68.6 68.4 68.8 68.3 68.1 68.0 41 Interbank loans 51.3 50.0 50.9 56.2 60.2 61.4 59.0 62.3 64.6 61.8 61.3 58.9 42 Cash assets4 62.6 68.6 69.7 70.5 74.6 74.2 71.8 71.4 69.8 68.7 76.2 70.4 43 Other assets5 50.0 63.1 61.6 63.1 66.9 65.2 64.9 67.8 67.4 67.1 70.9 65.4 44 Total assets6 1463.8 1,5604 1,573.8 1,584.2 1,611.6 1,622.6 1,614.9 1622£ 1,619.0 1,6174 1,6293 1,616.4 Liabilities 45 Deposits 1 163.3 1,246.3 1257 1 1,268.1 1,288.3 1,295.0 1,289.3 1,293.9 1,293.7 1,290.2 1,298.6 12865 46 Transaction 290.1 297.4 297.5 297 6 3040 308.0 2981 294.5 294.8 290.1 298.0 292.9 47 Nontransaction 873.2 949.0 959.6 970.6 984.2 987.0 991.2 999.4 998.9 1,000.1 1.000.6 993.6 48 Large time 1513 161.3 163.7 1660 168.0 168.3 169.3 171.4 170.7 1714 172.1 171 1 49 Other 722.0 787.7 795.8 8046 816.3 818.7 822.0 827.9 828.2 828.7 828.6 822.5 50 Borrowings 147 7 155.2 155 0 154.0 153.5 158.0 158.4 156.8 155.5 156.1 1568 1581 51 From banks in the U.S 83.4 77.9 74.8 72.9 71.3 73.5 71.5 70.3 69.1 69.9 70.1 71.3 52 From others 64.2 77.3 80.3 81 1 822 84.5 86.8 86.5 86.4 862 86.7 868 53 Net due to related foreign offices 4.0 4.5 4.8 5.2 5.0 4.3 42 6.1 4.1 3.6 13.1 3.6 54 Other liabilities 24.4 27.2 27.7 27.7 28.3 28.3 27.8 28.2 282 28.4 27.2 28.6 55 Total liabilities 13393 1,433.2 1,444.7 1455.0 1475.1 1,485.6 1479.7 1.484.9 1.481.5 14784 1495.7 1476.7 56 Residual (assets less liabilities)7 124.5 127.2 129.2 129.2 136.5 137.0 135.2 137.9 137.5 139.0 133.7 139.7 MEMO 57 Mortgage-backed securities'' 37.1 48.2 49.3 49.3 49.7 50.2 50.4 51.0 51.0 51.1 50.8 50.9 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics D May 1998 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued E. Foreign-related institutions Billions of dollars Monthly averages Wednesd*y figures Account 1997 1997 1998 1998 Feb. Aug. Sept. Oct. Nov. Dec. Jan.' Feb. Feb. 4 Feb. 11 Feb. 18 Feb. 25 Seasonally adjusted Assets 1 Bank credit 531.0 532.6 537.4 543.9 552.1 559.9 577.8 579.4 581.3 577.6 575.7 582.0 2 Securities in bank credit 177.4 177.9 182.4 181.3 195.8 199.9 199.3 197.5 203.6 1% 1 195.4 195.2 3 US government securities 84.7 85.8 87.8 86.4 86.1 84.3 80.6 86.0 89.3 83.3 81.1 86.5 4 Other securities 92.7 92.1 94.6 94.9 109.7 115.6 118.7 111.5 114.3 112.8 114.3 108.7 5 Loans and leases in bank credit2 . . . 353.6 354.7 355.0 362.6 356.3 359.9' 378.5 381.9 377.7 381.4 380.3 386.8 6 Commercial and industrial 217.1 219.7 222.2 223.6 222.6 223.8' 226.4 226.7 226.6 224.6 226.3 inn 7 Real estate 32.0 28.3 27.9 27.7 26.9 26.5 27.0 26.8 27.1 26.9 27.0 26.7 8 Security3 39.8 43.0 46.3 41.1 44.6' 54.5 54.5 52.2 56.9 53.5 56.3 9 Other loans and leases 64.7 644 62.0 65.0 65.6 65 1' 70.5 73.8 71.8 73.1 73.5 76.1 10 Interbank loans 20.9 18.0 18.0 20.0 23.1 30.7' 27.5 24.3 23.8 26.6 25.6 24.7 11 Cash assets4 32.9 34.4 35.5 34.8 36.2 34.6' 32.7 33.1 31.9 33.8 33.1 33.2 12 Other assets5 41.2 42.6 42.0 41.4 44.9 41.8' 44.4 42.2 41.9 41.9 41.9 42.8 13 Total assets6 625.7 627.4 632.7 639.9 656.0' 666.7' 6812 678.7 678.6 679.7 676.1 682.4 Liabilities 14 Deposits 238.0 263.4 265.5' 260.9 272.1 278.0 276.0 291.2 278.1 289.7 294.1 295.8 15 Transaction 9.7 11.2 10.8 10.4 10.7 10.5 11.0 10.6 10.3 10.5 10.6 10.8 16 Nontransaction 228.3 252.2 254.8 250.5 261.4 267.4 265.0 280.5 267.8 279.2 283.5 285.0 17 Large time 224.3 249.7 252.3 248.1 259.0 265.0 262.6 276.7 265.4 273.9 278.6 282.5 18 Other 3.9 2.5 2.5 2.4 2.4 2.4 2.4 3.8 25 5.3 4.9 2.5 19 Borrowings 143.7 137.4 143.3 161.8 165.1 157.2' 159.1 157.2 163.6 148.7 156.7 160.5 20 From banks in the US 34.4 31.2 35.9 37.7 30.5 27.7 25.2 26.9 29.2 23.4 26.6 28.5 71 From others 109.3 106.3 107.4 124.1 134.5 P9 5' 1319 1303 134.4 125.2 1301 1319 22 Net due to related foreign offices 140.0 130.6 127.3 118.6 1194 125.9 135.3 125.2 135.9 133.4 120.9 114.3 23 Other liabilities 100.3 96.0 94.1 93.4 97.0 98.3' 98.1 96.7 95.6 99.0 97.6 95.5 24 Total liabilities 621.9 627.4 630.2 634.7 653.5 659.4' 668.4 6703 6733 670.7 6693 666.1 25 Residual (assets less liabilities)7 3.7 0.0 2.5 5.2 2.6 7.2 13.8 8.4 5.3 8.9 6.8 16.2 Not seasonally adjusted Assets 26 Bank credit 531.6 536.5 535.4 542.5 551.1 554.5 574.2 579.5 582.4 579.6 574.7 578.4 27 Securities in bank credit 178.3 181.5 180.7 181.2 195.1 192.0 194.4 198.0 203.6 197.3 195.7 193.3 28 U.S. government securities 86.4 87.3 86.7 85.6 85.7 81.7 81.6 87.5 91.5 84.9 82.2 86.8 29 Trading account 20.6 18.3 17.2 15.1 17.6 15.8 15.5 16.2 23.4 13.3 11.3 15.1 30 Investment account 65.8 68.9 69.5 70.5 68.1 65.9 66.1 71.3 68.2 71.6 70.9 71.7 31 Other securities 91.9 94.2 94.0 95.6 109.4 110.3 112.8 110.5 112.1 112.4 113.5 106.5 32 Trading account 63 2 61.4 61.4 62.5 69.6 70.3 72.4 72.1 74.7 73.1 73.7 69.8 33 Investment account 28.7 32.8 32.6 33.1 39.8 40.0 40.4 38.4 37.3 39.3 39.8 36.7 34 Loans and leases in bank credit2 .. . 353.3 355.1 354.6 361.3 356.0 362.5' 379.8 381.5 378.8 382.3 379.0 385.1 35 Commercial and industrial 217.1 219.9 220.7 222.2 222.4 224.2' 226.3 226.7 226.7 225.3 225.9 227.3 36 Real estate 32.1 28.4 28.0 27.8 27.3 26.6 27.0 26.9 27.2 27.0 26.9 26.7 37 Security1 39.8 42.2 43.0 46.3 41.1 44.6' 54.5 54.5 52.2 56.9 53.5 56.3 38 Other loans and leases 64.4 646 63.0 64.9 65.2 67.1' 71.9 73.5 72.7 73.1 72.6 74.8 39 Interbank loans 20.9 18.0 18.0 20.0 23.1 30.7' 27.5 24.3 23.8 26.6 25.6 24.7 40 Cash assets4 32.1 34.3 34.7 35.2 36.5 360 33.1 32.4 31.8 33.2 31.9 32.4 41 Other assets5 42.0 43.4 42.4 41.0' 45.2 42.7' 43.6 43.0 42.3 43.4 42.4 43.6 42 Total assets6 6263 632.1 630.2 638.5 655.7 663.6' 678.1 678.9 680.0 682.6 6743 678.8 Liabilities 43 Deposits 234.8 2612 264.6 268.8 275.7 ->8l 0 276.2 287.3 275.8 286.7 287.4 292.7 44 Transaction 9^9 10.9 11.2 105 10.7 11.2 11.1 10.9 10.7 10.7 10.9 11.0 45 Nontransaction 224.9 250.3 253.3 258.3 265.0 269.8 265.1 276.4 265.1 276.0 276.5 281.7 46 Large time 221.0 247.8 250.8 255 8' 262.5' ">67.3 262.7 272.7 262.7 270.8 271.8 279.2 47 Other 3.9 2.5 2.5 2.5 2.5 2.5 2.4 3.7 2.4 5.3 4.8 2.4 48 Borrowings 137.1 142.6 144.2 157.1 159.8 155.2 155.6 150.5 160.8 144.9 147.9 148.9 49 From banks in the US 32.1 31.7 34.9 34.5 30.5 28.2 26.1 75 2 29.5 22.6 24.2 24.9 50 From others 105.0 110.9 109.3 122.6 129.3 mff 129.4 125J 131.3 122.3 123.7 124.0 51 Net due to related foreign offices 149.2 128.7 124.1 117.6 117.6 126.3 145.0 136.2 141.5 142.4 133.8 132.9 52 Other liabilities 102.7 96.4 93.9 91.3 97.7 96.8' 97.0 99.1 97.4 102.2 98.9 98.2 53 Total liabilities 623.9 629.0 626.8 634.8 650.8 6593' 673.7 673.0 675.6 6763 668.1 672.8 54 Residual (assets less liabilities)7 2.4 3.0 3.4 3.7 4.9 4.3 4.3 5.8 4.4 6.2 6.2 6.1 MEMO 55 Revaluation gains on off-balance-sheet items6 46.3 41.5 41.2 39.8 41.8 40.9 42.1 40.1 41.0 40.2 40.4 39.9 56 Revaluation losses on off-balancesheet items8 48.0 43.1 41.8 40.1 41.9 41.6 42.5 40.4 41.3 40.8 41.0 40.1 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 daia 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 I. 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 currenl 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 Financial Statistics • May 1998 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period Year ending December 1997 1998 Item D 19 e 9 c 3 . D 19 e 9 c 4 . D 19 e 9 c 5 . D 19 e 9 c 6 . D 19 e 9 c 7 . Aug. Sept. Oct. Nov. Dec. Jan. Commercial paper (seasonally adjusted unless noted otherwise) 1 All issuers 555,075 595382 674,904 775,371 9«6,699 885,601 908.640 921,769 940,524 966,699 973,761 Financial companies1 2 Dealer-placed paper2, total 218.947 223,038 275 815 361,147 513,307 437.340 475,792 483,489 483,475 513,307 509,950 3 Directly placed paper^, total 180,389 207,701 210,829 229,662 252,536 253,934 235,030 237,544 249,781 252,536 254,926 4 Nonfinancial companies4 155,739 164,643 188,260 184,563 200,857 194,327 197,818 200,736 207,268 200,857 208,886 Bankers dollar acceptances (not seasonally adjusted)"' 5 Total 32,348 29,835 29,242 25,754 t By holder 1 1 6 Accepting banks 12,421 11,783 i 7 Own bills 10,707 10,462 8 Bills bought from other banks 1,714 1,321 Federal Reserve Banks*" 9 Foreign correspondents 725 410 n a. na. na. na. na. na. na. na. 10 Others 19,202 17.642 a. n By basis 11 Imports into United States 10,217 10,062 12 Exports from United States 7,293 6,355 13 All other 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. ils 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 1995—Jan. 1 8.50 1995 8.83 1996—Jan 8.50 1997—Jan 8.25 Feb. 1 9.00 1996 8.27 Feb 8.25 Feb 8.25 July 7 8.75 1997 8.44 Mar. 8.25 Mar 8.30 Dec. 20 8.50 Apr 8.25 Apr 8.50 1995—Jan 8.50 Mav 8.25 May 8.50 1996—Feb. 1 8.25 Feb 9.00 June 8.25 June 8.50 Mar 9.00 July 8.25 July 8 50 1997_Mar. 26 8.50 Apr 9.00 Aug 8.25 Aug 8.50 May 9.00 Sept 8.25 Sept 8.50 June 9.00 Oct 8.25 Oct 8.50 July 8.80 Nov 8.25 Nov 8.50 Aug 8.75 Dec 8.25 Dec 8.50 Sept 8.75 Oct 8.75 1998—Jan 8.50 Nov 8.75 Feb 8.50 Dec 8.65 Mar. 8.50 1. The prime rate is one of several base rates that banks use to price short-term business Report. Data in this table also appear in the Board's H.I5 (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 ihe 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 1998 1998, week ending Item 1995 1996 1997 Nov. Dec. Jan. Feb. Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 MONEY MARKET INSTRUMENTS 1 Federal funds'-2J 5.83 5.30 5.46 5.52 5.50 5.56 5.51 5.53 5.52 5.43 5.54 5.51 2 Discount window borrowing24 5.21 5.02 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Commercial paper •4"3"6 Nonfinancial 3 1-month n.a. n.a. 5.57 5.53 5.78 5.46 5.47 5.47 5.46 5.47 5.46 5.49 4 2-month n.a. n.a. 5.57 5.59 5.71 5.44 5.44 5.43 5.43 5.43 5.44 5.47 5 3-month 5.56 5.60 5.67 5.42 5.42 5.40 5 41 5 41 5 42 5.44 Financial 6 1 -month n.a. n.a. 5.59 5.55 5.80 5.48 5.49 5.48 5.48 5.48 5.49 5.50 7 2-month n.a. n.a. 5.59 5.65 5.72 5.46 5.47 5.44 5.46 5.46 5.47 5.50 8 3-month n.a. n.a. 5.60 5.64 5.70 5.44 5.45 5.44 5.44 5.44 5.45 5.47 Commercial paper (historical) " 'b' 9 1-month 5.93 5.43 5.54 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 3-month 5.93 5.41 5.58 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 6-month 5.93 5.42 5.62 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Finance paper, directly placed (historical)3^-7-8 12 1-month 5.81 5.31 5.44 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 3-month 5.78 5.29 5.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 6-month 5 68 5.21 5.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Banters acceptances^^'9 15 3-month 581 5.31 5.54 5.66 5.75 5.48 5.46 5.47 5.47 5.45 5.45 5.48 16 6-month 5.80 5.31 5.57 5.63 5.68 5.45 5.41 5.44 5.42 5.39 5.38 5.44 Certificates of deposit, secondary marker*'™ 17 1 -month 5.87 5.35 5.54 5.61 5.88 5.53 5.53 5.53 5.52 5.53 5.53 5.55 18 3-month 5.92 5.39 5.62 5.74 5.80 5.54 5.54 5.53 5.53 5.53 5.53 5.56 19 6-month 5.98 5.47 5.73 5.78 5.82 5.56 5.55 5.54 5.53 5.54 5.54 5.58 20 Eurodollar deposits, 3-month3"11 5.93 5.38 5.61 5.71 5.79 5.53 5.53 5.51 5.52 5.52 5.53 5.54 US. Treasury bills Secondary market3'5 21 3-month 5.49 5.01 5.06 5.14 5.16 5.04 5.09 5.06 5.05 5.07 5.06 5.16 22 6-month 5.56 5.08 5.18 5.17 5.24 5.03 5.07 5.06 5.04 5.04 5.08 5.11 23 1-year 5.60 5.22 5.32 5.17 5.24 4.98 5.04 5.01 4.99 5.01 5.02 5.14 Auction average3-5-12 24 3-month 5.51 5.02 5.07 5.15 5.16 5.09 5.11 5.07 5.10 5.10 5.08 5.14 25 6-month 5.59 5.09 5.18 5.17 5.24 5.07 5.07 5.03 5.09 5.08 5.07 5.04 26 1-year 5.69 5.23 5.36 5.14 5.18 5.07 4.97 n.a. 4.97 n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities1 27 1-year 5.94 5.52 5.63 5.46 5.53 5.24 5.31 5.28 5.26 5.28 5.28 5.42 28 2-year 6.15 5.84 5.99 5.71 5.72 5.36 5.42 5.40 5.35 5.39 5.38 5.54 29 3-year 6.25 5.99 6.10 5.76 5.74 5.38 5.43 5.43 5.38 5.41 5.38 5.55 30 5-year 6.38 6.18 6.22 5.80 5.77 5.42 5.49 5.48 5.44 5.47 5.45 5.60 31 7-year 6.50 6.34 6.33 5.90 5.83 5.53 5.60 5.60 5.58 5.59 5.55 5.69 32 10-year 6.57 6.44 6.35 5.88 5.81 5.54 5.57 5.63 5.59 5.57 5.50 5.63 3^ 20-year 6.95 6.83 6.69 6.20 6.07 5.88 5.96 5.96 5.96 5.96 5.90 6.00 M 30-year 6.88 6.71 6.61 6.11 5.99 5.81 5.89 5.89 5.89 5.89 5.84 5.94 Composite 35 More than 10 years (long-term) 6.93 6.80 6.67 6.18 6.06 5.87 5.94 5.95 5.94 5.94 5.88 5.99 STATE AND LOCAL NOTES AND BONDS Moody's series1* 36 Aaa 5.80 5.52 5.32 5.19 5.03 4.88 4.92 4.92 4.90 4.90 4.91 4.95 37 Baa 6.10 5.79 5.50 5.32 5.17 5.04 5.09 5.08 5.07 5.05 5.07 5.16 38 Bond Buyer series15 5.95 5.76 5.52 5.33 5.19 5.06 5.10 5.11 5.11 5.08 5.07 5.14 CORPORATE BONDS 39 Seasoned issues, all industries16 7.83 7.66 7.54 7.13 7.03 6.89 6.95 6.97 6.96 6.97 6.93 6.99 Rating group 40 Aaa 7.59 7.37 7.27 6.87 6.76 6.61 6.67 6.70 6.68 6.69 6.62 6.71 41 Aa 7.72 7.55 7.48 7.07 6.99 6.82 6.88 6.89 6.87 6.89 6.84 6.92 42 A 7.83 7.69 7.54 7.15 7.05 6.93 7.01 7.02 7.02 7.02 6.96 7.04 43 Baa 8.20 8.05 7.87 7.42 7.32 7.19 7.25 7.28 7.27 7.27 7.20 7.28 44 A-rated, recendy offered utility bonds17 7.86 7.77 7.71 7.24 7.10 6.97 7.02 6.96 7.07 6.99 7.00 7.08 MEMO Dividend-price ratio 45 Common stocks 2.56 2.19 1.77 1.65 1.62 1.62 1.55 1.61 1.57 1.55 1.54 1.53 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. Al 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 Digitizedf ofro irn dFicRatiAonS pEurRpo ses only. G. 13 (415) monthly statistical releases. For ordering address, see inside front cover. 12. Auction date for daily data; weekly and monthly averages computed on an issue-date http://frabsaesirs..stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics • May 1998 1.36 STOCK MARKET Selected Statistics 1997 1998 Indicator 1995 1996 1997 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 291.18 357.98 456.99 457.07 480.94 482.39 489.74 499.25 492.14 504.66 504.13 532.15 2 Industrial 367.40 453.57 574.97 578.57 610.42 609.54 617.94 625.22 615.65 623.57 624.61 660.91 270.14 327.30 415.08 410.93 433.75 439.71 451.63 466.04 453.56 461.04 458.49 485.73 4 Utility 110.64 126.36 143.87 140.24 144.25 143.82 145.96 157.83 153.53 165.74 146.25 170.96 238.48 303.94 424.84 419.12 441.59 446.93 459.86 476.70 465.35 490.30 479.81 508.97 6 Standard & Poor's Corporation (1941-43 = 10)J 541.72 670.49 873.43 876.29 925.29 927.74 937.02 951.16 938.92 962.37 963.36 1,023.74 7 American Stock Exchange (Aug. 31. 1973 = 50)3 498.13 570.86 628.34 619.94 635.28 645.59 678.05 702.43 674.37 667.89 665.72 685.73 Volume of trading (thousands of shares) 8 New York Slock Exchange 345,729 409,740 523,254 516,241 543,006 506,205 541,204 606,513 531,449 541,134 632,895 610,958 9 American Stock Exchange 20,387 22.567 n.a. 23,277 25,562 24,095 28,252 32,873 27,741 27.624 28.199 26,808 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers4 76,680 97,400 126,090 113,440 116,190 119,810 126,050 128,190 127,330 126,090 127,790 135,590 Free credit balances at brokers5 16,250 22,540 31,410 23,860 24,290 23,375 23,630 26,950 26,735 31,410 29,480 27,450 34,340 40,430 52,160 41,840 43,985 42,960 43,770 47,465 45,470 52.160 48.620 48,640 Margin requirements (percent of market value and effeclve 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 50 60 50 50 50 50 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 Type of account or operation 1995 Sept. US. budget' 1 Receipts, total 1,351,830 1,453,062 1,579,292 174,772 114,898 103,481 167,998 162,610 97,952 2 On-budget 1.000,751 1,085,570 1,187,302 138,849 87.083 73,690 135,340 123,367 65,051 3 Off-budget 351,079 367,492 391,990 35,923 27,815 29,791 32,658 39,243 32,901 4 Outlays, total 1,515,729 1.560,512 1,601,235 124,831 150,866 120,830 154,359 137,231 139,701 5 On-budget 1.227,065 1,259,608 1,290.609 91,406 123,863 91,327 146.647 108,843 109,393 6 Off-budget 288,664 300,904 310,626 33,429 26,999 29,504 7,712 28,388 30.309 7 Surplus or deficit (-), total . -163,899 -107,450 -21,943 49.937 -35,964 -17,349 13.639 25,379 -41,750 8 On-budget -226,314 -174,038 -103.307 47,443 -36,780 -17,637 -11,307 14,524 -44,342 9 Off-budget 62,415 66,588 81,364 2.494 816 287 24.946 10,855 2,592 Source of financing (total) 10 Borrowing from the public 171,288 129,712 38,171 -18.318 6,315 29,108 -1,771 -24,807 30,565 11 Operating cash (decrease, or increase (-)).. . -2,007 -6,276 604 -31,545 23,360 483 -12,107 -8,422 24,027 12 Other2 -5,382 -15,986 -16,832 -74 6,289 -12,242 239 7,850 -12,842 MEMO 13 Treasury operating balance (level, end of period) 37,949 44,225 43,621 43,621 20,261 19,778 31,885 40,307 16,280 14 Federal Reserve Banks 8,620 7,700 7,692 7,692 4,616 5,127 5,444 5,552 5,037 15 Tax and loan accounts 29.329 36,525 35,930 35,930 15,645 14,651 26.441 34,756 11,243 1. Since 1990, off-budget items have been the social security trust funds (federal old-age net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loansurvivors insurance and federal disability insurance) and the U.S. Postal Service. valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCE. Monthly totals; U.S. Department of the Treasury. Monthly Treasury Statement of International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous and Budget, Budget of the U.S. Government. liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics • May 1998 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year Source or type 1996 RECEIPTS 1 All sources 1,453,062 1,579,292 767,099 707,551 845,527 773,810 167,998 162,610 97,952 2 Individual income taxes, net 656,417 737,466 347,285 323,884 400,435 354,072 69,060 95,798 42,209 3 Withheld 533,080 580,207 •264,177 279,988 292,252 306,865 64,604 56,628 54,225 4 Nonwithheld 212,168 250,753 162,782 53,491 191,050 58,069 5,240 40,039 2,914 5 Refunds 88,897 93,560 79,735 9.604 82,926 10,869 784 870 14,941 Corporation income taxes 6 Gross receipts 189,055 204,493 96.480 95,364 106,451 104,659 44,973 6,888 3,598 7 Refunds 17,231 22,198 9,704 10,053 9,635 10,135 936 2,481 2,769 8 Social insurance taxes and contributions, net 509,414 539,371 277,767 240,326 288,251 260,795 45,149 51,765 44,749 9 Employment taxes and contributions" 476,361 506,751 257,446 227,777 268,357 247,794 44,297 50,395 41,825 10 Unemployment insurance 28,584 28.202 18,068 10,302 17,709 10,724 425 1,036 2,589 11 Other net receipts3 4,469 4,418 2,254 2,245 2,184 2,280 427 333 335 12 Excise taxes 54,014 56,924 25,682 27,016 28,084 31,132 5,167 4,679 4,791 13 Customs deposits 18,670 17,928 8,731 9,294 8,619 9.679 1,416 1,387 1,454 14 Estate and gift taxes 17,189 19,845 8,775 8,835 10,477 10,262 1,498 1,808 1,500 15 Miscellaneous receipts4 . . 25,534 25.465 12,087 12,888 12,866 13,347 1,671 2,768 2,420 OUTLAYS 16 All types 1,560,512 1,601,235 785^68 800,176 797,418 824360 154359 137,231 139,701 17 National defense 265,748 270,473 132,599 139,402r 132,725r 140,873r 27,228r 20.927r 20.492 18 International affairs 13,496 15,228 8,076 8,532r 5,740r 9,420r 4,5O3r 740r 364 19 General science, space, and technology 16,709 17,174 8,897 8,260 8,939 10,040 1,899 1,498 1,404 20 Energy 2,844 1,483 1,356 695r 803r 41lr -267 291 -43 21 Natural resources and environment 21,614 21,369 10,254 10,307r 9,627r ll.l()6r 2,386r l,636r 1,746 22 Agriculture 9,159 9.032 73 11.037r 1.465r IO,59Or 2,875r 1,967r 329 23 Commerce and housing credit -10,472 -14,624 -6,885 -5,899 -7,575 -3,526 -1,144 -403 -1,065 24 Transportation 39,565 40,767 18,290 21,5l2r 16,847' 20,414' 3,400r 2,574r 2,504 25 Community and regional development 10,685 11,005 5,245 5,498 5,674r 5,749r 843 783 669 26 Education, training, employment, and social services 52,001 53,008 25,979 27,524r 25,O8Or 26,85 lr 4,681r 5,042r 6.535 27 Health 119,378 123,843 59,989 61,595 61.808 63,552 11,159 11,162 9.735 28 Social security and Medicare 523,901 555,273 264.647 269.412 278.862r 283,109 50,500 46,929 46.SI0 29 Income security 225,989 230,886 121,186 107,63 lr 124,034r 106,353r 19.962r 20,133' 28,194 30 Veterans benefits and services 36,985 39,313 18,140 21,109 17,696 22,077 4,931 3,331 3,386 31 Administration of justice 17,548 20.197 9,015 9,583 10,643 l(),212r 2,051 1,718 2,026 32 General government 11,892 12,768 4,641 6,546 6,623r 7,302r 2,504 836 108 33 Net interest5 241,090 244,013 120,576 122,573 I22,654r 122,620 20,480 20,570 19.901 34 Undistributed offsetting receipts6 -37,620 -49,973 -16,716 -25,142 -24,234 -22,795 -3,629 -2.504 -3.394 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 ]999\ monthly and half-year totals: U.S. Department of the Treadisability fund. sury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance All 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1995 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 5,017 5,153 5,197 5,260 5357 5,415 5,410 5,446 5,536 2 Public debt securities 4,989 5,118 5,161 5,225 5,323 5,381 5,376 5,413 5,502 3 Held by public 3,684 3,764 3,739 3,778 3,826 3,874 3,805 3,815 3,847 4 Held by agencies 1,305 1,354 1,422 1,447 1,497 1,507 1,572 1,599 1,656 5 Agency securities 28 36 36 35 34 34 34 33 34 6 Held by public 28 28 27 27 26 26 26 27 7 Held by agencies 0 7 7 7 8 Debt subject to statutory limit 4,900 5,030 5,073 5,137 5,237 5,294 5,290 5^28 5,417 9 Public debt securities 4,900 5,030 5,073 5,137 5,237 5,294 5,290 5,328 5,416 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 4,900 5,500 5,500 5,500 5,500 5,500 5,950 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 US. TREASURY Types and Ownership Billions of dollars, end of period Type and holder 1994 1995 1996 Ql Q2 Q3 Q4 1 Total gross public debt 4,800.2 4,988.7 5323.2 5,502.4 5380.9 5376.2 5,413.2 5,502.4 By type 2 Interest-bearing 4,769.2 4,964.4 5,317.2 5,494.9 5,375.1 5,370.5 5,407.5 5,494.9 3 Marketable 3,126.0 3,307.2 3,459.7 3,456.8 3,504.4 3,433.1 3,439.6 3,456.8 4 Bills 733.8 760.7 777.4 715.4 785.6 704.1 701.9 715.4 5 Notes 1,867.0 2,010.3 2,112.3 2,106.1 2,131.0 2,132.6 2,122.2 2,106.1 6 Bonds 510.3 521.2 555.0 587.3 565.4 565.4 576.2 587.3 7 Inflation-indexed notes1 n.a. n.a. n.a. 33.0 7.4 15.9 24.4 33.0 8 Nonmarketable2 1,643.1 1,657.2 1,857.5 2,038.1 1,870.8 1,937.4 1,967.9 2,038.1 9 State and local government series 132.6 104.5 101.3 124.1 104.8 107.9 111.9 124.1 10 Foreign issues* 42.5 40.8 37.4 36.2 36.8 35.4 34.9 36.2 11 Government 42.5 40.8 47.4 36.2 36.8 35.4 34.9 36.2 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 177.8 181.9 182.4 181.2 182.6 182.7 182.7 181.2 14 Government account series 1,259.8 1,299.6 1,505.9 1,666.7 1,516.6 1,581.5 1,608.5 1,666.7 15 Non-interest-bearing 31.0 24.3 6.0 7.5 5.8 5.7 5.6 7.5 By holder5 16 U.S. Treasury and other federal agencies and trust funds 1,257.1 1,304.5 1,497.2 1,655.7 1,506.8 1,571.6 1,598.5 1,655.7 17 Federal Reserve Banks 374.1 391.0 410.9 451.9 405.6 426.4 436.5 451.9 18 Private investors 3,168.0 3,294.9 3,411.2 3,393.4 3,451.7 3,361.7 3,388.9 3,393.4 19 Commercial banks 290.4 278.7 261.7 260.01" 282.3 265.7 261.6r 260.0 20 Money market funds 67.6 71.5 91.6r 87.8r 84.0 77.4 75.8r 87.8 21 Insurance companies 240.1 241.5 214.1 214.0r 214.3 216.0* 214.4r 214.0 22 Other companies 224.5 228.8 258.5 265.0 262.5 261.0 266.5 265.0 23 State and local treasuries67 540.2 421.5 363.7r 334.0r 348.0 345.3r 336.4r 334.0 Individuals 24 Savings bonds 180.5 185.0 187.0 186.5 186.5 186.3 186.2 186.5 25 Other securities 150.7 162.7 169.6 168.4 168.9 169.1 168.6 168.4 26 Foreign and international8 688.6 862.2 l,131.8r l,278.2r 1,192.0" l,221.7r l,266.8r 1,278.2 27 Other miscellaneous investors ' 785.5 843.0r 733.2r 599.4r 713.2r 619.2r 612.6r 599.4 1. The U.S. Treasury first issued inflation-indexed notes during the first quarter of 1997. 8. Consists of investments of foreign balances and international accounts in the United 2. Includes (not shown separately) securities issued to the Rural Electrification Administra- States. tion, depository bonds, retirement plan bonds, and individual retirement bonds. 9. Includes savings and loan associations, nonprofit institutions, credit unions, mutual 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur- savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury rency held by foreigners. deposit accounts, and federally sponsored agencies. 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual Public Debt of the United States; data by holder, Treasury Bulletin. holdings; data for other groups are Treasury estimates. 6. Includes state and local pension funds. 7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable federal securities was removed from "Other miscellaneous investors" and added to "State and local treasuries." The data shown here have been revised accordingly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics • May 1998 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions' Millions of dollars, daily averages 1997. 1997 1998 week 1998, week ending ending Item Nov. Dec. Jan. Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 43,506 38,244 39,909 29,390 42,416 40,994 37,381 38,845 42.516 38,754 40,062 38,841 Coupon securities, by maturity 2 Five years or less 118,847 95,901 137,268 59,127 128,295 153.884 124,469 142,424 119.673 115,005 96,774 144,026 3 More than five years 68,164 54,749 72,617 30,326 79,357 92.992 64,302 73,818 84,007 85,646 81,756 80,096 4 Federal agency 48,097 43,015 46,606 38.475 46,582 48,175 50,166 41,499 45,650 38,861 44,391 47,470 63 657 45 285 73 758 17 590 61 292 94 472 68 029 71,237 64,141 76,389 60,203 59,363 By type of counterparty With interdealer broker 6 U.S. Treasury 132,153 107,366 94,063 59,126 137,234 161,913 130,689 149,055 141,253 137,698 121,505 150,835 7 Federal agency 1,250 1,143 1,750 567 1,572 2.521 1,398 1,510 1,710 2,125 1,653 2.205 8 Mortgage-backed 19,089 13,748 16,441 6,110 19,908 28,462 26,718 24,645 21,494 24,869 20,000 19,274 9 U.S. Treasury 98,365 81,528 73,148 59,717 112,834 125,957 95,462 106,587 105,241 102,181 97,340 112,916 46,847 41,873 44,858 37,908 45,010 45,654 48,768 39,989 43,940 36,736 42,738 45,265 11 Mortgage-backed 44,569 31,538 33,042 11,480 41,384 66.010 41,311 46,592 42,647 51,520 40,203 40,089 FUTURES TRANSACTIONS3 By type of deliverable security 12 U.S. Treasury bills 262 404 165 352 226 367 138 120 258 401 77 225 Coupon securities, by maturity 13 Five years or less 2,041' 2,534' 2,107 1,465 4,304 3,201 2,229 2,318 1,946 1,400 1,662 4,049 14 More than five years 16,939' 13,394' 11,345 5,783 17,724 20,089 13,888 17,318 15,655 13,897 15,610 18,522 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 (I 0 0 0 0 0 0 0 0 Coupon securities, by maturity 1,674 1,831 2,173 640 1,807 4,799 3,061 2,099 2.856 2,588 1,878 2,885 6.353' 4,487' 3,742 2,470 7.903 5.460 3,983 6,588 5,091 5,288 5,160 8,494 20 Federal agency 0 0 0 0 0 0 0 0 0 0 0 n.a. 21 Mortgage-backed 549 632 428 90 515 737 706 600 622 330 739 881 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 thai 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 deliveiy is scheduled in thirty business series as of the week ending January 28, 1998. days or less. Stripped securities are reported at maiicet value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing' Millions of dollars 1997, week 1998, week ending ending Dec. 31 Jan. 7 Feb. 11 Positions NET OUTRIGHT POSITIONS3 fiv type of security 1 U.S. Treasury bills 18,776 18.205 13,067 8,400 19.343 14,900 12,871 5,154 7.900 4,244 14,147 Coupon securities, by maturity 2 Five years or less -17,008 -21,352 -12,393 -19.785 -14,528 -13,393 -14,543 -7,108 -9.565 -6,257 -6,557 .1 More than tive years -18,763 -16,759 -17,753 -16,484 -15.515 -15,037 -19,897 -20,561 -15,096 -21.399 -20,445 4 Federal agency 28.049 26,328 36,230 17,499 29.434 38,266 39,389 37,830 37,380 35.994 33,310 5 Mortgage-backed 37.409 44,132 46,945 42,503 46.366 48,880 49,783 42,751 47,110 57,244 52,185 NET FUTURES POSITIONS4 fiv type of deliverable security 6 U.S. Treasury bills .' -3.141 -2,635 -3,541 -3,203 -3,182 -3,367 -3,448 -4,165 -4,027 -4,904 -4,891 Coupon securities, by maturity 7 Five years or less 2,358 3,580 -1,715 1,768 -4,216 -1,979 -253 -410 -2,909 -2,667 -1,554 8 More than five years -20,650 -27,083 -26,187 -29.043' -29,805 -27.645 -27,138 -20,159 -21,845 -20.163 -22,654 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 Bv type of deliverable security 11 U.S. Treasury bills 0 0 0 0 0 0 Coupon securities, by maturity 12 Five years or less 2,234 -757 -586 -1,551 -652 -1,117 78 -653 -1,253 -1,027 -1.246 13 More than five years 3,838 3,224 3,003 2,831r 3,163 3,515 3.200 2,132 3,202 2,169 3,356 14 Federal agency n.a. n.a. n.a. n.a. n.a. n.a. n.a. 15 Mortgage-backed 869 782 1,001 1,222 841 203 860 -50 Financing" Reverse repurchase agreements Overnight and continuing 328,976 304,385 324,675 306,496 322.402 337,041 324,835 314,422 350,352 329.281 374,844 Term 688.464 654,600 746,498 571,315 670,529 738,725 770,417 806.323 786,654 848.506 626,731 Securities borrowed Overnight and continuing 201,701 200,401 214,756 209,303 217,021 219,985 212,852 209,166 212,450 213,321 218,106 Term 94,469 92,672 85,073 87,774 89,083 89,364 89.298 84,324 82,349 76,158 Securities received as pledge Overnight and continuing . . . 6,306 5,939 5,127 5,827 5,511 5,396 5,165 4,435 4,502 4,445 4,357 Term 99 286 n.a. n.a. 137 n.a. n.a. 166 165 261 267 Repurchase agreements Overnight and continuing .. . 679,506 648,786 715,197 600,427 700,774 733,257 720,141 706,615 733,169 728,930 768,739 Term 629,143 586,741 656,432 528,672 579.576 650,443 677,327 718,382 701,852 744.488 550,147 Securities loaned Overnight and continuing 7,759 7,927 8,157 7.435 8.336 8,594 7,905 7,794 8,446 8.573 8,593 Term 3,828 4,591 4,645 6.244 4,745 4,871 4,493 4,471 4.430 4,113 3,481 Securities pledged Overnight and continuing 50.941 53,643 52,182 65,507 54.835 51,136 51,851 50,907 51,715 54.489 59,232 Term 2.741 3,566 5.019 4,956 4.694 4,682 4,642 6,057 5,235 4.703 1,087 Collateralized loans Overnight and continuing n.a. n.a. n.a. n.a. n.a. Term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Total 14,645 13.891 14,467 10,563 18,077 15,341 12,957 11,494 11,896 10.541 7,304 MEMO: Matched book6 Securities in Overnight and continuing . 300,635 284,089 n.a. 287,031 306,066 324,775 313,439 Term 662.654 623,240 n.a. 530,605 643,071 697,823 717,775 Securities out Overnight and continuing , 386,203 374,312 n.a. 357,812 409,321 421,397 413,707 n.a. Term 544,801 495,105 n.a. 436,403 506,290 557,999 578,296 n.a. 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 collateraliza delivered 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 January 28, 1998. 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 Financial Statistics • May 1998 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period Agency Sept. 1 Federal and federally sponsored agencies 738,928 844,611 925,823 1,022,609 980,501 983,599 1,003,177 1,014,907 1,022,609 2 Federal agencies 39.186 37,347 29.380 27.792 27,484 27,392 27,356 27.500 27,792 3 Defense Department' 6 6 6 6 6 6 6 6 6 4 Export-Import Bank23 3,455 2,050 1,447 552 1,326 1,326 1,295 1.295 552 5 Federal Housing Administration 116 97 84 102 46 68 93 102 6 Government National Mortgage Association certificates of participation" n.a. n.a. n.a. n.a. n.a. n.a. rl Postal Service6 8,073 5,765 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 27,536 29.429 27,853 27,786 27,478 27,386 27,350 27,494 27,786 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies 699,742 807,264 896,443 994,817 953,017 956,207 975,821 987,407 994,817 11 Federal Home Loan Banks 205,817 243,194 263,404 313,919 292,174 295,212 302,310 308,745 313,919 12 Federal Home Loan Mortgage Corporation 93,279 119,961 156,980 169,200 165,690 160,050 172,433 174,900 169,200 13 Federal National Mortgage Association 257,230 299,174 331,270 369,774 348,115 358,003 356,149 361,602 369,774 14 Farm Credit Banks8 53,175 57,379 60,053 63,517 61,091 61,612 61,093 61,093 63,517 15 Student Loan Marketing Association 50,335 47,529 44.763 37,717 45,211 40,531 43,000 40,321 37,717 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 Corporation " 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt11 103,817 78,681 58,172 49,090 48,625 49,944 48,698 32,523 49,090 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 3,449 2,044 1,431 1,326 1,326 1,295 1,295 552 21 Postal Service* 8,073 5,765 n.a. n.a. n.a. 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority 3,200 3,200 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. Other lending 25 Farmers Home Administration 33,719 21,015 18,325 13,530 14,300 13,895 13,530 13,530 13,530 26 Rural Electrification Administration 17,392 17,144 16,702 14,898 15,568 14,917 14,819 14,819 14,898 27 Other 37,984 29.513 21.714 20,110 17,431 19,716 19,054 2,879 20,110 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. I, 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. Otf-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 3 7. 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 Type of issue or issuer, or use July Aug. Sept. Oct. 1 All issues, new and refunding1 145,657 171,222 214,693 17,786 17,401 21,499 21,898 20,207 21,342 16,770 21,306 By type of issue 2 General obligation 56,980 60,409 69,934 7,679 5,062 3,590 7,837 5,713 8,005 5,608 9,893 3 Revenue 88,677 110,813 134,989 9,061 11,518 17,909 14,061 14,494 13,337 11,162 11,413 By type of issuer 4 State 14,665 13,651 18,237 1,984 1,352 1,278 2,392 509 1.702 1,268 2.420 5 Special district or statutory authority2 93,500 113,228 134,919 10,715 10,480 14,890 13,195 13,586 15,600 11.794 14.228 6 Municipality, county, or township . .. 37,492 44,343 70,558 4,041 4,803 16,592 13,920 5,920 4,098 3,708 4,658 7 Issues for new capital 102,390 112,298 127,928 9,279 8,915 10,158 12,981 12,979 13,487 9,696r 12,538 By use >}f proceeds 8 Education 23,964 26,851 31,860 2,701 2,781 1,943 2,647 2.973 2,981 2,338 3,525 9 Transportation 11,890 12,324 13,951 666 1,276 2,654 1,215 1,420 1,144 1,521 1.760 10 Utilities and conservation 9,618 9,791 12,219 1,182 576 907 1,402 1,217 683 598 687 11 Social welfare 19,566 24,583 27,794 1,789 1,481 2,305 2,341 4,090 2,940 1.540 2,903 12 Industrial aid 6,581 6,287 6,667 334 799 441 729 574 897 448 581 13 Other purposes 30,771 32,462 35,095 2,607 2,024 1,908 4,642 2,705 4,842 3,251 3,082 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 US. Corporations Millions of dollars Type of issue, offering, or issuer July Aug. Sept. Oct. Dec. 1 All issues1 673,779 n.a. 83,890 6735 52,117 85,001r 71,219r 58,350 63,992r 59,126 2 Bonds2 573,206 n.a. 72,638 57,886 46476 75,166 58,166' 46,543 55,973' 51,710 By type of offering 3 Public, domestic 408,804 465,489' 537,778 60,979 46,415 40,840 60,226 47,037 42,969 54,443' 41,062 4 Private placement, domestic 87,492 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Sold abroad 76,910 83,433' 103,118' 11,660 11,471 5,736 14,941 11,199 3,574 1,530 10,648 By industry group 6 Manufacturing 61,070 49,476' 47,064 3,748 8,480 5,087 3,534 4,668 2,152 2,976' 9,041 7 Commercial and miscellaneous .. 50,689 40.544' 42,480 2,771 4,466 3,196 4,330 7,982 1,166 1,978' 4,352 8 Transportation 8,430 5,722' 11,352 424 544 406 296 1,322 299 448 2,233 9 Public utility 13,751 9,498' 16.660 1,377 3,674 1,407 1,357 1,664 1,590 1,372 1,228 10 Communication 22,999 14,525' 12,055 576 1,304 278 1,829 342 1,586 923 2,160 11 Real estate and financial 416,269 429,157' 511.285 63,743 39,419 36,202 63,820 42,189' 39,750 48,276' 32,696 12 Stocks2 100,573 n.a. 11,252 9,419 5,541 9,835' 13,053 11,807 8,019' 7,416 By type of offering 13 Public preferred 10,917 33,208 29,814' 3,846 678 645 1,878' 1,824 1,060 3,578' 3,607 14 Common 57,556 83,052 82,392' 7,406 8.741 4,895 7,957' 11,229 10,747 4,441' 3,809 15 Private placement' 32,100 By industry group 16 Manufacturing 21,545 1,627 1,056 836 1,294 17 Commercial and miscellaneous . . 27,844 2,938 2,804 1,673 3,714 18 Transportation 804 272 563 139 472 19 Public utility 1,936 1,046 483 48 405 20 Communication 1,077 374 120 52 235 21 Real estate and financial 47,367 5,384 3,875 2,371 3.885' 6,583 5,449 5,257' 5.675 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data cover only public offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data are not available. exclude secondary offerings, employee stock plans, investment companies other than closed- SOURCE. Beginning July 1993, Securities Data Company and the Board of Governors of end, intracorporate transactions, equities sold abroad, and Yankee bonds. Stock data include the Federal Reserve System. ownership securities issued by limited partnerships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics • May 1998 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1997 1998 Hem 1995 1996 June July Aug. Sept. Oct. Nov. Dec/ Jan. 1 Sales of own shares2 871,415 1,149,918 112318 125,710 114,358 116,021 126,824 110,231 150,133 147,994 2 Redemptions of own shares 699,497 853,460 86,759 90,095 84,366 86,449 98,109 76,115 113.359 109,395 171,918 296,458 25,559 35,615 29,992 29,572 28,715 34,117 36.774 38,598 2,06737 2,637,398 3,067,565 3,279,535 3,199434 3386347 3300,248 3375,197 3,430,795 3,479,784 5 Cash5 142,572 139,396 180,552 182,122 180.152 180,159 181,314 188,192 176,231 186,301 6 Other 1,924,765 2,498,002 2,887,013 3,097,413 3,019.382 3,206,388 3,118,934 3,187,005 3,254,564 3,293,483 1. Data on sales and redemptions exclude money market mutual funds but include 4. Market value at end of penod, less curreni 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 undenvritings 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 1996 1997 Account 1995 1996 1997 Ql Q2 Q3 Q4 Ql Q2 Q3 04 1 Profits with inventory valuation and capital consumption adjustment 650.0 735.9 805.0 717.7 738.5 739.6 747.8 779.6 795.1 827.3 818 1 622.6 676.6 729.8 664.9 682.2 679.1 680.0 708.4 719.8 753.4 737.3 2132 229 0 249 4 226 2 232 2 231 6 226.0 241.2 244 5 258.2 253.6 409.4 447.6 480.3 438.7 450.0 447.5 454.0 467.2 475.3 495.2 483.7 264 4 304 8 336 1 300 7 303 7 305 7 309 1 326 8 333 0 339.1 345.6 145.0 142.8 144.2 138.0 146.4 141.8 144.9 140.3 142.3 156.1 138.1 -24 3 -2 5 5 5' -5 1 -5 4 -2 7 3.3 35 5.9 3.6 9.2' 51.6 61.8 69.7 57.9 61.6 63.2 64.4 67.7 69.4 70.3 71.6' SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities' Billions of dollars, end of period; no! seasonally adjusted 1996 1997 Account 1995 1996 1997r Q2 Q3 Q4 Ql Q2 Q3 Q4 ASSETS 1 Accounts receivable, gross2 607.0 637.1 663.5 626.7 628.1 637.1 648.0 651.6 660.5 663.5 233.0 244.9 256.8 240.6 244.4 244.9 249.4 255.1 254.5 256.8 301.6 309.5 318.8 305.7 301.4 309.5 315.2 311.7 319.5 318.8 4 Real estate 72.4 82.7 87.9 80.4 82.2 82.7 83.4 84.8 86.4 87.9 5 LESS: Reserves for unearned income 60.7 55.6 52.7 57.2 54.8 55.6 51.3 57.2 54.6 52.7 6 Reserves for losses 12.8 13.1 13.0 12.7 12.9 13.1 12.8 13.3 12.7 13.0 533 5 568.3 597.8 556.7 560.5 568.3 583.9 581.2 593.1 597.8 8 All other 250.9 290.0 312.4 258.7 268.7 290.0 289.6 306.8 289.1 312.4 9 Total assets 784.4 858.3 910.2 815.4 829.2 858.3 873.4 887.9 882.3 910.2 LIABILITIES AND CAPITAL 15.3 19.7 24.1 17.7 18.3 19.7 18.4 18.8 20.4 24.1 11 Commercial paper 168.6 177.6 201.5 169.6 173.1 177.6 185.3 193.7 189.6' 201.5 Debt 12 Owed to parent 51.1 60.3 64.7 56.3 57.9 60.3 61.0 60.0 61.6' 64.7 300.0 332.5 328.9 319.0 322.3 332.5 324.6 345.3 322.8' 328.9 14 All other liabilities 163.6 174.7 189.6 163.2 164.8 174.7 189.2 171.4 190.1' 189.6 15 Capital, surplus, and undivided profits 85.9 93.5 101.3 89 7 92.8 93.5 94.9 98.7 97.9' 101.3 16 Total liabilities and capital 784.4 858.3 910.1 815.4 829.2 858.3 873.4 887.9 882.3 910.1 1. Includes finance company subsidiaries of bank holding companies but not of retailers 2. Before deduction for unearned income and losses. and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown, as they are not on the books. 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 Receivables' Billions of dollars, amounts outstanding Type of credit 1997' Aug. Sept. Seasonally adjusted 1 Total 682.4 762.4 810.6 799.0' 2 Consumer 281.9 306.6 326.9 322.7 322.6' 324.4' 323.7' 326.9' 325.6 3 Real estate 72.4 111.9 121 I 123.4 120.7 121.5 121.7 121.1' 122.1 4 Business 328.1 343.8 362.5 350.8 355.8' 356.8' 360.3' 362.5' 364.7 Not seasonally adjusted 689.5 769.7 818.3 791.4 795.3' 800.8r 806.9' 818.3r 813.6 6 Consumer 285.8 310.6 330.9 322.4 323.3' 324.2' 325.4' 330.9' 327.0 7 Motor vehicles loans 81.1 86.7 87.0 88.4 88.5 86.8 86.0 87.0 87.4 8 Motor vehicle leases 80.8 92.5 96.8 98.3 96.1 95 9 96 4 96.8 94.6 9 Revolving" 28.5 32.5 38.6 33.5 34.9 34.7' 34.8' 38.6' 37.6 10 Other1 42.6 33.2 34.4 35.2 35.0 35.3 35.5 34.4 35.2 Securitized assets4 11 Motor vehicle loans 34.8 36.8 44.3 38.3 39.7 42.6 42.5 44.3 42.8 12 Motor vehicle leases .... 3.5 8.7 10.8 8.9 10.0 9.9 11.0 10.8 10.7 13 Revolving n.a. 0.0 0.0 0.0 0.0 0.0 0.0 00 0.0 14 Other 14.7 20.1 19.0 19.7 19.0' 18.9' 19.2' 19.0' 18.7 15 Real estate 72.4 111.9 121.1 123.4 120.7 121,5 121,7 121.1' 122.1 16 One-to four-family n.a. 52.1 59.0 59.1 56.6 58.5 59.4 59.0' 59.8 17 Other n.a. 30.5 28.9 30.1 29.8 29.3 29.0 289 29.3 Securitized real estate assets4 18 One-to four-family n.a. 28.9 33.0 33.9 34.0 33.5 33.0 33.0 32.8 19 Other 0.4 0.2 0.3 0.3 0.3 0.2 0.2 0,2 20 Business 331.2 347.2 366.2 345.6 3514' 355.1' 359.8' 366.2' 364,4 21 Motor vehicles 66.5 67.1 63.5 65.2 67.4 61.2 62.0 63.5' 61.8 22 Retail loans 21.8 25.1 25.6 25.4 26.0 26.5 26.3 256 26.1 23 Wholesale loans5 36.6 33.0 27.7 30.4 31.8 25.0 25.8 27 7 25.7 24 Leases 8.0 9.0 10.2 9.4 9.6 9.7 9.8 10.2' 10.1 25 Equipment 8.0 9.0 10.2 194.9 199.0 198.5 198.9 2O4.0 204.6 26 Loans 8.0 9.0 10.2 51.3 51.9 50.3 49.6 51.7 51.2 27 Leases 8.0 9.0 10.2 143.6 147.1 148.2 149.4 152.3 153.4 28 Other business receivables6.. 8.0 9.0 10.2 53.0 53.1 54.7 54.0 51.1 52.0 Securitized assets4 29 Motor vehicles 8.0 9.0 10.2 19.8 19.6 28.4 32.4 33.0 31.5 30 Retail loans 8.0 9.0 10.2 2.3 2.2 2.1 2.5 2.4 2,3 31 Wholesale loans 8.0 9.0 10.2 17.5 17.4 26.3 29.8 30.5 29,2 32 Leases 8.0 9.0 10.2 0.0 0.0 0.0 0.0 0.0 0.0 33 Equipment 8.0 9.0 10.2 10,3 9.6' 9.7' 9.9' 10,7' 10.4 34 Loans 8.0 9.0 10.2 4.1 3.6' 3.8' 4.1' 4.2' 3.9 35 Leases 8.0 9.0 10.2 6.2 6.0 5.8 5.8 6,5 6.5 36 Other business receivables6 8.0 9.0 10.2 2.4 2.6 2.7' 2.6' 4.0' 4.0 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 secuntized 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 earned 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 [he loan originator. Data are shown Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Financial Statistics • May 1998 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1997 1998 Item 1995 1996 1997 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 175.8 182.4 180.1 191.2 190.6 183.4 184.0 190.7 184.1 195.3 2 Amount of loan (thousands of dollars) 134.5 139.2 140.3 148.2 147.0 142.4 143.5 149.8 142.3 148.5 3 Loan-to-price ratio (percent) 78.6 78.2 80.4 79.8 79.3 80.1 80.8 81.0 80.5 78.6 4 Maturity (years) 27.7 27.2 28.2 28.2 28.3 28.1 28.6 28.2 28.5 28.0 5 Fees and charges (percent of loan amount)2 1.21 1.21 1.02 1.06 1.12 0.94 0.95 0.96 0.91 0.99 Yield (percent per year) 6 Contract rate1 7.65 7.56 7.57 7.42 7.43 7.39 7.26 7.25 7.13 7.09 7 Effective rate1-3 7.85 7.77 7.73 7.59 7.61 7.54 7.40 7.40 7.27 7.24 8 Contract rate (HUD series)4 8.05 8.03 7.76 7.67 7.51 7.48 7.38 7.25 7.16 7.22 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 2O3)5 8.18 8.19 7.89 8.02 7.52 7.53 7.51 7.17 7.08 7.06 10 ONMA securities6 7.57 7.48 7.26 7.16 7.10 6.90 6.84 6.74 6.56 6.63 A:tivity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 253,511 287,052 316,678 304.528 307,256 310,421 314,627 316,678 320,062 322,957 12 FHA/VA insured 28,762 30,592 31,925 31,193 31,847 32.080 31,878 31.925 31,621 31,650 13 Conventional 224,749 256,460 284,753 273,335 275,409 278.341 282.749 284,753 288,441 291,307 14 Mortgage transactions purchased (during period) 56,598 68,618 70.465 7,606 6,544 7,619 8.166 6.692 7,647 8,630 Mortgage commitments (during period) 15 Issued7 ... 56,092 65,859 69,965 5.960 7.573 9,190 5.123 6.275 12,199 10,587 16 To sell8 360 130 1,298 219 215 300 139 140 60 0 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period^ 17 Total 107,424 137,755 164,421 155 169 157,165 159,801 160,974 164,421 169,142 175,770 18 FHA/VA insured 267 220 180 190 186 183 180 180 180 180 19 Conventional 107,157 137,535 164,241 154.979 156,979 159,618 160,794 164,241 168,962 175.590 Mortgage transactions (during period) 20 Purchases 98,470 125,103 117,397 9,808 10,362 12,175 11,152 15,975 13.120 13,610 21 Sales 85.877 119,702 114,260 9,187 9,727 11,713 10,832 14,587 12.702 12,481 22 Mortgage commitments contracted (during period)9 118.659 128,995 120,089 9,913 10,877 11,986 12,047 15.805 15,638 17,397 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 Type of holder and properly 1994 Q4 Ql Q2 Q3 Q4p 1 All holders. 4,392,093' 4,606,303' 4,929,430' 4,929,430' 4,986,602' 5,076,193' 5,176,094 5,277,185 By type of property 2 One- to four-family residences .. 3,357,475' 3,533,295' 3.761,711' 3,761,711' 3,806,572' 3,870,145' 3,946,690 4,019,228 3 Multifamily residences 274,625' 287,297' 312.558' 312,558' 316.582' 323,069' 327,991 338,135 4 Nonfarm. nonresidential 677,022' 701,150' 768,027' 768,027' 775,795' 794,301' 811,657 829,476 5 Farm 82,971 84,561 87,134 87,134 87,653 88,678' 89,755 90,346 By type of holder 6 Major financial institutions 1,819,806' 1,894,420' 1,979,114' 1,979,114' 1,993,046' 2,033,655' 2,066,259 2,084,728 7 Commercial banks2 1,012,711' 1,090.189' 1,145,389' 1,145,389' 1,160,136' 1,196,517' 1,227,076 1,244,210 8 One- to four-family 615,861' 669,434' 698,508' 698,508' 708,802' 733,670' 752,011 762,421 9 Multifamily 39,346 43,837 46,675' 46,675' 47,618 49.124' 49,648 51,100 10 Nonfarm, nonresidential 334,953' 353,088' 375,322' 375,322' 378,474' 387,661' 398,619 403,712 11 Farm 22,551 23,830 24,883 24,883 25,242 26,061 26,798 26.977 12 Savings institutions"* 596.191 596,763 628,335 628,335 626,381 629,062' 629,757 629,726 13 One- to four-family 477,626 482,353 513,712 513,712 513,393 516,521' 518,199 518,976 14 Multifamily 64,343 61,987 61,570 61,570 60,645 60,070' 60,335 59,527 Nonfarm, nonresidential 53,933 52,135 52,723 52,723 52,007 52,132' 50,878 50,870 Farm 289 288 331 331 336 338 344 353 Life insurance companies 210,904 207.468 205.390 205,390 206,529 208,077 209,426 210,792 One- to four-family 7,018 7,316 6,772 6,772 6,799 6,842 7,080 7,186 Multifamily 23,902 23,435 23,197 23,197 23,320 23.499 23,615 23,755 Nonfarm, nonresidential 170,421 167,095 165,399 165,399 166,277 167,548 168,374 169,377 Farm 9,563 9,622 10,022 10,022 10,133 10,188 10,358 10,473 315,580 306,774 300,935 300,935 295,203 292,966 291,410 292.522 6 2 2 2 6 7 7 8 One- to four-family 6 2 2 2 6 7 7 8 Multifamily 0 0 0 0 0 0 0 0 Farmers Home Administration4 41,781 41,791 41,596 41.596 41,485 41,400 41,332 41,195 One- to four-family 18,098 17,705 17,303 17,303 17,175 17,239 17,458 17.253 Multifamily 11,319 11,617 11,685 11,685 11,692 11,706 11.713 11,720 Nonfarm. nonresidential 5,670 6,248 6,841 6,841 6,969 7,135 7,246 7,370 Farm 6,694 6,221 5,768 5,768 5,649 5,321 4,916 4,852 Federal Housing and Veterans' Administrations 10,964 9,809 6,244 6,244 4,330 4,200 3,462 3,821 One- to four-family 4,753 5,180 3,524 3,524 2,335 2,299 2,810 3.091 Multifamily 6,211 4,629 2,719 2,719 1,995 1.900 652 730 Resolution Trust Corporation 10,428 1,864 0 0 0 0 0 0 One- to four-family 5,200 691 0 0 0 0 0 0 Multifamily 2,859 647 0 0 0 0 0 0 Nonfarm, nonresidential 2,369 525 0 0 0 0 0 0 Farm 0 0 0 0 0 0 0 0 Federal Deposit Insurance Corporation 7,821 4,303 2,431 2,431 2,217 1,816 1,476 724 One- to four-family 1,049 492 365 365 333 272 221 109 Multifamily 1.595 428 413 413 377 309 251 123 Nonfanm, nonresidential 5.177 3,383 1,653 1,653 1,508 1,235 1,004 492 Farm 0 0 0 0 0 0 0 0 Federal National Mortgage Association 174,312 176,824 174,556 174,556 172,829 170,386 168,458 167.722 One- to four-family 158,766 161,665 160,751 160,751 159,634 157,729 156,363 156,245 Multifamily 15,546 15,159 13,805 13,805 13,195 12.657 12,095 11,477 Federal Land Banks 28,555 28,428 29,602 29,602 29,668 29,963 30,346 30,598 One- to four-family 1,671 1,673 1,742 1,742 1,746 1,763 1,786 1,800 Farm 26,885 26.755 27,860 27.860 27,922 28,200 28,560 28,798 Federal Home Loan Mortgage Corporation 41,712 43,753 46,504 46,504 44,668 45,194 46,329 48,454 One- to four-family 38,882 39,901 41,758 41,758 39,640 40,092 40,953 42,629 Multifamily 2,830 3.852 4,746 4,746 5,028 5,102 5,376 5,825 53 Mortgage pools or trusts 1.732,347' 1,866,763' 2,070,436' 2,070,436' 2,113,770' 2,153,812' 2,210.930 2,282,566 54 Government National Mortgage Association 450,934 472,283 506,340 506,340 513,471 520,938 529,867 536,810 55 O""n e- to fo- ur-fa-m ily- .... 441,198 461,438 494,158 494,158 500,591 507,618 516,217 523,156 5 5 5 6 7 8 Fed M O e n u r e a lt - l i f H l a o m o f m i o ly u e r- L f o am an i ly Mortgage Corporation 4 4 8 9 7 0 9 , , , 8 7 7 5 2 3 1 5 6 5 5 1 1 1 5 2 0 , , , 0 2 8 5 3 4 1 8 5 5 5 5 5 1 4 1 2 . . , 2 5 1 6 1 8 0 3 2 5 5 5 5 1 4 1 2 , , , 2 5 1 6 8 1 0 2 3 5 5 6 6 1 2 0 2 , , , 8 3 8 9 6 8 4 9 0 5 5 6 6 1 7 4 3 , , , 1 4 3 8 4 2 7 5 0 5 5 6 6 1 7 9 3 , , , 9 3 6 2 4 5 0 0 0 5 5 7 7 1 9 6 3 , , , 3 8 6 8 5 4 5 4 6 59 Multifamily 3,126 2,813 2,747 2,747 2,525 2.742 2,580 2,539 60 Federal National Mortgage Association 530,343 582,959 650.780 650,780 663,668 673,931 690,919 709,582 61 One- to four-family 520,763 569,724 633.210 633,210 645,324 654,826 670,677 687,981 62 Multifamily 9,580 13,235 17.570 17,570 18,344 19,105 20,242 21,601 63 Farmers Home Administration 19 11 3 3 3 2 2 2 64 One- to four-family 3 2 0 0 0 0 0 0 65 Multifamily 0 0 0 0 0 0 0 0 66 Nonfarm, nonresidential 9 5 0 0 0 0 0 0 67 Farm 7 4 3 3 3 2 2 2 Private mortgage conduits 260,200' 296,459' 359,053' 359,053' 373,734' 391,753' 420,222 456,787 69 One- to four-family6 208,500' 227,800' 261,900' 261,900' 271,100' 279,450' 299,400 318,000 70 Multifamily 14,925 21,279 33,689 33,689 35,607 38,992 41,973 48,261 71 Nonfarm, nonresidential 36,774 47,380 63,464 63,464 67,027 73,312 78.849 90,526 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 524,360' 538,347' 578,945' 578,945' 584,583' 595,761' 607,495 617,369 74 One- to four-family 370,356' 375,682' 376,493' 376,493' 379,327' 387,372' 396,169 403,526 75 Multifamily 69,306' 73,533' si^o1 81,560' 83.354' 84,543' 85,861 87,823 76 Nonfarm, nonresidential.. 67,715' 71,291' 102,625' 103,533' 105,279' 106,689 107,129 77 Farm 16.983 17,841 102,625' 18,268 18.368 18,567' 18,776 18,891 18,268 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics • May 1998 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1997' 1998 Holder and type of credit 1995 1996 1997' Aug. Sept. Oct. Nov. Dec. Jan. Seasonally adjusted 1 Total 1,094,197 1,179,892 1,234,596 1,222,234 1,224,466 1,234,803 1,229,828 1,234,596 1,237,483 2 Automobile 364.231 392,370 415,337 403,154 406,219 410,431 408,647 415,337 417,707 442.994 499,209 530,811 523,686 526,377 530,748 529,810 530,811 533,530 4 Other 286,972 288,313 288,449 295,394 291,870 293,624 291,372 288,449 286,246 Not seasonally adjusted 5 Total 1,122,828 1,211,590 1,268,055 1,220,589 1,227.314 1,234,298 1,237,378 1,268,055 1,247,529 By major holder 6 Commercial banks 501,963 526,769 515,208 516,176 507,549 507,181 508,276 515,208 501,085 7 Finance companies 152,123 152,391 160,022 157,152 158,428 156.867 156,375 160,022 160,167 8 Credit unions 131,939 144,148 153.667 149.791 150,669 151,486 151,770 153,667 152,190 9 Savings institutions 40,106 44,711 47,172 47,820 48,487 48,049 47,611 47,172 46,733 10 Nonfinancial business1 85,061 77,745 78,927 68,639 68,658 68,547 70,464 78,927 74,579 11 Pools of securitized assets4 211,636 265,826 313,059 281,011 293,523 302,168 302,882 313,059 312,775 By major type of credit 367.069 395,609 418,861 405,740 409,812 414,950 412,870 418,861 415,939 13 Commercial banks 151.437 157,047 155,254 158,516 157,234 157,857 156,232 155,254 153,857 14 Finance companies 81.073 86,690 87.015 88,428 88,545 86,805 86.046 87,015 87,379 15 Pools of securitized assets4 44,635 51,719 64,952 52,427 55,991 60,648 60,379 64,952 63,068 16 Revolving 464,134 522,860 555,869 520,777 524,281 527.479 532,907 555,869 542,063 17 Commercial banks 210,298 228,615 219,826 217,466 209,269 209,544 212,726 219.826 208.500 18 Finance companies 28,460 32,493 38,608 33,543 34,925 34,717 34,789 38,608 37.585 19 Nonfinancial business3 53,525 44,901 44,966 37.578 37.685 37.479 38,865 44,966 41,917 20 Pools of securitized assets4 147,934 188,712 221.465 202,444 212,403 215,674 216,411 221,465 223,432 21 Other 291,625 293,121 293.325 294,072 293,221 291,869 291.601 293,325 289.527 22 Commercial banks 140,228 141,107 140,128 140.194 141,046 139,780 139,318 140,128 138,728 23 Finance companies 42,590 33,208 34,399 35,181 34,958 35,345 35,540 34,399 35,203 24 Nonfinancial business3 31,536 32,844 33,961 31.061 30,973 31,068 31,599 33,961 32,662 25 Pools of securitized assets4 19,067 25,395 26,642 26.140 25,129 25,846 26,092 26,642 26,275 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 or" 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 1998 Item 1995 1996 1997 July Aug. Sept. Oct Nov. Dec. Jan. INTEREST RATES Commercial banks' 1 48-month new car 9 57 9.05 9 02 n.a. 8 99 n.a. n.a. 8.96 n.a. n.a. 2 24-month personal 13.94 13.54 13.90 n.a. 13.84 n.a. n.a. 14.50 n.a. n.a. Credit card plan 3 All accounts. 16 02 15.63 15.77 n.a. 15.78 n.a. n.a. 15.65 n.a. 4 Accounts assessed interest 15.79 15.50 15.55 n.a. 15.79 n.a. n.a. 15.57 n.a. n.a. Auto finance companies 5 New car 11,19 9.84 7.12 6.71 5.93 6.12 7.27 6.85 5.93 6.12 6 Used car 14.48 13.53 13.27 13.51 13.38 13.29 13.22 13.14 13.16 12.77 OTHER TERMS3 Maturity {months) 1 New car 54.1 51.6 54.1 54.6 55.5 55.4 54.4 53.7 53.5 52.8 8 Used car 52.2 51.4 51.0 51.4 51.2 50.8 50.6 50.5 50.5 52.2 Loan-to-value ratio 9 New car 92 91 92 94 93 93 92 91 92 92 10 Used car 99 100 99 99 99 99 101 99 99 98 Amount financed (dollars) 11 New car 16,210 16,987 18,077 18,281 18.329 18,520 18,779 18,923 19.121 18,944 12 Used car 11,590 12,182 12,281 12,307 12,204 12,190 12.287 12,389 12.547 12,391 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter. extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies. statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A37 1.57 FUNDS RAISED IN US. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1996 1997 Transaction category or sector Q2 Q3 Q4 Qi Q2 03 Q4 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors. 589.4 575.2 704.2 719.7 758.8 694.9 686.8 638.7 724.2 612.6 722.3 By sector and instrument 2 Federal government 256.1 155.9 144.4 145.0 23.1 62.7 163.2 126.9 81.2 -97.1 40.9 67.4 3 Treasury securities 248.3 155.7 142.9 146.6 23.2 60.5 166.3 130.2 82.6 -97.3 41.9 65.6 4 Budget agency securities and mortgages 7.8 .2 1.5 -1.6 -.1 2.2 -3.1 -3.3 -1.4 2 -.9 1.7 5 Nonfederal 333.3 419.4 559.7 574.6 735.7 632.2 523.6 511.8 643.0 709.6 681.4 By instrument 6 Commercial paper 10.0 21.4 18.1 -.9 13.7 9.2 -14.2 -24.1 7.2 20.3 14.5 128 7 Municipal securities and loans 74.8 -35.9 -48.2 2.6 70.2 32.8 -64.7 41.6 43.7 95.9 51.8 89.3 8 Corporate bonds 75.2 23.3 73.3 72.5 90.7 71.5 67.8 89.9 79.4 86.1 122.9 74.4 9 Bank loans n.e.c 6.4 75.2 102.0 66.3 107.7 49.8 136.6 31.9 147.5 110.5 24.7 147.9 10 Other loans and advances -18.9 34.0 67.2 33.8 65.9 47.3 63.0 3.9 31.2 20.3 7J.5 138.3 11 Mortgages 125.1 176.5 208.4 311.7 333.8 306.9 253.3 330.0 263.1 316.6 340.9 414.4 12 Home 156.6 179.0 175.8 262.1 257.5 248.5 238.5 249.6 229.9 226.5 261.5 312.2 13 Multifamily residential -6.6 2.0 10.7 17.8 21.0 17.6 12.0 27.6 10.8 21.3 15.1 36.6 14 Commercial -25.9 -6.8 20.2 29.2 52.1 35.9 .7 51.2 20.4 64.6 60.0 63.2 15 Farm 1.0 2.2 1.6 2.6 3.2 4.9 2.2 1.6 2.1 4.1 4.3 2.4 16 Consumer credit 60.7 124.9 138.9 88.8 53.8 114.7 81.9 38.6 70.8 60.0 53.0 31.5 Bv borrowing sector 17 Household 218.7 322.8 363.0 383.0 364.1 406.0 363.5 312.1 357.9 350.4 322.2 425.8 18 Nonfinancia] business 52.3 141.9 245.7 190.3 311.7 204.9 220.4 159.9 244.5 279.1 317.3 405.9 19 Corporate 46.5 134.3 216.7 144.1 244.7 159.9 192.0 92.6 193.6 205.7 250.2 329.3 20 Nonfarm noncorporate 3.2 3.3 26.0 41.5 60.7 37.1 27.9 58.2 46.6 66.8 64.0 65.5 21 Farm 2.6 4.4 2.9 4.8 6.3 7.9 .6 9.2 4.3 6.7 3.1 111 22 State and local government 62.3 -45.3 -49.0 1.3 59.9 21.2 -60.3 39.8 40.6 80.0 41.8 77.0 23 Foreign net borrowing in United States . 69.8 -14.0 71.1 70.5 51.5 36.1 105.7 87.9 26.3 56.4 87.8 35.5 24 Commercial paper -9.6 -26.1 13.5 11.3 3.7 9.6 37.5 4.4 15.5 10.4 -11.6 .7 25 Bonds 82.9 12.2 49.7 49.4 41.3 11.2 60.2 78.5 11.0 34.3 94.6 25.3 26 Bank loans n.e.c .7 1.4 8.5 9.1 8.5 15.1 4.7 7.8 -.7 11.5 7.3 15.7 27 Other loans and advances ~4.2 -1.5 -.5 .8 -2.0 .1 3.4 -2.7 .5 2 -2.5 -6.1 28 Total domestic plus foreign 659.2 561.2 775.2 790.2 810.3 731.0 792.5 726.6 750.5 668.9 810.1 1,011.7 Financial sectors 29 Total net borrowing by financial sectors ... 293.6 464.3 448.4 536.3 614.3 721.7 436.8 644.8 325.9 661.0 536.7 933.8 Bv instrument 30 Federal government-related 165.3 287.5 204.1 231.5 213.4 301.4 222.9 252.8 105.7 286.2 161.0 300.6 31 Government-sponsored enterprise securities 80.6 176.9 105.9 90.4 99.0 126.9 80.0 123.3 -8.9 198.1 46.4 160.4 32 Mortgage pool securities 84.7 115.4 98.2 141.1 114.4 174.5 142 9 129.6 1146 88.1 114.6 140.3 33 Loans from U.S. government .0 -4.8 .0 .0 .0 .0 .0 .0 .0 .0 0 .0 34 Private 128.3 176.8 244.3 304.9 400.9 420.3 213.9 392.0 220.2 374.8 375.6 633.1 35 Open market paper -5.5 40.5 42.7 92.2 166.7 105.4 84.4 162.0 175.9 77.8 168.2 244.6 36 Corporate bonds 122.2 117.6 188.2 156.5 170.8 230.9 80.7 164.0 41.4 215.1 139.3 287.4 37 Bank loans n.e.c -14.4 -13.7 4.2 16.8 13.6 20.6 2.6 20.4 7.0 4.9 16.7 25.7 38 Other loans and advances 22.4 22.6 3.4 27.9 36.0 52.7 33.3 31.2 -20.1 63.0 37.5 63.3 39 Mortgages 3.6 9.8 5.9 11.4 14.0 10.8 12.9 14.3 16.0 14.0 14.0 12.0 By borrowing sector 40 Commercial banking 13.4 20.1 22.5 13.0 46.5 44.5 14.7 26.8 13.7 79.7 32.0 60.7 4L Savings institutions 11.3 12.8 2.6 25.5 19.8 42.1 25.8 23.0 -16.8 31.9 22.3 41.7 42 Credit unions .2 2 -.1 .1 .1 -.2 .3 .3 _ ^ 2 .2 3 43 Life insurance companies .2 3 -.1 I.I .2 .3 -.4 2.0 .i A .2 - 3 44 Government-sponsored enterprises 80.6 172.1 105.9 90.4 99.0 126.9 80.0 123.3 -8.9 198.1 46.4 160.4 45 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.4 174.5 142.9 129.6 114.6 88.1 114.6 140.3 46 Issuers of asset-backed securities (ABSs) 82.8 68.8 132.9 132.0 168.2 162.5 88.0 138.6 62.9 95.0 169.6 345.5 47 Finance companies -1.4 48.7 50.2 45.9 48.7 67.8 30.7 43.8 7.2 123.8 -2.9 66.6 48 Mortgage companies .0 -11.5 .4 12.4 4.8 16.0 1.7 12.1 5.9 5.0 3.6 4.9 49 Real estate investment trusts (REITs) 3.4 13.7 6.0 12.8 23.8 11.5 13.7 17.7 20.2 20.3 26.9 27.9 50 Brokers and dealers 12.0 .5 -5.0 -2.0 8.0 13.2 5.7 4.9 -2.9 34.9 -6.9 7.0 51 Funding corporations 6.3 23.1 34.9 64.1 80.7 62.7 33.7 123.0 129.4 -16.1 130.7 78.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics • May 1998 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued 1996 1997 Transaction category or sector 1993 1994 Q2 Q3 04 Ql Q2 Q3 Q4 All sectors 52 Total net borrowing, all sectors 952.7 1,025.5 1,223.7 1326.5 1,424.6 1,452.7 1,229.3 U71.S 1,076.4 1,329.9 1,346.7 1.945.5 5? Open market paper -5.1 35.7 74.3 102.6 184.1 124.2 107.7 142.3 198.6 108.5 171.1 258.1 54 U.S. government securities 421.4 448.1 348.5 376.5 236.5 364.1 386.1 379.7 186.9 189.1 201.9 368.0 55 Municipal securities 74.8 -35.9 -48.2 2.6 70.2 32.8 -64.7 41.6 437 95.9 51.8 89.3 56 Corporate and foreign bonds 280.3 153.2 311.1 278.4 302.8 313.6 208.7 332.4 131.8 335.5 356.8 387.1 57 Bank loans n.e.c -7.2 62.9 114.7 92.1 129.7 85.5 143.8 60.1 1538 126.8 48.7 189.4 58 Other loans and advances -.8 50.3 70.1 62.5 99.8 100.1 99.7 32.4 11.7 83.6 108.5 195.6 59 Mortgages 128.7 186.2 214.2 323.1 347.8 317.7 266.1 344.4 279.1 330.6 354.9 426.4 60 Consumer credit 60.7 124.9 138.9 88.8 53.8 114.7 81.9 38.6 70.8 60.0 53.0 31.5 Funds raised through mutual funds and corporate equities 61 Total net issues 429.7 125.2 143.9 230.5 217.8 380.4 71.9 156.0 197.7 183.0 313.9 176.6 62 Corporate equities 137.7 24.6 -3.5 -7.0 -41.2 75.9 -100.1 -20.3 -55.7 -57.9 10.2 -61.5 63 Nonfinancial corporations 21.3 -44.9 -58.3 -64.2 -79.9 .4 -127.6 -56.0 -78.8 -90.4 -60.4 -90.0 64 Foreign shares purchased by U.S. residents ... 63.4 48.1 50.4 58.8 38.0 70.1 32.7 42.3 47.0 53.0 62.2 -10.4 65 Financial corporations 53.0 21.4 4.4 -1.6 .7 5.4 -5.1 -6.7 -23.9 -20.6 8.4 38.8 66 Mutual fund shares 292.0 100.6 147.4 237.6 259.0 304.5 171.9 176.3 253.4 240.9 303.7 238.2 1. Data in this table also appear in the Board's Z. 1 (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 A39 1.58 SUMMARY OF FINANCIAL TRANSACTIONS' Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1996 1997 Transaction category or sector 1993 1994 1995 1996 1997 Q2 Q3 Q4 Ql Q2 Q3 Q4 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 952.7 1.025.5 1,223.7 1,326.5 1,424.6 1,452.7 1,229.3 1,371.5 1,076.4 1,329.9 1,346.7 1,945.5 2 Domestic nonfederal nonfinancial sectors 43.0 241.8 -85.7 -17.9 -115.2 311.1 -222.3 -158.5 -205.8 -66.3 -175.8 - 13.0 3 Household 2.4 278.5 -1.8 5.1 101.7 274.9 -81.9 -22.8 -204.2 -30.0 -121.5 -51.0 4 Nonfinancial corporate business 91 17.7 2.4 13.5 5.3 37.4 -9.1 -5.9 58.0 -51.5 20.0 -5.3 -j a 6 State and local governments ~~ 1.1 -55U -81.8 37.0 -19.6 -1.7 -131.7 -130.2 -60^2 14.5 -75.1 42.4 7 Federal government -1 3 8 2 . 4 6 —27.5 _ 2 -7.7 4.9 - i -7.1 -4.1 1 9 5 6 3.0 9.1 8 Rest of the world 1293 1323 273^9 409.3 316.4 268.9 485.3 532.2 3673 3010 402.7 192.5 9 Financial sectors 798 8 678.9 1 035 7 942.9 1^18 5 872.8 973.4 1.001.9 913 0 1,087.5 1,116.8 1,756.8 10 Monetary authority 36.2 3L5 ' 12J 12.3 "383 11.7 11.5 8.4 37 4 ' 47.2 14.3 ' 54.3 11 Commercial banking 142 2 163.4 265.9 187.5 324.3 179.7 196.1 2483 308 1 309.2 209.8 469.9 12 U.S.-chartered banks 149.6 148.1 186.5 119.6 275.0 121.9 119.5 158.9 195.9 301.1 209.5 393.5 13 Foreign banking offices in United States -9.8 11.2 75.4 633 39.6 50.7 71 1 80.5 104.0 1.1 - 6 53.8 14 Bank holding companies .0 .9 -.3 3.9 5.4 5.4 4.8 10.5 2.2 5.1 -50 19.4 15 Banks in U.S.-affiliated areas 24 33 4.2 .7 4.2 1.7 .7 -1.6 6.1 1.8 5.8 3.2 16 Savings institutions -23.3 6.7 -7.6 19.9 -7.7 43.8 49.7 -47.9 -5.3 23.8 -42.1 -7 1 17 Credit unions 21.7 28.1 16.2 25.5 15.7 33.0 21.1 243 18.5 25.7 15.7 2.7 18 Bank personal trusts and estates 9.5 7.1 18.8 3.9 9.2 4.2 7.S 7.2 8.2 8.9 9.4 103 19 Life insurance companies 100.9 66.7 99.2 72.5 121.1 .9 123.2 118.1 94 3 175.0 107.0 108 1 20 Other insurance companies 27 7 24.9 21.5 22.5 233 30.5 14.2 27.7 - 1 27.9 32.4 32.8 21 Private pension funds 49.5 45.5 61.4 46.5 66.9 46 9 41.3 31.0 52.4 58.5 66.2 90.5 22 Stale and local government retirement funds 22.7 223 27.5 45.9 48.3 60.4 45.5 41.9 3.6 39.2 90.6 59.7 23 Money market mutual funds 20.4 30.0 86.5 88.8 84.5 27.0 83.0 813 65.2 19.7 123.6 129 3 24 Mutual funds 159.5 -7.1 52.5 48.9 747 54.3 27.5 253 61.9 91.6 103.6 41 4 25 Closed-end funds 20.0 -3.7 10.5 2.2 .8 12 2.2 2.2 27 13 .1 -.9 26 Government-sponsored enterprises 87.8 117.8 84.7 92.0 95.0 114.7 81.4 137.9 45.1 119.2 55.5 160.1 27 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.4 174.5 142.9 129.6 114.6 88.1 114.6 140.3 28 Asset-backed securities issuers (ABSs) 80.2 61.7 111.1 101.8 129.8 135.7 62.0 89.6 19.3 80.2 107.0 292.7 29 Finance companies -20.9 48.3 49.9 18.4 22.2 36.3 13.2 -6.2 44.9 1.9 65.2 -23.2 30 Mortgage companies 0 -24.0 -3 4 8 2 6.7 -26.8 3.4 4 1 - -$ 10 0 7.2 9 7 31 Real estate investment trusts (REITs) .6 4.7 2.2 3^5 5.0 3.4 3.4 3.9 5.0 5.0 5.0 5.0 32 Brokers and dealers 14.8 -44.2 90 1 -15.7 159 -72.0 35.5 82 7 -145 -117 15.8 74 0 33 Funding corporations - 35.3 -16.2 -24.6 17.2 30.4 12.3 8.6 -76 31 9 -33.1 15.6 107.2 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 952.7 1,025.5 1,223.7 1,326.5 1,424.6 1,452.7 1,229.3 1,371.5 1,076.4 1,329.9 1,346.7 1,945.5 Other financial sources 35 Official foreign exchange 8 -5.8 8.8 -6.3 .7 1 6 -26.6 7 -17 6 .4 2.4 175 36 Special drawing rights certificates .0 .0 2.2 -.5 -.5 .0 -1.8 .0 -2.1 .0 .0 .0 37 Treasury currency .4 .7 .6 .0 .0 .0 2.3 -23 4 2 1.3 -1.9 38 Foreign deposits -18.5 52.9 35.3 82.0 89.0 3.0 119.7 104.5 188.6 18.8 105.4 43.1 39 Net interbank transactions 50.5 89.8 9.9 -51 6 -40.2 -50.8 -97 2 17.6 -88.8 -43 7 -42.7 14.5 40 Checkable deposits and currency 1173 -9.7 -12.7 158 41.1 3.9 105.9 -533 85.3 64.2 -49.2 64.3 41 Small time and savings deposits -70.3 -39.9 96.6 97.2 98.5 -3.2 94.2 90.1 157.9 24.5 46.6 165.1 42 Large time deposits -23.5 19.6 65.6 114 0 120 5 8V1 180.2 135.4 49.9 1763 194.1 61.6 43 Money markel fund shares 20^2 43.3 142.3 145.8 157.6 23.1 145.1 187.5 182.4 58.5 243.6 146.0 44 Security repurchase agreements 71.3 78.2 110.5 40 3 114.0 98 4 -15.9 833 32 8 193.7 115.9 113 6 45 Corporate equities 1377 24^6 -3.5 -7.0 -41.2 75.9 -1O0.1 -203 -55.7 -57.9 10.2 -61.5 46 Mutual fund shares 292.0 100.6 147.4 237.6 259.0 304.5 171.9 176.3 253.4 240.9 303.7 238.2 47 Trade payables 52.0 93.7 105.2 68.1 75.7 116.9 -15.9 97.2 66.8 63.4 131.9 40.6 48 Security credit 6] 4 - 1 26.7 52.4 103.8 -34.8 5.3 125.2 117.1 137.4 79 7 81.2 49 Life insurance reserves 36.0 34.5 44 9 43.6 57.0 31.4 59.2 66.7 39 8 77.5 62.8 480 50 Pension fund reserves 255.6 246.1 233.9 227.2 298.6 1956 221.6 277.0 243.3 337.3 311.8 3020 51 Taxes payable 11.4 2.6 4.6 14.0 20.1 7.6 12.5 16.6 30.4 1.8 29 9 18.1 52 Investment in bank personal trusts .9 17 8 -49.7 12.5 26.4 11.8 19.2 19.8 23.5 26.3 28.9 26.9 53 Noncorporate proprietors' equity 24.6 59.0 39.5 22.6 15.8 19.6 44.5 5.9 22.6 19.7 19.7 1.2 54 Miscellaneous 345.6 250.8 462.9 490.7 544.1 415-1 413 4 656.5 587.8 6JL1J 406 6 548.8 55 Total financial sources 2,318.0 2,084.3 2,694.7 2,925.1 3,364.6 2,755.4 2,566.9 3.355.8 2,994.4 3,302.3 3,349.2 3,812.6 Liabilities not identified as assets ( —) 56 Treasury currency -.2 -.2 -.5 -1.0 -.6 -1.0 1.3 -3.1 -.3 - 5 .8 -2.4 57 Foreign deposits -5.7 43.0 25.7 55.8 68.3 26.6 86.3 37.3 178.0 -10.2 78.1 27.2 58 Net interbank liabilities 4.2 -2.7 -3.1 -3.3 -16.0 -22.5 -4.4 42 26.9 -24.4 -51.6 -15.0 59 Security repurchase agreements 46.4 69.4 36.1 31.9 52.1 100.1 -90.6 132.6 -104.6 178.6 6.2 1283 60 Taxes payable 15.8 16.6 17.8 16 1 20.5 23 2 203 216 12 2 28.3 11.2 30.3 61 Miscellaneous -190.1 -145.6 - 110.6 -12(17 -283.0 -1232 -240.1 19(1 -189.3 -321 4 -281 7 -339.8 Floats not included in assets (-) 52 Federal government checkable deposits -1.5 -4.8 -6.0 .5 -2.7 -6.6 27.1 -21.4 -9.4 16.1 2.1 -19.5 63 Other checkable deposits -1.3 -2.8 -3.8 -4.0 -3.9 -5.0 -4.7 -3.7 -2.6 -4.8 -3.4 -4.8 54 Trade credit -4.3 3 -29.1 -33.9 -33.4 2 -103.5 -42.7 15.2 -73.1 -17.2 -58.6 65 Total identified to sectors as assets 2,454.5 2,111.1 2,768.2 2,»83.« 3,563.4 2,763.6 2,875.4 3,212.0 3,068.4 3,513.7 3,604.6 4,066.9 1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares F. 1 and F.5. For ordering address, see inside from cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics • May 1998 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1997 Transaction category or sector 1995 1996 1997 Q2 Q3 Q4 Ql Q2 Q3 Q4 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 13,013.0 13,717.2 14,436.9 15,194.1 14,065.4 14,241.9 14,436.9 14,602.1 14,727.9 14,913.9 15,194.1 flv sector and instrument 2 Federal government 3,492.3 3,636.7 3,781.8 3,804.9 3.693.8 3.733.1 3,781.8 3,829.8 3,760.6 3,771.2 3,804.9 3 Treasury securities 3,465.6 3,608.5 3,755.1 3,778.3 3,665.5 3,705.7 3,755.1 3,803.5 3,734.3 3,745.1 3,778.3 4 Budget agency securities and mortgages . 26.7 28.2 26.6 26.5 28.2 27.4 26.6 26.3 26.3 26.1 26.5 5 Nonfederal 9,520.7 10,080.4 11,389.2 10,508.8 10,772.3 10,967.3 11,142.7 11,389.2 By instrument Commercial paper 139.2 157.4 156.4 168.6 181.7 173.0 156.4 168.7 179.3 176.6 168.6 Municipal securities and loans 1,341.7 1.293.5 1,296.0 1,366.2 1,297.9 1,281.7 1,296.0 1,305.2 1,326.7 1,338.9 1,366.2 Corporate bonds 1,253.0 1,326.3 1,398.8 1,489.5 1,359.4 1,376.4 1,398.8 1,418.7 1,440.2 1,470.9 1,489.5 Bank loans n,e.c 759.9 861.9 928.2 1,035.8 889.2 919.2 928.2 963.8 996.5 998.5 1,035.8 Other loans and advances 669.6 736.9 770.6 836.5 757.3 769.4 770.6 782.9 786.9 801.3 836.5 Mortgages 4,373.4 4.581.7 4.893.4 5,227.2 4,741.6 4,815.7 4,893.4 4,946.6 5,032.7 5,129.1 5,227.2 Home 3,357.5 3,533.3 3,761.7 4,019.2 3,633.7 3,704.1 3.761.7 3,806.6 3.870.1 3,946.7 4,019.2 Multifamily residential 268.4 279.2 300.7 321.6 290.8 293.8 300.7 303.4 308.7 312.5 321.6 Commercial 664.5 684.7 743.9 796.0 731.0 731.1 743.9 749.0 765.2 780.2 796.0 Farm 83.0 84.6 87.1 90.3 86.2 86.7 87.1 87.7 88.7 89.8 90.3 Consumer credit 983.9 1.122.8 1.211.6 1,265.4 1.144.5 1,173.5 1,211.6 1,186.4 1,205.0 1,227.3 1,265.4 By borrowing sector 17 Household 4,482.5 4,850.7 5,204.6 5,571.5 4,991.3 5,101.0 5,204.6 5.240.0 5,340.5 5,439.4 5,571.5 18 Nonfinancial business 3,921.7 4,162.2 4,381.7 4,689.0 4,309.6 4,352.1 4,381.7 4,454.2 4,531.4 4,598.0 4.689.0 19 Corporate 2,657.7 2,869.2 3.042.4 3.282.8 2,993.7 3.028.4 3,042.4 3,104.9 3,160.4 3,209.7 3,282.8 20 Nonfarm noncorporate 1,121.8 1,147.9 1,189.3 1.250.1 1.167.8 1,174.1 1.189.3 1,200.9 1,217.6 1,233.0 1,250.1 21 Farm 142.2 145.1 149.9 156.2 148.2 149.5 149 9 148.3 153.4 155.4 156.2 22 State and local government 1,116.5 1,067.6 1,068.9 1,128.7 1,070.7 1,055.7 1,068.9 1,078.1 1,095.4 1,105.2 1,128.7 23 Foreign credit market debt held in United States 371.8 442.9 S13.4 558.8 462.6 490.2 513.4 517.8 531.6 548.7 558.8 24 Commercial paper 42.7 56.2 67.5 65.1 54.5 65.8 67.5 69.3 71.3 64.3 65.1 25 Bonds 242 3 291.9 341.3 382.6 306.7 321.7 341.3 344.1 352.7 376.3 382.6 26 Bank loans n.e.c 26.1 34.6 43.7 52.1 40.5 41.7 43.7 43.5 46.4 48.2 52.1 27 Other loans and advances 60.8 60.2 61.0 59.0 60.9 61.0 61.0 60.9 61.2 59.9 59.0 28 Total credit market debt owed by nonftnandal sectors, domestic and foreign 13,384.9 14,160.1 14,950.3 15,752.9 14,528.0 14,732.1 14,950.3 15,119.8 15,259.5 15,462.6 15,752.9 Financial sectors 29 Total credit market debt owed by financial sectors 3,797.3 4,248.4 4,784.7 5,366.0 4^11.9 4,624.1 4,784.7 4,861.4 5,029.4 5,133.7 5,366.0 By instrument 30 Federal government-related 2,172.7 2,376.8 2.608.3 2.821.7 2,489.4 2,545.1 2,608.3 2,634.7 2,706.2 2,746.5 2,821.7 31 Government-sponsored enterprise securitii 700.6 806.5 896.9 995.9 846.1 866.1 896.9 894.7 944.2 955.8 995.9 32 Mortgage pool securities 1,472.1 1,570.3 1.711.4 1,825.8 1,643.3 1,679.0 1,711.4 1,740.0 1,762.1 1,790.7 1,825.8 33 Loans from U.S. government .0 .0 .0 .0 0 .0 .0 .0 .0 .0 .0 34 Private 1.624.6 1,871.5 2,1764 2,544.3 2,022.5 2,079.0 2,176.4 2,226.7 2,323.2 2,387.2 2,544.3 35 Open maifcet paper 441.6 486.9 579.1 745.7 517.3 538.6 579.1 623.0 642.5 684.7 745.7 36 Cotporate bonds 983.9 1.172.0 1,328.5 1.466.3 1,265.2 1,288.8 1,328.5 1.334.4 1,390.7 1,396.0 1,466.3 37 Bank loans n.e.c 48.9 53.1 69.8 83.4 63.9 64.2 69.8 71.3 72.9 76.5 83.4 38 Other loans and advances 131.6 135.0 162.9 198.9 146.8 155.1 162.9 157.9 173.7 183.0 198.9 39 Mortgages 18.7 24.6 36.0 50.0 29.2 32.4 36.0 40.0 43.5 47.0 50.0 By borrowing sector 40 Commercial banks 94.5 102.6 113.6 141.0 104.6 107.7 113.6 115.3 125.7 130.0 141.0 41 Bank holding companies 133.6 148.0 150.0 168.6 148.4 149.1 150.0 151.6 161.1 164.6 168.6 42 Savings institutions 112.4 115.0 140.5 160.3 128.3 134.8 140.5 136.3 144.3 149.8 160.3 43 Credit unions .5 .4 .4 .6 .3 .4 .4 .4 .4 .5 .6 44 Life insurance companies .6 .5 1.6 1.8 1.2 1.1 1.6 1.8 1.8 1.9 1.8 45 Government-sponsored enterprises 700.6 806.5 896.9 995 9 846.1 866.1 896.9 894.7 944.2 955.8 995.9 46 Federally related mortgage pools 1,472.1 1,570.3 1,711.4 1,825.8 1,643.3 1,679.0 1,711.4 1,740.0 1,762.1 1,790.7 1,825.8 47 Issuers of asset-backed securities (ABSs) .. 554.1 687.0 819.1 998.4 756.6 781.2 819.1 829.8 852.5 908.8 998.4 48 Brokere and dealers 34.3 29.3 27.3 35.3 24.6 26.1 27.3 26.6 35.3 33.6 35.3 49 Finance companies 433.7 483.9 529.8 554.5 506.3 513.7 529.8 528.4 557.8 532.7 554.5 50 Mortgage companies 18.7 19.1 31.5 36.4 28.1 28.5 31.5 33.0 34.3 35.2 36.4 51 Real estate investment dusts fRFJTs) 31.1 37.1 49.9 73.7 42.0 45.4 49.9 54.9 60.0 66.7 73.7 52 Funding corporations 211.0 248.6 312.7 373.8 282.0 291.0 312.7 348.6 350.0 363.4 373.8 All sectors 53 Total credit market debt, domestic and foreign.. 17,182.2 18.408.5 19,735.0 21,118.9 19,039.9 19,356.2 19.735.0 19,981.2 20,288.9 20,596.3 21,118.9 54 Open market paper 623.5 700.4 803.0 979.4 753.6 777.4 803.0 861.1 893.1 925.7 979.4 55 U.S. government securities 5.665.0 6,013.6 6,390.0 6,626.5 6,183.1 6,278.2 6,390.0 6,464.5 6,466.8 6,517.7 6,626.5 56 Municipal securities 1,341.7 1,293.5 1.296.0 1,366.2 1,297.9 1,281.7 1,296.0 1,305.2 1,326.7 1,338.9 1,366.2 57 Corporate and foreign bonds 2,479.1 2,790.3 3.068.7 3,338.4 2,931.3 2,986.8 3,068.7 3,097.2 3,183.6 3.243.2 3,338.4 58 Bank loans n.e.c 834.9 949.6 1,041.7 1,171.3 993.7 1,025.0 1,041.7 1,078.6 1,115.7 1,123.1 1.171.3 59 Other loans and advances 862.0 932.1 994.5 1,094.4 965.0 985.4 994.5 1,001.7 1,021.8 1.044.2 1,094.4 60 Mortgages 4,392.1 4,606.3 4.929.4 5.277.2 4,770.8 4,848.1 4,929.4 4,986.6 5,076.2 5,176.1 5,277.2 61 Consumer credit 983.9 1,122.8 1.211.6 1.265.4 1,144.5 1,173.5 1,211.6 1,186.4 1,205.0 1.227.3 1,265.4 1. Data in this table also appear in the Board's Z.I (780) quarterly statistical release, tables L.2 through L.4 For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period Transaction category or sector Q2 Q3 Q4 Ql Q2 Q3 Q4 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 17,182.2 18,408.5 19,735.0 21,118.9 19,039.9 19,356.2 19,735.0 19,981.2 20,288.9 20,596.3 21,118.9 2 Domestic nonfederal nonfinancial sectors . .. . 2,998.6 2.877.8 2,905.0 2,753.7 2,936.2 2,896.5 2,905.0 2.825.6 2.785.6 2,725.9 2,753.7 3 Household 1,941.9 1,904.9 1,964.5 1,826.9 1,934.5 1,941.3 1,964.5 1,911.7 1,873.7 1,829.4 1,826.9 4 Nonfinancial corporate business 289.2 286.8 291.0 296.3 285.7 273.8 291.0 281.8 272.3 277.1 296.3 5 Nonfarm noncorporate business 37.6 37.9 38.3 39.0 38.1 38.2 38.3 38.5 38.6 38.8 39.0 6 State and local governments 729.9 648.1 611.1 591.5 677.8 643.2 611.1 593.6 600.9 580.5 591.5 7 Federal government 204.4 204.2 196.5 201.4 199.2 197.5 196.5 196.9 198.3 199.1 201.4 8 Rest of the world 1,254.8 1,563.1 1,953.6 2,270.0 1,722.2 1,844.8 1,953.6 2,051.1 2,125.3 2,227.3 2,270.0 9 Financial sectors 12,724.3 13,763.4 14,679.9 15,893.8 14,182.3 14,417.4 14,679.9 14,907.6 15,179.7 15,443.9 15.893.8 10 Monetary authority 368.2 380.8 393.1 431.4 386.3 386.2 393.1 397.1 412.4 412.7 431.4 11 Commercial banking 3,254.3 3,520.1 3,707.7 4,031.9 3.590.8 3,643.3 3,707.7 3,775.7 3,856.8 3,912.9 4.031.9 12 U.S.-charlered banks 2,869.6 3,056.1 3,175.8 3,450.8 3,101.3 3,135.3 3,175.8 3,218.1 3,295.2 3.351.9 3,450.8 13 Foreign banking offices in United Stales . 337.1 412.6 475.8 515.4 437.1 454.2 475.8 499.5 501.8 501.0 515.4 14 Bank holding companies 18.4 18.0 22.0 27.4 18.1 19.3 22.0 22.5 23.8 22.5 27.4 15 Banks in US.-afflliated areas 29.2 33.4 34.1 38.3 34.3 34.5 34.1 35.6 36.1 37.5 38.3 16 Savings institutions 920.8 913.3 933.2 925.5 932.7 945 2 933.2 931.9 937.8 927.3 925.5 17 Credit unions 246.8 263.0 288.5 304.2 276.9 282.6 288.5 291.2 299.2 303.6 304.2 18 Bank personal trusts and estates 248.0 229.2 233.1 242.3 229.4 231.3 233.1 235.2 237.4 239.7 242.3 19 Life insurance companies 1,482.6 1.581.8 1,654.3 1,775.4 1,596.7 1,627.0 1,654.3 1,680.2 1,724.1 1,750.4 1,775.4 20 Other insurance companies 446.4 468.7 491.2 514.4 480.7 484.2 491.2 491.2 498.1 506.2 514.4 21 Private pension funds 656.9 718.3 764.8 831.7 746.7 757.1 764.8 777.9 792.5 809.1 831.7 22 State and local government retirement funds . .. 455.8 483.3 529.2 577.5 509.8 517.7 529.2 531.6 542.7 562.0 577.5 23 Money market mutual funds 459.0 545.5 634.3 718.8 594.7 606.6 634.3 659.0 656.5 678.7 718.8 24 Mutual funds 718.8 771.3 820.2 894.8 809.0 818.3 820.2 838.3 860.6 889.2 894.8 25 Closed-end funds 86.0 96.4 98.7 99.5 97.6 98.1 98.7 99.3 99.7 99.7 99.5 26 Government-sponsored enterprises 663.3 748.0 813.6 908.6 758.9 779.3 813.6 824.3 854.8 868.7 908.6 27 Federally related mortgage pools 1,472.1 1,570.3 1,711.4 1,825.8 1,643.3 1,679.0 1,711.4 1,740.0 1,762.1 1,790.7 1,825.8 28 Asset-backed securities issuers (ABSs) 516.8 627.9 729.7 859.5 686.0 704.1 729.7 734.5 753.5 783.1 859.5 29 Finance companies 476.2 526.2 544.5 566.7 539.9 538.3 544.5 552.4 553.1 564.4 566.7 30 Mortgage companies 36.5 33.0 41.2 47.9 39.3 40.2 41.2 41.1 43.6 45.4 47.9 31 Real estate investment trusts (REITs) 13.3 15.5 19.0 24.0 17.2 18.0 19.0 20.3 21.5 22.8 24.0 32 Brokers and dealers 93.3 183.4 167.7 183.6 138.2 147.1 167.7 164.1 161.2 165.1 183.6 33 Funding corporations 109.3 87.3 104.5 130.3 108.1 113.9 104.5 122.5 112.0 112.3 130.3 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 17,182.2 18,408.5 19,735.0 21,118.9 19,039.9 19,356.2 19,735.0 19,981.2 20488.9 20,5963 21,118.9 Other liabilities 35 Official foreign exchange 53.2 63.7 53.7 48.9 61.4 54.3 53.7 46.3 46.7 46.1 48.9 36 Special drawing rights certificates. . 8.0 10.2 9.7 9.2 10.2 9.7 9.7 9.2 9.2 9.2 9.2 37 Treasury currency 17.6 18.2 18.2 18.2 18.2 18.8 18.2 18.3 18.3 18.7 18.2 38 Foreign deposits 324.6 359.2 438.1 527.0 385.2 415.1 438.1 485.2 489.9 516.2 527.0 39 Net interbank liabilities 280.1 290.7 240.8 198.9 250.0 225.8 240.8 210.2 197.1 186.9 198.9 40 Checkable deposits and currency .. 1,242.0 1,229.3 1,245.1 1.286.2 1,212.3 1,220.8 1.245.1 1,220.0 1.265.3 1,234.2 1,286.2 41 Small lime and savings deposits . .. 2,183.2 2.279.7 2.377.0 2,475.5 2,340.2 2,357.9 2.377.0 2,427.1 2,432.3 2,437.0 2.475.5 42 Large time deposits 411.2 476.9 590.9 711.4 511.1 557.2 590.9 606.0 646.7 696.1 711.4 43 Money market fund shares 602.9 745.3 891.1 1,048.7 809.5 838.1 891.1 950.8 952.4 1,005.1 1,048.7 44 Security repurchase agreements. . . . 549.5 660.0 700.3 814.3 692.0 687.6 700.3 713.3 765.1 792.5 814.3 45 Mutual fund shares 1.477.3 1,852.8 2,342.4 3,013.5 2,129.9 2.211.6 2,342.4 2,411.5 2,719.6 2,977.0 3,013.5 46 Security credit 279.0 305.7 358.1 461.9 318.6 317.8 358.1 380.0 414.8 432.2 461.9 47 Life insurance reserves 505.3 550.2 593.8 650.8 562.3 577.1 593.8 603.7 623.1 638.8 650.8 48 Pension fund reserves 4,880.1 5,600.5 6,313.8 7,453.9 5,901.1 6,030.9 6,313.8 6,414.7 6,940.1 7,325.1 7,453.9 49 Trade payables 1,141.5 1,246.7 1,314.8 1,390.5 1,269.7 1,263.0 1,314.8 1,300.6 1,322.2 1,351.3 1.390.5 50 Taxes payable 101.4 106.0 120.0 140.1 113.4 117.9 120.0 133.2 128.9 137.5 140.1 51 Investment in bank personal trusts . 699.4 767.4 872.0 1.050.7 811.7 829.0 872.0 890.4 969.7 1,035.2 1,050.7 52 Miscellaneous 5,402.7 5,792.0 6,163.8 6.441.0 5,943.3 6,031.6 6,163.8 6,344.1 6.276.2 6,394.0 6,441.0 53 Total liabilities 37341.4 40,762.9 44^78.5 48,859.7 42,379.7 43,120.4 44,378.5 45,146.0 46,506.6 47,829.3 48^59.7 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights 21 1 22.1 21.4 21.1 22.0 21.2 21.4 20.9 21.1 21.0 21.1 55 Corporate equities 6,237.9 8,331.3 10,061.1 12,958.6 9,105.0 9,340.5 10,061.1 10,072.3 11.719.8 12,804.6 12,958.6 56 Household equity in noncorporate business . .. 3,419.1 3,625.4 3,836.5 4,087.6 3,727.1 3.792.1 3,836.5 3.914.9 4.052.3 4,111.8 4,087.6 Liabilities not identified as assets ( —) 57 Treasury currency -5.4 -5.8 -6.8 -7.4 -6.3 -6.0 -6.8 -6.9 -7.0 -6.8 -7.4 58 Foreign deposits 276.2 301.2 354.1 422.4 326.1 347.7 354.1 398.6 396.0 415.6 422.4 59 Net interbank transactions -65 -9.0 -10.6 -28.3 -8.0 -11.6 -10.6 -1.6 -8.1 -22.1 -28.3 60 Security repurchase agreements 67.8 103.9 135.8 187.9 125.5 113.4 135.8 110.9 153.4 164.8 187.9 61 Taxes payable 48.8 60.8 73.2 93.2 61.0 67.7 73.2 70.6 72.5 82.3 93.2 62 Miscellaneous -977.7 -1,092.2 -1,414.2 -1,631.2 -1,222.4 1.300.4 -1,414.2 -1,382.7 -1,439.6 -1,448.0 -1,631.2 Floats not included in assets ( — ) 63 Federal government checkable deposits 3.4 3.1 -1.6 -8.1 -3.4 -1.7 -1.6 -9.7 -6.8 -7.8 -8.1 64 Other checkable deposits 38.0 34.2 30.1 26.2 31.8 23.1 30.1 25.6 27.9 19.5 26.2 65 Trade credit -245.8 -274.9 -308.7 -353.2 -338.5 -377.8 -308.7 -363.8 -390.0 -419.9 -353.2 66 Total identified to sectors as assets 47,820.7 53,620.4 59,446.2 67,225.5 56,268.0 57,419.8 59,446.2 60313.1 63.501.4 65,989.1 67,225.5 I. 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. 1 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 • May 1998 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1997 1998 Measure 1995 1996 1997 June July Aug. Sept. Oct. Nov. Dec.' Jan.' Feb. 1 Industrial production1 114.5 118.5 124.5 123.5 124.5 125.2 125.6 126.5 127.5r 127.9 128.0 128.1 Market groupings 110.6 113.7 118.5 117.6 118.1 119.2 119.1 120.2 121.2 121.1 121.3 121.3 3 Final, total 111.3 114.6 119.6 118.6 119.2 120.5 120.3 121.5 122.5 122.3 122.7 122.6 109.9 111.8 114.4 113.5 113.9 114.6 114.5 115.9 116.7' 116.2 116.8 116.5 113.8 119.6 128.8' 127.7 128.6 130.9 130.6 131.3 132.8' 133.3 133.2 133.5 6 Intermediate 108.3 110.8 115.1 114.7 114.6 115.3 115.2 116.3 117.3' 117.3 116.9 117.4 120 8 126 2 134 lr 133 0 134 9 134 9 136 1 136 7 137 7' 138 7 138 9 139 0 Industry groupings 8 Manufacturing 116.0 120.2 127.0 126.1 126.9 127.9 128.0 129.1 130.4 130.9 131.3 131.3 9 Capacity utilization, manufacturing (percent) .. 82.8 81.4 81.7 81.3 81.5 81.8 81.6 81.9 82.3 82.3 82.2 81.8 10 Construction contracts3 122.0 130.8 139.8' 143.0 140.0 139.0 139.0 m.V 140.0' 140.0 135.0 134.0 11 Nonagricultural employment, total4 114.9 117.2 119.9 119.7 120.1 120.1 120.4 120.7 121.1 121.5 121.9 122.2 98.3 99.0 100.3 100.2 100.2 100.4 100.4 100.6 100.9 101.3 101.9 102.0 97.5 97.2 97.6 97.5 97.5 97.7 97.7 97.9 98.1 98.3 98.5 98.5 14 Manufacturing, production workers 99.0 98.4 98.9 98.8 98.8 98.9 99.0 99.2 99.5 99.7 99.9 99.9 120.2 123.0 126.2 126.0 126.5 126.5 126.8 127.2 127.6 127.9 128.2 128.6 158.2 167.0 176.8 176.5 176.7 177.8 178.3 179.3 180.6 181.3 182.4 n.a. 17 Wages and salary disbursements 150.9 159.8 170.6 170.2 170.3 171.7 172.3 173.5 175.6' 176.3 177.5 n.a. 18 Manufacturing 130.4 135.7 142.0 141.0 141.1 142.1 142.8 144.4 145.7 146.4 146.4 n.a. 158.7 166.2 174.4 174.1 174.3 175.2 175.8 176.6 177.7' 178.5 179.9 n.a. 20 Retail sales5 .. 151 2 158 6 165 6 1645 166 5 167 2 166 7 166 5 166 8 167 6 169 2 170 0 Prices6 21 Consumer (1982-84=100) 152.4 156.9 160.5 160.3 160.5 160.8 161.2 161.6 161.5 161.3 161.6 161.9 22 Producer finished goods (1982= 100) 127.9 131.3 131.8 131.6 131.3 131.7 131.8 132.3' 131.8 131.1 130.2 130.1 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 December 1997. The recent 5. Based on data from U.S. Department of Commerce, Survey of Current Business. annual revision is described in an article in the February 1998 issue of the Bulletin. For a 6. Based on data not seasonally adjusted. Seasonally adjusted dala for changes in the price description of the aggregation methods for industrial production and capacity utilization, see indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- Monthly Labor Review. ments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For details about the NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series construction of individual industrial production series, see "Industrial Production: 1989 mentioned in notes 3 and 6, can also be found in the Survey of Current Business. Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. Figures for industrial production for the latest month are preliminary, and many figures for 187-204. the three months preceding the latest month have been revised. See "Recent Developments in 2. Ratio of index of production to index of capacity. Based on data from the Federal Industrial Capacity and Utilization," Federal Reserve Bulletin, vol. 76 (June 1990), pp. Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources. 411-35. See also "Industrial Production Capacity and Capacity Utilization since 1987," 3. Index of dollar value of total construction contracts, including residential, nonresiden- Federal Reserve Bulletin, vol. 79 (June 1993), pp. 590-605. tial, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge Division. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 1997 Category 1996 1997 July Aug. Sept. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 132,304 133,943 126,297 136,294 136,404 136,439 136,406 136,864 137,493 137,557 Employment 2 Nonagricultural industries3 121,460 123,264 126,159 126,209 126,368 126,339 126,583 127,191 127,392 127,764 127,829 3 Agriculture 3.440 3,443 3,399 3,452 3,379 3,422 3,327 3,384 3,385 3,319 3,335 Unemployment 4 Number 7,404 7,236 6.739 6.633 6,657 6,678 6,496 6,289 6,392 6,409 6,393 5 Rate (percent of civilian labor force) 5.6 5.4 4.9 4.9 4.9 4.9 4.8 4.6 4.7 4.7 4.6 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 117,191 119423 122,257 122,440 122,492 122,792 123,083 123,512 123,866 124,241 124^51 7 Manufacturing 18,524 18,457 18,538 18,514 18,555 18,553 18,590 18,634 18,674 18,719 18,717 8 Mining 581 574 573 574 573 576 574 572 574 574 572 9 Contract construction 5,160 5,400 5.627 5.625 5,637 5,642 5,650 5,682 5,747 5,839 5,880 10 Transportation and public utilities 6,132 6.261 6,426 6.443 6.289 6,473 6.497 6,495 6,478 6,529 6,563 11 Trade 27,565 28,108 28,788 28,823 28,864 28,902 28,970 29,132 29,196 29,241 29,271 12 Finance 6,806 6,899 7,053 7,058 7,068 7,082 7,108 7,132 7,151 7,163 7,190 13 Service 33,117 34,377 35,597 35,684 35,702 35,850 35,945 36,102 36,276 36,401 36,547 14 Government 19,305 19,447 19,655 19,719 19,804 19,714 19,749 19,763 19,770 19,775 19,811 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 Ql Q2 Q3 Q4r Ql Q2 Q3 Q4 Ql Q2 Q3 Q4' Outpul (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent) 1 Total industry 123.3 125.1 147.8 149.6 ISO 82.5 82.4 83.2 2 Manufacturing 125.7 127.6 156.3 81.5 3 Primary processing 116.7 117.7 118.5 119.7 135.8 136.9 138.0 139.2 85.9 86.0 85.8 86.0 4 Advanced processing4 128.0 129.7 132.1 135.3 160.6 163.2 165.7 168.1 79.7 79.5 79.8 80.5 5 Durable goods 137.5 140.2 143.7 147.2 170.4 173.8 177.2 180.6 80.7 80.7 81.1 81.5 6 Lumber and products 113.5 116.4 114.9 114.7 137.3 138.6 140.0 141.3 82.7 84.0 82.1 81.1 7 Primary metals 120.9 123.8 125.5 127.7 134.7 136.0 137.2 138.5 89.8 91.0 91 5 92.2 8 Iron and steel 119.4 122.6 122.8 126.2 134.1 135.4 136.6 137.9 89.1 90.6 89.9 91.6 9 Nonferrous 122.7 125.3 128.8 129.5 135.2 136.4 137.7 138.9 90.8 91.8 93.5 93.2 10 Industrial machinery and equipment 163.9 168.2 173.9 177.7 193.3 199.0 204.4 210.0 84.8 84.5 85.1 84.6 11 Electrical machinery 216.4 226.6 236.6 246.0 264.4 276.7 289.1 301.9 81.9 81.9 81.9 81.5 12 Motor vehicles and parts 133.6 130.5 136.7 144.0 180.6 182.6 184.7 186.7 74.0 71.4 74.0 77.1 13 Aerospace and miscellaneous transportation equipment 89.9 92.8 95.6 98.6 122.7 123.4 124.1 124.8 73.3 75.2 77.1 79.0 14 Nondurable goods 110.3 110.7 111.1 112.6 133.6 134.3 135.0 135.7 82.6 82.4 82.3 82.9 15 Textile mill products 107.3 108.5 110.9 111.5 130.5 131.1 131.7 132.3 82.3 82.8 84.3 84.3 16 Paper and products 111.7 112.2 114.1 113.5 124.9 125.5 126.0 126.7 89.4 89.4 90.5 89.6 17 Chemicals and products 114.5 114.8 114.8 117.2 143.9 145.1 146.3 147.5 79.5 79.1 78.5 79.5 18 Plastics materials 126.8 127.6 130.6 131.4 136.3 138.1 140.0 141.9 93.0 92.4 93.3 92.6 19 Petroleum products 107.7 111.0 109.5 109.8 114.1 114.7 115.2 115.7 94.4 96.8 95.1 94.9 20 Mining 105.4 106.0 106.4 105.8 117.6 117.9 118.1 118.2 89.6 89.9 90.1 89.5 21 Utilities 110.8 111.7 114.0 115.7 125.8 126.3 126.7 127.1 88.1 88.5 90.0 91.0 22 Electric 111.5 111.3 114.2 115.7 124.2 124.6 125.0 125.4 89.8 89.3 91.4 92.3 1975 Previous cycle" Latest cycle High Low High Low High Feb. Sept. Oct. Nov.' Dec.' Jan. Feb. Capacity utilization rate (percent)2 1 Total Industry 89.2 72.6 87.3 71.1 85.4 78.1 82.6 82.7 83.0 83.3 83.2 83.0 2 Manufacturing 70.5 86.9 69.0 85.7 76.6 81.7 81.6 81.9 82.3 82.3 82.2 81.8 3 Primary processing 91.2 68.2 88.1 66.2 88.9 77.7 86.1 85.7 85.7 86.2 86.1 86.0 85.6 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.7 79.7 80.2 80.6 80.6 80.5 80.1 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 80.9 81.0 81.1 81.8 81.7 81.3 80.9 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 83.2 80.7 80.1 82.8 80.5 79.8 80.4 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 90.2 91.5 92.3 93.1 91.4 92.1 91.2 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 89.4 90.8 91.9 92.1 90.6 91.8 91.2 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 91.4 92.5 92.8 94.4 92.5 92.7 91.4 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 84.8 84.2 84.8 84.6 84.4 84.2 83.6 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 82.2 81.0 80.9 82.0 81.6 81.1 80.6 12 Motor vehicles and parts.... 93.4 51.3 95.0 45.5 89.1 55.9 73.8 76.2 75.0 78.1 78.2 77.0 75.1 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 73.3 77.9 78.2 78.5 80.5 81.1 81.2 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 82.6 82.3 82.8 83.0 83.0 83.2 83.0 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77 7 82.0 84.5 84.5 85.1 83.5 84.7 84.1 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 89.5 90.1 89.2 89.7 89.9 88.7 88.4 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 79.6 78.8 79.3 78.9 80.1 80.2 80.4 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 92.9 93.6 91.2 93.0 93.7 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 94.7 95.4 96.2 93.8 94.6 95.1 94.6 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 90.1 90.1 89.6 89.7 89.2 90.6 90.2 21 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 87.7 90.8 92.0 90.7 90.3 87.4 88.1 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 89.4 92.5 94.3 91.5 91.0 89.3 90.1 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 December 1997. The recent primary metals; and fabricated metals. annual revision is described in an article in the February 1998 issue of the Bulletin. For a 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing description of the aggregation methods for industrial production and capacity utilization, see and publishing: chemical products such as drugs and toiletries; agricultural chemicals; leather "'Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- and products; machinery; transportation equipment; instruments; and miscellaneous manufacments," Federal Reserve Bulletin, vol. 83 (February 1997), pp. 67-92. For details about the tures. construction of individual industrial production series, see "Industrial Production: 1989 5. Monthly highs, 1978-80; monthly lows, 1982. Developments and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 6. Monthly highs, 1988-89; monthly lows, 1990-91. 187-204. 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 D May 1998 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1997 pro- 1997 Group por- avg. tion Apr. May July Aug. Sept. Oct. Nov.' Dec.1 Feb.P Index (1992= 100) MAIOR MARKETS 100.0 124.5 122.1 122.5 123.1 123.3 123.5 124.5 125.2 125.6 126.5 127.5 127.9 128.0 128.1 2 Products 60.5 118.5 116.5 116.9 117.2 117.7 117.6 118.1 119.2 119.1 120.2 121.2 121.1 121.3 121.3 3 Final products 4t>.3 119.6 117.2 117.9 118.0 118.6 118.6 119.2 120.5 120.3 121.5 122.5 122.3 122.7 122.6 4 Consumer goods, total 29.1 114.4 113.1 113.4 113.4 113.9 113.5 113.9 114.6 114.5 115.9 116.7 116.2 116.8 116.5 5 Durable consumer goods «.l 131.3 129.4 130.7 127.4 128.8 129.8 128.1 132.1 131.9 131.4 136.5 134.7 135.9 135.3 6 Automotive products 2.6 129.9 128.5 129.0 122.3 124.6 126.7 120.3 131.6 132.8 131.2 138.4 133.8 132.6 131.0 7 Aulos and trucks 1.7 136.5 135.1 135.6 124.4 127.6 130.3 120.2 137.6 140.9 139.7 147.8 142.7 139.6 136.7 8 Autos, consumer .9 115.2 116.5 117.6 110.7 112.4 110.8 113.0 118.6 119.9 115.2 120.3 113.9 116.0 105.7 9 Trucks, consumer .7 159.1 158.6 158.5 142.7 147.3 154.2 131.9 161.2 166.5 168.6 179.8 175.7 167.7 171.6 10 Auto parts and allied goods .9 119.3 117.9 118.4 118.2 119.1 120.3 119.3 121.8 120.1 117.9 123.8 120.1 121.4 121.8 11 Other 3.5 132.4 130.1 132.0 131.4 132.1 132.3 134.4 132.5 131.1 131.5 135.0 135.4 138.5 138.8 12 Appliances, televisions, and conditioners 1.0 168.6 164.1 166.9 164.2 166.5 165.4 174.8 169.8 166.0 169.4 177.2 178.6 185.4 189.5 !3 Carpeting and furniture .8 117.1 114.3 116.7 116.7 117.7 119.0 116.4 117.7 116.2 116.5 122.1 117.1 124.8 123.3 14 Miscellaneous home goods 1.6 120.0 119.1 120.3 120.3 120.2 120.3 122.1 119.8 119.4 118.6 119.2 122.1 121.2 120.9 15 Nondurable consumer goods 23.0 110.2 109.0 109.1 109.9 110.1 109.4 110.3 110.3 110.2 112.1 111.8 111.6 112.1 111.9 16 Foods and tobacco 10.3 109.3 109.2 110.0 109.1 108.9 108.1 109.6 108.9 108.6 109.7 110.7 110.1 112.1 111.6 17 Clothing 2.4 95.9 95.6 96.1 96.5 95.8 95.4 95.8 96.0 96.0 96.4 95.1 95.1 94.7 94.2 18 Chemical products 4.5 119.2 117.3 115.9 118.4 119.3 119.1 117.3 119.4 119.4 123.0 121.3 122.4 123.5 124.6 19 Paper products 2.9 109.4 107 1 107.8 108.2 108.9 109.8 110.8 109.8 110.1 111.3 111.7 110.1 109.9 107.9 20 Energy 2.9 111.5 108.3 107.3 111.9 112.8 109.7 112.4 112.8 112.4 116.2 113.9 114.5 110.9 111.7 21 Fuels .8 109.3 106.6 108.2 109.6 111.3 111.5 108.8 111.0 110.8 112.0 106.7 109.3 110.4 110.2 22 Residential utilities 2.1 112.2 108.7 106.4 112.6 11.3.0 108.3 113.7 113.2 112.8 117.8 117.1 116.7 110.7 112.0 23 Equipment 17.2 128.8 124.6 125.8 126.0 126.8 127.7 128.6 130.9 130.6 131.3 132.8 133.3 133.2 133.5 24 Business equipment 13.2 141.9 136.5 137.5 137.9 139.0 140.2 141.6 144.6 144.4 145.5 147.5 148.4 147.5 147.3 25 Information processing and related . 5.4 168.1 160.9 161.0 163.0 164.4 166.8 169.3 171.1 172.9 174.3 174.7 175.2 174.7 175.5 26 Computer and office equipment . 1.1 385.1 341.5 348.8 358.4 365.3 375.8 391.6 407.1 414.6 420.3 427.3 433.5 446.2 454.1 27 Industrial 4.0 133.3 129.8 130.6 131.6 131.5 131.7 133.7 135.8 133.8 135.9 136.3 138.0 136.7 136.3 28 Transit 25 111.2 105? 107.7 104.6 106.7 107.3 106.9 113.3 114.2 113.0 119.9 121.2 1709 119.2 29 Autos and trucks 1.2 119.7 118.2 121.4 112.5 114.6 113.6 111.5 120.3 120.2 117.0 128.2 124.6 123.4 119.6 30 Other 1.3 135.0 130.8 132.6 134.4 135.2 136.3 136.3 137.9 135.1 137.5 137.3 136.0 133.8 134.5 31 Defense and space equipment 3.3 75.2 75.6 75.7 75.4 75.6 76.0 74.9 75.0 74.7 74.7 74.5 74.5 75.4 76.4 32 Oil and gas well drilling .6 149.7 143.5 154.8 151.4 150.7 150.9 152.1 153.2 153.1 149.1 150.0 145.9 154.0 158.9 33 Manufactured homes .2 139.1 140.7 139.4 142.9 141.9 139.1 143.5 139.5 137.2 136.9 138.1 132.4 144.0 34 Intermediate products, total . 14.2 115.1 114.1 114.1 114.7 114.9 114.7 114.6 115.3 115.2 116.3 117.3 117.3 116.9 117.4 35 Construction supplies 5.3 121.7 121.7 122.3 121.8 122.2 122.2 121.2 122.7 120.4 121.3 123.6 122.8 123.8 124.3 36 Business supplies 8.9 1111 109.6 109.2 110.6 110.6 110.2 110.6 111.0 112.2 113.4 113.5 114.1 112.9 113.3 37 Materials . 39.5 134.1 131.0 131.3 132.5 132.4 133.0 134.9 134.9 136.1 136.7 137.7 138.7 138.9 139.0 38 Durable goods materials 20.8 158.2 152.2 153.0 155.1 155.4 156.9 159.3 160.3 161.3 163.2 165.0 166.4 167.7 167.8 39 Durable consumer parts .... 4.0 139.1 136.3 135.9 137.1 134.7 136.2 139.2 140.3 140.7 141.8 142.3 146.7 145.7 144.3 40 Equipment parts 7.6 221.9 206.1 210.0 213.4 216.7 220.0 224.6 227.6 229.6 233.3 237.9 240.7 244.8 247.1 41 Other 9.2 125.5 123.5 123.2 124.7 124.5 125.0 125.9 126.0 126.6 127.8 128.8 128.2 129.1 128.7 42 Basic metal materials 3.1 120.6 118.3 118.2 118.8 119.9 121.2 121.1 121.8 121.7 122.5 124.9 122.0 124.2 123.6 43 Nondurable goods materials. . . 8.9 113.0 112.6 112.5 113.0 111.8 111.9 113.5 112.3 113.3 113.1 114.4 115.8 114.6 114.9 44 Textile materials 1.1 109.3 108.0 106.3 109.4 106.1 108.1 112.3 108.4 111.4 111.9 111.0 112.5 108.3 109.5 45 Paper materials 1.8 112.6 112.0 112.5 112.6 112.6 110.9 113.8 114.3 112.7 113.4 112.2 113.6 112.9 112.6 4 4 4 4 5 6 7 8 9 0 En C O C P er r o h t g i h n e m y e m v r a e m r i r c y t a a e t l d e e n r m e i f a u r a l g e t s e l y ri m al a s terials. . . . 9 3 2 6 3 . . . . . 7 9 1 3 3 1 1 1 1 1 1 1 0 0 0 5 0 1 3 8 . . . . . 2 2 6 9 3 1 1 1 1 1 1 0 1 0 0 0 2 5 6 3 . . . . . 1 5 0 2 8 1 1 1 1 1 0 1 0 1 0 6 3 4 0 1 . . . . 2 4 8 9 4 1 1 1 1 1 0 0 0 1 0 7 3 5 1 9 . . . . 7 6 4 7 7 1 1 1 1 1 0 0 0 0 1 6 2 3 9 3 . . . . . 1 7 5 8 8 1 1 1 1 1 1 1 0 0 0 3 0 1 7 3 . . . . . 8 8 0 3 2 1 1 1 1 1 1 1 0 0 0 5 0 9 2 4 . . . . . 1 1 0 3 6 1 1 1 1 1 1 0 0 0 0 3 6 2 8 3 . . . . . 9 8 4 6 9 1 1 1 1 1 0 1 1 0 0 9 1 5 5 2 . . . . . 5 8 5 2 6 1 1 1 1 1 1 0 0 1 0 5 9 4 0 1 . . . . . 7 0 0 6 7 1 1 1 1 1 1 1 0 0 0 6 3 1 8 3 . . . . . 5 7 4 6 9 1 1 1 1 11 1 0 1 0 0 8 3 2 0 . . . . . 4 9 9 8 5 1 1 1 1 1 0 0 0 0 1 7 1 9 3 9 . . . . . 5 4 3 5 0 1 1 1 1 1 0 0 1 1 0 0 8 9 0 3 . . . . . 6 3 2 2 3 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 124.4 121.9 122.3 123.2 123.4 123.6 124.8 125.1 125.4 126.5 127.2 127.7 127.9 128.1 52 Total excluding motor vehicles and parts 95.1 123.8 121.5 121.9 122.7 123.0 123.1 124.3 124.6 124.8 125.9 126.6 126.9 127.2 127.4 53 Total excluding computer and office equipment 98.2 121.9 119.8 120.2 120.7 120.9 121.1 122.0 122.6 122.9 123.8 124.8 125.1 125.2 125.2 54 Consumer goods excluding autos and trucks 27.4 113.2 111.8 112.1 112.8 113.1 112.5 113.5 113.4 113.0 114.6 115.0 114.7 115.5 115.4 55 Consumer goods excluding energy 26 2 114 8 113.7 114.2 113.6 114.0 114.0 114.1 114.9 114.7 115.9 117.0 116.4 117.6 117.2 56 Business equipment excluding aulos and trucks 12.0 138.6 139.5 141.0 141.9 143.4 145.2 147.5 147.3 149.0 149.7 151.3 150.4 57 Business equipment excluding computer and office equipment 12.1 129.1 125.1 126.0 126.0 126.9 127.7 128.6 131.2 130.8 131.8 133.5 134.3 133.1 132.7 58 Materials excluding energy 29.8 143.7 139.6 140.1 141.6 141.4 142.5 144.6 144.8 145.8 147.0 148.6 150.0 150.4 150.6 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 1997 1998 SIC2 pro- 1997 Group code por- avg. tion Feb. Mar. Apr. May June July Aug. Sept. Oct Nov.r Dec.1 Jan. Feb11 Index (1992 -100) MAJOR INDUSTRIES 59Ibtal index 100.0 124.5 122.1 122.5 123.1 123.3 123.5 124.5 125.2 125.6 126.5 127,5 127.9 128.0 128.1 60Manufacturing 85.4 127.0 124.4 124.9 125.4 125.7 126.1 126.9 127.9 128.0 129.1 130.4 130.9 131.3 131.3 61 Primary processing 26.5 118.1 116.9 117.2 117.7 117.7 117.7 118.3 118.5 118.6 118.9 120.0 120.3 120.3 120.2 62 Advanced processing 58.9 131.4 128.1 128.6 129.2 129.6 130.2 131.2 132.5 132.7 134.1 135.5 136.2 136.7 136 8 63 Durable goods 45.0 142.3 137.8 138.7 139.5 140.1 141.2 142.4 144 3 144.4 145.5 147.7 148 4 148.8 148.9 64 Lumber and products 24 2.0 114.9 114.2 114.9 1159 116.4 117.0 116.1 115.4 113.3 112 9 117.0 114 2 113.4 114.4 65 Furniture and fixtures 25 1.4 122.5 120.6 120.7 123.5 123.3 123.5 124.2 121.1 122.0 123 0 124.1 124.5 123.2 124.2 66 Stone, clay, and glass products 32 2.1 120.5 118.9 119.5 121.1 119.4 120.0 120.9 120.5 121.2 121.0 122.1 123.6 122.1 122.6 67 Primary metals 33 3.1 124.4 121.6 121.8 122.3 124.2 124.9 125.2 125.5 125.9 127.4 128.9 126.9 128.4 127.8 68 Iron and steel 331.2 ] 7 122.7 119.9 119.6 121.2 123 9 122 6 122.2 121.8 124.5 126.4 127.0 125 3 127.5 127.1 69 Raw sleel 331PT .1 115^9 1124 114.0 I15J 1154 114.9 115'5 116J 119^2 1177 1209 119.2 122.8 121.0 70 Nonferrous 333-6,9 1.4 126.4 123.5 124.5 123.5 124.6 127.7 128.8 129.9 127.7 128.6 131.1 128.8 129.6 128.6 71 Fabricated metal products.. . 34 5.0 122.9 121.7 122.1 122.5 122.7 121.9 122.4 122.8 122.7 124.4 124.7 125.7 125.6 125.4 72 Industrial machinery and equipment 35 8.0 171.4 164.0 165.1 167.8 168.0 168.8 172.2 175.9 173.7 176.5 177.7 178 8 180.1 180.6 73 Computer and office equipment 357 1.8 381.8 336.6 344.2 354.1 361.4 372.3 388.5 403.9 412.0 418.0 425.7 432.4 445.6 453.7 74 Electrical machinery 36 7.3 231.5 2174 220.8 223.7 226.3 229 7 235.5 236.8 237.5 240.8 247.4 249.9 252.1 254.4 75 Transportation equipment. . . 37 9.5 115.6 111.4 112.3 110.7 110.8 113.0 112.2 117 0 118.8 118.3 121.6 123.4 123.0 121.6 76 Motor vehicles and parts . 371 4.9 137.2 133.3 134.0 129 7 129.2 132 s 130.0 138.9 141.2 139.6 145.0 146 6 144.9 141.8 77 Autos and light trucks . 371PT 2.6 128.3 127.2 127.8 117.8 120.6 122.4 115.0 129.5 132.3 1304 137.7 132.5 130.6 126.2 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 94.4 89.9 91.0 92.0 92.7 93.8 94.6 95.5 96.8 97.3 97.9 100.6 101.6 101.6 79 Instruments 38 5.4 108.0 107.2 106.5 106.6 107.6 107.9 108.0 109.2 108.9 109.7 109.5 108 7 1094 110.1 80 Miscellaneous 39 1.3 125.9 125.0 124.7 125.1 125.5 126.0 127.0 126.7 126.1 126.5 26.2 128.5 128.0 127,9 81 Nondurable goods 40.4 111.1 1 10.4 110.5 110.8 110.7 110.5 110.9 111.0 111.3 112.2 112.6 112.9 113 4 113.2 82 Foods 20 9.4 109.6 109.4 110.0 109.2 109.2 108.8 110.0 108 9 108.6 109.2 110.9 11 1.0 112.5 112.2 83 Tobacco products 21 1.6 112.7 113.0 114.2 113.0 111.5 109.0 110.5 112.5 112.0 118.8 115.9 110.1 112.3 111.7 84 Textile mill products 22 1.8 109.6 107.0 108.0 109.2 107.2 109.1 110.7 110.7 111.4 111.6 112.5 110.5 112.3 111.7 85 Apparel products 23 2.2 99.6 99.5 100.1 99.8 99.8 99.6 99.7 99.1 99.1 99.3 98.6 99.3 98.9 98.0 86 Paper and products 26 3.6 112.9 111.9 112.4 112.4 112.6 111.7 114.2 114.4 113.7 112.8 113.6 114.0 112.7 112.6 87 Printing and publishing 27 6.7 104.8 103.3 103.6 104.4 104.5 104.1 I04.I 104.4 105.1 1067 107.4 106.9 106.2 1059 88 Chemicals and products .... 28 9.9 115.3 114 6 113.6 115.2 114.5 114.6 114.3 114.5 115.6 116.7 116.5 118.5 119.0 1 19 6 89 Petroleum products 29 1 4 109.4 108.0 108.0 110 I 111.4 111.3 108.9 109.7 110.1 1112 108.6 109 7 110.4 109 9 90 Rubber and plastic products . 30 3.5 126.4 125k) 125.5 1244 1254 125^6 126.0 127.9 127^6 127 4 129.6 129^2 129.8 129 4 91 Leather and products 31 .3 73.7 76.0 76.6 75.9 75.3 74.0 74.0 71.2 70.9 72.4 71.0 71.1 69.7 70.2 92Mining 6.9 106.0 106.0 106.7 105.5 106.7 105.7 106.5 1063 106.5 105.9 106.1 105.5 107.1 106.8 93 Metal 10 .5 106.9 106.2 106.4 105.? 105.9 109 9 105.2 106.0 105.3 111.1 113.2 103.6 106.4 106.2 94 Coal 12 1.0 109.9 110.4 107.0 105.4 115.9 107.4 112.1 107.7 109.5 109.6 111.2 117.4 116.0 109.1 95 Oil and gas extraction 13 4.8 103.2 102.8 104.3 103.8 103.4 102.9 103.9 104.1 104.3 103 1 102.6 101.4 103.4 104.1 96 Stone and earth minerals 14 .6 118.8 123.5 123.6 116.8 118.2 120.9 117.8 119.9 117.7 116.2 119.2 120.2 122.6 123.4 97Unities 7.7 112.6 110.3 109.6 112.5 111.8 1109 113.8 113.0 115.1 116.9 115.3 114.9 111.3 112.3 98 Electric 491493PT 6.2 113.1 111.0 110.6 112.7 110.4 110 7 113.8 113.1 115.7 118.1 114.7 114.2 112.1 113.3 99 Gas 492.493PT 1.6 111.4 107.9 105.4 111.5 117.1 111.9 113.5 112.5 112.7 1119 117.8 117.3 108.1 108.5 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 126.4 123.9 124.3 125.2 125.5 125.7 126.7 127.2 127.3 1284 29.4 129.9 130.5 130.7 101Manufacturing excluding office and computing machines ... 83.6 124.1 121.8 122.2 122.7 122.9 123.2 123.9 124.8 124.9 125.9 127.2 127.6 128.0 127.9 Gross value (billions of 1992 dollars. annual rates) MAJOR MARKETS 102Products, total 2,001.9 2,373.3 2,344.1 2,355.4 2,353.4 2,365.8 2,365.3 2,368 4 2,402.0 2,396.9 2,416.1 2,442.2 2,436.7 2,442.2 2,440.6 103Final 1.552.1 1,856.0 1.827.3 1,838.7 1,832.9 1,844.4 1,844.6 1,849.1 1.879.3 1,875.6 1.890.6 1,911.0 1.906.5 1.914.7 1.910.9 104 Consumer goods 1,049.6 1,195.7 1,187.6 1,191.4 1,187.7 1,194.1 1,190.2 1.191.0 1,205.2 1,203.3 1,215.9 1,224.1 1,218.2 1,226.6 1.223.5 105 Equipment 502 5 660.0 639.2 646.8 644.8 649.8 654.1 657.8 674.0 672.3 674.5 686.9 688.5 688.2 687.5 106Intermediate 449.9 518.1 517.0 517.2 520.6 521.7 521.0 519.9 523.7 522.2 526.5 532.3 531.2 528.9 530.8 1. Data in (his table also appear in the Board's G, 17 (4!9) monthly statistical release. For ments," Federal Reserve Uniterm, vol. 83 (February 1997), pp. 67-92. For details about ihc the ordering address, see the inside front cover. The latest historical revision of the industrial construction of individual industrial production series, see "Industrial Production. 198SJ production index and the capacity utilization rates was released in December 1997. The recent Developments and Historical Revision." Federal Reserve Bulletin, vol. 76, (April 1990), pp. annual revision is described in an article in the February 1998 issue of the Bulletin. For a 187-204. description of the aggregation methods for industrial production and capacity utilization, see 2. Standard industrial classification. "Industrial Production and Capacity Utilization: Historical Revision and Recent Develop- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • May 1998 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1997 1998 Item 1995 1996 1997' Apr. May June July Aug. Sept. Oct. Nov.' Dec.' Jan. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,333 1,426 1.442 1,442 1,432 1,402 1,414 1,397 1,460 1,487 1,440 1,482 1,526 997 1,070 1,056 1,060 1,053 1,049 1,030 1,027 1,065 1,087 1,061 1,071 1,133 3 Two-family or more 335 356 387 382 379 353 384 370 395 400 379 411 393 4 Started 1,354 1,477 1.474 1,480 1,404 1,502 1,461 1,383 1,501 1,529 1,523 1,540 1,543 1,076 1,161 1,134 1,134 1.095 1,132 1,144 1.076 1,174 1,124 1,167 1,130 1,218 6 Two-family or more 278 316 340 346 309 370 317 307 327 405 356 410 325 7 Under construction at end of period1 776' 820' 834 814' 815 828' 836' 834' 843' 853' 862 870 885 8 One-family . . 554 584 570 564' 565' 566 570' 567' 571 574' 575 578 589 9 Two-family or more 222' 235 264 250' 250' 262' 266 267 272' 279' 287 292 296 10 Completed 1,319 1,405' 1,407 1,457' 1,387' 1,307' 1,331' 1,335' 1,433' 1,384' 1,432 1,410 1,288 11 One-family 1,073 1,123' 1,122 1,155' 1,098' 1,097' 1,074' 1,062' 1,133' 1,063' 1,145 1,093 999 12 Two-family or more 247' 283 285 302 289' 210' 257' 273' 300' 321' 287 317 289 13 Mobile homes shipped 341 361 354 366 354 353 356 354 351 349 352 353 362 Merchant builder activity m one-family units 14 Number sold 667 757 803 762' 764 810' 808' 799' 809' 805' 877 795 877 15 Number for sale at end of period1 374 326 286 291 289' 288 288 286 284' 284' 280 281 282 Price of units sold {thousands of dollars)2 16 Median 133.9 140.0 145.9 150.0 141.0 145.0 145.9 144.0 146.3 141.5' 145.0 143.0 148.0 17 Average 158.7 166.4 175.8 179.5 170.7 179.4 175.5 170.7 177.5 172.9' 175.5 173.6 179.6 EXISTING UNITS (one-family) 18 Number sold 3.812 4,087 4,215 4,040 4,190 4,120 4,180 4,280 4,300 4,380 4.390 4,370 4,370 Price of units sold (thousands of dollars)' 19 Median 113.1 118.2 124.1 120.7 123.1 127.2 126.5 127.5 125.8 124.4 124.3 125.9 126.1 20 Average 139.1 145.5 154.2 150.4 153.1 158.4 157.6 159.1 155.4 154.7 155.0 157.5 156.8 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 534,463 567,179 600,034 596,907 595,763 594,195 603,002 603,684 605,748 611,805 611,343 614,574 619,146 22 Private 407,370 435,929 461,375 457,604 459,882 456,927 464.326 465,236 468,822 469,567 470,272 474,704 480,103 23 Residential 231,230 246,659 259,640 259,917 259,662 257,277 258,803 259,958 263,799 265,717 267.489 271,015 273,755 176,140 189,271 201,735 197,687 200,220 199,650 205,523 205.278 205,023 203.850 202,783 203,689 206.348 25 Industrial buildings 32,505 31,997 30,642 29,331 30,501 31,046 31,796 31,480 30,675 29.964 29.239 29,121 29.323 26 Commercial buildings 68.223 74,593 80,857 76,545 78,670 79,009 82,346 81.552 80,551 81.424 81,775 82,306 82,815 27 Other buildings 27,089 30,525 36,977 38,229 37,738 35,775 36,672 37,274 38,729 37.694 37,744 38,039 38,686 28 Public utilities and other 48,323 52,156 53,260 53,582 53,311 53.820 54.709 54,972 55,068 54.768 54,025 54,223 55,524 29 Public 127,092 131,250 138,660 139,304 135,882 137.268 138,676 138,448 136,926 142,238 141,071 139,870 139,043 30 Military 2.983 2,541 2.562 2,408 2.548 2.580 2,738 2.767 2,451 2,794 2.782 2.338 2.680 31 Highway 36.319 37,898 41.120 42,356 40,694 41,531 41,087 41.715 40,126 39,400 44,271 41,856 43,756 32 Conservation and development 6,391 5,807 5.475 5,134 5,242 4,952 5,002 5.469 6,177 4,899 5,264 5,917 5,131 33 Other 81,399 85.005 89.503 89,406 87,398 88,205 89.849 88.497 88,172 95,145 88,754 89.759 87,476 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-3O-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 C m ha o n n g th e s fr e o a m rli e 1 r 2 Change f ( r a o n m n u 3 al m ra o t n e t ) hs earlier Change rom 1 month earlier Index Item level. 1997 1997 1998 Feb 1997 1998 1998 ' Feb. Feb Mar. June Sept. Dec. Oct. Nov. Dec. /an. Feb. CONSUMER PRICES2 (1982-84=100) 1 All items 3.0 1.4 l.S 1.5 2.3 1.5 .2 .1 .1 .0 .1 161.9 2 Food 3.8 1.9 -.3 2.1 2.8 1.5 3 .1 .0 3 .0 159.4 3 Energy items 7,8 -8.8 -1.4 -11.8 8.3 -7 7 .0 -1.8 -2.4 -2.2 103.2 4 All items less food and energy 2,5 2.3 2.2 2.6 1.7 2.4 2 .1 .2 .2 .3 172.1 5 Commodities 1.0 .4 8 .6 -.3 .6 .1 .1 .0 I .2 142.7 6 Services 3.1 3.1 3 1 3.1 2.6 3.3 .3 2 .3 .2 .3 188.8 PRODUCER PRICES (1982=100) 7 Finished goods 2.2 -1.6 -1.8 -3.0 1.2 -1.2 0' - 1' _2 -.7 -.1 130.1 8 Consumer foods 2.4 -.1 .0 -3.5 -1.5 .9 .7' -.4' -.1 -.4 .4 133.6 9 Consumer energy 9.5 -11.0 -11.8 -13.0 6.0 -6.1 -.5' -.8 -3.7 -1.8 75.8 10 Other consumer goods .7 .5 .6 -.6 1.7 .0 .1 -.1 .0 -.1 .1 145.8 11 Capital equipment .4 -.7 .0 -.9 .6 -1.7 -.3' .1' -.2 -.1 -.1 137.9 Intermediate materials 12 Excluding foods and feeds 1 1 -1.5 -1.3 -1.6 .6 -.6 .0 2 -.3 -.5 -.2 124.3 13 Excluding energy -.1 .0 .6 .3 .6 .0 -.1' .1 -.1 134.2 Crude materials 14 Foods -3.5 -5.3 -4.1 -10.8 -5.0 3.3 1.1' -.3' .0 -3.3 -.7 105.1 15 Energy 18.5 -26.2 -75.5 11.3 21.8 1.0 11.5' 2.8' -12.6 -7.3 -6.5 72.3 16 Other -2.1 -5.0 12.5 -3.7 .3 -7.9 -.1' -.5' -1.4 -2.2 .1 151.0 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for a)] 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 • May 1998 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of currenl dollars except as noted; quarterly data at seasonally adjusted annual rates 1996 1997 Account 1995 1996 1997' Q4 Ql Q2 Q3 Q41 GROSS DOMESTIC PRODUCT 1 Total 7,265.4 7,636.0 8,081.0 7,792.9 7,933.6 8,034.3 8,124.3 8,231.8 Bx source 2 Personal consumption expenditures 4,957.7 5,207.6 5,488.1 5,308.1 5,405.7 5,432.1 5.527.4 5,587.2 3 Durable goods 608.5 634.5 659.1 638.2 658.4 644.5 667.3 666.2 4 Nondurable goods 1,475.8 1,534.7 1,592.1 1,560.1 1,587.4 1,578.9 1,600.8 1,601.4 5 Services 2.873.4 3.038.4 3,236.9 3.109.8 3,159.9 3,208.7 3,259.3 3,319.6 6 Gross private domestic investment 1,038.2 1,116.5 1.240.9 1.151.1 1,193.6 1,242.0 1,250.2 1,277.8 7 Fixed investment 1.008.1 1,090.7 1,172.6 1.119.2 1,127.5 1,160.8 1,201.3 1,200.8 8 Nonresidential 723.0 781.4 845.4 807.2 811.3 836.3 872.0 861.9 9 Structures 200.6 215.2 229.9 227.0 227.4 226.8 232.9 232.5 10 Producers' durable equipment 522.4 566.2 615.5 580.2 583.9 609.5 639.1 629.4 11 Residential structures 285.1 309.2 327.2 312.0 316.2 324.6 329.3 338.9 12 Change in business inventories 30.1 25.9 68.3 31.9 66.1 81.1 48.9 77.0 13 Nonfarm 38.1 23.0 61.7 28.7 62.2 74.9 40.9 68.6 14 Net exports of goods and services -86.0 -94.8 -100.8 -88.6 -98.8 -88.7 -111.3 -104.2 15 Exports 818.4 870.9 958.0 904.6 922.2 960.3 965.8 983.8 16 Imports 904.5 965.7 1,058.8 993.2 1,021.0 1,049.0 1,077.1 1,088.0 17 Government consumption expenditures and gross investment 1,355.5 1,406.7 1.452.7 1,422.3 1,433.1 1.449.0 1,457.9 1,470.9 18 Federal 509.6 520.0 523.8 517.6 516.1 526.1 525.7 527.4 19 State and local 846.0 886.7 928.9 904.7 917.0 923.0 932.3 943.5 By major type of product 20 Final sales total 7,235.3 7,610.2 8.012.7 7,761.0 7,867.4 7,953.2 8.075.3 8,154.7 21 Goods 2.637.9 2,759.3 2.875.4 2,795.0 2,838.4 2,854.9 2,903.2 2.905.2 22 Durable 1,133.9 1,212.0 1.283.0 1,233.5 1.248.0 1,275.3 1,305.3 1,303.5 23 Nondurable 1,503.9 1,547.3 1.592.4 1,561.5 1,590.4 1,579.6 1,597.9 1,601.7 24 Services 3,980.7 4,187.3 4.433.1 4,282.7 4,338.2 4,400.1 4,462.3 4,531.9 25 Structures 616.8 663.6 704.1 683.3 690.8 698.2 709.8 717.6 26 Change in business inventories 30.1 25.9 68.3 31.9 66.1 81.1 48.9 77.0 27 Durable goods 29.1 16.9 32.4 -1.1 31.8 46.8 18.6 32.5 28 Nondurable goods 1.1 9.0 35.9 33.0 34.3 34.4 30.3 44.6 MEMO 29 Total GDP in chained 1992 dollars 6,742.1 6,928.4 7,189.6 7,017.4 7,101.6 7,159.6 7,214.0 7,283.3 NATIONAL INCOME 30 Total 5.912.3 6.254.5 n.a. 6,376.5 6,510.0 6,599.0 6,699.6 n.a. 31 Compensation of employees 4,215.4 4,426.9 4,703.5 4,520.7 4,606.3 4,663.4 4,725.2 4,819.2 32 Wages and salaries 3,442.6 3,633.6 3,878.5 3,718.0 3.792.7 3,842.7 3,897.3 3,981.2 33 Government and government enterprises 623.0 642.6 665.3 648.9 657.8 662.0 667.7 673.8 34 Other " 2.819.6 2,991.0 3.213.2 3,069.0 3.134.9 3.180.8 3,229.6 3,307.4 35 Supplement to wages and salaries 772.9 793.3 825.0 802.7 813.6 820.7 827.9 837.9 36 Employer contributions for social insurance .166.0 385.7 408.4 393.6 401.3 405.6 410.2 416.6 37 Other labor income 406.8 407.6 416.6 409.1 412.3 415.1 417.7 421.4 38 Proprietors' income' ... 489.0 520.3 544.5 528.3 534.6 543.6 547.2 552.5 39 Business and professional' 465.5 483.1 503.7 487.9 494.4 500.0 506.3 514.2 40 Farm1 23.4 37.2 40.7 40.4 40.2 43.6 40.9 38.2 41 Rental income of persons2 132.8 146.3 148.0 149.2 149.0 148.7 148.0 146.4 42 Corporate profits1 650.0 735.9 n.a. 747.8 779.6 795.1 827.3 n.a. 43 Profits before tax 622.6 676.6 n.a. 680.0 708.4 719.8 753.4 n.a. 44 Inventory valuation adjustment -24.3 -2.5 5.7 3.3 3.5 5.9 3.6 9.6 45 Capital consumption adjustment 51.6 61.8 69.8 64.4 67.7 69.4 70.3 71.6 46 Net interest 425.1 425.1 n.a. 430.6 440.J 448.1 451.8 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 04 Ql Q2 Q3 Q4r PERSONAL INCOME AND SAVING 1 Total personal income 6,150.8 6,495.2 6,874.2 6,618.4 6,746.2 6,829.1 6,906.9 7,014.6 2 Wage and salary disbursements 3,429.5 3,632.5 3.877.3 3,716.9 3,791.5 3,841.6 3.896.1 3.980.1 3 Commodity-producing industries 864.4 909.1 960.2 927.8 942.9 952.8 961.4 983.9 4 Manufacturing 648.4 674.7 705.9 685.6 694.1 700.3 706.0 723.4 5 Distributive industries 783.1 823.3 876.2 840.6 856.8 867.0 880.8 900.4 6 Service industries 1,159.0 1,257.5 1,375.5 1,299.5 1,334.1 1,359.8 1.386.3 1,421.9 7 Government and governmenl enterprises 623.0 642.6 665.3 648.9 657.8 662.0 667.7 673.8 8 Other labor income 406.8 407.6 416.6 409.1 412.3 415.1 417.7 421.4 9 Proprietors' income' 489.0 520.3 544.5 528.3 534.6 543.6 547.2 552.5 10 Business and professional1 465.5 483.1 503.7 487.9 494.4 500.0 506.3 514.2 11 Farm1 23.4 37.2 40.7 40.4 40.2 43.6 40.9 38.2 12 Rental income of persons2 132.8 146.3 148.0 149.2 149.0 148.7 148.0 146.4 13 Dividends 251.9 291.2 321.5 295.2 312.5 318.3 324.5 330.7 14 Personal interest income 718.9 735.7 768.8 749.8 757.2 766.1 772.6 779.3 15 Transfer payments 1,015.0 1,068.0 1,121.1 1,081.5 1,107.2 1,117.0 1.125.7 1,134.7 16 Old-age survivors, disability, and health insurance benefits 566.7 558.9 564.4 569.4 507.8 537.6 545.6 574.1 17 LESS: Personal contributions for social insurance 323.7 318.2 321.3 324.8 293.1 306.3 311.5 330.4 18 EQUALS: Personal income 6,874.2 6.746.2 6.829.1 6,906.9 6,150.8 6,495.2 6,618.4 7,014.6 19 LESS. Personal tax and nontax payments 988.7 955.7 979.2 998.0 795.1 886.9 922.6 1,021.8 20 EQUALS: Disposable personal income 5,885.5 5,790.5 5,849.9 5,908.9 5,355.7 5,608.3 5,695.8 5,992.8 21 LESS: Personal outlays 5,660.8 5,574.6 5,602.8 5,700.8 5,101.1 5,368.8 5,475.4 5,764.9 22 EQUALS: Personal saving 224.7 215.9 247.0 208.2 254.6 239.6 220.4 227 8 MEMO Per capita (chained 1992 dollars) 23 Gross domestic product 25,615.7 26,085.8 26,837.1 26.331.6 26,597.8 26,765.0 26,897.9 27,095.7 24 Personal consumption expenditures . 17,459.2 17,748.7 18,175.8 17,847.8 18,045.2 18,053.9 18,255.7 18,353.9 25 Disposable personal income 18,861.0 19,116.0 19,494.0 19,152.0 19,331.0 19,439.0 19,518.0 19,688.0 26 Saving rate (percent) 4.8 GROSS SAVING 27 Gross saving 1,165.5 1,267.8 1,303.0 1,332.9 1,396.9 1,411.6 n.a. 28 Gross private saving . . 1,093.1 1,125.5 1,131.4 1,134.0 1,178.1 1,159.6 n.a. 29 Personal saving 254.6 239.6 224.7 220.4 215.9 247.0 208.2 227.8 30 Undistributed corporate profits' 172.4 202.1 n.a 212.6 21L5 217.6 230.0 n a. 31 Corporate inventory valuation adjustment -24.3 -2.5 5.7 3.3 3.5 5.9 3.6 9.6 Capital consumption allowances 32 Corporate 428.9 452.3 475.6 462.0 467.4 472.6 478.0 484.5 33 Noncorporate 224.1 230.5 241.2 235.2 238.0 239.7 242.4 244.7 34 Gross governmenl saving 72.4 142.3 171.6 198.9 218.8 251.9 35 Federal -103.6 -39.3 -5.9 15.9 34.7 60.8 n.a. 36 Consumption of fixed capital 70.9 71.2 71.3 71.4 71.5 71.6 71.8 37 Current surplus or deficit (-), national accounts -174.4 -110.5 -77.1 -55.5 -36.8 -10.8 38 State and local 176.0 181.5 n.a. 177.5 182.9 184.1 191.1 n.a. 39 Consumption of fixed capital 72.9 76.2 79.5 77.2 78.2 79.2 79.7 80.8 40 Current surplus or deficit (-). national accounts 103.1 105.3 100.4 104.7 104.9 111.4 41 Gross investment 1,137.2 1,207.9 1,243.5 1,268.6 1,323.4 1,308.4 42 Gross private domestic investment . . . 1.038.2 1,116.5 1,240.9 1,151.1 1,193.6 1,242.0 1.250.2 1.277.8 43 Gross government investment 213.4 224.3 226.0 225.3 223.3 227.4 227.1 226.0 44 Net foreign investment -114.4 -132.9 n.a. -132.9 -148.4 -146.0 - 168.9 45 Statistical discrepancy -103.2 1. With inventory valuation and capital consumption adjustments. SOURCE. US 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 • May 1998 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1997 Item credits or debits 1996 1997 Q4 Q3 Q4I 1 Balance on current account -129.095 -148,184 -166.446 -36,874 -39,916' -37,795' -43,114 -45.619 2 Merchandise trade balance -173,560 -191,170 -198.934 -48,190 -49,844' -47,188' -52,001 -49,901 3 Merchandise exports 575,871 612,069 678,348 157,846 162,341' 171,227' 170,255 174,525 4 Merchandise imports -749,431 -803,239 -877,282 -206,036 -212,185' -218,415' -222,256 -224.426 5 Military transactions, net 3.866 3,786 3,830 1,295 437 1.048 1,398 947 6 Other service transactions, net 67,837 76,344 81,462 20,697 20,083' 20,470' 20,696 20,215 7 Investment income, net 6,808 2,824 -14,277 1,250 -2,015' -3,270' -4,137 -4,856 8 U.S. government grants -11,096 -14,933 -11,688 -5,499 -2.109 -2,245 -2,231 -5,103 9 U.S. government pensions and other transfers -3,420 -4,331 -4,075 -1,050 -1,033' -1,031 -1,023 10 Private remittances and other transfers -19,530 -20,704 -22.763 -5,377 -5,577' -5.808 -5,898 11 Change in U.S. government assets other than official reserve assets, net (increase. -) -549 -690 177 -284 -21 -268 461 12 Change in U.S. official reserve assets (increase, -) . -9,742 6,668 -1.010 -315 4,480 -236 -730 -4,524 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -808 370 -350 -146 72 -133 -139 -150 15 Reserve position in International Monetary Fund . -2,466 -1,280 -3,575 -28 1,055 54 -463 -4,221 16 Foreign currencies -6,468 7,578 2,915 -141 3,353 -157 -128 -153 17 Change in U.S. private assets abroad (increase, —). -296,916 -358,422 -426,105 -153,837 -132,756' -90,760' -110,427 -92.159 18 Bank-reported claims3 -75,108 -98,186 -151,076 -66,657 -62,026 -27,947 -30,602 -30,501 19 Nonbank-reported claims -34,997 -64,234 -76,298 -26,115 -29,466 -3,984 -17.848 20 U.S. purchases of foreign securities, net -100.074 -108.189 -79,287 -30,200 -14,510 -21,841 -39,214 -3,722 21 U.S. direct investments abroad, net -86,737 -87,813 -119,444 -30,865 -26,754' -36,988' -22,763 -32,936 22 Change in foreign official assets in United States (increase, +) 110,729 122,354 18,157 33,097 28.891 -5,374 21,867 -27,227 23 U.S. Treasury securities. 68,977 111,253 -7.019 33,564 23,289 -12,108 6,686 -24.886 24 Other U.S. government obligations. 3,735 4,381 4,048 1,854 651 644 2,667 86 25 Other U.S. government liabilities 744 720 539 160 478 654 -510 -83 26 Other V.S. liabilities reported by U.S. banks' I'..'......','. 34.008 4,722 21,274 -4,270 7,698 4,536 12,391 -3,351 27 Other foreign official assets 3,265 1,278 -685 1,789 -3,225 900 633 1.007 28 Change in foreign private assets in United States (increase, +) 340,505 425,201 672.340 161,482 153,391' 148,433' 161,425 209,090 29 U.S. bank-reported liabilities3 30,176 9,784 142.545 38,960 17,387 28,100 10,102 86,956 30 U.S. nonbank-reported liabilities 34,588 31,786 44,740 -2,912 15,210 -7,916 22,046 31 Foreign private purchases of U.S. Treasury securities, net 111,848 172,878 75,326 51,289 49,915 42,919 43,731 32 Foreign purchases of other US. securities, net 96,367 133,798 189,273 32,447 38,820 51,682 60,409 38.362 33 Foreign direct investments in United States, net 67.526 76,955 107,928 17,661 30,685' 26.652' 25,949 24,641 34 Allocation of special drawing rights 0 0 0 0 0 0 0 0 35 Discrepancy -14.931 -46,927 -97,113 -3,269 -14.069' -U.OOtf -29,482 -39,566 36 Due to seasonal adjustment 2,669 7,287' -1,485' -8,489 2.683 37 Before seasonal adjustment -97,113 -5,938 -21,356 -12.515 -20,993 -42,249 MEMO Changes in official assets 38 U.S. official reserve assets (increase, —) -9,742 6,668 -1,010 -315 4,480 -236 -730 -4,524 39 Foreign official assets in United States, excluding line 25 (increase, t-) 109.985 121,634 17,618 32,937 28,413 -6,028 22,377 -27,144 40 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 4,239 12,278 12,782 3,315 9,272 2,287 2,619 -1,396 1. Seasonal factors are not calculated for lines 12-16, 18-20, 22-34, and 38-40. 4. Associated primarily with military sales contracts and other transactions arranged with 2. Data are on an international accounts basis. The data differ from the Census basis data, or through foreign official agencies. shown in table 3.11, for reasons of coverage and timing. Military exports are excluded from 5. Consists of investments in U.S. corporate stocks and in debt securities of private merchandise trade data and are included in line 5. corporations and state and local governments. 3. Reporting banks include all types of depository institutions as well as some brokers and SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current dealers. Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A51 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1997' 1998 Item 1995 1996 1997r July Aug. Sept. Oct. Nov. Dec. Jan.p 1 Goods and services, balance -101,857 -111.040 -113,684 -9,919 -8,993 -10,996 -8,979 -8,904 -10,897 -12,044 2 Merchandise -173,560 -191,170 -198,975 -16,867 -16,578 -18,557 -16,498 -15,741 -17,703 -18,796 71,703 80,130 85,291 6.948 7,585 7.561 7,519 6,837 6,806 6.752 4 Goods and services, exports 794,610 848,833 931,370 77,681 78,867 78.104 80,067 78,661 79,352 77.283 5 Merchandise 575,871 612,069 678,150 56,683 57,264 56,308 58,388 57,524 58,414 56,296 218,739 236,764 253,220 20,998 21,603 21,796 21,679 21,137 20,938 20,987 7 Goods and services, imports -896,467 -959,873 -1,045,054 -87,600 -87,860 -89,100 -89,046 -87,565 -90,249 -89.327 -749,431 -803,239 -877,125 -73,550 -73,842 -74,865 -74,886 -73,265 -76,117 -75,092 9 Services -147,036 -156,634 -167,929 -14,050 -14,018 -14,235 -14,160 -14,300 -14,132 -14,235 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 US. RESERVE ASSETS Millions of dollars, end of period 1997 1998 Asset 1994 1995 1996 July Aug. Sept. Oct. Nov. Dec. Jan. Feb.!1 1 Total 74,335 85,832 75,090 66,120 66,640 67,148 68,036 67,112 69,954 70,003 70,628 2 Gold stock, including Exchange 11,051 11,050 11,049 11,051 11,050 11,050 11,050 11,050 11,050 11,046 11,046 10,039 11,037 10,312 9,810 9,985 9,997 10,132 10,120 10,027 9,998 10,217 4 Reserve position in International Monetary Fund2 12,030 14,649 15,435 13,677 13,959 14,042 14.243 14,571 18,071 18,039 18,135 5 Foreign currencies4 41,215 49.096 38,294 31,582 31,646 32,059 32.611 31,371 30,809 30,920 31.230 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 1998 Asset 1994 1995 1996 July Aug. Sept. Oct. Nov. Dec. Jan. Feb.p 1 Deposits 250 386 167 175 169 188 190 167 457 215 243 Held in custody 2 U.S. Treasury securities 441,866 522,170 638,049 653,157 660,461 655,406 638.100 635,092 620,885 625,219 621,956 3 Earmarked gold3 12,033 11,702 11,197 10,793 10,793 10,793 10,793 10,793 10,763 10,709 10,705 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 • May 1998 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1997' 1998 Item 1995 1996 July Aug. Sept. Oct. Nov. Dec. Jan.p 1 Total1 .... 630,918 758,624 781,414 793,548 803,621 798,596 791,618 776,806 779,307 By type 2 Liabilities reported by banks in the United States" 107,394 113,098 129,797 128,628 138,176 153,704 147.746 134,846 140,903 3 US. Treasury bills and certificates 168,534 198,921 161,270 165,453 161,610 153,283 150,102 148.301 145,609 U.S. Treasury bonds and notes 293,690 379.497 422,934 431,169 434,260 421,412 423,243 422,876 421,687 5 Nonmarketable* 6,491 5,958 5,804 5,841 5,879 5,919 5,955 5,994 6,033 6 U.S. securities other than U.S. Treasury securities5 54,809 61.140 61,609 62,457 63,696 64,278 64,572 54,789 65,075 By area 1 Europe1 222,406 257,915 272,159 272,566 276,594 280,489 272,630 262,928 261,955 19,473 21,295 21,112 20,959 21,233 19,418 19,275 18,749 18,339 66,721 80,623 93,117 94,262 94,754 90,190 94,135 97,310 96,697 10 Asia 311,016 385,484 380.702 390.584 394,551 391,541 390,203 381,172 385,949 11 Africa 6,296 7.379 8.882 8.934 10,218 9,812 9,542 10,118 10.213 12 Other countries 5,004 5.925 5,440 6.241 6,269 7.144 5,831 6,527 6,152 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 States' Payable in Foreign Currencies Millions of dollars, end of period 1997 Item 1994 1995 1996 Mar. June Sept. Dec. 89.258 109,713 103,383 109,238 109,433 118,477 116,738 2 Banks1 claims 60,711 74,016 66,018 72,589 ' 84,623 89,568 82,729 3 Deposits 19,661 22,696 22,467 24,542 26,461 28,961 24,769 41,050 51,320 43,551 48,047 58,162 60,607 57,960 10,878 6,145 10,978 10,196 10,265 10,210 8,476 1. Data on claims exclude foreign currencies held by U.S. monelajy authorities. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A53 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States' Payable in U.S. dollars Millions of dollars, end of period 1995 July Aug. Sept. Oct. BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,099,549 1,162,148 1,278,116 1,200,323 1,192,443 1,198,563 1,225,798 l,240.240r 1,278,116 1,259,215 2 Banks' own liabilities 753,461 758,998 878,019 807,103 788,607 797,480 824,419 833,966' 878,019 863,625 3 Demand deposits 24,448 27,034 32,076 27,655 27,107 28.332 33.551 35,690' 32,076 29,427 4 Time deposits2 192,558 186,910 193,483 189,352 190.465 187.475 193.424 191,772' 193,483 187,826 5 Other3 140,165 143,510 167,644 177,279 162,026 171.113 193.960 180,925' 167,644 184,745 6 Own foreign offices4 396.290 401,544 484.816 412,817 409,009 410,560 403,484 425,579' 484.816 461.627 7 Banks' custodial liabilities 346,088 403,150 400.097 393,220 403,836 401,083 401,379 406,274 400,097 395,590 8 U.S. Treasury bills and certificates6 197,355 236,874 193,325 202,630 209,121 205.946 200,215 196,476 193,325 184.878 9 Other negotiable and readily transferable instruments7 52,200 72,011 93,604 88,057 89,096 90,686 95.108 99.882 93,604 96,950 10 Other 96,533 94,265 113,168 102,533 105,619 104,451 106.056 109.916 113,168 113.762 11 Nonmonetary international and regional organizations1 11,039 13,972 11,690 11,796 10,569 11,806 13,914 12.469 11,690 11,075 12 Banks' own liabilities 10,347 13.355 11.486 11,384 10,068 11,524 13,509 12.205 11.486 10.883 13 Demand deposits 21 29 16 86 217 771 36 43 16 75 14 Time deposits 4.656 5,784 5,466 4,726 4,879 5,967 5.161 6,310 5,466 4,943 15 Other3 5,670 7,542 6,004 6,572 4,972 4,786 8,312 5,852 6.004 5,865 16 Banks' custodial liabilities" 692 617 204 412 501 282 405 264 204 192 17 U.S. Treasury bills and certificates6 350 352 69 47 166 53 148 46 69 85 18 Other negotiable and readily transferable instruments7 341 265 133 365 314 229 257 133 107 19 Other 1 0 0 21 0 0 2 0 20 Official institutions9 275,928 312,019 283,147 291,067 294,081 299,786 306,987 297,848' 283.147 286.512 21 Banks' own liabilities 83,447 79,406 101,430 102,366 99,111 105,354 118,054 109,938' 101,430 110.999 22 Demand deposits 2,098 1,511 2,312 1,711 2,198 1,745 2,034 1,891 2,312 1.499 23 Time deposits" 30,717 33,336 41,242 42,145 40,301 39,884 41,670 39,666 41,242 38.331 24 Other3 50,632 44,559 57,876 58,510 56.612 63,725 74,350 68,381' 57.876 71,169 25 Banks' custodial liabilities^ 192,481 232.613 181,717 188,701 194,970 194,432 188,933 187,910 181.717 175,513 26 U.S. Treasury bills and certificates6 168,534 198.921 148,301 161,270 165,453 161,610 153,283 150,102 148.301 145.609 27 Other negotiable and readily transferable instruments7 23,603 33,266 33,211 26,878 29,349 32,315 35,236 37,374 33.211 29.614 28 Other 344 426 205 553 168 507 414 434 205 290 29 Banks1" 691,412 694.835 816,129 734,459 730,322 723,002 733.017 765,524' 816,129 787,298 30 Banks' own liabilities 567,834 562.898 642,388 573,819 566,366 562,218 568.398 595,594' 642,388 617,501 31 Unaffiliated foreign banks 171,544 161.354 157,572 161,002 157,357 151,658 164.914 170.015' 157,572 155,874 32 Demand deposits 11.758 13.692 17,512 13,700 13,323 13,852 18,354 21.316' 17,512 15,974 33 Time deposits2 103,471 89,765 83,819 80,131 81,890 76,443 83,172 84.621' 83,819 80.141 34 Other3 56,315 57,897 56,241 67,171 62,144 61,363 63,388 64,078' 56,241 59,759 35 Own foreign offices4 396,290 401.544 484.816 412,817 409.009 410,560 403.484 425,579' 484,816 461,627 36 Banks' custodial liabilities 123,578 131,937 173,741 160.640 163,956 160,784 164.619 169.930 173,741 169.797 37 U.S. Treasury bills and certificates6 15,872 23,106 31,915 28.642 30.629 30,012 33,085 32,995 31.915 27.607 38 Other negotiable and readily transferable instruments 13,035 17,027 35,333 35.522 33,960 32,886 32,065 33,826 35,333 35,266 39 Other 94,671 91,804 106,493 96,476 99,367 97,886 99.469 103,109 106,493 106,924 40 Other foreigners 121,170 141,322 167,150 163,001 157.471 163,969 171,880 164,399 167.150 174.330 41 Banks' own liabilities 91,833 103,339 122,715 119.534 113,062 118,384 124,458 116,229 122.715 124,242 42 Demand deposits 10,571 11,802 12,236 12.158 11,369 11,964 13,127 12,440' 12.236 11,879 43 Time deposits" 53,714 58,025 62,956 62,350 63.395 65,181 63,421 61.175' 62.956 64,411 44 Other3 27,548 33,512 47.523 45.026 38,298 41,239 47.910 42.614 47^523 47.952 45 Banks' custodial liabilities5 29.337 37.983 44,435 43,467 44,409 45,585 47,422 48.170 44.435 50,088 46 U.S. Treasury bills and certificates6 12,599 14.495 13,040 12,671 12,873 14.271 13,699 13.333 13.040 11,577 47 Other negotiable and readily transferable instruments7 15,221 21.453 24,927 25,292 25,473 25.256 27,550 28,465 24,927 31,963 48 Other 1,517 2,035 6,468 5,504 6,063 6,058 6.173 6,372 6,468 6,548 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 9.103 14,573 16,046 16,453 16,040 15.872 15.485 16.553 16,046 17,038 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 • May 1998 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1997' July Aug. Sept. Nov. AREA 50 Total, all foreigners 1,099.549 1,162,148 1,278,116' 1,200,323 1,192,443 1,198,563 1,225,798 1,240,240' 1,278,116' 1,259,215 51 Foreign countries 1,088,510 1,148,176 1,266,426' 1,188,527 1,181,874 1,186,757 1,211,884 1,227,771' 1,266,426' 1,248,140 52 Europe 362,819 376,590 420,290" 411,680 407,700 402,063 418,988 425,584' 420,290' 401,360 53 Austria 3,537 5,128 2,717' 3,257 3,404 2,691 2,679 2,319 2,717' 2,787 54 Belgium and Luxembourg 24,792 24,084 41.007' 43,291 46.063 43,436 46,067 46,258 41,007' 39.018 55 Denmark 2,921 2,565 1,514 2,289 1.736 2,867 2,359 2,157 1,514 1.625 56 Finland 2,831 1,958 2,246 1.814 1.751 2,163 1,997 1,969 2,246 2,177 57 France 39,218 35,078 46.607 43 464 41.213 43,065 45,057 45,653' 46,607 44,773 58 Germany 24.035 24,660 23,737 24,978 22.626 25,201 22,117 23,040 23.737 21,987 59 Greece 2,014 1,835 1.515 1,726 1,592 2,086 2.075 1.229 1,515 1,676 60 Italy 10,868 10,946 11,378 9,490 9,179 9,852 11.449 10,713 11,378 9.854 61 Netherlands 13,745 11,110 7,385 8.440 7,823 8,388 8,119 7.010 7,385 6,287 62 Norway 1,394 1,288 317 B46 604 1,321 1,022 1.793 317 955 63 Portugal 2,761 3,562 2,262 2,075 1,931 1,958 1,888 1.987 2,262 1,515 64 Russia 7,948 7,623 7,968 13,604 13,216 12,784 11,722 6.938 7,968 5,573 65 Spain 10,011 17,707 18,989 15,158 15,203 17,796 21,934 20,921 18,989 19,413 66 Sweden 3,246 1,623 1,628 1.925 2,317 2,024 1,348 1,614 1.628 1,415 67 Switzerland 43,625 44,538 39,258 44.283 41,076 36,862 37,075 39,665 39,258 37,414 68 Turkey 4,124 6,738 4,054 6.594 5,933 4,736 4,661 4,218 4,054 3,659 69 United Kingdom 139,183 153,420 181.824 161.672 167,914 158.849 165,199 177.781 181,824 176.290 70 Yugoslavia11 177 206 239 267 244 243 233 234 239 292 71 Other Europe and other former U.S.S.R.I: 26.389 22,521 25,645' 24,507 23,875 25,741 31.987 30,085 25,645' 24,650 72 Canada 30,468 38,920 28,341 30,445 27,629 29,592 30.282 30,921 28.341 29,034 73 Latin America and Caribbean 440.213 467,529 531,078' 500,824 496,658 502,648 501,854 499,265 531,078' 525,811 74 Argentina 12,235 13.877 20,193 17,100 18,033 16,643 17.557 18.214 20,193 19,213 75 Bahamas 94,991 88,895 112,216' 92,136 86,271 86,914 89.630 92,389 112,216' 112,907 76 Bermuda 4,897 5,527 6,911' 5,919 7,786 6,084 6,209 6,012 6,9(1' 6,266 77 Brazil 23,797 27,701 31,032' 28.340 31,567 33,575 31.675 32,609 31.032' 31,927 78 British West Indies 239,083 251,465 271,162' 265.291 268,485 273,570 270,004 263,770 271,162' 265,812 79 Chile 2.826 2.915 4.072 3,440 3,353 3.327 3.579 3.283 4,072 4,513 80 Colombia 3,659 3,256 3.630 2,652 2,587 2,657 3.395 3,266 3,630 3.535 81 Cuba 8 21 66 54 60 55 71 57 66 63 82 Ecuador 1,314 1,767 2.078 1.640 1,512 1,508 1,671 1,704 2,078 1.876 83 Guatemala 1,276 1,282 1,494 1.455 1,389 1,449 1,399 1.361 1.494 1,491 84 Jamaica 481 628 450 532 534 523 481 445 450 449 85 Mexico 24,560 31,240 33,971 34 779 30,804 32,640 32,748 32.668 33.971 33,224 86 Netherlands Antilles 4,673 6,099 5,078 10.986 8,286 7,566 6,059 4,987 5,078 5,777 87 Panama 4,264 4,099 4,239 4 424 3,805 3,835 4,107 4,291 4,239 3,911 88 Peru 974 834 893 958 1.006 904 917 907 893 875 89 Uruguay 1,836 1,890 2,382 2 »2 2,070 1.997 2,184 2,247 2,382 2,201 90 Venezuela 11,808 17,363 21,601' 19.124 20,159 20,580 20,639 22,110' 21,601' 22,331 91 Other 7,531 8,670 9,610' 9,602 8,951 8,821 9,529 8,945' 9,610' 9,440 92 Asia 240.595 249,083 269,166' 227,759 231,017 234,560 242,074 255,000' 269,166' 274,165 China 93 Mainland 33,750 30,438 18,228' 9 480 10,450 12,664 16,244 17,433' 18.228' 20,133 94 Taiwan 11,714 15,995 11,760' 13,464 11,803 13,460 15,207 13,586 11,760' 12,932 95 Hong Kong 20,197 18,789 17,722' 18,737 17,647 18,533 19,755 18,886 17,722' 17,952 96 India 3,373 3,930 4,567 4,555 4,474 4,451 5,131 4,913 4,567 5,331 97 Indonesia 2,708 2,298 3,554 2,817 3,737 2,810 4,568 3.092 3.554 2,911 98 Israel 4,041 6,051 6,283 5.180 5,202 4,534 4,200 3.745 6.283 7,192 99 Japan 109,193 117,316 143,401' 118,410 119.581 118,536 116,852 133.690' 143.401' 138.663 100 Korea (South) 5,749 5.949 12,955 8,928 9,646 9,327 8,597 9.982 12.955 11,699 1 1 1 1 0 0 0 0 1 3 4 2 T P M O h h t i h i a d l e i i d l p r a l p e n i d n E e a s stern oil-exporting countries . ' ^ ' 1 1 1 5 8 2 3 , , , , 5 9 2 0 8 1 7 9 2 7 9 2 1 1 1 0 3 7 6 , , . , 9 3 2 7 1 8 7 4 2 5 2 8 2 1 5 6 3 4 . , , . 5 9 9 2 0 8 5 5 6 1 9 0 ' 2 1 2 5 3 4 . . , 7 2 3 9 1 6 0 0 2 6 2 8 2 1 4 5 2 5 , , , . 5 9 6 3 4 5 5 2 1 6 5 5 2 1 7 2 6 4 , , , , 0 4 5 2 1 0 4 7 2 9 9 5 2 1 7 2 6 4 , , , , 5 5 9 4 9 0 8 3 1 5 8 6 2 1 5 7 2 4 . . . . 2 8 5 0 7 1 5 2 4 7 8 4' 2 1 5 3 6 4 , , . . 5 2 9 9 0 5 5 8 1 0 9 6' 3 1 2 5 2 6 . , , , 5 8 9 0 0 5 3 5 5 0 8 9 105 Africa 7,641 8,116 10,343 9.734 9,731 10,380 10,310 9.520 10,343 10.291 106 Egypt 2,136 2,012 1,663 1.921 1,973 2,050 1,742 1,836 1.663 1,949 107 Morocco 104 112 138 112 94 99 105 69 138 131 108 South Africa 739 458 2,158 1.697 1,694 2,047 2,028 1,615 2,158 1,685 109 Zaire 10 10 10 8 7 14 3 5 10 7 110 Oil-exporting countries14 . 1,797 2.626 3,060 2,981 3,211 3,280 3,194 2,948 3,060 3,470 111 Other 2.855 2,898 3,314 3,015 2,752 2,890 3,238 3.047 3,314 3,049 112 Other 6,774 7,938 7,208 8,085 9,139 7,514 8,376 7,481 7,208 7,479 113 Australia 5,647 6,479 6,304 6,782 7,917 6,391 7,284 6,283 6,304 6,383 114 Other 1,127 1,459 904 1,303 1,222 1,123 1,092 1,198 904 1.096 115 Nonmonetary international and regional organizations. 11,039 13,972 11,690' 11,796 10,569 11,806 13,914 12,469 11,690' 11,075 116 International " 9.300 12,099 10,517' 10,341 9,434 10,634 11,943 10,926 10.517' 9,851 117 Latin American regional 893 1,339 424' 794 579 1.277 1,053 424' 975 118 Other regional17 846 534 749 661 556 694 490 749 249 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 Seiilcmenls. 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 Inler-American Development Bank. 13. Comprises Bahrain. Iran. Iraq. Kuwail, Oman. Qatar. Saudi Arabia, and United Arab 17. Asian, African, Middle Eastern, and European regional organizations, except the Bank Emirates (Trucial States). for International Settlements, which is included in "Other Europe." 14. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period Area or country 1997' July Aug. Sept. Nov. 1 Total, all foreigners 532,444 599,925 708,297 646,504 650,453 656,676 681,634 699,049r 708,297 702,931 2 Foreign countries 530,513 597,321 705,834 645,351 648,036 654,633 679,886 696,563r 705,834 700,014 3 Europe 132,150 165,769 200,023 186,365 189,759 199,261 213,886 215.061' 200,023 204,732 4 Austria 565 1,662 1,354 1,690 1,739 1,371 1,913 2.034 1,354 1,917 5 Belgium and Luxembourg 7,624 6,727 6,755 8,094 8,124 7,847 8,347 7,461 6,755 5,714 6 Denmark 403 492 980 806 811 1,082 896 844 980 1,531 7 Finland 1,055 971 1,233 1,247 1,773 1,889 1,808 1.259 1,233 1,492 8 France 15,033 15,246 16,239 18,689 16,232 17,531 17,043 19.817' 16,239 21,482 9 Germany 9,263 8,472 12,676 8,351 8,685 11,724 11,617 13.245' 12.676 10.849 10 Greece 469 568 402 461 481 499 463 401 402 504 11 Italy 5,370 6,457 6,259 7,443 8,015 7,670 7,146 6,870 6.259 6,661 12 Netherlands 5,346 7,117 6,141 12,050 11,083 11,548 11,504 11.496 6,141 5.394 13 Norway 665 808 555 745 849 1,713 1.419 2,080 555 979 14 Portugal 888 418 777 439 732 563 615 695 777 655 15 Russia 660 1,669 1,248 2,098 2,192 1,927 2,054 2,207 1,248 1.297 16 Spain 2,166 3,211 2,941 6,496 6,175 5,431 6,624 6,338 2,941 6.925 17 Sweden 2,080 1,739 1,854 1,740 1,639 1,659 1,838 1,804 1,854 1,738 18 Switzerland 7,474 19,798 28,846 24,883 24,338 25,393 29,980 29.399' 28,846 28,514 19 Turkey 803 1,109 1,558 1,362 1,305 1,410 1,424 1,572 1,558 1,648 20 United Kingdom 67,784 85,234 103,143 84,162 90,226 93,825 102,405 100,870 103,143 99.279 21 Yugoslavia^ 147 115 52 75 76 75 75 74 52 53 22 Other Europe and other former U.S.S.R.' 4,355 3,956 7,010 5,534 5,284 6,104 6,715 6,595 7,010 8,100 23 Canada 20,874 26,436 27,170 26,289 24,442 23,513 22,824 24,765 27.170 25.146 24 Latin America and Caribbean 256,944 274,153 343,752 300,339 298,786 302,528 303,877 317,478 343.752 345.572 25 Argentina 6,439 7,400 8,917 7,088 7,277 7,243 8,138 8,757 8.917 9,072 26 Bahamas 58,818 71.871 89.379 69,819 70,031 66,074 73,837 72.739 89.379 90,833 27 Bermuda 5,741 4.129 8,782 8.252 9,829 9,342 8,097 6,552 8,782 9,385 28 Brazil 13,297 17,259 20.900 18,879 19,249 19,422 20,127 20,382 20.900 21,625 29 British West Indies 124,037 105,510 146.257 134,438 128,373 133.778 133,310 141,801 146,257 146,658 30 Chile 4,864 5,136 7.913 5.686 5.919 6,235 7,189 7,783 7,913 7.910 31 Colombia 4,550 6,247 6.937 6,419 6.608 6.543 6,862 6,968 6,937 6,726 32 Cuba 0 0 0 0 0 0 0 3 0 0 33 Ecuador 825 1,031 1.311 1.165 1,199 1,218 1,307 1,292 1,311 1,390 34 Guatemala 457 620 886 679 689 764 760 787 886 863 35 Jamaica 323 345 424 359 375 374 364 405 424 422 36 Mexico 18,024 18,425 19,517 19,585 18,680 18,770 18,584 18,904 19,517 20,509 37 Netherlands Antilles 9,229 25,209 17,838 15,759 18,399 20,325 12,274 17,064 17,838 16,030 38 Panama 3,008 2,786 4,364 3,272 3,482 3,566 3,957 4,089 4,364 4,062 39 Peru 1,829 2,720 3,490 2,697 2,850 3,060 3,184 3,456 3,490 3.411 40 Uruguay 466 589 629 778 702 728 709 651 629 588 41 Venezuela 1.661 1,702 2,123 1,734 1,750 1,716 1,636 1,915 2,123 2,250 42 Other 3,376 3,174 4,085 3,730 3,374 3,370 3,542 3,930 4,085 3,838 43 Asia 115,336 122,478 125,020 122,517 124,927 120,807 129,589 129,760' 125,020 114,393 China 44 Mainland 1,023 1,401 1,579 2,385 2,574 2,798 2,345 2,102 1,579 2,541 45 Taiwan 1,713 1,894 921 1,523 1,521 1,250 1,271 1,000 921 847 46 Hong Kong 12,821 12,802 13,995 12,247 13,188 13,573 15,343 15,156 13,995 14,552 47 India 1,846 1,946 2,200 2,184 2,110 2,086 2,360 2,501 2,200 2,306 48 Indonesia 1,696 1,762 2,611 2,524 2,579 2,713 2,698 2,774' 2.611 2,346 49 Israel 739 633 768 855 749 907 1,539 1,201 768 925 50 Japan 61,468 59,967 59,546 55,592 54,427 52,480 59,437 60,195 59,546 52,903 51 Korea (South) 13,975 18,901 18,118 21,274 21,690 19,978 19,922 19,253 18,118 14,427 52 Philippines 1,318 1,697 1,689 1,723 1,834 1,670 1,455 1,533 1,689 1,794 53 Thailand 2,612 2,679 2,259 2,825 2,641 2,479 2,317 2,180 2,259 2,164 54 Middle Eastern oil-exporting countries4 9,639 10,424 10,790 9,751 9,503 7,988 8,490 8,909 10,790 9,133 55 Other 6,486 8,372 10,544 9,634 12,111 12,885 12,412 12,956' 10,544 10,455 56 Africa 2,742 2,776 3,530 3,125 3,281 3.464 3,342 3,332 3,530 3,587 57 Egypt 210 247 247 267 288 251 245 282 247 279 58 Morocco 514 524 511 463 554 547 599 412 511 498 59 South Africa 465 584 805 493 489 655 557 743 805 702 60 Zaire 1 0 0 0 0 0 0 0 0 0 61 Oil-exporting countries5 552 420 1,212 1,134 1,178 1,123 1,111 1,091 1,212 1,323 62 Other 1,000 1,001 755 768 772 830 804 755 785 63 Other 2,467 5,709 6,339 6,716 6,841 5.060 6.368 6,167 6,339 6,584 64 Australia 1,622 4,577 5,299 4,938 5,266 4.314 5.296 4.962 5,299 5,500 65 Other 845 1,132 1,040 1,778 1,575 746 1.072 1.205 1,040 1,084 66 Nonmonetary international and regional organizations6 .. 1,931 2,604 2,463 1,153 2,417 2,043 1.748 2,486 2,463 2,917 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 lU May 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 1998 Type of claim 1995 1996 1997 July Aug. Sept. Oct.' Nov.' Dec. Jan.p 1 Total 655,211r 743,919r 858,031 826,669' 858,031 2 Banks" claims 532.444 599,925 708,297 646,504 650,453 656,676 681,634 699,049 708,297 702,931 3 Foreign public borrowers 22,518 22,216 20,706 26,923 28,263 30,287 29.795 27,739 20,706 30,213 4 Own foreign offices 307,427 341,574 431,677 370,506 370,599 374,443 400,200 409.314 431,677 415,528 5 Unaffiliated foreign banks 101,595 113,682 109,496 117,694 115,343 104,749 115,295 122,350 109,496 111,296 37,771 33,826 29,789 36,006 35.436 29,509 30,358 32,373 29,789 29,287 7 Other 63,824 79,856 79,707 81,688 79,907 75,240 84,937 89,977 79,707 82,009 8 All other foreigners 100,904 122,453 146,418 131.381 136,248 147.197 136.344 139,646 146.418 145.894 122,767 143,994 149,734 169,993 149.734 10 Deposits 58,519 73,110 101,683 73,110 11 Negoriable and readily transferable 77,657 instruments4 44,161 53,967 50,291 53,967 12 Outstanding collections and other 51.207 20,087 22,657 18.019 22,657 15,130 MEMO 13 Customer liability on acceptances 8,410 10,388 9,587 10.854 9,587 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United Statess 30,717 39.661 34,166 38,213 45,342 38,171' 39.157 37,527 34.166 36,052 1. For banks' claims, data are monthly; for claims of banks" domestic customers, data are principally of amounts due from the head office or parent foreign bank, and from foreign for quarter ending with month indicated. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. Reporting banks include all types of depository institution as well as some brokers and 3. Assets held by reporting banks in the accounts of their domestic customers. dealers. 4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial 2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiar- paper. ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory 5. Includes demand and time deposits and negotiable and nonnegotiable certificates of agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists deposit denominated in U.S. dollars issued by banks abroad. 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1997 Maturity, by borrower and area2 1994 1995 1996 Mar. June Sept. Dec.p 1 Tolal 202,282 224,932 258,106 276,025 271,894 282,234 276,578 fly borrower 2 Maturity of one year or less 170,411 178,857 211,859 223,721 211,140 219,343 205,879 3 Foreign public borrowers 15.435 14,995 15,411 19,876 17,979 21,535 12.135 4 All other foreigners 154.976 163.862 196.448 203,845 193.161 197,808 193,744 5 Maturity of more than one year 31,871 46.075 46.247 52,304 60,754 62,891 70,699 6 Foreign public borrowers 7,838 7,522 6 790 8,835 11,220 8 752 8,528 7 All other foreigners 24,033 38,553 39,457 43,469 49,534 54.139 62,171 By area Maturity of one year or less 8 Europe 56,381 55,622 55 690 74,888 69,233 69 213 58,407 9 Canada... 6,690 6,751 8,339 10,423 10,320 8,460 9,917 10 Latin America and Caribbean 59,583 72,504 103 254 96,892 87,059 99,902 97,198 11 Asia 40,567 40.296 38,078 36.478 38,434 36,030 33,958 12 Africa 1,379 1.295 1.316 1,451 1,899 2,157 2,211 13 All other' 5.811 2,389 5.182 3.589 4,195 3,581 4,188 Maturity of more than one year 14 Europe 4,358 4.995 6.965 9,512 11,835 11,198 13,240 15 Canada 3,505 2,751 2,645 2,934 3,164 3,832 2,512 16 Latin America and Caribbean 15,717 27,681 24,943 26,797 31,001 34,873 42,069 17 Asia 5,323 7,941 9.392 10,773 12,510 10,394 10,159 18 Africa 1,583 1,421 1.361 1,204 1,264 1,236 1,236 19 All other1 1,385 1,286 941 1,084 980 1,358 1,483 I. Reporting banks include all types of depository iistitutions as well as some brokers and 2. Maturity is time remaining until maturity. dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1995 Area or country Dec. Sept. Sept. 1 Total.... 409.5 499.5 551.9 574.7 612.8r 586.2r 645.3r 647.6r 678.8r 712.3r 2 G-10 countries and Switzerland 161.9 191.2 206.0 203.4 226.9' 220Xf 228.3r 231.4' 250.0' 247.7' 3 Belgium and Luxembourg 7.4 7.2 13.6 11.0 11.4 11.3 11.7 14.1 9.4 11.4 4 France 12.0 19.1 19.4 17.9 18.0 17.4 16.6 19.7 17.9 20.2 5 Germany 12.6 24.7 27.3 31.5 31.4' 33.9' 29.8' 32.1' 34.1' 34 7' 6 Italy 7.7 11.8 11.5 13.2 14.9 15.2 16.0 14.4 20.2 19.3 7 Netherlands 4.7 3.6 3.7 3.1 4.7 5.9 4.0 4.5 6.4 7.2 8 Sweden 2.7 2.7 2.7 3.3 27 3.0 2.6 3.4 3.6 4.1 9 Switzerland 5.9 5.1 6.7 5.2 6.3 6.3 5.3 6.0 5.4 4.8 10 United Kingdom 84.4 85.8 82.4 84.7 101.6 90.5 104.7 99.2 110.6 108.3 11 Canada 6.9 10.0 10.3 10.8 12.2 14.8 14.0 16.3 15.7 15.1 12 Japan 17.6 21.1 28.5 22.7 23.6 21.7 23.7 21.7 268 22.6 13 Other industrialized countries 26.5 45.7 50.2 61.3 S5.5 62.1 65.7 66.4 71 7 73.8 14 Austria .7 1.1 .9 1.3 1.2 1.0 1.1 1.9 1.5 1.7 15 Denmark 1.0 1.3 2.6 3.4 3.3 1.7 1.5 1.7 2.8 3.7 16 Finland .4 .9 .8 .7 .6 .6 .8 .7 1.4 1.9 17 Greece 3.2 4.5 5.7 5.6 5.6 6.1 6.7 6.3 6.1 6.2 18 Norway 1.7 2.0 3.2 2.1 2.3 3.0 8.0 5.3 4.7 4.6 19 Portugal .8 1.2 1.3 1.6 1.6 1.4 .9 1.0 1.1 1.4 20 Spain 9.9 13.6 11.6 17.5 13.6 16.1 13.2 14.4 15.4 13.9 21 Turkey 2.1 1.6 1.9 2.0 2.3 2.8 2.7 2.8 3.4 4.4 22 Other Western Europe 3.2 3.2 4.7 3.8 3.4 4.8 4.7 6.3 5.5 6.1 23 South Africa 1.1 1.0 1.2 1.7 2.0 1.7 2.0 1.9 1.9 1.9 24 Australia 2.3 15.4 16.4 21.7 19.6 22.8 24.0 24.4 27.8 28.1 25 OPEC2 17.6 24.1 22.1 21.2 20.1 19.2 19.7 21.8 22.3 22.9 26 Ecuador .5 .5 .7 .8 .9 .9 II 1.1 .9 1.2 27 Venezuela 5.1 3.7 2.7 2.9 2.3 2.3 2.4 1.9 2.1 2.2 28 Indonesia 3.3 3.8 4.8 4.7 4.9 5.4 5.2 4.9 5.6 6.5 29 Middle East countries 7.6 15.3 13.3 12.3 11.5 10.2 10.7 13.2 12.5 11.8 30 African countries 1.2 .9 .6 .6 .5 .4 .4 .7 1.2 I.I 31 Non-OPEC developing countries . . 96.0 112.6 118.6 126.5 128.1 140.6 136.9 Latin America 32 Argentina 7.7 11.2 12.9 12.7 14.1 15.0 14.3 14.3 16.4 17.1 33 Brazil 12.0 8.4 13.7 18.3 21.7 17.8 20.7 22.0 27.3 26.1 34 Chile 4.7 6.1 6.8 6.4 6.7 6.6 7.0 6.8 7.6 7.9 35 Colombia 2.1 2.6 2.9 2.9 2.8 3.1 4.1 3.7 3.3 3.4 36 Mexico 17.9 18.4 17.3 16.1 15.4 16.3 16.2 17.2 16.6 16.4 37 Peru .4 .5 .8 .9 1.2 1.3 1.6 1.6 1.4 1.8 38 Other 3.1 2.7 2.8 3.1 3.0 3.0 3.3 3.4 3.4 3.6 Asia China 39 Mainland 2.0 1.1 3.3 2.9 2.6 2.5 2.7 3.6 4.3 40 Taiwan 7.3 9.2 9.4 9.7 9.8 10.4 10.3 105 10.6 9.7 41 India 3.2 4.2 4.4 4.7 4.2 3.8 4.3 4.9 5.3 4.9 42 Israel .5 .4 .5 .5 .6 .5 .5 .6 .8 1.0 43 Korea (South) 6.7 16.2 19.1 19.3 21.7 21.9 21.5 14.6 16.3 16.2 44 Malaysia. 4.4 3.1 4.4 5.2 5.3 5.5 6.0 6.5 6.4 5.6 45 Philippines 3.1 3.3 4.1 3.9 4.7 5.4 5.8 6.0 7.0 5.7 46 Thailand 3.1 2.1 4.9 5.2 5.4 4.8 5.7 6.8 7.3 6.2 47 Other Asia 3.1 4.7 4.5 4.3 4.8 4.1 4.1 4.3 4.7 4.5 Africa 48 Egypt .4 .6 .7 .9 1.1 .9 49 Morocco .7 .7 .7 .6 .7 .7 50 Zaire .0 .0 .1 .0 .0 .0 51 Other Africa3 .9 1.0 .9 .9 .9 .9 52 Eastern Europe,. 3.2 4.2 6.3 5.1 5.3 6.9 8.9 7.1 9.8 53 Russia4 1.6 1.0 1.4 1.0 1.8 3.7 3.5 4.2 5.1 54 Other 1.6 1.9 3.2 4.9 4.1 3.5 3.2 5.4 2.9 4.7 55 Oifshore banking centers. .. 73.5 72.9 99.2 101.3 106.1 105.2 134.7 131.3 129.6 140.3 56 Bahamas 10.9 10.2 11.0 13.9 17.3 14.2 20.3 20.9 16 1 19.8 Bermuda. 8.9 8.4 6.3 5.3 4.1 4.0 4.5 6.7 7.9 9.8 58 Cayman Islands and other British West Indies . . 18.4 21.4 32.4 28.8 26.1 32.0 37.2 32.8 35.1 45.7 5 6 9 0 P N a e n th am er a la 5 nds Antilles 2 2 . . 8 4 1 1. . 3 6 10 1. . 4 3 11 1 . . 1 6 13 1 . . 2 7 11 1. . 7 7 26 2 . . 1 0 1 2 9 . . 0 9 1 2 5 . . 6 8 21 2. . 1 7 61 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .1 .1 62 Hong Kong, China 18.8 20.0 25.0 25.3 27.6 26.0 27.9 30.8 35.2 27.2 63 Singapore 11.2 10.1 13.1 15.4 15.9 15.5 16.7 17.9 16.7 14.1 64 Other8... .1 .1 .1 .1 .1 .1 .1 .3 I 65 Miscellaneous and unallocated7 43.6 66.9 57.6 62.6 50.0 59.6 59.6 57.6 80.8 1. The banking offices covered by tliese data include U.S. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of US 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 lypes 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 • May 1998 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period Type of liability, and area or country 1993 Sept. Dec. Mar. Sept. 50,597 54,309 46,448 48,943 51,604 54,798 58,750' 55,184' 55,476 2 Payable in dollars 38,728 38,298 33,903 35,338 36.374 38,956 39,944' 38,494' 39,583 3 Payable in foreign currencies 11,869 16,011 12,545 13,605 15,230 15.842 18,806' 16,690' 15.893 By type 4 Financial liabilities 29,226 32,954 24,241 24,797 25,445 26,065 29,633' 26,864' 25,970 5 Payable in dollars 18,545 18,818 12,903 12,165 11,272 11,327 11,847' 11,203' 11,248 6 Payable in foreign currencies 10,681 14,136 11,338 12,632 14,173 14,738 17,786' 15,661' 14,722 7 Commercial liabilities 21,371 21,355 22,207 24,146 26,159 28,733 29,117 28,320 29,506 8 Trade payables 8,802 10,005 11,013 11,081 11,791 12,720 11,515 11,122 10,961 9 Advance receipts and other liabilities 12,569 11,350 11.194 13,065 14,368 16,013 17,602 17,198 18,545 10 Payable in dollars 20,183 19,480 21.000 23,173 25,102 27,629 28,097 27,291 28,335 11 Payable in foreign currencies 1,188 1,875 1,207 973 1,057 1,104 1,020 1,029 1,171 By area or country Financial liabilities 12 Europe 18,810 21.703 15,622 16,387 16,086 16,195 20,081' 18,530* 18,019 13 Belgium and Luxembourg . 175 495 369 498 547 632 769 238 89 14 France 2,539 1,727 999 1,011 1,220 1,091 1,205 1,280 1.334 15 Germany 975 1,961 1,974 1,850 2,276 1,834 1,589 1.765 1.730 16 Netherlands 534 552 466 444 519 556 507 466 507 17 Switzerland 634 688 895 1,156 830 699 694 591 645 18 United Kingdom 13,332 15,543 10.138 10,743 9,837 10,177 13,863' 12,968' 12,165 19 Canada 859 629 632 951 973 1,401 602 456 399 20 Latin America and Caribbean 3,359 2,034 1,783 969 1,169 1,668 1,876 1,279 1,061 21 Bahamas 1,148 101 59 31 50 236 293 124 10 22 Bermuda 0 80 147 28 25 50 27 55 64 23 Brazil 18 207 57 8 52 78 75 97 52 24 British West Indies 1,533 998 866 826 764 1,030 965 769 663 25 Mexico 17 0 12 13 17 16 15 76 26 Venezuela 5 5 1 1 1 1 1 27 Asia 5,956 8,403 5.988 6,351 6,969 6,423 6,370 6,015' 6,006 28 4,887 7,314 5,436 6,051 6.602 5,869 5,794 5,435 5,492 29 Middle Eastern oil-exporting countries1 23 35 27 26 25 25 72 39 23 30 Africa 133 135 150 72 153 38 29 29 33 31 Oil-exporting countries2 123 123 122 61 121 0 0 0 0 32 All other1 109 67 675 555 452 Commercial liabilities 33 Europe 6,827 6,773 7,700 7,916 8,680 9,767 9,551 8,711 9,362 34 Belgium and Luxembourg 239 241 331 326 427 479 643 738 705 35 France 655 728 481 678 657 680 680 709 783 36 Germany 684 604 767 839 949 1,002 1,047 852 950 37 Netherlands 688 722 500 617 668 766 553 290 453 38 Switzerland 375 327 413 516 405 624 481 430 401 39 United Kingdom , 2,039 2,444 3,568 3,266 3,663 4,303 4,165 3,827 3,834 879 1,037 1.040 998 1,144 1,090 1,068 1,136 1,150 41 Latin America and Caribbean 1,658 1,857 1,740 2,301 2,386 2,574 2,563 2,501 2,225 42 Bahamas 21 19 I 35 33 63 43 33 38 43 Bermuda 350 345 205 509 355 297 479 397 180 44 Brazil 214 161 98 119 198 196 201 225 233 45 British West Indies 27 23 56 10 15 14 14 26 23 46 Mexico 481 574 416 475 446 665 633 594 562 47 Venezuela 123 276 221 283 341 328 318 304 322 48 Asia 10,980 10,741 10,421 11,389 12,227 13,422 13,968 13,926 14,682 49 Japan 4,314 4,555 3,315 3,943 4,149 4,614 4,502 4,460 4,587 50 Middle Eastern oil-exporting countries1 1,534 1,576 1,912 1,784 1,951 2,168 2,495 2,420 2,984 51 Africa 453 428 619 924 1,020 1,040 1,037 941 929 52 Oil-exporting countries 167 256 254 462 490 532 479 423 504 574 1.105 1,158 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 Type of claim, and area or country 1993 June Sept. June Sept. 1 Total 49,159 57,888 52,509 60,195 59,092 63,642 66,202r 67,039' 68,646r 2 Payable in dollars 45,161 53,805 48,711 55,350 55,014 58,630 60,226' 60,855' 62,030' 3 Payable in foreign currencies 3,998 4,083 3,798 4,845 4.078 5,012 5,976' 6,184' 6,616' By type 4 Financial claims 27,771 33,897 27,398 35,251 34,200 35,268 38,647' 39,490' 39,945' 5 Deposits 15,717 18,507 15,133 19,507 19,877 21,404 20,250' 22,896' 21,837' 6 Payable in dollars 15,182 18,026 14,654 19,069 19,182 20,631 18,599' 21,405' 20,278' 7 Payable in foreign currencies 535 481 479 438 695 773 1,651' 1,491' 1,559' 8 Other financial claims 12,054 15,390 12,265 15,744 14,323 13,864 18,397' 16,594' 18,108' 9 Payable in dollars 10,862 14,306 10,976 13,347 12,234 12,069 15,381' 13,337' 14,795' 10 Payable in foreign currencies 1,192 1,084 1,289 2,397 2,089 1,795 3,016' 3,257' 3,313' 11 Commercial claims 21,388 23,991 25,111 24,944 24,892 28,374 27,555 27,549 28,701' 12 Trade receivables 18,425 21,158 22,998 22,353 22,454 25,751 24,801 24,858 25,110' 13 Advance payments and other claims 2,963 2,833 2,113 2,591 2,438 2,623 2.754 2,691 3,591' 14 Payable in dollars 19,117 21,473 23,081 22,934 23,598 25,930 26,246 26,113 26,957' 15 Payable in foreign currencies 2,271 2,518 2,030 2,010 1,294 2,444 1,309 1,436 1,744' By area or country Financial claims 16 Europe 7,299 7,936 7,609 10,498 9,777 9,282 11,176' 11,677' 13,758' 17 Belgium and Luxembourg 134 86 193 151 126 185 119 203 360 18 France 826 800 803 679 733 694 760 680 1,112 19 Germany 526 540 436 296 272 276 324 281 352 20 Netherlands 502 429 517 488 520 493 567 519 764 21 Switzerland 530 523 498 461 432 474 570 447 448 22 United Kingdom 3,585 4,649 4,303 7,426 6,603 6,119 7,937' 8,604' 9,150' 23 Canada 2,032 3,581 2,851 4,773 4,502 3,445 4,917 6,422 4,279' 24 Latin America and Caribbean 16,224 19,536 14,500 17,644 17,241 19,577 19,742 18,725 19,166' 25 Bahamas 1,336 2,424 1,965 2,168 1,746 1,452 1,894 2,064 2,442' 26 Bermuda 125 27 81 84 113 140 157 188 1901 27 Brazil 654 520 830 1,242 1,438 1,468 1,404 1,617 1,501 28 British West Indies 12,699 15,228 10,393 13,024 12,819 15,182 15,176 13,553' 12,947' 29 Mexico 872 723 554 392 413 457 517 497' 508 30 Venezuela 161 35 32 23 20 31 21 15 31 Asia 1,657 1,871 1,579 1,571 1,834 2,221 2,068 1,934 2,015 32 Japan 892 953 871 852 1,001 1,035 831 766 999 33 Middle Eastern oil-exporting countries' 3 141 3 9 13 22 12 20 15 34 Africa 99 373 276 197 177 174 182 179 174 35 Oil-exporting countries2 1 0 5 5 13 14 14 15 16 36 All other3 600 583 568 Commercial claims 9,105 9,540 9,824 9,842 9,288 10,443 9,863 9,603 10,486' 37 Europe 184 213 231 239 213 226 364 327 331 38 Belgium and Luxembourg 1,947 1,881 1,830 1,659 1,532 1,644 1,514 1,377 1,642' 39 France 1,018 1,027 1,070 1,335 1,250 1,337 1,364 1,229 1,395' 40 Germany 423 311 452 481 424 562 582 613 573 41 Netherlands 432 557 520 602 594 642 418 389 381 42 Switzerland 2,377 2,556 2,656 2,658 2,516 2,946 2,626 2,836 2,904' 43 United Kingdom 44 Canada 1,781 1,988 1,951 2,074 2,083 2,165 2,381 2,464 2,649' 45 Latin America and Caribbean 3,274 4,117 4,364 4,347 4,409 5,276 5.067 5,241 5,028' 46 Bahamas 11 9 30 28 14 35 40 29 22 47 Bermuda 182 234 272 264 290 275 159 197 128 48 Brazil 460 612 898 838 968 1,303 1,216 1,136 1,101' 49 British West Indies 71 83 79 103 119 190 127 98 98 50 Mexico 990 1,243 993 1,021 936 1,128 1,102 1.140 1,219' 51 Venezuela 293 348 285 313 316 357 330 451 418 52 Asia 6,014 6,982 7,312 6,939 7,289 8,376 8,348 8,460 8,576' 53 Japan 2,275 2,655 1,870 1.877 1,919 2,003 2,065 2,079 2,048' 54 Middle Eastern oil-exporting countries1 704 708 974 903 945 971 1,078 1,014 987' 55 Africa 493 454 654 731 746 718 618 764 56 Oil-exporting countries 72 67 87 83 142 166 100 81 207 57 Other3 1,006 1,054 1,092 1,368 1,163 1,198' 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 • May 1998 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1998 Transaction, and area or country Jan. - July Sept. Jan.p Jan. U.S. corporate securities 1 Foreign purchases 590.714 963,888 90,130 85,138 84,953 80,546 106,674 85.150 90,995 90,130 2 Foreign sales 578,203 897,851' 74,715 76,820 75,428 105,668 80,133 85,671 83,877 83,877 3 Net purchases, or sales (—) 12,511 66,037' 10,423 8,133 5,118 1,006 5,017 5324 6,253 6453 4 Foreign countries 12,585 66,177r 10,412 8,176 5,123 1,024 5,025 5358 6305 6305 5 Europe 5,367 59,041 6.108 4,391 5,296 5,910 5,318 5.832 6 France -2,402 3,134 6.623 1,187 461 241 -80 -65 299 6,623 7 Germany 1,104 9,075 665 1,080 584 374 538 857 788 665 8 Netherlands 1.415 3,833 546 88 -118 820 757 579 409 546 9 Switzerland 2,715 7,845 613 922 557 -405 848 1,043 1,474 613 10 United Kingdom 4,478 22,215 683 1,167 2,170 3,559 2,444 1,875 1.232 683 11 Canada 2,226 -1,174 2,741 -489 -286 -560 -520 -344 -304 2,741 12 Latin America and Caribbean ... 5,816 5,264' -254 3,968 2,456 813 -4,091 -627 -1,224 -254 13 Middle East1 -1,600 173 2,646 -51 -64 32 79 16 21 2,646 14 Other Asia 918 2,061 -166 686 1,545 -519 -508 888 1,071 -166 15 Japan -372 4,780 -2,693 849 888 -313 229 709 551 -2,693 16 Africa -85 471 -1,112 99 2 94 80 -36 7 -1,112 17 Other countries -57 341 34 91 132 -33 74 -190 -45 34 115 115 18 Nonmonetary international and regional organizations .... -74 -34 BONDS2 19 Foreign purchases 393,953 614,068' 57,381 62,627 62,605 50,762 57,972 53,036' 52,332 57,381 268,487 477,891' 44,301 46,045 48,283 41,297 44.446 48,772r 43,153 44,301 20 Foreign sales 125,466 136,177' 13,080 16,582 14,322 9,465 13,526 4,264' 9,179 13,080 21 Net purchases, or sales (—) . 125,295 135,585' 13,048 16,568 14,254 9,464 12,999 4352' 9,168 13,048 22 Foreign countries 23 Europe 77,570 74,049' 5,286 10,182 7.586 5,843 3,098 2,799 4,435 5,286 24 France 4,460 3,301 74 522 275 300 142 546 -67 74 25 Germany 4,439 2,742 289 1.606 34 638 120 165 -474 289 26 Netherlands 2,107 3,576 -433 -79 602 135 369 185 425 -433 27 Switzerland 1,170 547 760 -378 -304 -501 -109 1,212 593 760 28 United Kingdom 60,509 56,191' 4,018 7,284 6,577 4,109 2,111 -200 3,069 4,018 29 Canada 4,486 6,264 1,409 281 557 624 866 459 677 1,409 30 Latin America and Caribbean 17,737 34,821 5,469 3,283 2,110 1,265 3,712 3,884 7,220 5,469 31 Middle East1 1,679 1,656 78 -9 -44 -I -183 199 142 78 32 Other Asia 23,762 17,023 420 2,700 3,916 1,591 5,634 -3,193 -3,520 420 33 Japan 14,173 9,360 -1,023 1,885 2,996 -613 5,207 -2,883 -3,758 -1,023 34 Africa 624 1,005 142 104 103 8 II 88 49 142 35 Other countries -563 767' 244 27 26 134 -139 116' 165 244 36 Nonmonetary international and regional organizations .... 171 32 Foreign securities 37 Stocks, net purchases, or sales (-) -59,268 -38,7OtC 148 -7,532 -7,892 -170 -1,981 2.381' 1.861 148 38 Foreign purchases 450,365 719,150' 62,355 68,868 60,740 62,687 79,535 70,284' 64.328 62,355 39 Foreign sales 509,633 757.850' 62,207 76.400 68,632 62,857 81,516 67.903' 62.467 62,207 40 Bonds, net purchases, or sales (—) -51,369 -46,148' -3,744 -11,337 -4,852 -7,963 -739 -4,260' -3,062 -3,744 41 Foreign purchases 1,114,035 1,471,878' 95,207 133.992 123,558 122,266 163,626 111,002' 115,302 95,207 42 Foreign sales 98,951 145,329 128,410 130,229 164,365 115,262' 118,364 98,951 1,165,404 1,518,026' 43 Net purchases, or sales (—), of stocks and bonds -3,596 -18,869 -12,744 -8,133 -2,720 -l,879r -1,201 -3,596 -110,637 -84,*48' 44 Foreign countries -3,507 -18,906 -12,673 -8,127 -2,555 -1,831' -1,115 -3,507 -109,766 -84,792' 45 Europe -57,139 -26,744' -4,006 -10,412 -4,590 -5,501 -4,388 -2,229' 1,112 -4,006 46 Canada -7,685 -3,715 841 -1.815 -1,451 -1,153 409 557 -78 841 47 Latin America and Caribbean -11,507 -24,485 824 -2.421 -207 -112 1,899 -2,121' -2,918 824 48 Asia -27,831 -24,832' -1,090 -3,938 -4,802 -707 892 l,684r 1,053 -1,090 49 Japan -5,887 -9,996' -428 -2,370 95 -183 1,828 2,261' 1,861 -428 50 Africa -1,517 -3,090 -113 -72 -703 -273 -1,027 -174 -74 -113 51 Other countries -4.087 -1,926' 37 -248 -920 -381 -340 452' -210 37 52 Nonmonetary international and regional organizations -871 37 -71 -6 -165 -86 -89 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, 2. Includes stale 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 Transactions1 Millions of dollars; net purchases, or sales (-) during period Area or country Ja J n a . n — . July Aug. Sept. Oct. Nov. Dec. Jan.p 1 Total estimated 232,241 184,444r 6,363 2,949 23,966 16,045 16,530 16,114r -9,259 6,363 2 Foreign countries 234,083 184,016' 5,841 2,681 24,161 15,659 16,766 15,694' -7,649 5,841 3 Europe 118,781 145,904' 18,460 12,032 19,029 20,022 22,916 10,363 102 18,460 4 Belgium and Luxembourg 1,429 3,427 304 298 92 138 357 384 161 304 5 Germany 17,980 22,471 -1,085 6,428 4,050 2,714 4,847 5,255 3,052 -1,085 6 Netherlands -582 1,746' 403 378 882 -3 334 375 -1,525 403 7 Sweden 2,242 -464 82 2 583 16 302 -67 -124 82 8 Switzerland 328 6,028 2,419 344 -291 109 690 1,395 2,847 2,419 9 United Kingdom 65,658 99,139' 11,934 2,745 13,130 13,874 18,593 5,845 -1,746 11,934 10 Other Europe and former U.S.S.R 31,726 13,557 4,403 1,837 583 3,174 -2,207 -2,824 -2,563 4,403 11 Canada 2,331 -805' -1 719 -839 -414 -730 730 -2,132 -1 12 Latin America and Caribbean 20,785 -2,687 -3,619 -5,358 1,063 -769 -1,580 6,512 3,737 -3,619 13 Venezuela -69 559 4 57 25 -691 11 397 -36 4 14 Other Latin America and Caribbean 8,439 -586 1,711 -1,266 -3,245 -2,880 -3,773 -723 2,485 1,711 15 Netherlands Antilles 12,415 -2,660 -5,334 -4,149 4,283 2,802 2,182 6,838 1,288 -5,334 16 Asia 89,735 39,035' -8,231 -3,347 4,849 -4,614 -5,394 -1,002' -10,359 -8,231 17 Japan 41,366 20,359 -6,384 2,612 -3,458 -2,782 4,160 -4,784 -7,860 -6,384 18 Africa 1,083 1,523 37 194 218 461 45 -82 268 37 19 Other 1,368 1,046' -805 -1,559 -159 973 1,509 -827 735 -805 20 Nonmonetary international and regional organizations -1,842 428' 522 268 -195 386 -236 420 -1,610 522 21 International -1,390 552 445 14 -190 341 -74 451 -1,025 445 22 Latin American regional -779 173 32 70 -117 -21 78 -24 -131 32 MEMO 23 Foreign countries 234,083 184,016' 5,841 2,681 24,161 15,659 16,766 15,694' -7,649 5,841 24 Official institutions 85,807 43,379' -1,189 -2,413 8,235 3,091 -12,848 1,831' -367 -1,189 25 Other foreign 148,276 140,637' 7,030 5,094 15,926 12,568 29,614 13,863' -7,282 7,030 Oil-exporting countries 26 Middle East2 10,232 7,116 -2,411 -2,251 3,455 -3,877 3,175 -1,506 -2,411 27 Africa3 1 -13 1 0 -7 0 0 1 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. imirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS1 Percent per year, averages of daily figures Rate on Mar. 31, 1998 Rate on Mar. 31, 1998 Country Country Month Month effective effective Austria 2.5 Apr. 1996 Germany 2.5 Apr. 1996 Belgium 2.75 Oct. 1997 Italy 5.5 Dec. 1997 Canada 5.0 Jan. 1998 Japan .5 Sept. 1995 Denmark 3.5 Oct. 1997 Netherlands 2.5 Apr. 1996 France 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 1998 Type or country 1995 1996 1997 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 5.93 5.38 5.61 5.59 5.63 5.71 5.79 5.53 5.53 5.56 2 United Kingdom 6.63 5.99 6.81 7.19 7.24 7.52 7.60 7.49 7.46 7.47 7.14 4.49 3.59 3.66 3.83 4.02 4.61 4.68 5.02 4.93 4.43 3.21 3.24 3.24 3.51 3.68 3.67 3.51 3.45 3.44 5 Switzerland 2.94 1.92 1.58 1.36 1.73 1.91 1.56 1.27 .98 1.06 4.30 2.91 3.25 3.35 3.50 3.65 3.61 3.42 3.36 3.42 6.43 3.81 3.35 3.29 3.47 3.57 3.57 3.50 3.45 3.45 8 Italy 10.43 8.79 6.86 6.65 6.63 6.49 6.07 6.05 6.12 5.59 9 Belgium 4.73 3.19 3.40 3.55 3.76 3.72 3.61 3.47 3.53 3.61 10 Japan 1.20 .58 .58 .55 .52 .53 .78 .77 .84 .74 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 • May 1998 3.28 FOREIGN EXCHANGE RATES' Currency units per dollar except as noted 1997 Country/currency unit Jan. 1 Australia/dollar1 74.073 78.283 74.368 71.971 69.526 66.187 65.659 67.436 66.965 2 Austria/schilling 10.076 10.589 12.206 12.360 12.182 12.510 12.765 12.735 12.851 3 Belgium/franc 29.472 30.970 35.807 36.266 35.737 36.748 37.536 37.417 37.696 4 Canada/dollar 1.3725 1.3638 1.3849 1.3869 1.4128 1.4271 1.4409 1.4334 1.4168 5 China, P.R./yuan 8.3700 8.3389 8.3193 8.3135 8.3109 8.3099 8.3094 8.3072 8.3076 6 Denmark/krone 5.5999 5.8003 6.6092 6.6922 6.5937 6.7752 6.9190 6.9089 6.9656 7 Finland/markka 4.3763 4.5948 5.1956 5.2674 5.2217 5.3789 5.5006 5.4999 5.5461 8 France/franc 4.9864 5.1158 5.8393 5.8954 5.8001 5.9542 6.0832 6.0744 6.1253 9 Germany/deutsche mark 1.4321 1.5049 1.7348 1.7575 1.7323 1.7788 1.8165 1.8123 1.8271 10 Greece/drachma 231.68 240.82 273.28 276.84 271.87 279.93 287.24 286.70 306.05 11 Hong Kong/dollar 7.7357 7.7345 7.7431 7.7373 7.7314 7.7456 7.7425 7.7412 7.7457 12 India/rupee 32.418 35.506 36.365 36.302 37.289 39.400 39.391 39.008 39.566 13 Ireland/pound 160.35 159.95 151.63 146.92 150.30 145.33 138.19 137.71 136.73 14 Italy/lira 1,629.45 1,542.76 1,703.81 1,721.09 1.697.08 1,743.86 1,787.87 1,788.28 1,798.95 15 Japan/yen 93.96 108.78 121.06 121.06 125.38 129.73 129.55 125.85 129.08 16 Malaysia/ringgit 2.5073 2.5154 2.8173 3.2972 3.3791 3.7907 4.4093 3.8148 3.7442 17 Netherlands/guilder 1.6044 1.6863 1.9525 1.9800 1.9524 2.0051 2.0472 2.0432 2.0597 18 New Zealand/dollar2 65.625 68.765 66.247 63.556 62.420 59.137 57.925 58.286 57.260 19 Norway/krone 6.3355 6.4594 7.0857 7.0807 7.0588 7.2630 7.5007 7.5530 7.5830 20 Portugal/esc udo 149.88 154.28 175.44 179.07 176.84 181.91 185.80 185.54 187.02 21 Singapore/dollar 1.4171 1.4100 1.4857 1.5597 1.5820 1.6518 1.7477 1.6509 1.6186 22 South Africa/rand 3.6284 4.3011 4.6072 4.7145 4.8394 4.8706 4.9417 4.9337 4 9745 23 South Korea/won 772.69 805.00 950.77 929.42 1,035.22 1,494.04 1,707.30 1,628.42 1,489.26 24 Spain/peseta 124.64 126.68 146.53 148.32 146.30 150.46 153.93 153.61 154.94 25 Sri Lanka/rupee 51.047 55.289 59.026 59.723 60.132 61.591 62.281 62.363 62.059 26 Sweden/krona 7.1406 6.7082 7.6446 7.5765 7.5589 7.7977 8.0193 8.0723 7.9670 27 Switzerland/franc 1.1812 1.2361 1.4514 1.4516 1.4069 1.4393 1.4748 1.4631 1.4900 28 Taiwan/dollar 26.495 27.468 28.775 29.696 31.794 32.502 34.117 32.948 32.517 2 3 9 0 T U h n a it i e la d n d K /b in a g h d t om/pound s2 1 2 5 4 7 . .8 92 5 1 1 2 5 5 6 . . 3 0 5 7 9 1 3 6 1 3 . . 0 7 7 6 2 1 3 6 7 3 . . 5 3 4 0 3 1 3 6 9 8 . .8 09 9 2 1 4 6 4 5 . . 3 9 0 7 9 1 5 6 2 3 . . 9 5 8 0 3 1 4 6 5 4 . . 9 0 8 8 7 1 4 6 1 6 . . 3 1 4 9 8 MEMO 31 United States/dollar3 87.34 97.07 96.37 98.82 100.52 99.93 100.47 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 March 31, 1997 September 1997 A64 June 30, 1997 November 1997 A64 September 30, 1997 February 1998 A64 December 31, 1997 May 1998 A64 Terms of lending at commercial banks May 1997 October 1997 A64 August 1997 November 1997 A68 November 1997 February 1998 A68 February 1998 May 1998 A66 Assets and liabilities of U.S. branches and agencies of foreign banks March 31, 1997 August 1997 A64 June 30, 1997 November 1997 A72 September 30, 1997 February 1998 A72 December31, 1997 May 1998 A70 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 • May 1998 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities Consolidated Report of Condition, December 31, 1997 Millions of dollars except as noted Banks with foreign offices1 Bank o s f fi w ce it s h o d n o l m y2 estic Item Over 100 Under 100 1 Total assets' 4,980,275 4,286^06 3,302,317 2.608,348 1,367,255 310,703 2 Cash and balances due from depository institutions 353,952 267t,795 270,424 184,266 67,450 16t,078 3 Cash items in process of collection, unposted debits, and currency and coin 120,583 118.465 36,658 4 Cash items in process of collection and unposted debits n.a. 88,329 23,723 5 Currency and coin n.a. 30,135 12.935 n.a. 6 Balances due from depository institutions in the United States 48,831 35,741 18,997 7 Balances due from banks in foreign countries and foreign central banks 79,522 8.736 2,347 8 Balance1; due from Federal Reserve Banks 21,489 21.324 9,448 MEMO 9 Non-interest-bearing balances due from commercial banks in the United States (included in balances due from depository institutions in the United States) 31,674 14.600 6,272 10 Total securities, heId-to-maturity (amortized cost) and available-for-sale (fair value) . . . 860,854 458,418 404,552 318,894 83,541 11 U.S. Treasury securities 150,642 148,627 70,943 68,929 60,886 18,813 12 U.S. government agency and corporation obligations (excludes mortgage-backed securities) 145.072 144,990 37,653 37,570 75,754 31,666 13 Issued by U.S. government agencies 5.599 n.a. 2.661 n.a. 2,051 887 14 Issued by U.S. government-sponsored agencies 139,473 n.a. 34.991 n.a. 73,703 30,779 15 Securities issued by states and political subdivisions in the United States 76,643 76,430 22.621 22,408 39,875 14,147 16 General obligations 57,002 n.a. 16.045 n.a. 30,674 10,283 17 Revenue obligations 18,801 n.a. 6,014 n.a. 8,978 3,809 18 Industrial development and similar obligations 840 n.a. 562 n.a. 223 55 19 Mortgage-backed securities (MBS) 380,436 373,873 239,783 233,220 124,668 15,985 20 Pass-through securities 254,339 249,364 166,154 161,179 78.194 9,991 21 Guaranteed by GNMA 80,436 n.a. 57,074 n.a. 20,163 3,199 22 Issued by FNMA and FHLMC 171,960 n.a. 107,788 n.a. 57.419 6,753 23 Privately issued 1,943 1,943 1,293 1,293 612 38 24 Other mortgage-backed securities (includes CMOs, REMICs, and stripped MBS) . 126,096 124,509 73,628 72,041 46,474 5,994 25 Issued or guaranteed by FNMA, FHLMC or GNMA 102,329 102,329 58,183 58,183 38,482 5,664 26 Collateralized by MBS issued or guaranteed by FNMA, FHLMC, or GNMA . . 2.078 n.a. 652 n.a. 1.233 193 27 All other mortgage-backed securities 21,689 n.a. 14,794 n.a. 6,759 137 28 Other debt securities 82,537 38,839 71,701 28.002 9,402 1,435 29 Other domestic debt securities n.a. 20,305 18,879 9,204 Foreign debt securities n.a. 51,395 9,123 198 Equity securities 25,524 24,229 15,718 14,422 8,310 1,496 In[vestments in mutual funds and other equity securities with readily determinable fair value 8,689 8,067 5,844 5,222 2,377 468 33 All other equity securities 16,836 16,162 9,874 9,200 5,933 1,029 34 Federal funds sold and securities purchased under agreements to resell... 177,637 203,301 119,713 41,726 16,198 35 Total loans and lease-financing receivables, gross 2,954,28: 2,670,564 1,882,469 1,598,745 886,238 185,580 36 LESS: Unearned income on loans 4,048 3,237 1,715 904 1,657 676 37 Total loans and leases (net of unearned income) 2.950,240 2,667,327 1,880,755 1,597,841 884.581 184,905 38 LESS: Allowance for loan and lease losses 54 340 n.a. 34,834 n.a. 16,875 2,631 39 LESS; Allocated transfer risk reserves 26 n.a. 25 n.a. 0 0 40 EQUALS: Total loans and leases, net 2.895.874 n.a. 1,845,895 n.a. 867,706 182,274 Total loans and leases, gross, by category 41 Loans secured by real estate 1.235,471 1.207,331 670,108 641,968 459,881 105,482 42 Construction and land development 87.550 40,583 38,807 8,160 43 Farmland , 26,977 3,792 11,608 11,577 44 One- to four-family residential properties 713,664 412,510 246.974 54,181 45 Revolving, open-end loans, extended under lines of credit 98,047 66,985 28.266 2,797 46 All other loans 615,618 345.525 218,709 51.384 47 Muliifamily (rive or more) residential properties 41,080 22,103 16,628 2,349 48 Nonfarm nonresidential properties 338,060 162,981 145,864 29,216 49 Loans to depository institutions 85,058 59,259 81,710 55,912 3.231 116 50 Commercial banks in the United States n.a. 41,904 40,922 2.609 n.a. 51 Other depository institutions in the United States n.a. 10,135 10,085 377 n.a. 52 Banks in foreign countries n.a n.a. 29,671 4,904 245 n.a. 53 Loans to finance agricultural production and other loans to farmers 44,701 43,912 10,095 9,307 15,584 19,021 54 Commercial and industrial loans 791,322 632,982 614,559 456,219 145,570 31.194 55 U.S. addressees (domicile) n.a. n.a. 479,828 450,058 144,887 n.a. 56 Non-US, addressees (domicile) n.a. n.a. 134,731 6,160 682 n.a. 57 Acceptances of other banks 1,990 881 1,693 584 208 58 U.S. banks n.a. n.a. 319 319 n.a. 59 Foreign banks n.a. n.a. 1,373 265 n.a. 60 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 555,041 519,856 290,725 255,539 237,169 27,147 61 Credit cards and related plans 230,210 n.a. 109,850 n.a. 118.667 1,693 62 Other (includes single payment and installment) 324,831 n.a. 180,875 n.a. 118.502 25,454 63 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 18,394 18,381 10,906 10.894 6,587 900 64 All other loans 122,553 91.346 113,525 82,318 8,117 911 65 Loans to foreign governments and official institutions n.a. 7,807 680 22 n.a. 66 Other loans n.a. 105,718 81,639 8,095 67 Loans for purchasing and carrying securities n.a. n.a. 18,108 1,555 68 All other loans (excludes consumer loans) n.a. n.a. 63.531 6.539 n.a. 69 Lease-financing receivables 99.759 96,616 89.148 86,005 9.892 719 70 Assets held in trading accounts 296,558 295,546 952 71 Premises and fixed assets (including capitalized leases) 66.583 40.087 20.710 5,786 72 Other real estate owned 4,430 2,599 1.419 412 73 Investments in unconsolidated subsidiaries and associated companies 5.628 5.183 405 40 74 Customers' liability on acceptances outstanding 17,208 16,985 \ 215 75 Net due from own foreign offices. Edge Act and agreement subsidiaries, and IBFs n.a. 53,911 n.a. 76 Intangible assets 61,456 48.197 12,434 824 77 All other assets 156,507 115.682 35.343 5,482 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A65 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities—Continued Consolidated Report of Condition, December 31, 1997 Millions of dollars except as noted Banks with domestic Banks with foreign offices' offices only2 Domestic total Domestic Under 100 78 Total liabilities, limited-life preferred stock, and equity capital. 4,980,275 3,302,317 1,367,255 310,703 79 Total liabilities 4,565,124 3,871,154 3,049,396 2355,427 1,237,869 277,858 80 Total deposits 3,399,218 2,873.180 2,112,934 1,586.897 1,018,875 267,408 81 Individuals, partnerships, and corporations 3.022,246 2,673,483 1.837.180 1,488,417 943,052 242,014 82 U.S. government n.a. 6,676 n.a. 4,998 1,422 256 83 Slates and political subdivisions in the United States n.a. 123,675 47,822 55,051 20,802 84 Commercial banks in the United States 71,662 35.650 61.439 25,428 9.154 1,069 8 8 8 7 5 6 O Fo th r B e e a i r g n n d k s e b p a o n si k t s o , r y g o i v n e s r ti n t m ut e io n n ts s , i a n n t d h e o f U fic n ia it l e d i n S st t i a t t u e t s ions 1 n n 4 . . 1 a a , . . 696 n. 7 9 a , , . 4 7 0 0 6 8 1 9 n 4 . 9 1 a , , . 5 0 9 7 0 9 3 8 7 , . , 4 3 7 7 5 8 1 7 9 2, 6 5 8 0 7 8 4 3 8 1.3 1 4 3 9 88 Governments and official institutions n.a. n.a. 41,490 1,431 30 89 Certitied and official checks 17.414 16,581 8,805 7,972 6.704 1,905 90 Total transaction accounts 757,063 426,460 251,983 78,621 91 Individuals, partnerships, and corporations 656,510 367,679 220,261 68.570 92 U.S. government 3,281 2.049 1,072 161 93 States and political subdivisions in the United States. .. 42,868 18,305 17,090 7.472 94 Commercial banks in the United States 26.000 19,971 5,623 406 95 Other depository institutions in the United States 3,406 2.580 729 97 96 Foreign banks, governments, and official institutions. . . 8,418 7.904 504 9 97 Banks n.a. 7,096 497 n.a. 98 Governments and official institutions n.a. 808 7 n.a. 99 Certified and official checks 16.581 7,972 6.704 1.905 100 Demand deposits (included in total transaction accounts) . 587.164 375,838 170,095 41,231 1111 Individuals, partnerships, and corporations 510.998 323,912 149,932 37,154 102 U.S. government 3.172 1,998 1.024 150 103 States and political subdivisions in the United States.. . 18.604 11,505 5.585 1,514 104 Commercial banks in the United States 25,997 19,971 5.622 404 105 Other depository institutions in the United States 3.397 2,578 725 94 106 Foreign banks, governments, and official institutions.. . 8,415 7,902 504 9 107 Banks n.a. 7,096 497 n.a. 108 Governments and official institutions n.a. 806 7 n.a. 109 Certified and official checks 16,581 7,972 6,704 1,905 Total nontransaction accounts 2,116,116 1,160,437 766,892 188,787 Individuals, partnerships, and corporations 2,016,973 1,120,738 722,791 173,444 112 U.S. government 3,395 2,950 351 95 113 States and political subdivisions in the United States. . 80,808 29,517 37,961 13.329 114 Commercial banks in the United States 9,651 5,457 3,530 663 115 Other depository institutions in the United States 4.302 891 2.159 1.252 116 Foreign banks, governments, and official institutions.. 988 885 100 4 117 Banks n.a. 262 76 n.a. 118 Governments and official institutions 623 23 n.a. 119 Federal funds purchased and securities sold under agreements to repurchase 412.358 364,176 331,699 283,517 77,359 3.299 120 Demand notes issued to the U.S. Treasury 24,498 24,498 20,537 20.537 3,731 230 121 Trading liabilities 206,192 n.a. 206,089 n.a. 101 1 122 Other borrowed money 325,626 287,268 210,683 172,325 110,999 3,944 123 Banks' liability on acceptances executed and outstanding 17,319 13,685 17,097 13.462 215 124 Notes and debentures subordinated to deposits 61,779 n.a. 57,352 n.a. 4,400 125 Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. 103.977 n.a. 103,977 n.a. n.a. 126 All other liabilities 118.134 n.a. 93,005 n.a. 22,188 2,940 127 Total equity capital 415,151 252,921 129385 32,845 MEMO 128 Trading assets at large banks4 296,271 91,647 295,515 90,890 757 129 U.S. Treasury securities (domestic offices) 17,960 17,876 84 130 U.S. government agency corporation obligations 2.024 1,701 32.3 131 Securities issued by states and political subdivisions in the United States 1,230 1,158 72 132 Mortgage-backed securities 5.909 5,793 116 133 Other debt securities 10,331 10,269 62 134 Certificates of deposit 1,317 1.317 (I 135 Commercial paper 119 83 35 136 Bankers acceptances 1,317 1,313 4 137 Other trading assets 9,536 9,482 54 138 Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity contracts 151,485 41,904 151,480 41,899 5 139 Trading assets in foreign offices 95,043 0 95,043 0 0 140 Total individual retirement (IRA) and Keogh plan accounts 152,057 77,639 60,120 14 298 141 Total brokered deposits 54,794 31,056 22,174 1.565 142 Fully insured brokered deposits 45.619 24,074 20,110 1,435 143 Issued in denominations of less than $100.000 IO.D78 5,267 3,656 1,156 144 Issued in denominations of $100,000. or in denominations greater than $100,000 a participated out by the broker in shares of $100,000 or less 35.540 18.807 16,455 279 145 Money market deposit accounts (MMDAs) 651,192 445,716 177,798 27.678 146 Other savings deposits (excluding MMDAs) 344,736 185,806 132.749 26,181 147 Total time deposits of less than $100,000 741.309 319,599 320.783 100,928 148 Total time deposits of $100,000 or more 378.879 209,316 135,563 34,000 149 All negotiable order of withdrawal (NOW) accounts 166,818 50,008 80,272 36,538 150 Number of banks 9,128 9,128 2,763 6.198 NOTE. Table 4.20 has been revised; it now includes data that was previously reported in 2. "Over 100" refers to banks whose assets, on June 30 of the preceding calendar year, table 4.22. which has been discontinued. were $100 million or more. (These banks tile the FFIEC 032 or FFIEC 033 Call Report.) The notation "n.a." indicates the lesser detail available from banks that don't have foreign "Under 100" refers to banks whose assets, on June 30 of the preceding calendar year, were offices, the inapplicability of certain items to banks that have only domestic offices or the less than $100 million. (These banks tile the FFIEC 034 Call Report.) absence of detail on a fully consolidated basis for banks that have foreign offices. 3. Because the domestic portion of allowances for loan and lease losses and allocated I All transactions between domestic and foreign offices of a bank are reported in "net due transfer risk reserves are not reported for banks with foreign offices, the components of total from" and "net due to" lines. All other lines represent transactions with parties other than the assets (domestic) do not sum to the actual total (domestic). domestic and foreign offices of each bank. Because these intraoffice transactions are nullified 4. Components of "Trading assets at large banks" are reported only by hanks with either by consolidation, total assets and total liabilities for the entire bank may not equal the sum of total assets of $1 billion or more or with $2 billion or more in the par/notional amount of their assets and liabilities respectively of the domestic and foreign offices. off-balance-sheet derivative contracts. Digitized fFoorr eFigRn AoffSiceEs Rin clude branches in foreign countries, Puerto Rico, and U.S. territories and http://frapsoessre.sssitolonsu; issubfesiddi.aoriersg i/n foreign countries; all offices of Edge Act and agreement corporations wherever located; and IBFs. Federal Reserve Bank of St. Louis

A66 Special Tables • May 1998 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 2-6, 1998 A. Commercial and industrial loans made by all commercial banks1 Item W ( l e p a o f c e v a f i r e e n g c c r h e a t r i n l g a v e t t e e d ) e - A o ( f m m l d o o i o l a u l l i n n l o a s t n r o s s ) f ( A th v o d e u r o s a s l i g l a z a e n e r d s l ) s o a o n f W m a e v a i t e g u r h a ri g t t e y e d ^ - S c e o c l u la re te d r a b l y Amount of loan p s S r e u ( p p b a e je y r c c m t e e n t n o t) t c M om ad m e it u m nd en er t ba c s o e M r m a p o t m r e s i 4 o t c n ing Days penalty LOAN RISK5 1 All consumer and industrial loans 6.87 124,225 693 351 37.8 10.8 30.9 74.5 Foreign 2 Minimal risk 6.10 12,286 1,743 157 36.0 1.9 67.4 81.3 Foreign 3 Low risk 6.32 32,793 1,436 328 38.6 8.4 47.5 67.7 Foreign 4 Moderate risk 7.04 41,859 579 444 35.9 15.5 19.8 78.6 Foreign 5 Acceptable risk 7.33 23.328 608 281 35.1 9.8 16.2 78.8 Fed funds By malurity/repricing interval* 6 Zero interval 8.62 19,903 249 609 53.4 14.9 8.4 74.7 Prime 7 Minimal risk 7.19 711 372 369 22.7 4.9 44.7 69.8 Prime 8 Low risk 7.50 2,809 377 421 38.1 16.8 8.0 91.8 Prime 9 Moderate risk 8.60 7,687 204 863 60.6 19.7 10.7 93.8 Prime 10 Acceptable risk 9.57 4,149 174 637 70.5 17.0 8.1 95.2 Prime 1 ] Daily 6.27 49,265 1,796 113 33.9 9.5 32.9 62.2 Fed funds 12 Minimal risk 6.00 7,112 5,933 18 39.2 .5 73.1 72.8 Foreign 13 Low risk 5.98 15,773 6,769 37 47.6 9.9 54.0 52.5 Fed funds 14 Moderate risk . 6.50 14,008 1,299 258 29.5 15.8 11.1 65.6 Fed funds 15 Acceptable risk 6.42 8,915 2,340 85 11.9 4.3 5.2 56.6 Fed funds 16 2 to 30 days 6.58 37,169 1,521 31.4 10.8 41.2 88.7 Foreign 17 Minimal risk . . 5.97 3,283 3,128 36.3 3.3 71.5 99.4 Foreign 18 Low risk 6.24 9,527 2,770 325 26.2 4.5 53.9 817 Foreign 19 Moderate risk . 6.55 13,879 2,069 267 23.6 14.4 30.2 86.3 Foreign 20 Acceptable risk 7.19 6,625 1,545 230 38.2 12.2 30.5 92.8 Foreign 21 31 to 365 dayys 6.86 13,777 431 468 35.9 8.4 34.2 81.2 Foreign 2222 MMiniimil al rriiksk .. 6.38 1,044 485 1168 23.7 4.6 30.5 91.9 Foreign 23 Low risk 6.58 3,605 468 300 21.3 5.4 43.7 71.8 Foreign 24 Moderate risk 7.00 4,350 398 394 35.9 12.5 35.1 80.5 Foreign 25 Acceptable risk. 7.04 3,153 833 390 41.5 9.6 26.4 89.2 Foreign Months 26 More than 365 days 8.33 3,354 252 86 74.8 3.7 13.2 62.3 Prime 27 Minimal risk 8.96 43 66 39 69.6 12.8 18.9 10.7 Other 28 Low risk 7.93 1,010 576 148 78.5 3.8 12.2 89.7 Prime 29 Moderate risk 8.46 1,643 317 62 73.9 2.0 11.1 45.2 Prime 30 Acceptable risk 367 197 56 69.7 2.0 33.8 81.7 Prime Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN 31 1-99 9.70 3,074 3.1 155 83.9 29.6 4.3 76.7 Prime 32 100-999 8.64 11,111 3.2 93 69.2 22.6 14.4 87.6 Prime 33 1,000-9,999 7.24 34,334 2.9 81 38.7 13.2 29.3 82.6 Foreign 34 10.000+ 6.33 75,707 2.6 47 30.8 7.2 35.2 68.7 Fed funds Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 9.08 22,039 3.1 153 67.3 20.3 9.4 79.4 187 36 Fed funds 6.14 33,767 2.8 9 22.8 5.4 29.5 46.5 7,273 37 Other domestic 6.16 13,294 2.5 14 9.2 28.1 27.8 74.8 2,972 38 Foreign 6.47 38,958 2.5 38 46.7 6.3 53.6 95.4 3,730 39 Other 6.95 16,167 2.7 161 30.7 5.8 10.1 75.2 387 Footnotes appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A67 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 2-6, 1998 B. Commercial and industrial loans made by large domestic banks' Weighted- Amount of Average loan W a e v i e g r h a t g e e d- Amount of loans (percent) Most ( l e p a o f e v a fe r e n c c r e t a r i n g a v t t e e e )2 o ( f m l d o il o a li l n o l s a n r s s) (tho d u o s s l i a l z a n e r d s s ) of ma D tu a r y i s ty S c e o c l u la re te d r a b l y p S re u p p b e a j n e y a c m l t t y e t n o t c M om ad m e i u tm nd e e n r t ba c s o e r m a p t m e ri 4 o ci n ng LOAN RISK 1 All consumer and industrial loans 7.05 59,650 934 434 31.9 12.5 12.1 72.6 Prime 2 Minimal risk 6.11 4,056 5,248 398 7.5 .7 36.3 88.9 Other 3 Low risk 6.22 11,774 2,978 300 21.6 17.4 19.6 74.1 Domestic 4 Moderate risk 7.12 24.649 896 590 37.3 14.1 10.0 76.8 Prime 5 Acceptable risk 7.63 10,316 562 352 38.5 7.6 77 74.0 Prime By maturity/repricing interval 6 Zero interval 8.33 14,516 477 584 47.4 7.0 69.3 Prime 7 Minimal risk 6.57 485 1,831 341 8.2 32.0 59.0 Prime 8 Low risk 7.02 1,953 1,202 430 30.7 10.9 8.1 91.0 Other 9 Moderate risk 8.34 5,469 390 877 56.7 14.0 11.7 97.2 Prime 10 Acceptable risk 9 19 2,556 208 558 67.5 14.4 3.4 96.2 Prime 11 Daily 6.48 19,459 1,253 229 24.7 19.3 5.0 60.1 Fed funds 12 Minimal risk 5.98 1,427 6,134 51 4 1.4 30.6 84.0 Other 13 Low risk 5.97 4,564 4,492 121 23.1 33.2 4.8 57.5 Domestic 14 Moderate risk 6.80 7,339 908 450 38.1 21.7 2.7 59.6 Domestic 15 Acceptable risk 6.65 3,690 1,483 110 16.7 4.8 1.8 41.6 Fed funds 16 2 to 30 days 6.61 17,433 1,522 316 23.1 10.4 19.8 85.9 Foreign 17 Minimal risk 5.99 1,382 9,873 162 17.6 .0 54.1 00.0 Domestic 18 Low risk 6.06 3,514 5,049 338 11.6 7.5 35.3 83.3 Domestic 19 Moderate risk 6.51 8,339 3,514 320 18.7 9.7 12.6 81.2 Foreign 20 Acceptable risk 7.38 2,722 1,566 328 34.8 5.6 12.8 91.1 Foreign 21 31 to 365 days 6.75 5,835 1,777 612 31.5 4.4 23.1 87.2 Foreign 22 Minimal risk 6.33 668 10,139 1660 1.8 13.7 96.7 Foreign 23 Low risk 6.16 1.377 3,514 306 22.5 44.1 81.7 Foreign 24 Moderate risk 6.80 1,931 1,230 575 34.5 9.1 21.3 88.7 Foreign 25 Acceptable risk 7.61 1,059 1,432 593 45.3 3.6 20.0 84.3 Foreign Months 26 More than 365 days 8.02 1,974 1,218 63.9 27 Minimal risk 28 Low risk 6.76 330 2,999 38 48.5 29.0 73.8 Other 29 Moderate risk 8.24 1,346 1,996 62 68.4 13.0 40.6 Prime 30 Acceptable risk 8.89 213 358 48 64.4 41.0 92.5 Prime Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN 31 1-99 9.45 1,126 3.4 41 80.7 39.2 5.5 91.1 Prime 32 100-999 8.71 5,851 3.3 52 68.1 20.9 9.2 90.0 Prime 33 1,000-9,999 7.51 17,161 3.0 50 39.5 12.4 12.7 76.6 Prime 34 10.000+ 6.48 35,512 2.7 86 20.7 10.2 12.5 67.2 Domestic Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 8.89 14,446 3.2 63.7 13.9 9.2 73.2 313 36 Fed funds 6.14 9,712 3.0 19.4 16.4 1.8 42.6 7,774 37 OUier domestic 6.13 10,863 2.5 13 8.7 23.7 18.5 73.4 5,405 38 Foreign 6.72 11,225 2.8 47 34.9 7.2 20,2 91.1 3.043 39 Other 6.76 13,405 2.7 120 22.9 3.8 9.5 77.5 1.242 Footnoles appear ai the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • May 1998 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 2-6, 1998 C. Commercial and industrial loans made by small domestic banks1 Weighted- Amount of loans (percent) Weighted- Amount of Average loan Most hem ( e l p a o f e v a f r e e n c c r e a t r i n a g v t t e e e ) ^ 2 o ( f m l d o il o a l l i n l o s a n r s s) (tho d u o s s l i l a z a n e r d s) s of ma D tu a r y i s ty S c e o c l u la re te d r a b l y Callable p S re u p p b e a j n e y a c m l t l y e t n o t c M om ad m e it u m nd en er t ba c s o e r m a p t m e ri 4 o c n ing LOAN RISK5 1 All consumer and industrial loans 8.12 11.902 114 837 64.6 15.9 18.9 74.7 Prime 2 Minimal risk 7.95 479 RS 568 49.4 39.3 8.2 71.8 Prime 3 Low risk 7.38 3,797 230 1266 42.9 11.7 31.3 63.5 Prime 4 Moderate risk 8.69 3,337 81 665 71.7 22 9 16.5 75.6 Prime 5 Acceptable risk 8.40 2,339 140 659 91.4 6.2 197 91.4 Prime By maturity/repricing interval6 6 Zero interval 9.17 3.739 80 650 80.3 21.3 8.9 84 9 Prime 7 Minimal risk 8.23 74 51 525 55.8 23.8 4.8 77.8 Prime 8 Low risk 8.57 751 135 171 58.7 27.5 6.8 94.5 Prime S) Moderate risk 9.21 1,614 71 739 82.9 24.1 7.2 80.0 Prime 10 Acceptable risk 9.69 874 84 814 96.8 9.2 18.5 88.3 Prime 11 Daily 7.22 2,466 254 209 31.1 9.6 45.8 52.6 Fed funds 12 Minimal risk 8.16 89 122 681 59.9 20.7 20.0 79.6 Prime 1 3 Low risk 6.20 1,378 2.103 48 3.4 .5 71.7 27.9 Fed funds 14 Moderate risk 8.15 341 168 199 51.6 21.0 34.5 63.2 Prime 15 Acceptable risk 8.56 138 174 475 83.0 5.6 4.8 90.8 Prime 16 2 to 30 days 7 35 2.057 23) 254 47.2 15.0 19.7 85.4 Foreign 17 Minimal risk 6.87 151 269 138 22.0 66.0 5.2 89.3 Foreign 18 Low risk 6.71 471 271 147 40.2 4.4 19.2 61.0 Foreign 19 Moderate risk 7.44 505 165 362 44 1 24.5 29.1 86.7 Foreign 20 Acceptable risk 7.98 501 319 350 802 1.8 31.5 95.4 Foreign 21 31 to 365 days 7.64 2,231 83 385 73.8 16.4 15.4 72.3 Foreign 22 Minimal risk 8.41 129 64 686 60.1 37.4 7.9 58.8 Prime 23 Low risk 7.99 537 77 298 59.4 31.8 99 72.0 Foreign 24 Moderate risk 8.22 541 62 267 61.3 21.1 29.8 63.1 Olher 25 Acceptable risk 6.82 669 260 476 94.4 1.7 16.5 98.2 Foreign Months 26 More than 365 days 8.81 1.292 113 134 94.8 8.0 2.7 73.2 Prime 27 Minimal risk 9.82 33 51 47 85.9 11.7 12.8 Other 28 Low risk 8.50 651 421 207 96 9 59 .3 97.4 Prime 29 Moderate risk 9.51 285 63 60 98.3 11.2 25 64.3 Other 30 Acceptable risk 9.04 116 99 72 97.5 5.6 20.1 55.6 Other Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN 31 1-99 9.89 1.87] 2.9 223 87.0 23.9 2.5 67.5 Prime 32 100-999 9.02 3.364 3 0 I78 82.4 24.2 7 7 80.1 Prime 33 1,000-9.999 7^53 4^102 27 361 653 \2.5 17.0 887 Foreign 34 10,000+ 6.59 2.565 26 27 23.9 4.4 48.6 50.4 Fed funds Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 9.35 5,273 2.9 252 83.1 24.8 6.9 87.7 77 36 Fed funds 6.27 1.407 2 2 17 8.4 4.5 83.6 7.6 1.190 37 Other domestic 7.65 KM 1.8 214 47.1 47.5 1.8 77.5 51 38 Foreign 6.73 2.605 1.0 80 55.7 9.9 22.8 97.7 1.579 39 Olher 8.04 2,513 2.8 394 67.4 8.4 4.6 60.9 81 Footnoles appear at the end of the table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A69 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made. February 2-6, 1998 D. Commercial and industrial loans made by U.S. branches and agencies of foreign banks' Weighted- Amount of loans (percent) W a e v i e g r h a t g e e d- Am lo o a u n n s t of Aver s a i g z e e loan m av at e u ra ri g t e y co M m o m ?, o t n ( l e p o f e a fe r n c c t e r i a n v t e t e )' o ( f m d il o li l o la n r s s) (tho d u o s l a la n r d s s ) of Days S c e o c l u la re te d r a b l y Callable p S re u p p b e a n je y a c m l t t y e t n o t c M om ad m e i u tm nd e e n r t base r a p te ri 4 cing LOAN RISK 1 All consumer and industrial loans 6.39 52.674 4,586 158 38.3 54.2 76.5 Foreign 2 Minimal risk 5.99 7,751 9,176 10 50.1 86.4 78.0 Foreign 3 Low risk 6.15 17,222 7,164 144 49.2 1.6 70.1 64.3 Foreign 4 Moderate risk 6.49 13.873 3,801 149 24.8 16.2 37.9 82.6 Fed funds 5 Acceptable risk 6.81 10,673 3,299 132 19.4 12.7 23.6 80.6 Fed funds By maturiry/repricing interval*3 6 Zero interval 9.89 1.648 595 903 45.4 44.8 19.0 99.3 Prime 7 Minimal risk 8.63 152 810 1021 52.6 4.7 92.3 100.0 Pnme 8 Low risk 8.81 105 411 789 28.7 49.9 14.7 88.6 Prime 9 Moderate risk 9.35 604 610 1235 36.2 58.9 10.9 00.0 Prime 10 Acceptable risk 10.76 720 638 700 49.2 35.8 12.5 100.0 Prime 11 Daily 6.04 27,340 12,528 31 40.6 2.9 50.4 64.6 Fed funds 12 Minimal risk 5.97 5,595 24,058 2 48.8 .0 84.8 69.8 Foreign 13 Low risk 5.96 9,831 14,915 4 65.2 .4 74.4 53.6 Fed funds 14 Moderate risk 6.07 6,328 9,411 56 18.2 8.7 19.6 72.7 Fed funds 15 Acceptable risk 6.19 5,086 9,636 57 6.6 3.8 7.6 66.6 Fed funds 16 2 to 30 days 6.47 17,679 4,271 255 37.9 10.6 64.6 91.8 Foreign 17 Minimal risk 5.89 1,749 5,041 22 52.4 .5 91.0 99.9 Foreign 18 Low risk 6.31 5.540 5,552 333 34.3 2.6 68.6 82.5 Foreign 19 Moderate risk 6.53 5,035 3,942 171 29.7 21.3 59.6 948 Foreign 20 Acceptable risk 6.93 3,402 3,477 128 34.8 19.0 44.4 93.9 Foreign 21 31 to 365 days 6.67 5,712 2,985 354 25.5 9.0 52.4 78.5 Foreign 22 Minimal risk 5.45 246 3,467 87 63.7 87.7 96.3 Foreign 23 Low risk 6.48 1,691 4.499 296 8.3 .7 54.0 63.7 Foreign 24 Moderate risk 6.86 1,878 2,788 245 29.9 13.5 50.3 77.1 Foreign 25 Acceptable risk 6.71 1.424 3,046 202 13.8 17.7 35.7 88.7 Foreign 26 More than 365 days 8.26 51 22.3 57 0 90.7 Prime 27 Minimal risk * 28 Low nsk 8.33 29 60 4.5 95.5 100.0 Foreign 29 Moderate risk 30 Acceptable risk 8.50 38 59 14.6 37.4 100.0 Prime Weighted- Weighted- average average, risk maturity/ rating5 repricing interval Days SIZE OF LOAN 31 1-99 8.61 77 3.1 86 52.3 29.8 29.4 91.5 Prime 32 100-999 7.76 1,896 3.1 69 49.4 24.9 42.4 93.3 Foreign 33 1,000-9,999 . 6.80 13.071 2.9 36 29.3 14.4 54.5 88.7 Foreign 34 10,000 + 6.17 37,630 2.5 13 40.9 4.7 54.8 71.4 Fed funds Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime' 9.68 2,321 3.2 48 53.4 48.1 16.4 99.1 625 36 Fed funds 6.12 22.648 2.8 9 25.1 1.4 36.3 50.6 10242 37 Other domestic 6.25 2,327 2.5 9 10.1 47.5 72.6 81.5 5501 38 Foreign . . . 6.33 25,129 2.3 29 51.0 5.5 71.8 97.1 4919 39 Other NOTE. This table has been revised to reflect several changes in the E.2 statistical release. 5. A complete description of these risk categories is available from the Banking and First, business loan pricing information is now disaggregated by risk categories for most Money Market Statistics Section, Mail Stop 81, Board of Governors of the Federal Reserve loans. Second, the previous disaggregation of loans by maturity categories has been replaced System, Washington. DC 20551. The category "Moderate risk" includes the average loan, by a "maturity/repricing interval," which measures the period from the day the loan is made under average economic conditions, at the typical lender. The category "Acceptable nek" may until it is next scheduled to reprice (for loans that reprice), or the period from the day the loan include a small volume of special mention or classified loans. The weighted-average risk is made until it is scheduled to mature (for loans that do not reprice). Third, information on ralings published for loans in rows 31-39 are calculated by assigning a value of "1" to whether loans are callable or subject to prepayment penalties is now being collected and minimal risk loans; "2" to low nsk loans; "3" to moderate risk loans. "4" lo acceptable risk published. In addition to these new loan characteristics, the survey now includes gross loans; and "5" to special mention and classified loans. These values are weighted by loan business loan extensions of U.S. branches and agencies of foreign banks. amount and exclude loans with no risk rating. Some of the loans in lines 1.6, II, 16, 21, 26. 1. As of December 31, 1996, assets of most of the large banks were at least $7.0 billion. and 31-39 are not rated for risk. Median total assets for all insured banks were roughly $62 million. Assets at all U.S. branches 6. The maturity/repricing interval measures the period from the date the loan is made until it and agencies averaged 1.3 billion. first may reprice or it matures. For floating-rate loans that are subject to repricing at any 2. Effective (compounded) annual interest rates are calculated from the stated rate and time—such as many prime-based loans—the maturity/repricing interval is zero. For floating-rate other terms of the loans and weighted by loan amount. The standard error of the loan rate for loans that have a scheduled repncing interval, the maturity/repricing interval measures the number all commercial and industrial loans in the current survey (line 1. column 1) is 0.13 percentage of days between the date the loan is made and the date on which it is next scheduled to reprice. For points. The chances are about two DUI of three that the average rate shown would differ by less loans having rates that remain fixed until the loan matures (fixed-rate loans), the maturity/repricing than this amount from the average rate that would be found by a complete survey of the interval measures the number of days between the date the loan is made and the date on which it universe of all banks matures. Loans that reprice daily mature or reprice on the business day after they are made. Owing 3. Average maturities are weighted by loan amount and exclude loans with no stated to weekends and holidays, such loans may have maturity/repricing intervals in excess of one day; maturities. such loans are not included in the "2 to 30 day" category. 4. The most common base pricing rate is that used to price the largest dollar volume of 7. For the current survey, the average reported prime rate, weighted by the amount of Digitizedl ofaonsr. FBaRseA pSricEinRg rates include the prime rate (sometimes referred to as a bank's "base" or loans priced relative to a prime base rate, was 8.55 percent for all banks; 8.50 percent for "reference" rale); the federal funds rate; domestic money market rates other than the prime large domestic banks, 8.72 percent for small domestic banks; and 8.50 percent for U.S. http://frarsaeter a.sndtl Iohue ifsedfeeradl .founrdgs/ rate; foreign money market rates; and other base rates not included branches and agencies of foreign banks. Federal Rin ethsee forrvegeo iBnga cnlakss iofifc aStiotn. sL.ouis

A70 Special Tables • May 1998 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1997 Millions of dollars except as noted New York inc T l o u t d a i l ng o IB nl F y s inc T I l B o u F t d a s i l ng I o B n F ly s inc T I l B o u F t d a s i l ng I o B n F ly s inc T I l B o u F t d a i s l ng I o B n F ly s 1 Total assets4 925,249 272,147 726,479 235,615 56,676 12,121 63,027 9,834 2 Claims on nonrelated parties 784,794 128,373 610,090 109,383 53,691 6,116 62,951 3,432 3 Cash and balances due from depository institutions 104,953 67,681 98.144 63,820 2,090 1,454 2,378 1,461 4 Cash items in process of collection and unposted debits 3,636 0 3,476 0 16 0 28 0 5 Currency and coin (U.S. and foreign) 19 n.a. 14 n.a. 1 n.a. 1 n.a. 6 Balances with depository institutions in United Slates 60.104 33,169 55,383 30,519 1.735 1,200 1,659 949 7 U.S. branches and agencies of other foreign banks (including IBFs) 55,645 32,594 51,584 30,077 1,536 1,200 1,432 824 8 Other depository institutions in United States (including IBFs). .. 4,458 575 3,799 442 199 0 228 125 9 Balances with banks in foreign countries and with foreign central banks 38,470 34,512 36.791 33.301 262 254 623 512 10 Foreign branches of U.S. banks 1,286 1,058 1.177 1.005 0 0 23 23 11 Other banks in foreign countries and foreign central banks 37,184 33,454 35,614 32,296 262 254 600 489 12 Balances with Federal Reserve Banks 2,724 n.a. 2,479 n.a. 76 67 n.a. 13 Total securities and loans 484,457 51,991 346,045 38,107 48,651 4,180 47,495 1,423 14 Total securities, book value 116,109 7,057 108,629 6,078 2,072 631 4,437 15 U.S. Treasury. 28,021 n.a. 26,953 88 n.a. 592 16 Obligations of U.S. government agencies and corporations 39,797 n.a. 39,080 198 332 17 Other bonds, notes, debentures, and corporate stock (including state and local securities) 48,291 7,057 42,596 6,078 1,786 631 3,513 301 18 Securities of foreign governmental units 17,406 3,486 16,475 3,124 443 169 391 165 19 All Other 30,885 3,570 26,121 2,955 1,343 462 3,122 136 20 Federal funds sold and securities purchased under agreements to resell 71.603 5.962 62,454 5,000 904 370 5.976 485 21 U.S. branches and agencies of other foreign banks 10.975 3,904 9.874 3,343 448 260 440 300 22 Commercial banks in United States 15,715 720 14.397 720 290 0 599 0 23 Other 44,913 1,338 38.183 937 166 110 4,937 185 24 Total loans, gross 368,599 44,965 237,584 32,051 46.623 43,066 1,123 25 LESS: Unearned income on loans 251 32 168 22 44 8 1 26 EQUALS: Loans, net 368.348 44.934 237,416 32,028 46,579 3,549 43,058 1,122 Total loans, gross, by category 27 Real estate loans 25,302 142 16,353 72 6,440 70 1,027 0 28 Loans to depository institutions 36,823 25,880 22,333 16,719 3,104 2,164 1,495 794 29 Commercial banks in United States (including IBFs) 9,353 5.414 5.922 3,697 1,967 1,169 627 215 30 U.S. branches and agencies of other foreign banks 7,300 4.916 4,353 3,218 1,784 1,161 355 205 31 Other commercial banks in United States 2,052 497 1,569 479 183 8 272 10 32 Other depository institutions in United States (including IBFs). 16 0 16 0 0 0 0 0 33 Banks in foreign countries 27,454 20,467 16,396 13,022 1.137 995 869 579 34 Foreign branches of U.S. banks 953 702 787 586 0 0 0 0 35 Other banks in foreign countries 26,502 19,764 15.609 12,436 1,136 994 869 579 49,425 1,284 38.194 847 3,068 269 6,614 13 37 Commercial and industrial loans 232,766 15,430 141,323 12,469 32,812 1.006 32,523 314 38 U.S. addressees (domicile) 194,755 139 113,855 108 29,996 31 30,394 0 39 Non-U.S. addressees (domicile) 38.011 15,291 27,468 12,361 2,816 975 2,128 314 40 Acceptances of other banks 405 21 183 21 37 0 176 0 41 U.S. banks 29 0 19 0 3 0 0 0 42 Foreign banks 376 21 163 21 33 0 176 0 43 Loans to foreign governments and official institutions (including foreign central banks) 3,315 2,015 2,566 1,753 262 42 3 44 Loans for purchasing or carrying securities (secured and unsecured) . 14,435 80 12,445 80 374 0 74 0 45 All other loans 5.381 113 3,792 89 526 0 719 0 46 Lease financing receivables (net of unearned income) 748 0 395 0 0 0 350 0 47 U.S. addressees (domicile) 748 0 395 0 0 0 350 0 48 Non-U.S. addressees (domicile) 0 0 0 0 0 0 0 0 49 Trading assets 89,113 488 75.504 486 115 0 4,546 2 50 All other assets 34,669 2.251 27 942 1,969 1.930 112 2,557 60 51 Customers' liabilities on acceptances outstanding 6,555 n.a. 4,649 n.a. 1,118 n.a. 516 52 U.S. addressees (domicile) 4,309 n.a. 3,080 n.a. 956 n.a. 177 53 Non-U.S. addressees (domicile) 2,247 n.a. 1,569 n.a. 161 n.a. 339 54 Other assets including other claims on nonrelated parties 28.113 2.251 23,293 1,969 813 112 2,041 60 55 Net due from related depository institutions 140,455 143.774 116.390 126,232 2.984 6,005 76 6,402 56 Net due from head office and other related depository institutions5 57 Net due from establishing entity, head office, and other related 140,455 116.390 n.a. 2,984 76 depository institutions 143,774 6.005 6,402 n.a. n.a. 126,232 n.a. n.a. 58 Total liabilities4 272,147 12,121 9334 925,249 726,479 235,615 56,676 63,027 59 Liabilities to nonrelated parties 247,229 11,231 9,482 760,522 645,978 216.506 22,065 39,949 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A71 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1997—Continued Millions of dollars except as noted All states' New York California ex I T c B l o u F t d a s i l 3 ng o IB nl F y s exc T IB l o u F t d a s i l ng I o B n F ly s exc T IB l o u F t d a s i l ng I o B n F ly s exc T I l o B t u F a d s i l ng I o B n F ly s 60 Total deposits and credit balances 272,367 188,347 228,351 174,095 5,463 2,149 14,156 4,306 61 Individuals, partnerships, and corporations 205,972 11,643 169,516 6,591 4,087 529 12,485 102 62 U.S. addressees (domicile) 189,875 147 160,712 118 2,052 0 11,929 29 63 Non-U.S. addressees (domicile) 16,098 11,496 8,805 6,473 2,036 529 556 73 64 Commercial banks in United States (including IBFs) 32,295 35,019 27,433 33,284 531 325 1,085 1,050 65 U.S. branches and agencies of other foreign banks 19,144 30,435 17,437 28,863 248 289 639 950 66 Other commercial banks in United States 13,151 4,583 9,996 4,421 283 36 446 100 67 Banks in foreign countries 11,483 99.703 9,862 95,392 607 646 251 1,894 68 Foreign branches of U.S. banks 3,214 4,498 2,505 4,286 448 21 60 181 69 Other banks in foreign countries 8,269 95,205 7,357 91,106 159 624 191 1,714 70 Foreign governments and official institutions (including foreign central banks) 7,258 41,885 6,305 38,736 215 646 287 1,259 71 All other deposits and credit balances 15,014 14,928 92 11 3 45 1 72 Certified and official checks 345 306 13 4 73 Transaction accounts and credit balances (excluding IBFs) . 9,945 7,897 363 375 74 Individuals, partnerships, and corporations 7,983 6,438 323 367 U.S. addressees (domicile) 5,859 5,221 162 365 Non-U.S. addressees (domicile) 2,124 1,216 161 2 Commercial banks in United States (including IBFs) 28 22 1 0 U.S. branches and agencies of other foreign banks 10 7 0 0 Other commercial banks in United States 18 15 1 0 Banks in foreign countries 906 550 21 1 Foreign branches of U.S. banks 7 6 0 0 Other banks in foreign countries 543 21 Foreign governments and official institutions (including foreign central banks) 469 376 2 All other deposits and credit balances 214 205 3 85 Certified and official checks 345 306 13 86 Demand deposits (included in transaction accounts and credit balances) 9,438 7,668 265 373 Individuals, partnerships, and corporations 7,584 6,298 228 365 U.S. addressees (domicile) 5,765 5,162 141 363 Non-U.S. addressees (domicile) 1,819 1.136 87 2 Commercial banks in United States (including IBFs) 21 16 0 0 U.S. branches and agencies of other foreign banks 5 0 0 Other commercial banks in United States 16 14 0 0 Banks in foreign countries 883 531 20 1 Foreign branches of U.S. banks 7 6 0 0 Other banks in foreign countries 876 524 20 1 Foreign governments and official institutions (including foreign central banks) 455 372 1 2 All other deposits and credit balances 150 144 2 0 Certified and official checks 345 306 13 4 99 Nontransaction accounts (including MMDAs, excluding IBFs) . 262,422 220,454 5,100 13,781 100 Individuals, partnerships, and corporations 197,989 163,079 3,764 12,118 101 U.S. addressees (domicile) 184,016 155,490 1,889 11,564 102 Non-U.S. addressees (domicile) 13,974 7,588 1.875 554 103 Commercial banks in United States (including IBFs) 32,267 27.411 530 1,085 104 U.S. branches and agencies of other foreign banks 19,133 17.430 248 639 105 Other commercial banks in United States 13,133 9.981 282 446 106 Banks in foreign countries 10,577 9,313 586 249 107 Foreign branches of U.S. banks 3,207 2,499 448 60 108 Other banks in foreign countries 7,370 6,814 138 189 109 Foreign governments and official institutions (including foreign central banks) 6,788 5.929 213 285 110 All other deposits and credit balances 14,800 14,722 45 111 IBF deposit liabilities 188.347 174.095 2.149 4,306 112 Individuals, partnerships, and corporations 11.643 6.591 529 102 113 U.S. addressees (domicile) 147 118 0 29 114 Non-US, addressees (domicile) 11,496 6,473 529 73 115 Commercial banks in United States (including IBFs) 35,019 33,284 325 1,050 116 U.S. branches and agencies of other foreign banks 30,435 28,863 289 950 117 Other commercial banks in United States 4,583 4,421 36 100 118 Banks in foreign countries 99,703 95,392 646 1,894 119 Foreign branches of U.S. banks 4,498 4,286 21 181 120 Other banks in foreign countries 95,205 91,106 624 1.714 121 Foreign governments and official institutions (including foreign central banks) 41,885 38,736 646 1,259 122 All other deposits and credit balances 96 92 3 1 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • May 1998 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, December 31, 1997—Continued Millions of dollars except as noted All states2 New York in I c T B l o u F t d a s i l 3 ng o IB nl F y s 3 inc T I l B o u t F d a i s l ng I o B n F ly s inc T I l B o u t F d a i s l ng I o B n F ly s inc T I l B o u t F d a s i l ng I o B n F ly s 123 Federal funds purchased and securities sold under agreements to repurchase 114,418 20.623 103,792 16.997 1,828 778 6,398 2,123 124 US. branches and agencies of other foreign banks 11,164 4,977 8,263 3,398 933 428 1,376 760 125 Other commercial banks in United States 7,235 317 5,963 123 514 126 329 68 126 Other 96,019 15.329 89,566 13,475 381 224 4.692 1,295 127 Other borrowed money 92,409 35,540 63,950 22.933 10,935 8,208 9,894 2,981 128 Owed to nonrelated commercial banks in United States (including IBFs) 16,768 7,519 10,973 4,267 3,358 2,129 1,298 758 129 Owed to U.S. offices of nonrelated U.S. banks 6,135 976 4.828 625 799 299 212 10 130 Owed to U.S. branches and agencies of nonrelated foreign banks 10,632 6,542 6,145 3,642 2,559 1,830 1,085 748 131 Owed to nonrelated banks in foreign countries 25,173 23,033 16.017 14,280 6,048 5,932 2,081 2,006 132 Owed to foreign branches of nonrelated U.S. banks 1,361 1,240 499 421 641 629 165 165 133 Owed to foreign offices of nonrelated foreign banks 23,811 21,793 15,519 13,859 5,407 5,303 1,916 1,841 134 Owed to others 50,469 4,988 36,960 4,386 1,529 147 6,516 216 135 All other liabilities 92,982 2,720 75,791 2,482 1.689 96 5.194 72 136 Branch or agency liability on acceptances executed and outstanding 6,878 5,150 n.a. 1.115 n.a. 319 137 Trading liabilities 61,421 154 49,841 153 94 0 3,978 138 Other liabilities to nonrelated parties 24,683 2,566 20,801 2,329 480 96 71 139 Net due to related depository institutions5 164,727 24,918 80.501 19,109 34.611 890 23,078 352 140 Net due to head office and other related depository institutions5 .. . 164,727 n.a. 80.501 n.a. 34,611 n.a. 23,078 141 Net due to establishing entity, head office, and other related depository institutions5 24,918 19,109 MEMO 142 Non-interest-bearing balances with commercial banks in United States 1,265 1,034 0 49 143 Holding of own acceptances included in commercial and industrial loans 4,761 3,341 960 328 144 Commercial and industrial loans with remaining maturity of one year or less (excluding those in nonaccrual status) 128,274 74,325 18,581 21,814 145 Predetermined interest rates 78.254 45,780 9,145 17,240 146 Floating interest rates 50,020 28,545 9.436 4,574 147 Commercial and industrial loans with remaining maturity of more than one year (excluding those in nonaccrual status) 103,640 66,357 14,115 10.642 148 Predetermined interest rates 22,169 15,970 2,236 2.628 149 Floating interest rates 81,471 50.387 11.878 8,014 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 ASSETS AND LIABILITIES of US. Branches and Agencies of Foreign Banks, December 31, 1997'—Continued Millions of dollars except as noted All states2 New York California Illinois Item ex I T c B l o u F t d a s i l 3 ng o IB nl F y s ex T c IB l o u F t d a s i l ng I o B n F ly s exc T I l B o u F t d a s i l ng I o B n F ly s ex T c IB l o u t F d a s i l ng I o B n F ly s 150 Components of total nontransaclion accounts, included in total deposits and credit balances of nontransaction accounts, excluding IBFs 262,154 n.a. 221,998 n.a. 3,276 n.a. 14,047 n.a. 151 Time deposits of $100,000 or more 253,369 n.a. 214,837 n.a. 3,199 n.a. 13,382 n.a. 152 Time CDs in denominations of $100,000 or more with remaining maturity of more than 12 months 8,785 n.a. 7,161 n.a. 77 n.a. 664 n.a. All states2 New York California Illinois inc T I l B o u F t d a i s l ng I o B n F ly s inc T I l B o u F t d a i s l ng I o B n F ly s inc T I l B o u F t d a i s l ng I o B n F ly s inc T I l B o u F t d a s i l ng I o B n F ly s 153 Immediately available funds with a maturity greater than one day included in other borrowed money 44,080 n.a. 31,611 n.a. 7,034 n.a. 3,275 n.a. 154 Number of reports filed6 463 0 234 0 98 0 36 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, "Report of either because the item is not an eligible IBF asset or liability or because that level of detail is Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The form was first not reported for IBFs. From December 1981 through September 1985. IBF data were used for reporting data as of June 30, 1980, and was revised as of December 31, 1985. From included in all applicable items reported. November 1972 through May 1980, U.S. branches and agencies of foreign banks had filed a 4. Total assets and total liabilities include net balances, if any, due from or owed to related monthly FR 886a report. Aggregate data from that report were available through the Federal banking institutions in the United States and in foreign countries (see note 5). On the former Reserve monthly statisticalreleaseG.il, last issued on July 10, 1980. Data in this table and in monthly branch and agency report, available through the G.ll monthly statistical release, the G. 11 tables are not strictly comparable because of differences in reporting panels and in gross balances were included in total assets and total liabilities. Therefore, total asset and total definitions of balance sheet items. liability figures in this table are not comparable to those in the G. 11 tables. 2. Includes the District of Columbia. 5. Related depository institutions includes the foreign head office and other U.S. and 3. Effective December 1981, the Federal Reserve Board amended Regulations D and Q to foreign branches and agencies of a bank, a bank's parent holding company, and majoritypermit banking offices located in the United States to operate international banking facilities owned banking subsidiaries of the bank and of its parent holding company (including (IBFs). Since December 31, 1985, data for IBFs have been reported in a separate column. subsidiaries owned both directly and indirectly). These data are either included in or excluded from the total columns as indicated in the 6. In some cases two or more offices of a foreign bank within the same metropolitan area headings. The notation "n.a." indicates that no IBF data have been reported for that item, file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Index to Statistical Tables References are to pages A3-A73 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) FARM mortgage loans, 35 Assets and liabilities (See also Foreigners) Federal agency obligations, 5, 9, 10, 11, 28, 29 Commercial banks, 15-21, 64, 65 Federal credit agencies, 30 Domestic finance companies, 32, 33 Federal finance Federal Reserve Banks, 10 Debt subject to statutory limitation, and types and ownership Foreign banks, U.S. branches and agencies, 70-73 of gross debt, 27 Foreign-related institutions, 20 Receipts and outlays, 25, 26 Automobiles Treasury financing of surplus, or deficit, 25 Consumer credit, 36 Treasury operating balance, 25 Production, 44, 45 Federal Financing Bank, 30 Federal funds, 23, 25 BANKERS acceptances, 5, 10, 22, 23 Federal Home Loan Banks, 30 Bankers balances, 15-21, 70-73. (See also Foreigners) Federal Home Loan Mortgage Corporation, 30, 34, 35 Bonds (See also U.S. government securities) Federal Housing Administration, 30, 34, 35 New issues. 31 Federal Land Banks, 35 Rates, 23 Federal National Mortgage Association, 30, 34, 35 Business activity, nonfinancial, 42 Federal Reserve Banks Business loans (See Commercial and industrial loans) Condition statement, 10 Discount rates (See Interest rates) CAPACITY utilization, 43 U.S. government securities held, 5, 10, 11, 27 Capital accounts Federal Reserve credit, 5, 6, 10, 12 Commercial banks, 15-21, 64, 65 Federal Reserve notes, 10 Federal Reserve Banks, 10 Federally sponsored credit agencies, 30 Central banks, discount rates, 61 Finance companies Certificates of deposit, 23 Assets and liabilities, 32 Commercial and industrial loans Business credit, 33 Commercial banks, 15-21, 64, 65, 66-69 Loans, 36 Weekly reporting banks, 17, 18 Paper, 22, 23 Commercial banks Float, 5 Assets and liabilities, 15-21, 64, 65 Flow of funds, 37-41 Commercial and industrial loans, 15-21, 64, 65, 66-69 Foreign banks, US. branches and agencies, 69, 70-73 Consumer loans held, by type and terms, 36, 66-69 Foreign currency operations, 10 Number, by classes, 64, 65 Foreign deposits in U.S. banks, 5 Real estate mortgages held, by holder and property, 35 Foreign exchange rates, 62 Terms of lending, 66-69 Foreign-related institutions. 20 Time and savings deposits, 4 Foreign trade, 51 Commercial paper, 22, 23, 32 Foreigners Condition statements (See Assets and liabilities) Claims on, 52, 55, 56, 57, 59 Construction, 42, 46 Liabilities to, 51, 52, 53, 58, 60, 61 Consumer credit, 36 Consumer prices, 42 GOLD Consumption expenditures, 48, 49 Certificate account, 10 Corporations Stock, 5, 51 Profits and their distribution. 32 Government National Mortgage Association, 30, 34, 35 Security issues, 31, 61 Gross domestic product, 48, 49 Cost of living (See Consumer prices) Credit unions, 36 HOUSING, new and existing units, 46 Currency in circulation, 5, 13 Customer credit, stock market, 24 INCOME, personal and national, 42, 48, 49 Industrial production, 42, 44 DEBT (See specific types of debt or securities) Insurance companies, 27, 35 Demand deposits, 15-21 Interest rates Depository institutions Bonds, 23 Reserve requirements, 8 Commercial banks, 66—69 Reserves and related items, 4, 5, 6, 12, 64, 65 Consumer credit, 36 Deposits (See also specific types) Federal Reserve Banks, 7 Commercial banks, 4, 15-21, 64, 65 Foreign banks, U.S. branches and agencies, 69 Federal Reserve Banks, 5, 10 Foreign central banks and foreign countries, 61 Discount rales at Reserve Banks and at foreign central banks and Money and capital markets, 23 foreign countries (See Interest rates) Mortgages, 34 Discounts and advances by Reserve Banks (See Loans) Prime rate, 22 Dividends, corporate, 32 International capital transactions of United States, 50-61 International organizations, 52, 53, 55, 58, 59 EMPLOYMENT, 42 Inventories, 48 Eurodollars, 23, 61 Investment companies, issues and assets, 32 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 Investments (See also specific types) SAVING Commercial banks, 4, 15-21, 64, 65 Flow of funds, 37-41 Federal Reserve Banks, 10, 11 National income accounts, 48 Financial institutions, 35 Savings institutions, 35, 36, 37^41 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, 64, 65, 66-69 New issues, 31 Federal Reserve Banks. 5, 6, 7, 10, 11 Prices, 24 Financial institutions, 35 Special drawing rights, 5, 10, 50, 51 Foreign banks. U.S. branches and agencies, 69 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 Monetary and credit aggregates, 4, 12 TAX receipts, federal, 26 Money and capital market rates, 23 Thrift institutions, 4. (See also Credit unions and Savings Money stock measures and components, 4, 13 institutions) Mortgages (See Real estate loans) Time and savings deposits, 4, 13, 15-21, 64, 65 Mutual funds, 13, 32 Trade, foreign, 51 Mutual savings banks (See Thrift institutions) Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 Treasury operating balance, 25 NATIONAL defense outlays, 26 National income, 48 UNEMPLOYMENT, 42 OPEN market transactions, 9 U.S. government balances Commercial bank holdings, 15-21 PERSONAL income, 49 Treasury deposits at Reserve Banks, 5, 10. 25 Prices U.S. government securities Consumer and producer, 42, 47 Bank holdings, 15-21,27 Stock market, 24 Dealer transactions, positions, and financing, 29 Prime rate, 22 Federal Reserve Bank holdings, 5, 10, 11, 27 Producer prices, 42, 47 Foreign and international holdings and Production, 42, 44 transactions, 10. 27, 61 Profits, corporate, 32 Open market transactions, 9 Outstanding, by type and holder, 27, 28 REAL estate loans Rates, 23 Banks, 15-21, 35 U.S. international transactions, 50-62 Terms, yields, and activity, 34 Utilities, production, 45 Type of holder and property mortj ,35 Reserve requirements, 8 Reserves VETERANS Administration, 34, 35 Commercial banks, 15-21 Depository institutions, 4, 5, 6, 12 WEEKLY reporting banks, 17, 18 Federal Reserve Banks, 10 Wholesale (producer) prices, 42, 47 U.S. reserve assets, 51 Residential mortgage loans, 34, 35 Retail credit and retail sales, 36, 42 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • May 1998 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 LEWIS S. ALEXANDER, Associate Director Reserve System Affairs DALE W. HENDERSON, Associate Director LYNN S. FOX, Deputy Congressional Liaison PETER HOOPER III, Associate Director WINTHROP P. HAMBLEY, Special Assistant to the Board KAREN H. JOHNSON, Associate Director BOB STAHLY MOORE, Special Assistant to the Board DAVID H. HOWARD, Senior Adviser DIANE E. WERNEKE, Special Assistant to the Board DONALD B. ADAMS, Assistant Director THOMAS A. CONNORS, Assistant Director LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel MICHAEL J. PRELL, Director SCOTT G. ALVAREZ, Associate General Counsel EDWARD C. ETTIN, Deputy Director RICHARD M. ASHTON, Associate General Counsel DAVID J. STOCKTON, Deputy Director OLIVER IRELAND, Associate General Counsel MARTHA BETHEA, Associate Director KATHLEEN M. O'DAY, Associate General Counsel WILLIAM R. JONES, Associate Director ROBERT DEV. FRIERSON, Assistant General Counsel MYRON L. KWAST, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel PATRICK M. PARKINSON, Associate Director THOMAS D. SIMPSON, Associate Director LAWRENCE SLIFMAN, Associate Director OFFICE OF THE SECRETARY MARTHA S. SCANLON, Deputy Associate Director WILLIAM W. WILES, Secretary PETER A. TINSLEY, Deputy Associate Director JENNIFER J. JOHNSON, Deputy Secretary DAVID S. JONES, Assistant Director BARBARA R. LOWREY, Associate Secretary and Ombudsman STEPHEN D. OLINER, Assistant Director STEPHEN A. RHOADES, Assistant Director JANICE SHACK-MARQUEZ, Assistant Director DIVISION OF BANKING CHARLES S. STRUCKMEYER, Assistant Director SUPERVISION AND REGULATION ALICE PATRICIA WHITE, Assistant Director RICHARD SPILLENKOTHEN, Director JOYCE K. ZICKLER, Assistant Director STEPHEN C. SCHEMERING, Deputy Director GLENN B. CANNER, Senior Adviser HERBERT A. BIERN, Associate Director JOHN J. MINGO, Senior Adviser ROGER T. COLE, Associate Director WILLIAM A. RYBACK, Associate Director DIVISION OF MONETARY AFFAIRS GERALD A. EDWARDS, JR., Deputy Associate Director STEPHEN M. HOFFMAN, JR., Deputy Associate Director DONALD L. KOHN, Director JAMES V. HOUPT, Deputy Associate Director DAVID E. LINDSEY, Deputy Director JACK P. JENNINGS, Deputy Associate Director BRIAN F. MADIGAN, Associate Director MICHAEL G. MARTINSON, Deputy Associate Director RICHARD D. PORTER, Deputy Associate Director SIDNEY M. SUSSAN, Deputy Associate Director VINCENT R. REINHART, Assistant Director MOLLY S. WASSOM, Deputy Associate Director NORMAND R.V. BERNARD, Special Assistant to the Board HOWARD A. AMER, Assistant Director NORAH M. BARGER, Assistant Director DIVISION OF CONSUMER BETSY CROSS, Assistant Director AND COMMUNITY AFFAIRS RICHARD A. SMALL, Assistant Director GRIFFITH L. GARWOOD, Director WILLIAM SCHNEIDER, Project Director, GLENN E. LONEY, Associate Director National Information Center DOLORES S. SMITH, Associate Director MAUREEN P. ENGLISH, Assistant Director IRENE SHAWN MCNULTY, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 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 JOHN R. WEIS, Adviser PAUL W. BETTGE, Assistant Director JACK DENNIS, JR., Assistant Director MANAGEMENT DIVISION EARL G. HAMILTON, Assistant Director JOSEPH H. HAYES, JR., Assistant Director S. DAVID FROST, Director SHEILA CLARK, EEO Programs Director JEFFREY C. MARQUARDT, Assistant Director STEPHEN J. CLARK, Associate Director, Finance Function MARSHA REIDHILL, Assistant Director DARRELL R. PAULEY, Associate Director, Human Resources Function OFFICE OF THE INSPECTOR GENERAL BRENT L. BOWEN, Inspector General DIVISION OF SUPPORT SERVICES DONALD L. ROBINSON, Assistant Inspector General ROBERT E. FRAZIER, Director BARRY R. SNYDER, Assistant Inspector General 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

A78 Federal Reserve Bulletin • May 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. EDWARD W. KELLEY, JR. SUSAN M. PHILLIPS EDWARD M. GRAMLICH LAURENCE H. MEYER WILLIAM POOLE THOMAS M. HOENIG CATHY E. MINEHAN ALICE M. RIVLIN JERRY L. JORDAN 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 STEPHEN G. CECCHETTI, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary WILLIAM G. DEWALD, Associate Economist JOSEPH R. COYNE, Assistant Secretary CRAIG S. HAKKIO, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID E. LINDSEY, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel LARRY J. PROMISEL, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel MARK S. SNIDERMAN, Associate Economist MICHAEL J. PRELL, Economist THOMAS D. SIMPSON, Associate Economist EDWIN M. TRUMAN, Economist DAVID J. STOCKTON, Associate Economist LYNN E. BROWNE, Associate Economist PETER R. FISHER, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL THOMAS H. JACOBSEN, President CHARLES T. DOYLE, Vice President 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

A79 CONSUMER ADVISORY COUNCIL WILLIAM N. LUND, Augusta, Maine, Chainnan YVONNE S. SPARKS, St. Louis, Missouri, Vice Chairman RICHARD S. AMADOR, LOS Angeles, California MARTHA W. MILLER, Greensboro, North Carolina WALTER J. BOYER, Garland, Texas DANIEL W. MORTON, Columbus, Ohio WAYNE-KENT A. BRADSHAW, LOS Angeles, California CHARLOTTE NEWTON, Springfield, Virginia JEREMY EISLER, Ocean Springs, Mississippi CAROL PARRY, New York, New York ROBERT F. ELLIOT, Prospect Heights, Illinois PHILIP PRICE, JR., Philadelphia, Pennsylvania HERIBERTO FLORES, Springfield, Massachusetts DAVID L. RAMP, Minneapolis, Minnesota DWIGHT GOLANN, Boston, Massachusetts MARILYN ROSS, Omaha, Nebraska MARVA H. HARRIS, Pittsburgh, Pennsylvania MARGOT SAUNDERS, Washington, D.C. KARLA IRVINE, Cincinnati, Ohio ROBERT G. SCHWEMM, Lexington, Kentucky FRANCINE C. JUSTA, New York, New York DAVID J. SHIRK, Eugene, Oregon GAIL SMALL, Lame Deer, Montana JANET C. KOEHLER, Jacksonville, Florida GWENN KYZER, Allen, Texas GREGORY D. SQUIRES. Milwaukee, Wisconsin JOHN C. LAMB, Sacramento, California GEORGE P. SURGEON, Chicago, Illinois THEODORE J. WYSOCKI, JR., Chicago, Illinois ERROL T. LOUIS, Brooklyn, New York THRIFT INSTITUTIONS ADVISORY COUNCIL CHARLES R. RINEHART, Irwindale, California, President WILLIAM A. FITZGERALD, Omaha, Nebraska, Vice President GAROLD R. BASE, Piano, Texas F. WELLER MEYER, Falls Church, Virginia DAVID A. BOCHNOWSKI, Munster, Indiana EDWARD J. MOLNAR, Harleysville, Pennsylvania DAVID E. A. CARSON, Bridgeport, Connecticut GUY C. PINKERTON, Seattle, Washington RICHARD P. COUGHLIN, Stoneham, Massachusetts TERRY R. WEST, Jacksonville, Florida STEPHEN D. HAILER, Akron, Ohio FREDERICK WILLETTS, III, Wilmington, North Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Bulletin • May 1998 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, Federal Reserve Regulatory Service. Four vols. (Contains all MS-127, Board of Governors of the Federal Reserve System, four Handbooks plus substantial additional material.) $200.00 Washington, DC 20551, or telephone (202) 452-3244, or FAX per year. (202) 728-5886. You may also use the publications order Rates for subscribers outside the United States are as follows form available on the Board's World Wide Web site and include additional air mail costs: (http://www.bog.frb.fed.us). When a charge is indicated, payment Federal Reserve Regulatory Service, $250.00 per year. should accompany request and be made payable to the Board of Each Handbook, $90.00 per year. Governors of the Federal Reserve System or may be ordered via FEDERAL RESERVE REGULATORY SERVICE FOR PERSONAL Mastercard, Visa, or American Express. Payment from foreign COMPUTERS. Diskettes; updated monthly. residents should be drawn on a U.S. bank. 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 Stales 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 1980-89 March 1991 712 pp. $25.00 EDUCATION PAMPHLETS 1990 November 1991 185 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1991 November 1992 215 pp. $25.00 available without charge. 1992 December 1993 215 pp. $25.00 1993 December 1994 281 pp. $25.00 1994 December 1995 190 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1990-95 November 1996 404 pp. $25.00 Consumer Handbook to Credit Protection Laws A Guide to Business Credit for Women, Minorities, and Small Businesses SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF Series on the Structure of the Federal Reserve System 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 REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL Federal Reserve Banks 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 The Payment System Handbook. $75.00 per year. Keys to Vehicle Leasing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 STAFF STUDIES: Only Summaries Printed in the 166. THE ECONOMICS OF THE PRIVATE PLACEMENT MARKET, by BULLETIN Mark Carey, Stephen Prowse, John Rea, and Gregory Udell. January 1994. Ill pp. Studies and papers on economic and financial subjects that are of general interest. Requests to obtain single copies of the full text or 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANKto be added to the mailing list for the series may be sent to ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING Publications Services. PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, by Stephen A. Rhoades. July 1994. 37 pp. 168. THE ECONOMICS OF THE PRIVATE EQUITY MARKET, by Staff Studies 1-157 are out of print. George W. Fenn. Nellie Liang, and Stephen Prowse. November 1995. 69 pp. 158. THE ADEQUACY AND CONSISTENCY OF MARGIN REQUIRE- 169. BANK MERGERS AND INDUSTRYWIDE STRUCTURE, 1980-94, MENTS IN THE MARKETS FOR STOCKS AND DERIVATIVE by Stephen A. Rhoades. February 1996. 29 pp. PRODUCTS, by Mark J. Warshawsky with the assistance of 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- Dietrich Earnhart. September 1989. 23 pp. LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- IN SAVINGS ACT. by Gregory Elliehausen and Barbara R. ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and Lowery, December 1997. 17 pp. Donald Savage. February 1990. 12 pp. 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- DENCE, by Gregory Elliehausen, April 1998. 35 pp. VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September 1990. 35 pp. REPRINTS OF SELECTED Bulletin ARTICLES 161. A REVIEW OF CORPORATE RESTRUCTURING ACTIVITY, 1980-90, by Margaret Hastings Pickering. May 1991. Some Bulletin articles are reprinted. The articles listed below are 21p. those for which reprints are available. Beginning with the Janu- P 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- ary 1997 issue, articles are available on the Board's World Wide GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Web site (http://www.bog.frb.fed.us) under Publications, Federal Rhoades. February 1992. 11 pp. Reserve Bulletin articles. 163. CLEARANCE AND SETTLEMENT IN U.S. SECURITIES MAR- KETS, by Patrick Parkinson, Adam Gilbert, Emily Gollob, Limit of ten copies Lauren Hargraves, Richard Mead, Jeff Stehm, and Mary Ann Taylor. March 1992. 37 pp. FAMILY FINANCES IN THE U.S.: RECENT EVIDENCE FROM THE 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by SURVEY OF CONSUMER FINANCES. January 1997. James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. 165. THE DEMAND FOR TRADE CREDIT: AN INVESTIGATION OF MOTIVES FOR TRADE CREDIT USE BY SMALL BUSINESSES, by Gregory E. Elliehausen and John D. Wolken. September 1993. 18 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Federal Reserve Bulletin • May 1998 Maps of the Federal Reserve System EW YORK LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city a 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

A83 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimgjfi MD fcinnati Buffalo $•> % ' NY BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 7-G 8-H sville 'emphis ATLANTA CHICAGO ST. LOUIS 9-1 MINNEAPOLIS 10-J 12-L if 1 )V ALASKA ^^fc KANSAS CITY 11-K DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Federal Reserve Bulletin • May 1998 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. Turnipseed' 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. Tignanelli' Charlotte 28230 Dennis D. Lowery DanM. Bechter1 ATLANTA 30303 David R. Jones Jack Guynn John F. Wieland Patrick K. Barron James M. Mckee Birmingham 35283 Patricia B. Compton Fred R. Herr1 Jacksonville 32231 Judy Jones James D. Hawkins1 Miami 33152 R. Kirk Landon James T. Curry 111 Nashville 37203 Frances F. Marcum Melvyn K. Purcell New Orleans 70161 Lucimarian Roberts Robert J. Musso CHICAGO* 60690 Lester H. McKeever, Jr. Michael H. Moskow Arthur C. Martinez William C. Conrad Detroit 48231 Florine Mark David R. Allardice' ST. LOUIS 63166 John F. McDonnell William H. Poole Susan S. Elliott W. LeGrande Rives Little Rock 72203 Betta M. Carney Robert A. Hopkins Louisville 40232 Roger Reynolds Thomas A. Boone Memphis 38101 Carol G. Crawley Martha L. Perine MINNEAPOLIS 55480 David A. Koch Gary H. Stern James J. Howard Colleen K. Strand Helena 59601 William P. Underriner 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. Gambs' OklahomaCity 73125 Barry L. Eller Kelly J. Dubbert Omaha 68102 Arthur L. Shoener Steven D. Evans DALLAS 75201 Roger R. Hemminghaus Robert D. McTeer, Jr. James A. Martin Helen E. Holcomb El Paso 79999 Patricia Z. Holland-Branch Sammie C. Clay Houston 77252 Edward O. Gaylord Robert Smith, fl[' San Antonio 78295 H. B. Zachry, Jr. James L. Stull' SAN FRANCISCO 94120 Gary G. Michael Robert T. Parry Cynthia A. Parker John F. Moore Los Angeles 90051 Anne L. Evans MarkL. Mullinix' Portland 97208 Carol A. Whipple Raymond H. Laurence' 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