Federal Reserve Bulletin, 1999-09

Volume 85 • Number 9 • September 1999 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 599 INTERNATIONAL ACTIVITIES OF U.S. BANKS 80.7 percent, 1.4 percentage points below its AND IN U.S. BANKING MARKETS 1967-98 average. The international aetivity of U.S. hanks has grown relatively rapidly during the 1990s, as 624 STATEMENTS TO THE CONGRESS both the trading and derivatives aetivities of their foreign offices and their cross-border lend- Edward M. Gramlich, member. Board of Govering have increased. The growth has taken place nors, discusses the issue of customer financial mainly in relation to the Group of Ten and other privacy and testifies that in the area of financial industrial countries. Foreign bank activity in information, it is clear that many consumers U.S. markets has also grown, but at a slightly believe that an implicit contract exists between slower pace than U.S. banking overall, resulting the financial institution and the customer that in a small decline in the foreign bank share requires the financial institution to keep certain of domestic commercial bank assets. The role of transactional information confidential. The Con- Japanese banks has declined sharply, and the gress is now considering whether to place addirole of European banks has expanded. tional limitations on disclosures of customer information by banks and other financial institutions through the privacy provisions of H.R. 10; 616 TREASURY AND FEDERAL RESERVE Governor Gramlich further testifies that in mak- FOREIGN EXCHANGE OPERATIONS ing this decision, it is important that the tradeoff between economic efficiency and privacy be ad- During the second quarter of 1999, the dollar dressed with the fullest possible understanding appreciated 4.0 percent against the euro and was of the competing interests—especially a recoglargely unchanged against the yen. Movements nition of the importance of consistency across in the major currency pairs were influenced by markets (Testimony before the Subcommittee shifts in growth outlooks for the United States, on Financial Institutions and Consumer Credit Japan, and Europe. The dollar benefited from of the House Committee on Banking and Finanthe continued robust expansion of the U.S. econcial Services, July 21, 1999). omy, while the yen strengthened as prospects emerged for an economic recovery in Japan. The 626 Alan Greenspan, Chairman, Board of Goverdollar received some support against the euro nors. presents the Federal Reserve's semiannual during much of the quarter from a widening report on monetary policy and testifies that as differential between U.S. and European interest a result of our nation's ongoing favorable rates. Yield differentials, however, narrowed economic performance, not only has the broad sharply toward the end of the quarter, helping to majority of our people moved to a higher stanslow the rate of decline of the euro's exchange dard of living, but a strong economy has manvalue. The U.S. monetary authorities did not aged to bring into the workforce many who had intervene in the foreign exchange markets durfor too long been at its periphery. He testifies ing the quarter. further that a monetary policy focused on promoting price stability over the long run and a fiscal policy focused on enhancing national sav- 621 INDUSTRIAL PRODUCTION AND CAPACITY ing by accumulating budget surpluses have been UTILIZATION FOR JULY 1999 key elements in creating an environment foster- Industrial production, which had risen only ing the capital investment that has driven the 0.2 percent in May and 0.1 percent in June, gains in productivity and living standards (Testiincreased 0.7 percent in July, to 135.1 percent of mony before the House Committee on Banking its 1992 average. The rate of capacity utilization and Financial Services, July 22, 1999; Chairman for total industry rose 0.4 percentage point, to Greenspan presented identical testimony before Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

the Senate Committee on Banking, Housing, 639 LEGAL DEVELOPMENTS and Urban Affairs, July 28, 1999). Various bank holding company, bank service corporation, and bank merger orders; and pend- 632 ANNOUNCEMENTS ing cases. Establishment of a century date change special liquidity facility. AI FINANCIAL AND BUSINESS STATISTICS Cancellation of proposed changes to Regula- These tables reflect data available as of tion CC. July 28, 1999. Issuance of a supervisory letter on capital A3 GUIDE TO TABULAR PRESENTATION adequacy of large and complex banking organizations. A4 Domestic Financial Statistics A42 Domestic Nonfinancial Statistics Freeze on changes to the deposit-reporting A50 International Statistics schedule. Issuance of a joint policy statement on branch A63 GUIDE TO STATISTICAL RELEASES AND closings by insured depository institutions. SPECIAL TABLES Joint issuance of a letter by the federal bank A80 INDEX TO STATISTICAL TABLES regulatory authorities on the allowance for loan losses. A82 BOARD OF GOVERNORS AND STAFF Formation of the payments system development committee. A84 FEDERAL OPEN MARKET COMMITTEE AND Launch of the 1998 Survey of Small Business STAFF; ADVISORY COUNCILS Finances. Issuance by the Basel Committee of papers pro- A86 FEDERAL RESERVE BOARD PUBLICATIONS viding guidance on credit risk in banking. A88 MAPS OF THE FEDERAL RESERVE SYSTEM Enforcement actions. A90 FEDERAL RESERVE BANKS, BRANCHES, Changes in Board staff. AND OFFICES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

PUBLICATIONS COMMITTEE Lynn S. Fox, Chair • Karen H. Johnson • Donald L. Kohn • Stephen R. Malphrus • J. Virgil Mattingly, Jr. • Michael J. Prell • Dolores S. Smith • Richard Spillenkothen The Federal Reser\>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

International Activities of U.S. Banks and in U.S. Banking Markets James V. Houpt, of the Board's Division of Banking HISTORICAL BACKGROUND Supervision and Regulation, prepared this article. Mark Peirce, as well as Steve Schacht and Suzie For U.S. banks, the 1960s and 1970s were years of Taylor, provided assistance with data. rapid growth in international banking. The few truly global ones, which had long before ventured abroad, The globalization of financial markets, made possible refined their networks and penetrated foreign markets largely through market deregulation and technologi- more deeply. Other large regional and money center cal gains, has been widely recognized. Increased banks also expanded their operations, though they trading and derivatives activities, in particular, are largely confined their activities to foreign financial often cited as making financial markets more liquid centers and to commercial lending and wholesale and efficient and bringing markets throughout the financial business. world closer together. International lending by U.S. Meanwhile (mostly in the 1970s), many smaller and foreign banks, along with international trade and U.S. regional institutions began to recognize the benethe innovative financing necessary to support trade fits of a foreign presence, principally to accommodate and economic growth, has also grown rapidly in and retain domestic customers whose activities were recent decades. beginning to extend beyond U.S. borders. Some of Nevertheless, the extent of global markets and these banks established full-service branches, typieconomies can be exaggerated, and trends can be cally in European cities, but most of them sought reversed. Lenders and investors constantly reassess only "shell branches" in Caribbean centers as a risks, and government actions affect the openness and means of gaining access to Eurodollar markets.1 attractiveness of markets to outsiders. The record of Consequently, the number of U.S. banks having international banking, and of international trade in foreign branches began to grow. In late 1965, only general, is not one of uninterrupted growth, as wars, 13 U.S. banks had foreign branches, and most of social and political forces, and shifting economic and those had only a few; the branches' assets totaled financial conditions of countries change markets and less than $10 billion. By 1970, 79 banks had foreign business patterns. branches, with assets totaling $53 billion. Ten years A review of data on the activities of U.S. banks later, 159 banks—nearly every U.S. bank having abroad and foreign banks in the United States can assets of more than $2 billion—had at least one reveal much about the progress that banks and gov- foreign branch, the number of branches had grown ernments are making in developing truly internation- to 787, and combined branch assets exceeded ally diversified banking markets and institutions. The $340 billion. data can also highlight trends in international lend- Before the 1960s, few U.S. banks owned subsidiing and in the structuring of worldwide operations by aries abroad, and total subsidiary assets in 1965 were financial institutions. Walter Bagehot, the renowned less than $3 billion. During the 1970s, however, nineteenth-century economist, once stated that the subsidiaries also began to grow, building assets to characteristic danger of great nations is that they may $39 billion by 1975 and to more than $80 billion by at last fail from not comprehending the great insti- 1980. They typically conducted commercial or mertutions they have created. It is useful, therefore, to chant banking or pursued local retail business. understand the structure and evolution of the banking organizations that play vital roles in the world econ- 1. Shell branches are so named because they are merely booking omy. Such background aids in evaluating events as centers. Bank personnel do not conduct operations on site at these branches, but rather book balances at these offices from other they unfold. locations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

600 Federal Reserve Bulletin • September 1999 By the early 1980s, strains from the rapid growth century, U.S. banks have also generally been barred of international banking were beginning to show. from underwriting corporate securities and from con- Borrowers in many emerging economies were having ducting other financial activities typically permissible difficulty servicing their debt, and the specter of for foreign banks. losses loomed. By the end of the decade, despite Although such restrictions helped diffuse financial efforts by creditor banks worldwide to postpone or power, they also, some observers argued, hindered avoid them, many of those losses were realized, U.S. banks from providing international banking serrequiring significant charge-offs and additional loss vices to U.S. customers and from competing effecreserves. The threat of still further large losses on tively in foreign markets with institutions that offered loans to developing countries did not disappear until a greater range of financial services. As early as the early 1990s, when improving domestic economic 1919 these concerns led to enactment of secconditions and strong earnings enabled U.S. banks to tion 25(a) of the Federal Reserve Act (the portion charge off additional foreign loans and to put those known as the "Edge Act") and, through limitedproblems behind them. purpose Edge corporations, to meaningful relief from Banks of other countries—particularly European restrictions on branching interstate and investing banks—have engaged in international banking for abroad. Although some of the structures that develhundreds of years. For a time, they generally trailed oped over the years to facilitate international banking the largest U.S. banks in creating worldwide branch by U.S. banks are unique to U.S. banking, the main networks. But during the late 1970s they, too, became types of offices used by U.S. banks and bank holding more expansive and began to close the gap. Not sur- companies to engage in international banking are also prisingly, considering the prominence of U.S. busi- used by foreign banks—namely, branches, separately nesses and financial markets, much of the foreign incorporated subsidiaries, joint venture companies, bank growth was in the United States. and simple representative offices. The resulting increase in the U.S. market share controlled by foreign banks, fueled by some notable acquisitions of U.S. banks, generated considerable Foreign Offices political debate and in 1978 spurred the Congress to enact legislation intended to make more equitable a Foreign branch offices are the most important, and in competitive environment seen to favor foreign banks. most instances the preferred, vehicle through which The legislation (the International Banking Act of U.S. banks provide international banking services, for 1978) was aimed at eliminating the advantages several reasons. First, they are, legally, integral parts enjoyed by foreign banks and at strengthening the of the corporate bank and have the full authority supervisory oversight of those banks' U.S. activities, to represent and commit the bank—an advantage in not at barring their entry or at erecting barriers against many commercial and interbank situations. For examthem. Subsequently, although they had lost some ple, the lending limits imposed by a host country on advantages, the number of foreign banks operating the local branches of a foreign bank are ordinarily in U.S. markets and their market share continued based on the bank's worldwide capital, not on some to grow—from 153 banks and 13 percent of U.S. lower level of capital imputed from an individual domestic banking assets at the end of 1980 to 283 branch's own balance sheet.2 Also, the activities of banks and 24 percent ten years later. branches are typically more easily integrated into the internal reporting and control procedures of the bank than are the activities of other types of offices, and STRUCTURAL FRAMEWORK branches accommodate a more streamlined organizational structure. FOR INTERNATIONAL BANKING Many U.S. banks also find it necessary to operate The institutional structure for international banking abroad through separately incorporated, separately by U.S. banks is in large part a reflection of efforts to capitalized foreign subsidiaries. Most of the subsidirestrain banking power. Throughout this country's aries are wholly owned by the U.S. banking parent; history, government policy has sought to restrain all are at least majority owned and controlled by the concentration in banking and other financial activi- parent. Although a subsidiary's financial strength and ties. Until 1997, for example, US. banks generally were not allowed to branch across state lines (although, by then, their parent holding companies 2. In an exception to this general practice, Argentina imposes prudential lending limits on foreign bank branches that are based on could own banks in different states). For much of this local paid-in capital, not on the parent bank's capital. 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International Activities of U.S. Banks and in U.S. Banking Markets 601 reputation, and in many cases its operations, are help. In virtually every case, they provided the assisclosely tied to its parent's, in the legal sense a subsid- tance necessary to protect their reputations in finaniary could survive on its own. Banks (or bank holding cial markets, sometimes doing so at significant cost. companies) establish or acquire foreign subsidiaries Since the 1970s, joint ventures have been of little for any of several reasons:3 interest to U.S. banks, and they are not discussed further. • U.S. or foreign tax or banking laws favor opera- Some banks engage in international banking in tions through subsidiaries some locales through simple representative offices. • The host government does not permit foreign The principal role of the bank "representatives" that banks to have local branches staff these offices is to promote the bank's interest in • The parent bank seeks consumer business in the the local market—generating business, dealing with foreign market or a local image, or it has other local authorities and customers, and providing inforspecialized business that is facilitated by separate mation about local business conditions to the bank's incorporation other offices. Representative offices are not licensed • U.S. laws prohibit branches from engaging in or chartered and may not accept deposits or make certain activities that subsidiaries may perform, for loans. Indeed, they have no financial statements of example, underwriting corporate debt their own, and they direct any business they generate • Acquiring an established institution helps the to other offices or affiliates of the bank. purchaser gain an immediate, and perhaps sizable, presence in the market. U.S. Offices Limited liability is another reason for establishing separately incorporated subsidiaries. Although Although U.S. banking organizations conduct most of that is sometimes a consideration for banking their international activities through foreign branches organizations—for example, in the case of special- and subsidiaries, they also handle much international ized leasing company subsidiaries—it is generally banking directly from domestic offices—the bank's not an important factor in planning banking net- head office, an Edge corporation, or an international works. Financial institutions depend on raising large banking facility. Banks need no foreign office to issue sums daily, and they recognize that a good reputation and process letters of credit, for example, or to puris essential for long-term viability. The incentive to chase international loans, trade foreign exchange, support ailing subsidiaries is strong, limited liability take deposits from foreign sources, or place funds in notwithstanding. foreign banks. For these transactions, banks can typi- Banks also engage in international banking through cally accommodate customers through their head foreign joint ventures. These foreign companies, in offices and with the assistance of foreign corresponwhich the U.S. bank or bank holding company has a dent banks. noncontrolling 20 percent to 50 percent investment, Edge (and agreement) corporations are subsidioffer several advantages and serve the needs of cer- aries that enable banks to conduct international banktain banks. Investing banks can combine their exper- ing business outside their home states and to invest tise and resources while sharing the risks in what may abroad in a wider range of activities than is otherwise be for them a relatively new business. Also, U.S. permissible for U.S. banks.4 Banking and investing regulations allow banks to invest in a broader range functions are almost always conducted by separate of foreign activities if the investments do not repre- Edge corporations. Banking Edges are essentially sent controlling interests. limited-purpose banks; they may accept deposits and Foreign joint ventures were more popular in the offer a full range of banking services, but the busi- 1970s, when many U.S. banks were beginning to ness must be linked to a foreign or international enter international banking, than they are now. At transaction. Nonbanking (or "investment") Edge corthat time the advantages of joint ventures were porations are U.S. subsidiaries through which banks appealing, and banks sought partners both domes- hold most of their foreign subsidiaries and other tically and abroad. However, when the ventures foreign investments. encountered problems, as many eventually did, the U.S. banks were typically the only investors able to 4. Edge corporations take their name from Senator Walter Edge of New Jersey, who sponsored the section 25(a) amendment to the 3. James V. Houpt and Michael G. Martinson, Foreign Subsidiaries Federal Reserve Act in 1919 that gave rise to these corporations. of US. Banking Organizations, Staff Studies 120 (Board of Governors Agreement corporations are state-chartered companies that are granted of the Federal Reserve System, 1982). the same powers as Edge corporations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

602 Federal Reserve Bulletin • September 1999 International banking facilities (IBFs), which have foreign operations. The latter show where the credit existed only since 1981, have no separate organiza- and transfer risks lie, regardless of which office gentional identity but are merely separate sets of erated the assets and where they are booked. accounts maintained by their establishing (or "host") banking offices. IBFs are attractive to banks for several reasons. First, their deposits are exempt from any reserve requirements and are not assessed for (nor are Extent of Operations they covered by) federal deposit insurance. Also, in some states the earnings derived from balances When examining the organizational structure of interbooked in IBFs receive favorable state tax treatment. national banking, a question arises about which finan- To qualify for placement in an IBF, a banking trans- cial statistic best characterizes the role and imporaction must meet several tests to ensure that it is tance of each type of office. Amount of assets is an international and does not directly affect domestic obvious possibility, as it covers all the activities of an financial markets. IBFs have been described as effec- office and is a traditional measure of bank size. tively being shell branches, similar to those in the However, the assets of an individual office can Caribbean. The only difference is that IBF balances include significant intracompany transactions and are assets or obligations of offices located in the may reflect mostly the bank's internal funding prac- United States rather than abroad. tices. Those balances are important to understanding a particular office's specific role, but they can also mislead, and they are excluded from the consolidated financial statements that the bank presents to inves- U.S. BANK INVOLVEMENT tors and to the public at large. IN INTERNATIONAL BANKING MARKETS Amount of deposits is another common measure, but it, too, is limited. For example, some foreign The state of international banking can be examined in subsidiaries are not banks and, therefore, do not have two ways: (1) by looking at the number and size of deposits. Also, data on deposits cannot convey the offices of different types—for example, the assets of growing importance to banks of securities transacforeign branches, subsidiaries, and other foreign tions and off-balance-sheet derivatives activities. offices and the volume of internationally related A third measure, claims on unrelated parties, credit extended directly from the head office, and excludes dealings with affiliates. The figures for these (2) by reviewing data on total credit exposure to assets for each type of office can be summed to foreign parties, by country. Each approach has mer- produce a total that equals (conceptually) the consoliits. The former, which is based on "structure" data, dated assets of the parent. However, this measure provides more information about, and therefore more considers only one side of the balance sheet and insights into, the operational strategies of banks and therefore understates the role of offices that raise the legal and regulatory framework in which they funds and then transfer those funds to other offices of operate. By considering activities whenever an inter- the parent or to its subsidiaries. national link exists, even if the customer is not for- A full range of statistics and other information is eign, it also produces a broader measure than the needed to fully understand the importance and role second. Such a broader measure may be more appro- of any office in a bank's network, of course, but that priate because even loans to U.S. parties that are approach is beyond the scope of this article. The booked abroad may be booked there because they are discussion here is based on the two asset measures— financed with funds raised abroad. Structure data total assets and claims on unrelated parties. come from numerous sources, however, and reconcil- To place the importance of different types of offices ing the data can be difficult and lead to unexplained in perspective, it helps to look at aggregate data on differences, even when the reporting forms are claims on unrelated parties. By that measure, U.S. designed to be compatible. The "country exposure" banks and bank holding companies at the end of approach is more systematic because it relies on a 1998 held an estimated $861 billion of international single, consolidated figure that reporting institutions banking assets through their U.S. and foreign offices themselves generate to measure their foreign credit (table 1). That figure represented about 15 percent of and transfer risks. the assets of all U.S. banks and bank holding compa- This article reports both structure and country nies at the time. For some individual institutions, exposure data. The former are available over a longer however, international banking accounts for most of period, and they identify the location and size of the their consolidated assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

International Activities of U.S. Banks and in U.S. Banking Markets 603 1. International banking assets of U.S. insured commercial banks and bank holding companies, by type of office, selected years, 1980-98 Billions of dollars except as noted 1998 TTyyppee ooff ooffffiiccee 11998800 11998855 11999900 11999955 11999966 11999977 Amount Percent Domestic offices of U.S. banks 61.8 142.2 78.1 65.4 75.2 89.4 80.8 9.4 IBFs1 74.8 47.9 38.1 39.3 51.3 45.8 5.3 Other2 61.8 67.4 30.2 27.3 35.9 38.1 35.0 4.1 Foreign branches3 4 292.8 243.3 217.6 360.1 405.0 462.1 430.6 49.9 Foreign subsidiaries4-5 64.0 88.7 136.7 223.5 254.1 264.8 338.8 39.5 Banking Edge and agreement corporations 13.6 7.9 7.1 7.9 7.7 12.0 10.5 1.2 IBFs1 2.9 3.4 3.5 3.1 3.1 3.7 .4 Other2 13.6 5.0 3.7 4.4 4.6 8.9 6.8 .8 Total 432.2 482.1 439.5 656.9 742.1 828.2 860.6 100.0 NOTE. Data are as of December 31 and cover only claims on unrelated 3. Covers foreign branches of only those banks that are members of the parties. In this and subsequent tables, components may not sum to totals because Federal Reserve System; at the end of 1998, member banks accounted for of rounding. 98 percent of all foreign branch assets of U.S. banks. 1. International banking facilities (IBFs) were not authorized until December 4. Figures for 1995 and later years are reduced to reflect further FIN 39 1981. netting by the head office or parent bank. See text note 5. 2. Extensions of credit to foreign parties booked outside IBFs, plus the 5. Covers foreign subsidiaries held directly by bank holding companies and amount of international trade financing indicated by the amount of customers' those held indirectly through banks or Edge corporations. liability on acceptances outstanding. . . . Not applicable. Foreign Branches est level of international banking activity that existed only a few decades ago. From a base of $10 billion The number and assets of foreign branches of U.S. in 1965, the total assets of branches have increased banks grew sharply throughout the 1960s and 1970s more than seventyfold, reaching $705 billion at the but then stagnated and declined in the 1980s as end of 1998. Even since 1993, branch assets have mounting problems with loans to developing coun- nearly doubled. Unlike the growth in earlier periods, tries dampened enthusiasm for foreign lending (table 2). Regional institutions, in particular, reassessed and restructured their international presence, and many withdrew from international banking alto- 2. Foreign branches of U.S. insured commercial banks, gether. This retrenchment, together with the large selected years, 1955-98 number of bank mergers in the past decade, has Billions of dollars except as noted reduced the number of U.S. banks having foreign Assets of foreign branches1 branches nearly one-half since the mid-1980s, to NNuummbbeerr ooff NNuummbbeerr ooff bbaannkkss wwiitthh eighty-two banks at the end of 1998. YYeeaarr bb ff rr oo aa rr nn ee cc ii hh gg ee nn ss bb ff rr oo aa rr nn ee cc ii hh gg ee nn ss Adju a s s t s e e d t s t otal C u l n a r i e m la s t e o d n With fewer internationally active U.S. banks, the parties number of foreign branches also declined and did not 1955 7 115 2.0 n.a. surpass the peak levels of the mid-1980s until last 1960 8 131 3.5 n.a. 1965 13 211 9.8 n.a. year. The new level (935 branches) was reached only 1970 79 532 52.6 n.a. when both Citibank and BankBoston purchased 1975 126 762 162.7 n.a. Argentine banks and converted scores of acquired 1980 159 787 343.5 292.8 1985 162 916 329.2 243.3 offices to branches of their own banks. At the end 1990 122 833 304.4 217.6 of 1998, these branches, together with Argentine 1991 122 818 325.3 224.8 branches previously established by the two banks, 1992 115 787 311.0 218.8 1993 108 774 375.5 241.1 accounted for nearly one-quarter of all foreign 1994 106 781 506.2 316.0 branches of U.S. banks. That large share reflects both 1995 102 788 567.1 360.1 banks' long history in commercial and retail banking 1996 93 820 615.4 405.0 1997 89 852 734.7 462.1 in Argentina and that nation's willingness to accom- 1998 82 935 704.5 430.6 modate the banks' preference for branch offices. NOTE. Data are as of December 31. Covers foreign branches of banks that are members of the Federal Reserve System. Although foreign branch assets also dipped in the 1. Figures for 1994 and later years are reduced to reflect further FIN 39 early 1990s, that amount has grown dramatically netting by the head office or parent bank. For 1998, the reduction was $63 billion. See text note 5. over the long term, emphasizing the relatively modn.a. Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

604 Federal Reserve Bulletin • September 1999 1. Foreign branches of U.S. banks and foreign branch assets, by region, 1965-98 Number Billions of dollars Number Billions of dollars Europe Asia 200 150 — 100 50 200 150 100 50 1 i I M I II I I I I I I I I I I I I I I I 1965 1976 1987 1998 1965 1976 1987 1998 which was based in lending, much of the branch asset Europe (especially the United Kingdom) have had growth in recent years reflects trading activities and the largest, most developed, and most accessible a 1994 accounting change pertaining to derivatives financial markets. Mostly because of London's role transactions.5 in financial markets, but also because of the tradition- The growth of branch activities has varied consid- ally strong ties between Western Europe and the erably by world region (chart 1, tables A.l and A.2). United States, the assets of branches in Europe far Outside the United States, the major countries of exceed those of branches in other regions. From the late 1960s to the mid-1970s, European branches accounted for 60 percent to almost 80 per- 5. In 1994, banks implemented U.S. Financial Accounting Stancent of all foreign branch assets of U.S. banks. As dards Board interpretation 39 (FIN 39), which clarified the degree to which they could net counterparty claims arising from trading and branches in the Caribbean offshore centers, Singaderivatives activities and ended a practice known as "grand slam pore, and Japan began to grow, the relative impornetting." Institutions had been effectively netting their total gains on tance of European branches (by that measure) these activities with "offsetting" losses, regardless of counterparty. FIN 39 clarified that the netting of gains and losses was permissible declined. Since the early 1980s, the distribution of only by individual counterparty and required institutions to report the branch assets has changed little, with the European result for each counterparty as either an asset or a liability. The revised offices holding 44 percent at the end of 1998 and the approach more accurately reflects the results of an institution's trading and derivatives activities and the counterparty risks the activities Caribbean and Asian offices holding 26 percent and represent, but it also increases the amount of consolidated assets 21 percent respectively. Branches in Argentina and reported by the bank. Moreover, the calculations can substantially other Latin American countries accounted for most of increase the assets of individual offices that conduct these activities the balance. (particularly offices in London) because more netting among numerous counterparties is possible on a consolidated bankwide basis than is possible for a given office. As a result of their own (limited) netting abilities, foreign branches and subsidiaries of U.S. banks reported total trading assets (including the relevant revaluation gains) of $267 bil- Foreign Subsidiaries lion at the end of 1998. Further netting by the head offices reduced that figure to $169 billion (as shown in table 5). The assets for 1994 Although subsidiaries are generally smaller than and later years shown in tables 1 and 2 have also been adjusted to reflect such nettings. branches in terms of assets, they are in most cases Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

International Activities of U.S. Banks and in U.S. Banking Markets 605 integral parts of a bank's international banking net- 3. Foreign subsidiaries of U.S. banking organizations, work. They supplement the parent's branch activities by location of subsidiary, year-end 1998 or extend its reach into local retail banking in ways Billions of dollars except as noted not practical through branches. Through its Regu- Claims on lation K (International Banking Operations), the Fed- LLooccaattiioonn ooff ssuubbssiiddiiaarryy NNuummbbeerr Percent unrelated parties TToottaall aasssseettss eral Reserve Board requires that the activities of Amount Percent foreign subsidiaries be financial in nature, but within Europe 327 28.9 209.4 56.0 477.6 that stricture it permits a broad range of activities. In Belgium 8 .7 2.5 .7 2.6 Czech Republic 5 .4 1.4 .4 1.6 practice, most subsidiary activities have involved France 26 2.3 5.8 1.5 12.1 some form of traditional banking or lending. More Germany 24 2.1 21.8 5.8 34.7 Luxembourg 19 1.7 2.1 .6 8.0 recently, however, as the securities and trading activi- Poland 6 .5 1.8 .5 2.1 ties of major U.S. banks have grown, so too have Spain 14 1.2 13.8 3.7 14.9 these activities of their foreign subsidiaries. Switzerland 23 2.0 13.5 3.6 19.6 United Kingdom 110 9.7 136.3 36.4 358.3 Foreign subsidiaries have grown rapidly in recent Other 92 8.1 10.5 2.8 23.7 years: Their assets, including claims on affiliates, Offshore banking centers 211 18.6 25.3 6.8 66.6 Bahamas 19 1.7 3.7 1.0 5.7 climbed from $7 billion in 1970 to $81 billion by Cayman Islands 106 9.4 4.1 1.1 26.5 1980, to $191 billion by 1990, and to $718 billion by Channel Islands 59 5.2 6.3 1.7 18.7 Singapore 27 2.4 11.2 3.0 15.7 the end of 1998. As has been the case for foreign Latin America 238 21.0 28.0 7.5 40.5 branches, Europe has been the most attractive 57 5.0 12.0 3.2 19.1 location for subsidiaries, with those in the United Chile 29 2.6 2.9 .8 4.3 Colombia 12 1.1 1.5 .4 1.8 Kingdom overshadowing those in other countries Mexico 32 2.8 8.1 2.2 10.6 Other 108 9.5 3.5 .9 4.7 (table 3). Also like the growth of foreign branches, the growth of subsidiaries reflects London's role in Asia/Pacific 151 13.3 40.3 10.8 46.6 Hong Kong 64 5.6 9.0 2.4 11.6 international finance (as well as the United King- Japan 21 1.9 24.4 6.5 26.3 Malaysia 11 1.0 4.9 1.3 5.2 dom's openness to U.S. banks). Other 55 4.9 2.0 .5 3.4 Total assets provide an incomplete picture of Middle East 8 .7 13.3 3.6 13.4 foreign subsidiaries, however, because of the Africa 12 1.1 .7 .2 1.0 recent growth of trading activities—particularly in Australia 31 2.7 21.7 5.8 25.9 London—and the role subsidiaries play in their Canada 36 3.2 17.3 4.6 20.9 parents' networks. Overall, nearly half the total assets of foreign subsidiaries involve claims on related U.S. territories and other 60 5.3 8.6 2.3 9.8 parties. As noted, tax laws—U.S. state and local laws United States1 59 5.2 9.4 2.5 15.6 as well as U.S. federal laws and international tax Total 1,133 100.0 373.9 2 100.0 717.9 treaties—sometimes have the effect of encouraging 1. Covers companies that are regulated as foreign subsidiaries by the Federal banks to conduct business in subsidiaries rather than Reserve even though they are domiciled in the United States. These companies branch offices. A bank's past organizational structure are subject to the limitations and conditions of Regulation K, which requires that their activities be of a foreign or international nature. Many of them are leasing in a country, which itself has been influenced by past and investment companies. and current tax and banking laws and regulations, 2. Amount differs from the amount shown in table 1 because the latter ligure was reduced by the estimated effect on subsidiaries of FIN 39. also affects decisions regarding where to book transactions. Once staffed and operating, subsidiaries can be costly to dismantle even when changing circum- Edge Corporations stances favor a different approach. Foreign subsidiaries vary widely in size, depending The initial purpose for banking Edge corporations on their role. Some approach the size of large U.S. was to enable banks located outside New York State banks, when measured by total assets (including to gain a banking presence in New York City—a claims on affiliates). At the end of 1998, the 23 larg- near-necessity for conducting international banking est foreign subsidiaries (those having assets of more and for trading in foreign exchange; without such than $5 billion, about 2 percent of all such subsidi- subsidiaries, past restrictions on interstate branching aries) accounted for 68 percent of all foreign subsidi- would have prevented non-New York banks from ary assets. The nearly 800 subsidiaries having total operating an international banking business in the assets of less than $100 million (70 percent of all New York market. During the 1980s, in particular, foreign subsidiaries) held less than 2 percent of total US. and foreign banks also used Edge corporations foreign subsidiary assets. to expand beyond their home states into regional Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

606 Federal Reserve Bulletin • September 1999 financial centers such as Miami, Chicago, and loans in the United States, in offshore centers, and in San Francisco. countries different from those of the borrowers. They The recent removal of federal interstate branching also extend loans denominated in currencies other restrictions would seem to undermine much of the than the currency of the borrower's home country. continuing appeal of banking Edge corporations, and, Lending to foreign parties creates "country risk" and indeed, their relative role in international banking has also, depending on the currency, "transfer risk." 6 declined. Nevertheless, more than thirty corporations remain, operating mostly in New York and Miami. At the end of 1998, they held $18 billion in assets Monitoring Country Exposure (including claims on affiliates), roughly their size throughout the 1980s. Whereas banking Edges extend To monitor country risk and transfer risk, U.S. bankthe geographic reach of their parents, nonbanking, or ing agencies have for more than two decades col- "investment," Edges expand the kinds of companies lected information from internationally active banks in which their parent banks may invest. By law, U.S. about the domicile and nature of their foreign borrowbanks may invest abroad only in other banks. By ers. The information is collected through the quarinvesting indirectly through Edge corporations, they terly Country Exposure Lending Survey and is pubmay invest in virtually any type of foreign company, lished quarterly in the E.16 statistical release of the provided it conducts no business in the United States Federal Financial Institutions Examination Council. except that which is incidental to its foreign or inter- Aggregate data from the survey, along with data from national activities. (Through regulation, however, the similar surveys by foreign authorities in most other foreign subsidiaries of a bank's Edge corporations major countries, are sent to the Bank for International are restricted to financial activities, as are foreign Settlements (BIS), which then compiles data on intersubsidiaries owned directly by bank holding com- national lending by banks worldwide. The worldwide panies, that is, not through a subsidiary bank.) At figures indicate that U.S. banks account for about the end of 1998, 70 percent of the assets of all for- 10 percent of international lending by banks in BIS eign subsidiaries of U.S. banking organizations were reporting countries to parties in non-BIS reporting owned through Edge corporations. countries.7 That share is similar to the share held by French and Japanese banks and is materially smaller than the share held by German banks. International Banking Facilities Until recently, the supervisory emphasis in evaluating country and transfer risks was on cross-border International banking facilities were popular from the lending and on lending by local offices in a currency time their creation was authorized in 1981, and soon other than that of the host country. This emphasis 225 U.S. banking institutions had established such reflected the view that credit extended in a foreign facilities, placing more than $60 billion in them. currency to local borrowers by local offices was However, their early growth was simply the result of exposed to many of the same risks as cross-border a transfer of eligible credits within banks. After peak- loans. Credits in local currencies funded locally were ing at $79 billion in 1984, the IBF balances of U.S. a lesser concern, as the host country could, in prinbanks declined almost steadily, to $46 billion at the ciple, always meet local currency demands, even if end of 1998, as regional U.S. banks withdrew from the cost was rising inflation rates.8 foreign lending. Because of the typically interna- By the mid-1990s, the role of U.S. dollars in retail tional focus of their business, U.S. branches and and business transactions abroad had become more agencies of foreign banks (discussed later) make much greater use of these facilities, holding $169 bil- 6. Country risk comprises all the risks that arise from the ecolion in them at the end of 1998. nomic, social, legal, and political conditions of a foreign country that may have favorable or adverse consequences for loans (or investments) by foreigners to parties in that country. Transfer risk refers to the possibility that a country will be unable to provide local borrowers Country Exposure with sufficient access to foreign currencies that they can meet foreign obligations denominated in those currencies. 7. BIS reporting countries are the G-10 countries, Austria, Den- Data on the extent and size of the international opera- mark, Finland, Ireland, Norway, and Spain; non-BIS reporting countions of U.S. banks offer one perspective on growth tries are essentially the nonindustrial countries. 8. However, local currency credits extended in excess of local but provide no information on the nationality or type currency liabilities, that is, funded with foreign currency or offshore of foreign borrower. U.S. banks book many foreign borrowing, were included in measures of transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

International Activities of U.S. Banks and in U.S. Banking Markets 607 prominent. Local dollar markets developed in some Borrower Nationality countries, and the risks associated with foreign currency credits in those countries began to resemble U.S. bank claims involving transfer risk amounted the risks associated with other local loans rather than to $516 billion at the end of 1998 (table 4). Over the those characteristic of cross-border credits. The U.S. years, claims on borrowers residing in industrial country exposure survey was changed to take these countries have been far greater than claims on bordevelopments into account. Rather than net local rowers in any other group of countries, mainly becurrency positions, the banking agencies now con- cause of the importance of the industrial economies sider net local country positions, that is, the amount in global economic activity, the prominence of their of credit extended to local parties relative to the financial markets (especially London), and the relaamount raised from them. The change has been tively strong credit ratings of the countries and their meaningful in certain cases, particularly in relation to major banks and corporations. Claims on parties in Argentina, but has had little effect on reported figures the G-10 and other developed countries at the end of overall. 1998, totaling $379 billion, represented nearly three- Since 1997, the Federal Reserve has also moni- fourths of all transfer risk held by U.S. banks and tored U.S. bank exposures to foreign counterparties have consistently accounted for roughly half or more arising from unrealized gains from foreign exchange of that risk. By the end of 1998, roughly one-third of transactions and derivatives products.9 Although this dollar value was related to trading and derivathese exposures have always been an element of tives transactions. transfer risk, they have increased significantly in U.S. bank transfer risk claims on borrowers in recent years along with the growth of the underlying Latin American and Caribbean countries declined activities. With the addition of this information and sharply over 1988-91 as the region's foreign debt the reporting change described in the preceding para- payment problems became severe and widespread. graph, the supervisory measure of transfer risk has From a peak of $91 billion in 1984, including claims become the sum of cross-border claims, net local on Brazil and Mexico of roughly $27 billion each, country claims, and claims resulting from revaluation U.S. bank exposure to the region dropped as low as gains. $38 billion in 1991 before rising to the current level The need to monitor exposures arising from revalu- ($66 billion). Relative to the total capital of the ation gains was demonstrated following Indonesia's lending banks, exposure to Latin American and currency crisis in 1997. In lending to Indonesian Caribbean countries has declined even further. For borrowers, some banks had attempted to reduce or large U.S. money center banks, which hold more than eliminate their currency exposures by hedging the 70 percent of all U.S. bank claims on the region, the risk through contracts with local institutions, which amount of transfer risk exposure equals roughly onein turn committed to paying dollars in the future at a quarter of their combined capital accounts. In the fixed rate of exchange. As the country's financial and early and mid-1980s, that figure was well over economic problems grew, the U.S. dollar value of its 100 percent. currency, the rupiah, plunged, as did the dollar value Transfer risk claims of U.S. banks on emerging of the U.S. banks' rupiah-denominated loans. How- Asian economies followed a similar track, declinever, the offsetting gains on the hedging contracts ing from a peak of $45 billion in 1983 to a low of also increased the credit exposure of U.S. banks $22 billion in 1989. By 1993, exposures were again to Indonesian counterparties. Unfortunately, many of growing rapidly, building to a peak of $55 billion these counterparties were also weakened by financial in 1997, including $11 billion of revaluation gains and economic conditions in Indonesia and defaulted on foreign exchange and derivatives contracts. U.S. on their obligations to U.S. banks. The episode high- banks were not alone in increasing their exposures, lights the importance of monitoring counterparty as Japanese and European banks were particularly exposures under relevant stress scenarios. active in providing new financing. Most of the U.S. bank funding (like most international lending in general) was short term, however, and bank exposures fell sharply following the Asian market problems 9. When trades and derivatives transactions are initiated, by definithat began that year. By the end of 1998, transfer risk tion they are done at market rates, with no economic gain or loss to either party. Immediately thereafter, however, market rates and prices claims of U.S. banks on these countries had fallen begin to change, and one party benefits. As this happens, the party to $36 billion, largely as a result of asset sales and benefiting incurs a risk that the other party will default, causing losses charge-offs. just as if the underlying transaction had been a loan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

608 Federal Reserve Bulletin • September 1999 4. Country exposure of U.S. insured commercial banks, as measured by transfer risk, selected years, 1978-98 Billions of dollars Transfer risk claims Composition of transfer risk for 1998 CCoouunnttrryy ooff bboorrrroowweerr oorr gguuaarraannttoorr Cross- Net local Total Revaluation transfer 1978 1983 1988 1993 1996 1997 1998 border country gains risk exposure claims claims G-10 and Switzerland 100.2 183.0 169.7 155.4 174.3 263.4 318.3 203.3 94.8 20.2 318.3 Non-G-10 developed countries 20.4 45.8 27.5 29.3 43.9 62.7 60.9 35.1 15.4 10.4 60.9 Eastern Europe 5.8 4.6 3.1 1.5 7.1 9.1 4.9 4.3 .5 .1 4.9 Bulgaria .6 .1 .1 .1 .2 .2 .1 .1 .0 .0 .1 Czech Republic .2 .2 .0 .0 1.2 .6 .7 .5 .2 .0 .7 Hungary .8 .9 .3 .4 .7 .5 .7 .5 .2 .0 .7 Poland 1.2 .9 .3 .4 1.0 .9 1.7 1.6 * .1 1.7 Russia 1.2 .1 .5 .3 3.3 5.8 .9 .8 .1 * .9 Other 1.8 2.4 1.9 .3 .7 l.l .8 .8 .0 .0 .8 Latin America and the Caribbean ... 44.9 87.5 67.1 50.1 69.0 72.5 66.5 55.1 2.3 9.1 66.5 Argentina 2.6 9.1 8.2 8.7 11.8 11.6 11.0 8.5 .5 2.0 11.0 Brazil 14.2 24.1 22.0 9.9 22.8 23.2 17.6 14.1 .4 3.2 17.6 Chile 1.4 6.1 5.0 4.1 7.6 7.0 5.7 3.9 .1 1.7 5.7 Mexico 10.3 25.4 17.7 17.6 14.8 16.4 18.2 16.1 1.0 1.2 18.2 Other 16.4 22.8 14.2 9.8 12.0 14.3 14.0 12.5 .3 1.0 14.0 Asia 22.9 44.5 22.5 31.4 50.8 54.9 35.8 23.4 5.1 7.3 35.8 China, People's Republic * 1.4 .6 .8 2.6 3.1 1.8 1.2 .4 .3 1.8 China, Taiwan 3.2 4.9 3.0 4.1 5.2 4.1 3.6 2.7 .2 .7 3.6 Korea 4.3 13.1 6.4 8.6 16.5 21.4 12.9 7.8 1.9 3.1 12.9 Malaysia .8 2.1 .6 2.0 2.9 3.4 2.1 .7 .2 1.2 2.1 Philippines 3.0 5.9 4.1 2.1 4.3 2.5 2.2 1.6 .1 .5 2.2 Thailand 1.4 2.8 1.3 3.1 6.5 6.0 2.9 .9 .7 1.3 2.9 Other 10.2 14.3 6.5 10.7 12.8 14.4 10.3 8.5 1.6 .2 10.3 Africa 5.2 7.3 2.7 1.3 1.4 1.7 1.6 1.2 .2 .2 1.6 Offshore banking centers 7.5 15.9 7.8 14.3 23.6 31.5 23.2 18.0 3.9 1.3 23.2 International and regional organizations .4 1.0 1.6 1.3 1.1 3.5 5.1 2.6 2.5 .0 5.1 Total 207.4 389.6 301.8 284.4 371.2 499.2 516.3 342.9 124.8 48.6 516.3 * Less than $50 million. U.S. bank lending in Eastern Europe has increased consisted of nine banks, but it held only 58 percent since the removal of the Berlin Wall, but transfer risk of all such claims. A common statistic for measuring claims remain small ($4.9 billion at the end of 1998). market concentration is the Herfindahl-Hirschman Claims on Russia peaked at $5.8 billion in 1997 index, which does so by summing the squared market but fell to $0.9 billion by the end of 1998 after shares of participating institutions. From 1986 to the country announced a moratorium on public-sector 1998, according to Federal Reserve staff calculations, debt. the index more than doubled, rising from 800 to Although of lesser concern to supervisors, foreign 1623.10 bank lending in local currencies of funds raised locally has also grown in the 1990s. Such lending Trading and Derivatives Activities totaled $314.1 billion at the end of 1998, compared with $140.2 billion at the end of 1990. (These loans As noted, traditional asset-based measures can be are reflected only partially in table 4, under "Net misleading as a gauge of the scale and scope of local country claims.") today's large, complex banking organizations. The inadequacy of such measures is due in large part to Concentration among U.S. Lenders the growing importance of securities markets and related trading and derivatives activities. Rather than Mergers and acquisitions among large US. banking extending and funding loans in traditional ways and organizations since the mid-1980s have concentrated thereby increasing their assets, many large commerforeign lending among fewer U.S. banks. At the end of 1998, for example, a separately monitored group 10. For reference (though not applicable to this case), the U.S. of six large money center banks held 83 percent of all Department of Justice defines a market as unconcentrated if the index is less than 1000 and highly concentrated if it is greater than 1800. transfer risk claims of U.S. banks. In 1986 that group Otherwise, the market is considered to be "moderately" concentrated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

International Activities of U.S. Banks and in U.S. Banking Markets 609 cial banks (those in the United States, in particular) transactions are netted on a bilateral basis consistent are seeking more and more to securitize and sell with FIN 39, the fair value of all derivatives transpools of loans to investors, and then to service the actions of U.S. banks totaled $173 billion at the end assets that they and other financial institutions have of 1998, or 0.5 percent of the total notional value. sold. Securitizing and selling loans minimizes asset Trading and derivatives activities are heavily concengrowth, frees funds for additional lending, and may trated among the large money center banks, increascontribute to more efficient use of bank capital. ingly the same institutions that are most active abroad In the process of originating and securitizing (table 5). assets, managing their own market exposures, providing financial services to customers, and pursuing market opportunities, banks are increasing their vol- FOREIGN BANK PARTICIPATION ume of off-balance-sheet transactions. Most of these IN U.S. BANKING MARKETS activities, in turn, involve trading and derivatives activities and can also create additional needs for The large and open economy of the United States, foreign offices. combined with the key role of its currency in world Throughout the 1990s, trading assets increased markets, has attracted foreign banks and investors to rather steadily as a share of all U.S. commercial bank this country throughout its history. British merchant assets, rising from 2.0 percent at the end of 1990 to banks financed much of the trade with the colonies 5.2 percent ($285 billion) at the end of 1998. More and established offices here in the mid-1700s. Other than 60 percent of those assets were booked abroad, foreign banks operated formal banking agencies in principally in London but also, notably, in Tokyo and New York shortly after the Civil War. Their efforts Singapore. Indeed, as indicated earlier, much of the and capital were especially helpful in financing the recent growth of foreign branch and subsidiary assets growth of the U.S. railroads. has been due to the higher level of trading activities. In recent decades, the U.S. banking assets of for- Nearly all the derivatives transactions of U.S. banks eign banks have grown rapidly, climbing from (95 percent) are managed within the trading function, $27 billion and 3.6 percent of U.S.-booked commerand much of the activity heavily involves overseas cial banking assets in 1972 to $1.1 trillion and a offices. Nearly all the transactions (97 percent) are 23 percent market share at the end of 1998 (table 6). based on interest rate and foreign exchange rate Most of these assets—around 80 percent—are held in contracts, with interest rate contracts commanding a foreign bank branches and agencies located in the dominant and growing share. United States.11 By a common measure—notional value (the face As have U.S. bank holding companies, many forvalue of financial instruments upon which countereign banks have also established or acquired U.S. party payments are based)—the derivatives activities nonbank financial companies, such as leasing and of U.S. banks have grown markedly in recent years, finance companies, and U.S. securities subsidiaries. from $6.8 trillion at the beginning of the decade to $33.0 trillion at the end of 1998. Last year, notional values rose 32 percent because of soaring volumes in the third quarter as institutions adjusted their expo- 11. The assets of U.S. branches and agencies of foreign banks sures after Russia's default and the near failure of exclude substantial other assets thai are managed by these offices but Long-Term Capital Management, a large, highly are booked in the Caribbean. U.S. agencies ol foreign banks are similar to branch offices, except that, unlike branches, agencies have leveraged hedge fund. In each of the following two limited or no deposit-taking powers. Rather than providing funds to quarters (through March 1999), however, notional borrowers by granting the borrower a deposit to draw upon, an agency values declined slightly, the first consecutive quar- issues the borrower a "credit balance." In that context, deposits and credit balances are much the same. However, branches may also issue terly declines in this measure during the ten years for deposits (for example. CDs) to investors and other parties with whom which data are available. they have no other relationship. Generally, agencies may not do that Notional values dramatically overstate the eco- and must rely on other types of borrowing to fund their activities. Their credit balances must be "incidental to or |arise from] the nomic significance and risks these transactions exercise of other lawful banking powers." In practice, the differences present, however. Another measure—fair value (the between branches and agencies are often subtle. Both types of offices estimated replacement costs of the contracts)—often are integral parts of their parents: both have lending powers that are based on the capital of the consolidated bank; and the Federal Reserve serves better and is typically much smaller than the treats the credit balances of the agencies as deposits in determining notional value of a derivatives portfolio (0.5 percent reserve requirements. Branches and agencies established since 1991 to 2.0 percent). If the amounts U.S. banks owe to or have not been permitted to accept domestic retail deposits or to obtain FDIC insurance; a small number of foreign bank branches established are owed by individual counterparties on derivatives before 1991 may accept FDIC-insured deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

610 Federal Reserve Bulletin • September 1999 5. Trading, derivatives, and international activities of selected U.S. insured commercial banks, year-end 1998 Billions of dollars except as noted Trading assets Derivatives activities IIInnnttteeerrrnnnaaatttiiiooonnnaaalll aaasssssseeetttsss aaasss aaa BBBaaannnkkk Revaluation gain pppeeerrrccceeennntttaaagggeee ooofff DDoommeessttiicc ooffffiicceess FFoorreeiiggnn ooffffiicceess TToottaall NNoottiioonnaall vvaalluuee cccooonnnsssooollliiidddaaattteeeddd Domestic offices Foreign offices aaasssssseeetttsss Morgan Guaranty Trust Company .. 37.8 53.0 90.8 8,653.6 25.5 23.6 53.6 Chase Manhattan Bank 11.2 37.7 48.9 10,261.5 7.2 25.5 36.4 Bankers Trust Company 7.7 32.3 40.0 2,524.1 3.3 14.3 62.5 Citibank NA 5.5 26.2 31.7 3,625.3 5.2 20.6 68.4 NationsBank NA1 21.3 .6 21.9 2,700.9 7.1 .4 4.4 Bank of America NT&S A1 7.6 10.5 18.1 1,870.2 5.7 3.7 24.9 First National Bank of Chicago 2.7 4.9 7.6 1,421.3 1.8 4.3 22.4 First Union NB 7.0 .0 7.0 268.9 1.7 .0 9.0 Republic NB of NY 2.7 1.5 4.2 194.9 1.9 .5 31.0 BankBoston NA 2.0 1.1 3.1 147.9 1.7 .4 30.7 State Street B&TC 1.5 .1 1.6 139.2 1.2 .0 26.3 Bank of New York 1.3 .3 1.6 274.6 1.0 .3 21.7 Subtotal 108.2 168.2 276.4 32,082.4 63.2 93.4 32.9 All other banks 8.5 .3 8.7 918.2 2.6 .3 1.6 Total 116.7 168.5 285.1 33,000.6 65.8 93.7 12.9 2 1. These banks are now controlled by a single bank holding company, 2. Asset-weighted average. BankAmerica Corporation. subject to the restrictions of section 20 of the Glass- Japan's total to 55, the largest number, by far, for any Steagall Act.12 At the end of 1998, these nonbank nationality. Japan's economic problems in the 1990s, companies held assets exceeding $800 billion, with however, led to a significant retrenchment in the section 20 and similar U.S. securities affiliates international activities of its banks and to a reversal accounting for more than $500 billion of the total. of their earlier U.S. growth. By the end of 1998, the Before the 1970s, almost all the foreign banks number of Japanese banks had dropped to 35 and having offices in the United States were large banks their U.S. operations were much smaller than they from major industrial nations or were the largest or had been ten years earlier. second-largest banks in their home countries; by the The number of European banks with U.S. offices end of 1975, 20 percent of the foreign banks having also declined during the 1990s, from a peak of 103 in U.S. banking offices were not among the world's top 1989 to 81 at the close of 1998. However, this decline 500, and by 1985 that figure had increased to 34 per- was due more to mergers and acquisitions among cent. The number of foreign banks with offices in the banks throughout the continent than to any strategic United States also rose during the 1980s, from 153 at retreat from U.S. markets. the beginning of the decade and to a peak of 294 at In structuring their activities, foreign banks generthe end of 1991. ally have the same choices regarding the types of Much of the buildup to 1991 was driven by the entry of more than two dozen additional Japanese banks in the preceding four years. Those banks raised 6. Assets of U.S. banking offices of foreign banks, selected years, 1975-98 Billions of dollars except as noted 12. Section 20 of the Banking Act of 1933 (part of the Glass- Foreign Memo: Commercial bank Steagall Act) prohibits a bank from being affiliated with a company Branches banks share of Number of engaged "principally" in underwriting or dealing in securities. In Year and chartered Total U.S. foreign banks with 1989 the Federal Reserve interpreted that provision as permitting agencies in the commercial U.S. banking United States bank assets holding companies to own securities affiliates that engage in otherwise offices (percent) impermissible securities activities if the revenues from those activities did not account for more than 10 percent of the affiliate's total 1975 ... 38 12 50 4.6 79 revenues. In 1997, the percentage limitation was raised to 25 percent. 1980 ... 148 68 216 11.8 153 The securities affiliates that U.S. bank holding companies established 1985 ... 312 111 424 14.9 244 1990 ... 628 148 776 23.7 283 following this interpretation are referred to as "section 20" subsidiaries. By regulation, most of their activities must involve trading and 1995 ... 763 201 964 24.1 275 dealing in U.S. government securities and other financial instruments 1996 ... 822 189 1,011 24.1 267 also permissible to U.S. banks. Foreign banks are also allowed to own 1997 ... 927 214 1,141 25.0 264 1998 ... 903 231 1,134 22.6 243 such companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

International Activities of U.S. Banks and in U.S. Banking Markets 611 7. Assets of U.S. branches and agencies of foreign banks, by country of parent bank, selected years, 1988-98 Billions of dollars except as noted 1998 PPaarreenntt ccoouunnttrryy 11998888 11999900 11999922 11999944 11999966 Amount Percent Europe 139.5 176.5 269.0 292.5 392.4 519.4 57.5 Austria 1.2 2.4 4.2 4.1 4.4 7.6 .8 Belgium 3.1 4.6 4.8 3.9 5.5 8.4 .9 France 25.1 32.5 73.3 90.0 127.6 132.7 14.7 Germany 13.0 16.2 30.8 43.3 78.6 139.4 15.4 Italy 39.0 47.0 39.2 34.3 29.6 33.1 3.7 Netherlands 8.5 10.7 20.4 18.4 30.7 47.5 5.3 Spain 3.8 7.6 7.8 8.6 10.8 15.2 1.7 Sweden .3 5.3 11.8 6.9 7.5 15.0 1.7 Switzerland 23.9 25.6 44.0 47.9 53.6 60.1 6.7 United Kingdom 15.1 16.2 22.0 23.7 32.3 46.7 5.2 Other 6.5 8.4 10.7 11.3 12.0 13.7 1.5 Latin America 11.3 12.2 11.8 10.7 12.4 12.6 1.4 Argentina .9 1.0 1.2 1.5 2.0 1.2 .1 Brazil 3.9 3.9 3.5 4.2 4.0 4.0 .4 Mexico 3.7 4.7 3.6 2.2 2.9 3.0 .3 Venezuela 1.4 1.4 1.6 1.0 1.2 1.4 .2 Other 1.4 1.4 1.9 1.8 2.3 3.0 .3 Asia and Middle East 330.6 402.8 377.8 385.8 348.8 252.9 28.0 China, People's Republic 1.0 1.4 2.4 3.1 2.4 2.6 .3 China, Taiwan 2.3 3.6 5.7 8.5 10.1 10.5 1.2 Hong Kong 2.9 3.8 4.8 5.8 5.6 2.5 .3 Israel 3.5 3.9 4.2 4.6 5.0 6.0 .7 Japan 307.8 373.0 344.3 342.3 298.7 215.4 23.9 Korea 4.1 6.4 8.5 12.5 16.6 6.1 .7 Singapore .4 .9 1.1 1.8 2.4 2.5 .3 Other 8.8 9.9 6.7 7.3 8.0 7.3 .8 Africa .4 .2 .1 .1 .1 .2 * Other 33.1 36.1 53.6 52.2 68.7 117.7 13.0 Australia 3.8 6.5 7.2 5.1 7.8 9.0 1.0 Canada 28.4 28.5 45.0 47.2 60.9 108.8 12.0 Other .9 1.1 1.4 * * * * Total 514.9 627.9 712.4 741.3 822.4 902.8 100.0 *Less than 0.05 percent or $50 million. offices to open in the United States that US. banks As the assets of Japanese banks declined, those of have abroad, and they face similar advantages and French, German, and Canadian banks climbed, with disadvantages with each type. As with U.S. banks, each accounting for more than $100 billion at yearforeign banks generally prefer to operate through end 1998. Combined, these three nationalities now branch offices, although subsidiaries offer some key account for more than 40 percent of the assets of all features. U.S. branch and agency offices of foreign banks. With the addition of 5 percent to 7 percent shares each of Dutch, Swiss, and British banks, the "foreign U.S. Branches and Agencies bank share" of the U.S. banking market is much As with U.S. banks operating abroad, foreign banks more diversified among foreign nationalities today prefer to operate in the United States through than it was a decade ago. At the end of 1998, the branches (and agencies) because of the broad bank- Herfindahl-Hirschman index for this segment of the ing powers afforded such offices. Throughout the market was 1465, less than half the "highly concen- 1980s, Japanese banks heavily dominated the figures trated" level of 3775 ten years before. for assets of U.S. branches and agencies of foreign The composite balance sheet of U.S. branches and banks, building their share to nearly 60 percent by agencies has also changed notably during the past the end of 1990. Although they remain the larg- decade. In 1988, the activities of these offices were est national contingent, their assets have declined oriented more heavily toward interbank business, markedly, from $373 billion at year-end 1990 to with more than one-half of office assets and nearly $215 billion—and only a 24 percent share—at year- three-quarters of their funding related to affiliates end 1998 (table 7). and other banks; by the end of 1998, the propor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

612 Federal Reserve Bulletin • September 1999 tions had declined to about one-third and one-half Shanghai Banking Corporation), Union Bank of Calirespectively. fornia (Bank of Tokyo-Mitsubishi), Harris Trust Japanese banks are an exception to this pattern: At (Bank of Montreal), and LaSalle Bank (ABN Amro, the end of 1998, they derived half their funding from of the Netherlands). the parent, a share typically much larger than that for Such acquisitions can provide investors with key the U.S. offices of banks from other developed coun- elements of an international or global banking nettries. This funding pattern is due largely to the access work and can create synergies with their other operatheir parents have to low-cost funding in Japan, weak tions. Like any venture, they also carry risks and do loan demand in that country, and the fact that when not always succeed as planned. In addition to the borrowing in non-Japanese financial markets, Japa- difficulties that geographic distance can create in nese banks must pay premium rates because of their communicating and in coordinating actions, foreign lower credit ratings. acquisitions also introduce cultural differences and Foreign banks have historically considered com- can pose further problems if acquirers do not admercial lending an important role for their U.S. equately understand local banking markets and pracoffices, and they have continued to do so. U.S. tices. The loss of key personnel, for whatever reason, branches and agencies of foreign banks held 18 per- can quickly undermine the business if activities are cent of the U.S. commercial and industrial lending not managed and coordinated well. market at the beginning of the 1990s and as much as Such mishaps have also occurred in the other direc- 27 percent of the market in early 1997; by the end of tion. Particularly in the mid-1980s, U.S. banks 1998, however, their share had declined to 23 per- acquired several British securities firms after the cent. Trading activities are also important at these United Kingdom reduced regulations governing offices, as they are for large, internationally active much of its financial system. Using new opportunibanks generally. Among foreign banks, large Euro- ties to enter the market, many U.S. and foreign banks pean banks dominate the activity; for them, trading paid large premiums to acquire British broker-dealers assets account for nearly 10 percent of all the assets in order to expand their own securities activities and of their U.S. branches and agencies. to gain footholds in debt and equity markets that were At the end of 1998, nearly 80 percent of the assets expected to enjoy rapid growth. Cultural differences of U.S. branches and agencies were booked in (mostly between banking and securities firms) com- New York City; Chicago, at 7 percent, had the next- bined with the initial excessive euphoria to produce highest share. Los Angeles and San Francisco unsatisfactory results. Revenues frequently fell short together hosted 19 percent of the foreign bank offices of targets, or sometimes even of operating costs. (84 of the 454) but accounted for less than 5 percent After a few years, many of the new entrants sold or of office assets. closed their acquired operations, and the local industry shrank to a more sustainable size. U.S. Subsidiaries CONCLUSION Much consumer business requires a subsidiary bank, often with its own branch network and local identity. The continuing growth of international banking and Foreign investors that seek this business have two the strengthening of links between banking and secuoptions: to establish a new bank or to buy an existing rities markets have produced larger, more diversified one. During the 1970s and early 1980s, foreign banks financial institutions and further concentration of sought acquisitions to benefit from what they per- international activities among fewer U.S. banks. ceived as low-priced U.S. bank stocks and, in the case These trends are not unique to U.S. banking but apply of the larger acquisitions, to gain an immediate and to financial markets broadly. They are likely to consignificant market share. Foreign private individuals tinue as industry consolidation moves worldwide; also acquired U.S. banks during that time. the recently completed or proposed acquisitions by Even banks pursuing wholesale business can find foreign banks of two large U.S. commercial banks, purchasing another bank the most efficient way to Bankers Trust and Republic National Bank of acquire necessary talent and market share, as indi- New York, support that point. cated by Deutsche Bank's recent acquisition of Bank- To central bankers and bank supervisors, consoliers Trust Company of New York. Other notable U.S. dation in banking (whether domestic or international) banks that are owned by foreign banks include brings both comfort and concern. On the one hand, Marine Midland Bank (owned by Hong Kong and consolidation should offer surviving institutions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

International Activities of U.S. Banks and in U.S. Banking Markets 613 Guidelines for International Banking: The Basel Committee on Bank Supervision The presence of foreign banks in local economies and their calculations derived from banks' own internal models. Such effects on national and global financial markets have long an approach represents a new paradigm for bank regulation, made it necessary for national authorities to communicate one that is also being evaluated for credit risk. The commitwith their counterparts abroad. As the volume of interna- tee has also produced guidance on sound risk-management tional banking has increased in recent decades, so too has practices for credit risk, for the management of derivatives the need for bank supervisors and regulators to coordinate activities and interest rate risk, and for other important bank their efforts. operating and disclosure practices. Since the mid-1970s, the Bank for International Settle- Although the committee is composed of officials of only ments (BIS) in Basel, Switzerland, has performed an impor- major industrialized countries, its policies and standards tant role in facilitating the development and coordination of have been adopted throughout the world. More than one international bank supervisory policies, principally through hundred countries implement the 1988 Capital Accord, for its support of the Basel Committee on Bank Supervision. example, and many of them also urge their banks to adopt The committee, which includes the heads of supervision other sound banking practices identified by the committee. of the banking agencies of each of the G-10 countries and To foster stronger bank supervision worldwide, the com- Switzerland, set forth fundamental principles for allocating mittee in 1992 adopted minimum standards for consolidated supervisory responsibilities between home and host country supervision and in 1997 identified core principles of authorities when it adopted the 1975 "Concordat." Since supervision—twenty-five elements of the supervisory prothen the committee has produced the industry's current cess that the committee believes are necessary for an effeccapital standard (the 1988 Basel Capital Accord) and has tive bank supervisory program. Bank supervisory agencies provided leadership in many other international bank super- worldwide are encouraged to adhere to these principles and visory matters. to evaluate their own practices periodically. The full docu- Recent initiatives include, most notably, a 1997 amend- ment describing the core principles and other statements ment to the Accord addressing market risks that establishes issued by the committee are available on the BIS web site: new capital requirements for bank trading activities— www.bis.org. requirements determined on the basis of "value at risk" greater financial strength and diversification of risks tary Fund to promote greater disclosure and should along with larger asset size and equity base. On the help bring about still broader, more efficient financial other hand, greater concentration of decisionmaking markets. within the industry can lead to larger problems when International banking has long provided attractive they occur. Large problems, in turn, raise the specter opportunities to U.S. and foreign banks and will of systemic risks. clearly do so in the years ahead. The key to taking Events of the past several years also provide evi- advantage of the opportunities, as always, is underdence of the increased speed with which financial standing the risks and potential returns. Further gains problems move around the globe and serve to vali- by banks and other financial institutions in measuring date concerns that central bankers have expressed for and managing risks will enhance this understanding. some time about the effects of technology and finan- As the links among banking and financial markets cial innovation. Although Russia's debt moratorium multiply and more events have sudden worldwide was a relatively small event in terms of international effects, supervisory agencies throughout the world banking and capital market flows, it caused investors will also need to continue—indeed, to strengthen— throughout the world to reassess their risks. For their efforts to coordinate the regulation and oversome countries and institutions, the consequences in sight of large banks and other financial institutions. reduced liquidity were immediate and widespread. Through the Bank for International Settlements, a As nonbank investors play an ever-more-important substantial framework for conducting this work is role in financing economic growth, financial informa- already in place (see box). By developing their rules tion about major borrowers is likely to become more in ways compatible with sound market practice, available. Investor demands for greater transparency supervisors can contribute most to a healthy and about risks would complement efforts by interna- responsive international banking system for the new tional bank supervisors and the International Mone- millennium. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

614 Federal Reserve Bulletin • September 1999 A.l Number of foreign branches of Federal Reserve member banks, by location, selected years, 1965-98 Location 1965 1970 1975 1980 1985 1990 1995 1998 Europe 43 116 166 186 210 157 131 141 Belgium 4 10 10 8 9 5 5 5 France 4 12 19 15 12 11 9 8 Germany 6 21 27 27 18 15 8 10 Greece 1 9 17 16 21 22 26 32 Italy 1 4 9 15 22 12 11 11 Luxembourg 0 1 5 4 3 1 1 1 Netherlands 3 7 6 6 3 2 2 3 Spain 0 0 0 8 15 13 11 9 Switzerland 1 7 9 9 12 11 7 7 United Kingdom 21 44 49 53 68 42 30 30 Other 2 1 15 25 27 23 21 25 Latin America 75 168 133 165 216 239 242 354 Argentina 17 38 32 45 63 81 94 216 Brazil 15 16 18 19 19 44 50 13 Chile 3 17 1 6 30 40 39 44 Colombia 6 26 0 0 0 0 0 0 Panama 12 29 30 32 28 20 18 22 Other 22 42 52 63 76 54 41 59 Caribbean 13 116 162 193 193 155 124 108 Bahamas 3 61 73 75 74 52 39 27 Cayman Islands 0 0 47 79 91 80 70 67 Other 10 55 42 39 28 23 15 14 Asia 50 79 112 161 202 189 184 220 Hong Kong 6 13 23 43 73 57 43 52 India 6 11 9 10 10 11 12 15 Indonesia 0 6 5 5 5 6 7 8 Japan 14 15 31 29 30 33 36 37 Korea 0 3 3 12 19 24 22 23 Philippines 5 4 4 14 15 13 10 12 Singapore 8 11 20 26 25 20 16 19 Other 11 16 17 22 25 25 38 54 Africa 2 2 8 19 22 14 17 20 Middle East 5 12 20 31 31 22 22 23 U.S. territories 23 43 65 53 46 49 29 35 Other 0 0 0 0 0 1 11 15 Total 211 536 666 808 920 826 760 916 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

International Activities of U.S. Banks and in U.S. Banking Markets 615 A.2 Assets of foreign branches of Federal Reserve member banks, by location, selected years, 1965-98 Billions of dollars Location 1965 1970 1975 1980 1985 1990 1995 1998 Europe 5.6 39.2 92.0 170.3 154.0 137.0 287.3 336.4 Belgium 4.0 6.8 7.4 8.0 10.7 11.9 France 7.4 12.1 10.3 7.0 10.6 5.0 Germany 6.3 5.9 6.2 4.2 6.1 5.5 Greece 1.0 2.2 2.3 2.4 4.3 4.8 Italy 2.0 4.3 4.5 2.8 12.7 5.0 Netherlands 1.0 1.6 1.0 1.7 2.0 2.4 Spain .0 1.5 3.9 7.2 8.6 2.9 Switzerland 1.0 2.2 2.8 2.7 1.5 .8 United Kingdom 4.3 29.7 67.6 129.5 112.0 92.8 220.8 284.8 Other 1.7 4.2 3.6 8.2 10.0 13.3 Latin America .9 2.1 6.7 15.0 11.3 8.1 18.5 31.7 Argentina .2 2.4 1.4 1.6 7.5 16.3 Brazil .7 2.2 3.4 2.9 5.0 4.6 Chile * .3 1.1 1.7 3.0 4.7 Panama 4.8 8.0 4.2 .8 1.4 2.0 Other .9 2.1 1.2 1.1 1.6 4.1 Caribbean .9 4.4 37.7 97.8 86.0 80.5 146.3 203.2 Bahamas 30.9 68.9 47.9 43.1 75.6 73.3 Cayman Islands 5.9 26.9 37.0 36.7 70.1 128.9 Other .9 2.0 1.1 .7 .6 1.0 Asia 1.7 4.4 21.0 46.2 59.7 67.4 123.7 161.4 Hong Kong 2.6 7.7 11.3 16.2 28.7 38.2 India .2 .4 .9 3.1 3.5 5.2 Indonesia .3 .5 1.0 1.4 2.3 2.3 Japan 10.2 18.9 18.0 15.9 31.2 38.4 Korea 3 1.8 3.4 4.8 8.5 9.8 Philippines J5 3.1 3.5 2.2 2.9 3.3 Singapore 5.7 11.2 16.1 16.0 27.7 42.4 Other 1.2 2.6 5.5 7.8 18.9 21.8 Africa * * .1 1.0 1.0 1.1 1.8 4.0 Middle East .1 .3 2.1 7.0 5.4 3.8 8.4 8.2 U.S. territories .6 2.2 3.1 6.0 12.0 5.9 6.9 11.1 Other .6 6.5 11.5 Total 9.8 52.6 162.7 343.5 329.2 304.4 599.4 767.5 NOTE. Gross assets, including claims on affiliates. For 1965 and 1970, further . . . Not applicable, details by country are not available. Assets are not adjusted to reflect further * Less than $50 million. FIN 39 netting by the head offices of banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616 Treasury and Federal Reserve Foreign Exchange Operations This report, presented by Peter R. Fisher, Executive 1. Ten-year Treasury yield, 1999:Q2 Vice President, Federal Reserve Bank of New York, and Manager, System Open Market Account, de- Percent scribes the foreign exchange operations of the U.S. Department of the Treasury and the Federal Reserve System for the period from April through June 1999. Laura F. Ambroseno was primarily responsible for preparation of the report. During the second quarter of 1999, the dollar appreciated 4.0 percent against the euro and was largely unchanged against the yen. Movements in the major currency pairs were influenced by shifts in growth Apr. May June outlooks for the United States, Japan, and Europe. 1999 The dollar benefited from the continued robust expan- NOTE. The data are daily. sion of the U.S. economy, while the yen strengthened SOURCE. Bloomberg L.P. as prospects emerged for an economic recovery in lized somewhat after Chairman Greenspan indicated Japan. The dollar received some support against the on June 19 that the FOMC should employ "modest euro during much of the quarter from a widening preemptive action." On June 30, the FOMC increased differential between U.S. and European interest the federal funds target 25 basis points, to 5.00 perrates. Yield differentials, however, narrowed sharply cent, and adopted "a directive that includes no preditoward the end of the quarter, helping to slow the rate lection about near-term policy." Treasury yields marof decline of the euro's exchange value. The US. ginally retraced their increases, and the implied yield monetary authorities did not intervene in the foreign on the September federal funds futures contract fell exchange markets during the quarter. to 5.13 percent as market participants interpreted the removal of the tightening bias as an indication that further rate hikes might not be imminent. MARKETS REACT TO GLOBAL ECONOMIC GROWTH TRENDS 2. Implied yield on September 1999 federal funds futures contract, 1999:Q2 The U.S. economy continued to grow at a solid pace in the second quarter, negating earlier expectations of Percent a moderation in growth and leading to heightened anticipation of a modest tightening of U.S. monetary policy. After the release of higher-than-expected consumer inflation data on May 13 and the announcement by the Federal Open Market Committee (FOMC) of a tightening bias on May 18, concern emerged that the FOMC might embark on an aggressive course of tightening. The yield on the ten-year U.S. Treasury bond reached a high of 6.03 percent on June 11, which was nearly 100 basis points above the Apr. May June low point for the quarter. The implied yield on the 1999 September federal funds futures contract also rose to a period high of 5.22 percent on June 11 but stabi- NOTE. The data are daily. SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

617 3. Three-month implied yield on March 2000 euroyen 5. Three-month implied yield on March 2000 euribor futures contract, 1999:Q2 futures contract, 1999:Q2 Percent Percent -f- 0.6 — F— 0.5 1 — 0.4 — — 0.3 — — 0.2 — — 0.1 1 1 1 Apr. May June 1999 1999 NOTE. The data are daily. NOTE. The data are daily. The euribor rate is the European interbank offered SOURCE. Bloomberg L.P. rate for euro deposits. SOURCE. Bloomberg L.P. In Japan, the surprisingly strong first-quarter figure for gross domestic product released on June 10 as speculation mounted that the Bank of Japan might prompted market participants to reevaluate the time abandon its zero-interest-rate policy earlier than frame for possible economic recovery. Japanese expected. yields were pressured higher by the prospect of eco- The Governing Council of the European Central nomic growth and by bond supply concerns given Bank (ECB) cut the interest rate on its main refinancrenewed discussion of additional stimulus measures ing operations 50 basis points on April 8, to 2.50 perand tax cuts. The yield on the ten-year Japanese cent, a move that was perceived as positive for future government benchmark bond rose from a low of growth prospects in Europe. However, evidence of a 1.23 percent on May 17 to a high of 1.84 percent by near-term pickup in economic activity remained scant quarter-end. Japanese equities also reacted to the for most of the quarter. European bonds outpereconomic data and to further evidence of corporate formed U.S. Treasuries, with the spread between tenrestructuring, with the Nikkei index rising 10.7 peryear U.S. and ten-year German government bond cent over the quarter. Foreign investors were noteyields reaching a high of 178 basis points on June 15. worthy buyers of Japanese equities, thereby continu- Late in the quarter, better-than-expected business ing to increase the weight of Japanese assets in their confidence and German GDP data led to a marginal portfolios. The three-month implied yield of the shift in sentiment toward the European economy. March 2000 euroyen futures contract rose 25 basis Following the June 17 release of a May business points over the quarter, to a level of 65 basis points, sentiment survey in Germany, which showed a sharp improvement in business expectations, the yield on 4. Spread between ten-year U.S. and German government bond yields, 1999:Q2 the ten-year benchmark German bund rose 25 basis points, to 4.51 percent, and the ten-year U.S.-German Basis points bond yield spread narrowed to 135 basis points by quarter-end. The rise in bund yields was attributed, in part, to developments in the U.S. Treasury market, but fiscal policy concerns in the euro area and a surge in euro-denominated bond issuance were also cited as contributing factors. Although a pickup in European growth was widely discussed, many market participants remained cautious about growth prospects in the euro area. Nonetheless, by the end of the period, the three-month implied yield on the March 2000 euribor futures contract had risen 44 basis points, Apr. May June from a period low of 2.64 percent, as market partici- 1999 pants anticipated a possible shift by the ECB toward NOTE. The data are daily and are the ten-year U.S. yield minus the ten-year a tighter interest rate policy. German yield. SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin • September 1999 6. The yen against the dollar and the euro, 1999:Q2 7. One-month implied volatilities, 1999:Q2 , Basis points Percent Euro-yen exchange rate — 16 \ — 130 — \ Dollar-yen exchange rate . — 14 125 A/^ — — 12 - — 10 -A rv — 120 Dollar-yen exchange rate Euro-dollar exchange rate — 8 1 1 1 1 1 1 1 Apr. May June Apr. May June 1999 1999 NOTE. The data are daily. NOTE. The data are daily. SOURCE. Reuters. SOURCE. Reuters. if I am confirmed as secretary." Also during June, CURRENCY MOVEMENTS REFLECT CHANGING Japanese government officials repeatedly warned GROWTH PROSPECTS against any "premature" strengthening of the yen. In Japan, the surprisingly strong first-quarter figure A The yen's upward momentum was interrupted by strong correlation between the dollar-yen and euro- reports of intervention operations late in the quarter yen exchange rates suggested that the yen continued involving purchases of dollars and euros by the Bank to dominate movements in the major currency pairs of Japan. The ECB confirmed that it operated as this quarter. Against the dollar, the yen depreciated to agent for the Bank of Japan on one occasion. Some ¥124.32 in the first half of the quarter as expectations market participants interpreted the estimated scale of for the economic outlook in Japan remained un- the operations as indicative of the Japanese authorichanged and bond supply concerns waned. The yen's ties' determination to resist yen appreciation. Howdecline reflected the 90-basis-point widening of the ever, there was also a substantial body of opinion in long-term U.S.-Japanese interest rate differential the market that the main effect of the reported interfrom the start of the quarter to May 17. During this vention operations was to provide more attractive time, demand for dollars was encouraged by sus- levels for Japanese investors to hedge exposure to the tained U.S. economic growth, higher U.S. interest euro. In the options market, one-month implied volarates, and the perception that the FOMC would tility for the dollar-yen exchange rate collapsed from remain vigilant against inflation. more than 16 percent to less than 11 percent over the quarter, reflecting market expectations for dollar-yen The upward trend in the dollar-yen exchange rate exchanges to trade in a relatively narrow range. reversed sharply after the FOMC's shift toward a tightening bias on May 18, and renewed speculation of an additional stimulus package in Japan. The yen's 8. The euro against the dollar, 1999:Q2 appreciation gained momentum after Japan's firstquarter GDP release and mirrored the narrowing of Dollars per euro the long-term U.S.-Japanese interest rate differential by 47 basis points, to a level of 393 basis points, — 108 from May 17 to quarter-end. The yen was further / \ — 107 — supported as both domestic and foreign investors purchased Japanese equities in anticipation of an — 1 VI — 1.06 economic recovery. In addition, the persistent depre- — 1 A— — 105 104 ciation of the euro reportedly prompted Japanese institutional investors to sell euros against the yen to — ^ \ / \ A hedge euro-denominated debt holdings. » * — 1.03 Treasury Secretary-designate Summers, in his con- 1 1 1 I Apr. May June firmation hearing on June 17, said that "a strong 1999 currency is very much in our national interest. That NOTE. The data are daily. has been our policy and will continue to be our policy SOURCE. Reuters. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 619 The euro depreciated on balance against both the liquidity and credit quality. A significant portion of dollar and the yen, as the marginal improvement in these balances is invested in German and Japanese euro-area growth prospects lagged the shift in senti- government securities held directly or under repurment toward Japan and the surprising resilience of chase agreement. As of June 30, U.S. monetary U.S. economic performance. The euro was also pres- authorities had $8.1 billion in outright holdings of sured lower by market perceptions that the European foreign government securities. Monetary Union (EMU) monetary authorities placed Japanese and German government securities held a higher priority on internal price stability in the under repurchase agreement are arranged either euro area than on the euro's exchange rate. The euro through transactions executed directly in the market registered a particularly sharp depreciation toward or through agreements with official institutions. Forthe end of May, when the European Union finance eign government securities held under repurchase ministers agreed to relax Italy's budget deficit target agreement by the U.S. monetary authorities totaled to 2.4 percent of GDP from 2.0 percent. In the final $12.1 billion at the end of the quarter. Foreign curweeks of the quarter, the euro was supported, in part, rency reserves are also invested in deposits at the by the narrowing of spreads between U.S. and Euro- Bank for International Settlements and in facilities at pean interest rates and stabilized within a lower trad- other official institutions. ing range. On April 9, the ESF placed $1,697.4 million at the disposal of the Federal Reserve Bank of New York to put into effect the ESF share of the multilateral TREASURY AND FEDERAL RESERVE FOREIGN guarantee of Brazil's second drawing on its credit EXCHANGE RESERVES facility with the Bank for International Settlements (BIS). On June 18, Brazil made a partial repayment The U.S. monetary authorities did not undertake any of its December 18, 1998, drawing on the BIS facilintervention operations during the quarter. At the end ity. The ESF share of the guarantee of that drawing of the quarter, the current values of euro and Japanese was reduced by $467.7 million. An amount of yen reserve holdings totaled $14.7 billion for the $1,097.0 million remained at the FRBNY's disposal Federal Reserve System and $14.7 billion for the in connection with the guarantee of the portion of the Exchange Stabilization Fund (ESF). The U.S. mone- December 18 drawing that was rolled over. The ESF tary authorities invest all of their foreign currency received a commission of $35.5 million at the time of balances in a variety of instruments that yield market- this partial repayment. • related rates of return and have a high degree of The tables appear on page 620. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin • September 1999 1. Foreign currency holdings of U.S. monetary authorities based on current exchange rates, 1999:Q2 Millions of dollars Quarterly changes in balances, by source BBaallaannccee,, BBaallaannccee,, IItteemm MMaarr.. 3311,, 11999999 Net purchases Effect of Investment Currency Interest accrual JJuunnee 3300,, 11999999 and sales' sales2 income ad v j a u l s u t a m ti e o n n t s3 (net) and other FEDERAL RESERVE SYSTEM OPEN MARKET ACCOUNT (SOMA) EMU euro 7,227.6 0.0 0.0 50.6 -334.5 0.0 6,943.7 Japanese yen 7,950.1 0.0 0.0 1.6 -164.8 0.0 7,786.9 Total 15,177.7 0.0 0.0 52.2 -499.3 0.0 14,730.6 Interest receivables4 53.7 14.7 68.4 Other cash flow from investments 5 ... 13.9 -13.9 0.0 Total 15,245.3 0.0 0.0 52.2 -499.3 .8 14,799.0 U.S. TREASURY EXCHANGE STABILIZATION FUND (ESF) EMU euro 7,236.6 0.0 0.0 42.5 -334.5 0.0 6,944.6 Japanese yen 7,950.1 0.0 0.0 1.7 -164.8 0.0 7,787.0 Total 15.186.7 0.0 0.0 44.2 -499.3 0.0 14,731.6 Interest receivables4 35.8 -9.7 45.5 Other cash flow from investments5 ... 18.4 -18.4 0.0 Total 15,240.9 0.0 0.0 44.2 -499.3 -8.7 14,777.1 NOTE. In this and subsequent tables, components may not sum to totals 3. Foreign currency balances are marked-to-market monthly at month-end because of rounding. exchange rates. 1. Purchases and sales for the purpose of this table include foreign cur- 4. Interest receivables for the ESF are revalued at month-end exchange rates. rency sales and purchases related to official activity, swap drawings and repay- Interest receivables for the Federal Reserve System are carried at average cost ments, and warehousing. of acquisition and are not marked-to-market until interest is paid. Interest 2. This figure is calculated using marked-to-market exchange rates; it receivables for the Federal Reserve System are net of unearned interest represents the difference between the sale exchange rate and the most recent collected. revaluation exchange rate. Realized profits and losses on sales of foreign cur- 5. Values for cash flow differences from payment and collection of funds rencies, computed as the difference between the historic cost-of-acquisition between quarters. exchange rate and the sale exchange rate, are reflected in table 2. . . . Not applicable. 2. Net profits or losses (-) on U.S. Treasury 3. Currency arrangements, June 30, 1999 and Federal Reserve foreign exchange operations, Millions of dollars based on historical cost-of-acquisition exchange rates, 1999:Q2 Institution Amount of Outstanding, facility June 30, 1999 Millions of dollars Federal Reserve Federal U.S. Treasury reciprocal currency Reserve Exchange arrangements Period and item System Open Stabilization Market Account Fund BBaannkk ooff CCaannaaddaa 22,,000000 00..00 BBaannkk ooff MMeexxiiccoo 33,,000000 00..00 Valuation profits and losses on outstanding assets and liabilities, TToottaall 55,,000000 00..00 Mar. 31, 1999 EMU euro -10.6 -227.5 U.S. Treasury Japanese yen 911.2 1,123.3 Exchange Stabilization Fund currency arrangements Total 900.6 895.8 BBBaaannnkkk ooofff MMMeeexxxiiicccooo 33,,000000 00..00 Realized profits and losses from foreign currency sales. TTToootttaaalll 33,,000000 00..00 Apr. 1, 1999-June 30, 19991 EMU euro 0.0 0.0 Japanese yen 0.0 0.0 Total 0.0 0.0 Valuation profits and losses on outstanding assets and liabilities, June 30, 1999 EMU euro -345.0 -562.0 Japanese yen 746.3 958.5 Total 401.3 396.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

621 Industrial Production and Capacity Utilization for July 1999 Released for publication August 17 output increased 0.6 percent, and mining output, 0.8 percent. At 135.1 percent of its 1992 average, Industrial production, which had risen only 0.2 per- industrial production in July was 3.6 percent higher cent in May and 0.1 percent in June, increased than in July 1998. The rate of capacity utilization 0.7 percent in July. Because of high temperatures and for total industry rose 0.4 percentage point, to the heavy use of air conditioning, electric utility 80.7 percent, 1.4 percentage points below its 1967-98 output rose more than 3 percent; manufacturing average. Industrial production and capacity utilization Ratio scale, 1992 = 100 Percent of capacity Industrial production, market groups Ratio scale, 1992= 100 Ratio scale, 1992 = 100 145 145 135 135 125 125 115 115 105 105 95 95 Ratio scale, 1992 = 100 Ratio scale, 1992 = 100 Defense and space J I I L 1990 1992 1994 1996 1998 1990 1992 1994 1996 1998 All series are seasonally adjusted. Latest series, July. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin • September 1999 Industrial production and capacity utilization, July 1999 Industrial production, index, 1992=100 Percentage change Category 1999 1999' July 1998 to Apr.' Mayr Juner JulyP Apr.r Mayr Juner JulyP July 1999 Total 133.7 134.0 134.2 135.1 .3 .2 .1 .7 3.6 Previous estimate 133.7 134.0 134.2 .3 .2 .2 Major market groups Products, total2 125.6 125.8 125.7 126.2 .3 .2 -.1 .4 2.3 Consumer goods ... 115.5 115.7 115.9 115.9 .2 .1 .1 .1 1.7 Business equipment 170.6 171.3 170.5 171.9 .8 .4 -.5 .8 5.2 Construction supplies 132.0 132.7 131.9 133.1 .3 .5 -.6 .9 3.6 Materials 146.9 147.3 148.2 149.9 .2 .2 .6 1.1 5.6 Major industry groups Manufacturing 138.0 138.4 138.6 139.4 .4 .3 .1 .6 4.3 Durable 164.1 165.0 165.4 166.6 .6 .5 .3 .8 7.9 Nondurable 111.8 111.7 111.7 112.1 .1 -.1 .0 .3 .0 Mining 98.3 98.4 98.3 99.0 -.7 .1 -.1 .8 -5.4 Utilities 115.8 115.4 115.8 118.7 -.8 -.4 .4 2.5 .3 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1998 1999 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, JJJuuulllyyy 111999999888 11996677--9988 11998822 11998888--8899 July Apr.r Mayr Juner JulyP tttooo JJJuuulllyyy 111999999999 Total 82.1 71.1 85.4 81.1 80.4 80.4 80.3 80.7 4.1 Previous estimate 80.5 80.4 80.3 Manufacturing 81.1 69.0 85.7 79.8 79.6 79.5 79.4 79.7 4.5 Advanced processing 80.5 70.4 84.2 78.5 78.6 78.6 78.4 78.6 5.4 Primary processing . 82.4 66.2 88.9 83.4 82.5 82.4 82.5 83.0 2.4 Mining 87.5 80.3 88.0 87.2 81.1 81.2 81.1 81.6 1.1 Utilities 87.4 75.9 92.6 93.7 91.1 90.8 91.1 93.3 .7 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 goods increased, it remained 2.2 percent below its level of July 1998. The output of consumer goods edged up 0.1 percent After having eased 0.5 percent in June, the output for a third consecutive month. Because of a dip in of business equipment rebounded 0.8 percent in July. motor vehicle assemblies, the output of consumer The output of industrial equipment was up noticedurable goods fell 1.1 percent in July after solid ably, reversing part of the cumulative losses over the increases earlier. The production of automotive prod- preceding two months. The production of informaucts dropped 4.3 percent; it had increased more than tion processing equipment, which advanced 2.1 per- 6 percent from March to June. The production of cent in July, has risen 16.2 percent over the past other durable consumer goods advanced 1.6 percent twelve months. The output of transit equipment and after having changed little in both May and June; a of other equipment declined again. Within these rebound in the output of appliances along with fur- groups, the production of farm machinery and comther strength in home computing equipment and room mercial aircraft weakened further; assemblies of air conditioners accounted for the gain. The produc- light business vehicles fell back, but assemblies tion of nondurable consumer goods, which had been of medium and heavy trucks advanced more than weak in earlier months, rose 0.4 percent. A small 1 percent. The output of defense and space equipincrease in the production of non-energy products ment, which had fallen 1 percent in June, edged up was accompanied by a rebound in the production 0.2 percent. of energy goods as residential sales of electricity The production of construction supplies, which jumped. Although the output of consumer nondurable dipped in June, bounced back in July, continuing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 623 strong performance that has been evident since late long-run average. Some recovery in oil and gas well 1997. The output of materials increased 1.1 percent. drilling and an increase in coal mining contributed to The output of durable goods materials, which the increase. accounts for more than half of total materials in terms of value added, rose 1.3 percent, nearly double the increase in June; all the major groups within this REVISION OF INDUSTRIAL PRODUCTION AND category posted sizable gains. The output of energy CAPACITY UTILIZATION materials rose 1.9 percent, while the production of nondurable goods materials edged down. In November the Federal Reserve will publish revisions to its measures of industrial production (IP), capacity, capacity utilization, and industrial use of INDUSTRY GROUPS electric power. The revisions will begin with 1992 and will incorporate updated source data for more Manufacturing output advanced 0.6 percent in July recent years. after it had edged up 0.1 percent in June. Excluding This regular updating of source data for IP will motor vehicles and parts, the gain in July was 0.8 per- include some annual data from the Bureau of the cent. Production of both durables and nondurables Census's 1997 Census of Manufactures and from picked up. The 0.8 percent gain in the output of selected editions of its 1998 Current Industrial durables once again was led by significant advances Reports. Annual data from the U. S. Geological Surat makers of high-technology equipment and parts; vey on metallic and nonmetallic minerals (except however, the production of motor vehicles and parts fuels) for 1997 and 1998 will also be introduced. The fell 2 percent, reversing its increase in June. The updating will also include revisions to the monthly production indexes for furniture and fixtures; for indicator for each industry (either physical product stone, clay, and glass products; and for fabricated data, production-worker hours, or electric power metal products all increased 1 percent in July. Among usage) and revised seasonal factors. In addition, the nondurables, rebounds in the production of petroleum revision will introduce improved measures of producproducts, rubber and plastics products, and apparel tion for selected series. products were partly offset by declines in the leather, Capacity and capacity utilization will be revised to paper, and foods industries. incorporate preliminary data from the 1998 Survey The factory operating rate rose 0.3 percentage of Plant Capacity of the Bureau of the Census. The point in July, to 79.7 percent, with increases in both statistics on the industrial use of electric power will advanced- and primary-processing industries. Capac- incorporate additional information received from ity utilization in primary-processing industries rose utilities for the past few years and may include some 0.5 percentage point, to 83.0 percent, its highest data from the 1997 Census of Manufactures. level since January, while utilization in advanced- Once the revision is published, it will also be processing industries rose 0.2 percentage point, to made available on the Board's web site, http://www. 78.6 percent. federalreserve.gov/releases/gl7, and on diskettes The operating rate at electric utilities, which rose from Publications Services (telephone 202-452- 3 percentage points, to 97.6 percent, reflected both 3245). The revised data will also be available through the higher use of air conditioning during the heat the web site and the Economic Bulletin Board of the wave and the reluctance of some utilities in recent Department of Commerce. Further information on years to add capacity in a more competitive environ- these revisions is available from the Board's Indusment. The operating rate for mining rose 0.5 percent- trial Output Section (telephone 202-452-3197). • age point, to 81.6 percent, a level well below its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Statements to the Congress Statement by Edward M. Gramlich, Member, Board The current debate over the privacy of customer of Governors of the Federal Reserve System, before financial information concerns information that bankthe Subcommittee on Financial Institutions and Con- ing and other financial institutions derive from their sumer Credit of the Committee on Banking and relationships with their customers. This information Financial Services, U.S. House of Representatives, may include information submitted by a customer to July 21, 1999 a bank in order to obtain a loan or deposit service; information concerning transactions between a customer and a bank, such as individual deposits, check Thank you, Madame Chairwoman. You and the payments, or payments on loans; as well as informasubcommittee are to be commended for efforts to tion obtained by the bank from third parties, such as resolve the issue of customer financial privacy. This information from a credit report. The economic value is a vitally important issue in our increasingly of this customer financial information to the bank in information-dependent economy. unquestionable. It is necessary to the conduct of Information about individuals' needs and prefer- transactions and also helps the bank evaluate the ences is the cornerstone of any system that allocates credit risk of its customers. This information also has goods and services within an economy. The more value to others who may wish to sell goods or serinformation about needs and preferences that is avail- vices to the bank's customers and therefore has value able, the more accurately and efficiently will the to the bank as a marketable asset. economy meet these needs and preferences. But In the area of financial information, however, it though the availability of information promotes eco- is clear that many consumers believe that an implicit nomic efficiency, there is also a long-recognized contract exists between the financial institution and value in permitting individuals to maintain a zone of the customer that requires the financial institution privacy. This value must be weighed against the to keep certain transactional information confidenbenefits of economic efficiency that accrue from a tial. Control of information about ourselves is one broad dissemination of information. of the fundamental means by which we, as individu- To date, this issue has been largely handled in the als, manage our relationships with each other. The marketplace, where the competitive value to compa- feeling that financial information should be private nies of the use of customer information has been has deep historic roots, and bankers and bank custraded off against the competitive value of providing tomers have long viewed their business relationship customer privacy, but there could be a public dimen- as involving a high degree of trust. The maintenance sion as well. The growth of information-sharing tech- of this trust is essential to ensuring the confidence in nology has raised some important public policy issues our financial institutions that is so essential to their that must be dealt with by the Congress. operations. The collision between economic interests in the As market processes evolve, there is evidence that value of customer information and individual privacy consumers have come to value both economic effiinterests is an inevitable consequence of the growth ciency and privacy. On one side, individual consumin information technology. As information technol- ers often overcome their reluctance to share particuogy increases the flexibility of production processes lar items of information with third parties if they to meet changes in product demands, the value of benefit from the sharing of that information. Many information about existing and probable demands consumers participate in programs that assist retailers also increases. Increases in productivity will contrib- in collecting detailed information about their own ute most efficiently to increases in standards of living purchases in exchange for modest price discounts. when that productivity is focused on the goods and Similarly, the sharing of credit histories for certain services consumers desire most. In order to identify purposes is so widely accepted that sometimes crediexisting customers' preferences, as well as potential tors have been criticized by customers for failing to customers and their preferences, firms will seek infor- share information that would help these customers mation about the tastes of their own customers. improve their credit histories. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

625 At the same time, proposals or programs for using lessening privacy protections? If not, must the Coninformation about individuals have been abruptly gress itself strike the appropriate balance between dropped because of public responses. In Washing- these competing interests? ton, D.C., two sellers of prescription medications The Congress has already deemed it necessary to stopped sharing prescription data with a third party. address specifically the uses of consumer finan- Several states backed away from programs of shar- cial information in the Fair Credit Reporting Act ing driver's license photographs with a private com- (FCRA). This act governs the exchange of customer pany. Federal banking regulators dropped a proposal data by and with consumer reporting agencies. In to require banks to establish "Know Your Customer" connection with the enactment and amendment of programs. In each of these cases, the strength of the FCRA, the Congress grappled with some of the individual privacy preferences was underestimated, issues related to sharing customer information and public reaction forced a response more consistent between affiliates. After significant debate, the Conwith these preferences. gress balanced the issues of consumer privacy and It is also possible that the increased ease of collect- economic efficiency by allowing institutions to share ing and sharing information is allowing the practices information related solely to the institution's transacof information users to evolve more rapidly than tions or experiences with the customer but to require individuals' ability to respond'. Given the rapid evolu- that each customer be provided with the right to opt tion of current market practices and the paucity of out of sharing between affiliates of any other type public information about these practices, the ability of customer information. In addition, the Electronic of individual bank customers to influence these devel- Fund Transfer Act requires a financial institution opments through their market choices may not be holding certain accounts to inform consumers of the adequate. circumstances under which information will be made available to affiliates and third parties. Similarly, Already our judicial system is reaching for the several states have construed constitutional proviappropriate balance between the economic value of sions or enacted general or industry-specific statutes customer financial information and the customer's to establish financial privacy rights. privacy interest. The judicial system has long recognized the value of customer information: The courts Moreover, the Congress has given the banking have considered customer lists to be intellectual prop- agencies powers that may be exercised to address erty protectable as trade secrets for most of this abuses in this area. These include the banking agencentury. This suggests that customer account infor- cies' general enforcement powers over unsafe and mation may also be considered to be the intellectual unsound practices under the Federal Deposit Insurproperty of the bank. In a related context, the ance Act and the Federal Reserve's ability to adopt Supreme Court has flatly characterized documents rules addressing unfair or deceptive acts or practices relating to a customer's account as "the business under the Federal Trade Commission Improvement records of banks" to which the customer "can assert Act. Although we believe that information sharing neither ownership nor possession." Although owner- between banks and third parties is fairly common, to ship of property, including intellectual property, ordi- date we have received relatively few complaints and narily includes the power to use or transfer the prop- have not found the need to institute any enforcement erty, a number of state courts have limited banks' actions on privacy grounds. ownership rights in customer information, recogniz- The Congress is now considering whether to place ing the value of the privacy of financial transactions additional limitations on banks and other financial to individuals. Despite the fact that most banking institutions' disclosures of customer information, as relationships are based on a debtor-creditor relation- would be done by the privacy provisions of H.R. 10. ship, which entails considerably less responsibility By adding these additional limitations—such as profor the counterparty's interests than a fiduciary rela- viding customers the right to opt out and thereby tionship, these courts have found an implied contrac- limiting the sharing of the institution's own experitual duty on the part of banks to maintain the confi- ences and other transactional information with third dentiality of customer information. parties—it would be placing an increased value on This environment presents the Congress with a privacy protections for bank customers. In making series of important questions. Are banking practices this decision, it is important that the tradeoff between involving customer information developing so economic efficiency and privacy be addressed with quickly that customers will be unable to respond to the fullest possible understanding of the competing those practices effectively? If so, can market pro- interests. In particular, there should be recognition of cesses be made more efficient without materially the importance of consistency across markets—to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626 Federal Reserve Bulletin • September 1999 ensure that any limitations imposed on one industry, Act and the Privacy Act. Significantly, these quessuch as financial services, do not place that industry tions relate to governmental, as opposed to private, at a competitive disadvantage. access to data about individuals. The Board's privacy If the Congress were to enact the privacy pro- policy statement was adopted in June and can be visions of sections 501 through 510 of H.R. 10 as accessed from the Board's home page and several drafted, we believe that the exceptions would permit other locations on the Board's web site (www. routine payment transactions and supervisory activi- federalreserve.gov). At its web site, the Board colties to continue. However, the committee may wish to lects information concerning the frequency and consult others as to the efficacy of other exceptions to volume of visits to the site. It does not collect inforthe disclosure limitations. There may be some room mation that identifies individuals, nor does it use to clarify the drafting, and we would be happy to "cookies" (that is, entries placed in the individual's offer suggestions to that end. In addition, the time computer to allow monitoring of the individual's use period for adopting or implementing regulations is of a web site). The Board does not see an obvious ambitious. Thought might be given to extending the need to revise the Right to Financial Privacy Act at implementation period to at least a year. this time, though there is a need for its continued Finally, your letter of invitation raised issues review. We would want to make a more thorough with respect to the Board's own privacy policy and to study of the issue before recommending any specific our experience with the Right to Financial Privacy changes. Statement by Alan Greenspan, Chairman, Board of month, when it became apparent that much of the Governors of the Federal Reserve System, before the financial strain of last fall had eased, that foreign Committee on Banking and Financial Services, U.S. economies were firming, and that demand in the House of Representatives, July 22, 1999 (Chairman United States was growing at an unsustainable pace, Greenspan presented identical testimony before the the FOMC raised its intended federal funds rate Committee on Banking, Housing, and Urban Affairs, VA percentage point, to 5 percent. To have refrained U.S. Senate, July 28, 1999.) from doing so in our judgment would have put the U.S. economy's expansion at risk. Thank you, Mr. Chairman and other members of the If nothing else, the experience of the last decade committee, for this opportunity to present the Federal has reinforced earlier evidence that a necessary con- Reserve's semiannual report on monetary policy.1 dition for maximum sustainable economic growth is To date, 1999 has been an exceptional year for the price stability. While product prices have remained American economy but a challenging one for Ameri- remarkably restrained in the face of exceptionally can monetary policy. Through the first six months strong demand and expanding potential supply, it is of this year, the U.S. economy has further extended imperative that we do not become complacent. its remarkable performance: Almost 1 lA million jobs The already shrunken pool of job seekers and were added to payrolls on net, and gross domestic considerable strength of aggregate demand suggest product apparently expanded at a brisk pace, perhaps that the Federal Reserve will need to be especially near that of the prior three years. alert to inflation risks. Should productivity fail to At the root of this impressive expansion of eco- continue to accelerate and demand growth persist or nomic activity has been a marked acceleration in the strengthen, the economy could overheat. That would productivity of our nation's workforce. This produc- engender inflationary pressures and put the sustaintivity growth has allowed further healthy advances in ability of this unprecedented period of remarkable real wages and has permitted activity to expand at a growth in jeopardy. One indication that inflation risks robust clip while helping to foster price stability. were rising would be a tendency for labor markets to Last fall, the Federal Open Market Committee tighten further. But the FOMC also needs to continue (FOMC) eased monetary policy to counter a to assess whether the existing degree of pressure in seizing-up of financial markets that threatened to these markets is consistent with sustaining our lowdisrupt economic activity significantly. As those mar- inflation environment. If new data suggest it is likely kets recovered, the FOMC had to assess whether that that the pace of cost and price increases will be policy stance remained appropriate. By late last picking up, the Federal Reserve will have to act promptly and forcefully to preclude imbalances from 1. See "Monetary Policy Report to the Congress," Federal Reserve arising that would only require a more disruptive Bulletin, vol. 85 (August 1999), pp. 529-52. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 627 adjustment later—one that could impair the expan- haps once every fifty or one hundred years. The sion and bring into question whether the many gains evidence then was only marginal and inconclusive. already made can be sustained. Of course, tremendous advances in computing and telecommunications were apparent, but their translations into improved overall economic efficiency and RECENT DEVELOPMENTS rising national productivity were conjectural at best. While the growth of output per hour had shown some A number of important forces have been shaping signs of quickening, the normal variations exhibited recent developments in the U.S. economy. One by such data in the past were quite large. More has been a recovery of financial markets from the intriguing was the remarkable surge in capital investdisruptions of last fall. By the end of 1998, the ment after 1993, especially in high-tech goods, a full extreme withdrawal from risk-taking and consequent two years after a general recovery was under way. seizing-up of markets had largely dissipated. This This suggested a marked increase in the perceived year, risk spreads have narrowed further—though prospective rates of return on the newer technologies. generally not to the unrealistically low levels of a That American productivity growth has picked up year ago—and a heavy volume of issuance in credit over the past five years or so has become increasingly markets has signaled a return to their more normal evident. Nonfarm business productivity (on a methfunctioning. Equity prices have risen to new highs odologically consistent basis) grew at an average rate and, in the process, have elevated price-earnings of a bit more than 1 percent per year in the 1980s. In ratios to historic levels. recent years, productivity growth has picked up to Abroad, many financial markets and economies more than 2 percent, with the past year averaging also have improved. Brazil weathered a depreciation about 2Vi percent. of its currency with limited fallout on its neighbors. To gauge the potential for similar, if not larger, In Asia, a number of the emerging market economies gains in productivity going forward, we need to seemed to be reviving after the trying adjustments attempt to arrive at some understanding of what has of the previous year or so. Progress has not been occurred to date. A good deal of the acceleration in universal, and in many economies prospects remain output per hour has reflected the sizable increase in clouded, depending importantly on the persistence of the stock of labor-saving equipment. But that is not efforts to make fundamental reforms whose necessity the whole story. Output has grown beyond what had been made so painfully obvious in the crises normally would have been expected from increased those economies endured. Nonetheless, the risks of inputs of labor and capital alone. Business restructurfurther major disruptions to financial and trade flows ing and the synergies of the new technologies have that had concerned the FOMC when it eased policy enhanced productive efficiencies. American industry last fall have clearly diminished. Improving global quite generally has shared an improved level of effiprospects also mean that the U.S. economy will no ciency and cost containment through high-tech capilonger be experiencing declines in basic commodity tal investment, not solely newer industries at the and import prices that held down inflation in recent cutting edge of innovation. Our century-old motor years. vehicle industry, for example, has raised output per In the domestic economy, data becoming available hour by a dramatic 4Vi percent annually on average this year have tended to confirm that productivity in the past two years, compared with a lackluster growth has stepped up. It is this acceleration of 1 lA percent on average earlier this decade. Much the productivity over recent years that has explained same is true of many other mature industries, such much of the surprising combination of a slowing in as steel, textiles, and other stalwarts of an earlier inflation and sustained rapid real growth. Increased age. This has confirmed the earlier indications of an labor productivity has directly limited the rise of unit underlying improvement in rates of return on the labor costs and accordingly damped pressures on newer technologies and their profitable synergies prices. This good inflation performance, reinforced with the existing capital stock. also by falling import prices, in turn has fostered These developments have created a broad range of further declines in inflation expectations over recent potential innovations that have granted firms greater years that bode well for pressures on costs and prices ability to profitably displace costly factors of producgoing forward. tion whenever profit margins have been threatened. In testimony before this committee several years Moreover, the accelerating use of newer technologies ago, I raised the possibility that we were entering has markedly enhanced the flexibility of our produca period of technological innovation that occurs per- tive facilities. It has dramatically reduced the lead Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin • September 1999 times on the acquisition of new equipment and back toward the slower standard of much of the last enabled firms to adjust quickly to changing market twenty-five years, or climb even more. By the last I demands. This has indirectly increased productive do not just mean that productivity will continue to capacity and effectively, at least for now, eliminated grow but that it will grow at an increasingly faster production bottlenecks and the shortages and price pace through a continuation of the process that has pressures they inevitably breed. so successfully contained inflation and supported eco- This greater ability to pare costs, increase produc- nomic growth in recent years. tion flexibility, and expand capacity are arguably the The business and financial community does not major reasons why inflationary pressures have been as yet appear to sense a pending flattening in this held in check in recent years. Others have included process of increasing productivity growth. This is the one-time fall in the prices of oil, other commodi- certainly the widespread impression imparted by corties, and imports more generally. In addition, a break- porate executives. And it is further evidenced by the ing down of barriers to cross-border trade, owing earnings forecasts of more than a thousand securities both to the new technologies and to the reduction of analysts who regularly follow S&P 500 companies government restrictions on trade, has intensified the on a firm-by-firm basis, which presumably embody pressures of competition, helping to contain prices. what corporate executives are telling them. While the Coupled with the decline in military spending world- level of these estimates is no doubt upwardly biased, wide, this has freed up resources for more productive unless these biases have significantly changed over endeavors, especially in a number of previously non- time, the revisions of these estimates should be sugmarket economies. gestive of changes in underlying economic forces. More generally, the consequent erosion of pricing Except for a short hiatus in the latter part of 1998, power has imparted an important imperative to hold analysts' expectations of five-year earnings growth down costs. The availability of new technology to have been revised up continually since early 1995. If each company and its rivals affords both the opportu- anything, the pace of those upward revisions has nity and the competitive necessity of taking steps to quickened of late. True, some of that may reflect a reduce costs, which translates on a consolidated basis pickup in expected earnings of foreign affiliates, into increased national productivity. especially in Europe, Japan, and the rest of Asia. But The acceleration in productivity owes importantly most of this year's increase almost surely owes to to new information technologies. Before this informa- domestic influences. tion technology revolution, most of twentieth-century There are only a limited number of ways that the business decisionmaking had been hampered by lim- expected long-term growth of domestic profits can ited information. Owing to the paucity of timely increase, and some we can reasonably rule out. There knowledge of customers' needs, the location of is little evidence that company executives or security inventories, and the status of material flows through- analysts have significantly changed their views in out complex production systems, businesses built in recent months of the longer-term outlook for continsubstantial redundancies. ued price containment, the share of profits relative Doubling up on materials and staffing was essen- to wages, or anticipated growth of hours worked. tial as a cushion against the inevitable misjudgments Rather, analysts and the company executives they made in real time when decisions were based on talk to appear to be expecting that unit costs will be information that was hours, days, or even weeks old. held in check, or even lowered, as sales expand. While business people must still operate in an uncer- Hence, implicit in upward revisions of their forecasts, tain world, the recent years' remarkable surge in the when consolidated, is higher expected national proavailability of real-time information has enabled them ductivity growth. to remove large swaths of inventory safety stocks, Independent data on costs and prices in recent redundant capital equipment, and layers of workers, years tend to confirm what aggregate data on output while arming them with detailed data to fine-tune and hours worked indicate: that productivity growth specifications to most individual customer needs. has risen. With price inflation stable and domestic Despite the remarkable progress witnessed to date, operating profit margins rising, the rate of increase in history counsels us to be quite modest about our total consolidated unit costs must have been falling. ability to project the future path and pace of technol- Even taking into account the evidence of declining ogy and its implications for productivity and eco- unit interest costs of nonfinancial corporations, unit nomic growth. We must remember that the pickup in labor cost increases (which constitute three-quarters productivity is relatively recent, and a key question is of total unit costs) must also be slowing. Because whether that growth will persist at a high rate, drop until very recently growth of compensation per hour Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 629 has been rising, albeit modestly, it follows that pro- wage costs are inevitable, short—as I have put it ductivity growth must have been rising these past five previously—of a repeal of the law of supply and years as well. Accelerating productivity is thus evi- demand. Such cost increases have invariably predent in underlying consolidated income statements saged rising inflation in the past, and presumably of nonfinancial corporations, as well as in our more would in the future, which would threaten the ecodirect, though doubtless partly flawed, measures of nomic expansion. output and input. By themselves, neither rising wages nor swelling That said, we must also understand the limits to employment rolls pose a risk to sustained economic this process of productivity-driven growth. To be growth. Indeed, the Federal Reserve welcomes such sure, the recent acceleration in productivity has pro- developments and has attempted to gauge its policy vided an offset to our taut labor markets by holding in recent years to allow the economy to realize its unit costs in check and by adding to the competitive full, enhanced potential. In doing so, we must remain pressures that have contained prices. But once growth concerned with evolving shorter-run imbalances that in output per hour stabilizes, even if at a higher rate, can constrain long-run economic expansion and job any pickup in the growth of nominal compensation growth. per hour will translate directly into a more rapid rate With productivity growth boosting both aggregate of increase in unit labor costs, heightening the pres- demand and aggregate supply, the implications for sure on firms to raise the prices of the goods and the real market interest rates that are consistent with services they sell. Thus, should the increments of sustainable economic growth are not obvious. In fact, gains in technology that have fostered productivity current real rates, although somewhat high by historislow, any extant pressures in the labor market should cal standards, have been consistent with continuing ultimately show through to product prices. rapid growth in an environment where, as a conse- Meanwhile, though, the impressive productivity quence of greater productivity growth, capital gains growth of recent years has also had important impli- and high returns on investment give both households cations for the growth of aggregate demand. If pro- and businesses enhanced incentives to spend. ductivity is driving up real incomes and profits— and, hence, gross domestic income—then gross domestic product must mirror this rise with some OTHER CONSIDERATIONS combination of higher sales of motor vehicles, other consumer goods, new homes, capital equipment, and Even if labor supply and demand were in balance, net exports. By themselves, surges in economic however, other aspects of the economic environment growth are not necessarily unsustainable—provided may exhibit imbalances that could have important they do not exceed the sum of the rate of growth in implications for future developments. For example, the labor force and productivity for a protracted in recent years, as a number of analysts have pointed period. However, when productivity is accelerating, out, a significant shortfall has emerged in the private it is very difficult to gauge when an economy is in the saving with which to finance domestic investment in process of overheating. plant and equipment and houses. In such circumstances, assessing conditions in the One offset to the decline in household saving labor market can be helpful in forming those judg- out of income has been a major shift of the federal ments. Employment growth has exceeded the growth budget to surplus. Of course, an important part of that in working-age population this past year by almost budgetary improvement, in turn, owes to augmented !/2 percentage point. While somewhat less than the revenues from capital gains and other taxes that have spread between these growth rates over much of the flowed from the rising market value of assets. Still, past few years, this excess is still large enough to the budget surpluses have helped to hold down intercontinue the further tightening of labor markets. It est rates and facilitate private spending. implies that real gross domestic product is growing The remaining gap between private saving and faster than its potential. To an important extent, this domestic investment has been filled by a sizable excess of the growth of demand over supply owes to increase in saving invested from abroad, largely a the wealth effect as consumers increasingly perceive consequence of the technologically driven marked their capital gains in the stock and housing markets as increase in rates of return on U.S. investments. Morepermanent and, evidently as a consequence, spend over, in recent years, with many foreign economies part of them, an issue to which I shall return shortly. faltering, U.S. investments have looked particularly There can be little doubt that, if the pool of job attractive. As U.S. international indebtedness mounts, seekers shrinks sufficiently, upward pressures on however, and foreign economies revive, capital Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin • September 1999 inflows from abroad that enable domestic investment its ninth year. For monetary policy to foster maxito exceed domestic saving may be difficult to sustain. mum sustainable economic growth, it is useful to Any resulting decline in demand for dollar assets preempt forces of imbalance before they threaten could well be associated with higher market interest economic stability. But this may not always be rates, unless domestic saving rebounds. possible—the future at times can be too opaque to penetrate. When we can be preemptive, we should be, because modest preemptive actions can obviate NEAR-TERM OUTLOOK more drastic actions at a later date that could destabilize the economy. Going forward, the members of the Federal Reserve I should emphasize that preemptive policymaking Board and presidents of the Federal Reserve Banks is equally applicable in both directions, as has been believe there are mechanisms in place that should evident over the years both in our inclination to raise help to slow the growth of spending to a pace more interest rates when the potential for inflationary presconsistent with that of potential output growth. Consures emerged, as in the spring of 1994, or to lower sumption growth should slow some, if, as seems most rates when the more palpable risk was economic likely, outsized gains in share values are not repeated. weakness, as in the fall of last year. This evenhanded- In that event, businesses may trim their capital spendness is necessary because emerging adverse trends ing plans, a tendency that would be reinforced by the may fall on either side of our long-run objective higher level of market interest rates that borrowers of price stability. Stable prices allow households now face. But with large unexploited long-term profit and firms to concentrate their efforts on what they opportunities stemming from still-burgeoning innovado best: consuming, producing, saving, and investtions and falling prices of many capital goods, the ing. A rapidly rising or a falling general price level typical cyclical retrenchment could be muted. would confound market signals and place strains on Working to offset somewhat this anticipated slowthe system that ultimately may throttle economic ing of the growth of domestic demand, our export expansion. markets can be expected to be more buoyant because In the face of uncertainty, the Federal Reserve at of the revival in growth in many of our important times has been willing to move policy based on an trading partners. assessment that risks to the outlook were dispropor- After considering the various forces at work in the tionately skewed in one direction or the other, rather near term, most of the Federal Reserve governors and than on a firm conviction that, absent action, the Bank presidents expect the growth rate of real GDP economy would develop imbalances. For instance, to be between V/2 percent and 33A percent over the both the modest policy tightening of the spring of four quarters of 1999 and 2Vi percent to 3 percent in 1997 and some portion of the easing of last fall could 2000. The unemployment rate is expected to remain be viewed as insurance against potential adverse ecoin the range of the past eighteen months. nomic outcomes. Inflation, as measured by the four-quarter percent As I have already indicated, by its June meeting change in the consumer price index, is expected to be the FOMC was of the view that the full extent of 2lA percent to 2Vi percent over the four quarters of this insurance was no longer needed. It also did not this year. Increases in the consumer price index thus believe that its recent modest tightening would far in 1999 have been greater than the average in put the risks of inflation going forward completely 1998, but the governors and Bank presidents do not into balance. However, given the many uncertainties anticipate a further pickup in inflation going forward. surrounding developments on both the supply and An abatement of the recent run-up in energy prices demand side of the economy, the FOMC did not want would contribute to such a pattern, but policymakers' to foster the impression that it was committed in short forecasts also reflect their determination to hold the order to tighten further. Rather, it judged that it would line on inflation, through policy actions if necessary. need to evaluate the incoming data for more signs The central tendency of their CPI inflation forecasts that further imbalances were likely to develop. for 2000 is 2 percent to 2xh percent. Preemptive policymaking requires that the Federal Reserve continually monitor economic conditions, PREEMPTIVE POLICYMAKING update forecasts, and appraise the setting of its policy instrument. Equity prices figure importantly in that In its deliberations this year, the FOMC has had to forecasting process because they influence aggregate wrestle with the issue of what policy setting has the demand. As I testified last month, the central bank capacity to sustain this remarkable expansion, now in cannot effectively directly target stock or other asset Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 631 prices. Should an asset bubble arise, or even if one surrounding the rollover. The availability of this is already in train, monetary policy properly cali- backstop funding should make depository institutions brated can doubtless mitigate at least part of the more willing to provide loans and lines of credit to impact on the economy. And, obviously, if we could other financial institutions and businesses and to meet find a way to prevent or deflate emerging bubbles, we any deposit withdrawals as this century closes. would be better off. But identifying a bubble in the The banking industry is also working hard, and process of inflating may be among the most formi- with evident success, to prepare for the event. By the dable challenges confronting a central bank, pitting end of May, 98 percent of the nation's depository its own assessment of fundamentals against the com- institutions examined by Federal Financial Institubined judgment of millions of investors. tions Examination Council agencies were making By itself, the interpretation that we are currently satisfactory progress on their Year 2000 preparations. enjoying productivity acceleration does not ensure The agencies are now in the process of examining that equity prices are not overextended. There can be supervised institutions for compliance with the little doubt that if the nation's productivity growth June 30 milestone date for completing testing and has stepped up, the level of profits and their future implementation of remediated mission-critical syspotential would be elevated. That prospect has sup- tems. Supervisors also expect institutions to prepare ported higher stock prices. The danger is that in these business resumption contingency plans and to maincircumstances, an unwarranted, perhaps euphoric, tain open lines of communication with customers and extension of recent developments can drive equity counterparties about their own readiness. The few prices to levels that are unsupportable even if risks remaining laggards among financial institutions in in the future become relatively small. Such straying Year 2000 preparedness have been targeted for addiabove fundamentals could create problems for our tional follow-up and, as necessary, will be subject to economy when the inevitable adjustment occurs. It formal enforcement actions. is the job of economic policymakers to mitigate the fallout when it occurs and, hopefully, ease the transition to the next expansion. CONCLUSION As a result of our nation's ongoing favorable eco- CENTURY DATE CHANGE PREPARATIONS nomic performance, not only has the broad majority of our people moved to a higher standard of living, I would be remiss in this overview of near-term but a strong economy also has managed to bring into economic developments if I did not relay the ongoing the productive workforce many who had for too long efforts of the Federal Reserve, other financial regula- been at its periphery. The unemployment rate for tors, and the private sector to come to grips with the those with less than a high school education has rollover of their computer systems at the start of the declined from 10% percent in early 1994 to 63A perupcoming century. While I have been in this business cent today, twice the percentage point decline in the too long to promise that 2000 will open on an entirely overall unemployment rate. These gains have enabled trouble-free note, the efforts to address potential prob- large segments of our society to obtain skills on the lems in the banking and financial system have been job and the self-esteem associated with work. exhaustive. For our part, the Federal Reserve System The questions before us today are what macroecohas now completed remediation and testing of all nomic policy settings can best extend this favorable its mission-critical applications, including testing its performance. No doubt, a monetary policy focused securities and funds-transfer systems with our thou- on promoting price stability over the long run and sands of financial institution customers. a fiscal policy focused on enhancing national saving As we have said previously, while we do not by accumulating budget surpluses have been key believe consumers need to hold excess cash because elements in creating an environment fostering the we expect the full array of payment options to work, capital investment that has driven the gains to prowe have taken precautions to ensure that ample cur- ductivity and living standards. I am confident that rency is available. Further, the Federal Reserve estab- by maintaining this discipline, policymakers in the lished a special liquidity facility at which sound Congress, in the executive branch, and at the Federal depository institutions with good collateral can Reserve will give our vital U.S. economy its best readily borrow at a slight penalty rate in the months chance of continuing its remarkable progress. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Announcements ESTABLISHMENT OF A CENTURY DATE CHANGE funds in the private sector, but low enough to provide SPECIAL LIQUIDITY FACILITY a reasonable backstop should strains develop in funding and credit markets. The Federal Reserve Board on July 20, 1999, voted to establish a Century Date Change Special Liquidity Facility, a program for lending to depository institu- CANCELLATION OF PROPOSED CHANGES tions from October 1, 1999, through April 7, 2000. TO REGULATION CC The facility will help ensure that depository institutions have adequate liquidity to meet any unusual The Federal Reserve on July 8, 1999, decided not demands in the period around the century date to propose specific changes to Regulation CC (Availchange. Among other things, it should help enable ability of Funds and Collection of Checks) at this institutions to more confidently commit to supplying time to reduce the maximum holds banks may place loans to other financial institutions and businesses on nonlocal checks. through the rollover period. The Board concluded that return times do not The interest rate charged on loans from the special support shortening the permissible holds on nonlocal facility will be 150 basis points higher than the checks and that the costs and potential risks of short- Federal Open Market Committee's intended federal ening holds on all or some nonlocal checks would funds rate. Although the collateral requirements will outweigh the likely benefits. be the same as for regular discount window loans, This decision was based on an analysis of issues there will be no restrictions on the use and duration raised by commenters in response to an advance of loans from the special facility while it is in opernotice of proposed rulemaking issued in December ation. Moreover, borrowers will not be required to 1998 that requested comment on the potential beneseek funds elsewhere first. fits and drawbacks of shortening the maximum hold The Board proposed the special facility on May 21, for nonlocal checks. 1999, and received ninety-three comments. All but three favored its establishment. Commenters frequently noted that even though the financial services industry was well prepared for the Year 2000, the ISSUANCE OF A SUPERVISORY LETTER ON facility would increase certainty that funds would be CAPITAL ADEQUACY OF LARGE AND COMPLEX available to meet liquidity needs around the end of BANKING ORGANIZATIONS the year. In response to comments, the Board set an earlier start date for the special facility than it had The Federal Reserve on July 1, 1999, issued a superfirst proposed—October 1 rather than November 1. visory letter that emphasizes the growing need for It also decided not to automatically tie eligibility large and complex banking organizations to maintain for borrowing from the special facility to meeting strong internal processes to ensure that their capital minimum capital requirements. Lending Reserve is fully sufficient to support the underlying risks Banks will evaluate the eligibility of borrowers who they face as well as to meet minimum regulatory had been adequately capitalized and in sound finan- standards. cial condition but whose capital ratios have tempo- Capital adequacy is a critical element of a bank's rarily fallen below minimum requirements as a result safety and soundness. With the growing scope and of developments related to the century date change. complexity of business activities and ongoing finan- Many commenters had suggested a lower interest cial innovation, simple ratios—including risk-based rate on loans from the special facility. But the Board capital ratios—and traditional rules of thumb no set the rate at 150 basis points above the federal longer suffice in assessing the overall capital adefunds rate target, as it had first proposed. That spread quacy of many banking organizations. was judged to be high enough to ensure that deposi- The supervisory letter directs examiners to evalutory institutions would still have incentives to seek ate internal capital management processes to judge Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

633 whether they meaningfully tie the identification, liabilities. The Federal Reserve collects deposit monitoring, and evaluation of risk to the determina- data—either weekly, quarterly, or annually—in order tion of the institution's capital needs. To support that to administer reserve requirements and measure the evaluation, this letter describes the fundamental ele- money supply. In general, the larger the institution, ments of a sound and comprehensive internal capital the more detailed and more frequent is its reporting. adequacy analysis and the key areas of risk it should This year, in effect, deposit-reporting requirements encompass. for most institutions will be frozen, thus reducing the This letter grew, in part, out of a recent supervisory need for depository institutions to modify their data review of internal capital management processes at processing systems as the century change approaches. several large, complex banking organizations. This The Board and other supervisory agencies required review suggests that these processes could be signifi- institutions to have their data processing systems cantly improved, in particular to become better inte- ready for the century change by June 30 and to grated with internal risk measurement and analysis. manage any subsequent changes in their systems with In providing guidance to examiners and supervi- great care. sors, this supervisory letter is also intended to encour- One exception to the freeze on changes to the age such banking organizations to strengthen their deposit-reporting schedule applies to institutions risk measurement capabilities as well as to integrate that will become subject to reserve requirements these capabilities more fully in evaluating their own this year because of growth in their reservable liabilicapital adequacy. ties. Those institutions will be required to report The practices described in this letter extend in quarterly on form FR 2900. (For some of these instisome cases beyond those currently followed by most tutions, deposit growth normally would require large banking organizations. Examiners should gen- weekly reporting.) This exception is necessary erally expect these institutions to make steady and because of the Board's responsibility to administer meaningful progress toward implementation of a reserve requirements. comprehensive internal process for assessing capital In addition, institutions that usually would have adequacy in relation to risk, rather than immediate been required to shift from annual to quarterly reportand full implementation. However, examiners should ing (for institutions exempt from reserve requireexpect those banking organizations actively involved ments) and from quarterly to weekly reporting (for in complex securitizations or other similar transfers institutions subject to reserve requirements) can of risk to have in place or immediately implement a instead remain in the less-frequent reporting catecomprehensive internal capital analysis that fully gory for the coming year. Finally, depository institureflects all risks. tions that qualify to shift to a less burdensome report- Supervisory letters are the primary means by which ing category may do so. Such downshifts are never the Federal Reserve communicates key policy direc- compulsory. tives to its examiners, supervisory staff, and the bank- In September 2000, the procedures for adjusting ing industry. The long-term goal of this supervisory institutions' deposit-reporting schedules will revert to letter is to encourage broader adoption of sound the usual practice. Affected depository institutions practices in internal analysis of capital adequacy, to will be notified by their Federal Reserve Bank. promote further innovation and enhancements by the industry in this area, and to better integrate such internal analysis into the supervisory process. ISSUANCE OF A JOINT POLICY STATEMENT ON BRANCH CLOSINGS BY INSURED DEPOSITORY INSTITUTIONS FREEZE ON CHANGES TO THE DEPOSIT-REPORTING SCHEDULE The Federal Reserve Board, along with the Office of the Comptroller of the Currency, the Federal Deposit Because of the approaching century date change, the Insurance Corporation, and the Office of Thrift Federal Reserve Board announced on July 15, 1999, Supervision on July 7, 1999, issued a joint policy that this year it would not require some depository statement regarding branch closings by insured institutions to shift to more frequent and detailed depository institutions. The joint policy statement is reporting of their deposits in September. effective immediately. Normally, institutions may be required to switch to The policy statement clarifies additional statutory a new reporting category each September, depending steps regarding notice and consultation for proposed on growth in their level of deposits and reservable branch closings by interstate banks in low- or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin • September 1999 moderate-income areas and makes certain other clari- • Prudent, conservative, but not excessive, loan loss fying changes. allowances that fall within an acceptable range of estimated losses are appropriate. In accordance with GAAP, an institution should record its best estimate within the range of credit losses, including when management's best esti- JOINT ISSUANCE OF A LETTER BY THE mate is at the high end of the range; • Determining the allowance for loan losses is inevita- FEDERAL BANK REGULATORY AUTHORITIES bly imprecise, and an appropriate allowance falls within a ON THE ALLOWANCE FOR LOAN LOSSES range of estimated losses; • An "unallocated" loan loss allowance is appropriate The Securities and Exchange Commission, Federal when it reflects an estimate of probable losses, determined Deposit Insurance Corporation, Federal Reserve in accordance with GAAP, and is properly supported; Board, Office of the Comptroller of the Currency, and • Allowance estimates should be based on a comprehensive, well-documented, and consistently applied analysis of Office of Thrift Supervision have jointly issued to the loan portfolio; and financial institutions the following letter on the allow- • The loan loss allowance should take into consideration ance for loan losses. all available information existing as of the financial statement date, including environmental factors such as industry, geographical, economic, and political factors. Joint Interagency Letter to Financial Institutions The Agencies will continue to cooperate and communi- July 12, 1999 cate with respect to significant issues of policy through their Chief Accountants' meetings. In addition, the SEC Over the past several months, the banking regulators and staff will consult with the appropriate banking regulators as the Securities and Exchange Commission ("SEC") (jointly part of the SEC's process in determining whether to take a as the "Agencies") have worked together to provide a significant action in their review of the accounting for a consistent message on the allowance for loan losses. In a financial institution's loan loss allowance. March 10, 1999 Joint Interagency Letter to Financial Insti- As set forth in the March 10, 1999 joint letter, the tutions, the Agencies stated, "We recognize that today Agencies agreed to provide by March 2000 additional instability in certain global markets, for example, is likely guidance regarding documentation and disclosure issues. to increase loss inherent in affected institutions' portfolios In addition, as indicated in that joint letter, certain other and consequently require higher allowances for credit accounting issues will be addressed over the next two years losses than were appropriate in more stable times." On through the efforts of the AICPA Allowance for Loan May 19, 1999, SEC Chairman Arthur Levitt reiterated this Losses Task Force. While this guidance is under developmessage and added, "Some have interpreted our efforts on ment, financial institutions should follow GAAP, including bank reserves to suggest that the SEC thinks reserves are the concepts set forth herein and the guidance included too high and should be lowered. That couldn't be further with Topic D-80, as they establish their loan loss allowfrom the truth. ... I want to emphasize—it is not our ances for financial reporting purposes. policy that institutions artificially lower reserves or ever have inadequate reserves." As announced in the March 10, 1999 joint letter, efforts are ongoing to provide the banking industry and account- FORMATION OF THE PAYMENTS SYSTEM ing profession with enhanced guidance on appropriate DEVELOPMENT COMMITTEE methodologies, disclosures, and supporting documentation for loan loss allowances. The Agencies have agreed to The Board of Governors of the Federal Reserve Syssupport and encourage the FASB process and the AICPA Allowance for Loan Losses Task Force in clarifying cer- tem on July 20, 1999, announced the formation of the tain aspects of generally accepted accounting principles Payments System Development Committee. It will ("GAAP") related to loan loss allowances. In this regard, advise the Board and System officials on medium- FASB Emerging Issues Task Force Topic D-80 includes and long-term public policy issues surrounding develguidance on certain loan loss accounting issues. In addition, the Joint Working Group of the Agencies (as opments in the retail payments system. This commitdescribed in the March 10, 1999 joint letter) is seeking tee will follow up on the work of the Committee on input and guidance from the banking industry and account- the Federal Reserve in the Payments Mechanism, ing profession in providing additional disclosure and docwhich was chaired by Board Vice Chair Alice Rivlin. umentation guidance. This interagency letter, building Governor Roger W. Ferguson Jr. and President on the prior interagency joint statements, is intended to reaffirm fundamental principles concerning the loan loss Cathy E. Minehan of the Federal Reserve Bank of allowance and to highlight the future work of the Agencies Boston will co-chair the committee. The other memin this area. The Agencies have agreed on the following bers of the committee will be Governor Edward W. important aspects of loan loss allowance practices: Kelley Jr. and First Vice President Jamie B. Stewart Jr. of the Federal Reserve Bank of New York. • Arriving at an appropriate allowance involves a high The committee will also work with officials throughdegree of management judgment and results in a range of estimated losses; out the Federal Reserve System, particularly the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 635 System's Retail Product Office located at the Federal More information is available on the Federal Reserve Bank of Atlanta. Reserve's web site at http://www.federalreserve.gov/ The committee will focus on key issues involving ssbf/ or at the National Opinion Research Center's the future development of payment systems that site at http://norc.uchicago.edu/ssbf/ facilitate consumer, government, and low-value corporate transactions. It will serve as a forum for the analysis of technological and market trends, provide ISSUANCE BY THE BASEL COMMITTEE OF a mechanism for consulting with payments system PAPERS PROVIDING GUIDANCE ON CREDIT providers and users, and advise the Board and Sys- RISK IN BANKING tem officials on the need for action by the Federal Reserve System on payment system topics. This com- The Basel Committee on Banking Supervision has mittee will play an active role, working collabora- issued four papers providing guidance to banks and tively with the private sector, to identify strategies to banking supervisors on various aspects of credit risk enhance the long-term efficiency of check and auto- in banking. These papers form part of an ongoing mated clearinghouse services and to move to the next effort by the committee to strengthen procedures for generation of payment systems. risk management in banks. They may be obtained from the BIS Web site at http://www.bis.org The four papers are the following: LAUNCH OF THE 1998 SURVEY OF SMALL • Sound Practices for Loan Accounting and BUSINESS FINANCES Disclosure • Principles for the Management of Credit Risk The Federal Reserve Board has begun the 1998 Sur- • Best Practices for Credit Risk Disclosure vey of Small Business Finances in an effort to better • Supervisory Guidance for Managing Settlement understand how economic and regulatory changes Risk in Foreign Exchange Transactions have affected small firms' access to credit. From July 1, 1999, through the end of 1999, the Sound Practices for Loan Accounting and Disclo- National Opinion Research Center at the University sure is final. The paper addresses issues facing banks of Chicago, on behalf of the Board, will interview, by and bank supervisors in accounting for loans and loan telephone, 6,000 executives at businesses with fewer losses. It is a revised version of a consultative paper than 500 employees. issued in October 1998. Participants were randomly selected from all fifty The Basel Committee invites comments, by states and the District of Columbia using scientific November 30, 1999, on the other three papers from sampling methods. They will be asked about their use all interested parties, including bankers, rating agenof credit and other financial services and their expecies, analysts, industry groups, standard-setters, and rience in obtaining credit during 1998. Information supervisors. They may be submitted to the commitwill be collected about firms' assets, liabilities, tee's web site or mailed to the following address: income, and expenses. The names and addresses of participants and any other identifying information will be held in the Basel Committee on Banking Supervision strictest confidence. Participation is voluntary, but Attention: Mr. William Coen a broad sample will help policymakers more Bank for International Settlements clearly understand the effects of their actions on CH-4002 Basel, Switzerland small businesses. "The Federal Reserve is concerned with how eco- Principles for the Management of Credit Risk nomic and regulatory changes affect small busi- encourages banking supervisors globally to promote nesses," Federal Reserve Chairman Alan Greenspan sound practices for managing credit risk. The paper said. "Such changes can, in turn, have important identifies sound practices that banks should use in implications for economic policy making." managing the credit risk in all of their activities, both This is the third time the survey has been con- banking and trading. ducted since 1988. The last survey examined small Best Practices for Credit Risk Disclosure identifies business finances in 1993. The Board will publish the the credit-risk information that market participants new study after all the data have been collected and and supervisors need to make a meaningful assessanalyzed. ment of banking organizations. It encourages such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636 Federal Reserve Bulletin • September 1999 institutions in all countries to provide that informa- Processing Services Business. The notice alleges that tion to the public. in carrying out these activities, Messrs. Kingdon, Supervisory Guidance for Managing Settlement Goglia, and Plante caused false entries to be made in Risk in Foreign Exchange Transactions is being the books and records of the bank. issued as part of the credit package because settle- The Board's actions against Messrs. Kingdon, ment risk clearly has a credit-risk dimension. The Goglia, and Plante have been coordinated with the guidance builds on previous work by the Committee U.S. Attorney's Office for the Southern District of on Payment and Settlement Systems of the Bank for New York, which on July 19, 1999, announced crim- International Settlements. inal indictments against the three individuals. The Basel Committee was established by the cen- In March 1999, Bankers Trust pled guilty to three tral bank governors of the Group of Ten countries in felony counts and agreed to pay a $60 million fine to 1975 and operates under the auspices of the Bank for the United States in connection with the operations of International Settlements in Basel, Switzerland. The the bank's Client Processing Services Business. Committee consists of senior supervisory authorities representing the world's largest banking systems and The Federal Reserve Board on July 20, 1999, works to strengthen bank supervisory and regulatory announced the execution of a written agreement by practices worldwide. and between Grimes County Capital Corporation, Houston, Texas, and the Federal Reserve Bank of Dallas. ENFORCEMENT ACTIONS The Federal Reserve Board on July 30, 1999, The Federal Reserve Board on July 7, 1999, announced the issuance of a notice of suspension announced the issuance of a combined order to cease against Joseph C. Liu, the President, Chief Executive and desist and order of assessment of a civil money Officer, and a director of the Great Eastern Bank, penalty against John Riesmeyer, a former foreign Flushing, New York. exchange trader and institution-affiliated party of the Mr. Liu is being suspended from his positions at New York Branch of Barclays Bank PLC, London, the Great Eastern Bank on account of his indictment England. and arrest today on charges of conspiracy, the mis- Mr. Riesmeyer, without admitting to any allegaapplication of bank funds, and the making of false tions, consented to the issuance of the order based entries in the bank's books and records. on his alleged falsification of trading records of the The suspension is effective pending the resolution New York Branch of Barclays Bank PLC. Mr. Riesof the criminal charges against Mr. Liu, or until the meyer paid a fine of $15,000. Board terminates the notice of suspension. The Board's action against Mr. Liu has been coor- The Federal Reserve Board on July 19, 1999, dinated with the U.S. Attorney's Office for the Eastannounced the issuance of a notice of intent to proern District of New York. The board of directors of hibit against Bruce Jeffrey Kingdon, Kenneth Goglia, the Great Eastern Bank will be appointing William J. and Harvey Plante, former officers of the Bankers Laraia, the former President of The Apple Bank, New Trust Company, New York, New York. The notice York, as the new president of the bank. seeks the issuance of orders permanently barring Messrs. Kingdon, Goglia, and Plante from participating in the banking industry. The notice alleges that Messrs. Kingdon, Goglia, CHANGES IN BOARD STAFF and Plante engaged in violations of law, unsafe and unsound banking practices, and acts that constitute The Board of Governors has approved the promobreaches of their fiduciary duties in connection with tion of David H. Howard to Deputy Director and Bankers Trust's Client Processing Services Business Thomas A. Connors to Deputy Associate Director, between late 1993 and March 1996. It is further and the appointment to the official staff of Richalleged that Messrs. Kingdon, Goglia, and Plante ard T. Freeman, William L. Helkie, and Steven B. transferred funds to Bankers Trust that were the Kamin as Assistant Directors, all in the Division of property of the bank's customers or their beneficia- International Finance. ries or that were subject to escheatment to state Mr. Freeman will have direct responsibility for the authorities to fraudulently enhance revenues and International Banking and Financial Markets Secoffset expenses incurred by Bankers Trust's Client tions. He has served on the Board's staff since 1977 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 637 and as chief of the World Payments and Economic Economic Activity Sections. Mr. Kamin joined Activity Section since 1988. Mr. Freeman has a Ph.D. the Board's staff in 1987 and was named chief of in economics from Stanford University. the International Development Section in 1997. Mr. Helkie will have direct responsibility for the Mr. Kamin holds a Ph.D. in economics from the U.S. International Transactions Section. He joined Massachusetts Institute of Technology. the Board's staff in 1982 and has served as section chief of the U.S. International Transactions Section On August 5, 1999, the Board of Governors since 1992. He has a Ph.D. in economics from Pur- announced the promotion of Donald L. Robinson due University. from Assistant Inspector General for Investigations Mr. Kamin will have direct responsibility for the to Deputy Inspector General, effective August 1, International Development and World Payments and 1999. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

639 Legal Developments FINAL RULE-AMENDMENT TO REGULATION A rates for funds, is available for the entire length of the period, and is not subject to the conditions regarding spe- The Board of Governors is amending 12 C.F.R. Part 201, cific use or exhaustion of other liquidity sources as is its Regulation A (Extensions of Credit by Federal Reserve adjustment credit under paragraph (a) of this section. Banks), to establish a special lending program under which Federal Reserve Banks will extend credit at a rate 150 4. In section 201.6, paragraph (d) is revised to read as basis points above the Federal Open Market Committee's follows: targeted federal funds rate to eligible institutions to accommodate liquidity needs during the century date change period. Unlike adjustment credit, borrowers will not be Section 201.6—General requirements. required to seek credit elsewhere first, uses of funds will not be limited, and the loans may be outstanding for any period while the facility is open. Effective October 1, 1999, 12 C.F.R. Part 201 is amended as follows: (d) Indirect credit for others. Except for depository institutions that receive credit under the Special Liquidity Facility Part 201—Extensions of Credit by Federal Reserve described in section 201.3(e), no depository institution Banks (Regulation A) shall act as the medium or agent of another depository institution in receiving Federal Reserve credit except with 1. The authority citation for 12 C.F.R. Part 201 continues the permission of the Federal Reserve bank extending to read as follows: credit. Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, 347d, 5. In section 201.7, the introductory text is designated as 348 et seq., 357, 374, 374a and 461. paragraph (a), and a new paragraph (b) is added to read as follows: 2. In section 201.2, new paragraphs (j) and (k) are added to read as follows: Section 201.7— Branches and agencies. Section 201.2—Definitions. (j) Eligible institution means a depository institution that is (b) This part applies to a United States branch or agency of in sound financial condition in the judgment of the lending a foreign bank in the same manner and to the same extent Federal Reserve Bank. as an eligible institution if the foreign bank is in sound (k) Targeted federal funds rate means the federal funds rate financial condition in the judgment of the lending Federal targeted by the Federal Open Market Committee. Reserve Bank. 3. In section 201.3, new paragraph (e) is added to read as 6. In section 201.52, the heading is revised and a new follows: paragraph (c) is added to read as follows: Section 201.3—Availability and terms. Section 201.52—Other credit for depository institutions. (e) Special liquidity facility for century date change. Federal Reserve Banks may extend credit between and including October 1, 1999, and April 7, 2000, or such later date as determined by the Board, under a special liquidity (c) Special liquidity facility. The rate for credit extended to facility to ease liquidity pressures during the century date eligible institutions under the special liquidity facility prochange period. This type of credit is available only to visions in section 201.3(e) is equal to the targeted federal eligible institutions. This type of credit is granted at a funds rate plus 1.5 percentage points on each day the credit special rate above the basic discount rate and other market is outstanding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin • September 1999 ORDERS ISSUED UNDER BANK HOLDING COMPANY Protestant contends that Applicants have significantly ACT underestimated the probable cost of acquiring Bank and, consequently, the financial resources needed to acquire and Orders Issued Under Section 3 of the Bank Holding support Bank. Protestant argues that Applicants have failed Company Act to demonstrate that they possess adequate financial resources to consummate the proposal. Security Pecos Bancshares, Inc. The Board has carefully reviewed all the financial and Pecos, Texas managerial information provided by Applicants and Protestant regarding the proposal and the assessment of the Security Delaware Pecos Bancshares, Inc. financial resources of Bank made in confidential reports of Dover, Delaware examination by the Federal Reserve Bank of Dallas. The Board notes that Bank currently is well capitalized. In Order Approving the Formation of Bank Holding addition, under the proposal submitted by Applicants, the Companies projected financial condition of Applicants and Bank and the projected debt-service obligation of Applicants are Security Pecos Bancshares, Inc. ("Security Pecos") and reasonable and consistent with the Board's guidelines. The Security Delaware Pecos Bancshares, Inc. ("Security Dela- Board also has considered several commitments made by ware") (collectively, "Applicants") have requested the Applicants, including a commitment not to incur or assume Board's approval under section 3 of the Bank Holding any indebtedness in connection with the proposal if, imme- Company Act ("BHC Act") (12 U.S.C. § 1842) to become diately thereafter, Bank would be less than well capitalbank holding companies by acquiring up to 100 percent of ized.3 the outstanding voting shares of Security State Bank of The Board also has reviewed relevant reports of exami- Pecos, Pecos, Texas ("Bank").1 nation of Bank, and the managerial resources of Appli- Notice of the proposal, affording interested persons an cants' organizers, all of whom currently are officers and opportunity to submit comments, has been published (64 directors of Bank. Based on these and all the other facts of Federal Register 9512 (1999)). The time for filing com- record, including the commitments made by Applicants, ments has expired, and the Board has considered the pro- the Board concludes that financial and managerial considposal and all comments received in light of the factors set erations as well as the future prospects of Applicants and forth in section 3 of the BHC Act. Bank are consistent with approval.4 Applicants are nonoperating companies formed to ac- Considerations relating to the convenience and needs of quire Bank. Bank is the 382d largest depository institution the community, including the performance record of Bank in Texas, controlling $59.5 million in deposits, represent- under the Community Reinvestment Act, and other supering less than 1 percent of total deposits in depository visory factors also are consistent with approval.5 institutions in the state.2 The proposal would not result in the acquisition of any additional banking assets. Based on all the facts of record, the Board concludes that the pro- 3. Protestant also contends that the debt that Security Pecos would posal would not have any significantly adverse effects on assume from its organizers would unfairly burden minority shareholdcompetition or on the concentration of banking resources ers of Security Pecos, who would not contribute any debt. The Board notes that the courts have concluded that the Board's limited jurisdicin any relevant banking market. tion to review applications under the BHC Act does not authorize it to The BHC Act also requires the Board to consider the consider matters relating only to shareholder relations and their proper financial and managerial resources and future prospects of compensation. See Western Bancshares, Inc. v. Board of Governors, the companies and banks involved in a proposal, the conve- 480 F.2d 749 (10th Cir. 1973). These are matters of state corporate law nience and needs of the community to be served, and and may be raised before a court with the authority to provide Protestant with adequate relief, if deemed appropriate. certain other supervisory factors. The Board has carefully 4. Protestant maintains that actions by Applicants in connection considered these factors in light of all the facts of record, with the presentation of the proposal to the Board raise adverse including comments from a bank holding company that managerial considerations. For example, Protestant alleges that Appliobjects to the proposal ("Protestant"). cants did not disclose to the Board the appointment by Bank's board of directors of an independent committee to evaluate offers to acquire Bank, the independent committee's recommendation to Bank's shareholders, and the fact that Applicants' organizers raised their tender offer price after Applicants filed their application. In response, Appli- 1. Applicants also would acquire all the voting shares of Security cants assert that the application has been amended to describe fully Safety Deposit Box Corporation, Pecos, Texas ("Security Box"), Applicants' current tender offer, and the record of the application which provides safe deposit box services to customers of Bank. Shares includes substantially all facts regarding Protestant's dispute with of Security Box are held in trust for the benefit of shareholders of Applicants and the role of the independent committee. Moreover, as Bank on a pro rata basis and are only transferable with Bank shares. noted above, all of Applicants' organizers are officers or directors of Under section 225.22(c) of the Board's Regulation Y (12C.F.R. Bank, and the Board has considered Protestant's allegations in light of 225.22(c)), Applicants may acquire Security Box without the Board's the most recent examination report and other supervisory information prior approval. concerning the managerial resources of Bank. 2. Deposit data are as of December 31, 1998. In this context, 5. The Board also received a comment from an individual objecting depository institutions include commercial banks, savings associa- that the proposed ownership of Bank by Security Delaware, a Delations, and savings banks. ware chartered company, is intended solely to authorize Bank to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 641 Protestant also contends that Applicants are effectively deemed to be conditions imposed in writing by the Board prohibited from acquiring Security Pecos under the Texas in connection with its findings and decision and, as such, Business Combination Law ("Combination Law"), which may be enforced in proceedings under applicable law. is designed to impede hostile takeovers of Texas compa- The proposed acquisition shall not be consummated nies.6 Protestant argues that it is unlikely that Applicants before the fifteenth calendar day after the effective date of will obtain approval of the share exchange agreement by this order, or later than three months after the effective date two-thirds of all shareholders eligible to vote on the pro- of this order, unless such period is extended for good cause posal, as required by Texas law. by the Board or by the Federal Reserve Bank of Dallas, The Board may not approve the acquisition of a bank by acting pursuant to delegated authority. a bank holding company if the acquisition is prohibited by By order of the Board of Governors, effective July 28, state law.7 The Texas Banking Commissioner has reviewed 1999. the proposal and indicated that the Combination Law applies to the proposal as structured because it includes an This action was taken pursuant to the Board's Rules Regarding exchange agreement between Bank and Applicants. Delegation of Authority (12C.F.R. 265.4(b)(1)) by a committee of Board members. Voting for this action: Chairman Greenspan and Applicants intend to proceed with the proposed transac- Governors Kelley and Ferguson. Absent and not voting: Governors tion and to comply with the requirements of the Combina- Meyer and Gramlich. tion Law. However, to address the possibility that Applicants may not be able to obtain the required shareholder ROBERT DEV. FRIERSON approval under the Combination Law, Applicants have Associate Secretary of the Board proposed alternative methods to acquire Bank that, Applicants assert, would not be subject to the Combination Stockman Financial Corporation Law.8 Miles City, Montana Applicants have determined not to proceed with the transaction unless they obtain at least 85 percent of Bank's Order Approving the Acquisition of a Bank Holding voting shares. Applicants also have made several financial Company commitments intended to ensure that Applicants' financial resources and condition would not be impaired by a volun- Stockman Financial Corporation ("Stockman Financial"), tary exchange and that Applicants' organizational structure a bank holding company within the meaning of the Bank would be substantially identical whether the proposal was Holding Company Act ("BHC Act"), has requested the consummated under an exchange agreement or on a volun- Board's approval under section 3 of the BHC Act tary basis. (12 U.S.C. § 1842) to acquire all the voting shares of Terry Bancshares, Inc. ("Terry Bancshares"), and thereby ac- Based on the foregoing and all the facts of record, the quire its subsidiary bank, State Bank of Terry, both of Board has determined that the application should be, and Terry, Montana. hereby is, approved. The Board's approval is specifically conditioned on compliance by Applicants with all the Notice of the proposal, affording interested persons an commitments made in connection with the application. For opportunity to submit comments, has been published the purposes of this action, the commitments and condi- (64 Federal Register 25,042 (1999)). The time for filing tions relied on by the Board in reaching its decision are comments has expired, and the Board has considered the proposal in light of the factors set forth in section 3 of the BHC Act. Stockman Financial is the sixth largest depository instiengage in transactions not otherwise permitted in Texas. The proposal would not have this effect. tution in Montana, controlling $302.8 million in deposits, 6. Tex. Bus. Corp. Act Ann. art. 13.01 et seq. (West 1999). Protes- representing 3.4 percent of total deposits in depository tant argues that, under the Combination Law, Applicants' organizers institutions in the state.1 Terry Bancshares is the 49th are "affiliated shareholders" of Bank, and, as affiliated shareholders, largest depository institution in Montana, controlling the organizers may not cause Bank and Security Pecos to enter into an exchange agreement unless the proposal either has been approved by a $31.8 million in deposits, representing less than 1 percent majority of the board of directors of Bank before the organizers of the total deposits in depository institutions in the state. became affiliated shareholders or is subsequently ratified by two-thirds On consummation of this proposal, Stockman Financial of the shareholders of Bank (other than the organizers). An affiliated would remain the sixth largest depository institution in shareholder is any shareholder or group of shareholders that controls Montana, controlling deposits of $334.6 million, representmore than 20 percent of the shares of a Texas company. 7. See Whitney National Bank of Jefferson Parish u Bank of New ing 3.8 percent of the total deposits in depository institu- Orleans and Trust Company, 379 U.S. 411 (1965). tions in the state. 8. Under one alternative, Applicants' organizers and any other willing shareholders of Bank would make a voluntary exchange of Bank shares for shares to be issued by Security Pecos. By making the exchange voluntarily, an exchange agreement involving Bank would not be required, and the proposed acquisition could proceed without a "business combination" as defined in the Combination Law. Based on a review of the relevant provisions of state law, and after consultation 1. Deposit data are as of June 30, 1998. In this context, depository with the Texas Banking Commissioner, it appears that this alternative institutions include commercial banks, savings banks, and savings would comply with applicable state law. associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin • September 1999 Competitive Considerations has reviewed the proposal and advised the Board that consummation of the proposal would not likely have any The BHC Act prohibits the Board from approving an significantly adverse competitive effects in the Miles City application under section 3 of the BHC Act if the proposal banking market or any other relevant banking market. would result in a monopoly or would be in furtherance of Based on all the facts of record, the Board concludes that any attempt to monopolize the business of banking. The consummation of the proposal would not result in any BHC Act also prohibits the Board from approving a prosignificantly adverse effects on competition or on the conposed combination that would substantially lessen compecentration of banking resources in the Miles City banking tition or tend to create a monopoly in any relevant banking market or any other relevant market. market, unless the Board finds that the anticompetitive effects of the proposal are clearly outweighed in the public interest by the probable effect of the proposal in meeting Other Factors the convenience and needs of the community to be served.2 The BHC Act also requires the Board to consider the Stockman Financial and Terry Bancshares compete di- financial and managerial resources and future prospects of rectly in the Miles City, Montana, banking market.3 Stock- the companies and banks involved in the proposal, the man Financial is the largest depository institution in the convenience and needs of the communities to be served, Miles City banking market, controlling deposits of and certain supervisory factors. The facts of record include $117.1 million, representing 27.5 percent of the total de- supervisory reports of examination assessing the financial posits in depository institutions in the market ("market information provided by Stockman Financial. Based on all deposits").4 Terry Bancshares is the fifth largest depository the facts of record, the Board concludes that the financial institution in the market, controlling market deposits of and managerial resources and the future prospects of Stock- $31.8 million, representing 7.5 percent of market deposits. man Financial, Terry Bancshares, and their respective sub- On consummation of this proposal, Stockman Financial sidiary banks, are consistent with approval, as are the other would control market deposits of $148.9 million, represent- supervisory factors the Board must consider under secing 35 percent of market deposits. Concentration in the tion 3 of the BHC Act. In addition, considerations relating market, as measured by the Herfindahl-Hirschman Index to the convenience and needs of the communities to be ("HHI"), would increase by 411 points to 1808.5 served, including the records of performance of the institu- In evaluating the competitive effects of the proposal in tions involved under the Community Reinvestment Act the Miles City banking market, the Board has considered (12 U.S.C. § 2901 et seq.), are consistent with approval of several factors. The Miles City banking market is a rela- the application. tively small rural market in southeastern Montana and ten competitors of Stockman Financial would remain in the Conclusion market after consummation of the proposal, including three large multistate bank holding companies. Five of the ten Based on the foregoing, and in light of all the facts of depository institutions that would compete with Stockman record, the Board has determined that the application Financial after consummation would each have a market should be, and hereby is, approved. The Board's approval share of more than 5 percent. The Department of Justice is specifically conditioned on compliance by Stockman Financial with all the commitments made in connection with this application. For purposes of this action, the 2. 12 U.S.C. § 1842(c)(1). commitments and conditions relied on by the Board in 3. The Miles City banking market is defined as Carter, Custer, reaching its decision are deemed to be conditions imposed Fallon, Garfield, Powder River, Prairie, and Rosebud Counties, all in in writing by the Board in connection with its findings and Montana. decision and, as such, may be enforced in proceedings 4. Market share data are as of June 30, 1998. Market share data are based on calculations that include the deposits of thrift institutions under applicable law. weighted at 50 percent. The Board previously has indicated that thrift The acquisition of Terry Bancshares shall not be coninstitutions have become, or have the potential to become, significant summated before the fifteenth calendar day following the competitors of commercial banks. See, e.g., Midwest Financial Group, effective date of this order, or later than three months after 75 Federal Reserve Bulletin 386 (1989); National City Corporation, the effective date of this order, unless such period is ex- 70 Federal Reserve Bulletin 743 (1984). Thus, the Board regularly has included thrift deposits in the calculation of market share on a tended for good cause by the Board or by the Federal 50-percent weighted basis. See, e.g., First Hawaiian Inc., 77 Federal Reserve Bank of Minneapolis, acting pursuant to delegated Reserve Bulletin 52 (1991). authority. 5. Under the Merger Guidelines of the Department of Justice, By order of the Board of Governors, effective July 2, 49 Federal Register 26,923 (June 29, 1984), a market in which the 1999. post-merger HHI is more than 1800 is considered to be highly concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and absence of other factors indicating anticompetitive effects) unless the Governors Kelley, Meyer, and Gramlich. Absent and not voting: post-merger HHI is at least 1800 and the merger increases the HHI by Governor Ferguson. 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 effects of ROBERT DEV. FRIERSON limited-purpose lenders and other nondepository financial institutions. Associate Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 643 Orders Issued Under Section 4 of the Bank Holding companies under section 4(c)(8) of the BHC Act. Notifi- Company Act cant has committed that it will conduct these activities in accordance with the limitations set forth in Regulation Y The Fuji Bank, Limited and the Board's orders and interpretations relating to each Tokyo, Japan of these activities.2 In order to approve the proposal, the Board also must Order Approving Notice to Engage in Nonbanking determine that performance of the proposed activities is a Activities proper incident to banking, that is, that the performance of the proposed activities by Fuji "can reasonably be ex- The Fuji Bank, Limited ("Fuji"), a bank holding company pected to produce benefits to the public . . . that outweigh within the meaning of the Bank Holding Company Act possible adverse elfects, such as undue concentration of ("BHC Act"), has requested the Board's approval under resources, decreased or unfair competition, conflicts of intersection 4(c)(8) of the BHC Act (12U.S.C. § 1843(c)(8)) ests, or unsound banking practices." 12 U.S.C. § 1843(c)(8). and section 225.24 of the Board's Regulation Y (12 C.F.R. As part of its evaluation of these factors, the Board 225.24) to acquire through its subsidiary, Heller Financial, considers the financial and managerial resources of the Inc., Chicago, Illinois ("Heller"), all the outstanding vot- notificant and the effect of the transaction on those resourcing shares of HealthCare Financial Partners, Inc., Chevy es.3 In this case, the acquisition of HealthCare would be Chase, Maryland ("HealthCare"), and thereby engage in made and funded by Heller, and therefore would not rethe following activities: quire additional financial or managerial resources from (1) Extending credit and servicing loans and activi- Fuji. The proposed transaction would not involve signifities related to extending credit pursuant to sec- cant risk, and would not represent a significant expansion tion 225.28(b)(1) and (b)(2) of Regulation Y of Fuji's U.S. operations, but rather a further development (12 C.F.R. 225.28(b)(1) & (b)(2)); of existing business lines by Heller, which has a record of (2) Leasing personal and real property pursuant to successfully managing similar activities. The most recently section 225.28(b)(3) of Regulation Y (12 C.F.R. reported capital ratios of Fuji exceed the relevant risk- 225.28(b)(3)); based capital standards established under the Basle Accord, and the proposed transaction is not expected to have a (3) Providing financial and investment advisory sermaterial effect on the capital of the consolidated organizavices pursuant to section 225.28(b)(6) of Regulation. The Board has also considered recent financial statetion Y (12 C.F.R. 225.28(b)(6)); and ments, including pro forma financial statements and other (4) Providing management consulting services puravailable information, and the condition of the U.S. operasuant to section 225.28(b)(9) of Regulation Y tions of Fuji. Based on these and other facts of record, (12 C.F.R. 225.28(b)(9)). including information regarding Heller's financial condition and managerial resources and relevant supervisory Notice of the proposal, affording interested persons an information, the Board has determined that financial and opportunity to submit comments, has been published managerial considerations are consistent with approval. (64 Federal Register 33,081 (1999)). The time for filing comments has expired, and the Board has considered the The Board also has carefully considered the competitive notice and all comments received in light of the factors set effects of the proposed acquisition of HealthCare. Heller forth in section 4(c)(8) of the BHC Act. currently engages in most of the activities conducted by Fuji, with total consolidated assets of approximately HealthCare. The Board notes that the markets for lending $486 billion, is the fifth largest banking organization in and leasing and other specialty financial services are un- Japan and the twelfth largest banking organization in the concentrated and that there are numerous providers of world.1 In the United States, Fuji controls Fuji Bank and these services. There is also a high level of competition in Trust Company and 16.8 percent of the voting shares of the markets for the financial advisory and management Yasuda Bank and Trust Company, both in New York, consulting services that HealthCare provides through its New York. Fuji also operates branches in New York, subsidiaries. Consummation of the proposal would have a New York; and Chicago, Illinois; and agencies in Los de minimis effect on competition, and the Board has deter- Angeles, California; Atlanta, Georgia; Houston, Texas; and mined that the proposal would not have a significantly San Francisco, California. adverse effect on competition in any relevant market. The Board previously has determined by regulation that extending credit and engaging in activities related to extending credit, leasing, and providing financial and invest- 2. HealthCare also engages in certain real estate investment activities that are not permissible for a bank holding company under section ment advisory and management consulting services are 4 of the BHC Act. Fuji has committed that it will conform the real closely related to banking and permissible for bank holding estate activities of HealthCare to the requirements of section 4 of the BHC Act within two years after consummation of the proposal, and will cease making any impermissible real estate investments within six months of consummation of the proposal. 1. Asset data are as of March 31, 1999. Foreign ranking data are as 3. See 12 C.F.R. 225.26; The Fuji Bank, Limited, 75 Federal Reof December 31, 1997, adjusted to date for significant mergers and serve Bulletin 94 (1989); Bayerishe Vereinbank AG, 73 Federal Reacquisitions. serve Bulletin 155 (1987). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin • September 1999 The Board expects that the proposed transaction would The Sumitomo Bank, Limited give Fuji an increased ability to serve the needs of its Osaka, Japan customers and would allow Fuji to provide existing and new customers with a broader range of products and ser- Order Approving Notice to Engage in Nonbanking vices at lower costs. The Board also expects that combin- Activities ing the expertise of Heller and HealthCare would allow Heller to be a more effective competitor in the health care The Sumitomo Bank, Limited ("Bank"), a foreign banking financing industry. In addition, there are public benefits to organization subject to the provisions of the Bank Holding be derived from permitting capital markets to operate so Company Act ("BHC Act"), has requested the Board's that bank holding companies can make potentially profit- approval under section 4(c)(8) of the BHC Act able investments in nonbanking companies and from per- (12 U.S.C. § 1843(c)(8)) and section 225.24 of the Board's mitting banking organizations to allocate their resources in Regulation Y (12 C.F.R. 225.24) to retain its indirect interthe manner they consider to be most efficient when such est in Daiwa SB Investments (USA) Ltd., New York, investments are consistent, as in this case, with the relevant New York ("Company"), and thereby engage in financial considerations under the BHC Act. and investment advisory activities pursuant to section Based on the foregoing and all the other facts of record, 225.28(b)(6) of Regulation Y (12 C.F.R. 225.28(b)(6)). including the commitments made by Fuji, the Board has Notice of the proposal, affording interested persons an determined that the performance of the proposed activities opportunity to submit comments, has been published by Fuji can reasonably be expected to produce benefits to (64 Federal Register 29,646 (1999)). The time for filing the public that would outweigh any possible adverse effects comments has expired, and the Board has considered the under the proper incident to banking standard of sec- proposal and all comments received in light of the factors tion 4(c)(8) of the BHC Act. set forth in section 4(c)(8) of the BHC Act. Bank, with total consolidated assets of approximately Conclusion $456 billion, is the third largest banking organization in Japan.1 In the United States, Bank operates branches in Based on all the facts of record, including all the commit- New York, New York; San Francisco and Los Angeles, ments and representations made by the notificant, and California; and Chicago, Illinois. Company has under mansubject to all the terms and conditions set forth in this agement approximately $1.1 billion in assets. order, the Board has determined that the notice should be, Bank acquired an indirect interest in Company in conand hereby is, approved. This determination is subject to nection with the reorganization of Daiwa Securities Co., all the conditions set forth in the Board's Regulation Y, Ltd., Tokyo, Japan, ("Daiwa Securities"). As a result of including those in sections 225.7 and 225.25(c) (12 C.F.R. this transaction, Bank and its affiliates received a 44 per- 225.7 and 225.25(c)), and to the Board's authority to cent interest in Daiwa Securities' Japanese investment require modification or termination of the activities of a management subsidiary, Daiwa International Capital Manbank holding company or any of its subsidiaries as the agement Co., Ltd. ("DICAM"), while Daiwa Securities Board finds necessary to assure compliance with, or to retained a 44 percent interest. DICAM was renamed Daiwa prevent evasion of, the provisions and purposes of the SB Investments Ltd., and Company was formed by renam- BHC Act and the Board's regulations and orders issued ing DICAM's wholly owned U.S. investment management thereunder. The Board's decision is specifically condi- subsidiary, Daiwa International Capital Management Corp. tioned on compliance with all the commitments made in (USA), a registered investment advisor. the notice, including the commitments and conditions dis- Company continues to be an investment advisor regiscussed in this order. The commitments and conditions tered with the Securities and Exchange Commission relied on in reaching this decision shall be deemed to be ("SEC") under the Investment Advisers Act of 1940 conditions imposed in writing by the Board in connection ("1940 Act") (15 U.S.C. § 80b-1 et seq.). Accordingly, with its findings and decision and, as such, may be en- Company is, and will remain, subject to the recordkeeping forced in proceedings under applicable law. and reporting obligations, fiduciary standards, and other This proposal shall not be consummated later than three requirements of the 1940 Act and the SEC. months after the effective date of this order, unless such The Board previously has determined by regulation that period is extended for good cause by the Board or the financial and investment advisory activities are closely Federal Reserve Bank of New York, acting pursuant to related to banking within the meaning of section 4(c)(8) of delegated authority. the BHC Act.2 Bank has committed that it will conduct the By order of the Board of Governors, effective July 20, activities of Company in accordance with the limitations 1999. set forth in Regulation Y and the Board's orders and interpretations relating to the activities. Voting for this action: Chairman Greenspan and Governors Kelley, Meyer, Ferguson, and Gramlich. 1. Asset and ranking data are as of March 31, 1999, and use ROBERT DEV. FRIERSON exchange rates then in effect. Associate Secretary of the Board 2. See 12 C.F.R. 225.28(b)(6). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 645 In order to approve the proposal, the Board also must should be, and hereby is, approved. The Board's determidetermine that the proposed activity is a proper incident to nation is subject to all the conditions set forth in the banking, that is, that the proposed transaction "can reason- Board's Regulation Y, including those in sections 225.7 ably be expected to produce benefits to the public . . . that and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the outweigh possible adverse effects, such as undue concen- Board's authority to require modification or termination of tration of resources, decreased or unfair competition, con- the activities of a bank holding company or any of its flicts of interests, or unsound banking practices."3 As a part subsidiaries as the Board finds necessary to assure compliof its evaluation of these factors, the Board considers the ance with, or to prevent evasion of, the provisions and financial condition and managerial resources of the notifi- purposes of the BHC Act and the Board's regulations and cant and its subsidiaries and the effect the transaction orders issued thereunder. The Board's decision is specifiwould have on those resources.4 cally conditioned on compliance with all the commitments The retention of Company would not require additional made in the notice, including the commitments and condifinancial or managerial resources from Bank. The nature tions discussed in this order. The commitments and condiand size of Company's activities would not involve signif- tions relied on in reaching this decision shall be deemed to icant risk, nor would the proposal represent a significant be conditions imposed in writing by the Board in connecexpansion of Bank's U.S. operations. The most recently tion with its findings and decision and, as such, may be reported capital ratios of Bank exceed the relevant risk- enforced in proceedings under applicable law. based capital standards established under the Basle Ac- By order of the Board of Governors, effective July 20, cord, and the inclusion of Company would have no mate- 1999. rial effect on the capital ratios. The Board has also considered recent financial statements, including pro forma Voting for this action: Chairman Greenspan and Governors Kelley, financial statements and other available information, and Meyer, Ferguson, and Gramlich. the condition of the U.S. operations of Bank. Based on these and other facts of record, including relevant supervi- ROBERT DEV. FRIERSON Associate Secretary of the Board sory information, the Board has determined that financial and managerial considerations are consistent with approval. ORDERS ISSUED UNDER BANK MERGER ACT There is no evidence in the record indicating that consummation of this proposal is likely to result in signifi- Civitas Bank cantly adverse effects, such as undue concentration of St. Joseph, Michigan resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. There are numer- Order Approving Acquisition and Establishment of ous existing and potential competitors in the market for Branches investment advisory services. This acquisition, therefore, would have a de minimis effect on competition in the Civitas Bank ("Civitas"), a state member bank,1 has apmarket for these services. The Board expects that the plied under section 18(c) of the Federal Deposit Insurance acquisition would provide public benefits by giving Com- Act (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to pany access to the resources and experience of Bank and acquire the deposits and certain assets of five Indiana its affiliates. In addition, there are public benefits to be branches of First Indiana Bank, a federal savings bank, derived from permitting capital markets to operate so that Indianapolis, Indiana ("First Indiana").2 Civitas also has bank holding companies can make potentially profitable applied under section 9 of the Federal Reserve Act investments in nonbanking companies and from permitting (12 U.S.C. § 321) ("FRA") to establish branches at the banking organizations to allocate their resources in the locations of the branches to be acquired, as described in the manner they consider to be most efficient when such invest- Appendix. ments are consistent, as in this case, with the relevant Notice of the applications, affording interested persons considerations under the BHC Act. The Board has deteran opportunity to submit comments, has been given in mined, therefore, that the performance of the proposed accordance with the Bank Merger Act and the Board's activities by Company can reasonably be expected to pro- Rules of Procedure (12 C.F.R. 262.3(b)). As required by duce public benefits that outweigh possible adverse effects the Bank Merger Act, reports on the competitive effects of under the proper incident to banking standard of section the acquisitions were requested from the United States 4(c)(8) of the BHC Act. Attorney General and the other federal banking agencies. Based on the foregoing and all the facts of record, The time for filing comments has expired, and the Board including the commitments made by Bank in connection with the notice, and subject to the terms and conditions set forth in this order, the Board has determined that the notice 1. Civitas changed its name from Citizens Bank of Mid-America in April 1999. 2. With the exception of overdraft lines of credit and loans secured 3. See 12 U.S.C. § 1843(c)(8). by certain deposits, Civitas would not acquire the loans associated 4. See 12 C.F.R. 225.26. with these branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin • September 1999 has considered the applications and all facts of record in Area ("MSA").7 There are high levels of commuting to light of the factors set forth in the Bank Merger Act and Evansville and high daily and Sunday subscription rates section 9 of the FRA. for the Evansville newspaper among households in Posey Civitas is a subsidiary of CNB Bancshares, Inc., Evans- County. In particular, there is substantial commuting beville, Indiana, the third largest commercial banking organi- tween the county seat, Mt. Vernon, in the western half of zation in Indiana, which controls total deposits of Posey County, and Evansville. The Board also considered $3.5 billion, representing 5.1 percent of total deposits in the proximity of Mt. Vernon to Evansville, the ease of commercial banking organizations in the state.3 The five travel from Mt. Vernon to Evansville, and the extensive branches of First Indiana to be acquired control deposits of exposure of all of Posey County to Evansville advertising $136.7 million, representing less than 1 percent of deposits media. in the state. On consummation, Civitas would control ap- The Board has carefully reviewed the competitive effects proximately $3.6 billion in deposits, representing 5.3 per- of the proposal in the Evansville banking market in light of cent of total deposits in commercial banking organizations all the facts of record, including the characteristics of the in Indiana. market and the projected increase in the concentration of total deposits in depository institutions8 in this market Competitive Considerations ("market deposits"), as measured by the Herfindahl- Hirschman Index ("HHI") under the Department of Justice The Bank Merger Act prohibits the Board from approving Merger Guidelines ("DOJ Guidelines"). The Board has an application if the proposal would result in a monopoly also carefully considered the number of competitors that or would be in furtherance of any attempt to monopolize would remain in the market after consummation of the the business of banking.4 The Bank Merger Act also pro- proposal. hibits the Board from approving a proposal that would Civitas is the second largest depository institution in the substantially lessen competition or tend to create a monop- Evansville banking market, controlling $1.4 billion in deoly in any relevant market, unless the Board finds that the posits, representing 35.2 percent of market deposits.9 The anticompetitive effects of the proposed transaction are five First Indiana branches to be acquired control total clearly outweighed in the public interest by the probable deposits of $136.7 million, representing 1.7 percent of effects of the transaction in meeting the convenience and market deposits. On consummation of the proposal, Civitas needs of the community to be served.5 would control 38 percent of market deposits, and the HHI Civitas and the branches of First Indiana to be acquired would increase 152 points to 2871.10 compete with each other in the Evansville, Indiana, bank- The Board believes that several characteristics of the ing market. In evaluating the competitive issues raised by Evansville banking market mitigate the potential anticomthis proposal the Board has considered the contention by petitive effects of this proposal. Eighteen bank and thrift Civitas that the principal relevant banking market in this case, the Evansville banking market, should be expanded 7. The Board had previously determined that the Evansville banking to reflect the position of Evansville as an economic center market included three counties of the Evansville MSA (Vanderburgh based on commuting patterns and advertising markets. and Warrick Counties in Indiana and Henderson County in Kentucky), The Board believes that the relevant banking market the eastern half of Posey County, Indiana, and substantial portions of must reflect commercial and banking realities and should Spencer and Gibson Counties in Indiana, which are located outside the Evansville MSA. consist of the localized area where the banks involved offer 8. In this context, depository institutions include commercial banks, their services and where local customers can practicably savings banks, and savings associations. turn for alternatives; the key question to be considered in 9. Market share data are reported as of June 30, 1998, and are based making this selection "is not where the parties ... do on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institubusiness or even where they compete, but where, within tions have become, or have the potential to become, significant the area of competitive overlap, the effect of the merger on competitors of commercial banks. See Midwest Financial Group, 75 competition will be direct and immediate."6 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Applying these principles to the facts of this case, the Federal Reserve Bulletin 743 (1984). Because the deposits of the First Board concludes that the definition of the Evansville bank- Indiana branches would be acquired by a commercial banking organization, those deposits are included at 100 percent in the calculation of ing market should be expanded to include not only the pro forma market share. See Norwest Corporation, 78 Federal Reeastern half but all of Posey County, Indiana, one of four serve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve counties comprising the Evansville Metropolitan Statistical Bulletin 669 (1990). 10. Under the revised DOJ Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger 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 anticom- 3. Deposit data are those reported as of June 30, 1998. petitive effects) unless the post-merger HHI is at least 1800 and the 4. 12 U.S.C. § 1828(c)(5)(A). merger increases the HHI by more than 200 points. The Department 5. 12 U.S.C. § 1828(c)(5)(B). of Justice has stated that the higher than normal HHI thresholds for 6. St. Joseph Valley Bank, 68 Federal Reserve Bulletin 673 (1982) screening bank mergers for anticompetitive effects implicitly recog- (quoting United States v. Philadelphia National Bank, 374 U.S. 321, nize the competitive effect of limited-purpose lenders and other nonde- 357 (1963)). pository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 647 institutions, including Civitas, would compete in the mar- by the Board or by the Federal Reserve Bank of Chicago, ket after consummation of the proposal. The Evansville acting pursuant to delegated authority. banking market is also attractive for entry. Data for the By order of the Board of Governors, effective July 14, year ending June 30, 1998, show that the Evansville MSA 1999. has had larger increases in total deposits, deposits per banking office, and per capita income than the increases on Voting for this action: Chairman Greenspan and Governors Kelley, average in these statistics for other MSAs in Indiana. The Meyer, Ferguson, and Gramlich. Absent and not voting: Vice Chair Rivlin. market has experienced two de novo entries since 1995. Indiana, moreover, permits unrestricted intrastate branch- ROBERT DEV. FRIERSON ing.11 Associate Secretary of the Board The Department of Justice has advised the Board that consummation of the proposal would not likely have a Appendix significant adverse effect on competition in any relevant banking market. The other federal banking agencies also Branches of First Indiana to be Established by Civitas have been afforded an opportunity to comment and have Bank (All in Indiana) not objected to consummation of the proposal. After carefully reviewing these and all other facts of 1. 8388 Bell Oaks Drive, Newburgh. record, the Board concludes that consummation of the 2. 4720 Lincoln Avenue, Evansville. proposed transaction would not be likely to result in a 3. 123 Main Street, Evansville. significantly adverse effect on competition or on the con- 4. 405 E. Fourth Street, Mt. Vernon. centration of banking resources in the Evansville banking 5. 3540 First Avenue, Evansville. market or any other relevant banking market. Accordingly, the Board has determined that competitive factors are consistent with approval. ORDERS ISSUED UNDER INTERNATIONAL BANKING In reviewing this proposal under the Bank Merger Act ACT and section 9 of the FRA, the Board has considered the financial and managerial resources and future prospects of Banco de la Ciudad de Buenos Aires the existing and proposed institutions. The Board has re- Buenos Aires, Argentina viewed these factors in light of all the facts of record, including supervisory reports of examination assessing the Order Approving Establishment of a Representative financial and managerial resources of Civitas. The Board Office notes that Civitas would remain well capitalized on consummation of the proposal. Based on all the facts of Banco de la Ciudad de Buenos Aires ("Bank"), Buenos record, the Board concludes that considerations relating to Aires, Argentina, a foreign bank within the meaning of the the financial and managerial resources and future prospects International Banking Act ("IBA"), has applied under secof the institutions involved are consistent with approval. In tion 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a addition, the Board has considered the effects of the prorepresentative office in New York, New York. The Foreign posed acquisition on the convenience and needs of the Bank Supervision Enhancement Act of 1991, which communities to be served in light of all the facts of record amended the IBA, provides that a foreign bank must obtain and concludes that convenience and needs considerations, the approval of the Board to establish a representative including the performance records of the institutions in- office in the United States. volved under the Community Reinvestment Act, are consis- Notice of the application, affording interested persons an tent with approval. The Board also concludes that the opportunity to submit comments, has been published in a proposal is consistent with approval under the considernewspaper of general circulation in New York, New York ations in the FRA. (The Daily News, February 8, 1999). The time for filing Based on the foregoing and all the facts of record, the comments has expired, and the Board has considered the Board approves these applications. For purposes of this application and all comments received. action, the commitments and conditions relied on in reach- Bank, with total consolidated assets of approximately ing this decision are conditions imposed in writing by the $3.1 billion,1 ranks among the 15 largest banks in Argen- Board and, as such, may be enforced in proceedings under tina. Bank has 35 offices in Argentina and no offices applicable law. outside Argentina.2 The acquisition of the branches may not be consum- Bank is wholly owned by the city of Buenos Aires, and, mated before the fifteenth calendar day after the effective with the exception of the Fundacion del Banco de la date of this order, or later than three months after the Ciudad de Buenos Aires (the "Foundation"), has no affilieffective date of this order unless such period is extended 1. Data are as of fiscal year ending October 31, 1998. 2. Bank's Los Angeles representative office was closed in 1989 to 11. Ind. Code Ann. §§ 28-2-13-19 & 12-2-16-15 (West 1998). reduce costs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin • September 1999 ated entities.3 Bank provides a full range of banking- Bank"), which regulates and supervises the entire banking related financial services to individuals, small and medium- system in Argentina. The Central Bank has no objection to sized businesses, and large domestic and multinational Bank's establishment of the proposed representative office. corporate clients. Bank and another Argentine bank serve The Board has previously determined that factors relating as the official court depositary for required court deposits to the supervision of two other Argentine banks, both of relating to all proceedings pending before federal and local which also proposed to establish representative offices in courts in Buenos Aires. the United States, were consistent with approval.6 The The proposed representative office would solicit loans Board has determined that Bank is supervised by the and, in connection with such loan solicitation, prepare Central Bank on substantially the same terms and condiapplications, execute documents on Bank's behalf pursuant tions as the two other Argentine banks. to powers of attorney, assemble credit information, and Based on all the facts of record, the Board has determake property inspections and appraisals. The office would mined that factors relating to the supervision of Bank by its also solicit other banking business on behalf of Bank, home country supervisor are consistent with approval of conduct research, and act as liaison with correspondents of the proposed representative office. Bank. The Board has also determined that for purposes of the In acting on an application to establish a representative IBA and Regulation K, Bank engages directly in the busioffice, the IBA and Regulation K provide that the Board ness of banking outside of the United States. Bank has shall take into account whether the foreign bank engages provided the Board with information necessary to assess directly in the business of banking outside the United the application through submissions that address the rele- States, and has furnished to the Board the information it vant issues. needs to assess the application adequately. The Board also The Board also has taken into account the additional shall take into account whether the foreign bank and any standards set forth in section 7 of the IBA and Regulation K foreign bank parent is subject to comprehensive supervi- (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). As sion or regulation on a consolidated basis by its home noted above, the Central Bank has no objection to the country supervisor (12 U.S.C. § 3107(a)(2); 12 C.F.R. establishment of the proposed representative office. The 211.24(d)(2)).4 In addition, the Board may take into account Board also has determined that financial and managerial additional standards set forth in the IBA and Regulation K factors are consistent with approval of the proposed repre- (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). The sentative office. Bank appears to have the experience and Board has previously stated that the standards that apply to capacity to support the proposed office and has established the establishment of a branch or agency need not in every controls and procedures for the proposed representative case apply to the establishment of a representative office, office to ensure compliance with U.S. law. because representative offices do not engage in a banking With respect to access to information on Bank's operabusiness and cannot take deposits or make loans.5 tions, the Board has reviewed the restrictions on disclosure With respect to home country supervision of Bank, the in Argentina and has communicated with relevant govern- Board has considered the following information. Bank is ment authorities regarding access to information. Bank has subject to the regulatory and supervisory authority of the committed to make available to the Board such informa- Central Bank of the Republic of Argentina ("Central tion on the operations of Bank and any of its affiliates that the Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Company Act of 3. The Foundation, a subsidiary of Bank, is an autonomous legal 1956, as amended, and other applicable federal law. To the entity that undertakes activities in furtherance of the humanitarian extent that the provision of such information to the Board needs of the Buenos Aires community. may be prohibited by law or otherwise, Bank has commit- 4. In assessing this standard, the Board considers, among other ted to cooperate with the Board to obtain any necessary factors, the extent to which the home country supervisors: consents or waivers that might be required from third (i) Ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide; parties for disclosure of such information. In addition, (ii) Obtain information on the condition of the bank and its subsid- subject to certain conditions, the Central Bank may share iaries and offices through regular examination reports, audit information on Bank's operations with other supervisors, reports, or otherwise; including the Board. In light of these commitments and (iii) Obtain information on the dealings with and relationship beother facts of record, and subject to the conditions detween the bank and its affiliates, both foreign and domestic; (iv) Receive from the bank financial reports that are consolidated scribed below, the Board concludes that Bank has provided on a worldwide basis or comparable information that permits adequate assurances of access to any necessary information analysis of the bank's financial condition on a worldwide that the Board may request. consolidated basis; On the basis of all the facts of record, and subject to the (v) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. commitments made by Bank, and the terms and conditions These are indicia of comprehensive, consolidated supervision. No single factor is essential, and other elements may inform the Board's determination. 5. See 58 Federal Register 6348, 6351 (1993). See also Citizens 6. See Banco Roberts, S.A., 81 Federal Reserve Bulletin 202 (1995); National Bank, 79 Federal Reserve Bulletin 805 (1993); Agricultural Banco Frances del Rio de la Plata S.A., 81 Federal Reserve Bulletin Bank of China, 83 Federal Reserve Bulletin 617 (1997). 618 (1995). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 649 set forth in this order, the Board has determined that connection with this application and with the conditions in Bank's application to establish a representative office this order.7 The commitments and conditions referred to should be, and hereby is, approved. If any restrictions on above are conditions imposed in writing by the Board in access to information on the operations or activities of connection with its decision, and may be enforced in Bank or any of its affiliates subsequently interfere with the proceedings under 12 U.S.C. § 1818 against Bank and its Board's ability to obtain information to determine and affiliates. enforce compliance by Bank or its affiliates with applicable By order of the Board of Governors, effective May 5, federal statutes, the Board may require termination of any 1999. of Bank's direct or indirect activities in the United States. Approval of this application is also specifically conditioned Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and on Bank's compliance with the commitments made in Governors Kelley, Ferguson, and Gramlich. Absent and not voting: Governor Meyer. ROBERT DEV. FRIERSON Associate Secretary of the Board 7. The Board's authority to approve the establishment of the pro- and its agent, the New York State Banking Department ("Departposed office parallels the continuing authority of the State of New ment"), to license the proposed representative office of Bank in York to license offices of a foreign bank. The Board's approval of this accordance with any terms or conditions that the Department may application does not supplant the authority of the State of New York- impose. APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 4 Applicant(s) Bank(s) Effective Date HSBC Holdings pic, HSBC Asset Management Americas Inc. July 22, 1999 London, England New York, New York HSBC Finance (Netherlands), London, England HSBC Holdings B.V., Amsterdam, The Netherlands Popular, Inc., CheckChangers D.C., Inc., July 30, 1999 Hato Rey, Puerto Rico Washington, D.C. Popular Cash Express, Inc., LMBC Corp., Oak Park, Illinois Hialeah, Florida Money Transfer Center, Inc., North Miami, Florida Metro CheckCashers, Ltd., Inc., Miami, Florida Florida Check Cashers #1, Ltd., Opa Locka, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin • September 1999 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 Apex Mortgage Company, Edmond Bank and Trust, Kansas City June 30, 1999 Edmond, Oklahoma Edmond, Oklahoma Associated Banc-Corp, Riverside Acquisition Corp., Chicago July 2, 1999 Green Bay, Wisconsin Minneapolis, Minnesota Riverside Bancshares Corporation, Minneapolis, Minnesota Belvedere Capital Partners LLC, Placer Savings Bank, San Francisco July 14, 1999 San Francisco, California Auburn, California California Community Financial Institutions Fund Limited Partnership, San Francisco, California Placer Capital Co., San Francisco, California Cardinal Financial Corporation, Cardinal Bank-Manassas/Prince Richmond July 9, 1999 Fairfax, Virginia William, N.A., Manassas, Virginia Cardinal Bank-Dulles, N.A., Reston, Virginia Castle Creek Capital Partners Fund State National Bancshares, Inc., San Francisco July 1, 1999 Ha, L.P., Lubbock, Texas Rancho Santa Fe, California Castle Creek Capital Partners Fund lib, L.P., Rancho Santa Fe, California Coconut Grove Bankshares, Inc., Coconut Grove Bank, Atlanta July 8, 1999 Coconut Grove, Florida Coconut Grove, Florida Community Banks of the South, Inc., Southern Community Bank, Atlanta July 1, 1999 Orlando, Florida Orlando, Florida Community First Bancshares, Inc., Valley National Corporation, Minneapolis July 8, 1999 Fargo, North Dakota El Cajon, California Valle de Oro Bank, National Association, Spring Valley, California Eggemeyer Advisory Corp., State National Bancshares, Inc., San Francisco July 1, 1999 Rancho Santa Fe, California Lubbock, Texas WJR Corp., Castle Creek Partners Fund I, L.P., Rancho Santa Fe, California Rancho Santa Fe, California Castle Creek Capital L.L.C., Castle Creek Capital Partners Fund Ha, Rancho Santa Fe, California L.P., Rancho Santa Fe, California Castle Creek Capital Partners Fund lib, L.P, Rancho Santa Fe, California First Bancshares Corporation, Baybank Corporation, Minneapolis July 14, 1999 Gladstone, Michigan Gladstone, Michigan First Banks, Inc., Century Bank, St. Louis July 12, 1999 Creve Coeur, Missouri Beverly Hills, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 651 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date First National Corporation, FirstBancorporation, Inc., Richmond June 28, 1999 Orangeburg, South Carolina Beaufort, South Carolina HaleCo Bancshares, Inc., La Plata Bancshares, Inc., Dallas July 15, 1999 Plainview, Texas Hereford, Texas Commerce Bancshares, Inc., La Plata Bancshares Delaware, Inc., Dover, Delaware Dover, Delaware The First National Bank of Hereford, Hereford, Texas HCNB Bancorp, Inc., Harbor Capital National Bank, Richmond July 8, 1999 Rockville, Maryland Rockville, Maryland Jamesmark Bancshares, Inc., Old Missouri National Bank, St. Louis June 30, 1999 Springfield, Missouri Springfield, Missouri James River Bankshares, Inc., State Bank of Remington, Inc., Richmond July 7, 1999 Suffolk, Virginia Remington, Virginia J. R. Montgomery Bancorporation, Fort Sill National Bank, Kansas City June 25, 1999 Lawton, Oklahoma Fort Sill, Oklahoma La Plata Bancshares, Inc., The First National Bank of Hereford, Dallas July 15, 1999 Hereford, Texas Hereford, Texas La Plata Bancshares Delaware, Inc., Dover, Delaware Merchants & Manufacturers Pyramid Bancorp, Inc., Chicago June 30, 1999 Bancorp, Grafton, Wisconsin New Berlin, Wisconsin Grafton State Bank, Grafton, Wisconsin National Commerce Bancorporation, First Financial Corporation, St. Louis June 24, 1999 Memphis, Tennessee Mount Juliet, Tennessee First Bank & Trust, Mount Juliet, Tennessee Pembina County Bankshares, Ltd., Stephen Bancshares, Inc., Minneapolis June 30, 1999 Cavalier, North Dakota Stephen, Minnesota Farmers State Bank of Stephen, Stephen, Minnesota Peoples Bancorp, Inc., The Peoples' Bank of Arlington Chicago July 2, 1999 Arlington Heights, Illinois Heights, Arlington Heights, Illinois Peoples Bancorp of North Carolina, Peoples Bank, Richmond July 21, 1999 Inc., Newton, North Carolina Newton, North Carolina Premier Bancshares, Inc., North Fulton Bancshares, Inc., Atlanta July 15, 1999 Atlanta, Georgia Roswell, Georgia Milton National Bank, Roswell, Georgia Quincy Bancshares, Inc., Bank of Quincy, St. Louis July 16, 1999 Quincy, Illinois Quincy, Illinois Third Street Bancshares, Inc., Settlers Bank, Cleveland July 14, 1999 Marietta, Ohio Marietta, Ohio Tonti Financial Corporation, Greater Ohio River Corporation, Cleveland July 8, 1999 Columbus, Ohio Columbus, Ohio Union Bankshares, Inc., Citizens Savings Bank & Trust Boston July 9, 1999 Morrisville, Vermont Company, St. Johnsbury, Vermont United Americas Bancshares, Inc. United Americas Bank, Atlanta July 1, 1999 Atlanta, Georgia Atlanta, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin • September 1999 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date United Financial Corp., Valley Bancorp., Minneapolis July 15, 1999 Great Falls, Montana Phoenix, Arizona Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Bank of Montreal, EFS, Inc., Chicago July 20, 1999 Toronto, Canada Chicago, Illinois Bankmont Financial Corporation, BankBoston (NH), N.A., Chicago, Illinois Nashua, New Hampshire Central Bancompany, Fulton Bancorp, Inc., St. Louis July 12, 1999 Jefferson City, Missouri Fulton, Missouri Fulton Savings Bank, FSB, Fulton, Missouri Cowlitz Bancorporation, Independent Financial Network, Inc., San Francisco June 29, 1999 Longview, Washington Bellevue, Washington Credit Suisse Group, Warburg, Pincus Asset Management New York June 30, 1999 Zurich, Switzerland Holdings, Inc., Credit Suisse First Boston, New York, New York Zurich, Switzerland Credit Suisse Asset Management, New York, New York E.M. Warburg, Pincus & Co., LLC, New York, New York Warburg, Pincus & Co., New York, New York Farmers State Corporation, Southwest State Agency, Minneapolis July 9, 1999 Mankato, Minnesota Springfield, Minnesota Fifth Third Bancorp, Vanguard Financial Company, Cleveland June 23, 1999 Cincinnati, Ohio Cincinnati, Ohio Fifth Third Bank Cincinnati, Cincinnati, Ohio First Western Bancorp, Inc., Vollmer Insurance, Minneapolis July 14, 1999 Huron, South Dakota Newell, South Dakota Mahaska Investment Company, Midwest Bancshares, Inc., Chicago July 22, 1999 Oskaloosa, Iowa Burlington, Iowa Midwest Federal Savings and Loan Association of Eastern Iowa, Burlington, Iowa Northern Star Financial, Inc., Homeland Mortgage LLC, Minneapolis July 2, 1999 Mankato, Minnesota Morris, Minnesota Northwest Financial Corp., Gateway Savings Bank, Chicago July 14, 1999 Spencer, Iowa Ankeny, Iowa South Holland Bancorp, Inc., South Holland Mortgage, LLC, Chicago July 8, 1999 South Holland, Illinois South Holland, Illinois South Holland Trust and Savings Mortgage Bank Services, LLC, Bank, South Holland, Illinois South Holland, Illinois Wells Fargo & Company, Goodson Insurance Agency, Inc., San Francisco July 12, 1999 San Francisco, California Greenwood, Colorado Norwest Insurance, Inc., Minneapolis, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 653 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Westdeutsche Landesbank Fixed-Income Investment Management New York July 15, 1999 Girozentrale, Division of Nicholas-Applegate Dusseldorf, Germany Capital Management, Criterion Investment Management, Houston, Texas LLC, Houston, Texas Western State Agency, Inc., Towner Insurance Agency, Minneapolis July 21, 1999 Devils Lake, North Dakota Towner, North Dakota Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date BB&T Corporation, Matewan Bancshares, Inc., Richmond July 15, 1999 Winston-Salem, North Carolina Williamson, West Virginia 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 Bank of Utah, FCB Acquisition Corporation, San Francisco July 16, 1999 Ogden, Utah Ogden, Utah First Bancorp, Inc., Logan, Utah First Commerce Bank, Logan, Utah County Bank, Town and Country Finance and Thrift, San Francisco July 16, 1999 Merced, California Turlock, California F&M Bank-Winchester, Wachovia Bank, National Association, Richmond June 28, 1999 Winchester, Virginia Winston-Salem, North Carolina JRB Acquisition Bank, Inc. State Bank of Remington, Inc., Richmond July 7, 1999 Suffolk, Virginia Remington, Virginia WestStar Bank, Western Colorado Bank, Kansas City July 15, 1999 Vail, Colorado Montrose, Colorado Bank of Telluride, Telluride, Colorado PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the ments. The Board filed a motion to dismiss on June 15, Federal Reserve Banks in which the Board of Governors is not 1999. named a party. Hunter v. Board of Governors, No. 1:98CV02994 (TFH) (D.D.C., filed December 9, 1998). Action under the Free- Sedgwick v. Board of Governors, No. Civ 99 0702 (D. Ari- dom of Information Act and the Privacy Act. The Board zona, filed April 14, 1999). Action under Federal Tort filed a motion to dismiss or for summary judgment on Claims Act alleging violation of bank supervision require- July 22, 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin • September 1999 Folstad v. Board of Governors, No. 1:99 CV 124 (W.D. Mich., all federal defendants. The court dismissed the action on filed February 17, 1999). Freedom of Information Act com- March 31, 1999, and on April 28, 1999, the plaintiff filed a plaint. On March 23, 1999, the Board filed a motion to notice of appeal. dismiss or for summary judgment. Bettersworth v. Board of Governors, No. 97-CA-624 (W.D. Nelson v. Greenspan, No. 1:99CV00215 (EGS) (D.D.C., filed Tex., filed August 21, 1997). Privacy Act case. On June 1, January 28, 1999). Employment discrimination complaint. 1999, the Board filed a motion for summary judgment. On March 29, 1999, the Board filed a motion to dismiss the action. Fraternal Order of Police v. Board of Governors, No. 1:98CV03116 (D.D.C., filed December 22, 1998). Declara- FINAL ENFORCEMENT ORDERS ISSUED BY THE tory judgment action challenging Board labor practices. On BOARD OF GOVERNORS February 26, 1999, the Board filed a motion to dismiss the action. Bruce Jeffrey Kingdon, Kenneth Goglia, and Harvey Plante Inner City Press/Community on the Move v. Board of Governors, No. 98-9604 (2d Cir., filed December 3, 1998). Appeal of district court order dated October 6, 1998, granting Bankers Trust Company summary judgment for the Board in a Freedom of Informa- New York, New York tion Act case. The court heard oral argument on June 2, 1999, and affirmed the district court's order on June 23, The Federal Reserve Board announced on July 19, 1999, 1999. the issuance of a Notice of Intent to Prohibit against Bruce Independent Community Bankers of America v. Board of Gov- Jeffrey Kingdon, Kenneth Goglia and Harvey Plante, ernors, No. 98-1482 (D.C. Cir., filed October 21, 1998). former officers of the Bankers Trust Company, New York, Petition for review of a Board order dated September 23, New York. The Notice seeks the issuance of orders perma- 1998, conditionally approving the applications of Travelers nently barring Messrs. Kingdon, Goglia and Plante from Group, Inc., New York, New York, to become a bank participating in the banking industry. holding company by acquiring Citicorp, New York, New York, and its bank and nonbank subsidiaries. Oral argument Joseph C. Liu is scheduled for October 1, 1999. Great Eastern Bank Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK) Flushing, New York (S.D.N.Y., filed May 15, 1998). Action to freeze assets of individual pending administrative adjudication of civil money penalty assessment by the Board. On May 26, 1998, The Federal Reserve Board announced on July 30, 1999, the court issued a preliminary injunction restraining the the issuance of a Notice of Suspension against Joseph C. transfer or disposition of the individual's assets and appoint- Liu, the President, Chief Executive Officer and a director ing the Federal Reserve Bank of New York as receiver for of the Great Eastern Bank, Flushing, New York. those assets. John Riesmeyer Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed May 4, 1998). Appeal and cross-appeal of district court Barclays Bank PLC order granting in part and denying in part the Board's London, England motion for summary judgment seeking prejudgment interest and a statutory surcharge in connection with a civil money penalty assessed by the Board. On February 24, 1999, the The Federal Reserve Board announced on July 7, 1999, the court granted the Board's appeal and denied the cross- issuance of a Combined Order to Cease and Desist and appeal, and remanded the matter to the district court for Order of Assessment of a Civil Money Penalty against determination of prejudgment interest due to the Board. John Riesmeyer, a former foreign exchange trader and institution-affiliated party of the New York Branch of Bar- Fenili v. Davidson, No. C-98-01568-CW (N.D. California, clays Bank PLC, London, England. filed April 17, 1998). Tort and constitutional claim arising out of return of a check. On June 5,1998, the Board filed its motion to dismiss. Logan v. Greenspan, No. 1:98CV00049 (D.D.C., filed Janu- WRITTEN AGREEMENT APPROVED BY FEDERAL ary 9, 1998). Employment discrimination complaint. RESERVE BANKS Goldman v. Department of the Treasury, No. 98-9451 (11th Circuit, filed November 10, 1998). Appeal from a District Grimes County Capital Corporation Court order dismissing an action challenging Federal Houston, Texas Reserve notes as lawful money. Kerr v. Department of the Treasury, No. CV-S-97-01877- The Federal Reserve Board announced on July 20, 1999, DWH (D. Nev., filed December 22, 1997). Challenge to the execution of a Written Agreement by and between income taxation and Federal Reserve notes. On Septem- Grimes County Capital Corporation, Houston, Texas, and ber 3, 1998, a motion to dismiss was filed on behalf of the Federal Reserve Bank of Dallas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance—Continued A27 Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, and debt measures A29 U.S. government securities dealers— A5 Reserves of depository institutions and Reserve Bank Positions and financing credit A30 Federal and federally sponsored credit A6 Reserves and borrowings—Depository agencies—Debt outstanding institutions Securities Markets and Corporate Finance Policy Instruments A31 New security issues—Tax-exempt state and local A7 Federal Reserve Bank interest rates governments and corporations A8 Reserve requirements of depository institutions A32 Open-end investment companies—Net sales A9 Federal Reserve open market transactions and assets A32 Corporate profits and their distribution Federal Reserve Banks A32 Domestic finance companies—Assets and 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 A3 5 Mortgage debt outstanding A12 Aggregate reserves of depository institutions and monetary base A13 Money stock and debt measures Consumer Credit A3 6 Total outstanding Commercial Banking Institutions— A3 6 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 A23 Interest rates—Money and capital markets A42 Nonfinancial business activity A24 Stock market—Selected statistics A42 Labor force, employment, and unemployment 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

61 Federal Reserve Bulletin • September 1999 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 A62 Foreign exchange rates Banks A52 Selected U.S. liabilities to foreign official A63 GUIDE TO STATISTICAL RELEASES AND institutions SPECIAL TABLES Reported by Banks in the United States SPECIAL TABLES A52 Liabilities to, and claims on, foreigners A53 Liabilities to foreigners A64 Residential lending reported under the Home A55 Banks' own claims on foreigners Mortgage Disclosure Act, 1998 A56 Banks' own and domestic customers' claims on A73 Disposition of applications for private mortgage foreigners insurance, 1998 A56 Banks' own claims on unaffiliated foreigners A76 Small loans to businesses and farms, 1998 A57 Claims on foreign countries—Combined A79 Community development lending reported under the domestic offices and foreign branches Community Reinvestment Act, 1998 Reported by Nonbanking Business A80 INDEX TO SPECIAL TABLES Enterprises in the United States A58 Liabilities to unaffiliated foreigners A59 Claims on unaffiliated foreigners Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected GNMA Government National Mortgage Association e Estimated GDP Gross domestic product n.a. Not available HUD Department of Housing and Urban p Preliminary Development r Revised (Notation appears on column heading IMF International Monetary Fund when about half of the figures in that column IO Interest only are changed.) IPCs Individuals, partnerships, and corporations * Amounts insignificant in terms of the last decimal IRA Individual retirement account place shown in the table (for example, less than MMDA Money market deposit account 500,000 when the smallestunit given is millions) MSA Metropolitan statistical area 0 Calculated to be zero NOW Negotiable order of withdrawal . . . Cell not applicable OCD Other checkable deposit ATS Automatic transfer service OPEC Organization of Petroleum Exporting Countries BIF Bank insurance fund OTS Office of Thrift Supervision CD Certificate of deposit PMI Private mortgage insurance CMO Collateralized mortgage obligation PO Principal only CRA Community Reinvestment Act of 1977 REIT Real estate investment trust FFB Federal Financing Bank REMIC Real estate mortgage investment conduit FHA Federal Housing Administration RHS Rural Housing Service FHLBB Federal Home Loan Bank Board RP Repurchase agreement FHLMC Federal Home Loan Mortgage Corporation RTC Resolution Trust Corporation FmHA Farmers Home Administration SCO Securitized credit obligation FNMA Federal National Mortgage Association SDR Special drawing right FSLIC Federal Savings and Loan Insurance Corporation SIC Standard Industrial Classification G-7 Group of Seven VA Department of Veterans Affairs G-10 Group of Ten 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 Nonfinancial Statistics • September 1999 l.to RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1998 1999 1999 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q3 Q4 Qlr Q2 Feb.r Mar.r Apr. May June Reserves of depository institutions2 1 Total -7.7 -1.8 -1.2 -6.5 -15.3 -22.5 7.2 10.4 -40.3 2 Required -8.9 -2.5 1.0 -5.6 -7.0 -25.6 11.5 8.0 -41.7 3 Nonborrowed -8.6 -.6 -1.3 -6.7 -13.0 -21.1 4.4r 11.5 -40.9 4 Monetary base3 6.9 8.7 9.1 10.1 9.4 7.8 10.3 13.9 6.1 Concepts of money and debt4 5 Ml -2.0 5.0 2.8 3.4 1.8 10.3 6.9 -4.0 -4.1 6 M2 6.9 11.0 7.2 5.7 5.7 2.7 8.8 4.6 4.2 7 M3 8.6 12.8r 7.5 5.2 9.4 -1.2 8.2r 5.0 5.3 8 Debt 5.8r 6.3r 5.9 n.a. 4.9 7.0 6.9 5.2 n.a. Nontransaction components 9 In M25 9.9 13.0 8.7 6.4 6.9 .3 9.4 7.4 6.9 10 In M3 only6 13.4r 17.9r 8.2 4.0 19.8 -12.1 6.7r 6.1 8.5 Time and savings deposits Commercial banks 11 Savings, including MMDAs 15.8 17.6 11.6 9.6 5.4 .2 17.5 7.8 11.8 12 Small time7 .1 ,3r -5.4 -3.7 -7.7 -3.7 —3.5r -2.3 -2.7 13 Large time8'9 3.5 3.8r -.1 -3.9 -22.4 -18.6 12.7r -2.0 -9.2 Thrift institutions 14 Savings, including MMDAs 9.0 10.1 12.8 14.8 14.3 7.6 9.5 27.3 18.8 15 Small time7 -7.3 -6.7 -6.3 -6.7 -6.3 -7.8 -4.1 -7.1 -11.7 16 Large time8 .5 10.4 7.6 -7.0 -14.5 -14.7 4.1 -14.8 -1.4 Money market mutual funds 17 Retail 19.0 28.4 20.5 10.3 22.6 3.1 12.6 9.1 7.8 18 Institution-only 26.6 41.8 17.9 14.5 34.7 -1.8 21.1 13.8 7.7 Repurchase agreements and Eurodollars 19 Repurchase agreements10 11.5r 16.5r 11.7 -6.8 69.7 -48.7 — 37.0r 17.6 48.3 20 Eurodollars10 21.7 3.2r -.8 23.8 47.3 49.4 22.6r -2.2 4.4 Debt components4 21 Federal -1.5 -2.0 -2.6 n.a. -7.3 -1.1 -2.4 -5.3 n.a. 22 Nonfederal 8.2r 8.9r 8.5 n.a. 8.7 9.4 9.6 8.2 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- depository institutions, and (4) Eurodollars (overnight and term) held by U.S. residents at ing during preceding month or quarter. foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with and Canada. Excludes amounts held by depository institutions, the U.S. government, money regulatory changes in reserve requirements. (See also table 1.20.) market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally by summing large time deposits, institutional money fund balances, RP liabilities, adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency and Eurodollars, each seasonally adjusted separately, and adding this result to seasonally component of the money stock, plus (3) (for all quarterly reporters on the "Report of adjusted M2. Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference sectors—the federal sector (U.S. government, not including government-sponsored enterbetween current vault cash and the amount applied to satisfy current reserve requirements. prises or federally related mortgage pools) and the nonfederal sectors (state and local 4. Composition of the money stock measures and debt is as follows: governments, households and nonprofit organizations, nonfinancial corporate and nonfarm Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, commercial banks other than those owed to depository institutions, the U.S. government, and which are derived from the Federal Reserve Board's flow of funds accounts, are breakforeign banks and official institutions, less cash items in the process of collection and Federal adjusted (that is, discontinuities in the data have been smoothed into the series) and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of month-averaged (that is, the data have been derived by averaging adjacent month-end levels). withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail credit union share draft accounts, and demand deposits at thrift institutions. Seasonally money fund balances, each seasonally adjusted separately. adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities OCDs, each seasonally adjusted separately. (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time term) of U.S. addressees, each seasonally adjusted separately. deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail 7. Small time deposits—including retail RPs—are those issued in amounts of less than money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions balances at depository institutions and money market funds. Seasonally adjusted M2 is are subtracted from small time deposits. calculated by summing savings deposits, small-denomination time deposits, and retail money 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those fund balances, each seasonally adjusted separately, and adding this result to seasonally booked at international banking facilities. adjusted M1. 9. Large time deposits at commercial banks less those held by money market funds, M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) depository institutions, the U.S. government, and foreign banks and official institutions. balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 10. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures Apr. May May 19 May 26 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 512,869 518,390 522,071 515,171 524,639 U.S. government securities2 2 Bought outright—System account3 469,926 477,296 484,748 476,179 480,308 482,393 483,903 484,684 485,298 3 Held under repurchase agreements 6,691 3,974 2,017 4,079 845 5,556 1,079 1,851 44 Federal agency obligations 4 Bought outright 311 311 276 311 311 311 311 263 5 Held under repurchase agreements 2,110 0 3,492 0 2,514 0 5,160 0 1,789 0 4,139 0 2,407 0 0 837 0 6 Acceptances 7 Lo A an d s j u to s tm de e p n o t s c it r o e r d y i t institutions 167 14 18 33 13 24 26 8 Seasonal credit 38 0 91 0 126 0 87 0 106 0 105 0 0 1110 14 0 2 9 Extended credit 10 Float 297 512 281 301 395 -16 364 695 350 11 Other Federal Reserve assets 33,330 32,700 32,090 32,794 31,409 32,138 31,506 31,906 32,202 12 Gold stock 11,050 11,049 11,047 11,049 11,048 11,048 11,047 11,047 11,047 1 1 3 4 T S r p e e a c s i u al r y d r c a u w rr i e n n g cy r ig o h u ts t st c a e n r d ti i f n i g c ate account 26 8 , , 7 2 0 00 2 r 26 8 , , 8 2 1 0 6 0 26 8 , , 9 2 0 0 7 0 2 8 6 , ,8 2 1 00 6 26 8 , , 8 2 4 0 5 0 26 8 , , 8 2 7 0 4 0 26 8 , , 8 2 8 0 8 0 26 8 , , 9 2 0 0 2 0 26 8 , , 9 2 1 0 6 0 ABSORBING RESERVE FUNDS 15 Currency in circulation 519,381r 523,518 528,576 523,123 523,790 528,315 528,969 528,215 527,891 16 Treasury cash holdings 144 148 108 147 142 144 136 109 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 6,379 5,421 5,929 5,157 4,888 4,897 4,855 5,449 7,023 18 Foreign 208 200 214 195 251 185 165 247 211 19 Service-related balances and adjustments .. 6,715r 6,889 6,962 6,779 6,954 6,882 6,900 6,727 7,026 20 Other 283 273 232 293 269 233 262 245 212 21 Other Federal Reserve liabilities and capital . 17,275 17,361 17,638 17,471 17,353 17,526 17,430 17,656 17,569 22 Reserve balances with Federal Reserve Banks' 8,435 10,644 8,565 11,843 7,617 12,579 7,080 10,022 5,304 End-of-month figures Wednesday figures Apr. May May 19 May 26 June 2 June 9 June 16 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 519,959 526,186 532.865 520,114 518,976 520,400 520,219 U.S. government securities2 2 Bought outright—System account3 473,573 482,531 484.866 477,335 480,718 481,204 484,706 484,812 485,243 3 Held under repurchase agreements 8,930 6,004 9,100 4,785 2,476 2,634 425 1,430 50 Federal agency obligations 4 Bought outright 311 311 259 311 311 311 311 263 263 5 6 Ac H ce e p ld ta u n n ce d s e r repurchase agreements 3,292 0 4,497 0 5,179 0 5,648 0 3,522 0 2,867 0 3,106 0 1,457 0 1,107 0 Loans to depository institutions 7 Adjustment credit 2 14 56 6 13 7 7 125 8 9 E Se x a te s n on d a e l d c c r r e e d d i i t t 65 0 107 0 164 0 95 0 11 0 0 97 0 93 0 12 0 8 16 0 9 0 Float 36 373 272 677 9 -1,236 89 72 279 1 Other Federal Reserve assets 33,749 32,350 32,968 31,258 31,821 31,578 31,664 32,051 32,386 12 Gold stock 11,050 11,048 11,046 11,048 11,048 11,048 11,047 11,047 11,046 13 Special drawing rights certificate account 8,200 8,200 8,200 8,200 8,200 8,200 8,200 8,200 8,200 14 Treasury currency outstanding 26,757r 26,874 26,930 26,816 26,845 26,874 26,888 26,902 26,916 ABSORBING RESERVE FUNDS 15 Currency in circulation 519,751' 528,042 531,952 524,132 526,448 529,987 529,545 528,984 528,946 16 Treasury cash holdings 167 145 90 141 145 140 112 90 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 10,040 5,056 6,720 4,783 5,101 4,979 4,683 4,709 6,885 18 Foreign 260 157 410 188 211 270 166 195 174 19 Service-related balances and adjustments . . 6,786r 6,882 7,220 6,779 6,954 6,882 6,900 6,727 7,026 20 Other 263 223 241 305 235 266 253 251 199 21 Other Federal Reserve liabilities and capital . 17,214 17,575 17,662 17,244 17,121 17,110 17,362 17,368 17,294 22 Reserve balances with Federal Reserve Banks4 11,486r 14,226 14,745 12,604 8,855 3,954 7,513 8,046 5,171 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 3. Includes compensation that adjusts for the effects of inflation on the principal of 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged inflation-indexed securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 4. Excludes required clearing balances and adjustments to compensate for float. under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • September 1999 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1996 1997 1998 1998 1999 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr/ May June 1 Reserve balances with Reserve Banks2 13,330 10,664 9,021 9,021 9,658 8,578 8,851 9,238 10,070 8,541 2 Total vault cash3 44,525 44,740 44,305 44,305 45,499 46,468 42,898 42,163 42,458 42,631 3 Applied vault cash4 37,844 37,255 35,997 35,997 36,687 36,660 34,270 34,407 34,805 33,856 4 Surplus vault cash5 6,681 7,485 8,308 8,308 8,812 9,809 8,628 7,757 7,653 8,775 5 Total reserves6 51,174 47,920 45,018 45,018 46,345 45,237 43,121 43,645 44,875 42,397 6 Required reserves 49,758 46,235 43,435 43,435 44,811 44,022 41,816 42,486 43,619 41,133 7 Excess reserve balances at Reserve Banks7 1,416 1,685 1,583 1,583 1,534 1,215 1,305 1,159 1,256 1,264 8 Total borrowings at Reserve Banks8 155 324 117 117 206 116 65 166 127 145 9 Seasonal borrowings 68 79 15 15 7 9 18 39 89 127 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 Biweekly averages of daily figures for two week periods ending on dates indicated 1999 Feb. 24 Mar. 10 Mar. 24 Apr. 7 Apr. 21 May 5r May 19 June 2 June 16 June 30 1 Reserve balances with Reserve Banks2 8,233 9,356 8,309 9,213 8,409 10,547 9,878 10,096 8,546 8,315 2 Total vault cash3 45,597 42,284 43,524 42,525 42,349r 41,594 42,562 42,696 41,828 43,425 3 Applied vault cash4 35,997 34,007 34,521 34,147 34,422 34,586 34,749 34,962 33,492 34,062 4 Surplus vault cash5 9,600 8,277 9,004 8,378 1,921' 7,009 7,813 7,735 8,336 9,364 5 Total reserves6 44,230 43,362 42,830 43,360 42,831 45,133 44,626 45,058 42,037 42,377 6 Required reserves 43,041 42,062 41,613 41,872 41,915 43,852 43,533 43,623 40,883 41,028 7 Excess reserve balances at Reserve Banks7 1,189 1,300 1,217 1,487 916 1,281 1,093 1,434 1,154 1,348 8 Total borrowings at Reserve Banks8 112 22 63 130 149 223 103 117 114 180 9 Seasonal borrowings 9 14 18 24 33 59 85 106 100 158 10 Extended credit9 0 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For 5. Total vault cash (line 2) less applied vault cash (line 3). ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 2. Excludes required clearing balances and adjustments to compensate for float and (line 3). includes other off-balance-sheet "as-of' adjustments. 7. Total reserves (line 5) less required reserves (line 6). 3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by 8. Also includes adjustment credit. those banks and thrifts that are not exempt from reserve requirements. Dates refer to the 9. Consists of borrowing at the discount window under the terms and conditions estabmaintenance periods in which the vault cash can be used to satisfy reserve requirements. lished for the extended credit program to help depository institutions deal with sustained 4. All vault cash held during the lagged computation period by "bound" institutions (that liquidity pressures. Because there is not the same need to repay such borrowing promptly as is, those whose required reserves exceed their vault cash) plus the amount of vault cash with traditional short-term adjustment credit, the money market effect of extended credit is applied during the maintenance period by "nonbound" institutions (that is, those whose vault similar to that of nonborrowed reserves. 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 credit' Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 8/ O 6/ n 9 9 Effective date Previous rate 8/ O 6/ n 9 9 Effective date Previous rate 8/ O 6/ n 9 9 Effective date Previous rate Boston 4.50 11/18/98 4.75 5.10 7/15/99 5.00 5.60 7/15/99 5.50 New York 11/17/98 Philadelphia 11/17/98 Cleveland 11/19/98 Richmond 11/18/98 Atlanta 11/18/98 Chicago 11/19/98 St. Louis 11/19/98 Minneapolis 11/19/98 Kansas City 11/18/98 Dallas 11/17/98 San Francisco .... 4.50 11/17/98 4.75 5.10 7/15/99 5.00 5.60 7/15/99 5.50 Range of rates for adjustment credit in recent years4 Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank level)—All of Effective date level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1977 1982—July 20 11.5-12 11.5 1990—Dec. 19 6.5 6.5 23 11.5 11.5 1978—Jan. 9 6-6.5 6.5 Aug. 2 11-11.5 11 1991—Feb. 1 6-6.5 6 20 6.5 6.5 3 11 11 4 6 6 May 11 6.5-7 7 16 10.5 10.5 Apr. 30 5.5-6 5.5 12 7 7 27 10-10.5 10 May 2 5.5 5.5 July 3 7-7.25 7.25 30 10 10 Sept. 13 5-5.5 5 10 7.25 7.25 Oct. 12 9.5-10 9.5 17 5 5 Aug. 21 7.75 7.75 13 9.5 9.5 Nov. 6 4.5-5 4.5 Sept. 22 8 8 Nov. 22 9-9.5 9 7 4.5 4.5 Oct. 16 8-8.5 8.5 26 9 9 Dec. 20 3.5^4.5 3.5 20 8.5 8.5 Dec. 14 8.5-9 9 24 3.5 3.5 Nov. 1 8.5-9.5 9.5 15 8.5-9 8.5 3 9.5 9.5 17 8.5 8.5 1992—July 2 3-3.5 3 7 3 3 1979—July 20 10 10 1984—Apr. 9 8.5-9 9 Aug. 17 10-10.5 10.5 13 9 9 1994—May 17 3-3.5 3.5 20 10.5 10.5 Nov. 21 8.5-9 8.5 18 3.5 3.5 Sept. 19 10.5-11 11 26 8.5 8.5 Aug. 16 3.5-1 4 21 11 11 Dec. 24 8 8 18 4 4 Oct. 8 11-12 12 Nov. 15 4-4.75 4.75 10 12 12 1985—May 20 7.5-8 7.5 17 4.75 4.75 24 7.5 7.5 1980—Feb. 15 12-13 13 1995—Feb. 1 4.75-5.25 5.25 19 13 13 1986—Mar. 7 7-7.5 7 9 5.25 5.25 May 29 12-13 13 10 7 7 30 12 12 Apr. 21 6.5-7 6.5 1996—Jan. 31 5.00-5.25 5.00 June 13 11-12 11 23 6.5 6.5 Feb. 5 5.00 5.00 16 11 11 July 11 6 6 July 28 10-11 10 Aug. 21 5.5-6 5.5 1998—Oct. 15 4.75-5.00 4.75 29 10 10 22 5.5 5.5 Oct. 16 4.75 4.75 Sept. 26 11 11 Nov. 17 12 12 1987—Sept. 4 5.5-6 6 1998—Nov. 17 4.50-4.75 4.50 Dec. 5 12-13 13 11 6 6 Nov. 19 4.50 4.50 8 13 13 1981—May 5 13-14 14 1988—Aug. 9 6-6.5 6.5 IInn eeffffeecctt AAuugg.. 66,, 11999999 4.50 4.50 8 14 14 11 6.5 6.5 Nov. 2 13-14 13 6 13 13 1989—Feb. 24 6.5-7 7 Dec. 4 12 12 27 7 7 1. Available on a short-term basis to help depository institutions meet temporary needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that cannot be met through reasonable alternative sources. The highest rate established flexible rate somewhat above rates charged on market sources of funds is charged. The rate for loans to depository institutions may be charged on adjustment credit loans of unusual size ordinarily is reestablished on the first business day of each two-week reserve maintenance that result from a major operating problem at the borrower's facility. period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis 2. Available to help relatively small depository institutions meet regular seasonal needs for points. funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 4. For earlier data, see the following publications of the Board of Governors: Banking and that cannot be met through special industry lenders. The discount rate on seasonal credit takes Monetary Statistics, 1914-194], and 1941-1970; and the Annual Statistical Digest, 1970into account rates charged by market sources of funds and ordinarily is reestablished on the 1979. first business day of each two-week reserve maintenance period; however, it is never less than In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit the discount rate applicable to adjustment credit. borrowings by institutions with deposits of $500 million or more that had borrowed in 3. May be made available to depository institutions when similar assistance is not successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was reasonably available from other sources, including special industry lenders. Such credit may in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed be provided when exceptional circumstances (including sustained deposit drains, impaired on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to access to money market funds, or sudden deterioration in loan repayment performance) or 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, practices involve only a particular institution, or to meet the needs of institutions experiencing and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the difficulties adjusting to changing market conditions over a longer period (particularly at times surcharge was changed from a calendar quarter to a moving thirteen-week period. The of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is surcharge was eliminated on Nov. 17, 1981. charged on extended-credit loans outstanding less than thirty days; however, at the discretion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • September 1999 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt Percentage of deposits Effective date Net transaction accounts2 1 $0 million-$46.5 million3 33333 1111122222/////3333311111/////9999988888 2 More than $46.5 million4 1111100000 1111122222/////3333311111/////9999988888 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 1. Required reserves must be held in the form of deposits with Federal Reserve Banks succeeding calendar year by 80 percent of the percentage increase in the total reservable or vault cash. Nonmember institutions may maintain reserve balances with a Federal liabilities of all depository institutions, measured on an annual basis as of June 30. No Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For corresponding adjustment is made in the event of a decrease. 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 December 31, 1998, for depository institutions that report include commercial banks, savings banks, savings and loan associations, credit unions, weekly, and with the period beginning January 14, 1999, for institutions that report quarterly, agencies and branches of foreign banks, and Edge Act corporations. the exemption was raised from $4.7 million to $4.9 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 years was reduced from 3 percent to 1 x/i percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1V'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 years or more has been zero since Oct. 6, 1983. December 31, 1998, for depository institutions that report weekly, and with the period 6. The reserve requirement on Eurocurrency liabilities was reduced from 3 percent to zero beginning January 14, 1999, for institutions that report quarterly, the amount was decreased in the same manner and on the same dates as the reserve requirement on nonpersonal time from $47.8 million to $46.5 million. deposits with an original maturity of less than 1 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 1998 1999 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar. Apr. May U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 9,901 9,147 3,550 0 0 0 0 00 00 00 ? Gross sales 0 0 0 0 0 0 0 0 0 0 Exchanges 426,928 436,257 450,835 34,957 41,393 35,069 36,862 35,065 48,142 37,107 4 For new bills 426,928 435,907 450,835 34,957 41,393 35,069 36,862 35,065 48,142 37,107 5 Redemptions 0 0 2,000 0 0 0 0 0 0 0 Others within one year Gross purchases 524 5,549 6,297 662 0 0 2,103 1,060 1,677 11,,442211 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 30,512 41,716 46,062 5,444 2,539 2,865 5,578 3,015 3,768 3,768 9 Exchanges -41,394 -27,499 -49,434 -8,093 -2,555 -400 -7,458 -5,956 -3,370 -4,607 10 Redemptions 2,015 1,996 2,676 0 0 492 0 0 726 0 One to five years 11 Gross purchases 3,898 19,680 12,901 2,397 0 0 2,752 2,428 3,362 44,,444422 1? Gross sales 0 0 0 0 0 0 0 0 0 0 N Maturity shifts -25,022 -37,987 -37,777 -4,574 -2,539 -2,865 -4,928 -3,015 -3,768 -3,768 14 Exchanges 31,459 20,274 37,154 6,013 2,555 0 4,778 5,956 3,020 2,562 Five to ten years 15 Gross purchases 1,116 3,849 2,294 862 0 0 335 346 945 1,584 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,469 -1,954 -5,908 718 0 0 -650 0 0 0 18 Exchanges 6,666 5,215 7,439 1,135 0 400 1,340 0 0 2,045 More than ten years 19 Gross purchases 1,655 5,897 4,884 698 0 615 0 2,404 262 22,,889900 70 Gross sales 0 0 0 0 0 0 0 0 0 0 ?1 Maturity shifts -20 -1,775 -2,377 -1,589 0 0 0 0 0 0 22 Exchanges 3,270 2,360 4,842 945 0 0 1,340 0 350 0 All maturities 7.3 Gross purchases 17,094 44,122 29,926 4,619 0 615 5,190 6,238 6,246 10,337 74 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 2,015 1,996 4,676 0 0 492 0 0 726 0 Matched transactions ?6 Gross purchases 3,092,399 3,577,954 4,395,430 358,438 418,538 365,779 324,078 393,267 366,838 356,960 27 Gross sales 3,094,769 3,580,274 4,399,330 359,256 420,397 363,604 322,669 394,865 364,476 358,362 Repurchase agreements ?8 Gross purchases 457,568 810,485 512,671 23,884 49,296 21,968 2266,,009988 6622,,887788 4455,,006677 2277,,660055 29 Gross sales 450,359 809,268 514,186 19,200 38,592 37,157 27,025 53,706 48,867 30,531 30 Net change in U.S. Treasury securities 19,919 41,022 19,835 8,484 8,845 -12,891 5,672 13,812 4,082 6,008 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 00 00 00 3? Gross sales 0 0 25 0 0 0 0 0 0 0 33 Redemptions 409 1,540 322 20 30 2 0 25 0 0 Repurchase agreements 34 Gross purchases 75,354 160,409 284,316 51,419 48,815 23,577 37,416 35,731 20,623 3388,,116677 35 Gross sales 74,842 159,369 276,266 48,785 44,285 31,744 36,067 34,009 22,937 36,962 36 Net change in federal agency obligations 103 -500 7,703 2,614 4,500 -8,169 1,349 1,697 -2,314 1,205 37 Total net change in System Open Market Account.. . 20,021 40,522 27,538 11,098 13,345 -21,060 7,021 15,509 1,768 7,213 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 Nonfinancial Statistics • September 1999 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1999 1999 June 2 June 9 June 16 June 23 June 30 Apr. 30 May 31 June 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,048 11.047 11,047 11,046 11,046 11,050 11,048 11,046 2 Special drawing rights certificate account 8,200 8,200 8,200 8,200 8,200 8,200 8,200 8,200 3 348 345 342 337 311 430 372 311 Loans 4 To depository institutions 110 100 135 294 220 68 121 220 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 311 311 263 263 259 311 311 259 8 Held under repurchase agreements 2,867 3,106 1,457 1,107 5,179 3,292 4,497 5,179 9 Total U.S. Treasury securities 483,838 485,131 486,242 485,293 493,966 482,503 488,535 493,966 10 Bought outright" 481,204 484,706 484,812 485,243 484,866 473,573 482,531 484,866 11 Bills 196,390 199,004 198.089 198,512 198,127 199,121 197,719 198,127 17 207,109 207,995 208,843 208,849 208,855 199,721 207,108 208,855 n Bonds 77,704 77,706 77,880 77,882 77,884 74,731 77,704 77,884 14 Held under repurchase agreements 2,634 425 1,430 50 9,100 8,930 6,004 9,100 15 Total loans and securities 487,126 488,648 488,096 486,957 499,624 486,174 493,463 499,624 16 Items in process of collection 13,053 7,833 7,625 6,912 7,765 5,248 5,658 7,765 17 Bank premises 1,315 1,316 1,316 1,320 1,321 1,310 1,315 1,321 Other assets 18 Denominated in foreign currencies3 14,863 14.867 14,871 14,874 14,799 15,034 14,860 14,799 19 All other4 15,443 15,499 15,920 16,205 16,898 17,336 16,164 16,898 20 Total assets 551,395 547,754 547,418 545,850 559,964 544,782 551,080 559,964 LIABILITIES 21 Federal Reserve notes 503,601 503,115 502,513 502,457 505,423 493,590 501,685 505,423 22 Total deposits 20,064 19,906 20,073 19,282 29,527 28,623 26,577 29,527 23 Depository institutions 14,549 14,804 14,918 12,024 22,156 18,061 21,140 22,156 24 U.S. Treasury—General account 4,979 4,683 4,709 6,885 6,720 10,040 5,056 6,720 25 Foreign—Official accounts 270 166 195 174 410 260 157 410 26 Other 266 253 251 199 241 263 223 241 27 Deferred credit items 10,619 7,371 7,465 6,818 7,352 5,354 5,243 7,352 28 Other liabilities and accrued dividends5 4,333 4,334 4,272 4,202 4,654 4,493 4,474 4,654 29 Total liabilities 538,617 534,726 534,322 532,759 546,956 532,062 537,979 546,956 CAPITAL ACCOUNTS 30 Capital paid in 6,247 6,264 6,286 6,291 6,282 6,182 6,239 6,282 31 Surplus 5,952 5.952 5,952 5,952 5,952 5,952 5,952 5,952 32 Other capital accounts 579 811 858 849 775 586 911 775 33 Total liabilities and capital accounts 551,395 547,754 547,418 545,850 559,964 544,782 551,080 559,964 MEMO 34 Marketable U.S. Treasury securities held in custody for foreign and international accounts n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Banks) 713,123 716,340 719,743 723,418 726,892 687,900 710,687 726,892 36 LESS: Held by Federal Reserve Banks 209,521 213,225 217,230 220,961 221,469 194,309 209,002 221,469 37 Federal Reserve notes, net 503,601 503,115 502,513 502,457 505,423 493,590 501,685 505,423 Collateral held against notes, net 38 Gold certificate account 11,048 11,047 11,047 11,046 11,046 11,050 11,048 11,046 39 Special drawing rights certificate account 8,200 8,200 8,200 8,200 8,200 8,200 8,200 8,200 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 484,354 483,868 483,266 483,211 486,177 474,340 482,437 486,177 42 Total collateral 503,601 503,115 502,513 502,457 505,423 493,590 501,685 505,423 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 3. Valued monthly at market exchange rates. release. For ordering address, see inside front cover. 4. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury 2. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with bills maturing within ninety days. Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on 5. Includes exchange-translation account reflecting the monthly revaluation at market the principal of inflation-indexed securities. Excludes securities sold and scheduled to be exchange rates of foreign exchange commitments. bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 1999 1999 June 2 June 9 June 16 June 23 June 30 Apr. 30 May 31 June 30 1 Total loans 110 100 135 294 220 65 68 193 2 Within fifteen days' 37 24 126 272 149 64 40 159 3. Sixteen days to ninety days 73 76 9 22 71 1 28 34 4 Total U.S. Treasury securities2 483,838 485,132 486,242 485,293 493,966 478,416 482,503 493,966 5 Within fifteen days' 17,182 10,760 12,685 13,995 24,353 26,785 13,804 24,353 6 Sixteen days to ninety days 93,767 100,529 98,509 101,142 92,490 98,303 103,293 92,490 7 Ninety-one days to one year 139,774 140,719 140,904 136,004 142,621 134,439 142,071 142,621 8 One year to five years 121,096 121,098 122,047 122,048 122,393 112,263 115,147 122,393 9 Five years to ten years 49,404 49,408 49,478 49,483 49,487 46,598 47,546 49,487 10 More than ten years 62,615 62,617 62,619 62,621 62,623 60,029 60,642 62,623 11 Total federal agency obligations 3,176 3,417 1,720 1,370 5,438 5,917 3,603 5,438 12 Within fifteen days' 2,915 3,152 1,461 1,111 5,184 5,606 3,292 5,184 13 Sixteen days to ninety days 25 25 21 21 16 27 37 16 14 Ninety-one days to one year 68 68 68 68 68 79 79 68 15 One year to five years 20 20 20 20 20 30 20 20 16 Five years to ten years 150 150 150 150 150 175 175 150 17 More than ten years 0 0 0 0 0 0 0 0 1. Holdings under repurchase agreements are classified as maturing within fifteen days in 2. Includes compensation that adjusts 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 • September 1999 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1998 1999 1995 1996 1997 1998 Dec. Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 56.45 50.16 46.86 44.90 44.50 44.90 45.13 44.55 43.72 43.98 44.36 42.87 2 Nonborrowed reserves4 56.20 50.01 46.54 44.79 44.41 44.79 44.92 44.44 43.65 43.81r 44.23 42.73 3 Nonborrowed reserves plus extended credit5 56.20 50.01 46.54 44.79 44.41 44.79 44.92 44.44 43.65 43.81r 44.23 42.73 4 Required reserves 55.16 48.75 45.18 43.32 42.87 43.32 43.59 43.34 42.41 42.82 43.11 41.61 5 Monetary base6 434.10 451.37 478.88 512.32 509.14 512.32 516.81 520.84 524.23 528.74r 534.86 537.59 Not seasonally adjusted 6 Total reserves7 58.02 51.45 48.01 45.12 44.24 45.12 46.34 45.25 43.14 43.67 44.91 42.44 7 Nonborrowed reserves 57.76 51.30 47.69 45.00 44.16 45.00 46.14 45.13 43.08 43.50r 44.78 42.29 8 Nonborrowed reserves plus extended credit5 57.76 51.30 47.69 45.00 44.16 45.00 46.14 45.13 43.08 43.50r 44.78 42.29 9 Required reserves8 56.73 50.04 46.33 43.54 42.62 43.54 44.81 44.03 41.84 42.51 43.65 41.17 10 Monetary base9 439.03 456.63 484.98 518.28 510.14 518.28 520.01 519.70 523.35 526.77r 533.12 535.85 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves'1 57.90 51.17 47.92 45.02 44.15 45.02 46.35 45.24 43.12 43.65 44.88 42.40 12 Nonborrowed reserves 57.64 51.02 47.60 44.90 44.07 44.90 46.14 45.12 43.06 43.48 44.75 42.25 13 Nonborrowed reserves plus extended credit5 57.64 51.02 47.60 44.90 44.07 44.90 46.14 45.12 43.06 43.48 44.75 42.25 14 Required reserves 56.61 49.76 46.24 43.44 42.53 43.44 44.81 44.02 41.82 42.49r 43.62 41.13 15 Monetary base12 444.45 463.40 491.79 525.06 516.96 525.06 527.59 526.85 530.30 533.49r 539.98 542.78 16 Excess reserves13 1.29 1.42 1.69 1.58 1.62 1.58 1.53 1.22 1.31 1.16 1.26 1.26 17 Borrowings from the Federal Reserve .26 .16 .32 .12 .08 .12 .21 .12 .07 .17 .13 .15 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly 8. To adjust required reserves for discontinuities that are due to regulatory changes in statistical release. Historical data starting in 1959 and estimates of the effect on required reserve requirements, a multiplicative procedure is used to estimate what required reserves reserves of changes in reserve requirements are available from the Money and Reserves would have been in past periods had current reserve requirements been in effect. Break- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve adjusted required reserves include required reserves against transactions deposits and nonper- System, Washington, DC 20551. sonal time and savings deposits (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus changes in reserve requirements. (See also table 1.10.) (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all adjusted required reserves (line 4) plus excess reserves (line 16). those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, difference between current vault cash and the amount applied to satisfy current reserve break-adjusted total reserves (line 1) less total borrowings of depository institutions from the requirements. Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no 5. Extended credit consists of borrowing at the discount window under the terms and adjustments to eliminate the effects of discontinuities associated with regulatory changes in conditions established for the extended credit program to help depository institutions deal reserve requirements. with sustained liquidity pressures. Because there is not the same need to repay such 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve borrowing promptly as with traditional short-term adjustment credit, the money market effect requirements. of extended credit is similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for component of the money stock, plus (3) (for all quarterly reporters on the "Report of all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve difference between current vault cash and the amount applied to satisfy current reserve requirements. Since February 1984, currency and vault cash figures have been measured over requirements. the computation periods ending on Mondays. 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). reserves (line 16). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 1.21 MONEY STOCK AND DEBT MEASURES1 Billions of dollars, averages of daily figures 1999 IItteemm D 19 e 9 c 5 . D 19 e 9 c 6 . 1 D 9 e 9 c 7 . D 19 e 9 c 8 . Mar.' Apr.' May June Seasonally adjusted Measures2 1 Ml 1,126.7 1,081.3 1,074.9 1,093.4 1,102.0 1,108.3 1,104.6 1,100.8 2 M2 3,649.1 3,823.9 4,046.6 4,402.0' 4,457.1 4,489.7 4,506.8 4,522.7 3 M3 4,618.5 4,955.6 5,404.7 5,996.2' 6,058.2 6,099.8 6,125.1 6,152.4 4 Debt 13,697.7r 14,392.8r 15,094.9' 16,026.1' 16,259.7 16,353.0 16,423.5 n.a. Ml components 5 Currency3 372.3 394.1 424.5 459.2 472.0 476.5 481.0 484.1 6 Travelers checks 8.3 8.0 7.7 7.8 7.8 7.8 7.8 8.2 7 Demand deposits5 389.4 403.0 396.5 377.5 374.1 373.9 369.1 362.3 8 Other checkable deposits6 356.7 276.2 246.2 248.8 248.1 250.2 246.7 246.2 Nontransaction components 9 In M27 2,522.4 2,742.6 2,971.8 3,308.7 3,355.1 3,381.4 3,402.2 3,421.9 10 In M3 only8 969.4 1,131.7 1,358.1' 1,594.1' 1,601.1 1,610.1 1,618.3 1,629.7 Commercial banks 11 Savings deposits, including MMDAs 775.3 905.2 1,022.9 1,189.8 1,207.9 1,225.5 1,233.5 1,245.6 12 Small time deposits9 575.0 593.7 626.1 626.0' 616.1 614.3 613.1 611.7 13 Large time deposits10, 11 346.6 414.8 490.2 541.0' 528.4 534.0 533.1 529.0 Thrift institutions 14 Savings deposits, including MMDAs 359.8 367.1 377.3 415.2 428.1 431.5 441.3 448.2 15 Small time deposits9 356.7 353.8 343.2 325.9 320.8 319.7 317.8 314.7 16 Large time deposits10 74.5 78.4 85.9 89.1 88.8 89.1 88.0 87.9 Money market mutual funds 17 Retail 455.5 522.8 602.3 751.7 782.3 790.5 796.5 801.7 18 Institution-only 255.9 313.3 379.9 516.2 529.1 538.4 544.6 548.1 Repurchase agreements and Eurodollars 19 Repurchase agreements12 198.7 211.3 252.8 297.1' 295.3 286.2 290.4 302.1 20 Eurodollars12 93.7 113.9 149.3' 150.7' 159.4 162.4 162.1 162.7 Debt components 21 Federal debt 3,638.9 3,780.6 3,798.4 3,747.4 3,714.7 3,707.2 3,690.8 n.a. 22 Nonfederal debt 10,058.8r 10,612.3r 11,296.5' 12,278.7' 12,545.0 12,645.7 12,732.6 n.a. Not seasonally adjusted Measures2 23 Ml 1,152.4 1,104.9 1,097.4 1,115.3 1,097.2 1,113.7 1,096.6 1,098.1 24 M2 3,671.7 3,843.7 4,064.8 4,418.8' 4,480.6 4,527.3 4,486.2 4,510.6 25 M3 4,638.0 4,972.5 5,420.9' 6,012.3' 6,097.3 6,136.9 6,110.2 6,135.8 26 Debt 13,699.2r 14,392.9' 15,094.4' 16,026.5' 16,252.6 16,339.0 16,387.9 n.a. Ml components 27 Currency3 376.2 397.9 428.9 464.2 471.3 476.0 479.9 448833..22 28 Travelers checks 8.5 8.3 7.9 8.0 7.9 7.9 7.9 8.1 29 Demand deposits5 407.2 419.9 412.3 392.4 368.9 374.0 363.3 360.8 30 Other checkable deposits6 360.5 278.8 248.3 250.7 249.0 255.8 245.5 246.0 Nontransaction components 31 In M27 2,519.3 2,738.9 2,967.4 3,303.6 3,383.5 3,413.6 3,389.6 3,412.5 32 In M3 only8 966.4 1,128.8 1,356.0 1,593.4' 1,616.6 1,609.6 1,624.0 1,625.2 Commercial banks 33 Savings deposits, including MMDAs 774.1 903.3 1,020.4 1,186.8 1,217.6 1,241.3 1,234.8 1,249.1 34 Small time deposits9 573.8 592.7 625.3 625.4 616.9 614.4 611.8 610.3 35 Large time deposits'0- " 345.8 413.3 487.7 537.4' 532.9 534.7 539.0 534.5 Thrift institutions 36 Savings deposits, including MMDAs 359.2 366.3 376.4 414.1 431.5 437.0 441.8 449.5 37 Small time deposits9 355.9 353.2 342.8 325.6 321.2 319.7 . 317.2 314.0 38 Large time deposits10 74.3 78.1 85.4 88.5 89.5 89.2 89.0 88.8 Money market mutual funds 39 Retail 456.1 523.2 602.5 751.7 796.2 801.1 784.0 789.6 40 Institution-only 257.7 316.0 384.5 523.3 537.9 536.7 538.3 540.6 Repurchase agreements and Eurodollars 41 Repurchase agreements12 193.8 205.7 246.1 228899..88'' 297.9 288.9 296.8 301.9 42 Eurodollars12 94.9 115.7 152.3 154.5' 158.4 160.1 161.0 159.5 Debt components 43 Federal debt 3,645.9 3,787.9 3,805.8 3,754.9 3,741.2 3,717.1 3,674.2 n.a. 44 Nonfederal debt 10,053.3r 10,605.0' 11,288.6' 12,271.5' 12,511.4 12,621.9 12,713.7 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • September 1999 NOTES TO TABLE 1.21 1. Latest monthly and weekly figures are available from the Board's H.6 (508) weekly prises or federally related mortgage pools) and the nonfederal sectors (state and local statistical release. Historical data starting in 1959 are available from the Money and Reserves governments, households and nonprofit organizations, nonfinancial corporate and nonfarm Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and System, Washington, DC 20551. corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, 2. Composition of the money stock measures and debt is as follows: which are derived from the Federal Reserve Board's flow of funds accounts, are break- Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of adjusted (that is, discontinuities in the data have been smoothed into the series) and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all month-averaged (that is, the data have been derived by averaging adjacent month-end levels). commercial banks other than those owed to depository institutions, the U.S. government, and 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository foreign banks and official institutions, less cash items in the process of collection and Federal institutions. Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, Travelers checks issued by depository institutions are included in demand deposits. credit union share draft accounts, and demand deposits at thrift institutions. Seasonally 5. Demand deposits at commercial banks and foreign-related institutions other than those adjusted Ml is computed by summing currency, travelers checks, demand deposits, and owed to depository institutions, the U.S. government, and foreign banks and official institu- OCDs, each seasonally adjusted separately. tions, less cash items in the process of collection and Federal Reserve float. M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time 6. Consists of NOW and ATS account balances at all depository institutions, credit union deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) share draft account balances, and demand deposits at thrift institutions. balances in retail money market mutual funds. Excludes individual retirement accounts 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally money fund balances. adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities and retail money fund balances, each seasonally adjusted separately, and adding this result to (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and seasonally adjusted Ml. term) of U.S. addressees. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) 9. Small time deposits—including retail RPs—are those issued in amounts of less than issued by all depository institutions, (2) balances in institutional money funds, (3) RP $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are liabilities (overnight and term) issued by all depository institutions, and (4) Eurodollars subtracted from small time deposits. (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those at all banking offices in the United Kingdom and Canada. Excludes amounts held by booked at international banking facilities. depository institutions, the U.S. government, money market funds, and foreign banks and 11. Large time deposits at commercial banks less those held by money market funds, official institutions. Seasonally adjusted M3 is calculated by summing large time deposits, depository institutions, the U.S. government, and foreign banks and official institutions. institutional money fund balances, RP liabilities, and Eurodollars, each seasonally adjusted 12. Includes both overnight and term. separately, and adding this result to seasonally adjusted M2. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial sectors—the federal sector (U.S. government, not including government-sponsored enter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A15 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1 A. All commercial banks Billions of dollars Monthly averages Wednesday figures Account 1998 1998 1999 1999 June1 Dec.r Jan.r Feb.r Mar.r Apr.r Mayr June June 9 June 16 June 23 June 30 Seasonally adjusted Assets 1 Bank credit 4,265.4 4,548.4 4,538.7 4,524.4 4,493.5 4,501.0 4,507.1 4,537.8 4,516.6 4,541.8 4,557.1 4,538.6 7 Securities in bank credit 1,126.3 1,227.3 1,217.8 1,207.8 1,189.3 1,190.0 1,189.6 1,202.7 1,192.5 1,199.9 1,203.4 1,216.4 U.S. government securities 759.2 792.4 794.1 791.2 798.6 799.7 797.9 810.7 803.1 809.9 813.4 818.9 4 Other securities 367.0 434.9 423.7 416.5 390.8 390.3 391.7 392.0 389.3 390.0 390.0 397.5 Loans and leases in bank credit2 .. . 3,139.1 3,321.1 3,320.8 3,316.6 3,304.2 3,311.0 3,317.5 3,335.2 3,324.1 3,341.9 3,353.7 3,322.2 6 Commercial and industrial 898.0 949.0 948.8 948.9 952.5 956.9 952.0 957.6 955.3 960.7 959.4 955.6 7 Real estate 1,269.2 1,329.5 1,336.3 1,338.2 1,339.6 1,341.8 1,349.0 1,353.4 1,353.6 1,356.1 1,354.0 1,350.7 8 Revolving home equity 100.1 99.1 98.8 98.4 98.6 99.4 100.3 99.7 101.0 101.7 101.4 94.3 9 Other 1,169.1 1,230.4 1,237.5 1,239.8 1,241.0 1,242.5 1,248.7 1,253.7 1,252.6 1,254.4 1,252.6 1,256.4 in Consumer 498.5 500.0 501.9 501.3 500.5 501.0 496.8 493.7 493.7 495.5 497.9 487.9 n Security3 129.1 151.9 147.5 140.1 120.1 122.9 127.3 131.2 130.2 129.5 137.2 127.1 1? Other loans and leases 344.3 390.7 386.3 388.2 391.5 388.4 392.3 399.2 391.3 400.1 405.2 400.8 n Interbank loans 218.8 217.4 223.2 227.9 221.4 217.3 227.2 224.3 213.8 222.2 234.2 226.4 14 Cash assets4 249.9 253.7 259.1 256.4 259.0 260.8 262.6 262.0 265.9 254.1 266.4 258.7 15 Other assets5 310.0 341.8 354.2 357.8 355.7 345.2 346.2 346.6 344.8 345.9 350.8 348.2 16 Total assets6 4,986.6 5,303.5 5,317.1 5,3083 5,271.0 5,265.8 5,284.2 5312.0 5,282.2 5305.0 5349.4 53133 Liabilities 17 Deposits 3,224.5 3,341.5 3,369.6 3,378.7 3,368.1 3,377.9 3,372.4 3,372.2 3,357.1 3,369.1 3,371.2 3,386.9 18 Transaction 679.7 672.0 667.6 661.5 667.3 663.0 655.3 661.3 641.4 650.9 671.7 683.2 19 Nontransaction 2,544.8 2,669.5 2,702.0 2,717.2 2,700.8 2,714.9 2,717.0 2,710.9 2,715.7 2,718.2 2,699.5 2,703.7 70 Large time 702.1 719.9 726.4 730.5 719.4 725.4 722.1 716.2 710.8 718.5 717.2 717.2 71 Other 1,842.7 1,949.6 1,975.6 1,986.8 1,981.5 1,989.5 1,994.9 1,994.7 2,004.9 1,999.6 1,982.3 1,986.5 77 Borrowings 905.9 1,021.1 1,004.1 991.8 988.2 986.2 999.7 1,021.3 1,019.8 1,022.4 1,035.4 1,013.1 73 From banks in the US 293.0 322.5 318.7 316.8 319.6 312.2 323.8 336.6 332.3 338.7 341.1 334.5 74 From others 612.9 698.5 685.3 675.0 668.7 674.0 676.0 684.6 687.6 683.7 694.3 678.6 75 Net due to related foreign offices 180.4 213.8 213.5 217.4 217.3 210.5 204.2 217.0 219.0 216.3 215.1 215.4 26 Other liabilities 271.3 307.0 304.7 295.9 271.4 273.1 269.7 269.7 267.1 270.3 272.3 268.7 27 Total liabilities 4,582.0 4,883.4 4,891.8 4,883.8 4,845.1 4347.7 4,846.0 4,880.2 4,863.1 4,878.1 4,894.0 4,884.2 28 Residual (assets less liabilities)7 404.5 420.1 425.3 424.4 425.9 418.1 438.3 431.8 419.1 426.9 455.4 429.2 Not seasonally adjusted Assets 79 Bank credit 4,262.1 4,563.9 4,547.8 4,522.0 4,491.9 4,509.1 4,509.5 4,532.0 4,518.4 4,539.5 4,538.7 4,530.3 30 Securities in bank credit 1,124.6 1,229.0 1,220.4 1,213.3 1,196.0 1,198.6 1,195.0 1,199.4 1,197.0 1,196.1 1,195.9 1,207.3 31 U.S. government securities 759.5 793.2 794.4 795.5 805.0 809.6 806.0 810.2 809.2 809.1 809.4 813.2 37 Other securities 365.1 435.8 426.0 417.8 391.0 389.0 388.9 389.2 387.7 387.0 386.5 394.1 33 Loans and leases in bank credit2 . . . 3,137.5 3,334.9 3,327.3 3,308.7 3,295.9 3,310.5 3,314.5 3,332.6 3,321.4 3,343.4 3,342.8 3323.0 34 Commercial and industrial 899.0 949.0 947.6 950.3 956.1 963.6 956.4 957.8 954.0 960.9 958.9 957.5 35 Real estate 1,269.8 1,331.4 1,335.3 1,332.5 1,333.0 1,338.5 1,348.5 1,354.0 1,357.1 1,356.3 1,352.1 1,351.3 36 Revolving home equity 99.8 99.5 98.9 98.0 97.7 98.7 100.0 99.3 100.4 101.3 101.1 94.1 37 Other 1,170.0 1,231.9 1,236.4 1,234.5 1,235.3 1,239.8 1,248.5 1,254.7 1,256.7 1,255.0 1,251.0 1,257.2 38 Consumer 495.6 505.4 508.1 501.2 495.7 497.4 494.3 491.0 490.7 492.6 495.8 485.1 39 Security3 128.8 154.1 147.5 139.7 123.5 124.8 127.2 130.7 130.4 133.4 134.1 124.4 40 Other loans and leases 344.3 395.1 388.7 385.0 387.5 386.2 388.1 399.1 389.4 400.3 401.9 404.7 41 Interbank loans 215.3 225.7 226.1 227.6 224.5 222.3 223.1 221.6 213.3 223.0 221.8 226.4 47 Cash assets4 245.7 268.8 272.1 257.5 251.5 258.4 260.3 257.6 249.6 257.2 247.6 265.5 43 Other assets5 314.8 342.7 346.7 354.5 351.1 348.2 347.7 352.5 349.5 351.2 352.5 359.3 44 Total assets6 4,980.4 5,343.2 5,335.1 5,303.4 5,260.5 5,279.7 5,281.7 5,304.8 5,271.6 53U.8 5301.6 5322.7 Liabilities 45 Deposits 3,223.8 3,375.3 3,368.9 3,355.7 3,362.7 3,388.7 3,362.9 3,370.1 3,362.3 3,382.2 3,331.6 3,391.3 46 Transaction 675.6 706.2 682.4 656.6 660.8 670.7 646.2 656.3 629.4 657.4 638.2 695.4 47 Nontransaction 2,548.2 2,669.2 2,686.4 2,699.1 2,701.9 2,718.0 2,716.7 2,713.8 2,732.9 2,724.8 2,693.4 2,696.0 48 Large time 699.7 724.5 724.5 731.2 721.4 722.4 723.3 713.5 713.2 716.7 713.1 708.8 49 Other 1,848.5 1,944.7 1,961.9 1,967.9 1,980.6 1,995.7 1,993.4 2,000.3 2,019.7 2,008.1 1,980.4 1,987.1 50 Borrowings 910.7 1,023.6 1,020.2 994.5 981.6 986.0 1,007.8 1,024.1 1,001.8 1,021.3 1,057.1 1,021.6 51 From banks in the U.S 293.4 328.5 323.8 317.2 319.1 312.8 324.7 336.2 325.7 336.4 345.9 337.1 57 From others 617.2 695.2 696.4 677.3 662.5 673.2 683.1 687.9 676.2 684.9 711.2 684.5 53 Net due to related foreign offices .... 176.7 219.1 216.4 227.1 215.4 203.5 210.6 211.2 209.6 206.2 210.2 215.1 54 Other liabilities 270.6 307.8 305.6 298.3 272.1 272.7 269.4 269.1 267.1 269.4 271.3 268.1 55 Total liabilities 4,581.8 4,925.9 4,911.1 4,875.6 4,831.8 4,850.9 4,850.7 4,874.6 4,840.7 4,879.1 4,870-3 4396.0 56 Residual (assets less liabilities)7 398.6 417.3 424.0 427.8 428.7 428.8 431.0 430.3 430.9 432.7 431.3 426.6 MEMO 57 Revaluation gains on oif-balance-sheet items8 92.7 116.2 112.5 108.5 87.0 87.1 87.4 84.4 86.4 85.4 85.0 78.1 58 Revaluation losses on off-balancesheet items8 91.5 114.1 109.5 106.7 85.9 87.9 88.4 86.0 87.3 85.8 87.7 80.8 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • September 1999 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1998 1998 1999 1999 Juner Dec.r Jan.r Feb.r Mar/ Apr/ Mayr June June 9 June 16 June 23 June 30 Seasonally adjusted Assets 1 Bank credit 3,692.4 3,948.0 3,953.4 3,954.3 3,939.6 3,949.5 3,964.4 4,004.8 3,984.3 4,006.3 4,021.5 4,011.9 2 Securities in bank credit 922.1 1,013.5 1,006.1 1,003.2 990.9 989.6 992.6 1,008.3 998.7 1,003.9 1,008.5 1,024.7 3 U.S. government securities 670.6 709.6 709.9 708.3 714.9 711.9 712.2 723.7 717.4 721.7 725.9 732.4 4 Other securities 251.5 303.9 296.2 294.9 276.0 277.6 280.4 284.6 281.3 282.2 282.6 292.4 5 Loans and leases in bank credit2 2,770.3 2,934.5 2,947.2 2,951.1 2,948.7 2,960.0 2,971.9 2,996.5 2,985.6 3,002.5 3,013.0 2,987.1 6 Commercial and industrial 685.0 731.2 735.3 736.7 742.2 748.6 750.8 761.3 757.3 763.1 762.9 763.3 7 Real estate 1,244.9 1,307.7 1,314.9 1,317.7 1,319.8 1,322.1 1,329.5 1,334.5 1,334.2 1,337.4 1,335.4 1,332.2 8 Revolving home equity 100.1 99.1 98.8 98.4 98.6 99.4 100.3 99.7 101.0 101.7 101.4 94.3 9 Other 1,144.8 1,208.6 1,216.1 1,219.3 1,221.3 1,222.7 1,229.1 1,234.8 1,233.2 1,235.7 1.234.0 1,237.9 10 Consumer 498.5 500.0 501.9 501.3 500.5 501.0 496.8 493.7 493.7 495.5 497.9 487.9 11 Security3 68.5 85.6 84.3 80.6 69.3 71.5 74.7 80.3 80.1 79.1 85.6 75.5 12 Other loans and leases 273.4 309.8 310.8 314.7 316.8 316.9 320.1 326.7 320.3 327.4 331.2 328.2 13 Interbank loans 194.8 189.4 193.8 196.4 195.7 191.8 200.3 199.3 189.3 196.7 210.4 201.5 14 Cash assets4 215.0 217.7 222.5 220.2 222.0 223.1 223.7 226.8 228.1 216.7 233.5 226.8 15 Other assets5 276.0 303.2 315.5 320.0 318.1 307.8 310.8 313.9 313.8 310.5 320.8 313.8 16 Total assets6 4,321.0 4,600.6 4,627.4 4,632.8 4,617.1 4,614.0 4,640.8 4,686.3 4,656.8 4,671.6 4,727.4 4,695.7 Liabilities 17 Deposits 2,919.9 3,029.5 3,048.6 3,056.6 3,057.7 3,064.1 3,060.7 3,065.8 3,052.4 3,060.1 3,063.5 3,082.9 18 Transaction 668.1 660.4 654.7 647.8 654.6 650.8 642.9 648.5 628.6 637.8 659.1 670.3 19 Nontransaction 2,251.8 2,369.1 2,393.9 2,408.8 2,403.1 2,413.3 2,417.8 2,417.4 2,423.8 2,422.3 2,4044 2,412.6 20 Large time 410.5 421.1 420.2 423.4 422.8 425.4 424.8 424.8 421.2 424.8 424.0 428.2 21 Other 1,841.3 1,948.0 1,973.7 1,985.5 1,980.3 1,987.9 1,993.0 1,992.6 2,002.6 1,997.5 1,980.4 1,984.4 22 Borrowings 717.0 817.3 810.4 810.9 813.8 811.5 824.1 838.3 837.0 835.1 851.8 833.1 23 From banks in the U.S 264.1 295.2 297.1 298.9 295.6 291.0 302.6 310.7 306.5 308.5 315.1 311.6 24 From others 452.9 522.1 513.3 511.9 518.2 520.5 521.4 527.6 530.5 526.6 536.7 521.5 25 Net due to related foreign offices .... 81.8 112.4 111.8 117.3 117.8 115.4 118.4 145.4 144.3 145.6 150.9 144.3 26 Other liabilities 203.6 230.2 230.2 225.7 204.2 205.7 208.9 210.4 209.0 209.5 214.5 209.1 27 Total liabilities 3,922.3 4,189.4 4,201.0 4,210.5 4,193.5 4,196.7 4,212.0 4,260.0 4,242.6 4,250.3 4,280.7 4,269.4 28 Residual (assets less liabilities)7 398.7 411.2 426.4 422.2 423.6 417.3 428.8 426.2 414.2 421.3 446.6 426.2 Not seasonally adjusted Assets 29 Bank credit 3,692.1 3,960.7 3,959.0 3,948.1 3,936.3 3,960.5 3,972.2 4,002.1 3,989.0 4,008.4 4,008.3 4,004.0 30 Securities in bank credit 921.4 1,016.6 1,008.5 1,007.1 996.4 999.8 999.7 1,006.0 1,002.9 1,002.0 1,002.9 1,016.0 31 U.S. government securities 670.7 710.2 710.5 712.2 720.4 722.2 719.6 722.8 722.5 720.9 722.1 726.0 32 Other securities 250.7 306.4 298.0 294.8 276.0 277.6 280.1 283.2 280.4 281.2 280.8 290.0 33 Loans and leases in bank credit2 2,770.7 2,944.0 2,950.5 2,941.0 2,939.9 2,960.7 2,972.4 2,996.2 2,986.1 3,006.4 3,005.4 2,988.1 34 Commercial and industrial 687.6 728.5 732.3 736.3 745.5 756.7 757.9 763.2 758.4 765.4 763.9 765.8 35 Real estate 1,245.8 1,309.6 1,313.8 1,311.6 1,313.2 1,319.0 1,329.1 1,335.3 1,337.9 1,337.8 1,333.7 1,333.0 36 Revolving home equity 99.8 99.5 98.9 98.0 97.7 98.7 100.0 99.3 1004 101.3 101.1 94.1 37 Other 1,146.0 1,210.1 1,214.9 1.213.6 1,215.5 1,220.3 1,229.2 1,236.0 1,237.5 1,236.5 1,232.5 1,238.9 38 Consumer 495.6 505.4 508.1 501.2 495.7 497.4 494.3 491.0 490.7 492.6 495.8 485.1 39 Security3 67.9 87.3 84.4 80.6 72.1 73.4 74.8 79.5 80.4 82.5 82.6 71.9 40 Other loans and leases 273.9 313.3 311.9 311.3 313.4 314.1 316.3 327.1 318.7 328.2 329.4 332.2 41 Interbank loans 191.3 197.6 196.7 196.1 198.8 196.8 196.2 196.7 188.8 197.5 198.0 201.4 42 Cash assets4 210.0 231.3 235.1 222.0 215.6 222.0 221.8 221.5 211.1 218.9 213.9 232.6 43 Other assets5 281.8 302.6 307.7 315.5 312.9 312.5 313.1 320.9 318.9 316.9 323.9 326.3 44 Total assets6 4,318.0 4,634.5 4,641.1 4,623.7 4,605.4 4,633.8 4,644.7 4,682.4 4,648.9 4,682.9 4,685.3 4,705.9 Liabilities 45 Deposits 2,918.3 3,059.7 3,050.5 3,034.8 3,049.1 3,075.5 3,048.9 3,063.1 3,055.4 3,072.9 3,023.7 3,087.9 46 Transaction 664.2 694.2 669.4 643.1 648.0 658.7 634.0 643.7 617.3 644.7 626.0 682.0 47 Nontransaction 2,254.1 2,365.5 2,381.0 2,391.7 2,401.0 2,416.8 2,414.9 2,419.4 2,438.1 2,428.2 2,397.7 2,406.0 48 Large time 407.3 423.6 421.9 425.8 422.6 423.3 423.6 421.2 420.6 422.3 419.5 421.0 49 Other 1,846.9 1,941.9 1,959.2 1,965.9 1,978.5 1,993.5 1,991.3 1,998.1 2,017.5 2,005.9 1,978.2 1,985.0 50 Borrowings 721.8 819.8 826.6 813.5 807.2 811.3 832.2 841.2 819.0 834.0 873.5 841.6 51 From banks in the U.S 264.6 301.1 302.2 299.3 295.1 291.7 303.5 310.3 299.9 306.2 319.9 314.2 52 From others 457.2 518.7 524.4 514.2 512.0 519.7 528.6 530.8 519.1 527.8 553.6 527.5 53 Net due to related foreign offices .... 80.1 111.4 112.0 123.4 117.7 114.0 126.7 141.0 138.1 137.9 146.1 143.4 54 Other liabilities 203.5 229.6 230.9 226.5 204.8 206.4 209.1 210.3 209.1 209.1 214.1 209.0 55 Total liabilities 3,923.6 4,220.5 4,220.0 4,198.3 4,178.7 4,207.2 4,216.8 4,255.5 4,221.6 4,253.9 4,257.4 4,281.9 56 Residual (assets less liabilities)7 394.3 414.0 421.2 425.5 426.7 426.6 427.9 426.9 427.3 428.9 427.8 424.0 MEMO 57 Revaluation gains on off-balance-sheet items8 50.5 68.0 66.5 64.9 46.8 48.3 50.6 51.0 51.8 51.8 52.2 46.6 58 Revaluation losses on off-balancesheet items8 50.9 69.6 67.2 65.4 46.7 49.0 52.5 53.4 53.8 53.1 56.1 49.4 59 Mortgage-backed securities9 290.3 345.4 342.2 341.0 336.3 334.8 333.6 329.6 331.6 328.4 328.2 329.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 1998 1998 1999 1999 June1 Dec/ Jan.r Feb.r Mar.r Apr.r Mayr June June 9 June 16 June 23 June 30 Seasonally adjusted Assets 1 Bank credit 2,287.3 2,442.4 2,435.3 2,428.5 2,401.2 2,405.6 2,413.7 2,440.5 2,426.3 2,441.4 2,454.9 2,441.7 2 Securities in bank credit 521.9 577.5 566.6 560.4 544.0 541.1 540.9 551.1 542.8 546.7 550.0 566.1 3 U.S. government securities 362.0 380.2 378.6 376.2 379.8 376.0 374.1 380.3 375.6 378.3 381.4 387.6 4 Trading account 23.6 23.0 25.1 17.9 22.5 25.9 22.3 25.1 21.4 23.0 25.4 31.7 5 Investment account 338.3 357.2 353.5 358.4 357.3 350.1 351.8 355.2 354.2 355.3 356.0 355.9 6 Other securities 160.0 197.2 188.0 184.2 164.3 165.1 166.8 170.8 167.1 168.4 168.6 178.5 7 Trading account 76.7 100.2 91.4 87.5 66.7 66.1 68.3 67.5 67.8 69.2 68.5 62.9 8 Investment account 83.3 97.0 96.6 96.7 97.5 99.0 98.6 103.2 99.3 99.3 100.1 115.6 9 State and local government . 22.5 24.8 24.6 24.7 24.9 24.6 24.8 25.3 25.4 25.3 25.2 25.2 10 Other 60.8 72.2 71.9 72.0 72.7 74.4 73.8 78.0 73.9 74.0 74.9 90.4 11 Loans and leases in bank credit2 . . . 1,765.4 1,865.0 1,868.7 1,868.1 1,857.2 1,864.5 1,872.8 1,889.4 1,883.6 1,894.7 1,904.9 1,875.6 12 Commercial and industrial 503.2 534.9 536.3 537.5 541.9 547.0 547.2 555.6 552.7 557.5 557.0 556.3 13 Bankers acceptances 1.2 1.3 1.3 1.2 1.1 1.1 1.0 1.0 1.1 1.0 0.9 1.0 14 Other 502.0 533.6 535.1 536.3 540.7 545.9 546.2 554.6 551.6 556.5 556.1 555.3 15 Real estate 696.6 711.6 710.0 709.2 705.6 705.3 708.7 708.0 710.5 710.8 707.7 703.3 16 Revolving home equity 71.7 70.2 69.9 69.8 69.9 70.5 71.2 70.4 71.8 72.3 72.2 64.9 17 Other 624.9 641.4 640.0 639.4 635.8 634.8 637.4 637.7 638.7 638.5 635.5 638.4 18 Consumer 299.8 301.5 304.4 303.4 301.0 299.5 296.6 292.2 294.0 293.8 295.6 285.3 19 Security' 62.6 79.4 78.3 74.7 63.4 65.8 69.4 75.1 74.7 73.8 80.7 70.3 20 Federal funds sold to and repurchase agreements with broker-dealers 44.0 62.6 61.5 57.7 46.2 47.8 51.3 55.5 56.2 54.5 5599..00 5500..99 21 Other 18.6 16.8 16.8 17.0 17.2 18.0 18.1 19.6 18.4 19.2 21.6 19.4 22 State and local government 11.4 11.7 11.7 11.6 11.6 11.8 11.8 11.8 11.9 11.9 11.7 11.6 23 Agricultural 10.2 10.3 10.3 10.4 10.3 10.2 9.9 9.9 9.8 9.9 9.9 9.9 24 Federal funds sold to and repurchase agreements with others 5.7 16.4 12.8 12.2 12.2 11.5 14.1 37.9 3344..77 38.5 4400..22 3388..33 25 All other loans 81.4 93.1 96.3 96.0 95.7 95.7 95.8 79.1 76.0 78.9 82.1 80.1 26 Lease-financing receivables 94.4 106.1 108.6 113.1 115.6 117.8 119.2 119.9 119.4 119.8 120.0 120.6 27 Interbank loans 130.5 124.6 127.3 129.9 132.1 130.0 141.5 143.0 134.2 139.9 155.4 143.0 28 Federal funds sold to and repurchase agreements with commercial banks 79.7 75.5 80.1 80.2 83.2 79.4 86.3 8855..44 7766..88 8833..88 9977..00 8844..00 29 Other 50.8 49.1 47.2 49.7 48.9 50.6 55.2 57.6 57.4 56.1 58.4 59.0 30 Cash assets4 148.5 147.7 152.3 150.4 151.9 154.2 152.0 154.7 156.7 146.2 160.4 154.2 31 Other assets5 216.5 229.8 238.1 242.6 239.5 228.8 229.9 231.8 232.8 229.8 237.6 229.3 32 Total assets6 2,744.6 2,906.5 2,914.7 2^13.1 2,886.2 2^803 2£98.7 2,931.6 2,911.6 2,918.8 2,969.9 2,9303 Liabilities 33 Deposits 1,655.9 1,683.7 1,684.8 1,680.2 1,678.5 1,685.4 1,680.4 1,680.6 1,674.5 1,676.3 1,678.2 1,689.2 34 Transaction 384.4 371.2 366.1 359.6 363.6 365.9 357.1 359.1 349.2 352.4 365.9 368.9 35 Nontransaction 1,271.5 1,312.6 1,318.7 1,320.7 1,315.0 1,319.6 1,323.3 1,321.5 1,325.3 1,323.8 1,312.2 1,320.3 36 Large time 226.1 230.8 230.2 229.5 226.8 227.6 224.6 226.5 223.0 226.1 226.0 230.8 37 Other 1,045.4 1,081.7 1,088.5 1,091.2 1,088.2 1,092.0 1,098.7 1,095.0 1,102.3 1,097.7 1,086.3 1,089.4 38 Borrowings 557.9 633.2 628.2 624.8 621.9 621.2 628.7 638.8 637.2 635.9 652.3 632.8 39 From banks in the U.S 190.9 209.4 213.7 214.0 208.8 205.9 214.5 219.0 216.6 217.2 222.1 218.5 40 From others 367.0 423.9 414.5 410.8 413.1 415.4 414.2 419.7 420.7 418.7 430.2 414.3 41 Net due to related foreign offices 77.9 108.8 108.7 114.1 113.2 110.5 113.3 141.3 139.6 141.8 147.6 139.9 42 Other liabilities 176.3 199.1 199.3 195.1 173.4 174.1 176.7 177.3 176.2 175.9 181.2 176.0 43 Total liabilities 2/467.9 2,624.9 2,621.0 2,614.2 2,587.0 2^91-2 2^99.2 2,638.0 2,627.5 2,629.9 2,659.2 2,637.8 44 Residual (assets less liabilities)7 276.7 281.7 293.7 298.9 299.2 289.1 299.5 293.6 284.1 288.9 310.7 292.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 DomesticN onfinancial Statistics • September 1999 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks—Continued Monthly averages Wednesday figures AAAccccccooouuunnnttt 1998 1998 1999 1999 Juner Dec/ Jan.r Feb.r Mar.r Apr/ Mayr June June 9 June 16 June 23 June 30 Not seasonally adjusted Assets 45 Bank credit 2,280.4 2,456.9 2,447.4 2,433.1 2,403.7 2,411.5 2,411.3 2,430.8 2,421.7 2,437.1 2,434.2 2,429.2 46 Securities in bank credit 519.2 580.9 569.7 566.5 548.0 546.4 542.7 546.9 543.8 543.0 542.5 557.4 47 U.S. government securities 360.1 380.9 379.8 381.7 383.8 382.1 376.9 377.5 377.7 375.6 375.4 381.0 48 Trading account 22.5 23.7 25.2 18.6 23.4 25.2 20.8 23.5 22.0 22.5 23.0 27.2 49 Investment account 337.6 357.2 354.6 363.1 360.4 356.8 356.2 354.0 355.8 353.1 352.5 353.8 50 Mortgage-backed securities .. 219.9 256.1 252.7 250.5 243.9 241.1 238.0 233.6 235.5 232.4 232.1 233.6 51 Other 117.7 101.1 102.0 112.7 116.5 115.8 118.2 120.5 120.2 120.7 120.4 120.2 52 One year or less 31.9 26.8 27.7 25.8 24.0 24.5 23.8 24.8 24.5 25.0 24.9 24.9 53 One to five years 49.6 38.8 37.9 47.2 52.6 53.1 54.8 56.6 56.2 56.5 56.5 57.0 54 More than five years . . . 36.2 35.5 36.3 39.6 39.9 38.1 39.5 39.1 39.5 39.3 39.1 38.3 55 Other securities 159.1 200.0 189.8 184.8 164.2 164.4 165.8 169.3 166.1 167.3 167.0 176.4 56 Trading account 76.7 100.2 91.4 87.5 66.7 66.1 68.3 67.5 67.8 69.2 68.5 62.9 57 Investment account 82.4 99.8 98.4 97.3 97.5 98.2 97.5 101.8 98.2 98.2 98.5 113.5 58 State and local government . . 22.4 25.0 24.8 24.8 24.9 24.7 24.9 25.1 25.3 25.1 25.1 24.8 59 Other 60.0 74.8 73.6 72.5 72.6 73.5 72.6 76.7 73.0 73.0 73.3 88.7 60 Loans and leases in bank credit2 . . 1,761.3 1,875.9 1,877.8 1,866.6 1,855.7 1,865.0 1,868.6 1,883.9 1,878.0 1,894.1 1,891.7 1,871.8 61 Commercial and industrial 504.1 533.0 534.1 537.5 544.5 553.0 551.7 555.6 551.6 557.8 556.2 557.4 62 Bankers acceptances 1.2 1.3 1.3 1.2 1.1 1.1 1.0 1.0 1.1 1.0 .9 1.0 63 Other 502.9 531.7 532.8 536.3 543.4 551.9 550.7 554.6 550.5 556.8 555.2 556.4 64 Real estate 695.0 715.1 712.7 707.9 702.7 702.4 706.0 706.0 710.4 709.0 703.3 701.5 65 Revolving home equity 71.6 70.4 70.0 69.5 69.2 70.0 70.9 70.1 71.3 72.1 72.0 64.9 66 Other 383.2 398.9 394.5 387.2 380.9 378.6 380.4 381.0 384.8 381.9 376.8 380.6 67 Commercial 240.3 245.8 248.2 251.2 252.6 253.8 254.6 254.9 254.3 255.0 254.5 256.0 68 Consumer 298.0 304.8 309.7 303.9 298.3 297.0 294.4 290.3 291.7 291.8 293.9 283.5 69 Security3 62.0 81.0 78.4 74.7 66.1 67.7 69.5 74.3 75.0 77.2 77.7 66.7 70 Federal funds sold to and repurchase agreements with broker-^dealers .... 42.7 63.8 62.1 58.2 48.8 49.7 51.0 53.9 56.8 57.0 54.8 45.9 71 Other 19.4 17.2 16.3 16.5 17.3 18.0 18.5 20.4 18.2 20.2 23.0 20.8 72 State and local government .... 11.3 11.8 11.7 11.6 11.6 11.6 11.6 11.6 11.7 11.7 11.6 11.5 73 Agricultural 10.3 10.3 10.2 10.0 9.9 10.0 9.9 10.0 9.9 10.0 10.0 10.1 74 Federal funds sold to and repurchase agreements with others 5.7 16.4 12.8 12.2 12.2 11.5 14.1 37.9 34.7 38.5 40.2 38.3 75 All other loans 80.3 97.6 97.9 94.5 93.9 93.7 92.3 78.0 73.3 78.1 78.8 82.0 76 Lease-financing receivables .... 94.5 105.8 110.3 114.4 116.5 118.0 119.1 120.1 119.7 120.1 120.1 120.9 77 Interbank loans 131.0 127.8 130.1 129.7 132.2 134.0 141.6 143.4 131.6 142.7 150.2 148.6 78 Federal funds sold to and repurchase agreements with commercial banks 79.3 79.3 83.7 80.8 83.0 82.1 85.4 84.5 73.0 84.5 91.4 88.4 79 Other 51.7 48.5 46.4 49.0 49.3 52.0 56.3 58.8 58.6 58.1 58.9 60.1 80 Cash assets4 144.6 158.0 161.7 151.2 147.0 153.1 150.4 150.5 143.0 148.3 146.0 158.0 81 Other assets5 221.3 229.2 233.4 239.5 235.7 233.2 232.2 237.1 237.3 234.9 240.7 237.6 82 Total assets6 2,739.1 2,933.8 2,934.9 2^)15.2 2,880.1 2,893.7 2,897.2 2,923.2 2,894.9 2,9243 2,932.7 2,9353 Liabilities 83 Deposits 1,651.3 1,707.8 1,694.1 1,675.9 1,676.9 1,691.6 1,666.0 1,674.5 1,667.2 1,682.1 1,646.6 1,692.9 84 Transaction 381.7 394.1 376.4 356.6 358.3 370.0 350.6 355.4 337.2 357.8 343.2 379.0 85 Nontransaction 1,269.5 1,313.7 1,317.7 1,319.3 1,318.7 1,321.6 1,315.4 1,319.1 1,330.1 1,324.3 1,303.4 1,314.0 86 Large time 222.9 233.4 231.8 231.9 226.6 225.5 223.5 223.0 222.4 223.6 221.5 223.6 87 Other 1,046.6 1,080.3 1,085.9 1,087.4 1,092.1 1,096.1 1,092.0 1,096.1 1,107.7 1,100.7 1,081.9 1,090.4 88 Borrowings 561.9 633.9 643.9 630.0 620.9 623.7 636.4 640.5 623.9 636.0 667.8 636.3 89 From banks in the U.S 191.2 213.4 218.0 215.5 210.8 208.2 215.5 218.4 212.2 215.9 224.4 219.0 90 From nonbanks in the U.S 370.6 420.5 425.8 414.5 410.1 415.4 420.9 422.0 411.7 420.1 443.4 417.2 91 Net due to related foreign offices .. . 76.2 107.8 109.0 120.2 113.1 109.0 121.6 136.9 133.5 134.1 142.8 138.9 92 Other liabilities 176.3 199.1 199.3 195.1 173.4 174.1 176.7 177.3 176.2 175.9 181.2 176.0 93 Total liabilities 2,465.7 2,648.7 2,646.2 2,621.3 2^843 2^98.4 2,600.8 2,629.2 2,600.9 2,628.1 2,638.4 2,644.1 94 Residual (assets less liabilities)7 .... 273.4 285.2 288.7 293.9 295.8 295.3 296.4 294.0 294.0 296.3 294.3 291.1 MEMO 95 Revaluation gains on off-balancesheet items8 50.5 68.0 66.5 64.9 46.8 48.3 50.6 51.0 51.8 51.8 52.2 46.6 96 Revaluation losses on off-balancesheet items8 50.9 69.6 67.2 65.4 46.6 49.0 52.5 53.4 53.8 53.1 56.1 49.4 97 Mortgage-backed securities' 242.3 286.7 282.1 279.2 272.2 269.5 265.5 261.0 262.8 260.0 259.5 260.9 98 Pass-through securities 159.8 197.2 194.3 189.6 182.5 179.6 176.9 173.6 174.6 172.8 172.4 174.0 99 CMOs, REMICs, and other mortgage-backed securities . . 82.5 89.5 87.9 89.6 89.7 89.9 88.7 87.4 88.2 87.3 87.2 86.9 100 Net unrealized gains (losses) on available-for-sale securities10 . . . 3.2 3.0 3.0 2.3 .6 .9 .5 -1.3 -1.0 -1.1 -1.1 -2.4 101 Offshore credit to U.S. residents" . .. 36.1 38.5 38.9 38.9 39.0 37.9 37.7 37.0 37.2 37.1 36.8 37.0 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 Wednesday figures Account 1998 1998 1999 1999 Juner Dec.r Jan.r Feb.r Mar.' Apr.1 Mayr June June 9 June 16 June 23 June 30 Seasonally adjusted Assets 1 Bank credit 1,405.1 1,505.5 1,518.1 1,525.8 1,538.4 1,544.0 1,550.8 1,564.3 1,557.9 1,564.9 1,566.6 1,570.2 2 Securities in bank credit 400.2 436.1 439.5 442.8 446.9 448.4 451.7 457.2 455.9 457.1 458.6 458.7 3 U.S. government securities 308.7 329.4 331.3 332.1 335.1 335.9 338.1 343.4 341.7 343.4 344.5 344.8 4 Other securities 91.5 106.7 108.3 110.7 111.8 112.5 113.5 113.9 114.2 113.7 114.1 113.9 5 Loans and leases in bank credit2 1,004.9 1,069.5 1,078.5 1,083.0 1,091.5 1,095.5 1,099.1 1,107.0 1,102.0 1,107.8 1,108.1 1,111.5 6 Commercial and industrial 181.7 196.3 199.0 199.2 200.3 201.6 203.6 205.7 204.7 205.6 205.9 207.0 7 Real estate 548.3 596.1 604.9 608.5 614.2 616.8 620.8 626.5 623.7 626.5 627.7 628.9 8 Revolving home equity 28.4 28.9 28.9 28.6 28.7 28.9 29.1 29.3 29.2 29.4 29.2 29.4 9 Other 519.9 567.2 576.0 579.9 585.5 588.0 591.7 597.2 594.5 597.2 598.5 599.5 10 Consumer 198.7 198.6 197.5 197.9 199.5 201.5 200.2 201.5 199.7 201.8 202.3 202.6 11 Security3 5.9 6.3 6.0 5.9 6.0 5.7 5.3 5.2 5.4 5.3 4.9 5.2 12 Other loans and leases 70.4 72.2 71.2 71.4 71.5 69.9 69.2 68.1 68.5 68.6 67.3 67.8 13 Interbank loans 64.3 64.7 66.6 66.4 63.6 61.9 58.8 56.4 55.1 56.8 55.0 58.4 14 Cash assets4 66.5 70.0 70.2 69.8 70.0 68.9 71.8 72.1 71.3 70.6 73.0 72.6 15 Other assets5 59.5 73.4 77.4 77.3 78.7 79.0 81.0 82.2 81.0 80.7 83.1 84.5 16 Total assets6 1,576.4 1,694.1 1,712.7 1,719.7 1,730.9 1,733.7 1,742.1 1,754.7 1,745.2 1,7523 1,7573 1,765.4 Liabilities 17 Deposits 1,264.0 1,345.8 1,363.8 1,376.4 1,379.2 1,378.7 1,380.2 1,385.2 1,377.9 1,383.8 1,385.4 1,393.7 18 Transaction 283.7 289.3 288.6 288.2 291.1 285.0 285.7 289.3 279.4 285.4 293.2 301.4 19 Nontransaction 980.3 1,056.6 1,075.2 1,088.2 1,088.1 1,093.7 1,094.5 1,095.9 1,098.5 1,098.4 1,092.2 1,092.3 20 Large time 184.4 190.2 190.0 193.9 196.0 197.8 200.2 198.2 198.2 198.7 198.0 197.4 21 Other 795.9 866.3 885.1 894.3 892.1 896.0 894.3 897.7 900.3 899.8 894.2 894.9 22 Borrowings 159.1 184.0 182.2 186.1 191.9 190.2 195.4 199.5 199.7 199.2 199.5 200.4 23 From banks in the U.S 73.2 85.8 83.4 84.9 86.8 85.1 88.2 91.7 89.9 91.3 93.0 93.1 24 From others 85.9 98.2 98.8 101.2 105.1 105.1 107.2 107.9 109.8 107.9 106.5 107.2 25 Net due to related foreign offices .... 3.9 3.6 3.0 3.2 4.5 4.9 5.0 4.1 4.7 3.8 3.3 4.4 26 Other liabilities 27.3 31.1 31.0 30.6 30.9 31.6 32.2 33.1 32.8 33.5 33.4 33.1 27 Total liabilities 1,4543 1,5645 1,580.0 13963 1,6063 1,6053 1,612.8 1,622.0 1,615.1 1,620.4 1,6213 1,631.6 28 Residual (assets less liabilities)7 122.0 129.5 132.7 123.4 124.4 128.2 129.3 132.6 130.1 132.4 136.0 133.8 Not seasonally adjusted Assets 29 Bank credit 1,411.7 1,503.8 1,511.5 1,515.0 1332.6 1,549.1 1,560.9 1,571.3 1,567.3 1,571.3 1,574.1 1,574.8 30 Securities in bank credit 402.2 435.7 438.8 440.6 448.4 453.4 457.0 459.1 459.1 459.0 460.4 458.6 31 U.S. government securities 310.6 329.3 330.7 330.5 336.6 340.1 342.7 345.3 344.8 345.2 346.6 345.0 32 Other securities 91.6 106.4 108.1 110.1 111.8 113.3 114.3 113.8 114.4 113.8 113.8 113.5 33 Loans and leases in bank credit2 1,009.5 1,068.1 1,072.7 1,074.4 1,084.2 1,095.7 1,103.9 1,112.3 1,108.1 1,112.3 1,113.7 1,116.2 34 Commercial and industrial 183.5 195.4 198.2 198.9 201.0 203.7 206.2 207.6 206.8 207.5 207.7 208.5 35 Real estate 550.8 594.5 601.0 603.7 610.6 616.6 623.2 629.3 627.5 628 8 630.3 631.5 36 Revolving home equity 28.3 29.1 28.9 28.5 28.5 28.8 29.0 29.2 29.1 29.2 29.1 29.2 37 Other 522.5 565.4 572.1 575.2 582.0 587.9 594.1 600.1 598.4 599.6 601.2 602.3 38 Consumer 197.6 200.6 198.4 197.3 197.4 200.4 200.0 200.8 199.0 200.8 202.0 201.6 39 Security3 5.9 6.3 6.0 5.9 6.0 5.7 5.3 5.2 5.4 5.3 4.9 5.2 40 Other loans and leases 71.7 71.4 69.1 68.6 69.3 69.2 69.3 69.4 69.4 69.9 68.8 69.4 41 Interbank loans 60.3 69.8 66.6 66.3 66.6 62.8 54.6 53.3 57.1 54.8 47.8 52.9 42 Cash assets4 65.3 73.3 73.4 70.8 68.6 68.9 71.3 71.0 68.1 70.6 67.9 74.6 43 Other assets5 60.6 73.3 74.3 76.1 77.3 79.3 80.9 83.8 81.6 82.0 83.2 88.7 44 Total assets6 1,578.9 1,700.7 1,7063 1,708.6 1,7253 1,740.1 1,747.5 1,7593 1,754.0 1,758.5 1,752.6 1,770.7 Liabilities 45 Deposits 1,267.0 1,351.8 1,356.4 1,358.9 1,372.1 1,383.9 1,382.8 1,388.6 1,388.2 1,390.8 1,377.1 1,395.0 46 Transaction 282.4 300.0 293.0 286.5 289.8 288.7 283.4 288.3 280.1 287.0 282.8 303.0 47 Nontransaction 984.6 1,051.8 1,063.4 1,072.4 1,082.4 1,095.2 1,099.5 1,100.3 1,108.1 1,103.9 1,094.3 1,092.0 48 Large time 184.4 190.2 190.0 193.9 196.0 197.8 200.2 198.2 198.2 198.7 198.0 197.4 49 Other 800.2 861.6 873.3 878.5 886.4 897.4 899.3 902.1 909.8 905.2 896.4 894.6 50 Borrowings 159.9 186.0 182.7 183.5 186.3 187.6 195.7 200.7 195.0 198.1 205.7 205.4 51 From banks in the U.S 73.3 87.8 84.1 83.8 84.4 83.4 88.0 91.9 87.7 90.3 95.5 95.1 52 From others 86.6 98.2 98.5 99.7 101.9 104.2 107.7 108.8 107.3 107.8 110.2 110.3 53 Net due to related foreign offices .... 3.9 3.6 3.0 3.2 4.5 4.9 5.0 4.1 4.7 3.8 3.3 4.4 54 Other liabilities 27.2 30.5 31.6 31.4 31.5 32.3 32.4 33.0 32.9 33.2 33.0 33.0 55 Total liabilities 1,458.0 1,571.9 1373.8 1377.0 1394.4 1,608.8 1,616.0 1,626.4 1,620.7 1,625.8 1,619.1 1,637.8 56 Residual (assets less liabilities)7 120.9 128.8 132.5 131.6 130.9 131.3 131.5 132.9 133.3 132.7 133.6 132.9 MEMO 57 Mortgage-backed securities' 47.9 58.7 60.0 61.8 64.1 65.3 68.1 68.6 68.8 68.4 68.7 68.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • September 1999 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued E. Foreign-related institutions Billions of dollars Monthly averages Wednesday figures Account 1998 1998 1999 1999 June Dec.r Jan.' Feb.r Mar.r Apr/ Mayr June June 9 June 16 June 23 June 30 Seasonally adjusted Assets 1 Bank credit 573.0 600.4 585.3 570.1 553.9 551.4 542.6 533.1 532.3 535.5 535.6 526.7 2 Securities in bank credit 204.1 213.8 211.7 204.6 198.4 200.4 197.0 194.4 193.8 196.1 194.9 191.6 3 U.S. government securities 88.61 82.8 84.2 82.9 83.7 87.7 85.6 87.0 85.8 88.2 87.5 86.5 4 Other securities 115.5r 131.0 127.5 121.7 114.7 112.7 111.4 107.4 108.0 107.9 107.4 105.1 5 Loans and leases in bank credit2 . . . 368.8r 386.7 373.6 365.6 355.5 351.0 345.6 338.7 338.5 339.4 340.8 335.1 6 Commercial and industrial 2l3.ff 217.8 213.5 212.2 210.3 208.3 201.2 196.3 198.0 197.6 196.5 192.4 7 Real estate 24.3 21.7 21.4 20.5 19.7 19.7 19.6 18.9 19.4 18.7 18.6 18.6 8 Security3 60.6 66.3 63.2 59.4 50.7 51.4 52.7 51.0 50.1 50.4 51.6 51.6 9 Other loans and leases 70.9 80.8 75.5 73.5 74.7 71.6 72.2 72.5 71.0 72.7 74.0 72.5 10 Interbank loans 24.0 28.1 29.4 31.5 25.7 25.4 26.8 25.0 24.5 25.5 23.8 24.9 11 Cash assets4 34.9 36.0 36.6 36.3 37.1 37.7 38.9 35.2 37.9 37.3 32.9 31.9 12 Other assets5 34.0 38.6 38.7 37.8 37.5 37.4 35.4 32.7 31.0 35.4 30.0 34.5 13 Total assets6 665.6 702.9 689.7 675.5 653.9 651.7 643.4 625.7 625.4 633.4 622.1 617.7 Liabilities 14 Deposits 304.6 311.9 321.0 322.1 310.4 313.8 311.7 306.4 304.7 309.0 307.6 304.0 15 Transaction 11.6 11.6 12.9 13.7 12.7 12.2 12.5 12.8 12.8 13.1 12.5 12.9 16 Nontransaction 293.0 300.4 308.0 308.4 297.8 301.6 299.3 293.6 291.9 295.9 295.1 291.1 17 Borrowings ISSY 203.8 193.6 181.0 174.4 174.7 175.6 183.0 182.9 187.3 183.6 180.0 18 From banks in the U.S 28.9r 27.3 21.6 17.9 23.9 21.2 21.1 25.9 25.8 30.2 26.0 22.9 19 From others 160.0 176.4 172.0 163.1 150.5 153.5 154.5 157.0 157.1 157.1 157.6 157.1 20 Net due to related foreign offices 98.6 101.4 101.7 100.1 99.6 95.1 85.8 71.6 74.8 70.7 64.1 71.1 21 Other liabilities 67.7 76.8 74.5 70.2 67.2 67.4 60.8 59.3 58.1 60.9 57.8 59.6 22 Total liabilities 659.8 694.0 690.8 6733 651.6 650.9 634.0 620.2 620.4 627.8 6M 6147 23 Residual (assets less liabilities)7 5.8r 8.9 -1.1 2.2 2.3 .8 9.5 5.5 4.9 5.6 8.8 2.9 Not seasonally adjusted Assets 24 Bank credit 570.0 603.3 588.8 573.9 555.5 548.6 537.3 529.9 529.4 531.2 530.4 526.3 25 Securities in bank credit 203.2 212.4 212.0 206.2 199.5 198.8 195.2 193.5 194.0 194.1 193.0 191.3 26 U.S. government securities 88^ 83.0 83.9 83.2 84.5 87.4 86.4 87.4 86.8 88.2 87.3 87.2 27 Trading account 20.1 15.3 17.4 18.0 19.1 20.3 17.5 19.0 18.8 19.4 19.0 18.6 28 Investment account 68.8r 67.7 66.5 65.3 65.5 67.1 68.9 68.4 67.9 68.8 68.2 68.6 29 Other securities 114.4r 129.4 128.1 123.0 115.0 111.4 108.8 106.1 107.3 105.9 105.8 104.1 30 Trading account 70.1 79.1 79.0 74.7 70.3 68.4 67.6 63.4 64.5 62.9 62.9 61.7 31 Investment account 44.2r 50.4 49.1 48.2 44.7 43.0 41.2 42.7 42.8 43.0 42.9 42.4 32 Loans and leases in bank credit2 . . . 366.8 390.9 376.8 367.7 356.0 349.7 342.1 336.5 335.4 337.0 337.4 335.0 33 Commercial and industrial 211.4r 220.5 215.3 214.0 210.7 206.8 198.5 194.6 195.6 195.5 195.0 191.7 34 Real estate 24.0 21.8 21.6 20.8 19.8 19.5 19.3 18.6 19.1 18.5 18.4 18.3 35 Security3 60.9 66.8 63.2 59.1 51.4 51.4 52.4 51.2 49.9 50.9 51.4 52.5 36 Other loans and leases 70.4 81.8 76.8 73.7 74.1 72.1 71.8 72.0 70.7 72.2 72.6 72.5 37 Interbank loans 24.0 28.1 29.4 31.5 25.7 25.4 26.8 25.0 24.5 25.5 23.8 24.9 38 Cash assets4 35.7 37.5 37.0 35.5 36.0 36.5 38.6 36.1 38.5 38.3 33.7 32.9 39 Other assets5 33.0 40.1 39.0 39.0 38.1 35.7 34.6 31.6 30.6 34.3 28.6 32.9 40 Total assets6 662.4 708.7 693.9 679.6 655.0 645.9 637.0 622.4 622.7 628.9 6163 616.7 Liabilities 41 Deposits 305.5 315.6 318.4 320.8 313.7 313.2 314.0 307.1 306.9 309.3 307.9 303.4 42 Transaction 11.4 12.0 13.0 13.5 12.8 12.0 12.2 12.6 12.1 12.7 12.2 13.4 43 Nontransaction 294.1 303.6 305.4 307.4 300.9 301.2 301.8 294.5 294.8 296.6 295.7 290.0 44 Borrowings 188.^ 203.8 193.6 181.0 174.4 174.7 175.6 183.0 182.9 187.3 183.6 180.0 45 From banks in the U.S 28.91 27.3 21.6 17.9 23.9 21.2 21.1 25.9 25.8 30.2 26.0 22.9 46 From others 160.0 176.4 172.0 163.1 150.5 153.5 154.5 157.0 157.1 157.1 157.6 157.1 47 Net due to related foreign offices .... 96.6 107.7 104.4 103.7 97.8 89.5 83.9 70.2 71.4 68.3 64.1 71.7 48 Other liabilities 67.2 78.2 74.7 71.8 67.2 66.3 60.3 58.8 57.9 60.3 57.2 59.1 49 Total liabilities 658.1 7053 691.1 6773 653.1 643.6 633.9 619.0 619.1 625.2 612.8 614.1 50 Residual (assets less liabilities)7 4.3 3.4 2.8 2.4 2.0 2.2 3.1 3.3 3.6 3.8 3.5 2.6 MEMO 51 Revaluation gains on off-balance-sheet items8 42.2 48.2 46.0 43.6 40.2 38.8 36.8 33.4 34.6 33.7 32.7 31.6 52 Revaluation losses on off-balancesheet items8 40.6 44.5 42.3 41.3 39.2 38.9 35.9 32.6 33.6 32.7 31.6 31.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A21 NOTES TO TABLE 1.26 NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 group that contained the acquired bank and put into past data for the group containing the statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, ratio procedure is used to adjust past levels. "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks being published in the Bulletin. Instead, abbreviated balance sheets for both large and small in the United States, all of which are included in "Interbank loans." domestically chartered banks have been included in table 1.26, parts C and D. Data are both 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. securities. branches and agencies of foreign banks have been replaced by balance sheet estimates of all 4. Includes vault cash, cash items in process of collection, balances due from depository foreign-related institutions and are included in table 1.26, part E. These data are break- institutions, and balances due from Federal Reserve Banks. adjusted. 5. Excludes the due-from position with related foreign offices, which is included in "Net The not-seasonally-adjusted data for all tables now contain additional balance sheet items, due to related foreign offices." which were available as of October 2, 1996. 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for 1. Covers the following types of institutions in the fifty states and the District of transfer risk. Loans are reported gross of these items. Columbia: domestically chartered commercial banks that submit a weekly report of condition 7. This balancing item is not intended as a measure of equity capital for use in capital (large domestic); other domestically chartered commercial banks (small domestic); branches adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related seasonal patterns estimated for total assets and total liabilities. institutions). Excludes International Banking Facilities. Data are Wednesday values or pro 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and rata averages of Wednesday values. Large domestic banks constitute a universe; data for equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. small domestic banks and foreign-related institutions are estimates based on weekly samples 9. Includes mortgage-backed securities issued by U.S. government agencies, U.S. and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications government-sponsored enterprises, and private entities. of assets and liabilities. 10. Difference between fair value and historical cost for securities classified as available- The data for large and small domestic banks presented on pp. A17-19 are adjusted to for-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are remove the estimated effects of mergers between these two groups. The adjustment for restated to include an estimate of these tax effects. mergers changes past levels to make them comparable with current levels. Estimated 11. Mainly commercial and industrial loans but also includes an unknown amount of credit quantities of balance sheet items acquired in mergers are removed from past data for the bank extended to other than nonfinancial businesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • September 1999 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING A. Commercial Paper Millions of dollars, seasonally adjusted, end of period Year ending December 1998 1999 IItteemm 1994 1995 1996 1997 1998 Dec. Jan. Feb. Mar. Apr. May 1 AH issuers 595,382 674,904 775,371 966,699 1,163303 1,163,303 1,178,168 1,178,303 1,204,627 1,219,789 1,230,009 Financial companies' 2 Dealer-placed paper, total2 223,038 275,815 361,147 513,307 614,142 614,142 629,569 615,053 684,616 697,030 710,857 3 Directly placed paper, total3 207,701 210,829 229,662 252,536 322,030 322,030 314,601 320,468 276,424 276,721 268,129 4 Nonfinancial companies4 164,643 188,260 184,563 200,857 227,132 227,132 233,998 242,782 243,587 246,038 251,023 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, 3. As reported by financial companies that place their paper directly with investors. personal, and mortgage financing; factoring, finance leasing, and other business lending; 4. Includes public utilities and firms engaged primarily in such activities as communicainsurance underwriting; and other investment activities. tions, construction, manufacturing, mining, wholesale and retail trade, transportation, and 2. Includes all financial-company paper sold by dealers in the open market. services. B. Bankers Dollar Acceptances1 Millions of dollars, not seasonally adjusted, year ending September2 Item 1995 1996 1997 1998 1 Total amount of reporting banks' acceptances in existence 29,242 25,832 25,774 14,363 2 Amount of other banks' eligible acceptances held by reporting banks 1,249 709 736 523 3 Amount of own eligible acceptances held by reporting banks (included in item 1) 10,516 7,770 6,862 4,884 4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries (included in item 1) 11,373 9,361 10,467 5,413 1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United 2. Data on bankers dollar acceptances are gathered from approximately 65 institutions; States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks; includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal agencies of foreign banks, and Edge and agreement corporations. The reporting group is Reserve Act (12 U.S.C. §372). revised every year. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Average Average rate rate 8.50 1996 1997—Jan. . 1998—July . 8.25 1997 Feb. . Aug. 1998 Mar. . Sept. Apr. Oct. . 1996—Jan. . May Nov. 8.25 Feb. , June , Dec. 8.00 Mar. July .. 7.75 Apr. . Aug. 1999—Jan. .. May . Sept. Feb. . June Oct. . Mar. July . Nov. Apr. Aug. Dec. May Sept. June Oct.. 1998—Jan July . Nov. Feb. Dec. Mar. Apr. May June 1. The prime rate is one of several base rates that banks use to price short-term business Report. Data in this table also appear in the Board's H.15 (519) weekly and G.13 (415) loans. The table shows the date on which a new rate came to be the predominant one quoted monthly statistical releases. For ordering address, see inside front cover. by a majority of the twenty-five largest banks by asset size, based on the most recent Call Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A23 1.35 INTEREST RATES Money and Capital Markets Percent per year; figures are averages of business day data unless otherwise noted 1999 1999, week ending 11999966 11999977 11999988 Mar. Apr. May June May 28 June 4 June 11 June 18 June 25 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 5.30 5.46 5.35 4.81 4.74 4.74 4.76 4.73 4.65 4.71 4.73 4.71 2 Discount window borrowing2'4 5.02 5.00 4.92 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 Commercial paper3,5,6 Nonfinancial 3 1-month n.a. 5.57 5.40 4.82 4.79 4.79 4.95 4.81 4.85 4.85 4.95 5.01 4 2-month n.a. 5.57 5.38 4.82 4.78 4.80 4.98 4.82 4.87 4.88 4.99 5.05 5 3-month n.a. 5.56 5.34 4.81 4.79 4.81 4.98 4.84 4.87 4.90 5.00 5.03 Financial 6 1-month n.a. 5.59 5.42 4.84 4.80 4.80 4.96 4.81 4.84 4.88 4.97 5.03 7 2-month n.a. 5.59 5.40 4.83 4.80 4.82 5.00 4.85 4.90 4.93 5.01 5.06 8 3-month n.a. 5.60 5.37 4.84 4.80 4.83 5.04 4.86 4.92 4.96 5.04 5.11 Commercial paper (historical)3,5'7 9 1-month 5.43 5.54 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 3-month 5.41 5.58 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 6-month 5.42 5.62 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Finance paper, directly placed (historical)i'5'i 12 1-month 5.31 5.44 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 3-month 5.29 5.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 6-month 5.21 5.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Bankers acceptances3,5,9 15 3-month 5.31 5.54 5.39 4.82 4.80 4.86 5.04 4.87 4.95 4.99 5.04 5.06 16 6-month 5.31 5.57 5.30 4.82 4.80 4.89 5.14 4.91 5.02 5.10 5.15 5.15 Certificates of deposit, secondary market3,10 17 1-month 5.35 5.54 5.49 4.88 4.84 4.84 5.01 4.86 4.90 4.93 5.01 5.08 18 3-month 5.39 5.62 5.47 4.91 4.88 4.92 5.13 4.96 5.01 5.05 5.12 5.18 19 6-month 5.47 5.73 5.44 4.98 4.94 5.03 5.31 5.10 5.19 5.24 5.30 5.36 20 Eurodollar deposits, 3-month3'11 5.38 5.61 5.45 4.88 4.87 4.90 5.09 4.94 4.98 5.01 5.09 5.14 U.S. Treasury bills Secondary market ,5 21 3-month 5.01 5.06 4.78 4.44 4.29 4.50 4.57 4.52 4.53 4.50 4.56 4.61 22 6-month 5.08 5.18 4.83 4.47 4.37 4.56 4.82 4.62 4.75 4.81 4.82 4.85 23 1-year. 5.22 5.32 4.80 4.53 4.45 4.60 4.82 4.66 4.81 4.84 4.77 4.85 Auction high ' ' 24 3-month 5.02 5.07 4.81 4.48 4.28 4.51 4.59 4.50 4.62 4.51 4.62 4.61 25 6-month 5.09 5.18 4.85 4.52 4.36 4.55 4.81 4.57 4.75 4.76 4.86 4.85 26 1 -year 5.23 5.36 4.85 4.67 4.50 4.63 4.89 4.63 n.a. n.a. n.a. 4.89 U.S. TREASURY NOTES AND BONDS Constant maturities13 27 1-year 5.52 5.63 5.05 4.78 4.69 4.85 5.10 4.93 5.08 5.12 5.03 5.14 28 2-year 5.84 5.99 5.13 5.05 4.98 5.25 5.62 5.35 5.55 5.62 5.60 5.69 29 3-year 5.99 6.10 5.14 5.11 5.03 5.33 5.70 5.43 5.63 5.70 5.67 5.77 30 5-year 6.18 6.22 5.15 5.14 5.08 5.44 5.81 5.51 5.75 5.81 5.80 5.88 31 1-year 6.34 6.33 5.28 5.36 5.28 5.64 6.05 5.73 5.97 6.04 6.04 6.13 32 10-year 6.44 6.35 5.26 5.23 5.18 5.54 5.90 5.56 5.80 5.89 5.91 5.98 33 20-year 6.83 6.69 5.72 5.87 5.82 6.08 6.36 6.11 6.27 6.35 6.37 6.45 34 30-year 6.71 6.61 5.58 5.58 5.55 5.81 6.04 5.80 5.95 6.03 6.05 6.11 Composite 6.80 6.67 5.69 5.81 5.77 6.04 6.31 6.06 6.22 6.30 6.31 6.39 35 More than 10 years (long-term) STATE AND LOCAL NOTES AND BONDS Moody's series14 5.52 5.32 4.93 4.96 4.89 5.05 5.22 5.12 5.14 5.20 5.25 5.27 36 Aaa 5.79 5.50 5.14 5.32 5.27 5.43 5.59 5.49 5.52 5.57 5.60 5.66 37 Baa 5.76 5.52 5.09 5.10 5.08 5.18 5.37 5.23 5.29 5.34 5.38 5.45 38 Bond Buyer series CORPORATE BONDS 7.66 7.54 6.87 7.07 7.05 7.32 7.62 7.39 7.52 7.59 7.62 7.70 39 Seasoned issues, all industries16 Rating group 7.37 7.27 6.53 6.62 6.64 6.93 7.23 6.99 7.13 7.21 7.24 7.31 40 Aaa 7.55 7.48 6.80 6.98 6.96 7.23 7.52 7.30 7.43 7.50 7.52 7.60 41 Aa 7.69 7.54 6.93 7.14 7.13 7.40 7.69 7.47 7.59 7.67 7.70 7.78 42 A 8.05 7.87 7.22 7.53 7.48 7.72 8.02 7.79 7.92 7.99 8.02 8.10 43 Baa MEMO Dividend-price ratio1 44 Common stocks 2.19 1.77 1.49 1.30 1.24 1.24 1.25 1.28 1.29 1.26 1.25 1.24 1. The daily effective federal funds rate is a weighted average of rates on trades through 11. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for New York brokers. indication purposes only. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the 12. Auction date for daily data; weekly and monthly averages computed on an issue-date current week; monthly figures include each calendar day in the month. basis. On or after October 28, 1998, data are stop yields from uniform-price auctions. Before 3. Annualized using a 360-day year or bank interest. that, they are weighted average yields from multiple-price auctions. 4. Rate for the Federal Reserve Bank of New York. 13. Yields on actively traded issues adjusted to constant maturities. Source: US. Depart- 5. Quoted on a discount basis. ment of the Treasury. 6. Interest rates interpolated from data on certain commercial paper trades settled by the 14. General obligation bonds based on Thursday figures; Moody's Investors Service. Depository Trust Company. The trades represent sales of commercial paper by dealers or 15. State and local government general obligation bonds maturing in twenty years are used direct issuers to investors (that is, the offer side). See Board's Commercial Paper Web pages in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys' (http://www.federalreserve.gov/releases/cp) for more information. A1 rating. Based on Thursday figures. 7. An average of offering rates on commercial paper for firms whose bond rating is AA or 16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected the equivalent. Series ended August 29, 1997. long-term bonds. 8. An average of offering rates on paper directly placed by finance companies. Series 17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in ended August 29, 1997. the price index. 9. Representative closing yields for acceptances of the highest-rated money center banks. NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and 10. An average of dealer offering rates on nationally traded certificates of deposit. G.13 (415) monthly statistical releases. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • September 1999 1.36 STOCK MARKET Selected Statistics 1998 1999 IInnddiiccaattoorr 11999966 11999977 11999988 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Prices and trading volume ^averages of daily figures)' Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 357.98 456.99 550.65 511.49 564.26 576.05 595.43 588.70 603.69 627.75 635.62 629.53 2 Industrial 453.57 574.97 684.35 636.62 704.46 717.14 741.43 736.20 751.93 780.84 791.72 783.96 3 Transportation 327.30 415.08 468.61 396.61 442.95 456.70 479.72 477.47 491.25 523.08 537.88 520.66 4 Utility 126.36 143.87 190.52 195.09 206.29 215.57 224.75 218.24 218.11 228.48 242.98 241.36 5 Finance 303.94 424.84 516.65 448.12 501.45 510.31 523.38 514.75 544.08 564.99 562.66 546.43 6 Standard & Poor's Corporation (1941-43 = 10)2 670.49 873.43 1,085.50 1,032.47 1,144.43 1,190.05 1,248.77 1,246.58 1,281.66 1,334.76 1,332.07 1,322.55 7 American Stock Exchange (Aug. 31, 1973 = 50)3 570.86 628.34 682.69 607.16 667.60 660.76 704.22 699.15 711.08 748.29 787.02 772.01 Volume of trading (thousands of shares) 8 New York Stock Exchange 409,740 523,254 666,534 808,816 668,932 680,397 847,135 756,932 776,538 874,818 785,778 723,025 9 American Stock Exchange 22,567 24,390 28,870 31,946 27,266 28,756 31,015 31,774 29,563 38,895 35,241 28,806 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers' 97,400 126,090 140,980 130,160 139,710 140,980 153,240 151,530 156,440 172,880 177,984 176,930 Free credit balances at brokers5 11 Margin accounts6 22,540 31,410 40,250 43,500 40,620 40,250 36,880 38,850 40,120 41,200 41,250 42,865 12 Cash accounts 40,430 52,160 62,450 54,610 56,170 62,450 59,600 57,910 59,435 60,870 61,665 64,100 Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 13 Margin stocks 70 80 65 55 65 50 14 Convertible bonds 50 60 50 50 50 50 15 Short sales 70 80 65 55 65 50 1. Daily data on prices are available upon request to the Board of Governors. For ordering 6. Series initiated in June 1984. address, see inside front cover. 7. Margin requirements, stated in regulations adopted by the Board of Governors pursuant 2. In July 1976 a financial group, composed of banks and insurance companies, was added to the Securities Exchange Act of 1934, limit the amount of credit that can be used to to the group of stocks on which the index is based. The index is now based on 400 industrial purchase and carry "margin securities" (as defined in the regulations) when such credit is stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and collateralized by securities. Margin requirements on securities are the difference between the 40 financial. market value (100 percent) and the maximum loan value of collateral as prescribed by the 3. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, previous readings in half. 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971. 4. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the included credit extended against stocks, convertible bonds, stocks acquired through the initial margin required for writing options on securities, setting it at 30 percent of the current exercise of subscription rights, corporate bonds, and government securities. Separate report- market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the ing of data for margin stocks, convertible bonds, and subscription issues was discontinued in required initial margin, allowing it to be the same as the option maintenance margin required April 1984. by the appropriate exchange or self-regulatory organization; such maintenance margin rules 5. Free credit balances are amounts in accounts with no unfulfilled commitments to must be approved by the Securities and Exchange Commission. brokers and are subject to withdrawal by customers on demand. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A25 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year TTTyyypppeee ooofff aaaccccccooouuunnnttt ooorrr ooopppeeerrraaatttiiiooonnn 1999 11999966 11999977 11999988 Jan. Feb. Mar. Apr. May June U.S. budget1 1 Receipts, total 1,453,062 1,579,292 1,721,798 171,722 99,414 130,292 266,142 98,587 199,479 2 On-budget 1,085,570 1,187,302 1,305,999 129,921 65,058 92,425 219,403 62,646 156,901 3 Off-budget 367,492 391,990 415,799 41,801 34,356 37,867 46,739 35,941 42,578 4 Outlays, total 1,560,512 1,601,235 1,652,552 101,217 141,760 152,701 152,683 122,556 145,911 5 On-budget 1,259,608 1,290,609 1,335,948 102,320 110,486 121,999 123,376 91,358 136,113 6 Off-budget 300,904 310,626 316,604 -1,103 31,274 30,702 29,307 31,197 9,799 7 Surplus or deficit (-), total -107,450 -21,943 69,246 70,505 -42,345 -22,409 113,459 -23,969 53,568 8 On-budget -174,038 -103,307 -29,949 27,601 -45,428 -29,574 96,027 -28,712 20,788 9 Off-budget 66,588 81,364 99,195 42,904 3,082 7,165 17,432 4,744 32,779 Source of financing (total) 10 Borrowing from the public 129,712 38,171 -51,049 -31,249 1,688 37,013 -85,208 -551 -22,246 11 Operating cash (decrease, or increase (—)) -6,276 604 4,743 -39,567 52,432 -16,988 -36,512 32,495 -27,459 12 Other 2 -15,986 -16,832 -22,940 311 -11,775 2,384 8,261 -7,975 -3,863 MEMO 13 Treasury operating balance (level, end of period) 44,225 43,621 38,878 57,070 4,638 21,626 58,138 25,643 53,102 14 Federal Reserve Banks 7,700 7,692 4,952 7,623 4,538 5,374 10,040 5,506 6,720 15 Tax and loan accounts 36,525 35,930 33,926 49,446 100 16,252 48,098 20,586 46,382 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 Nonfinancial Statistics • September 1999 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1997 1998 1999 1999 11999977 11999988 H2 HI H2 HI Apr. May June RECEIPTS 1 A11 sources 1,579,292 1,721,798 773,810 922,630 825,057 965,636 266,142 98,587 199,479 2 Individual income taxes, net 737,466 828,586 354,072 447,514 392,332 481,527 164,832 30,585 92,993 3 Withheld 580,207 646,483 306,865 316,309 339,144 351,068 55,484 50,727 57,716 4 Nonwithheld 250,753 281,527 58,069 219,136 65,204 240,278 145,935 4,119 37,706 5 Refunds 93,560 99,476 10,869 87,989 12,032 109,875 3366,,660000 2244,,227733 22,,443388 Corporation income taxes 6 Gross receipts 204,493 213,249 104,659 109,353 104,163 106,861 27,118 5,176 40,610 7 Refunds 22,198 24,593 10,135 14,220 14,250 17,092 5,419 1,229 1,346 8 Social insurance taxes and contributions, net . .. 539,371 571,831 260,795 312,713 268,466 324,831 65,162 53,698 55,144 y Employment taxes and contributions2 506,751 540,014 247,794 293,520 256,142 306,235 60,186 45,617 54,380 10 Unemployment insurance 28,202 27,484 10,724 17,080 10,121 16,378 4,547 7,731 370 n Other net receipts3 4,418 4,333 2,280 2,112 2,202 2,216 428 350 393 12 Excise taxes 56,924 57,673 31,133 29,922 33,366 31,015 5,579 4,978 5,880 13 Customs deposits 17,928 18,297 9,679 8,546 9,838 8,440 1,350 1,256 1,599 14 Estate and gift taxes 19,845 24,076 10,262 12,971 12,359 14,915 5,138 1,942 1,857 15 Miscellaneous receipts4 25,465 32,658 13,348 15,829 18,735 15,140 2,383 2,181 2,742 OUTLAYS 16 All types 1,601,235 1,652,552 824,368 815,884 877,412 816,828 152,683 122,556 145,911 17 National defense 270,473 268,456 140,873 129,351 140,196 134,414 25,433 19,211 24,122 18 International affairs 15,228 13,109 9,420 4,610 8,297 6,879 1,686 640 1,053 19 General science, space, and technology 17,174 18,219 10,040 9,426 10,142 9,319 1,565 1,581 1,800 20 Energy 1,483 1,270 411 957 699 797 -156 104 557 21 Natural resources and environment 21,369 22,396 11,106 10,051 12,671 10,351 1,611 1,595 1,906 22 Agriculture 9,032 12,206 10,590 2,387 16,757 9,803 666 487 2,591 23 Commerce and housing credit -14,624 1,014 -3,526 -2,483 4,046 -1,629 -536 989 -116 24 Transportation 40,767 40,332 20,414 16,196 20,836r 17,082 2,737 3,010 3,882 25 Community and regional development 11,005 9,720 5,749 4,863 6,972 5,368 684 906 11,,220011 26 Education, training, employment, and social services 53,008 54,919 26,851 25,928 27,760 29,003 4,202 4,464 4,143 27 Health 123,843 131,440 63,552 65,053 67,836 69,320 12,284 10,657 12,307 28 Social security and Medicare 555,273 572,047 283,109 286,305 316,809 261,146 51,816 44,519 52,990 29 Income security 230,886 233,202 106,353 125,196 109,481 126,144 24,420 12,880 14,574 30 Veterans benefits and services 39,313 41,781 22,077 19,615 22,750 20,105 5,498 1,893 3,619 31 Administration of justice 20,197 22,832 10,212 11,287 12,041 13,149 2,625 1,886 2,536 32 General government 12,768 13,444 7,302 6,139 9,136 6,650 929 621 3,508 33 Net interest5 244,013 243,359 122,620 122,345 116,954 116,655 20,195 19,976 18,518 34 Undistributed offsetting receipts6 -49,973 -47,194 -22,795 -21,340 -25,795 -17,724 -2,976 -2,864 -3,278 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 2000\ 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 A27 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1997 1998 1999 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 5,410 5,446 5,536 5,573 5,578 5,556 5,643 5,726 n.a. 2 Public debt securities 5,376 5,413 5,502 5,542 5,548 5,526 5,614 5,652 5,639 3 Held by public 3,805 3,815 3,847 3,872 3,790 3,761 3,787 n.a. n.a. 4 Held by agencies 1,572 1,599 1,656 1,670 1,758 1,766 1,827 1,857 n.a. 5 Agency securities 34 33 34 31 30 29 29 74 n.a. 6 Held by public 26 26 27 26 26 26 29 n.a. n.a. 7 Held by agencies 7 7 7 5 4 4 1 n.a. n.a. 8 Debt subject to statutory limit 5,290 5,328 5,417 5,457 5,460 5,440 5,530 5,566 5,552 9 Public debt securities 5,290 5,328 5,416 5,456 5,460 5,439 5,530 5,566 5,552 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 5,500 5,950 5,950 5,950 5,950 5,950 5,950 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 U.S. TREASURY Types and Ownership Billions of dollars, end of period 1998 1999 TTyyppee aanndd hhoollddeerr 11999955 11999966 11999977 11999988 Q3 Q4 Ql Q2 1 Total gross public debt 4,988.7 5,323.2 5,502.4 5,614.2 5,526.2 5,614.2 5,651.6 5,638.8 By type 2 Interest-bearing 4,964.4 5,317.2 5,494.9 5,605.4 5,518.7 5,605.4 5,643.1 5,629.5 3 Marketable 3,307.2 3,459.7 3,456.8 3,355.5 3,331.0 3,355.5 3,361.3 3,248.5 4 Bills 760.7 777.4 715.4 691.0 637.7 691.0 725.5 647.8 5 Notes 2,010.3 2,112.3 2,106.1 1,960.7 2,009.1 1,960.7 1,912.0 1,8 38.5 6 Bonds 521.2 555.0 587.3 621.2 610.4 621.2 632.5 632.5 7 Inflation-indexed notes and bonds' n.a. n.a. 33.0 50.6 41.9 50.6 59.2 59.9 8 Nonmarketable2 1,657.2 1,857.5 2,038.1 2,249.9 2,187.7 2,249.9 2,281.8 2,381.0 9 State and local government series 104.5 101.3 124.1 165.3 164.4 165.3 167.5 172.6 10 Foreign issues" 40.8 37.4 36.2 34.3 35.1 34.3 33.5 30.9 11 Government 40.8 47.4 36.2 34.3 35.1 34.3 33.5 30.9 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 181.9 182.4 181.2 180.3 180.8 180.3 180.6 180.0 14 Government account series4 1,299.6 1,505.9 1,666.7 1,840.0 1,777.3 1,840.0 1,870.2 1,967.5 15 Non-interest-bearing 24.3 6.0 7.5 8.8 7.5 8.8 8.5 9.3 By holder 5 16 U.S. Treasury and other federal agencies and trust funds 1,304.5 1,497.2 1,655.7 1,826.8 1,765.6 1,826.8 1,857.1 17 Federal Reserve Banks 391.0 410.9 451.9 471.7 458.1 471.7 464.5 18 Private investors 3,307.7r 3,431.2r 3,414.6r 3,334.0 3,313.2r 3,334.0 3,327.6 19 Commercial banks 278.7 261.8 269.8 215.0 219.8 215.0 20 Money market funds 71.5 91.6 88.9 105.8 84.2 105.8 21 Insurance companies 241.5 214.1 224.9 186.0 186.1 186.0 22 Other companies 228.8 258.5 265.0 267.9 271.4 267.9 23 State and local treasuries6-7 469.6 482.5 493.0 490.0 487.4 490.0 n.a. n.a. Individuals 24 Savings bonds 185.0 187.0 186.5 186.7 186.0 186.7 25 Other securities 162.7 169.6 168.4 164.9 166.4 164.9 26 Foreign and international8 835.2 1,102.1 1,241.6 1,276.3 1,221.8 1,276.3 2/ Other miscellaneous investors7,9 825.9 678.9 552.0 441.4 477.9 441.4 1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of 7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable 1997. federal securities was removed from "Other miscellaneous investors" and added to "State and 2. Includes (not shown separately) securities issued to the Rural Electrification Administra- local treasuries." The data shown here have been revised accordingly. tion, depository bonds, retirement plan bonds, and individual retirement bonds. 8. Consists of investments of foreign balances and international accounts in the United 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur- States. rency held by foreigners. 9. Includes savings and loan associations, nonprofit institutions, credit unions, mutual 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. savings banks, corporate pension trust funds, dealers and brokers, certain U.S. Treasury 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual deposit accounts, and federally sponsored agencies. holdings; data for other groups are Treasury estimates. SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the 6. Includes state and local pension funds. Public Debt of the United States; data by holder, Treasury Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 DomesticN onfinancial Statistics • September 1999 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1999 1999, week ending IItteemm Mar. Apr. May May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 June 30 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 3344,,442266 2288,,667700 3300,,779911 2277,,558888 22,250 30,178 33,860 44,136 26,723 28,957 28,737 25,325 Coupon securities, by maturity 2 Five years or less 9966,,114411 87,799 109,736 99,140 111,305 119,095 107,406 106,003 87,777 98,614 109,472 96,184 3 More than five years 62,008 53,786 76,896 64,242 80,606 89,051 74,641 66,867 57,031 69,981 58,992 59,964 4 Inflation-indexed 402 1,415 1,147 1,122 1,200 1,213 912 1,368 730 1,573 1,620 1,154 Federal agency 5 Discount notes 4400,,008899 37,345 42,161 39,540 38,485 46,343 42,548 43,296 42,921 44,185 45,409 46,320 Coupon securities, by maturity 6 One year or less 11,,009977 11,,222222 11,,119944 11,,334422 1,088 1,411 962 1,248 423 807 743 505 7 More than one year, but less than or equal to five years 7,640 6,875 5,966 6,925 8,027 5,562 4,926 3,978 6,850 4,278 4,466 7,127 8 More than five years 3,141 4,625 4,333 6,005 5,494 2,417 4,876 3,013 7,717 4,275 3,004 2,524 9 Mortgage-backed 69,547 69,382 73,553 65,902 96,920 78,245 62,490 52,876 85,323 99,470 57,709 55,947 By type of counterparty With interdealer broker 10 U.S. Treasury 106,659 93,341 118,422 105,038 120,682 126,287 118,279 115,167 96,344 108,996 107,973 96,074 11 Federal agency 4,121 3,904 4,202 3,983 5,334 3,824 4,451 2,751 4,148 3,606 3,771 3,373 12 Mortgage-backed 23,601 23,682 26,585 22,906 30,665 30,181 25,026 20,066 31,289 33,004 23,007 21,558 With other 13 U.S. Treasury 86,316 78,330 100,149 87,054 94,680 113,249 98,540 103,208 75,918 90,129 90,848 86,552 14 Federal agency 47,846 46,162 49,452 49,829 47,760 51,909 48,861 48,783 53,762 49,938 49,851 53,103 15 Mortgage-backed 45,946 45,700 46,968 42,996 66,255 48,065 37,464 32,810 54,034 66,466 34,702 34,389 FUTURES TRANSACTIONS3 By type of deliverable security 16 U.S. Treasury bills 0 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0 0 Coupon securities, by maturity 17 Five years or less 2,649 1,947 3,921 3,233 2,836 2,810 3,774 8,515 3,878 3,729 3,494 2,272 18 More than five years 15,926 11,950 18,045 16,092 18,445 18,446 17,309 19,888 13,311 15,059 13,695 12,802 19 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 0 Federal agency 20 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 21 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 22 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 0 23 More than five years 0 0 0 0 0 0 0 0 0 0 0 0 24 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 0 OPTIONS TRANSACTIONS4 By type of underlying security 25 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 26 Five years or less 1,506 985 1,434 1,095 1,647 1,326 1,304 1,816 1,924 2,048 1,438 1,453 27 More than five years 5,050 4,657 6,556 6,417 8,312 6,498 5,645 5,383 4,946 4,607 6,116 4,144 28 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 00 Federal agency 29 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 30 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 31 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 0 32 More than five years 0 0 0 0 0 0 0 0 0 0 0 0 33 Mortgage-backed 825 783 827 0 0 0 0 0 0 0 0 0 1. Transactions are market purchases and sales of securities as reported to the Federal Forward transactions are agreements made in the over-the-counter market that specify Reserve Bank of New York by the U.S. government securities dealers on its published list of delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt primary dealers. Monthly averages are based on the number of trading days in the month. securities are included when the time to delivery is more than five business days. Forward Transactions are assumed to be evenly distributed among the trading days of the report week. contracts for mortgage-backed agency securities are included when the time to delivery is Immediate, forward, and futures transactions are reported at principal value, which does not more than thirty business days. include accrued interest; options transactions are reported at the face value of the underlying 3. Futures transactions are standardized agreements arranged on an exchange. All futures securities. transactions are included regardless of time to delivery. Dealers report cumulative transactions for each week ending Wednesday. 4. Options transactions are purchases or sales of put and call options, whether arranged on 2. Outright transactions include immediate and forward transactions. Immediate delivery an organized exchange or in the over-the-counter market, and include options on futures refers to purchases or sales of securities (other than mortgage-backed federal agency securi- contracts on U.S. Treasury and federal agency securities. ties) for which delivery is scheduled in five business days or less and "when-issued" NOTE, "n.a." indicates that data are not published because of insufficient activity. securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1999 1999, week ending IItteemm Mar. Apr. May May 5 May 12 May 19 May 26 June 2 June 9 June 16 June 23 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 24,510 24,563 6,146 9,624 6,876 3,577 -671 14,784 8,035 584 3,279 Coupon securities, by maturity 2 Five years or less -18,124 -14,332 -33,183 -29,701 -33.182 -40,279 -27,919 -34,104 -33,478 -33,837 -27,785 3 More than five years -6,408 -5,060 -11,576 -6,844 -8,983 -16,296 -12,522 -12,003 -15,259 -16,490 -15,219 4 Inflation-indexed 1,846 2,618 2,523 2,387 2,328 2,831 2,681 2,282 2,291 2,211 1,870 Federal agency 5 Discount notes 18,189 24,321 19,406 21,224 22,962 16,900 18,887 16,847 18,208 19,790 15,999 Coupon securities, by maturity 6 One year or less 2,683 2,538 2,439 2,499 2,205 2,710 2,606 2,091 2,450 2,627 2,611 7 More than one year, but less than or equal to five years 5,222 3,991 6,001 6,094 6,971 6,352 5,514 4,742 5,978 6,901 5,442 8 More than five years 4,110 6,131 6,705 8,035 6,619 6,651 6,441 5,943 9,292 6,797 5,468 9 Mortgage-backed 16,774 12,875 16,251 15,220 16,619 18,292 16,347 13,776 14,450 12,849 18,844 NET FUTURES POSITIONS4 By type of deliverable security 10 U.S. Treasury bills 00 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 00 00 Coupon securities, by maturity 11 Five years or less -910 93 7,117 5,086 7,304 8,167 8,054 6,104 8,742 8,852 9,919 12 More than five years -12,929 -17,408 -4,873 -9,980 -6,700 -3,142 -3,640 -1,355 -2,451 -326 -42 13 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 14 Discount notes 00 00 00 00 00 00 0 0 0 0 0 Coupon securities, by maturity 15 One year or less 00 00 00 00 00 00 00 00 00 0 0 16 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 17 More than five years 0 0 0 0 0 0 0 0 0 0 0 18 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 NET OPTIONS POSITIONS By type of deliverable security 19 U.S. Treasury bills 00 00 00 00 00 00 00 0 00 0 00 Coupon securities, by maturity 20 Five years or less -1,268 -1,180 -142 -2,154 76 290 463 111 -1,374 -2,230 -2,791 21 More than five years -448 -396 -1,581 -2,916 -3,188 -1,342 149 -753 -1,159 -272 -1,230 22 Inflation-indexed n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0 Federal agency 23 Discount notes 00 00 00 00 0 0 0 0 0 0 0 Coupon securities, by maturity 24 One year or less 00 00 00 00 00 00 00 0 00 0 0 25 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 n.a. n.a. n.a. 26 More than five years n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 27 Mortgage-backed 6,928 5,579 7,992 6,111 7,523 9,901 7,705 8,257 8,416 6,247 5,412 Financing5 Reverse repurchase agreements 28 Overnight and continuing 256,331 251,605 262,314 263,907 248,483 288,115 239,101 276,464 250,601 283,399 261,829 29 Term 781,168 818,297 806,177 873,473 921,739 721,626 770,366 745,598 803,032 824,794 846,179 Securities borrowed 30 Overnight and continuing 226,297 212,240 226,492 215,477 215,997 231,322 229,860 240,721 234,845 248,602 243,760 31 Term 93,810 102,437 97,977 108,953 107,395 91,045 96,836 85,116 91,587 90,676 96,640 Securities received as pledge 32 Overnight and continuing 2,555 n.a. 2,814 n.a. n.a. 2,901 2,727 n.a. n.a. 2,659 n.a. 33 Term 0 0 0 0 0 0 0 n.a. n.a. 0 0 Repurchase agreements 34 Overnight and continuing 655,676 677,260 660,275 668,484 663,131 676,072 637,601 657,693 639,636 672,973 650,226 35 Term 673,650 711,067 693,158 760,392 790,734 614,627 669,937 631,770 676,202 699,832 731,503 Securities loaned 36 Overnight and continuing 12,875 10,235 10,819 10,528 10,874 10,736 10,933 10,988 11,799 12,487 12,000 37 Term 6,122 5,942 6,566 6,218 6,628 6,680 6,664 6,528 6,003 6,074 6,093 Securities pledged 38 Overnight and continuing 48,533 45,650 47,279 47,273 46,479 48,287 47,661 46,461 44,679 45,196 52,037 39 Term 7,712 10,700 9,702 11,337 10,700 7,603 10,434 8,582 8,781 9,182 9,907 Collateralized loans 40 Total 18,177 17,891 16,223 16,191 16,256 12,988 17,881 18,417 17,414 17,966 13,101 1. Data for positions and financing are obtained from reports submitted to the Federal securities are included when the time to delivery is more than five business days. Forward Reserve Bank of New York by the U.S. government securities dealers on its published list of contracts for mortgage-backed agency securities are included when the time to delivery is primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar more than thirty business days. days of the report week are assumed to be constant. Monthly averages are based on the 4. Futures positions reflect standardized agreements arranged on an exchange. All futures number of calendar days in the month. positions are included regardless of time to delivery. 2. Securities positions are reported at market value. 5. Overnight financing refers to agreements made on one business day that mature on the 3. Net outright positions include immediate and forward positions. Net immediate posi- next business day; continuing contracts are agreements that remain in effect for more than one tions include securities purchased or sold (other than mortgage-backed agency securities) that business day but have no specific maturity and can be terminated without advance notice by have been delivered or are scheduled to be delivered in five business days or less and either party; term agreements have a fixed maturity of more than one business day. Financing "when-issued" securities that settle on the issue date of offering. Net immediate positions for data are reported in terms of actual funds paid or received, including accrued interest. mortgage-backed agency securities include securities purchased or sold that have been NOTE, "n.a." indicates that data are not published because of insufficient activity. delivered or are scheduled to be delivered in thirty business days or less. Forward positions reflect agreements made in the over-the-counter market that specify delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • September 1999 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1998 1999 AAggeennccyy 11999955 11999966 11999977 11999988 Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies 844,611 925,823 1,022,609 1,296,477 1,296,477 1,311,010 1,324,812 1,347,872 1,377,524 2 Federal agencies 37,347 29,380 27,792 26,502 26,502 26,355 26,180 26,243 26,100 3 Defense Department1 6 6 6 6 6 6 6 6 6 4 Export-Import Bank2,3 2,050 1,447 552 n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 97 84 102 205 205 70 69 80 84 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. I Postal Service6 5,765 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 29,429 27,853 27,786 26,496 26,496 26,349 26,174 26,237 26,094 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 807,264 896,443 994,817 1,269,975 1,269,975 1,284,655 1,298,632 1,321,629 1,351,424 11 Federal Home Loan Banks 243,194 263,404 313,919 382,131 382,131 383,572 383,769 402,364 415,602 12 Federal Home Loan Mortgage Corporation 119,961 156,980 169,200 287,396 287,396 300,927 299,171 299,196 310,387 13 Federal National Mortgage Association 299,174 331,270 369,774 460,291 460,291 461,157 471,300 475,418 478,994 14 Farm Credit Banks8 57,379 60,053 63,517 63,488 63,488 61,292 66,622 66,529 67,527 15 Student Loan Marketing Association9 47,529 44,763 37,717 35,399 35,399 36,385 36,464 36,762 n.a. 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation11 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 78,681 58,172 49,090 44,129 44,129 43,803 43,151 41,454 41,637 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 2,044 1.431 552 A • • f f • 21 Postal Service6 5,765 n.a. n.a. T T T 1 T T 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2 23 4 T U e n n it n e e d s s S e t e a t V es a l R le a y i l A w u ay th o A r s it s y o ciation6 n 3 . , a 2 . 0 0 n n. . a a . . n n . . a a . . i I 1 I i I 1 1 1 1 t 1 Other lending14 2B Farmers Home Administration 21,015 18,325 13,530 9,500 9,500 9,500 9,090 8,715 8,550 26 Rural Electrification Administration 17,144 16,702 14,898 14,091 14,091 14,101 14,100 13,980 13,999 21 Other 29,513 21,714 20,110 20,538 20,538 20,202 19,961 18,759 19,088 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 10. The Financing Corporation, established in August 1987 to recapitalize the Federal under family housing and homeowners assistance programs. Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to 3. On-budget since Sept. 30, 1976. provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 4. Consists of debentures issued in payment of Federal Housing Administration insurance 12. The Resolution Funding Corporation, established by the Financial Institutions Reform, claims. Once issued, these securities may be sold privately on the securities market. Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989. 5. Certificates of participation issued before fiscal year 1969 by the Government National 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations Mortgage Association acting as trustee for the Farmers Home Administration, the Department issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the of Health, Education, and Welfare, the Department of Housing and Urban Development, the purpose of lending to other agencies, its debt is not included in the main portion of the table to Small Business Administration, and the Veterans Administration. avoid double counting. 6. Off-budget. 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans 7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally Federal Agricultural Mortgage Corporation, therefore details do not sum to total. Some data being small. The Farmers Home Administration entry consists exclusively of agency assets, are estimated. whereas the Rural Electrification Administration entry consists of both agency assets and 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is guaranteed loans. shown on line 17. 9. Before late 1982, the association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A31 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 1998 1999 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues, new and refunding1 171,222 214,694 262,342 19,325 24,288 16,926 16,233 24,323 15,758 16,234 23,428 By type of issue 2 General obligation 60,409 69,934 87,015 5,433 8,632 6,925 6,786 8,323 6,443 5,294 10,997 3 Revenue 110,813 134,989 175,327 13,892 15,656 10,001 9,446 16,000 9,315 10,941 12,431 By type of issuer 4 State 13,651 18,237 23,506 778 2,561 318 1,837 1,895 907 1,220 1,236 5 Special district or statutory authority2 113,228 134,919 178,421 13,473 15,937 12,929 11,145 14,604 10,010 11,279 18,414 6 Municipality, county, or township 44,343 70,558 60,173 5,073 5,790 3,679 3,251 7,825 4,841 3,735 3,779 7 Issues for new capital 112,298 135,519 160,568 12,452 14,517 11,917 10,674 16,201 10,474 12,149 19,509 By use of proceeds 8 Education 26,851 31,860 36,904 2,353 2,766 2,936 3,751 3,537 2,734 2,795 3,793 9 Transportation 12,324 13,951 19,926 806 1,800 1,706 628 1,640 1,107 1,791 1,650 10 Utilities and conservation 9,791 12,219 21,037 2,225 984 672 394 2,839 1,372 603 1,594 11 Social welfare 24,583 27,794 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Industrial aid 6,287 6,667 8,594 638 1,376 452 343 1,084 618 1,058 739 13 Other purposes 32,462 35,095 42,450 3,242 4,477 4,439 3,207 3,918 2,592 3,760 7,195 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 1998 1999 TTyyppee ooff oo rr ii ss ii ss ss uu ss ee uu ,, ee oo rr ffffeerriinngg,, 11999966 11999977 11999988 Oct. Nov. Dec. Jan. Feb. Mar.r Apr. May 1 All issues' 773,110 929,256 l,127,499r 70,287 111,762 81,326 93,665 103,175 126,161 84,550 110,396 2 Bonds2 651,104 811,376 l,000,744r 61,632 102,860 72,656 86,529 92,885 116,440 75,409 94,689 By type of offering 3 Sold in the United States 567,671 708,188 922,779r 54,795 95,106 69,395 76,511 82,871 101,024 64,575 87,848 4 Sold abroad 83,433 103,188 77,965 6,837 7,754 3,261 10,018 10,014 15,416 10,834 6,841 MEMO 5 Private placements, domestic 43,692 54,996 37,848 2,428 2,878 3,874 684 648 1,224 n.a. n.a. By industry group 6 Nonfinancial 167,904 222,603 307,935r 14,426 32,124 25,008 21,193 23,131 39,818 30,676 30,701 7 Financial 483,200 588,773 692,809 47,206 70,736 47,648 65,336 69,754 76,623 44,733 63,988 8 Stocks3 122,006 117,880 126,755 8,655 8,902 8,670 7,136 10,290 9,721 9,141 15,707 By type of offering 9 Public 122,006 117,880 126,755 8,655 8,902 8,670 7,136 10,290 9,721 9,141 15,707 10 Private placement4 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 80,460 60,386 74,113 5,879 6,145 7,559 3,701 8,911 8,534 7,640 10,382 12 Financial 41,546 57,494 52,642 2,776 2,757 1,111 3,435 1,379 1,187 1,501 5,325 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data include 144(a) offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data cover only public offerings. exclude secondary offerings, employee stock plans, investment companies other than closed- 4. Data are not available. end, intracorporate transactions, and Yankee bonds. Stock data include ownership securities SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve issued by limited partnerships. System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • September 1999 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1998 1999 IItteemm 11999977 11999988 Nov. Dec. Jan. Feb. Mar. Apr/ May June 1 Sales of own shares2 1,190,900 1,461,430 112,627 140,700 161,889 132,199 164,290 166,324 140,422 138,559 2 Redemptions of own shares 918,728 1,217,022 89,702 134,289 135,713 128,125 146,479 139,035 127,800 117,842 3 Net sales3 272,172 244,408 22,925 6,412 26,176 4,074 17,811 27,288 12,622 20,717 4 Assets4 3,409,315 4,173,531 4,002,089 4,173,531 4,298,071 4,180,115 4,328,150 4,505,237 4,442,880 4,650,272 5 Cash5 174,154 191,393 207,422 191,393 203,470 198,134 198,741 211,243 211,580 216,646 6 Other 3,235,161 3,982,138 3,794,667 3,982,138 4,094,601 3,981,982 4,129,409 4,293,994 4,231,300 4,433,626 1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual 4. Market value at end of period, less current liabilities. funds. 5. Includes all U.S. Treasury securities and other short-term debt securities. 2. Excludes reinvestment of net income dividends and capital gains distributions and share SOURCE. Investment Company Institute. Data based on reports of membership, which issue of conversions from one fund to another in the same group. comprises substantially all open-end investment companies registered with the Securities and 3. Excludes sales and redemptions resulting from transfers of shares into or out of money Exchange Commission. Data reflect underwritings of newly formed companies after their market mutual funds within the same fund family. initial offering of securities. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1997 1998 1999 AAccccoouunntt 11999966 11999977 11999988 Q2 Q3 Q4 Qi Q2 Q3 Q4 Qlr 1 Profits with inventory valuation and capital consumption adjustment 750.4 817.9 824.6 815.5 840.9 820.8 829.2 820.6 827.0 821.7 868.8 2 Profits before taxes 680.2 734.4 717.8 729.8 758.9 736.4 719.1 723.5 720.5 708.1 752.6 3 Profits-tax liability 226.1 246.1 240.1 241.9 254.2 249.3 239.9 241.6 243.2 235.6 250.7 4 Profits after taxes 454.1 488.3 477.7 487.8 504.7 487.1 479.2 481.8 477.3 472.5 501.9 5 Dividends 261.9 275.1 279.2 274.7 275.1 276.4 277.3 278.1 279.0 282.3 285.6 6 Undistributed profits 192.3 213.2 198.5 213.2 229.5 210.6 201.8 203.7 198.3 190.2 216.4 7 Inventory valuation -1.2 6.9 14.5 10.3 4.8 4.3 25.3 7.8 11.7 13.4 11.6 8 Capital consumption adjustment 71.4 76.6 92.3 75.5 77.2 80.1 84.9 89.4 94.8 100.2 104.6 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1997 1998 1999 AAccccoouunntt 11999966 11999977 11999988rr Q3 Q4 Qi Q2 Q3 Q4r Qlr ASSETS 1 Accounts receivable, gross2 637.1 663.3 711.7 660.5 663.3 667.2 676.0 687.6 711.7 732.4 2 Consumer 244.9 256.8 261.8 254.5 256.8 251.7 251.3 254.0 261.8 261.7 3 Business 309.5 318.5 347.5 319.5 318.5 325.9 334.9 335.1 347.5 361.7 4 Real estate 82.7 87.9 102.3 86.4 87.9 89.6 89.9 98.5 102.3 109.0 5 LESS; Reserves for unearned income 55.6 52.7 56.3 54.6 52.7 52.1 53.2 52.4 56.3 52.8 6 Reserves for losses 13.1 13.0 13.8 12.7 13.0 13.1 13.2 13.2 13.8 13.3 7 Accounts receivable, net 568.3 597.6 641.6 593.1 597.6 601.9 609.6 622.0 641.6 666.2 8 All other 290.0 312.4 337.9 289.1 312.4 329.7 340.1 313.7 337.9 363.9 9 Total assets 858.3 910.0 979.5 882.3 910.0 931.6 949.7 935.7 979.5 1,030.1 LIABILITIES AND CAPITAL 10 Bank loans 19.7 24.1 26.3 20.4 24.1 22.0 22.3 24.9 26.3 24.8 11 Commercial paper 177.6 201.5 231.5 189.6 201.5 211.7 225.9 226.9 231.5 222.9 Debt 12 Owed to parent 60.3 64.7 61.8 61.6 64.7 64.6 60.0 58.3 61.8 64.6 13 Not elsewhere classified 332.5 328.8 339.7 322.8 328.8 338.2 348.7 337.6 339.7 366.4 14 All other liabilities 174.7 189.6 203.2 190.1 189.6 193.1 188.9 185.4 203.2 220.1 15 Capital, surplus, and undivided profits 93.5 101.3 117.0 97.9 101.3 102.1 103.9 103.6 117.0 131.4 16 Total liabilities and capital 858.3 910.0 979.5 882.3 910.0 931.6 949.7 936.6 979.5 1,030.1 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 Receivables1 Billions of dollars, amounts outstanding 1998 1999 TTyyppee ooff ccrreeddiitt 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted 1 Total 761.9 809.8 874.9 871.1 874.9 888.2r 898.4r 911.3r 918.5 2 Consumer 307.7 327.7 352.5 352.1 352.5 356.5r 360.7r 363.4r 363.3 3 Real estate 111.9 121.1 131.4 134.3 131.4 135.7 135.7 137.5r 141.2 4 Business 342.4 361.0 391.0 384.7 391.0 396.0 402.0 410.4r 414.1 Not seasonally adjusted 5 Total 769.7 818.1 884.0 872.8 884.0 888.4r 897.8r 911.9r 918.5 6 Consumer 310.6 330.9 356.1 352.2 356.1 355.8r 357.4r 359.7r 361.0 7 Motor vehicles loans 86.7 87.0 103.1 99.0 103.1 102.8 105.0 104.7 106.8 8 Motor vehicle leases 92.5 96.8 93.3 94.4 93.3 93.9 94.5 93.9 94.8 9 Revolving2 32.5 38.6 32.3 33.1 32.3 32.1r 31.5r 31.2r 31.5 10 Other3 33.2 34.4 33.1 34.6 33.1 32.1 32.5 32.0 32.0 Securitized assets4 11 Motor vehicle loans 36.8 44.3 54.8 53.4 54.8 56.0 54.9 59.0 57.8 12 Motor vehicle leases 8.7 10.8 12.7 14.2 12.7 12.5 12.3 12.0 11.8 13 Revolving .0 .0 8.7 5.3 8.7 8.6 8.7 9.1r 8.8 14 Other 20.1 19.0 18.1 18.4 18.1 17.9 18.1 17.8 17.6 15 Real estate 111.9 121.1 131.4 134.3 131.4 135.7 135.7 137.5r 141.2 16 One- to four-family 52.1 59.0 75.7 74.1 75.7 80.1 80.3 77.7 81.7 17 Other 30.5 28.9 26.6 30.7 26.6 26.9 27.1 31.6r 31.6 Securitized real estate assets4 18 One- to four-family 28.9 33.0 29.0 29.4 29.0 28.6 28.3 28.0 27.6 19 Other .4 .2 .1 .1 .1 .1 .1 .3 .3 20 Business 347.2 366.1 396.5 386.3 396.5 396.9 404.6 414.8r 416.3 21 Motor vehicles 67.1 63.5 79.6 70.9 79.6 79.1 82.1 84.8r 86.2 22 Retail loans 25.1 25.6 28.1 29.4 28.1 28.4 28.9 30.0 30.7 23 Wholesale loans5 33.0 27.7 32.8 30.3 32.8 31.9 34.3 36.0 36.5 24 Leases 9.0 10.2 18.7 11.2 18.7 18.9 18.9 18.8r 18.9 25 Equipment 194.8 203.9 198.0 212.0 198.0 197.6 200.7 202.3r 203.1 26 Loans 59.9 51.5 50.4 47.8 50.4 49.7 51.0 51.6 52.0 27 Leases 134.9 152.3 147.6 164.2 147.6 147.8 149.8 150.7r 151.0 28 Other business receivables6 47.6 51.1 69.9 60.4 69.9 72.5 73.3 75.7r 75.8 Securitized assets4 29 Motor vehicles 24.0 33.0 29.2 25.8 29.2 28.2 28.8 31.0 30.5 30 Retail loans 2.7 2.4 2.6 2.4 2.6 2.5 2.4 2.4 2.4 31 Wholesale loans 21.3 30.5 24.7 23.4 24.7 23.8 24.6 26.6 26.2 32 Leases .0 .0 1.9 .0 1.9 1.9 1.9 1.9 1.9 33 Equipment 11.3 10.7 13.0 11.8 13.0 12.7 12.9 12.8 12.5 34 Loans 4.7 4.2 6.6 5.4 6.6 6.3 6.2 6.1 5.8 35 Leases 6.6 6.5 6.4 6.4 6.4 6.4 6.7 6.7 6.6 36 Other business receivables6 2.4 4.0 6.8 5.3 6.8 6.8 6.8 8.2 8.3 NOTE. This table has been revised to incorporate several changes resulting from the before deductions for unearned income and losses. Components may not sum to totals benchmarking of finance company receivables to the June 1996 Survey of Finance Compa- because of rounding. nies. In that benchmark survey, and in the monthly surveys that have followed, more detailed 2. Excludes revolving credit reported as held by depository institutions that are subsidiarbreakdowns have been obtained for some components. In addition, previously unavailable ies of finance companies. data on securitized real estate loans are now included in this table. The new information has 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of resulted in some reclassification of receivables among the three major categories (consumer, consumer goods such as appliances, apparel, boats, and recreation vehicles. real estate, and business) and in discontinuities in some component series between May and 4. Outstanding balances of pools upon which securities have been issued; these balances June 1996. are no longer carried on the balance sheets of the loan originator. Includes finance company subsidiaries of bank holding companies but not of retailers and 5. Credit arising from transactions between manufacturers and dealers, that is, floor plan banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For financing. ordering address, see inside front cover. 6. Includes loans on commercial accounts receivable, factored commercial accounts, and 1. Owned receivables are those carried on the balance sheet of the institution. Managed receivable dealer capital; small loans used primarily for business or farm purposes; and receivables are outstanding balances of pools upon which securities have been issued; these wholesale and lease paper for mobile homes, campers, and travel trailers. balances are no longer carried on the balance sheets of the loan originator. Data are shown Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • September 1999 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1998 1999 IItteemm 11999966 11999977 11999988 Dec. Jan. Feb. Mar. Apr. May June Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 182.4 180.1 195.2 206.0 202.3 204.1 211.0 209.4 207.5 211.0 2 Amount of loan (thousands of dollars) 139.2 140.3 151.1 159.0 153.3 155.4 162.9 162.4 161.6 162.0 3 Loan-to-price ratio (percent) 78.2 80.4 80.0 79.4 78.0 78.2 79.4 79.5 79.8 79.0 4 Maturity (years) 27.2 28.2 28.4 28.7 28.4 28.7 28.8 28.9 28.7 28.6 5 Fees and charges (percent of loan amount)2 1.21 1.02 .89 .98 1.01 .92 .82 .77 .69 .72 Yield (percent per year) 6 Contract rate1 7.56 7.57 6.95 6.80 6.81 6.78 6.74 6.74 6.78 6.92 7 Effective rate1-3 7.77 7.73 7.08 6.94 6.96 6.92 6.86 6.85 6.89 7.03 8 Contract rate (HUD series)4 8.03 7.76 7.00 6.83 6.80 7.02 7.03 6.93 7.17 7.59 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.19 7.89 7.04 7.06 7.08 7.10 7.07 7.08 7.58 8.13 10 GNMA securities6 7.48 7.26 6.43 6.18 6.18 6.42 6.58 6.50 6.79 7.21 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 287,052 316,678 414,515 414,515 418,323 431,836 440,139 446,025 464,530 473,463 12 FHA/VA insured 30,592 31,925 33,770 33,770 33,483 34,000 34,870 36,158 38,938 41,143 13 Conventional 256,460 284,753 380,745 380,745 384,840 397,836 405,269 409,867 425,592 432,172 14 Mortgage transactions purchased (during period) 68,618 70,465 188,448 26,222 14,005 22,029 16,923 14,225 25,640 15,934 Mortgage commitments (during period) 15 Issued7 65,859 69,965 193,795 16,803 20,754 26,509 16,891 20,192 12,517 19,507 16 To sell8 130 1,298 1,880 434 0 0 266 75 178 351 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 137,755 164,421 255,010 255,010 257,062 262,921 277,624 284,006 285,881 299,184 18 FHA/VA insured 220 177 785 785 387 755 754 1,613r 1,610 1,610 19 Conventional 137,535 164,244 254,225 254,225 256,675 262,166 276,870 282,393r 284,271 297,574 Mortgage transactions (during period) 20 Purchases 125,103 117.401 267,402 34,299 27,680r 25,225 29,921 26,473 22,503 21,950 21 119,702 114,258 250,565 28,024 31,430r 24,23 lr 28,740 25,464 21,972 20,349 22 Mortgage commitments contracted (during period)9 128,995 120,089 281,899 29,703 23,900 24,829 32,546 24,050 20,052 21,610 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 A3 5 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1998 1999 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999955 11999966 11999977 Qi Q2 Q3 Q4 Qlp 1 All holders 4,604,408r 4,898,791r 5,212,899r 5,323,116r 5,434,606r 5,568,971r 5,723,504r 5,860,041 By type of property 2 One- to four-family residences 3,510,749r 3,726,748r 3,969,525r 4,055,368r 4,135,647r 4,238,430r 4,343,358r 4,441,804 3 Multifamily residences 277,oor 294,396r 308,794r 314,636r 321,223r 327,661r 337,736r 347,448 4 Nonfarm, nonresidential 732,097r 790,513r 844,28lr 861,819r 884,814r 908,635r 946,096r 973,710 5 84,561 87,134 90,299 91,291r 92,923r 94,244r 96,315r 97,080 By type of holder 6 Major financial institutions 1,900,089 1,981,885 2,083,978 2,114,077r 2,121,531r 2,136,776r 2,194,959r 2,198,641 7 Commercial banks2 1,090,189 1,145,389 1,245,315 l,270,586r l,281,440r l,295,173r l,337,545r 1,337,140 H One- to four-family 646,545r 677,603r 745,510r 764,656r 770,438r 770,489r 797,746r 783,291 9 Multifamily 42,521r 45,45 lr 49,670r 51,007r 51,449r 52,443' 53,123r 56,430 in Nonfarm, nonresidential 377,293r 397,452r 423,148r 427,465r 431,234r 443,553r 457,642r 467,907 n Farm 23,830 24,883 26,986 27,458 28,319 28,688 29,034 29,512 12. Savings institutions3 596,763 628,335 631,822 637,012 632,359 634,244 643,773 646,202 n One- to four-family 482,353 513,712 520,672 527,036 522,088 525,842 533,680 534,490 14 Multifamily 61,987 61,570 59,543 59,074 58,908 56,706 56,806 56,761 is Nonfarm, nonresidential 52,135 52,723 51,252 50,532 50,978 51,297 52,871 54,516 16 Farm 288 331 354 369 386 399 417 435 17 Life insurance companies 213,137 208,161 206,841 206,479r 207,732r 207,359r 213,640r 215,299 18 One- to four-family 8,890 6,977 7,187 6,979r 6,814r 6,594r 6,590r 6,631 19 Multifamily 28,714 30,750 30,402 30,394r 30,618r 30,565r 31,522r 31,004 ?n Nonfarm, nonresidential 165,876 160314 158,780 158,493r 159,456r 159,189r 164,004r 166,060 21 Farm 9,657 10,120 10,472 10,613r 10,844r ll,011r 1 l,524r 11,604 22 Federal and related agencies 308,757 295,192 286,167 286,877 287,161 287,125 292,636r 288,312 23 Government National Mortgage Association 2 2 8 8 8 7 7 7 24 One to four-family 2 2 8 8 8 7 7 7 25 Multifamily 0 0 0 0 0 0 0 0 76 Farmers Home Administration 41,791 41,596 41,195 40,972 40,921 40,907 40,851 40,691 27 One- to four-famiiy 17,705 17,303 17,253 17,160 17,059 17,025 16,895 16,777 28 Multifamily 11,617 11,685 11,720 11,714 11,722 11,736 11,739 11,731 79 Nonfarm, nonresidential 6,248 6,841 7,370 7,369 7,497 7,566 7,705 7,769 30 Farm 6,221 5,768 4,852 4,729 4,644 4,579 4,513 4,413 31 Federal Housing and Veterans' Administrations 9,809 6,244 3,821 3,694 3,631 3,405 3,674' 3,675 37 One- to four-family 5,180 3,524 1,767 1,641 1,610 1,550 1,849' 1,850 33 Multifamily 4,629 2,719 2,054 2,053 2,021 1,855 1,825' 1,825 34 Resolution Trust Corporation 1,864 0 0 0 0 0 0 0 35 One to four-family 691 0 0 0 0 0 0 0 36 Multifamily 647 0 0 0 0 0 0 0 37 Nonfarm, nonresidential 525 0 0 0 0 0 0 0 38 Farm 0 0 0 0 0 0 0 0 39 Federal Deposit Insurance Corporation 4,303 2,431 724 786 564 482 361 315 4n One- to four-family 492 365 109 118 85 72 54 47 41 Multifamily 428 413 123 134 96 82 61 54 47 Nonfarm, nonresidential 3,383 1,653 492 534 384 328 245 214 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 178,807 168,813 161,308 160,048 159,816 159,104 157,675 157,185 45 One- to four-family 163,648 155,008 149,831 149,254 149,383 149,069 147,594 147,063 46 Multifamily 15,159 13,805 11,477 10,794 10,433 10,035 10,081 10,122 47 Federal Land Banks 28,428 29,602 30,657 31,005 31,352 32,009 32,983' 33,128 48 One- to four-family 1,673 1,742 1,804 1,824 1,845 1,883 1,941' 1,949 49 Farm 26,755 27,860 28,853 29,181 29,507 30,126 31,042' 31,179 50 Federal Home Loan Mortgage Corporation 43,753 46,504 48,454 50,364 50,869 51,211 57,085 53,312 51 One to four-family 39,901 41,758 42,629 44,440 44,597 44,254 49,106 44,139 52 Multifamily 3,852 4,746 5,825 5,924 6,272 6,957 7,979 9,173 53 Mortgage pools or trusts5 1,863,210 2,064,882 2,272,953r 2,330,799r 2,442,558r 2,548,192r 2,632,893' 2,761,941 54 Government National Mortgage Association 472,283 506,340 536,810 533,011 537,586 541,431 537,431 542,409 55 One- to four-family 461,438 494,158 523,156 519,152 523,243 526,934 522,483 527,461 56 Multifamily 10,845 12,182 13,654 13,859 14,343 14,497 14,948 14,948 57 Federal Home Loan Mortgage Corporation 515,051 554,260 579,385 583,144 609,791 635,726 646,459 687,179 58 One to four-family 512,238 551,513 576,846 580,715 607,469 633,124 643,465 684,240 59 Multifamily 2,813 2,747 2,539 2,429 2,322 2,602 2,994 2,939 6n Federal National Mortgage Association 582,959 650,780 709,582 730,832 761,359 798,460 834,518 881,815 61 One- to four-family 569,724 633,210 687,981 708,125 737,631 770,979 804,205 849,513 62 Multifamily 13,235 17,570 21,601 22,707 23,728 27,481 30,313 32,302 63 Farmers Home Administration4 11 3 2 2 2 2 1 1 64 One- to four-family 2 0 0 0 0 0 0 0 65 Multifamily 0 0 0 0 0 0 0 0 66 Nonfarm, nonresidential 5 0 0 0 0 0 0 0 67 Farm 4 3 2 2 2 2 1 1 68 Private mortgage conduits 292,906 353,499 447,173r 483,810r 533,820' 572,573r 614,484' 650,537 69 One to four-family6 227,800 261,900 318,000 336,824 364,316 391,736 410,900 430,653 70 Multifamily 15,584 21,967 29,218r 33,432r 38,098r 40,895r 44,654' 48,403 71 Nonfarm, nonresidential 49,522 69,633 99,955 113,554r 131,406r 139,942r 158,930' 171,482 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 532,353r 556,832r 569,802r 591,363r 583,357r 596,877r 603,017' 611,147 74 One- to four-family 372,468r 367,973r 376,773r 397,437r 389,063r 398,87 lr 406,843' 413,692 75 Multifamily 64,969r 68,791r 70,966r 71,116r 71,213r 71,806r 71,691' 71,756 76 Nonfarm, nonresidential 77,109r 101,898r 103,284r 103,871r 103,860r 106,76 r 104,699' 105,763 77 Farm 17,806 18,169 18,779 18,939r 19,221r 19,440r 19,784' 19,937 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 Nonfinancial Statistics • September 1999 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1998 1999 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999966 11999977 11999988 Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted 1 Total 1,182,439 1,234,122 1,300,491 1,300,491 1,315,653 1,325,101 1,332,139 1,332,634 1,344,735 2 Revolving 499,532 531,294 560,653 560,653 565,035 566,858 567,283 570,054 572,154 3 Nonrevolving2 682,907 702,828 739,838 739,838 750,619 758,244 764,857 762,580 772,580 Not seasonally adjusted 4 Total 1,211,590 1,264,103 1,331,742 1,331,742 1,324,528 1,318,872 1,318,611 1,323,067 1,332,564 By major holder 5 Commercial banks 526,769 512,563 508,932 508,932 508,635 500,429 494,039 495,873 495,972 6 Finance companies 152,391 160,022 168,491 168,491 166,979 169,013 167,815 170,275 168,891 7 Credit unions 144,148 152,362 155,406 155,406 155,726 155,203 155,110 155,933 157,004 8 Savings institutions 44.711 47,172 51,611 51,611 52,283 52,953 53,623 54,294 54,964 9 Nonfinancial business 77,745 78,927 74,877 74,877 70,947 67,948 67,138 67,117 68,058 10 Pools of securitized assets3 265,826 313,057 372,425 372,425 369,958 373,326 380,886 378,344 387,675 By major type of credit4 11 Revolving 522,860 555,858 586,528 586,528 574,901 567,549 561,542 564,099 566,214 12 Commercial banks 228,615 219,826 210,346 210,346 204,774 197,623 190,028 191,295 190,165 13 Finance companies 32,493 38,608 32,309 32,309 32,088 31,544 31,197 31,457 31,697 14 Credit unions 17,826 19,552 19,930 19,930 19,295 19,202 18,894 19,044 19,011 15 Savings institutions 10,313 11,441 12,450 12,450 12,425 12,399 12,373 12,348 12,322 16 Nonfinancial business 44,901 44,966 39,166 39,166 36,401 34,337 33,754 33,726 34,446 17 Pools of securitized assets3 188,712 221,465 272,327 272,327 269,918 272,444 275,296 276,229 278,573 18 Nonrevolving credit 688,730 708,245 745,214 745,214 749,627 751,323 757,069 757,894 766,350 19 Commercial banks 298,154 292,737 298,586 298,586 303,861 302,806 304,011 304,578 305,807 20 Finance companies 119,898 121,414 136,182 136,182 134,891 137,469 136,618 138,818 137,194 21 Credit unions 126,322 132,810 135,476 135,476 136,431 136,001 136,216 136,889 137,993 22 Savings institutions 34,398 35,731 39,161 39,161 39,858 40,554 41,250 41,946 42,642 23 Nonfinancial business 32,844 33,961 35,711 35,711 34,546 33,611 33,384 33,391 33,612 24 Pools of securitized assets3 77,114 91,592 100,098 100,098 100,040 100,882 105,590 102,272 109,102 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 3. Outstanding balances of pools upon which securities have been issued; these balances extended to individuals. Data in this table also appear in the Board's G. 19 (421) monthly are no longer carried on the balance sheets of the loan originator. statistical release. For ordering address, see inside front cover. 4. Totals include estimates for certain holders for which only consumer credit totals are 2. Comprises motor vehicle loans, mobile home loans, and all other loans that are not available. included in revolving credit, such as loans for education, boats, trailers, or vacations. These loans may be secured or unsecured. 1.56 TERMS OF CONSUMER CREDIT1 Percent per year except as noted 1998 1999 IItteemm 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar. Apr. May INTEREST RATES Commercial banks2 1 48-month new car 9.05 9.02 8.72 8.62 n.a. n.a. 8.34 n.a. n.a. 8.30 2 24-month personal 13.54 13.90 13.74 13.75 n.a. n.a. 13.41 n.a. n.a. 13.26 Credit card plan 3 All accounts 15.63 15.77 15.71 15.69 n.a. n.a. 15.41 n.a. n.a. 15.21 4 Accounts assessed interest 15.50 15.57 15.59 15.54 n.a. n.a. 14.73 n.a. n.a. 14.94 Auto finance companies 5 New car 9.84 7.12 6.30 6.79 6.43 6.22 6.43 6.31 6.52 6.57 6 Used car 13.53 13.27 12.64 12.41 12.31 11.81 12.08 12.09 12.17 12.16 OTHER TERMS3 Maturity (months) 7 New car 51.6 54.1 52.1 52.8 52.2 52.1 53.4 53.0 52.8 52.4 8 Used car 51.4 51.0 53.5 54.3 54.2 56.0 55.9 56.0 56.0 56.1 Loan-to-value ratio 9 New car 91 92 92 91 91 92 92 91 92 92 10 Used car 100 99 99 100 100 99 99 99 99 99 Amount financed (dollars) 11 New car 16,987 18,077 19,083 19,590 19,734 19,628 19,304 19,339 19,435 19,539 12 Used car 12,182 12,281 12,691 13,112 13,202 13,497 13,604 13,653 13,647 13,700 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A37 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors . . . 586.6 575.7 700.0 693.1 722.6 812.7 839.9 906.1 909.6 843.6 1,089.0 1,002.0 By sector and instrument 7 Federal government 256.1 155.9 144.4 145.0 23.1 30.3 40.8 -30.0 -70.9 -136.5 26.9 -119.2 3 Treasury securities 248.3 155.7 142.9 146.6 23.2 31.2 39.0 -27.6 -69.4 -136.1 14.7 -117.7 4 Budget agency securities and mortgages 7.8 .2 1.5 -1.6 -.1 -.9 1.7 -2.4 -1.4 -.4 12.2 -1.5 5 Nonfederal 330.5 419.9 555.6 548.1 699.5 782.4 799.2 936.1 980.5 980.1 1,062.1 1,121.2 Bv instrument 6 Commercial paper 10.0 21.4 18.1 -.9 13.7 14.5 12.8 51.1 3.8 85.6 -43.0 64.4 7 Municipal securities and loans 74.8 -35.9 -48.2 2.6 71.4 88.9 103.2 116.7 100.1 83.6 87.0 67.9 8 Corporate bonds 75.2 23.3 73.3 72.5 90.7 122.9 74.4 157.2 160.8 87.1 123.8 155.0 9 Bank loans n.e.c 6.4 75.2 101.1 62.1 106.7 29.5 139.7 1.5 194.2 127.5 114.4 38.1 10 Other loans and advances -18.9 34.0 67.2 36.4 66.2 78.1 142.3 84.3 34.6 73.6 106.7 118.6 11 Mortgages 122.3 177.0 205.1 286.7 298.2 398.2 289.0 466.9 420.7 441.1 609.1 550.9 17 Home 160.0 183.3 179.7 243.0 235.8 325.6 199.3 371.4 310.4 345.2 444.1 420.4 n Multifamily residential —5.1 -2.1 7.6 11.5 10.8 11.0 18.5 22.5 21.1 16.1 30.7 32.6 14 Commercial -33.6 -6.5 16.2 29.6 48.4 58.0 68.3 69.7 83.4 75.2 127.2 94.8 15 Farm 1.0 2.2 1.6 2.6 3.2 3.5 2.9 3.3 5.9 4.5 7.2 3.1 16 Consumer credit 60.7 124.9 138.9 88.8 52.5 50.3 37.8 58.5 66.3 81.7 64.1 126.2 By borrowing sector 17 Household 211.6 316.1 349.0 346.0 326.6 360.3 293.4 440.6 453.1 436.0 561.2 555566..33 18 Nonfinancial business 52.7 150.0 258.1 208.9 316.8 349.5 413.5 401.2 448.5 471.4 425.5 498.1 19 Corporate 46.9 142.4 224.6 120.4 233.2 256.0 317.7 296.8 345.6 368.1 315.9 390.9 20 Nonfarm noncorporate 3.2 3.3 30.6 83.8 77.4 88.8 86.5 97.2 95.9 97.3 103.1 101.7 7| Farm 2.6 4.4 2.9 4.8 6.2 4.7 9.2 7.2 7.1 6.0 6.6 5.5 22 State and local government 66.2 -46.2 -51.5 -6.8 56.1 72.6 92.3 94.3 78.9 72.6 75.4 66.8 Foreign net borrowing in United States 69.8 -14.0 71.1 76.9 56.9 92.5 42.3 67.8 85.9 -28.0 -38.1 20.7 74 Commercial paper -9.6 -26.1 13.5 11.3 3.7 -11.6 .7 55.3 -25.5 6.2 -4.7 18.3 ?5 Bonds 82.9 12.2 49.7 55.8 46.7 100.3 32.4 14.3 107.5 -35.3 -32.9 2.0 7.6 Bank loans n.e.c .7 1.4 8.5 9.1 8.5 7.3 15.7 5.2 8.4 3.6 9.8 1.1 27 Other loans and advances -4.2 -1.5 -.5 .8 -2.0 -3.5 -6.5 -7.0 -4.4 -2.4 -10.3 -.7 28 Total domestic plus foreign 656.4 561.7 771.1 770.0 779.5 905.2 882.2 973.9 995.6 815.6 1,050.9 1,022.7 Financial sectors 29 Total net borrowing by financial sectors 294.4 468.4 456.5 557.3 652.0 603.1 988.3 933.0 987.5 1,055.5 1,298.2 1,202.2 By instrument 30 Federal government-related 165.3 287.5 204.1 231.5 212.8 161.0 298.1 227.3 413.4 561.6 681.6 564.9 31 Government-sponsored enterprise securities 80.6 176.9 105.9 90.4 98.4 46.4 157.9 142.5 166.4 294.0 510.5 193.0 37. Mortgage pool securities 84.7 115.4 98.2 141.1 114.4 114.6 140.3 84.8 247.0 267.5 171.2 372.0 33 Loans from U.S. government .0 -4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 129.1 180.9 252.4 325.8 439.2 442.1 690.2 705.7 574.2 493.9 616.6 637.2 35 Open market paper -5.5 40.5 42.7 92.2 166.7 168.8 244.2 237.4 134.8 141.0 130.7 79.2 36 Corporate bonds 123.1 121.8 195.9 176.9 209.0 203.8 339.0 350.3 373.5 169.8 273.7 488.7 37 Bank loans n.e.c -14.4 -13.7 5.1 20.9 13.1 25.3 25.0 76.1 -30.0 61.2 11.7 7.0 38 Other loans and advances 22.4 22.6 3.4 27.9 35.6 37.5 61.7 32.7 76.0 82.3 169.9 42.2 39 Mortgages 3.6 9.8 5.3 7.9 14.9 6.7 20.1 9.1 19.9 39.6 30.6 20.1 By borrowing sector 40 Commercial banking 13.4 20.1 22.5 13.0 46.1 32.5 61.0 83.5 80.0 61.7 66.3 3322..66 41 Savings institutions 11.3 12.8 2.6 25.5 19.7 22.3 41.7 10.6 31.2 63.7 103.2 58.0 47. Credit unions .2 .2 -.1 .1 .1 .2 .3 .5 .2 1.0 .4 1.5 43 Life insurance companies .2 .3 -.1 1.1 .2 .2 -.3 .0 -.6 1.6 1.8 3.3 44 Government-sponsored enterprises 80.6 172.1 105.9 90.4 98.4 46.4 157.9 142.5 166.4 294.0 510.5 193.0 45 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.4 114.6 140.3 84.8 247.0 267.5 171.2 372.0 46 Issuers of asset-backed securities (ABSs) 85.4 76.5 142.4 153.9 200.7 225.0 373.1 281.8 358.4 291.0 334.1 302.2 47 Finance companies -1.4 48.7 50.2 45.9 48.7 8.9 59.6 80.1 101.8 -14.0 4.3 76.0 48 Mortgage companies .0 -11.5 .4 12.4 -4.7 11.4 -17.4 49.2 -48.0 2.0 2.0 3.1 49 Real estate investment trusts (REITs) 1.7 10.2 4.5 11.9 39.6 33.3 66.0 63.1 64.4 79.3 44.0 26.4 50 Brokers and dealers 12.0 .5 -5.0 -2.0 8.1 -6.9 7.0 -1.0 20.0 -2.6 12.4 -31.2 51 Funding corporations 6.3 23.1 34.9 64.1 80.7 115.3 99.2 137.9 -33.3 10.1 48.1 165.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A97 Domestic Nonfinancial Statistics • September 1999 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999966 11999977 Q3 Q4 Qi Q2 Q3 Q4 Ql All sectors 52 Total net borrowing, all sectors 950.8 1,030.2 1,227.6 1,327.3 1,431.5 1,508.4 1,870.5 1,906.9 1,983.1 1,871.1 2,349.1 2,224.9 53 Open market paper -5.1 35.7 74.3 102.6 184.1 171.7 257.7 343.8 113.1 232.7 83.0 161.9 54 U.S. government securities 421.4 448.1 348.5 376.5 235.9 191.3 338.9 197.3 342.5 425.1 708.5 445.7 55 Municipal securities 74.8 -35.9 -48.2 2.6 71.4 88.9 103.2 116.7 100.1 83.6 87.0 67.9 56 Corporate and foreign bonds 281.2 157.3 318.9 305.2 346.5 427.1 445.8 521.9 641.9 221.6 364.6 645.7 57 Bank loans n.e.c -7.2 62.9 114.7 92.1 128.2 62.2 180.5 82.8 172.5 192.3 135.9 46.2 58 Other loans and advances -.8 50.3 70.2 65.1 99.8 112.1 197.5 110.0 106.1 153.4 266.3 160.1 59 Mortgages 125.9 186.7 210.4 294.6 313.1 404.8 309.1 476.0 440.5 480.7 639.7 571.1 60 Consumer credit 60.7 124.9 138.9 88.8 52.5 50.3 37.8 58.5 66.3 81.7 64.1 126.2 Funds raised through mutual funds and corporate equities 61 Total net issues 429.7 125.2 144.3 228.9 186.4 239.4 157.7 217.7 276.8 -166.5 46.8 124.9 62 Corporate equities 137.7 24.6 -3.1 -8.7 -78.8 -60.5 -103.3 -107.5 -115.9 -319.0 -196.7 -96.1 63 Nonfinancial corporations 21.3 -44.9 -58.3 -69.5 -114.4 -124.0 -143.3 -139.2 -129.1 -308.4 -491.3 -46.1 64 Foreign shares purchased by U.S. residents 63.4 48.1 50.4 60.0 41.3 64.3 -.3 13.6 4.0 -32.9 319.1 -33.0 65 Financial corporations 53.0 21.4 4.8 .8 -5.6 -.8 40.3 18.2 9.2 22.2 -24.6 -17.1 66 Mutual fund shares 292.0 100.6 147.4 237.6 265.1 299.9 261.0 325.2 392.7 152.5 243.5 221.1 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999933 11999944 11999955 11999966 11999977 Q3 Q4 Ql Q2 Q3 Q4 Ql NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 950.8 1,030.2 1,227.6 1,327.3 1,431.5 1,508.4 1,870.5 1,906.9 1,983.1 1,871.1 2,349.1 2,224.9 ? Domestic nonfederal nonfinancial sectors 38.3 238.1 -99.1 -30.0 -125.9 -175.5 10.5 -236.3 394.3 15.4 -326.7 190.5 Household -2.3 274.9 -3.7 3.8 -128.2 -152.9 -18.0 -253.2 295.2 -138.0 -426.0 123.0 4 Nonfinancial corporate business 9.1 17.7 -8.8 4.2 2.7 18.6 -12.8 4.2 -61.0 17.4 10.3 31.2 Nonfarm noncorporate business -1.1 .6 4.7 -4.3 -.6 -.6 -.6 .0 .0 .0 .0 .0 6 State and local governments 32.6 -55.0 -91.4 -33.7 .1 -40.7 42.0 12.8 160.1 136.0 89.0 36.2 7 Federal government -18.4 -27.5 -.2 -7.7 4.9 3.3 9.0 15.5 12.8 13.9 11.8 18.2 8 Rest of the world 129.3 132.3 273.9 417.3 310.1 402.9 208.7 238.6 314.2 58.6 391.8 194.4 9 Financial sectors 801.6 687.1 1,053.0 947.8 1,242.4 1,277.6 1,642.4 1,889.1 1,261.8 1,783.3 2,272.2 1,821.8 10 Monetary authority 36.2 31.5 12.7 12.3 38.3 22.9 52.9 27.4 7.7 48.3 ..88 71.3 11 Commercial banking 142.2 163.4 265.9 187.5 324.3 226.2 464.9 292.9 136.1 242.7 555544..99 52.1 1? U.S.-chartered banks 149.6 148.1 186.5 119.6 274.9 220.7 386.2 260.5 130.5 286.8 570.1 124.5 13 Foreign banking offices in United States —9.8 11.2 75.4 63.3 40.2 4.6 58.2 11.6 18.1 -53.1 -24.2 -61.9 14 Bank holding companies .0 .9 -.3 3.9 5.4 -5.0 19.4 15.3 -17.6 6.0 -7.4 -6.0 15 Banks in U.S.-affiliated areas 2.4 3.3 4.2 .7 3.7 5.8 1.1 5.5 5.1 2.9 16.4 -4.5 16 Savings institutions -23.3 6.7 -7.6 19.9 -4.7 -35.3 -2.0 10.8 -1.8 34.0 102.1 104.2 17 Credit unions 21.7 28.1 16.2 25.5 16.8 13.6 7.7 16.5 22.7 19.3 17.4 37.0 18 Bank personal trusts and estates 9.5 7.1 -8.3 -7.7 7.6 7.3 8.8 2.4 3.1 2.0 3.9 3.1 19 Life insurance companies 100.4 72.0 100.0 69.6 94.3 92.9 34.1 88.4 62.6 70.9 86.6 105.9 20 Other insurance companies 27.7 24.9 21.5 22.5 25.2 32.0 34.7 23.4 -1.5 -7.7 67.5 20.7 ?1 Private pension funds 50.2 46.1 56.0 52.3 65.5 64.6 79.5 74.5 130.1 95.6 174.4 60.7 22 State and local government retirement funds 22.7 22.3 27.5 45.9 36.6 79.1 9.5 80.7 61.6 50.9 48.0 52.1 ?3 Money market mutual funds 20.4 30.0 86.5 88.8 87.5 121.5 144.2 172.0 200.1 247.5 356.4 239.7 ?4 Mutual funds 159.5 -7.1 52.5 48.9 80.9 108.0 61.8 146.3 155.7 97.7 102.7 84.3 75 Closed-end funds 20.0 -3.7 10.5 4.7 -3.4 -3.4 -3.4 -2.4 -2.4 -2.4 -2.0 -2.0 26 Government-sponsored enterprises 87.8 117.8 86.7 84.2 94.3 55.6 158.5 198.9 150.2 264.0 430.0 158.4 27 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.4 114.6 140.3 8844..88 247.0 267.5 171.2 372.0 28 Asset-backed securities issuers (ABSs) 82.8 69.4 120.6 123.6 162.3 162.4 320.3 222222..77 327.4 245.5 311.1 284.7 7.9 Finance companies -20.9 48.3 49.9 18.4 21.9 68.3 -21.3 28.7 27.1 79.7 72.1 73.3 30 Mortgage companies .0 -24.0 -3.4 8.2 -9.1 82.9 -93.6 58.8 -56.4 4.5 6.0 10.0 31 Real estate investment trusts (REITs) .4 -.7 1.4 4.4 20.2 16.2 38.9 25.6 6.1 -11.3 -40.8 4.0 32 Brokers and dealers 14.8 -44.2 90.1 -15.7 14.9 18.0 71.7 245.8 -183.1 77.0 -209.1 86.1 33 Funding corporations -35.1 -16.2 -23.8 13.5 54.8 30.2 134.8 90.6 -30.4 -42.4 19.1 4.3 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 950.8 1,030.2 1,227.6 1,327.3 1,431.5 1,508.4 1,870.5 1,906.9 1,983.1 1,871.1 2,349.1 2,224.9 Other financial sources 35 Official foreign exchange .8 -5.8 8.8 -6.3 .7 2.4 1177..55 11..00 88..11 1111..44 8.6 --1177..44 36 Special drawing rights certificates .0 .0 2.2 -.5 -.5 .0 .0 .0 ..00 .0 .0 -4.0 37 Treasury currency .4 .7 .6 .1 .0 1.3 -1.9 .3 .2 1.7 -2.3 .0 38 Foreign deposits -18.5 52.9 35.3 85.9 107.4 116.1 103.0 -45.3 89.0 87.3 36.8 72.2 39 Net interbank transactions 50.5 89.8 9.9 -51.6 -19.7 -25.0 79.8 -124.8 30.0 49.8 -89.7 125.8 40 Checkable deposits and currency 117.3 -9.7 -12.7 15.8 41.5 -38.4 71.9 65.6 109.3 -61.7 80.7 79.8 41 Small time and savings deposits -70.3 -39.9 96.6 97.2 97.1 47.0 155.9 154.9 36.2 111.6 309.0 -1.2 4? Large time deposits -23.5 19.6 65.6 114.0 122.5 188.4 70.7 186.2 -16.5 81.5 119.2 -14.2 43 Money market fund shares 20.2 43.3 142.3 145.8 157.6 226.2 147.8 248.0 186.4 400.7 306.6 248.1 44 Security repurchase agreements 71.3 78.2 110.5 41.4 120.9 115.5 117.9 259.5 -113.6 228.6 -164.3 255.3 45 Corporate equities 137.7 24.6 -3.1 -8.7 -78.8 -60.5 -103.3 -107.5 -115.9 -319.0 -196.7 -96.1 46 Mutual fund shares 292.0 100.6 147.4 237.6 265.1 299.9 261.0 325.2 392.7 152.5 243.5 221.1 47 Trade payables 52.2 94.0 101.5 83.4 100.4 137.9 146.9 63.8 -58.0 56.7 -97.1 73.0 48 Security credit 61.4 -.1 26.7 52.4 111.0 91.1 116.8 165.3 128.3 179.6 -39.6 -89.6 49 Life insurance reserves 37.1 35.5 45.8 44.5 54.3 63.9 37.4 49.3 53.3 51.7 59.0 54.7 50 Pension fund reserves 267.4 259.6 229.2 244.3 307.6 338.1 301.1 262.2 265.8 278.8 318.7 280.2 51 Taxes payable 11.4 2.6 6.2 16.0 16.8 30.7 -.6 8.5 -1.0 36.0 8.2 12.2 52 Investment in bank personal trusts .9 17.8 4.0 -8.6 75.0 80.8 78.4 50.3 57.5 47.8 67.1 64.1 53 Noncorporate proprietors' equity 24.1 53.6 60.3 .1 6.7 15.0 -43.7 -6.3 -5.4 -59.9 15.8 19.0 54 Miscellaneous 345.3 241.3 455.6 521.5 590.1 722.7 386.1 1,164.0 294.2 661.9 975.1 192.5 55 Total financial sources 2,328.5 2,088.8 2,760.3 2,951.9 3,507.3 3,861.5 3,813.3 4,627.1 3,323.7 3,868.2 4,307.7 3,700.2 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.2 -.5 -.9 -.6 .7 --22..44 -.2 -.3 11..11 --33..44 --11..22 57 Foreign deposits -5.7 43.0 25.1 59.6 107.4 93.7 147.9 -94.5 144.3 73.7 26.5 25.0 58 Net interbank liabilities 4.2 -2.7 -3.1 -3.3 -19.9 -50.0 -33.0 30.7 11.4 19.4 -49.0 54.3 59 Security repurchase agreements 46.4 69.4 17.5 .5 65.3 23.9 190.8 148.7 -170.5 106.0 -3.0 198.9 60 Taxes payable 15.8 16.6 21.1 20.4 18.8 15.2 11.6 4.4 5.3 26.4 17.3 3.4 61 Miscellaneous -163.5 -192.8 -229.6 -50.2 -235.3 -54.9 -566.5 -62.0 -203.6 -91.8 -72.7 -503.9 Floats not included in assets ( —) 62 Federal government checkable deposits -1.5 -4.8 -6.0 .5 -2.7 10.0 -7.9 7.5 -41.7 2244..11 20.4 -3.2 63 Other checkable deposits -1.3 -2.8 -3.8 -4.0 -3.9 -3.0 -5.0 -4.0 -3.0 -3.2 -2.1 -2.0 64 Trade credit -4.0 1.5 -11.7 -52.6 8.5 66.9 46.4 6.6 -148.8 -76.4 -49.6 -48.4 65 Total identified to sectors as assets 2,438.1 2,161.7 2,951.3 2,981.8 3,569.7 3,758.8 4,031.5 4,589.9 3,730.6 3,788.8 4,423.2 3,977.3 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F.1 and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • September 1999 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1997 1998 1999 11999977 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 13,016.0 13,716.0 14,409.2 15,130.2 14,881.7 15,130.2 15,358.2 15,547.0 15,754.7 16,067.3 16,325.9 By sector and instrument 2 Federal government 3,492.3 3,636.7 3,781.8 3,804.9 3,771.2 3,804.9 3,830.8 3,749.0 3,720.2 3,752.2 3,759.7 3 Treasury securities 3,465.6 3,608.5 3,755.1 3,778.3 3,745.1 3,778.3 3,804.8 3,723.4 3,694.7 3,723.7 3,731.6 4 Budget agency securities and mortgages 26.7 28.2 26.6 26.5 26.1 26.5 25.9 25.6 25.5 28.5 28.1 5 Nonfederal 9,523.7 10,079.3 10,627.4 11,325.4 11,110.5 11,325.4 11,527.4 11,798.1 12,034.6 12,315.1 12,566.2 By instrument 6 Commercial paper 139.2 157.4 156.4 168.6 176.6 168.6 193.1 202.5 216.9 193.0 223.9 / Municipal securities and loans 1,341.7 1,293.5 1,296.0 1,367.5 1,340.2 1,367.5 1,397.1 1,429.3 1,439.9 1,464.3 1,481.6 8 Corporate bonds 1,253.0 1,326.3 1,398.8 1,489.5 1,470.9 1,489.5 1,528.8 1,569.0 1,590.8 1,621.8 1,660.5 y Bank loans n.e.c 759.9 861.0 923.1 1,029.8 994.0 1,029.8 1,032.2 1,086.8 1,109.9 1,139.2 1,151.5 10 Other loans and advances 669.6 736.9 773.2 839.5 802.9 839.5 866.1 873.5 886.1 914.2 949.7 n Mortgages 4.376.4 4,581.4 4,868.2 5,166.4 5,099.0 5,166.4 5,274.2 5,380.3 5,504.4 5,650.9 5,780.5 12 Home 3.332.1 3,511.8 3,721.2 3,957.0 3,912.1 3,957.0 4,040.9 4,119.4 4,219.5 4,324.8 4,421.7 13 Multifamily residential 261.5 269.1 284.3 295.1 290.4 295.1 300.7 306.0 310.0 317.7 325.8 14 Commercial 699.8 716.0 775.6 824.1 807.0 824.1 841.5 862.3 881.1 912.9 936.6 15 Farm 83.0 84.6 87.1 90.3 89.6 90.3 91.1 92.6 93.7 95.5 96.3 16 Consumer credit 983.9 1,122.8 1,211.6 1,264.1 1,226.7 1,264.1 1,236.0 1,256.8 1,286.6 1,331.7 1,318.6 By borrowing sector 1/ Household 4.429.1 4,783.0 5,100.2 5,429.5 5,333.0 5,429.5 5,487.5 5,608.2 5,738.5 5,902.3 5,987.8 18 Nonfinancial business 3,972.9 4,226.1 4,463.8 4,776.4 4,682.0 4,776.4 4,895.6 5,019.0 5,117.3 5,213.0 5,360.8 19 Corporate 2,708.9 2,928.6 3,077.7 3,306.7 3,235.5 3,306.7 3,402.6 3,496.7 3,569.4 3,638.2 3,762.0 20 Nonfarm noncorporate 1,121.8 1,152.4 1,236.1 1,313.6 1,291.3 1,313.6 1,337.9 1,361.8 1,385.5 1,411.9 1,437.4 21 Farm 142.2 145.1 149.9 156.1 155.2 156.1 155.1 160.6 162.5 162.9 161.3 22 State and local government 1,121.7 1,070.2 1,063.4 1,119.5 1,095.5 1,119.5 1,144.3 1,170.8 1,178.8 1,199.8 1,217.6 23 Foreign credit market debt held in United States 370.8 441.9 518.8 569.6 557.7 569.6 584.1 606.6 600.2 591.6 596.2 24 Commercial paper 42.7 56.2 67.5 65.1 64.3 65.1 76.7 71.4 74.0 72.9 77.2 25 Bonds 242.3 291.9 347.7 394.4 386.3 394.4 398.0 424.9 416.0 407.8 408.3 26 Bank loans n.e.c 26.1 34.6 43.7 52.1 48.2 52.1 53.4 55.5 56.4 58.9 59.1 27 Other loans and advances 59.8 59.3 60.0 58.0 58.9 58.0 55.9 54.8 53.8 52.0 51.5 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 13,386.9 14,158.0 14,928.0 15,699.9 15,439.4 15,699.9 15,942.3 16,153.6 16,355.0 16,658.9 16,922.1 Financial sectors 29 Total credit market debt owed by financial sectors 3,822.2 4,281.3 4,838.6 5,457.5 5,214.2 5,457.5 5,685.7 5,937.4 6,206.2 6,526.1 6,821.6 By instrument 30 Federal government-related 2,172.7 2,376.8 2,608.3 2,821.0 2,746.5 2,821.0 2,877.9 2,981.2 3,121.6 3,292.0 3,433.2 31 Government-sponsored enterprise securities 700.6 806.5 896.9 995.3 955.8 995.3 1,030.9 1,072.5 1,146.0 1,273.6 1,321.8 32 Mortgage pool securities 1,472.1 1,570.3 1,711.4 1,825.8 1,790.7 1,825.8 1,847.0 1,908.7 1,975.6 2,018.4 2,111.4 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 1,649.5 1,904.5 2,230.4 2,636.5 2,467.7 2,636.5 2,807.9 2,956.2 3,084.6 3,234.1 3,388.3 35 Open market paper 441.6 486.9 579.1 745.7 684.7 745.7 804.9 838.9 874.2 906.7 926.4 36 Corporate bonds 1,008.8 1,204.7 1,381.5 1,557.5 1,477.3 1,557.5 1,640.9 1,738.7 1,786.2 1,849.4 1,967.2 37 Bank loans n.e.c 48.9 54.0 74.9 88.0 80.9 88.0 106.3 99.0 113.9 117.7 118.8 38 Other loans and advances 131.6 135.0 162.9 198.5 183.0 198.5 206.6 225.6 246.2 288.7 299.3 39 Mortgages 18.7 24.1 31.9 46.8 41.8 46.8 49.1 54.1 64.0 71.6 76.6 By borrowing sector 40 Commercial banks 94.5 102.6 113.6 140.6 130.0 140.6 148.7 159.6 169.6 188.6 187.6 41 Bank holding companies 133.6 148.0 150.0 168.6 164.0 168.6 181.2 190.5 196.1 193.5 202.6 42 Savings institutions 112.4 115.0 140.5 160.3 149.8 160.3 162.9 170.7 186.6 212.4 226.9 43 Credit unions .5 .4 .4 .6 .5 .6 .7 .8 1.0 1.1 1.5 44 Life insurance companies .6 .5 1.6 1.8 1.9 1.8 1.8 1.6 2.0 2.5 3.3 45 Government-sponsored enterprises 700.6 806.5 896.9 995.3 955.8 995.3 1,030.9 1,072.5 1,146.0 1,273.6 1,321.8 46 Federally related mortgage pools 1,472.1 1,570.3 1,711.4 1,825.8 1,790.7 1,825.8 1,847.0 1,908.7 1,975.6 2,018.4 2,111.4 47 Issuers of asset-backed securities (ABSs) 570.1 712.5 866.4 1,078.2 981.0 1,078.2 1,143.0 1,230.4 1,307.0 1,394.6 1,464.2 48 Brokers and dealers 34.3 29.3 27.3 35.3 33.6 35.3 35.1 40.1 39.4 42.5 34.7 49 Finance companies 433.7 483.9 529.8 554.5 532.7 554.5 571.9 596.9 589.4 597.5 614.1 50 Mortgage companies 18.7 19.1 31.5 26.8 31.2 26.8 39.1 27.1 27.6 28.1 28.9 51 Real estate investment Crusts (REITs) 40.0 44.6 56.5 96.1 79.6 96.1 111.9 128.0 147.8 158.8 165.4 52 Funding corporations 211.0 248.6 312.7 373.7 363.4 373.7 411.6 410.5 417.9 414.4 459.1 All sectors 53 Total credit market debt, domestic and foreign .. . 17,209.1 18,439.3 19,766.6 21,157.4 20,653.6 21,157.4 21,628.0 22,091.0 22,561.1 23,184.9 23,743.7 54 Open market paper 623.5 700.4 803.0 979.4 925.7 979.4 1,074.8 1,112.7 1,165.1 1,172.6 1,227.6 55 U.S. government securities 5,665.0 6,013.6 6,390.0 6,625.9 6,517.7 6,625.9 6,708.6 6,730.2 6,841.8 7,044.2 7,192.9 56 Municipal securities 1,341.7 1,293.5 1,296.0 1,367.5 1,340.2 1,367.5 1,397.1 1,429.3 1,439.9 1,464.3 1,481.6 57 Corporate and foreign bonds 2,504.0 2,822.9 3,128.1 3,441.5 3,334.5 3,441.5 3,567.7 3,732.6 3,793.1 3,879.0 4,036.1 58 Bank loans n.e.c 834.9 949.6 1,041.7 1,169.8 1,123.1 1,169.8 1,191.9 1,241.3 1,280.3 1,315.7 1,329.4 59 Other loans and advances 860.9 931.1 996.2 1,095.9 1,044.9 1,095.9 1,128.7 1,153.9 1,186.1 1,254.9 1,300.4 60 Mortgages 4,395.1 4,605.5 4,900.1 5,213.2 5,140.8 5,213.2 5,323.2 5,434.3 5,568.3 5,722.5 5,857.1 61 Consumer credit 983.9 1,122.8 1,211.6 1,264.1 1,226.7 1,264.1 1,236.0 1,256.8 1,286.6 1,331.7 1,318.6 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999955 11999966 11999977 Q3 Q4 Ql Q2 Q3 Q4 Ql CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 17,209.1 18,439.3 19,766.6 21,157.4 20,653.6 21,157.4 21,628.0 22,091.0 22,561.1 23,184.9 23,743.7 2 Domestic nonfederal nonfinancial sectors 3,031.0 2,890.6 2,900.7 2,724.8 2,710.6 2,724.8 2,662.1 2,718.7 2,739.1 2,686.4 2,733.4 Household 1,974.3 1,929.3 1,982.7 1,804.4 1,814.5 1,804.4 1,759.6 1,786.8 1,769.5 1,673.9 1,727.6 4 Nonfinancial corporate business 289.2 280.4 275.2 278.0 265.1 278.0 259.1 245.4 251.2 270.7 257.2 5 Nonfarm noncorporate business 37.6 42.3 38.0 37.4 37.5 37.4 37.4 37.4 37.4 37.4 37.4 6 State and local governments 729.9 638.6 604.8 605.0 593.5 605.0 606.0 649.1 681.1 704.4 711.2 7 Federal government 203.4 203.2 195.5 200.4 198.2 200.4 204.3 207.5 210.9 213.9 218.5 8 Rest of the world 1,216.0 1,530.3 1,933.8 2,259.0 2,196.4 2,259.0 2,324.0 2,401.2 2,416.4 2,509.8 2,563.6 9 Financial sectors 12,758.7 13,815.2 14,736.6 15,973.2 15,548.4 15,973.2 16,437.6 16,763.6 17,194.7 17,774.8 18,228.1 10 Monetary authority 368.2 380.8 393.1 431.4 412.7 431.4 433.8 440.3 446.5 452.5 466.0 11 Commercial banking 3,254.3 3,520.1 3,707.7 4,031.9 3,912.9 4,031.9 4,093.3 4,136.4 4,195.7 4,337.1 4,340.2 17 U.S.-chartered banks 2,869.6 3,056.1 3,175.8 3,450.7 3,351.9 3,450.7 3,505.0 3,543.6 3,616.2 3,761.3 3,782.9 13 Foreign banking offices in United States 337.1 412.6 475.8 516.1 501.0 516.1 517.9 525.6 510.1 504.2 488.1 14 Bank holding companies 18.4 18.0 22.0 27.4 22.5 27.4 31.2 26.8 28.3 26.5 25.0 15 Banks in U.S.-affiliated areas 29.2 33.4 34.1 37.8 37.5 37.8 39.2 40.4 41.1 45.2 44.1 16 Savings institutions 920.8 913.3 933.2 928.5 929.0 928.5 931.2 930.8 939.3 964.8 990.8 17 Credit unions 246.8 263.0 288.5 305.3 303.9 305.3 306.7 315.1 320.5 324.2 330.7 18 Bank personal trusts and estates 248.0 239.7 232.0 239.5 237.3 239.5 240.1 240.9 241.4 242.4 243.1 19 Life insurance companies 1,487.5 1,587.5 1,657.0 1,751.3 1,746.7 1,751.3 1,777.3 1,793.2 1,810.6 1,828.4 1,858.9 70 Other insurance companies 446.4 468.7 491.2 515.3 506.6 515.3 521.1 520.8 518.9 535.7 540.9 71 Private pension funds 660.9 716.9 769.2 834.7 814.8 834.7 853.4 885.9 909.8 953.4 968.6 7? State and local government retirement funds 455.8 483.3 529.2 565.8 562.0 565.8 582.2 600.2 613.1 626.1 635.1 73 Money market mutual funds 459.0 545.5 634.3 721.9 678.7 721.9 775.0 815.9 869.9 965.9 1,036.2 74 Mutual funds 718.8 771.3 820.2 901.1 890.4 901.1 940.0 979.1 1,005.9 1,026.7 1,049.9 75 Closed-end funds 86.0 96.4 101.1 97.7 98.5 97.7 97.1 96.5 95.9 95.4 94.9 76 Government-sponsored enterprises 663.3 750.0 807.9 902.2 862.5 902.2 951.4 989.4 1,055.4 1,163.0 1,202.0 77 Federally related mortgage pools 1,472.1 1,570.3 1,711.4 1,825.8 1,790.7 1,825.8 1,847.0 1,908.7 1,975.6 2,018.4 2,111.4 78 Asset-backed securities issuers (ABSs) 532.8 653.4 777.0 939.3 855.3 939.3 989.3 1,068.9 1,134.2 1,216.0 1,281.2 79 Finance companies 476.2 526.2 544.5 566.4 564.4 566.4 572.0 579.0 592.7 618.4 635.4 30 Mortgage companies 36.5 33.0 41.2 32.1 55.5 32.1 46.8 32.7 33.8 35.3 37.8 31 Real estate investment trusts (REITs) 24.6 26.0 30.4 50.6 40.8 50.6 57.0 58.5 55.7 45.5 46.5 37 Brokers and dealers 93.3 183.4 167.7 182.6 164.7 182.6 244.0 198.3 217.5 165.2 186.8 33 Funding corporations 107.5 86.3 99.8 149.9 120.9 149.9 179.0 173.2 162.4 160.5 171.9 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 17,209.1 18,439.3 19,766.6 21,157.4 20,653.6 21,157.4 21,628.0 22,091.0 22,561.1 23,184.9 23,743.7 Other liabilities 35 Official foreign exchange 53.2 63.7 53.7 48.9 46.1 48.9 48.2 50.1 54.5 60.1 53.6 36 Special drawing rights certificates 8.0 10.2 9.7 9.2 9.2 9.2 9.2 9.2 9.2 9.2 8.2 37 Treasury currency 17.6 18.2 18.3 18.3 18.7 18.3 18.4 18.4 18.8 18.3 18.3 38 Foreign deposits 373.9 418.8 516.1 619.4 597.8 619.4 608.1 630.4 652.2 661.4 679.4 39 Net interbank liabilities 280.1 290.7 240.8 219.4 189.0 219.4 177.9 189.2 196.5 187.6 206.5 40 Checkable deposits and currency 1,242.0 1,229.3 1,245.1 1,286.6 1,234.2 1,286.6 1,259.4 1,321.0 1,282.7 1,335.1 1,313.3 41 Small time and savings deposits 2,183.2 2,279.7 2,377.0 2,474.1 2,438.8 2,474.1 2,525.2 2,530.8 2,553.5 2,627.0 2,639.3 47 Large time deposits 411.2 476.9 590.9 713.4 696.1 713.4 760.9 754.0 776.5 806.0 803.4 43 Money market fund shares 602.9 745.3 891.1 1,048.7 1,005.1 1,048.7 1,130.7 1,153.7 1,249.7 1,334.2 1,416.0 44 Security repurchase agreements 549.5 660.0 701.5 822.4 797.7 822.4 891.0 861.5 919.8 875.0 941.2 45 Mutual fund shares 1,477.3 1,852.8 2,342.4 2,989.4 2,973.6 2,989.4 3,339.3 3,438.4 3,137.3 3,610.0 3,763.3 46 Security credit 279.0 305.7 358.1 469.1 431.8 469.1 505.3 540.6 579.0 577.5 550.2 47 Life insurance reserves 520.3 566.2 610.6 665.0 655.6 665.0 677.3 690.6 703.5 718.3 731.9 48 Pension fund reserves 5,057.5 5,821.1 6,567.8 7,680.9 7,556.4 7,680.9 8,246.8 8,344.4 7,805.4 8,724.2 8,873.0 49 Trade payables 1,140.6 1,242.2 1,325.6 1,426.0 1,362.5 1,426.0 1,409.3 1,400.5 1,414.4 1,417.3 1,402.5 50 Taxes payable 101.4 107.6 123.6 140.4 143.4 140.4 151.2 143.5 154.3 153.3 165.5 51 Investment in bank personal trusts 699.4 803.0 871.7 1,082.8 1,058.9 1,082.8 1,179.5 1,204.9 1,118.9 1,274.2 1,317.0 52 Miscellaneous 5,292.2 5,656.0 6,144.2 6,800.8 6,787.7 6,800.8 7,039.7 7,094.8 7,370.9 7,287.2 7,350.5 53 Total liabilities 37,498.7 40,986.5 44,754.6 49,672.1 48,656.2 49,672.1 51,605.3 52,466.9 52,558.3 54,860.6 55,976.5 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.1 22.1 21.4 21.1 21.0 21.1 21.2 21.0 21.2 21.6 20.7 55 Corporate equities 6,237.9 8,331.3 10,062.4 12,776.0 12,649.4 12,776.0 14,397.6 14,556.1 12,758.4 15,437.7 15,970.3 56 Household equity in noncorporate business 3,410.5 3,658.3 3,865.2 4,214.9 4,142.3 4,214.9 4,231.1 4,268.5 4,291.6 4,315.1 4,314.3 Liabilities not identified as assets (—) 57 Treasury currency -5.4 -5.8 -6.7 -7.3 -6.7 -7.3 -7.4 -7.4 -7.2 -8.0 -8.3 58 Foreign deposits 325.4 360.2 431.4 534.6 501.8 534.6 511.0 547.1 565.5 572.2 578.4 59 Net interbank transactions -6.5 -9.0 -10.6 -32.2 -22.1 -32.2 -21.2 -17.1 -15.4 -27.2 -11.2 60 Security repurchase agreements 67.8 85.3 85.9 151.2 113.0 151.2 191.8 144.0 180.8 171.5 224.0 61 Taxes payable 48.8 62.4 76.7 93.5 88.2 93.5 89.1 94.7 101.5 103.8 96.5 62 Miscellaneous -1,106.4 -1,460.3 -1,706.6 -1,913.0 -1,461.4 -1,913.0 -1,895.2 -1,916.3 -1,921.8 -2,201.6 -2,340.3 Floats not included in assets (—) 63 Federal government checkable deposits 3.4 3.1 -1.6 -8.1 -7.8 -8.1 -10.4 -16.1 -12.0 -3.9 -7.2 64 Other checkable deposits 38.0 34.2 30.1 26.2 19.5 26.2 21.4 24.2 15.7 23.1 18.9 65 Trade credit -245.9 -257.6 -310.1 -312.7 -396.2 -312.7 -364.0 -413.2 -438.8 -379.7 -445.4 66 Total identified to sectors as assets 48,048.8 54,185.8 60,115.1 68,151.9 66,640.6 68,151.9 71,740.0 72,872.7 71,161.2 76,384.8 78,176.5 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. L.l and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • September 1999 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1998 1999 MMeeaassuurree 11999966 11999977 11999988 Oct. Nov. Dec. Jan. Feb/ Mar/ Apr/ May June 1 Industrial production' 119.5 126.8 131.3 132.4 132.2 132.3 132.3 132.5 133.3 133.7 134.0 134.2 Market groupings 2 Products, total 114.4 119.6 123.5 124.9 124.5 124.4 124.5 124.6 125.2 125.6 125.8 125.6 3 Final, total 115.5 121.1 125.4 126.7 126.1 125.9 125.8 125.9 126.5 126.9 127.2 127.2 4 Consumer goods 111.3 114.1 115.2 115.2 114.8 114.9 115.2 115.3 115.3 115.6 115.6 115.6 5 Equipment 122.7 133.9 144.2 147.5 146.5 145.6 145.0 145.1 146.7 147.2 148.2 148.3 6 Intermediate 110.9 115.2 118.0 119.0 119.3 119.8 120.3 120.4 121.0 121.6 121.3 120.7 7 Materials 127.8 138.2 144.0 144.5 144.6 145.2 144.9 145.3 146.7 146.9 147.4 148.2 Industry groupings 8 Manufacturing 121.4 129.7 135.1 136.1 136.4 136.7 136.4 136.9 137.5 " 138.0 138.4 138.6 9 Capacity utilization, manufacturing (percent)2. . 81.4 82.0 80.8 80.3 80.1 80.0 79.5 79.5 79.5 79.6 79.6 79.4 10 Construction contracts3 130.9 142.8 155.9r 156.0r 163.0r 166.0r 170.0r 163.0 159.0 162.0 156.0 159.0 11 Nonagricultural employment, total4 117.3 120.3 123.4 124.1 124.4 124.8r 124.9 125.3 125.4 125.7 125.7 125.9 12 Goods-producing, total 2.4 2.4 2.3 102.6r 102.5r 102.8r 102.6r 102.7 102.5 102.5 102.1 102.1 13 Manufacturing, total 97.4 98.2 98.5 98.4r 98.lr 98.0r 97.8r 97.6 97.4 97.2 97.0 96.8 14 Manufacturing, production workers 98.6 99.6 99.6 99.2r 98.9r 98.8r 98.6r 98.3 98.2 98.0 97.8 97.4 15 Service-producing 123.1 126.5 130.1 131.0r 131,4r 131.8 132.1 132.5 132.7 133.1 133.2 133.6 16 Personal income, total 165.2 174.5 183.3 185.6 187.2 187.1 188.2r 189.1 189.6 190.7 191.4 n.a. 17 Wages and salary disbursements 159.8 171.2 182.6 185.7 186.7 187.6 189.0 190.2 190.6 191.8 192.8 n.a. 18 Manufacturing 135.7 144.7 151.1 151.8 151.6 151.7 152.4 152.8 152.9 153.5 154.4 n.a. 19 Disposable personal income5 164.0 171.7 178.6 180.7 182.4 182.1 183.2r 183.9 184.6 185.5 186.1 n.a. 20 Retail sales5 159.6 166.9 175.1 177.7 178.9 180.9 183.3 186.4 186.4 187.3 189.6 189.7 Prices6 21 Consumer (1982-84=100) 156.9 160.5 163.0 164.0 164.0 163.9 164.3 164.5 165.0 166.2 166.2 166.2 22 Producer finished goods (1982=100) 131.3 131.8 130.7 131.4 130.9 131.1 131,4r 130.8 131.2 131.8 132.4 132.7 1. Data in this table appear in the Board's G. 17 (419) monthly statistical release. The data 3. Index of dollar value of total construction contracts, including residential, nonresidenare also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The tial, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge latest historical revision of the industrial production index and the capacity utilization rates Division. was released in November 1998. The recent annual revision is described in an article in the 4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series January 1999 issue of the Bulletin. For a description of the methods of estimating industrial covers employees only, excluding personnel in the armed forces. production and capacity utilization, see "Industrial Production and Capacity Utilization: 5. Based on data from U.S. Department of Commerce, Survey of Current Business. Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price 1997), pp. 67-92, and the references cited therein. For details about the construction of indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, individual industrial production series, see "Industrial Production: 1989 Developments and Monthly Labor Review. Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series 2. Ratio of index of production to index of capacity. Based on data from the Federal mentioned in notes 3 and 6, can also be found in the Survey of Current Business. Reserve, DRI McGraw-Hill, U.S. Department of Commerce, and other sources. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 1998r 1999 CCaatteeggoorryy 11999966 11999977 11999988 Nov. Dec. Jan/ Feb/ Mar/ Apr/ May June HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 133,943 136,297 137,673 138,193 138,547 139,347 139,271 138,816 139,091 139,019 139,408 Employment 2 Nonagricultural industries1 123,264 126,159 128,085 128,765 129,304 130,097 129,817 129,752 129,685 129,929 130,078 3 Agriculture 3,443 3,399 3,378 3,348 3,222 3,299 3,328 3,281 3,384 3,295 3,354 Unemployment 4 Number 7,236 6,739 6,210 6,080 6,021 5,950 6,127 5,783 6,022 5,795 5,975 5 Rate (percent of civilian labor force) 5.4 4.9 4.5 4.4 4.3 4.3 4.4 4.2 4.3 4.2 4.3 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 119,608 122,690 125,833 126,841 127,186 127,378 127,730 127,813 128,134 128,129 128,397 7 Manufacturing 18,495 18,657 18,716 18,639 18,611 18,585 18,538 18,503 18,473 18,427 18,392 8 Mining 580 592 575 574 570 560 553 550 538 531 528 9 Contract construction 5,418 5,686 5,965 6,085 6,173 6,170 6,238 6,232 6,277 6,238 6,264 10 Transportation and public utilities 6,253 6,395 6,551 6,671 6,684 6,708 6,723 6,732 6,750 6,758 6,787 11 Trade 28,079 28,659 29,299 29,334 29,426 29,480 29,585 29,558 29,689 29,713 29,771 12 Finance 6,911 7,091 7,341 7,520 7,542 7,570 7,581 7,595 7,611 7,618 7,642 13 Service 34,454 36,040 37,525 38,070 38,207 38,313 38,458 38,556 38,697 38,766 38,917 14 Government 19,419 19,570 19,862 19,948 19,973 19,992 20,054 20,087 20,099 20,078 20,096 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 1998 1999 1998 1999 1998 1999 SSeerriieess Q3 Q4 Qlr Q2 Q3 Q4r Qlr Q2 Q3 Q4r Qlr Q2 Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 131.6 132.3 132.7 134.0 161.5 163.5 165.2 166.7 81.5 80.9 80.3 80.4 2 Manufacturing 134.8 136.4 136.9 138.3 168.1 170.3 172.3 174.0 80.2 80.1 79.5 79.5 3 Primary processing3 120.2 120.6 121.7 121.7 145.1 146.1 146.9 147.7 82.9 82.5 82.8 82.4 4 Advanced processing4 142.1 144.4 144.6 146.8 179.2 182.0 184.5 186.7 79.3 79.3 78.3 78.6 Durable goods 157.9 161.2 162.1 165.1 197.5 201.2 204.4 207.4 79.9 80.1 79.3 79.6 6 Lumber and products 117.7 119.2 121.6 120.3 143.9 144.9 146.0 147.1 81.8 82.3 83.3 81.8 7 Primary metals 122.4 119.3 120.4 122.5 143.2 144.4 145.4 145.9 85.5 82.6 82.8 84.0 8 Iron and steel 118.7 112.9 115.5 119.4 144.6 146.5 147.9 148.8 82.1 77.0 78.1 80.2 9 Nonferrous 126.8 126.9 126.3 126.3 141.3 141.7 142.1 142.4 89.7 89.6 88.9 88.7 10 Industrial machinery and equipment 207.9 211.7 214.6 220.0 242.9 251.6 259.8 266.9 85.6 84.1 82.6 82.4 11 Electrical machinery 292.7 304.8 310.3 327.9 381.6 396.6 411.0 424.9 76.7 76.9 75.5 77.2 12 Motor vehicles and parts 137.2 148.5 147.5 151.6 184.9 186.0 186.7 187.1 74.2 79.8 79.0 81.0 13 Aerospace and miscellaneous transportation equipment . . . 106.6 105.8 103.1 100.2 128.0 128.5 128.8 128.7 83.3 82.4 80.1 7777..88 14 Nondurable goods 111.3 111.4 111.6 111.5 137.5 138.4 139.1 139.6 80.9 80.5 80.2 79.9 15 Textile mill products 112.1 110.2 109.7 110.2 135.1 135.2 135.0 134.7 83.0 81.5 81.2 81.8 16 Paper and products 115.0 114.3 116.3 114.3 132.5 133.4 134.2 135.0 86.8 85.7 86.7 84.7 17 Chemicals and products 114.4 114.0 114.0 114.9 148.9 149.7 150.3 150.8 76.8 76.1 75.8 76.2 18 Plastics materials 128.4 131.9 129.6 130.1 141.9 143.2 144.4 145.6 90.5 92.1 89.8 89.3 19 Petroleum products 112.7 111.9 115.4 113.5 116.8 117.1 117.4 117.7 96.5 95.6 98.3 96.4 ?0 Mining 103.6 100.7 98.8 98.7 120.1 120.6 120.9 121.2 86.2 83.5 81.7 81.4 ?1 Utilities 119.6 112.9 114.3 115.1 126.5 126.7 126.9 127.1 94.6 89.2 90.0 90.6 22 Electric 121.2 116.7 116.4 117.1 124.0 124.3 124.5 124.7 97.7 93.9 93.5 94.0 1973 1975 Previous cycle5 Latest cycle6 1998 1999 High Low High Low High Low June Jan. Feb. Mar.r Apr.r Mayr Junep Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 81.5 80.3r 80.2 80.5 80.5 80.4 80.3 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 80.2 79.5 79.5 79.5 79.6 79.6 79.4 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 83.3 83.0 82.7r 82.7 82.5 82.4 82.2 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.2 78.2 78.4 78.4 78.6 78.6 78.5 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 79.3 79.3 79.1 79.4 79.5 79.7 79.6 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 81.5 83.8 83.6r 82.5 82.0 82.2 81.0 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 85.8 83.2 81.5r 83.8 83.8 84.0 84.1 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 83.5 79.1 76.1 79.0 79.9 80.3 80.5 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 88.6 88.3 88.4r 89.9 88.7 88.7 88.7 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 86.6 82.5 82.3 83.0 82.9 82.4 8822..11 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 76.8 76.0 75.2r 75.3 76.7 77.4 77.5 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 65.7 77.9 79.2 79.8 79.9 80.9 82.2 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 83.2 80.1 80.6r 79.5 7788..77 7777..66 7777..11 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 81.8 80.1 80.4r 80.2 80.1 79.9 79.7 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 83.0 80.9 81.9r 80.8 81.9 82.2 81.4 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 87.1 86.7 86.7r 86.6 84.9 84.3 8844..88 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 78.3 74.9 76. lr 76.5 76.5 76.3 7755..88 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 89.7 88.2 91.7 89.4 90.0 89.3 88.7 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 95.7 99.5 99.1 .96.2 96.9 97.3 95.1 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 87.3 81.5 81.8r 81.8 81.2 81.4 81.7 21 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 94.0 90.5 87.7r 91.9 91.5 89.9 90.2 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 97.7 93.4 91.6 95.4 94.9 93.4 93.6 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; latest historical revision of the industrial production index and the capacity utilization rates primary metals; and fabricated metals. was released in November 1998. The recent annual revision is described in an article in the 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing January 1999 issue of the Bulletin. For a description of the methods of estimating industrial and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather production and capacity utilization, see "Industrial Production and Capacity Utilization: and products; machinery; transportation equipment; instruments; and miscellaneous manufac- Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February tures. 1997), pp. 67-92, and the references cited therein. For details about the construction of 5. Monthly highs, 1978-80; monthly lows, 1982. individual industrial production series, see "Industrial Production: 1989 Developments and 6. Monthly highs, 1988-89; monthly lows, 1990-91. Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 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 • September 1999 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1998 1999 GGrroouupp pro- 1998 por- avg. tion June July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar/ Apr/ Mayr Junep Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 131.3 130.6 130.5 132.4 131.9 132.4 132.2 132.3 132.3 132.5 133.3 133.7 134.0 134.2 2 Products 60.5 123.5 123.6 123.3 124.9 124.1 124.9 124.5 124.4 124.5 124.6 125.2 125.6 125.8 125.6 3 Final products 46.3 125.4 125.5 124.7 126.8 126.0 126.7 126.1 125.9 125.8 125.9 126.5 126.9 127.2 127.2 4 Consumer goods, total 29.1 115.2 115.1 114.0 116.1 114.8 115.2 114.8 114.9 115.2 115.3 115.3 115.6 115.6 115.6 5 Durable consumer goods 6.1 135.7 130.7 124.6 140.1 137.4 140.5 138.9 139.8 141.5 143.3 142.2 144.9 146.9 147.7 6 Automotive products 2.6 132.9 121.7 107.3 141.7 136.4 141.1 139.6 139.8 141.7 140.4 138.4 140.9 144.7 147.2 7 Autos and trucks 1.7 137.8 118.2 92.8 151.4 143.4 150.6 149.1 147.7 149.4 149.3 147.5 150.1 154.7 158.9 8 Autos, consumer .9 109.2 93.8 75.8 124.4 128.3 119.9 113.7 115.5 111.7 109.0 110.8 112.8 108.8 112.4 9 Trucks, consumer .7 166.2 142.2 110.0 178.9 161.1 181.0 183.2 179.1 185.2 187.2 182.5 185.7 197.3 202.1 10 Auto parts and allied goods .... .9 125.0 125.4 125.6 127.6 125.9 127.4 125.9 128.2 130.5 127.5 125.3 127.7 130.3 130.5 11 Other 3.5 137.8 137.8 138.7 138.5 138.0 139.7 137.9 139.5 141.0 145.4 145.0 147.9 148.4 147.7 12 Appliances, televisions, and air conditioners 1.0 206.2 199.9 207.8 209.4 209.9 215.2 222.5 226.0 229.6 241.4 241.7 252.0 250.7 253.2 13 Carpeting and furniture .8 117.1 117.0 117.3 116.7 116.3 120.3 117.5 116.8 120.7 123.1 117.8 119.0 120.3 119.7 14 Miscellaneous home goods 1.6 114.7 117.1 115.9 115.3 114.5 113.6 109.5 111.4 110.9 113.5 115.5 116.7 117.2 115.5 15 Nondurable consumer goods 23.0 110.1 111.2 111.2 110.3 109.3 109.1 109.0 108.9 108.9 108.6 108.8 108.6 108.1 107.9 16 Foods and tobacco 10.3 109.0 108.5 108.5 107.5 106.9 108.0 109.6 109.6 110.0 110.2 109.6 109.1 108.6 108.9 17 Clothing 2.4 97.8 98.8 98.4 97.7 97.1 95.4 94.5 94.6 93.4 92.6 92.3 92.3 91.3 90.8 18 Chemical products 4.5 120.5 122.8 122.2 119.0 118.0 117.2 119.3 118.7 115.3 117.4 117.3 117.1 117.0 115.9 19 Paper products 2.9 105.8 105.3 106.3 106.6 105.9 105.2 104.1 103.6 102.0 101.0 99.5 100.4 101.2 101.5 20 Energy 2.9 112.2 118.2 118.4 120.1 116.8 115.0 106.5 107.1 113.3 108.9 115.3 114.5 112.1 111.6 21 Fuels .8 110.5 111.4 112.9 112.1 108.3 108.4 109.1 109.6 112.2 113.3 110.5 112.0 113.2 110.4 22 Residential utilities 2.1 112.3 121.2 120.7 123.7 120.7 117.8 104.5 105.2 113.3 106.0 117.2 115.2 111.1 111.6 23 Equipment 17.2 144.2 144.1 143.9 146.0 146.2 147.5 146.5 145.6 145.0 145.1 146.7 147.2 148.2 148.3 24 Business equipment 13.2 163.5 163.6 163.5 166.6 167.4 169.0 168.1 167.9 167.3 167.6 169.3 170.7 171.7 171.9 25 Information processing and related 5.4 209.9 210.3 211.8 213.1 217.3 219.0 219.7 220.8 222.0 222.1 226.6 232.7 239.9 242.9 26 Computer and office equipment 1.1 646.0 638.6 654.6 671.6 693.6 716.7 745.2 759.9 777.0 787.2 824.8 852.8 879.3 903.0 27 Industrial 4.0 140.0 142.9 144.2 142.3 139.5 141.6 139.9 141.3 139.9 137.9 138.5 139.1 137.3 136.5 28 Transit 2.5 133.7 128.2 121.9 141.6 140.1 141.6 140.5 139.6 137.6 137.7 137.2 137.6 136.3 136.3 29 Autos and trucks 1.2 124.6 108.6 91.7 136.9 135.6 136.1 136.4 136.0 134.8 133.2 135.0 137.9 140.2 143.1 30 Other 1.3 138.9 141.7 146.6 132.6 140.9 141.1 138.5 131.7 131.5 140.2 142.8 135.7 134.9 131.1 31 Defense and space equipment 3.3 75.7 75.8 76.1 76.5 75.5 76.4 75.7 74.6 74.4 74.8 74.9 74.5 74.8 74.3 32 Oil and gas well drilling .6 134.7 136.7 131.9 127.7 123.4 119.4 115.2 103.2 99.2 97.4 104.2 97.2 100.3 100.4 33 Manufactured homes .2 149.2 146.1 151.1 145.7 147.8 150.9 154.6 156.6 159.1 154.1 152.8 148.0 145.2 147.1 34 Intermediate products, total 14.2 118.0 118.0 119.1 119.1 118.3 119.0 119.3 119.8 120.3 120.4 121.0 121.6 121.3 120.7 35 Construction supplies 5.3 127.2 126.1 128.5 128.0 126.9 128.4 129.6 131.0 132.4 132.7 131.7 132.2 132.1 131.3 36 Business supplies 8.9 112.6 113.2 113.6 113.8 113.3 113.5 113.2 113.3 113.1 113.1 114.7 115.3 114.8 114.4 37 Materials 39.5 144.0 141.8 141.9 144.4 144.4 144.5 144.6 145.2 144.9 145.3 146.7 146.9 147.4 148.2 38 Durable goods materials 20.8 176.4 171.7 171.8 177.4 177.7 178.8 179.9 180.4 180.1 180.0 182.6 183.4 184.6 185.9 39 Durable consumer parts 4.0 144.0 131.9 129.7 149.6 147.7 146.2 145.6 144.8 141.9 145.4 147.7 146.1 145.6 146.1 40 Equipment parts 7.6 277.4 271.0 274.1 278.0 282.7 287.0 289.9 292.6 293.2 292.5 297.0 302.6 307.3 311.5 41 Other 9.2 129.0 128.3 128.1 128.3 127.7 128.4 129.3 129.3 129.8 128.6 130.2 129.9 130.3 130.7 42 Basic metal materials 3.1 121.2 120.1 120.2 121.9 118.2 118.3 117.3 116.3 118.4 116.1 118.4 118.9 119.7 119.7 43 Nondurable goods materials 8.9 113.5 113.9 114.1 113.1 112.0 111.7 112.2 112.5 112.0 113.2 113.0 112.6 112.3 112.6 44 Textile materials 1.1 108.7 110.2 110.1 107.7 107.6 108.8 103.0 102.5 99.0 101.1 101.8 103.0 102.2 101.5 45 Paper materials 1.8 116.0 117.3 117.3 116.4 115.0 115.8 112.7 114.7 116.5 116.0 116.9 115.9 113.9 115.4 46 Chemical materials 3.9 114.5 114.8 114.6 113.6 111.8 111.1 113.7 113.0 112.8 114.0 113.7 113.7 114.0 114.2 47 Other 2.1 111.5 110.6 111.7 111.6 111.5 110.4 113.2 114.4 112.5 114.8 113.1 111.9 112.3 112.2 48 Energy materials 9.7 103.5 104.8 104.8 104.4 105.2 103.7 101.5 102.6 102.6 102.6 103.4 103.5 103.0 103.3 49 Primary energy 6.3 101.2 101.8 102.9 101.2 102.3 102.6 99.8 100.3 100.4 101.2 100.4 98.7 99.0 98.8 50 Converted fuel materials 3.3 108.1 110.7 108.6 110.7 110.9 106.1 104.9 107.2 107.1 105.6 109.2 112.6 110.7 111.8 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 131.3 131.2 131.6 132.1 131.7 132.1 131.9 132.1 132.0 132.3 133.2 133.5 133.6 133.7 52 Total excluding motor vehicles and parts 95.1 130.8 131.2 131.7 131.3 131.0 131.5 131.4 131.7 131.7 131.7 132.6 133.0 133.1 133.2 53 Total excluding computer and office equipment 98.2 127.1 126.4 126.2 128.0 127.4 127.8 127.4 127.5 127.4 127.6 128.2 128.5 128.6 128.7 54 Consumer goods excluding autos and trucks . 27.4 113.9 114.8 114.9 114.3 113.2 113.4 113.0 113.2 113.4 113.5 113.6 113.8 113.5 113.3 55 Consumer goods excluding energy 26.2 115.5 114.7 113.5 115.7 114.6 115.3 115.8 115.8 115.4 116.0 115.3 115.8 116.0 116.0 56 Business equipment excluding autos and trucks 12.0 167.9 170.0 171.8 169.9 171.0 172.7 171.6 171.5 170.9 171.5 173.1 174.3 175.2 175.1 57 Business equipment excluding computer and office equipment 12.1 142.4 142.7 142.2 144.8 145.1 146.2 144.6 144.1 143.1 143.2 144.0 144.8 145.2 144.9 58 Materials excluding energy 29.8 156.7 153.4 153.6 156.9 156.7 157.3 158.2 158.6 158.2 158.6 160.2 160.6 161.3 162.3 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 1998 1999 GGrroouupp c S o I d C e p p r o o r - - 1 av 99 g 8 . tion June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.r Mar.r Apr.r May' JJuunneepp Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 131.3 130.6 130.5 132.4 131.9 132.4 132.2 132.3 132.3 132.5 133.3 133.7 134.0 134.2 60 Manufacturing 85.4 135.1 133.7 133.6 135.7 135.2 136.1 136.4 136.7 136.4 136.9 137.5 138.0 138.4 138.6 61 Primary processing 26.5 120.7 120.2 120.7 120.6 119.3 120.1 120.3 121.3 121.8 121.6 121.7 121.6 121.7 121.6 62 Advanced processing 58.8 142.1 140.4 139.9 143.3 143.2 144.2 144.6 144.4 143.8 144.6 145.4 146.3 146.8 147.2 63 Durable goods 45.0 157.5 154.8 154.4 159.8 159.6 161.2 161.0 161.5 161.4 161.7 163.1 164.2 165.2 165.9 64 Lumber and products 24 2.0 117.0 116.7 117.5 118.5 117.0 118.0 118.3 121.4 122.0 122.1 120.7 120.3 121.0 119.5 65 Furniture and fixtures 25 1.4 121.4 122.0 120.8 120.1 121.6 124.5 123.6 122.9 122.5 124.5 126.1 123.6 124.8 124.5 66 Stone, clay, and glass products 32 2.1 126.2 123.5 125.4 127.0 126.6 128.3 130.5 131.6 133.5 132.2 131.1 129.3 130.0 130.8 67 Primary metals 33 3.1 123.8 122.1 122.6 124.4 120.1 120.6 118.7 118.6 120.7 118.5 122.0 122.1 122.6 122.8' 68 Iron and steel 331,2 1.7 121.1 119.8 120.2 122.5 113.4 114.4 109.7 114.6 116.7 112.6 117.1 118.6 119.6 119.9 69 Raw steel 331PT .1 115.7 116.0 118.3 120.3 112.6 109.7 100.2 102.0 106.6 106.6 109.1 110.5 113.4 113.7 70 Nonferrous 333-6,9 1.4 127.0 124.9 125.4 126.7 128.1 128.0 129.3 123.4 125.4 125.6 127.9 126.2 126.3 126.4 71 Fabricated metal products . . 34 5.0 127.3 128.0 127.8 126.3 126.2 126.9 127.7 128.7 127.6 126.7 127.5 127.8 127.1 127.2 72 Industrial machinery and equipment 35 8.0 203.7 205.8 209.0 207.0 207.7 211.2 211.1 212.7 212.3 213.9 217.6 219.3 219.9 220.9 73 Computer and office equipment 357 1.8 649.1 641.4 657.0 673.6 695.5 718.5 746.9 761.6 778.9 789.3 828.3 859.3 889.1 914.1 74 Electrical machinery 36 7.3 291.9 285.5 289.4 290.8 297.7 302.4 304.8 307.3 308.7 309.2 313.1 322.4 328.7 332.7 75 Transportation equipment. . . 37 9.5 123.0 114.2 108.2 130.3 127.6 128.4 127.1 125.6 124.0 125.6 125.5 125.0 125.2 126.0 76 Motor vehicles and parts . 371 4.9 141.1 121.1 107.6 154.2 149.9 150.2 148.8 146.6 145.3 147.9 149.2 149.4 151.4 153.9 77 Autos and light trucks . 371PT 2.6 128.5 110.1 86.9 142.0 136.5 140.4 138.1 137.3 137.9 137.3 136.3 138.7 141.4 145.4 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 104.9 106.3 107.1 106.9 105.8 106.9 105.7 104.8 103.2 103.7 102.4 101.3 99.9 99.2 79 Instruments 38 5.4 113.0 112.4 112.6 113.0 114.2 114.6 114.1 113.9 114.3 113.8 114.6 115.6 117.2 117.2 80 Miscellaneous 39 1.3 117.7 118.5 118.5 117.7 117.0 115.9 114.1 115.4 114.8 115.8 116.7 118.2 119.3 117.6 81 Nondurable goods 40.4 111.9 112.0 112.1 111.3 110.6 110.9 111.6 111.7 111.3 111.9 111.7 111.8 111.6 111.3 82 Foods 20 9.4 109.6 109.2 109.0 107.9 107.7 109.1 111.3 111.1 112.0 112.3 111.4 111.4 110.7 111.1 83 Tobacco products 21 1.6 106.0 104.7 106.0 107.0 104.2 101.9 99.8 100.0 96.9 97.4 97.3 96.2 97.3 96.3 84 Textile mill products 22 1.8 112.2 112.0 113.2 111.8 111.2 112.4 108.8 109.4 109.3 110.6 109.0 110.5 110.7 109.5 85 Apparel products 23 2.2 99.2 100.5 100.1 99.2 98.3 97.3 95.5 95.3 94.1 93.6 93.3 94.1 93.2 92.4 86 Paper and products 26 3.6 115.0 114.9 115.9 115.3 113.9 115.4 112.3 115.3 116.2 116.4 116.5 114.4 113.8 114.7 87 Printing and publishing .... 27 6.7 105.1 105.5 105.4 104.9 104.6 104.2 105.4 105.1 103.6 103.8 103.7 104.2 104.2 103.9 88 Chemicals and products .... 28 9.9 115.5 116.2 115.7 114.3 113.3 113.1 114.7 114.0 112.5 114.4 115.1 115.2 115.1 114.5 89 Petroleum products 29 1.4 112.0 111.6 113.4 114.1 110.7 110.4 112.8 112.5 116.7 116.4 113.1 113.9 114.6 112.1 90 Rubber and plastic products . 30 3.5 132.6 132.4 132.7 132.2 132.6 133.4 135.0 136.0 135.4 135.2 135.4 136.4 136.5 136.5 91 Leather and products 31 .3 75.3 74.5 75.3 74.0 73.5 72.8 74.3 73.0 70.9 70.5 70.7 70.7 70.3 68.8 92 Mining 6.9 104.0 104.7 104.6 103.7 102.4 102.0 101.1 99.0 98.5 98.9 98.9 98.3 98.7 99.1 93 Metal " 10 .5 110.0 108.0 105.7 109.0 106.4 113.6 110.7 108.3 110.1 108.4 104.1 106.1 106.7 105.3 94 Coal 12 1.0 109.7 110.4 112.8 109.7 115.8 110.8 108.6 114.5 107.7 109.1 103.4 106.8 106.1 106.5 95 Oil and gas extraction 13 4.8 99.6 100.4 100.0 99.2 96.8 96.8 94.2 91.0 91.5 91.7 93.3 91.8 92.2 92.8 96 Stone and earth minerals 14 .6 124.7 125.6 125.4 124.3 120.3 118.8 132.1 125.6 126.9 127.7 129.1 126.7 128.8 129.0 97 Utilities 7.7 113.9 118.7 118.3 120.2 120.3 116.5 110.6 111.8 114.7 111.3 116.7 116.3 114.3 114.7 98 Electric 491,493PT 6.2 117.2 121.0 119.8 121.2 122.6 120.3 114.6 115.2 116.2 114.1 118.9 118.2 116.4 116.7 99 Gas 492.493PT 1.6 101.9 108.4 111.7 115.7 109.7 98.7 92.0 96.0 108.4 98.6 106.9 107.4 104.7 105.6 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 134.7 134.5 135.1 134.6 134.4 135.3 135.7 136.2 136.0 136.3 136.8 137.4 137.7 137.7 101 Manufacturing excluding computer and office equipment 83.6 130.2 128.8 128.6 130.6 130.0 130.8 130.9 131.1 130.8 131.2 131.5 131.9 132.1 132.2 102 Computers, communications equipment and semiconductors 5.9 515.6 502.9 511.8 522.5 538.3 552.1 562.8 571.2 576.6 580.0 597.8 620.1 641.9 657.2 103 Manufacturing excluding computers and semiconductors 81.1 120.1 119.2 118.9 120.6 119.9 120.4 120.4 120.5 120.1 120.5 120.7 120.8 120.8 120.7 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 118.5 117.5 117.2 119.0 118.1 118.7 118.8 118.9 118.5 118.9 119.0 119.0 118.9 118.7 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total 2,001.9 2,489.8 2,470.3 2,454.6 2,525.1 2,501.0 2,519.7 2,511.6 2,513.9 2,527.3 2,527.2 2,536.0 2,549.5 2,551.0 2,549.4 106 Final 1,552.1 1,958.0 1,938.2 1,915.6 1,985.9 1,966.4 1,982.3 1,973.4 1,972.7 1,982.5 1,982.7 1,989.4 1,999.1 2,002.7 2,004.8 107 Consumer goods 1,049.6 1,212.3 1,201.8 1,185.0 1,227.4 1,208.2 1,217.1 1,212.6 1,215.0 1,227.4 1,227.0 1,226.3 1,231.7 1,231.5 1,232.1 108 Equipment 502.5 746.9 740.1 734.3 762.5 762.7 769.8 765.2 762.0 758.8 759.5 767.3 771.6 775.6 777.2 109 Intermediate 449.9 533.6 532.6 538.4 540.3 535.7 538.7 539.1 541.9 545.4 545.1 547.1 550.9 549.1 545.7 1. Data in this table appear in the Board's G. 17 (419) monthly statistical release. The data Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The 1997), pp. 67-92, and the references cited therein. For details about the construction of latest historical revision of the industrial production index and the capacity utilization rates individual industrial production series, see "Industrial Production: 1989 Developments and was released in November 1998. The recent annual revision is described in an article in the Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. January 1999 issue of the Bulletin. For a description of the methods of estimating industrial 2. Standard industrial classification. production and capacity utilization, see "Industrial Production and Capacity Utilization: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • September 1999 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1998 1999 11999977 11999988 Aug. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr. May Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,426 1,441 1,604 1,670 1,569 1,726 1,688 1,708 1,778 1,738 1,654 1,572 1,591 2 One-family 1,070 1,062 1,184 1,202 1,171 1,210 1,254 1,296 1,275 1,306 1,242 1,214 1,243 3 Two-family or more 356 379 421 468 398 516 434 412 503 432 412 358 348 4 Started 1,477 1,474 1,617 1,615 1,576 1,698 1,654 1,750 1,820 1,752 1,746 1,577 1,665 One-family 1,161 1,134 1,271 1,264 1,251 1,298 1,375 1,383 1,393 1,380 1,394 1,260 1,395 6 Two-family or more 316 340 346 351 325 400 279 367 427 372 352 317 270 7 Under construction at end of period1 819 834 935 939 946 968 971 999 1,011 1,032 1,036 1,029 1,028 8 One-family 584 570 638 644 648 659 667 688 697 712 714 708 708 9 Two-family or more 235 264 297 295 298 309 304 311 314 320 322 321 320 10 Completed 1,406 1,406 1,473 1,517 1,459 1,455 1,600 1,440 1,648 1,528 1,700 1,623 1,669 11 One-family 1,123 1,120 1,158 1,183 1,184 1,164 1,254 1,150 1,292 1,246 1,357 1,314 1,351 12 Two-family or more 283 285 315 334 275 291 346 290 356 282 343 309 318 13 Mobile homes shipped 361 354 372 368 369 352 389 382 390 381 383 368 365 Merchant builder activity in one-family units 14 Number sold 757 804 886 836 861 903 985 958 908 909 880 936 888 15 Number for sale at end of period1 326 287 300 285 289 293 292 295 295 297 301 301 309 Price of units sold (thousands of dollars)2 16 Median 140.0 146.0 152.5 154.9 155.0 154.5 151.0 152.5 152.5 159.9 154.8 159.0 149.9 17 Average 166.4 176.2 181.9 186.5 182.7 182.8 178.6 183.3 182.8 191.4 187.9 189.1 185.1 EXISTING UNITS (one-family) 18 Number sold 4,196 4,381 4,970 4,810 4,960 4,940 5,020 5,340 5,060 5,140 5,420 5,250 5,000 Price of units sold (thousands of dollars)2 19 Median 115.8 121.8 128.4 130.8 129.4 128.1 129.4 128.5 130.3 128.1 129.6 130.7 132.8 20 Average 141.8 150.5 159.1 162.0 158.9 157.7 159.9 159.6 162.8 159.6 162.3 163.8 167.4 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 581,920r 617,877r 664,451r 670,007r 672,053r 674,253r 680,U7r 690,462r 697,858 710,657 715,396 700,795 694,317 22 Private 447,593r 474,842r 518,987r 523,652r 524,270r 528,694r 534,743r 541,591r 543,471 548,682 555,362 545,891 541,845 23 Residential 255,577r 265,908' 293,569r 297,314r 299,752r 302,056r 306,299r 310,261r 315,828 318,483 323,133 321,493 319,984 24 Nonresidential 192,017' 208,933r 225,418r 226,338r 224,518r 226,638r 228,444r 231,330r 227,643 230,199 232,229 224,398 221,861 25 Industrial buildings 32,644r 31,355r 32,308r 33,177r 32,423r 30,928r 30,845r 30,327r 29,895 28,967 29,052 25,374 24,251 26 Commercial buildings 75,829r 86,190r 95,252r 93,765r 93,286r 97,705r 99,83 lr 101,605r 100,164 102,802 103,983 100,991 100,840 27 Other buildings 30,648r 37,198r 39,438r 39,326r 39,017r 38,749r 39,744r 42,354r 38,833 40,449 39,840 39,556 38,705 28 Public utilities and other 52,896r 54,190r 58,421r 60,070r 59,792r 59,256r 58,024r 57,044r 58,751 57,981 59,354 58,477 58,065 29 Public 134,326r 143,035r 145,464r 146,355r 147,783r 145,559r 145,374' 148,871r 154,387 161,975 160,033 154,904 152,472 30 Military 2,604r 2,559r 2,588r 2,760r 2,103r 2,407r 2,296r 2,306r 1,881 2,636 2,223 2,287 2,152 31 Highway 39,883r 44,295r 45,067r 44,700r 45,057r 46,30 lr 43,929r 44,583r 50,538 54,880 53,099 48,971 48,347 32 Conservation and development 5,827r 5,576r 5,487r 5,470r 5,920r 5,321r 5,639r 5,406r 6,018 6,271 6,194 6,113 5,414 33 Other 86,012r 90,605r 92,322r 93,425r 94,703r 91,530r 93,510r 96,576r 95,950 98,188 98,517 97,533 96,559 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) IIInnndddeeexxx llleeevvveeelll,,, IIIttteeemmm 1998 1999 1999 JJJuuunnneee 11999988 11999999 111999999999 111 JJuunnee JJuunnee Sept. Dec. Mar. June Feb. Mar. Apr. May June CONSUMER PRICES2 (1982-84=100) 1 All items 1.7 2.0 1.5 2.0 1.5 2.9 .1 .2 .7 .0 .0 166.2 ? Food 2.2 2.2 2.5 2.8 1.7 1.7 .1 -.2 .1 .4 .0 163.6 Energy items -5.9 1.0 -9.0 -5.1 5.8 14.2 .0 1.6 6.1 -1.3 -1.2 106.8 4 All items less food and energy 2.2 2.1 2.3 2.5 .9 2.3 .1 .1 .4 .1 .1 176.6 5 Commodities .4 .6 1.1 2.5 -3.0 2.0 -.4 -.3 .6 -.1 .0 143.7 6 Services 3.1 2.6 3.0 2.5 2.7 2.5 .2 .3 .4 .2 .1 195.3 PRODUCER PRICES (1982=100) 7 Finished goods -.7 1.5 .6 2.2 .9 2.1 — .5' .4' .5 .2 -.1 132.7 Consumer foods -.1 1.1 1.8 .3 2.1 .3 -1.2' .3' -.9 .5 .4 135.3 9 Consumer energy -7.7 1.6 -9.2 -8.9 6.8 20.6 -1.1' 2.0' 5.1 .0 -.3 78.4 in Other consumer goods 1.7 2.5 3.0 8.3 -.5 -.5 .1' .1 .0 .0 -.1 150.9 li Capital equipment -.7 .1 .9 .3 -.3 -.3 .1 -.1' .0 .2 -.3 137.4 Intermediate materials 12 Excluding foods and feeds -1.4 -.3 -2.2 -4.5 .7 5.4 -.2' .4' .7 .2 .4 112233..66 13 Excluding energy -.4 -.5 -1.8 -2.7 -.9 3.1 -.1' .1 .2 .2 .5 132.9 Crude materials 14 Foods -4.6 -6.2 -19.6 -7.0 4.1 .0 —3.0r ~.7r -2.5 2.2 .4 9999..66 15 Energy -15.5 14.6 -25.3 13.5 -16.9 145.1 -3.6' 4.3' 8.5 11.9 3.1 76.7 16 Other -6.9 -10.0 -19.9 -24.3 1.2 7.0 1.2' -1.0' -1.1 2.3 .5 131.9 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • September 1999 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1998 1999 AAccccoouunntt 11999966 11999977 11999988 QL Q2 Q3 Q4 QLR GROSS DOMESTIC PRODUCT 1 Total 7,661.6 8,110.9 8,511.0 8,384.2 8,440.6 8,537.9 8,681.2 8,808.7 By source 2 Personal consumption expenditures 5,215.7 5,493.7 5,807.9 5,676.5 5,773.7 5,846.7 5,934.8 6,050.6 3 Durable goods 643.3 673.0 724.7 705.1 720.1 718.9 754.5 771.2 4 Nondurable goods 1,539.2 1,600.6 1,662.4 1,633.1 1,655.2 1,670.0 1,691.3 1,736.0 Services 3,033.2 3,220.1 3,420.8 3,338.2 3,398.4 3,457.7 3,488.9 3,543.4 6 Gross private domestic investment 1,131.9 1,256.0 1,367.1 1,366.6 1,345.0 1,364.4 1,392.4 1,417.4 / Fixed investment 1,099.8 1,188.6 1,307.8 1,271.1 1,305.8 1,307.5 1,346.7 1,377.9 8 Nonresidential 787.9 860.7 938.2 921.3 941.9 931.6 957.9 972.6 9 Structures 216.9 240.2 246.9 245.0 245.4 246.2 250.9 255.0 10 Producers' durable equipment 571.0 620.5 691.3 676.3 696.6 685.4 706.9 717.6 11 Residential structures 311.8 327.9 369.6 349.8 363.8 375.8 388.9 405.3 12 Change in business inventories 32.1 67.4 59.3 95.5 39.2 57.0 45.7 39.5 13 Nonfarm 24.5 63.1 52.7 90.5 31.5 49.3 39.3 36.4 14 Net exports of goods and services -91.2 -93.4 -151.2 -123.7 -159.3 -165.5 -156.2 -196.9 15 Exports 873.8 965.4 959.0 973.3 949.6 936.2 976.8 962.7 16 Imports 965.0 1,058.8 1,110.2 1,097.1 1,108.9 1,101.7 1,133.0 1,159.6 17 Government consumption expenditures and gross investment 1,405.2 1,454.6 1,487.1 1,464.9 1,481.2 1,492.3 1,510.2 1,537.5 18 Federal 518.4 520.2 520.6 511.6 520.7 519.4 530.7 536.6 19 State and local 886.8 934.4 966.5 953.3 960.4 972.9 979.5 1,000.9 By major type of product 20 Final sales, total 7,629.5 8,043.5 8,451.6 8,288.7 8,401.3 8,480.9 8,635.5 8,769.1 21 Goods 2,780.3 2,911.2 3,044.7 3,005.8 3,025.3 3,029.0 3,118.8 3,154.1 22 Durable 1,228.8 1,310.1 1,391.0 1,376.9 1,380.8 1,373.0 1,433.1 1,436.1 23 Nondurable 1,551.6 1,601.0 1,653.7 1,628.8 1,644.4 1,655.9 1,685.7 1,718.1 24 Services 4,179.5 4,414.1 4,641.0 4,538.4 4,619.5 4,678.5 4,727.7 4,793.7 25 Structures 669.7 718.3 765.9 744.6 756.6 773.5 789.0 821.3 26 Change in business inventories 32.1 67.4 59.3 95.5 39.2 57.0 45.7 39.5 27 Durable goods 20.8 33.6 25.2 49.9 4.5 19.5 27.0 16.5 28 Nondurable goods 11.4 33.8 34.1 45.6 34.7 37.5 18.7 23.1 MEMO 29 Total GDP in chained 1992 dollars 6,994.8 7,269.8 7,551.9 7,464.7 7,498.6 7,566.5 7,677.7 7,759.6 NATIONAL INCOME 30 Total 6,256.0 6,646.5 6,994.7 6,875.0 6,945.5 7,032.3 7,126.0 7,265.2 31 Compensation of employees 4,409.0 4,687.2 4,981.0 4,882.8 4,945.2 5,011.6 5,084.3 5,166.5 32 Wages and salaries 3,640.4 3,893.6 4,153.9 4,065.9 4,121.6 4,181.1 4,246.8 4,317.0 33 Government and government enterprises 640.9 664.2 689.3 679.5 685.8 692.7 699.2 711.2 34 Other 2.999.5 3,229.4 3,464.6 3,386.4 3,435.8 3,488.4 3,547.6 3,605.7 35 Supplement to wages and salaries 768.6 793.7 827.1 816.8 823.5 830.5 837.5 849.6 36 Employer contributions for social insurance 381.7 400.7 420.1 414.1 417.9 422.1 426.5 434.9 37 Other labor income 387.0 392.9 406.9 402.8 405.7 408.4 411.0 414.7 4 3 3 0 9 8 Pro B F p a u r r s i m e in t 1 o e r s s s ' a i n n d c o p m ro e1 f essional1 4 5 8 2 3 8 7 8 . . . 8 7 9 5 5 1 3 5 5 5 1 . . . 5 8 2 5 5 4 7 2 8 8 7 . . . 5 7 2 5 53 6 2 6 4 7 . . . 8 4 2 5 54 2 7 7 4 1 . . . 7 0 7 5 5 7 5 2 6 0 5 . . . 1 9 2 5 56 9 3 2 6 4 . . . 2 7 9 5 5 7 9 2 5 2 8 . . . 8 5 3 41 Rental income of persons2 150.2 158.2 162.6 158.3 161.0 163.6 167.5 167.7 4 4 2 3 Co P rp ro o f r i a t t s e b p e r f o o f r i e t s t 1 a x3 6 7 8 5 0 0 . . 2 4 8 73 1 4 7 . . 4 9 8 71 2 7 4 . . 8 6 7 8 1 2 9 9 . . 1 2 7 8 2 2 3 0 . . 5 6 7 8 2 2 0 7 . . 5 0 7 8 0 2 8 1 . . 1 7 7 8 5 6 2 8 . . 6 8 44 Inventory valuation adjustment -1.2 6.9 14.5 25.3 7.8 11.7 13.4 11.6 45 Capital consumption adjustment 71.4 76.6 92.3 84.9 89.4 94.8 100.2 104.6 46 Net interest 418.6 432.0 449.3 440.5 447.1 454.0 455.6 463.9 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 1998 1999 AAccccoouunntt 11999966 11999977 11999988 Ql Q2 Q3 Q4 Qir PERSONAL INCOME AND SAVING 1 Total personal income 6,425.2 6,784.0 7,126.1 7,003.9 7,081.9 7,160.8 7,257.9 7,349.3 2 Wage and salary disbursements 3,631.1 3,889.8 4,149.9 4,061.9 4,117.6 4,177.1 4,242.8 4,317.0 Commodity-producing industries 909.0 975.0 1,026.9 1,019.0 1,023.2 1,028.0 1,037.4 1,048.1 4 Manufacturing 674.6 719.5 751.5 750.4 750.8 750.9 754.1 759.2 Distributive industries 823.3 879.8 939.6 918.9 932.2 945.8 961.5 971.4 6 Service industries 1,257.9 1,370.8 1,494.0 1,444.5 1,476.4 1,510.6 1,544.6 1,586.2 7 Government and government enterprises 640.9 664.2 689.3 679.5 685.8 692.7 699.2 711.2 8 Other labor income 387.0 392.9 406.9 402.8 405.7 408.4 411.0 414.7 9 Proprietors' income1 527.7 551.2 577.2 564.2 571.7 576.1 596.9 598.3 10 Business and professional1 488.8 515.8 548.5 536.8 544.0 550.9 562.2 575.8 11 Farm1 38.9 35.5 28.7 27.4 27.7 25.2 34.7 22.5 1?, Rental income of persons2 150.2 158.2 162.6 158.3 161.0 163.6 167.5 167.7 n Dividends 248.2 260.3 263.1 261.6 262.1 263.0 265.7 268.8 14 Personal interest income 719.4 747.3 764.8 757.0 763.0 769.2 769.9 771.0 is Transfer payments 1,068.0 1,110.4 1,149.0 1,139.0 1,145.8 1,152.9 1,158.3 1,175.2 16 Old age survivors, disability, and health insurance benefits 538.0 565.9 586.5 581.6 585.0 589.0 590.6 597.9 17 LESS: Personal contributions for social insurance 306.3 326.2 347.4 340.9 345.1 349.5 354.1 363.4 18 EQUALS: Personal income 6,425.2 6,784.0 7,126.1 7,003.9 7,081.9 7,160.8 7,257.9 7,349.3 19 LESS: Personal tax and nontax payments 890.5 989.0 1,098.3 1,066.8 1,092.9 1,108.4 1,124.9 1,144.1 20 EQUALS: Disposable personal income 5,534.7 5,795.1 6,027.9 5,937.1 5,988.9 6,052.4 6,133.1 6,205.2 21 LESS: Personal outlays 5,376.2 5,674.1 6,000.2 5,864.0 5,963.3 6,039.8 6,133.6 6,250.7 22 EQUALS: Personal saving 158.5 121.0 27.7 73.0 25.6 12.6 -.6 -45.5 MEMO Per capita (chained 1992 dollars) Gross domestic product 26,335.7 27,136.2 27,938.9 27,718.8 27,783.0 27,972.1 28,299.8 2288,,552277..99 74 Personal consumption expenditures 17,893.0 18,340.9 19,065.0 18,771.1 19,007.8 19,156.3 19,336.4 19,602.7 25 Disposable personal income 18,989.0 19,349.0 19,790.0 19,632.0 19,719.0 19,829.0 19,980.0 20,101.0 26 Saving rate (percent) 2.9 2.1 .5 1.2 .4 .2 .0 -.7 GROSS SAVING 27 Gross saving 1,274.5 1,406.3 1,468.0 1,482.5 1,448.5 1,474.5 1,466.6 1,511.4 28 Gross private saving 1,114.5 1,141.6 1,090.4 1,130.1 1,079.0 1,078.7 1,073.7 1,061.9 29 Personal saving 158.5 121.0 27.7 73.0 25.6 12.6 -.6 -45.5 30 Undistributed corporate profits1 262.4 296.7 305.4 312.0 300.9 304.8 303.9 332.5 31 Corporate inventory valuation adjustment -1.2 6.9 14.5 25.3 7.8 11.7 13.4 11.6 Capital consumption allowances 37 Corporate 452.0 477.3 500.6 492.5 497.8 503.1 550088..99 551144..99 33 Noncorporate 232.3 242.8 252.7 248.6 250.7 254.2 257.5 260.0 34 Gross government saving 160.0 264.7 377.6 352.4 369.4 395.7 392.9 449.4 35 Federal -39.6 49.5 142.5 128.7 143.9 161.6 135.8 192.3 .36 Consumption of fixed capital 70.6 70.6 69.7 69.9 69.5 69.6 70.0 69.5 37 Current surplus or deficit (-), national accounts -110.3 -21.1 72.8 58.8 74.4 92.0 65.8 122.7 38 State and local 199.7 215.2 235.2 223.7 225.6 234.2 257.1 257.2 39 Consumption of fixed capital 77.1 81.1 85.0 83.5 84.3 85.4 86.6 87.5 40 Current surplus or deficit (-), national accounts 122.6 134.1 150.2 140.2 141.3 148.7 170.5 169.7 41 Gross investment 1,242.3 1,350.5 1,391.5 1,428.4 1,362.7 1,372.5 1,402.4 1,418.3 47 Gross private domestic investment 1,131.9 1,256.0 1,367.1 1,366.6 1,345.0 1,364.4 1,392.4 1,417.4 43 Gross government investment 229.7 235.4 237.0 237.4 232.5 239.7 238.3 255.6 44 Net foreign investment -119.2 -140.9 -212.6 -175.6 -214.8 -231.6 -228.3 -254.7 45 Statistical discrepancy -32.2 -55.8 -76.5 -54.1 -85.7 -102.0 -64.2 -93.1 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • September 1999 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1998r 1999 IItteemm ccrreeddiittss oorr ddeebbiittss 11999966rr 11999977rr 11999988rr Ql Q2 Q3 Q4 Qlp 1 Balance on current account -129,295 -143,465 -220,562 -43,018 -52,400 -63,476 -61,669 -68,583 ? Balance on goods and services -104,318 -104,730 -164,282 -33,338 -41,961 -45,724 -43,262 -53,761 3 Exports 849,806 938,543 933,907 235,831 231,889 229,284 236,904 232,095 4 Imports -954,124 -1,043,273 -1,098,189 -269,169 -273,850 -275,008 -280,166 -285,856 5 Income, net 17,210 3,231 -12,205 247 -553 -6,965 -4,933 -4,724 6 Investment, net 21,754 8,185 -6,956 1,518 735 -5,637 -3,571 -3,330 7 Direct 67,746 69,220 59,405 16,837 16,177 11,834 14,558 14,524 8 Portfolio -45,992 -61,035 -66,361 -15,319 -15,442 -17,471 -18,129 -17,854 9 Compensation of employees -4,544 -4,954 -5,249 -1,271 -1,288 -1,328 -1,362 -1,394 10 Unilateral current transfers, net -42,187 -41,966 -44,075 -9,927 -9,886 -10,787 -13,474 -10,098 11 Change in U.S. government assets other than official reserve assets, net (increase, —) -989 68 -429 -81 -483 185 -50 147 12 Change in U.S. official reserve assets (increase, —) 6,668 -1,010 -6,784 -444 -1,945 -2,026 -2,369 4,068 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) 370 -350 -149 -182 72 118888 -227 563 15 Reserve position in International Monetary Fund -1,280 -3,575 -5,118 -85 -1,031 --22,,007788 -1,924 3 16 Foreign currencies 7,578 2,915 -1,517 -177 -986 -136 -218 3,502 17 Change in U.S. private assets abroad (increase, —) -386,441 -464,354 -285,605 -59,074 -118,089 -60,256 -48,188 5,012 18 Bank-reported claims3 -91,555 -144,822 -24,918 -1,062 -27,704 -33,344 37,192 35,226 19 Nonbank-reported claims -86,333 -120,403 -25,041 -6,596 -14,327 -20,320 16,202 -405 ?.o U.S. purchases of foreign securities, net -115,859 -89,174 -102,817 -14,116 -32,886 14,994 -70,809 8,488 21 U.S. direct investments abroad, net -92,694 -109,955 -132,829 -37,300 -43,172 -21,586 -30,773 -38,297 22 Change in foreign official assets in United States (increase, +) 127,390 18,119 -21,684 11,004 -10,551 -46,489 24,352 8,568 23 U.S. Treasury securities 115,671 -6,690 -9,957 11,336 -20,318 -32,811 31,836 3,416 24 Other U.S. government obligations 5,008 4,529 6,332 2,610 254 1,906 1,562 5,993 25 Other U.S. government liabilities" -316 -1,798 -3,113 -1,028 -807 -224 -1,054 -1,605 26 Other U.S. liabilities reported by U.S. banks3 5,704 22,286 -11,469 -958 9,488 -12,866 -7,133 666 27 Other foreign official assets4 1,323 -208 -3,477 -956 832 -2,494 -859 98 28 Change in foreign private assets in United States (increase, +) 447,457 733,542 524,321 85,813 173,017 140,036 125,453 66,302 29 U.S. bank-reported liabilities" 16,478 149,026 40,731 -48,909 34,138 77,313 -21,811 -14,545 30 U.S. nonbank-reported liabilities 39,404 107,779 9,412 32,707 18,040 11,875 -53,210 11,205 31 Foreign private purchases of U.S. Treasury securities, net 154,996 146,433 46,155 -2,557 25,759 -1,438 24,391 -11,434 37 U.S. currency flows 17,362 24,782 16,622 746 2,349 7,277 6,250 2,440 33 Foreign purchases of other U.S. securities, net 130,240 196,258 218,026 76,810 71,785 20,103 49,328 59,507 34 Foreign direct investments in United States, net 88,977 109,264 193,375 27,016 20,946 24,906 120,505 19,129 35 Capital account transactions, net5 672 292 617 143 160 148 166 170 36 Discrepancy -65,462 -143,192 10,126 5,657 10,291 31,878 -37,695 -15,684 37 Due to seasonal adjustment 5,915 528 -10,582 4,144 5,717 38 Before seasonal adjustment -65,462 -143,192 10,126 -258 9,763 42,460 -41,839 -21,401 MEMO Changes in official assets 39 U.S. official reserve assets (increase, —) 6,668 -1,010 -6,784 -444 -1,945 -2,026 -2,369 44,,006688 40 Foreign official assets in United States, excluding line 25 (increase, +) 127,706 19,917 -18,571 12,032 -9,744 -46,265 25,406 10,173 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 14,911 12,124 -11,499 -1,257 -657 -11,642 2,057 44,,773300 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38^11. corporations and state and local governments. 2. Reporting banks included all types of depository institutions as well as some brokers 5. Consists of capital transfers (such as those of accompanying migrants entering or and dealers. leaving the country and debt forgiveness) and the acquisition and disposal of nonproduced 3. Associated primarily with military sales contracts and other transactions arranged with nonfinancial assets. or through foreign official agencies. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current 4. Consists of investments in U.S. corporate stocks and in debt securities of private 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 1998r 1999 IItteemm 11999966rr 11999977rr 11999988rr Nov. Dec. Jan.r Feb.r Mar/ Apr/ Mayp 1 Goods and services, balance -104,318 -104,731 -164,282 -14,663 -14,241 -16,269 -18,543 -18,947 -18,591 -21,336 2 Merchandise -191,270 -196,652 -246,932 -21,538 -21,059 -23,349 -25,172 -25,680 -25,334 -28,210 3 Services 86,952 91,921 82,650 6,875 6,818 7,080 6,629 6,733 6,743 6,874 4 Goods and services, exports 849,806 938,543 933,907 79,126 78,161 77,903 77,139 77,054 78,224 77,605 5 Merchandise 612,057 679,715 670,246 56,926 56,005 55,263 54,704 54,326 55,269 54,629 6 Services 237,749 258,828 263,661 22,200 22,156 22,640 22,435 22,728 22,955 22,976 7 Goods and services, imports -954,124 -1,043,273 -1,098,189 -93,789 -92,402 -94,172 -95,682 -96,001 -96,815 -98,941 8 Merchandise -803,327 -876,366 -917,178 -78,464 -77,064 -78,612 -79,876 -80,006 -80,603 -82,839 9 Services -150,797 -166,907 -181,011 -15,325 -15,338 -15,560 -15,806 -15,995 -16,212 -16,102 1. Data show monthly values consistent with quarterly figures in the U.S. balance of SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of payments accounts. Economic Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1998 1999 AAsssseett 11999955 11999966 11999977 Dec. Jan. Feb. Mar. Apr. May June Julyp 1 Total 85,832 75,090 69,954 81,755 80,675 75,322 74,359 73,694 72,121 71,689 73,303 2 Gold stock, including Exchange Stabilization Fund1 11,050 11,049 11,050 11,041 11,046 11,048 11,049 11,049 11,049 11,046 11,046 3 Special drawing rights2'3 11,037 10,312 10,027 10,603 10,465 9,474 9,682 9,634 9,784 9,719 9,925 4 Reserve position in International Monetary Fund2 14,649 15,435 18,071 24,111 24,129 24,283 23,231 23,054 21,689 21,462 21,462 5 Foreign currencies4 49,096 38,294 30,809 36,001 35,035 30,517 30,397 29,957 29,599 29,462 30,870 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 1998 1999 AAsssseett 11999955 11999966 11999977 Dec. Jan. Feb. Mar. Apr. May June Julyp 1 Deposits 386 167 457 167 233 200 166 260 157 409 257 Held in custody 2 U.S. Treasury securities2 522,170 638,049 620,885 607,574 612,670 615,139 610,649 606,662 606,579 611,372 619,004 3 Earmarked gold3 11,702 11,197 10,763 10,343 10,343 10,347 10,347 10,340 10,340 10,329 10,329 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 • September 1999 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1998 1999 IItteemm 11999966 11999977 Nov/ Dec/ Jan/ Feb/ Mar/ Apr/ Mayp 1 Total1 756,533 776,505 751,523 757,934 761,225 760,002 765,705 766,527 760,204 By type 2 Liabilities reported by banks in the United States 113,098 135,384 125,173 123,915 121,834 125,275 124,581 135,571 123,886 3 U.S. Treasury bills and certificates3 198,921 148,301 133,702 134,141 136,840 135,471 141,941 135,765 136,199 U.S. Treasury bonds and notes 4 Marketable 384,045 428,004 426,853 432,127 433,590 429,891 425,224 418,528 421,751 5 Nonmarketable4 5,968 5,994 6,035 6,074 6,113 6,151 6,191 6,231 6,143 6 U.S. securities other than U.S. Treasury securities5 54,501 58,822 59,760 61,677 62,848 63,214 67,768 70,432 72,225 By area 7 Europe1 246,983 252,289 261,028 256,026 258,298 256,164 253,808 245,285 242,329 8 Canada 38,723 36,177 36,885 36,715 37,471 38,462 39,611 38,563 38,181 9 Latin America and Caribbean 79,949 96,942 76,800 79,417 73,986 75,986 72,828 81,374 80,675 10 403,265 400,144 389,359 398,717 404,414 403,100 412,531 414,229 411,990 11 Africa 7,242 9,981 10,084 10,059 10,144 9,838 9,906 9,656 9,326 12 Other countries 6,457 7,058 3,453 3,086 2,998 2,538 3,107 3,506 3,789 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 1994 benchmark survey of foreign portfolio investment in the United March 1988, 20-year maturity issue and beginning March 1990, 30-year maturity issue; States. 3.16 LIABILITIES TO, AND CLAIMS ON, FOREIGNERS Reported by Banks in the United States1 Payable in Foreign Currencies Millions of dollars, end of period 1998 1999 IItteemm 11999955 11999966 11999977 June Sept. Dec/ Mar. 1 Banks' liabilities 109,713 103,383 117,524 87,889 92,934 101,125 101,359 2 Banks' claims 74,016 66,018 83,038 68,286 67,901 78,152 80,642 3 Deposits 22,696 22,467 28,661 27,387 27,293 45,985 42,147 4 Other claims 51,320 43,551 54,377 40,899 40,608 32,167 38,495 5 Claims of banks' domestic customers2 6,145 10,978 8,191 7,354 8,453 20,718 11,039 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A53 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1998 1999 IItteemm 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar.r Apr. Mayp BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,162,148 1,283,027 1,346,827 1,346,457 1,346,827 1,332,425 1,340,770 1,337,831 1,333,947 1,352,872 2 Banks' own liabilities 758,998 882,980 884,529 880,919 884,529 872,307 880,160 872,914 879,436 900,593 3 Demand deposits 27,034 31,344 29,341 32,104 29,341 33,039 31,905 30,913 31,180 32,184 4 Time deposits2 186,910 198,546 151,589 149,787 151,589 147,456 153,182 152,136 157,711 156,277 5 Other3 143,510 168,011 140,753 143,441 140,753 145,309 161,955 157,104 160,103 160,744 6 Own foreign offices4 401,544 485,079 562,846 555,587 562,846 546,503 533,118 532,761 530,442 551,388 7 Banks' custodial liabilities5 403,150 400,047 462,298 465,538 462,298 460,118 460,610 464,917 454,511 452,279 8 U.S. Treasury bills and certificates6 236,874 193,239 183,490 182,917 183,490 185,231 184,851 192,840 178,515 177,849 9 Other negotiable and readily transferable instruments7 72,011 93,641 141,103 142,399 141,103 137,428 134,109 133,311 129,051 124,511 10 Other 94,265 113,167 137,705 140,222 137,705 137,459 141,650 138,766 146,945 149,919 11 Nonmonetary international and regional organizations8 . . 13,972 11,690 11,833 13,307 11,833 13,839 19,706 15,337 15,363 13,997 12 Banks' own liabilities 13,355 11,486 10,850 12,367 10,850 12,829 18,949 14,621 14,626 13,250 13 Demand deposits 29 16 172 234 172 62 407 194 13 25 14 Time deposits2 5,784 5,466 5,793 5,802 5,793 6,161 7,215 6,856 6,324 5,840 15 Other3 7,542 6,004 4,885 6,331 4,885 6,606 11,327 7,571 8,289 7,385 16 Banks' custodial liabilities5 617 204 983 940 983 1,010 757 716 737 747 17 U.S. Treasury bills and certificates6 352 69 636 570 636 623 549 548 555 616 18 Other negotiable and readily transferable instruments7 265 133 347 370 347 387 207 168 182 131 19 Other 0 2 0 0 0 0 1 0 0 0 20 Official institutions' 312,019 283,685 258,056 258,875 258,056 258,674 260,746 266,522 271,336 260,085 21 Banks' own liabilities 79,406 102,028 79,149 79,491 79,149 76,044 77,262 76,834 85,841 79,068 22 Demand deposits 1,511 2,314 2,787 2,744 2,787 3,666 2,850 3,393 3,599 2,789 23 Time deposits2 33,336 41,396 28,947 25,700 28,947 24,176 25,988 23,840 29,104 26,928 24 Other3 44,559 58,318 47,415 51,047 47,415 48,202 48,424 49,601 53,138 49,351 25 Banks' custodial liabilities5 232,613 181,657 178,907 179,384 178,907 182,630 183,484 189,688 185,495 181,017 26 U.S. Treasury bills and certificates6 198,921 148,301 134,141 133,702 134,141 136,840 135,471 141,941 135,765 136,199 27 Other negotiable and readily transferable instruments7 33,266 33,151 44,092 45,213 44,092 45,202 47,213 47,174 49,443 44,586 28 Other 426 205 674 469 674 588 800 573 287 232 29 Banks10 694,835 815,247 885,442 885,929 885,442 866,186 854,523 851,749 848,086 881,697 30 Banks' own liabilities 562,898 641,447 676,208 673,648 676,208 658,114 648,149 648,753 646,375 676,737 31 Unaffiliated foreign banks 161,354 156,368 113,362 118,061 113,362 111,611 115,031 115,992 115,933 125,349 32 Demand deposits 13,692 16,767 14,072 15,119 14,072 15,327 15,335 13,985 13,344 15,957 33 Time deposits2 89,765 83,433 46,273 51,352 46,273 46,745 46,745 49,147 50,251 49,768 34 Other3 57,897 56,168 53,017 51,590 53,017 49,539 52,951 52,860 52,338 59,624 35 Own foreign offices4 401,544 485,079 562,846 555,587 562,846 546,503 533,118 532,761 530,442 551,388 36 Banks' custodial liabilities5 131,937 173,800 209,234 212,281 209,234 208,072 206,374 202,996 201,711 204,960 37 U.S. Treasury bills and certificates6 23,106 31,915 35,544 35,213 35,544 35,325 34,472 36,737 29,636 28,323 38 Other negotiable and readily transferable instruments7 17,027 35,393 45,102 45,132 45,102 44,087 40,108 37,304 34,959 35,513 39 Other 91,804 106,492 128,588 131,936 128,588 128,660 131,794 128,955 137,116 141,124 40 Other foreigners 141,322 172,405 191,496 188,346 191,496 193,726 205,795 204,223 199,162 197,093 41 Banks' own liabilities 103,339 128,019 118,322 115,413 118,322 125,320 135,800 132,706 132,594 131,538 42 Demand deposits 11,802 12,247 12,310 14,007 12,310 13,984 13,313 13,341 14,224 13,413 43 Time deposits2 58,025 68,251 70,576 66,933 70,576 70,374 73,234 72,293 72,032 73,741 44 Other3 33,512 47,521 35,436 34,473 35,436 40,962 49,253 47,072 46,338 44,384 45 Banks' custodial liabilities5 37,983 44,386 73,174 72,933 73,174 68,406 69,995 71,517 66,568 65,555 46 U.S. Treasury bills and certificates6 14,495 12,954 13,169 13,432 13,169 12,443 14,359 13,614 12,559 12,711 47 Other negotiable and readily transferable instruments7 21,453 24,964 51,562 51,684 51,562 47,752 46,581 48,665 44,467 44,281 48 Other 2,035 6,468 8,443 7,817 8,443 8,211 9,055 9,238 9,542 8,563 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 14,573 16,083 27,026 28,858 27,026 25,858 23,341 23,035 21,718 24,111 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 • September 1999 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1998 1999 IItteemm 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar. Apr. Mayp AREA 50 Total, all foreigners 1,162,148 1,283,027 1,346,827 1,346,457 1,346,827 1,332,425 1,340,770 l,337,831r 1,333,947 1,352,872 51 Foreign countries 1,148,176 1,271,337 1,334,994 1,333,150 1,334,994 1,318,586 1,321,064 l,322,494r 1,318,584 1,338,875 52 Europe 376,590 419,672 427,367 449,567 427,367 429,636 436,330 418,436r 409,512 434,220 53 Austria 5,128 2,717 3,178 2,824 3,178 2,902 3,070 3,274 2,428 2,224 54 Belgium and Luxembourg 24,084 41,007 42,818 42,014 42,818 38,897 41,594 41,468 37,991 39,227 55 Denmark 2,565 1,514 1,437 1,675 1,437 1,200 1,826 1,992 1,300 1,267 56 Finland 1,958 2,246 1,862 1,706 1,862 1,989 1,643 1,800 1,655 1,645 5/ France 35,078 46,607 44,616 48,155 44,616 44,444 47,617 47,935r 49,095 48,326 58 Germany 24,660 23,737 21,357 22,606 21,357 20,315 23,111 23,746 18,574 24,688 59 Greece 1,835 1,552 2,066 2,444 2,066 2,195 2,509 2,447 2,237 2,691 60 Italy 10,946 11,378 7,103 6,378 7,103 6,155 6,684 5,743 5,909 5,942 61 Netherlands 11,110 7,385 10,793 9,298 10,793 10,580 14,792 12,273 11,037 11,759 62 Norway 1,288 317 710 797 710 1,065 1,102 1,022 1,181 1,210 63 Portugal 3,562 2,262 3,235 2,400 3,235 2,543 2,225 2,237 2,277 2,462 64 Russia 7,623 7,968 2,439 2,698 2,439 2,231 2,438 2,500 2,693 2,945 65 Spain 17,707 18,989 15,775 27,017 15,775 12,843 13,457 9,319r 11,058 8,079 66 Sweden 1,623 1,628 3,027 3,857 3,027 3,132 2,918 2,193 1,974 3,430 6/ Switzerland 44,538 39,023 50,654 50,167 50,654 59,871 60,348 47,874 54,547 66,284 68 Turkey 6,738 4,054 4,286 3,842 4,286 5,105 5,045 5,639 5,787 5,810 69 United Kingdom 153,420 181,904 181,554 195,113 181,554 177,240 173,542 175,302r 169,795 178,014 /O Yugoslavia" 206 239 258 271 258 275 247r 237 221 242 /I Other Europe and other former U.S.S.R.12 22,521 25,145 30,199 26,305 30,199 36,654 32,162r 31,435 29,753 27,975 72 Canada 38,920 28,341 30,212 29,249 30,212 29,725 28,019 31,788 28,360 28,543 73 Latin America and Caribbean 467,529 536,393 554,734 545,454 554,734 540,664 538,465 551,71 lr 578,151 591,099 74 Argentina 13,877 20,199 19,013 18,892 19,013 17,175 18,245 16,891 18,349 16,467 / 5 Bahamas 88,895 112,217 118,085 115,598 118,085 121,606 118,727 119,207r 118,649 118,180 76 Bermuda 5,527 6,911 6,839 7,241 6,839 8,969 8,370 7,514 6,957 7,951 II Brazil 27,701 31,037 15,800 13,370 15,800 12,268 12,913 13,841 17,128 17,383 18 British West Indies 251,465 276,418 302,472 298,422 302,472 287,308 285,676 300,109r 322,011 334,478 79 Chile 2,915 4,072 5,010 4,778 5,010 5,188 5,189 5,057r 6,805 7,236 80 Colombia 3,256 3,652 4,616 4,124 4,616 4,535 4,462 4,636 4,710 44,,993322 81 Cuba 21 66 62 63 62 64 62 63 64 6644 82 Ecuador 1,767 2,078 1,573 1,510 1,573 1,525 1,513 1,606 1,688 1,820 83 Guatemala 1,282 1,494 1,332 1,204 1,332 1,224 1,338 1,392 1,386 1,446 84 Jamaica 628 450 539 524 539 565 542 551 534 553 85 Mexico 31,240 33,972 37,148 36,720 37,148 35,965 35,891 36,622 36,004 37,314 86 Netherlands Antilles 6,099 5,085 5,010 6,009 5,010 5,681 8,406 7,256 5,633 3,853 8/ Panama 4,099 4,241 3,864 3,774 3,864 4,499 4,401 4,196 3,974 44,,000066 88 Peru 834 893 840 814 840 864 828 810 819 886655 89 Uruguay 1,890 2,382 2,486 2,240 2,486 2,380 2,274 2,378 2,345 2,345 90 Venezuela 17,363 21,601 19,894 19,631 19,894 20,250 19,354 19,149 20,512 21,222 91 Other 8,670 9,625 10,151 10,540 10,151 10,598 10,274 10,433 10,583 10,984 92 249,083 269,379 307,140 293,584 330077,,114400 330011,,445544 330022,,552200 330055,,448833rr 228877,,554455 226699,,114422 China 93 Mainland 30,438 18,252 13,041 13,784 13,041 14,854 15,345 13,996 16,350 14,753 94 Taiwan 15,995 11,840 12,708 12,361 12,708 10,980 12,211 13,183 12,641 10,910 95 Hong Kong 18,789 17,722 20,898 16,739 20,898 22,844 25,509 27,589 26,314 25,726 96 India 3,930 4,567 5,250 5,089 5,250 5,279 5,241 6,189 5,979 5,520 91 Indonesia 2,298 3,554 8,282 6,247 8,282 7,909 6,172 6,675 7,434 6,211 98 Israel 6,051 6,281 7,749 8,106 7,749 7,287 7,598 8,246 7,037 7,004 99 Japan 117,316 143,401 168,236 164,311 168,236 161,207 161,073 161,887 142,326 132,607 100 Korea (South) 5,949 13,060 12,454 12,396 12,454 12,446 9,990 ll,141r 9,849 11,387 101 Philippines 3,378 3,250 3,324 2,849 3,324 2,318 2,482 22,,336622 2,440 2,492 102 Thailand 10,912 6,501 7,359 6,788 7,359 7,300 6,590 66,,558888 6,296 5,739 103 Middle Eastern oil-exporting countries13 16,285 14,959 15,609 16,370 15,609 14,655 16,157 15,433r 14,495 15,451 104 Other 17,742 25,992 32,230 28,544 32,230 34,375 34,152 32,194r 36,384 31,342 105 8,116 10,347 8,905 8,889 8,905 9,110 8,658 8,463r 7,874 7,713 106 EGYPT 2,012 1,663 1,339 1,498 1,339 1,856 1,902 1,758 1,599 1,339 10/ Morocco 112 138 97 75 97 98 73 85 90 72 108 South Africa 458 2,158 1,522 1,659 1,522 1,308 1,343 1,258 1,165 1,132 109 Zaire 10 10 5 12 5 6 13 9 4 12 110 Oil-exporting countries14 2,626 3,060 3,088 3,017 3,088 2,989 2,737 2,772 2,534 2,508 111 Other 2,898 3,318 2,854 2,628 2,854 2,853 2,590 2,581r 2,482 2,650 112 Other 7,938 7,205 6,636 6,407 6,636 7,997 7,072 6,613 7,142 8,158 113 Australia 6,479 6,304 5,495 5,180 5,495 6,854 5,550 5,582 5,987 6,820 114 Other 1,459 901 1,141 1,227 1,141 1,143 1,522 1,031 1,155 1,338 115 Nonmonetary international and regional organizations . . 13,972 11,690 11,833 13,307 11,833 13,839 19,706 15,337r 15,363 13,997 116 International15 12,099 10,517 10,221 11,398 10,221 11,787 17,079 12,845r 12,936 11,689 117 Latin American regional16 1,339 424 594 598 594 917 1,411 1,394 1,304 653 118 Other regional17 534 749 1,018 1,311 1,018 1,135 1,216 1,098 1,123 1,655 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 15. Principally the International Bank for Reconstruction and Development. Excludes 12. Includes the Bank for International Settlements. Since December 1992, has "holdings of dollars" of the International Monetary Fund. included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 17. Asian, African, Middle Eastern, and European regional organizations, except the Bank Emirates (Trucial States). for International Settlements, which is included in "Other Europe." 14. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1998 1999 AArreeaa oorr ccoouunnttrryy 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar.r Apr.1" Mayp 1 Total, all foreigners 599,925 708,225 734,794 757,183 734,794 718,269 712,979r 710,914 736,048 751,001 2 Foreign countries 597,321 705,762 731,176 751,875 731,176 713,263 707,553r 706,294 730,795 746,514 3 Europe 165,769 199,880 233,480 228,924 233,480 225,892 230,424 226,547 236,437 265,784 4 Austria 1,662 1,354 1,043 2,311 1,043 2,634 1,824 2,759 2,389 2,902 5 Belgium and Luxembourg 6,727 6,641 7,187 7,409 7,187 5,599 7,073 5,451 7,533 9,811 6 Denmark 492 980 2,383 2,524 2,383 1,816 1,656 1,619 2,297 2,141 7 Finland 971 1,233 1,070 1,050 1,070 963 1,233 1,351 1,349 1,480 8 France 15,246 16,239 15,251 18,881 15,251 18,575 18,583 15,187 15,942 15,790 9 Germany 8,472 12,676 15,922 17,997 15,922 15,115 16,362 16,849 17,158 18,336 in Greece 568 402 575 510 575 533 637 554 651 585 ii Italy 6,457 6,230 7,283 6,544 7,283 6,168 5,714 6,035 6,727 6,434 i? Netherlands 7,117 6,141 5,734 5,686 5,734 5,828 6,048 6,690 7,251 8,588 13 Norway 808 555 827 385 827 645 561 596 970 753 14 Portugal 418 111 669 679 669 584 888 1,205 1,060 1,134 15 Russia 1,669 1,248 789 760 789 742 724 971 787 1,016 16 Spain 3,211 2,942 5,735 5,234 5,735 4,560 4,260 3,041 2,949 4,516 17 Sweden 1,739 1,854 4,223 5,087 4,223 4,338 4,664 4,439 4,141 2,950 18 Switzerland 19,798 28,846 46,880 45,858 46,880 46,122 50,905 51,673 48,477 65,498 19 Turkey 1,109 1,558 1,982 1,915 1,982 1,796 1,870 2,078 1,943 1,918 2.0 United Kingdom 85,234 103,143 106,358 97,072 106,358 98,959 97,431 97,259 105,255 112,931 21 Yugoslavia2 115 52 53 53 53 53 54 54 55 54 22 Other Europe and other former U.S.S.R.3 3,956 7,009 9,516 8,969 9,516 10,862 9,937 8,736 9,503 8,947 23 Canada 26,436 27,189 47,212 44,830 47,212 42,925 40,801 41,264 40,756 41,116 ?4 Latin America and Caribbean 274,153 343,730 342,081 368,212 342,081 344,347 340,678r 341,434 365,120 352,972 75 Argentina 7,400 8,924 9,553 9,225 9,553 9,713 10,184 10,399 10,075 10,318 76 Bahamas 71,871 89,379 96,455 91,171 96,455 93,000 91,104 88,639 84,023 78,480 77 Bermuda 4,129 8,782 4,969 5,702 4,969 5,547 6,033r 4,096 4,426 6,276 ?8 Brazil 17,259 21,696 16,193 17,771 16,193 15,616 15,357 15,143 14,788 14,879 79 British West Indies 105,510 145,471 153,269 179,253 153,269 158,010 155,326 162,867 193,306 185,463 30 Chile 5,136 7,913 8,261 8,824 8,261 8,232 8,085 8,082 7,810 7,545 31 Colombia 6,247 6,945 6,523 6,639 6,523 6,433 6,462 6,222 6,105 5,877 3? Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 1,031 1,311 1,400 1,351 1,400 1,403 1,341 1,219 1,135 1,104 34 Guatemala 620 886 1,127 1,483 1,127 1,107 1,255 1,052 1,062 1,157 35 Jamaica 345 424 239 299 239 333 602 318 326 327 36 Mexico 18,425 19,428 21,143 22,483 21,143 21,128 21,564 20,532 19,434 19,284 37 Netherlands Antilles 25,209 17,838 6,779 7,696 6,779 7,403 6,571 6,661 5,711 5,867 38 Panama 2,786 4,364 3,584 3,864 3,584 3,549 3,390 3,320 4,329 3,298 39 Peru 2,720 3,491 3,260 3,618 3,260 3,364 3,353 3,232 3,111 3,053 40 Uruguay 589 629 1,126 1,040 1,126 997 934 838 772 724 41 Venezuela 1,702 2,129 3,089 2,788 3,089 3,312 3,684 3,506 3,138 3,245 42 Other 3,174 4,120 5,111 5,005 5,111 5,200 5,433 5,308 5,569 6,075 43 122,478 125,092 98,650 100,771 98,650 90,840 86,526r 88,066 79,250 77,648 China 44 Mainland 1,401 1,579 1,311 2,488 1,311 2,691 2,400 3,398 3,461 3,006 45 Taiwan 1,894 922 1,041 957 1,041 728 778 1,331 866 763 46 Hong Kong 12,802 13,991 9,082 8,238 9,082 8,332 6,809r 8,017 6,312 4,980 47 India 1,946 2,200 1,440 1,533 1,440 1,483 1,529 1,701 1,703 1,458 48 Indonesia 1,762 2,651 1,954 2,072 1,954 1,948 2,110 1,897 1,911 2,061 49 Israel 633 768 1,166 916 1,166 833 774 1,082 803 1,236 50 Japan 59,967 59,549 46,712 48,406 46,712 41,817 39,141 39,971 32,639 30,596 51 Korea (South) 18,901 18,162 8,238 8,947 8,238 8,679 8,479 9,119 11,119 12,325 52 Philippines 1,697 1,689 1,465 1,619 1,465 1,310 1,589 1,540 1,546 1,808 53 Thailand 2,679 2,259 1,806 1,895 1,806 1,759 1,708 1,720 1,732 1,623 54 Middle Eastern oil-exporting countries4 10,424 10,790 16,145 15,077 16,145 14,328 12,831 12,151 11,669 10,569 55 Other 8,372 10,532 8,290 8,623 8,290 6,932 8,378 6,139 5,489 7,223 56 2,776 3,530 3,122 2,611 3,122 2,899 3,087 2,938 2,688 2,448 57 Egypt 247 247 257 259 257 302 264 260 228 221 58 Morocco 524 511 372 390 372 378 361 422 463 444 59 South Africa 584 805 643 704 643 802 933 798 567 640 60 Zaire 0 0 0 0 0 0 0 0 0 0 61 Oil-exporting countries5 420 1,212 936 454 936 516 625 325 257 288 62 Other 1,001 755 914 804 914 901 904 1,133 1,173 855 63 Other 5,709 6,341 6,631 6,527 6,631 6,360 6,037 6,045 6,544 6,546 64 Australia 4,577 5,300 6,167 6,008 6,167 5,866 5,367 5,638 6,060 6,093 65 Other 1,132 1,041 464 519 464 494 670 407 484 453 66 Nonmonetary international and regional organizations6.. . 2,604 2,463 3,618 5,308 3,618 5,006 5,426 4,620 5,253 4,487 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 • September 1999 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 1998 1999 TTyyppee ooff ccllaaiimm 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar.r Apr.r May? 1 Total 743,919 852,852 875,332 875,332 862,203 2 Banks' claims 599,925 708,225 734,794 757,183 734,794 718,269 712,979r 710,914 736,048 751,001 3 Foreign public borrowers 22,216 20,581 23,540 27,063 23,540 30,269 31,514 34,772 35,469 36,474 4 Own foreign offices2 341,574 431,685 484,356 487,641 484,356 459,017 461,705r 467,948 485,347 492,646 5 Unaffiliated foreign banks 113,682 109,230 105,732 117,919 105,732 106,557 102,588r 93,815 93,618 99,723 6 Deposits 33,826 30,995 26,808 33,774 26,808 30,558 29,400 25,074 23,973 25,236 7 Other 79,856 78,235 78,924 84,145 78,924 75,999 73,188r 68,741 69,645 74,487 8 All other foreigners 122,453 146,729 121,166 124,560 121,166 122,426 117,172r 114,379 121,614 122,158 9 Claims of banks' domestic customers3 143,994 144,627 140,538 140,538 151,289 10 Deposits 77,657 73,110 78,167 78,167 94,438 11 Negotiable and readily transferable instruments4 51,207 53,967 48,848 48,848 47,713 12 Outstanding collections and other claims 15,130 17,550 13,523 13,523 9,138 MEMO 13 Customer liability on acceptances 10,388 9,624 4,519 4,519 4,485 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 39,661 33,816 39,978 32,888 39,978 38,941 39,055 33,038 33,474 31,210 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 1998 1999 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999955 11999966 11999977 June Sept.r Dec.r Mar.p 1 Total 224,932 258,106 276,550 293,060r 281,505 250,743 242,398 By borrower 2 Maturity of one year or less 178,857 211,859 205,781 21 l,599r 208,716 186,717 175,504 3 Foreign public borrowers 14,995 15,411 12,081 16,997 14,613 13,668 20,921 4 All other foreigners 163,862 196,448 193,700 194,602' 194,103 173,049 154,583 5 Maturity of more than one year 46,075 46,247 70,769 81,461r 72,789 64,026 66,894 6 Foreign public borrowers 7,522 6,790 8,499 10,688 10,926 9,839 13,291 7 All other foreigners 38,553 39,457 62,270 70,773r 61,863 54,187 53,603 By area Maturity of one year or less 8 Europe 55,622 55,690 58,294 73,786r 68,995 68,706 66,886 9 Canada 6,751 8,339 9,917 8,766 8,953 11,124 7,836 10 Latin America and Caribbean 72,504 103,254 97,207 99,864r 99,989 81,756 71,234 11 Asia 40,296 38,078 33,964 23,570 22,330 18,031 21,346 12 Africa 1,295 1,316 2,211 1,116 1,762 1,835 1,547 13 All other3 2,389 5,182 4,188 4,497 6,687 5,265 6,655 Maturity of more than one year 14 Europe 4,995 6,965 13,240 15,607r 15,396 15,056 16,980 15 Canada 2,751 2,645 2,525 2,571 2,982 3,140 2,781 16 Latin America and Caribbean 27,681 24,943 42,049 47,988r 39,165 33,423 33,441 17 Asia 7,941 9,392 10,235 12,630 12,172 10,037 10,936 18 Africa 1,421 1,361 1,236 1,259 1,170 1,233 1,184 19 All other3 1,286 941 1,484 1,406 1,904 1,137 1,572 1. Reporting banks include all types of depository institutions as well as some brokers and 2. Maturity is time remaining until maturity, dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of US. Banks1 Billions of dollars, end of period 1997 1998 1999 AArreeaa oorr ccoouunnttrryy 11999955 11999966 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar.p 1 Total 551.9 645.3 647.6 678.8 711.0 719.3 739.1 749.0 724.3 687.5 675.0 2 G-10 countries and Switzerland 206.0 228.3 231.4 250.0 247.8 242.8 249.0 275.2 258.3 247.0 241.3 3 Belgium and Luxembourg 13.6 11.7 14.1 9.4 11.4 11.0 11.2 13.1 10.9 13.1 14.0 4 France 19.4 16.6 19.7 17.9 20.2 15.4 15.5 20.5 19.9 18.0 19.5 5 Germany 27.3 29.8 32.1 34.1 34.7 28.6 25.5 28.8 28.9 30.7 31.4 6 Italy 11.5 16.0 14.4 20.2 19.3 15.5 19.7 19.5 17.9 11.3 13.2 7 Netherlands 3.7 4.0 4.5 6.4 7.2 6.2 7.3 8.3 8.1 7.7 8.9 8 Sweden 2.7 2.6 3.4 3.6 4.1 3.3 4.8 3.1 2.1 2.2 3.6 9 Switzerland 6.7 5.3 6.0 5.4 4.8 7.2 5.6 6.9 7.4 8.2 7.3 in United Kingdom 82.4 104.7 99.2 110.6 108.3 113.4 120.1 134.9 124.9 114.9 106.4 11 Canada 10.3 14.0 16.3 15.7 15.1 13.7 13.5 16.5 15.5 16.7 15.7 12 Japan 28.5 23.7 21.7 26.8 22.6 28.6 25.8 23.7 22.7 24.1 21.3 13 Other industrialized countries 50.2 65.7 66.4 71.7 73.8 64.5 74.3 72.1 71.3 67.7 76.1 14 Austria .9 1.1 1.9 1.5 1.7 1.5 1.7 1.9 2.1 1.4 2.5 15 Denmark 2.6 1.5 1.7 2.8 3.7 2.4 2.0 2.1 2.8 2.1 3.2 16 Finland .8 .8 .7 1.4 1.9 1.3 1.5 1.4 1.6 1.4 1.4 17 Greece 5.7 6.7 6.3 6.1 6.2 5.1 6.1 5.8 5.7 5.9 6.2 18 Norway 3.2 8.0 5.3 4.7 4.6 3.6 4.0 3.4 3.2 3.2 3.3 19 Portugal 1.3 .9 1.0 1.1 1.4 .9 .7 1.3 1.0 1.3 1.3 20 Spain 11.6 13.2 14.4 15.4 13.9 11.7 16.5 15.2 17.5 13.5 14.3 21 Turkey 1.9 2.7 2.8 3.4 4.4 4.5 4.9 6.5 5.2 4.8 5.0 22 Other Western Europe 4.7 4.7 6.3 5.5 6.1 8.2 9.9 9.6 10.3 10.4 10.1 23 South Africa 1.2 2.0 1.9 1.9 1.9 2.2 3.7 5.0 3.7 3.5 3.4 24 Australia 16.4 24.0 24.4 27.8 28.0 23.1 23.2 20.0 18.2 20.3 25.2 25 OPEC2 22.1 19.7 21.8 22.3 22.9 26.0 25.7 25.3 25.8 26.9 25.8 26 Ecuador .7 1.1 1.1 .9 1.2 1.3 1.3 1.2 1.2 1.2 1.1 27 Venezuela 2.7 2.4 1.9 2.1 2.2 2.5 3.3 3.2 3.1 3.2 3.4 78 Indonesia 4.8 5.2 4.9 5.6 6.5 6.7 5.5 5.1 4.7 4.7 4.4 29 Middle East countries 13.3 10.7 13.2 12.5 11.8 14.4 14.3 15.5 16.1 16.9 16.6 30 African countries .6 .4 .7 1.2 1.1 1.2 1.4 .3 .8 1.0 .4 31 Non-OPEC developing countries 112.6 130.3 128.1 140.6 137.0 138.7 147.4 144.4 139.7 140.9 143.8 Latin America 32 Argentina 12.9 14.3 14.3 16.4 17.1 18.4 19.3 20.2 22.3 22.3 23.5 33 Brazil 13.7 20.7 22.0 27.3 26.1 28.6 32.4 29.9 24.9 24.2 23.6 34 Chile 6.8 7.0 6.8 7.6 8.0 8.7 9.0 9.1 8.5 8.3 8.5 35 Colombia 2.9 4.1 3.7 3.3 3.4 3.4 3.3 3.6 3.4 3.2 3.2 36 Mexico 17.3 16.2 17.2 16.6 16.4 17.4 17.7 17.9 18.4 18.4 18.9 37 Peru .8 1.6 1.6 1.4 1.8 2.0 2.1 2.2 2.2 2.2 2.2 38 Other 2.8 3.3 3.4 3.4 3.6 4.1 4.0 4.4 4.6 5.4 5.4 Asia China 39 Mainland 1.8 2.5 2.7 3.6 4.3 3.2 4.2 3.9 2.8 3.0 5.1 40 Taiwan 9.4 10.3 10.5 10.6 9.7 9.0 11.7 11.3 12.1 12.8 11.6 41 India 4.4 4.3 4.9 5.3 4.9 4.9 5.0 4.9 5.3 5.3 5.6 42 Israel .5 .5 .6 .8 1.0 .7 .7 .9 .9 1.1 1.1 43 Korea (South) 19.1 21.5 14.6 16.3 16.2 15.6 16.2 14.5 12.9 13.6 13.3 44 Malaysia 4.4 6.0 6.5 6.4 5.6 5.1 4.5 4.7 5.0 5.6 5.9 45 Philippines 4.1 5.8 6.0 7.0 5.7 5.7 5.0 5.4 4.7 5.1 5.3 46 Thailand 4.9 5.7 6.8 7.3 6.2 5.4 5.5 4.9 5.3 4.6 4.5 47 Other Asia 4.5 4.1 4.3 4.7 4.5 4.3 4.2 3.7 3.1 2.9 3.0 Africa 48 Egypt .4 .7 .9 1.1 .9 .9 1.0 1.5 1.7 1.3 1.4 49 Morocco .7 .7 .6 .7 .7 .6 .6 .6 .5 .5 .5 50 Zaire .0 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .9 .9 .9 .9 .9 .8 1.1 .8 1.1 1.0 1.2 52 Eastern Europe 4.2 6.9 8.9 7.1 9.8 9.1 12.0 10.9 6.0 5.2 6.0 53 Russia4 1.0 3.7 3.5 4.2 5.1 5.1 7.5 6.8 2.8 2.2 2.1 54 Other 3.2 3.2 5.4 2.9 4.7 4.0 4.6 4.1 3.2 3.1 3.9 55 Offshore banking centers 99.2 134.7 131.3 129.6 138.9 139.0 129.3 125.5 118.6 90.8 83.7 56 Bahamas 11.0 20.3 20.9 16.1 19.8 23.3 29.2 24.7 28.9 33.0 30.2 57 Bermuda 6.3 4.5 6.7 7.9 9.8 9.8 9.0 9.3 10.4 4.5 3.8 58 Cayman Islands and other British West Indies 32.4 37.2 32.8 35.1 45.7 43.4 24.9 33.9 27.4 12.3 7.0 59 Netherlands Antilles 10.3 26.1 19.9 15.8 21.7 14.6 14.0 10.5 6.0 2.6 2.7 60 Panama5 1.4 2.0 2.0 2.6 2.1 3.1 3.2 3.3 4.0 3.8 3.9 61 Lebanon .1 .1 .1 .1 .1 .1 .1 .1 .2 .1 .1 62 Hong Kong, China 25.0 27.9 30.8 35.2 27.2 32.2 33.8 30.0 30.6 23.2 22.6 63 Singapore 13.1 16.7 17.9 16.7 12.7 12.7 15.0 13.5 11.1 11.1 13.1 64 Other® .1 .1 .1 .3 .1 .1 .1 .2 .2 .2 .2 65 Miscellaneous and unallocated7 57.6 59.6 59.6 57.6 80.8 99.1 101.3 95.7 104.5 109.0 98.2 1. The banking offices covered by these data include U.S. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Soviet Union. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 5. 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 • September 1999 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1997 1998 1999 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999955 11999966 11999977 Dec. Mar. June Sept. Dec. Mar.p 1 Total 46,448 61,782 60,037 60,037 58,040 51,433 49,279r 46,553 46,663 2 Payable in dollars 33,903 39,542 41,956 41,956 42,258 40,026 38,410r 36,651 34,030 3 Payable in foreign currencies 12,545 22,240 18,081 18,081 15,782 11,407 10,869 9,902 12,633 By type 4 Financial liabilities 24,241 33,049 29,532 29,532 28,050 22,322 19,331 19,255 22,458 5 Payable in dollars 12,903 11,913 13,043 13,043 13,568 11,988 9,812 10,371 11,225 6 Payable in foreign currencies 11,338 21,136 16,489 16,489 14,482 10,334 9,519 8,884 11,233 7 Commercial liabilities 22,207 28,733 30,505 30,505 29,990 29,111 29,948r 27,298 24,205 8 Trade payables 11,013 12,720 10,904 10,904 10,107 9,537 10,276 10,961 9,999 9 Advance receipts and other liabilities 11,194 16,013 19,601 19,601 19,883 19,574 19,672r 16,337 14,206 10 Payable in dollars 21,000 27,629 28,913 28,913 28,690 28,038 28,598r 26,280 22,805 11 Payable in foreign currencies 1,207 1,104 1,592 1,592 1,300 1,073 1,350 1,018 1,400 By area or country Financial liabilities 12 Europe 15,622 23,179 19,657 19,657 20,307 15,468 12,905 12,589 16,098 13 Belgium and Luxembourg 369 632 186 186 127 75 150 79 50 14 France 999 1,091 1,684 1,684 1,795 1,699 1,457 1,097 1,178 15 Germany 1,974 1,834 2,018 2,018 2,578 2,441 2,167 2,063 1,906 16 Netherlands 466 556 494 494 472 484 417 1,406 1,337 17 Switzerland 895 699 776 776 345 189 179 155 141 18 United Kingdom 10,138 17,161 12,737 12,737 13,145 8,765 6,610 5,980 9,729 19 Canada 632 1,401 2,392 2,392 1,045 539 389 693 781 20 Latin America and Caribbean 1,783 1,668 1,386 1,386 965 1,320 1,351 1,495 1,528 21 Bahamas 59 236 141 141 17 6 1 7 1 22 Bermuda 147 50 229 229 86 49 73 101 78 23 Brazil 57 78 143 143 91 76 154 152 137 24 British West Indies 866 1,030 604 604 517 845 834 957 1,064 25 Mexico 12 17 26 26 21 51 23 59 22 26 Venezuela 2 1 1 1 1 1 1 2 2 27 Asia 5,988 6,423 5,394 5,394 5,024 4,315 4,005 3,785 3,475 28 Japan 5,436 5,869 5,085 5,085 4,767 3,869 3,754 3,612 3,337 29 Middle Eastern oil-exporting countries' 27 25 32 32 23 0 0 0 1 30 Africa 150 38 60 60 33 29 31 28 31 31 Oil-exporting countries2 122 0 0 0 0 0 0 0 2 32 All other3 66 340 643 643 676 651 650 665 545 Commercial liabilities 33 Europe 7,700 9,767 10,228 10,228 9,951 9,987 11,010 10,032 8,580 34 Belgium and Luxembourg 331 479 666 666 565 557 623 278 229 35 France 481 680 764 764 840 612 740 920 654 36 Germany 767 1,002 1,274 1,274 1,068 1,219 1,408 1,394 1,088 37 Netherlands 500 766 439 439 443 485 440 429 361 38 Switzerland 413 624 375 375 407 349 507 499 535 39 United Kingdom 3,568 4,303 4,086 4,086 4,041 3,743 4,286 3,697 3,008 40 Canada 1,040 1,090 1,175 1,175 1,347 1,206 1,504 1,390 1,597 41 Latin America and Caribbean 1,740 2,574 2,176 2,176 2,051 2,285 1,840 1,619 1,612 42 Bahamas 1 63 16 16 27 14 48 14 11 43 Bermuda 205 297 203 203 174 209 168 198 225 44 Brazil 98 196 220 220 249 246 256 152 107 45 British West Indies 56 14 12 12 5 27 5 10 7 46 Mexico 416 665 565 565 520 557 511 347 437 47 Venezuela 221 328 261 261 219 196 230 202 155 48 Asia 10,421 13,422 14,966 14,966 14,672 13,611 13,539r 12,322 10,428 49 Japan 3,315 4,614 4,500 4,500 4,372 3,995 3,779 3,808 2,715 50 Middle Eastern oil-exporting countries' 1,912 2,168 3,111 3,111 3,138 3,194 3,582 2,851 2,479 51 Africa 619 1,040 874 874 833 921 810 794 727 52 Oil-exporting countries2 254 532 408 408 376 354 372 393 377 53 Other3 687 840 1,086 1,086 1,136 1,101 1,245 1,141 1,261 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 1997 1998 1999 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999955 11999966 11999977 Dec. Mar. June Sept. Dec. Mar.p 1 Total 52,509 65,897 68,128 68,128 71,004 63,202 67,976 77,468r 69,065 2 Payable in dollars 48,711 59,156 62,173 62,173 65,359 57,601 62,034 72,188r 64,080 3 Payable in foreign currencies 3,798 6,741 5,955 5,955 5,645 5,601 5,942 5,280 4,985 By type 4 Financial claims 27,398 37,523 36,959 36,959 40,301 32,355 37,262 4466,,224499rr 38,136 5 Deposits 15,133 21,624 22,909 22,909 20,863 14,762 15,406 30,192 18,701 6 Payable in dollars 14,654 20,852 21,060 21,060 19,155 13,084 13,374 28,549 17,116 7 Payable in foreign currencies 479 772 1,849 1,849 1,708 1,678 2,032 1,643 1,585 8 Other financial claims 12,265 15,899 14,050 14,050 19,438 17,593 21,856 16,057r 19,435 9 Payable in dollars 10,976 12,374 11,806 11,806 16,981 14,918 19,867 14,049r 17,404 10 Payable in foreign currencies 1,289 3,525 2,244 2,244 2,457 2,675 1,989 2,008 2,031 11 Commercial claims 25,111 28,374 31,169 31,169 30,703 30,847 30,714 31,219 30,929 12 Trade receivables 22,998 25,751 27,536 27,536 26,888 26,764 26,330 27,211 26,816 13 Advance payments and other claims 2,113 2,623 3,633 3,633 3,815 4,083 4,384 4,008 4,113 14 Payable in dollars 23,081 25,930 29,307 29,307 29,223 29,599 28,793 29,590 29,560 15 Payable in foreign currencies 2,030 2,444 1,862 1,862 1,480 1,248 1,921 1,629 1,369 By area or country Financial claims 16 Europe 7,609 11,085 14,999 14,999 14,187 14,105 14,473 12,287r 12,800 17 Belgium and Luxembourg 193 185 406 406 378 518 496 661 469 18 France 803 694 1,015 1,015 902 810 1,140 863 913 19 Germany 436 276 427 427 393 290 359 304r 302 20 Netherlands 517 493 677 677 911 975 867 875 955 21 Switzerland 498 474 434 434 401 403 409 414 530 22 United Kingdom 4,303 7,922 10,337 10,337 9,289 9,639 9,849 7,765 8,357 23 Canada 2,851 3,442 3,313 3,313 4,688 3,020 4,090 2,502 3,111 24 Latin America and Caribbean 14,500 20,032 15,543 15,543 18,207 11,967 15,758 27,714 18,825 25 Bahamas 1,965 1,553 2,308 2,308 1,316 1,306 2,105 403 666 26 Bermuda 81 140 108 108 66 48 63 39 41 27 Brazil 830 1,468 1,313 1,313 1,408 1,394 710 835 1,112 28 British West Indies 10,393 15,536 10,462 10,462 13,551 7,349 10,960 24,388 14,621 29 Mexico 554 457 537 537 967 1,089 1,122 1,245 1,583 30 Venezuela 32 31 36 36 47 57 50 55 72 31 Asia 1,579 2,221 2,133 2,133 2,174 2,376 2,121 3,026 2,648 32 Japan 871 1,035 823 823 791 886 928 1,194 942 33 Middle Eastern oil-exporting countries' 3 22 11 11 9 12 13 9 8 34 Africa 276 174 319 319 325 155 157 159r 174 35 Oil-exporting countries 5 14 15 15 16 15 16 16 26 36 All other3 583 569 652 652 720 732 663 561r 578 Commercial claims 37 Europe 9,824 10,443 12,120 12,120 12,854 12,882 13,029 13,249 12,782 38 Belgium and Luxembourg 231 226 328 328 232 216 219 238 281 39 France 1,830 1,644 1,796 1,796 1,939 1,955 2,098 2,172 2,173 40 Germany 1,070 1,337 1,614 1,614 1,670 1,757 1,502 1,822 1,599 41 Netherlands 452 562 597 597 534 492 463 467 415 42 Switzerland 520 642 554 554 476 418 546 484 367 43 United Kingdom 2,656 2,946 3,660 3,660 4,828 4,664 4,681 4,769 4,529 44 Canada 1,951 2,165 2,660 2,660 2,882 2,779 2,291 2,625r 3,075 45 Latin America and Caribbean 4,364 5,276 5,750 5,750 5,481 6,082 5,773 6,298r 5,930 46 Bahamas 30 35 27 27 13 12 39 24 10 47 Bermuda 272 275 244 244 238 359 173 536 500 48 Brazil 898 1,303 1,162 1,162 1,128 1,183 1,062 1,025r 936 49 British West Indies 79 190 109 109 88 110 91 104r 117 50 Mexico 993 1,128 1,392 1,392 1,302 1,462 1,356 l,545r 1,431 51 Venezuela 285 357 576 576 441 585 566 401 361 52 7,312 8,376 8,713 8,713 7,638 7,367 7,190 7,194 7,080 53 Japan 1,870 2,003 1,976 1,976 1,713 1,757 1,789 1,681 1,486 54 Middle Eastern oil-exporting countries 974 971 1,107 1,107 987 1,127 967 1,131 1,286 55 Africa 654 746 680 680 613 657 740 712 685 56 Oil-exporting countries2 87 166 119 119 122 116 128 165 116 57 Other3 1,006 1,368 1,246 1,246 1,235 1,080 1,691 1,141 1,377 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 • September 1999 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1999 1998 1999 Transaction, and area or country 1997 1998r J M an ay .- Nov. Dec. Jan. Feb/ Mar/ Apr/ Mayp U.S. corporate securities STOCKS 1 Foreign purchases 1,097,958 1,573,733 903,733 126,571 138,942 155,819 159,570 179,894 223,006 185,444 2 Foreign sales 1,028,361 1,523,204 866,737 119,042 134,306 152,303 154,968 177,007 205,493 176,966 3 Net purchases, or sales (-) 69,597 50,529 36,996 7,529 4,636 3,516 4,602 2,887 17,513 8,478 4 Foreign countries 69,754 50,909 36,977 7,546 4,634 3,502 4,602 2,887 17,497 8,489 5 Europe 62,688 68,124 35,747 4,406 2,441 6,048 6,403 6,563 11,493 5,240 6 France 6,641 5,672 1,889 50 -614 537 -175 1,199 534 -206 7 Germany 9,059 9,195 5,172 372 -189 1,035 872 480 1,814 971 8 Netherlands 3,831 8,249 3,300 1,816 332 86 956 1,103 417 738 9 Switzerland 7,848 5,001 4,518 -420 -314 -10 582 1,551 1,934 461 10 United Kingdom 22,478 23,952 12,880 1,902 3,154 3,893 2,833 575 3,758 1,821 11 Canada -1,406 -4,689 1,411 -201 -976 728 248 723 -129 -159 12 Latin America and Caribbean 5,203 760 3,547 3,691 3,088 -1,279 -1,279 -1,415 5,516 2,004 13 Middle East1 383 -916 279 -334 -219 152 -240 298 -355 424 14 Other Asia 2,072 -12,347 -4,714 -8 155 -2,306 -630 -3,257 905 574 15 Japan 4,787 -1,171 -963 822 141 -616 -344 -1,925 1,458 464 16 Africa 472 639 295 41 16 22 11 87 37 138 17 Other countries 342 -662 412 -49 129 137 89 -112 30 268 18 Nonmonetary international and regional organizations -157 -380 19 -17 2 14 0 0 16 -11 BONDS2 19 Foreign purchases 610,116 904,813 352,716 81,893r 58,837r 66,57 LR 74,054 77,101 69,804 65,186 20 Foreign sales 475,958 725,980 258,793 60,470r 41,141 53,744r 55,878 52,331 47,355 49,485 21 Net purchases, or sales (-) 134,158 178,833 93,923 21,423r 17,696r 12,827r 18,176 24,770 22,449 15,701 22 Foreign countries 133,595 179,176 93,938 22,393r 17,618r 12,826r 18,135 24,974 22,389 15,614 23 Europe 71,631 130,152 49,049 16,677r 9,052r 2,858r 13,596 12,832 10,448 9,315 24 France 3,300 3,386 607 235 -170 145 124 22 -36 352 25 Germany 2,742 4,369 2,610 435 217 398 1,268 190 -43 797 26 Netherlands 3,576 3,443 681 64 996 60 329 418 106 -232 27 Switzerland 187 4,826 1,805 251 -36 403 535 272 467 128 28 United Kingdom 54,134 99,732 35,621 13,737r 6,816r 704r 9,997 9,268 8,538 7,114 29 Canada 6,264 6,121 1,947 558 184 100 475 640 319 413 30 Latin America and Caribbean 34,733 23,938 22,991 2,295 2,688 6,382 2,057 5,203 5,967 3,382 31 Middle East1 2,155 4,997 2,256 835 2,472 1,436 314 859 364 -717 32 Other Asia 16,996 12,662 16,615 1,904 3,152 2,032 1,439 5,132 4,904 3,108 33 Japan 9,357 8,384 2,530 1,194 2,238 561 165 589 1,215 0 34 Africa 1,005 190 980 24 16 40 266 261 331 82 35 Other countries 811 1,116 100 100 54 -22 -12 47 56 31 36 Nonmonetary international and regional organizations 563 -343 -15 -970 78 1 41 -204 60 87 Foreign securities 37 Stocks, net purchases, or sales (-) -40,942 6,367 16,322 -2,729 841 3,308 3,083 1,845 5,583 2,503 38 Foreign purchases 756,015 929,914 431,758 70,402 69,578 77,931 73,941 95,216 98,501 86,169 39 Foreign sales 796,957 923,547 415,436 73,131 68,737 74,623 70,858 93,371 92,918 83,666 40 Bonds, net purchases, or sales (-) -48,171 -17,360 -1,719 -918 -4,684 -2,304 -255 1,710 -2,747 1,877 41 Foreign purchases 1,451,704 1,328,282 346,039 55,573 56,845 56,072 66,198 76,129 73,376 74,264 42 Foreign sales 1,499,875 1,345,642 347,758 56,491 61,529 58,376 66,453 74,419 76,123 72,387 43 Net purchases, or sales (—), of stocks and bonds .... -89,113 -10,993 14,603 -3,647 -3,843 1,004 2,828 3,555 2,836 4,380 44 Foreign countries -88,921 -10,657 14,464 -3,641 -3,683 883 2,552 3,595 2,954 4,480 45 Europe -29,874 12,927 38,082 2,326 3,072 406 6,429 14,014 9,710 7,523 46 Canada -3,085 -1,896 -1,534 562 -4,828 -310 -551 -131 -449 -93 47 Latin America and Caribbean -25,258 -13,931 -4,743 -4,074 -19 2,355 491 -3,586 -1,953 -2,050 48 -25,123 -3,890 -16,496 -2,064 -1,489 -1,558 -3,344 -7,155 -3,946 -493 49 Japan -10,001 -1,739 -14,648 -2,390 -1,882 141 -3,390 -7,250 -3,445 -704 50 Africa -3,293 -1,373 113 -56 5 22 -25 -16 20 112 51 Other countries -2,288 -2,494 -958 -335 -424 -32 -448 469 -428 -519 52 Nonmonetary international and regional organizations -192 -336 139 -6 -160 121 276 -40 -118 -100 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, 2. Includes state and local government securities and securities of U.S. government Saudi Arabia, and United Arab Emirates (Trucial States). agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions A61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales (—) during period 1999 1998 1999 AArreeaa oorr ccoouunnttrryy 11999977 11999988 J M an. a — y Nov. Dec. Jan. Feb. Mar. Apr. Mayp 1 Total estimated 184,171 49,039r -14,909 25,456 10,549 -4,165 -14,623 1,532 -3,271 5,618 2 Foreign countries 183,688 46,570r -14,488 25,556 9,426 -4,107 -14,182 1,762 -3,257 5,296 3 Europe 144,921 23,797r -22,873 5,475 8,077 2,530r -7,354 l,342r -15,394 -3,997 4 Belgium and Luxembourg 3,427 3,805 518 510 2,148 -229 204 -54 476 121 5 Germany 22,471 144r -566 307 -556 -268 217 428 -653 -290 6 Netherlands 1,746 -5,533 2,501 -1,156 898 2,347 -584 197 -256 797 7 Sweden -465 1,486 -162 586 581 163 -228 386 -462 -21 8 Switzerland 6,028 5,240 -4,004 531 175 -2,171 47 -1,457 -302 -121 9 United Kingdom 98,253 14,384r -14,063 3,207 3,074 l,729r -5,721 l,129r -6,672 -4,528 10 Other Europe and former U.S.S.R 13,461 4,27 r -7,097 1,490 1,757 959 -1,289 713 -7,525 45 11 Canada -811 615r 3,396 3,694 614 -1,729 1,127 213 1,205 2,580 12 Latin America and Caribbean -2,554 — 3,662r -4,014 1,961 -3,817 -5,621 -6,037 1,100 5,200 1,344 13 Venezuela 655 59 91 327 108 -17 463 -445 2 88 14 Other Latin America and Caribbean -549 9,523r -3,062 -5,411 -165 -1,979 -2,024 -2,570 3,654 -143 15 Netherlands Antilles -2,660 -13,244 -1,043 7,045 -3,760 -3,625 -4,476 4,115 1,544 1,399 16 Asia 39,567 27,433r 8,973 13,632 4,347 l,299r -2,216 -1,714r 5,973 5,631 17 Japan 20,360 13,048 3,190 7,311 3,750 -2,134 -1,124 -1,311 6,475 1,284 18 Africa 1,524 751 -250 145 16 17 -6 -52 -11 -198 19 Other 1,041 -2,364r 280 649 189 -603 304 873 -230 -64 20 Nonmonetary international and regional organizations 483 2,469 -421 -100 1,123 -58 -441 -230 -14 322 21 International 621 1,502 -416 -19 1,084 -77 -371 -206 15 223 22 Latin American regional 170 199 121 -6 2 3 1 -5 0 122 MEMO 23 Foreign countries 183,688 46,570r -14,488 25,556 9,426 -4,107 -14,182 1,762 -3,257 5,296 24 Official institutions 43,959 4,123 -10,376 11,843 5,274 1,463r -3,699 —4,667r -6,696 3,223 25 Other foreign 139,729 42,447r -4,112 13,713 4,152 —5,570r -10,483 6,429r 3,439 2,073 Oil-exporting countries 26 Middle East2 7,636 -16,554 6,881 233 -2,442 3,069r -618 l,478r 65 2,887 27 Africa3 -12 2 0 0 0 0 0 0 0 0 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • September 1999 3.28 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR1 Currency units per dollar except as noted 1999 IItteemm 11999966 11999977 11999988 Feb. Mar. Apr. Mayr June July Exchange Rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 78.28 74.37 62.91 63.99 63.08 64.20 66.28 65.63 65.62 2 Austria/schilling 10.589 12.206 12.379 n.a. n.a. n.a. n.a. n.a. n.a. 3 Belgium/franc 30.97 35.81 36.31 n.a. n.a. n.a. n.a. n.a. n.a. 4 Brazil/real 1.0051 1.0779 1.1605 1.9261 1.9057 1.7025 1.6853 1.7669 1.8023 5 Canada/dollar 1.3638 1.3849 1.4836 1.4977 1.5176 1.4881 1.4611 1.4695 1.4890 6 China, P.R./yuan 8.3389 8.3193 8.3008 8.2755 8.2792 8.2792 8.2785 8.2780 8.2776 7 Denmark/krone 5.8003 6.6092 6.7030 6.6379 6.8287 6.9475 6.9925 7.1643 7.1792 8 European Monetary Union/euro3 n.a. n.a. n.a. 1.1203 1.0886 1.0701 1.0630 1.0377 1.0370 9 Finland/markka 4.5948 5.1956 5.3473 n.a. n.a. n.a. n.a. n.a. n.a. 10 France/franc 5.1158 5.8393 5.8995 n.a. n.a. n.a. n.a. n.a. n.a. 11 Germany/deutsche mark 1.5049 1.7348 1.7597 n.a. n.a. n.a. n.a. n.a. n.a. 12 Greece/drachma 240.82 273.28 295.70 287.41 296.36 304.26 305.96 312.49 313.52 13 Hong Kong/dollar 7.7345 7.7431 7.7467 7.7490 7.7493 7.7495 7.7531 7.7575 7.7603 14 India/rupee 35.51 36.36 41.36 42.53 42.52 42.80 42.86 43.21 43.36 15 Ireland/pound2 159.95 151.63 142.48 n.a. n.a. n.a. n.a. n.a. n.a. 16 Italy/lira 1,542.76 1,703.81 1,736.85 n.a. n.a. n.a. n.a. n.a. n.a. 17 Japan/yen 108.78 121.06 130.99 116.67 119.47 119.77 122.00 120.72 119.33 18 Malaysia/ringgit 2.5154 2.8173 3.9254 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 19 Mexico/peso 7.600 7.918 9.152 10.006 9.732 9.430 9.396 9.515 9.370 20 Netherlands/guilder 1.6863 1.9525 1.9837 n.a. n.a. n.a. n.a. n.a. n.a. 21 New Zealand/dollar2 68.77 66.25 53.61 54.35 53.45 54.27 55.30 53.25 52.61 22 Norway/krone 6.4594 7.0857 7.5521 7.7240 7.8151 7.7750 7.7496 7.8749 7.9029 23 Portugal/escudo 154.28 175.44 180.25 n.a. n.a. n.a. n.a. n.a. n.a. 24 Singapore/dollar 1.4100 1.4857 1.6722 1.7004 1.7292 1.7134 1.7122 1.7107 1.6958 25 South Africa/rand 4.3011 4.6072 5.5417 6.1146 6.2136 6.1186 6.1809 6.0880 6.1182 26 South Korea/won 805.00 947.65 1,400.40 1,188.84 1,229.72 1,209.96 1,197.92 1,168.91 1,189.10 27 Spain/peseta 126.68 146.53 149.41 n.a. n.a. n.a. n.a. n.a. n.a. 28 Sri Lanka/rupee 55.289 59.026 65.006 69.070 69.570 69.588 70.581 71.211 71.912 29 Sweden/krona 6.7082 7.6446 7.9522 7.9532 8.2144 8.3293 8.4432 8.5065 8.4431 30 Switzerland/franc 1.2361 1.4514 1.4506 1.4272 1.4660 1.4971 1.5078 1.5374 1.5474 31 Taiwan/dollar 27.468 28.775 33.547 32.564 33.165 32.965 32.791 32.525 32.338 32 Thailand/baht 25.359 31.072 41.262 37.137 37.557 37.631 37.051 36.926 37.143 33 United Kingdom/pound2 156.07 163.76 165.73 162.76 162.13 160.89 161.54 159.50 156.51 34 Venezuela/bolivar 417.19 488.39 548.39 577.32 580.06 587.79 596.48 603.29 611.17 Indexes3 NOMINAL 35 G-10 (March 1973 = 100)4 87.34 96.38 98.85 n.a. n.a. n.a. n.a. n.a. n.a. 36 Broad (January 1997 = 100)5 97.43 104.47 116.25 116.37 117.80 117.15 116.91 117.45 117.48 37 Major currencies (March 1973= 100)6 85.23 91.85 96.52 93.76 95.69 95.76 95.79 96.56 96.78 38 Other important trading partners (January 1997= 100)7 98.25 104.67 125.70 130.83 131.03 129.24 128.55 128.56 128.26 REAL 39 Broad (March 1973 = 100)' 82.34r 86.73r 94.27r 93.02r 94.36r 94.26r 93.93 94.23 93.90 40 Major currencies (March 1973= 100)6 85.88r 93.25r 98.37r 96.40r 98.42r 9S.lT 98.66 99.25 98.99 41 Other important trading partners (March 1973= 100)7 81.41r 82.33r 93.10r 92.69r 93.23r 92.57r 91.94 91.91 91.48 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, of the other G-10 countries. The weight for each of the ten countries is the 1972-76 average see inside front cover. world trade of that country divided by the average world trade of all ten countries combined. 2. Value in U.S. cents. Series revised as of August 1978 (see Federal Reserve Bulletin, vol. 64 (August 1978), 3. As of January 1999, the euro is reported in place of the individual euro area currencies. p. 700). These currency rates can be derived from the euro rate by using the fixed conversion rates (in 6. Weighted average of the foreign exchange value of the U.S. dollar against the currencies currencies per euro) as shown below: of a broad group of U.S. trading partners. The weight for each currency is computed as an average of U.S. bilateral import shares from and export shares to the issuing country and of a Euro equals measure of the importance to U.S. exporters of that country's trade in third country markets. 13.7603 Austrian schillings 1936.27 Italian lire 7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 40.3399 Belgian francs 40.3399 Luxembourg francs broad index currencies that circulate widely outside the country of issue. The weight for each 5.94573 Finnish markkas 2.20371 Netherlands guilders currency is its broad index weight scaled so that the weights of the subset of currencies in the 6.55957 French francs 200.482 Portuguese escudos index sum to one. 1.95583 German marks 166.386 Spanish pesetas 8. Weighted average of the foreign exchange value of the U.S. dollar against a subset of .787564 Irish pounds broad index currencies that do not circulate widely outside the country of issue. The weight for each currency is its broad index weight scaled so that the weights of the subset of 4. For more information on the indexes of the foreign exchange value of the dollar, see currencies in the index sum to one. Federal Reserve Bulletin, vol. 84 (October 1998), pp. 811-18. 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 1998 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks June 30, 1998 November 1998 A64 September 30, 1998 February 1999 A64 December 31, 1998 May 1999 A64 March 31, 1999 August 1999 A64 Terms of lending at commercial banks August 1998 November 1998 A66 November 1998 February 1999 A66 February 1999 May 1999 A66 May 1999 August 1999 A66 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 1998 November 1998 A72 September 30, 1998 February 1999 A72 December 31, 1998 May 1999 A72 March 31, 1999 August 1999 All Pro forma balance sheet and income statements for priced service operations June 30, 1998 October 1998 A64 September 30, 1998 January 1999 A64 March 31, 1999 July 1999 A64 Residential lending reported under the Home Mortgage Disclosure Act 1997 September 1998 A64 1998 September 1999 A64 Disposition of applications for private mortgage insurance 1997 September 1998 A72 1998 September 1999 A73 Small loans to businesses and farms 1997 September 1998 A76 1998 September 1999 A76 Community development lending reported under the Community Reinvestment Act 1997 September 1998 A79 1998 September 1999 A79 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Special Tables • September 1999 4.34 RESIDENTIAL LENDING ACTIVITY OF FINANCIAL INSTITUTIONS COVERED BY HMDA, 1986-98 Number Item 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1 Loans or applications (millions)2 2.83 3.42 3.39 3.13 6.59 7.89 12.01 15.38 12.19 11.23 14.81 16.41 24.66 2 Reporting institutions 8,898 9,431 9,319 9,203 9,332 9,358 9,073 9,650 9,858 9,539 9,328 7,925 7,836 3 Disclosure reports 12,329 13,033 13,919 14,154 24,041 25,934 28,782 35,976 38,750 36,611 42,946 47,416 57,294 1. Before 1990, includes only home purchase, home refinancing, and home improvement 2. Revised from preliminary data published in Glenn B. Canner and Dolores S. Smith, loans originated by covered institutions; beginning in 1990 (first year under revised reporting "Home Mortgage Disclosure Act: Expanded Data on Residential Lending," Federal Reserve system), includes such loans originated and purchased, applications approved but not ac- Bulletin, vol. 77 (November 1991), p. 861, to reflect corrections and the reporting of cepted by the applicant, applications denied or withdrawn, and applications closed because additional data. information was incomplete. SOURCE. FFIEC, Home Mortgage Disclosure Act. 4.35 APPLICATIONS FOR HOME LOANS REPORTED UNDER HMDA, 1998 By Type of Dwelling, Purpose of Loan, and Loan Program Thousands One- to four-family dwellings MMuullttiiffaammiillyy LLooaann pprrooggrraamm AAllll ddwweelllliinnggss'' Home purchase Home refinancing Home improvement All 1 I'll A 913.2 450.3 134.7 1,498.1 4.7 1,502.8 2 VA 266.6 277.5 * 544.6 * 544.7 3 FmHA 32.0 1.1 5.8 38.9 * 38.9 4 Conventional 6,738.0 10,683.6 1,884.5 19,306.2 43.6 19,349.7 5 Total 7,949.8 11,412.5 2,025.4 21,387.7 48.3 21,436.0 *Fewer than 500. SOURCE. FFIEC, Home Mortgage Disclosure Act. 1. Multifamily dwellings are those for five or more families. 4.36 HOME LOANS ORIGINATED BY LENDERS REPORTED UNDER HMDA, 1998 By Type of Dwelling, Purpose of Loan, and Type of Lender Percent One- to four-family dwellings Home purchase Multifamily Type of lender Home Home dwellings' refinancing improvement VA- FmHA- Conventional guaranteed insured 1 Commercial bank .. 7.5 9.2 13.9 20.9 18.1 23.9 61.6 24.8 44.8 2 Savings association 6.6 6.5 4.2 17.4 15.1 15.6 10.2 15.0 34.1 4 3 M Cr o e r d t i g t a u g n e io c n o mpany2 85. . 7 2 82 1 . . 5 9 81. . 8 0 60 1 . . 0 8 65 1 . . 3 5 57 3. . 1 3 1 1 6 1 . . 5 7 57 3 . . 0 2 20. . 7 4 5 Total 100 100 100 100 100 100 100 100 MEMO Distribution of loans 6 Number 732,586 215,289 25,390 3,576,732 4,549,997 6,705,214 985,003 12,240,214 34,367 7 Percent 6.0 1.8 .2 29.1 37.1 54.6 8.0 99.7 .3 *Less than .05 percent. 2. Comprises all covered mortgage companies, including those affiliated with a commer- 1. Multifamily dwellings are those for five or more families. cial bank, savings association, or credit union. SOURCE. FFIEC, Home Mortgage Disclosure Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A65 4.37 APPLICATIONS FOR LOANS FOR ONE- TO FOUR-FAMILY HOMES REPORTED UNDER HMDA, 1998 By Purpose of Loan and Characteristics of Applicant and Census Tract Home purchase Home refinancing Home improvement Government-backed Characteristic MEMO MEMO Percentage of Percentage of characteristic's characteristic's home purchase home purchase loans loans Racial/ethnic identity 1 American Indian or Alaskan Native . . . 6,149 .5 11.7 46,594 .8 36,132 9,510 .7 2 Asian or Pacific 3 Black I slander 16 1 1 9 , , 8 2 2 6 9 6 14 1 . . 1 7 2 1 2 0 . . 7 3 5 1 5 6 1 7 , , 3 2 9 9 6 7 9 2 . . 1 8 7 8 7 9 . . 3 7 2 64 5 7 5 , , 7 1 2 3 0 3 7 3 . . 6 0 1 2 4 6 5 , , 6 5 2 3 4 6 121..00 4 Hispanic 170,724 14.8 30.8 383,508 6.3 69.2 446,913 5.2 123,079 9.3 5 White 746,341 64.9 13.6 4,751,012 78.2 86.4 6,825,276 79.6 970,548 73.6 6 Other 9,528 .8 13.5 61,055 1.0 86.5 189,121 2.2 21,473 1.6 7 All 35,980 3.1 23.9 114,482 1.9 76.1 175,597 2.0 22,509 1.7 8 Total 1,149,817 100.0 15.9 6,075,344 100.0 84.1 8,575,892 100.0 1,319,279 100.0 Income (percentage of MSA medianJ2 9 Less than 50 118,200 11.4 18.7 515,005 11.2 81.3 840,710 9.9 252,673 15.5 10 50-79 353,546 34.1 26.4 984,125 21.4 73.6 1,654,353 19.4 378,134 23.2 11 80-99 214,024 20.7 25.4 629,026 13.7 74.6 1,220,790 14.3 243,493 15.0 12 100-119 145,783 14.1 21.1 544,833 11.8 78.9 1,098,236 12.9 203,227 12.5 13 120 or more 203,920 19.7 9.6 1,931,356 41.9 90.4 3,701,816 43.5 550,118 33.8 14 Total 1,035,473 100.0 18.4 4,604,345 100.0 81.6 8,515,905 100.0 1,627,645 100.0 CENSUS TRACT Racial/ethnic composition (minorities as percentage of population) 15 Less than 10 388,640 37.5 14.3 2,335,118 49.6 85.7 4,715,504 50.1 738,762 45.8 16 10-19 236,439 22.8 18.4 1,046,844 22.3 81.6 1,882,594 20.0 282,683 17.5 17 20-49 264,690 25.5 23.2 875,072 18.6 76.8 1,644,030 17.5 284,290 17.6 18 50-79 85,213 8.2 23.7 273,698 5.8 76.3 601,275 6.4 133,090 8.2 19 80-100 61,853 6.0 26.3 173,568 3.7 73.7 571,469 6.1 175,157 10.9 20 Total 1,036,835 100.0 18.1 4,704,300 100.0 81.9 9,414,872 100.0 1,613,982 100.0 Income 3 21 Low 20,938 2.0 18.5 92,263 2.0 81.5 223,750 2.4 71,351 4.3 22 Moderate 166,483 15.9 21.9 594,718 12.6 78.1 1,198,730 12.7 306,152 18.6 23 Middle 605,966 57.8 20.5 2,351,647 49.9 79.5 4,835,580 51.2 860,495 52.2 24 Upper 255,587 24.4 13.3 1,671,981 35.5 86.7 3,188,403 33.8 409,705 24.9 25 Total 1,048,974 100.0 18.2 4,710,609 100.0 81.8 9,446,463 100.0 1,647,703 100.0 Location 4 26 Central city 475,995 44.8 20.2 1,885,861 39.4 79.8 3,691,803 38.6 731,889 43.6 27 Non-central city 586,168 55.2 16.8 2,904,610 60.6 83.2 5,876,950 61.4 945,383 56.4 28 Total 1,062,163 100.0 4,790,471 9,568,753 1,677,272 NOTE. Lenders reported 21,436,038 applications for home loans in 1998. Not all character- median family income for the MSA in which the tract is located. Categories are defined as istics were reported for all applications; thus the number of applications being distributed by follows: Low income, median family income for census tract less than 50 percent of median characteristic varies by characteristic. family income for MSA; Moderate income, median family income for census tract at least 50 1. Loans backed by the Federal Housing Administration, the Department of Veterans and less than 80 percent of MSA median; Middle income, median family income at least 80 Affairs, or the Farmers Home Administration. percent and less than 120 percent of MSA median; Upper income, median family income 120 2. Median family income of the metropolitan statistical area (MSA) in which the property percent and greater of MSA median. related to the loan is located. 4. For census tracts located in MSAs. 3. Census tracts are categorized by the median family income for the tract relative to the SOURCE. FFIEC, Home Mortgage Disclosure Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Special Tables • September 1999 4.38 APPLICATIONS FOR LOANS FOR ONE- TO FOUR-FAMILY HOMES REPORTED UNDER HMDA, 1998 By Purpose of Loan, with Denial Rate, and by Characteristic of Applicant Home purchase HHoommee rreeffiinnaanncciinngg HHoommee iimmpprroovveemmeenntt ccchhh AAA aaarrr ppp aaa ppp cccttt lll eee iiiccc rrr aaa iiisss nnn ttt ttt iii ccc111 Government-backed2 Conventional Distribution Denial rate Distribution Denial rate Distribution Denial rate Distribution Denial rate American Indian or Alaskan Native 1 One male 34.70 9.50 30.80 53.80 28.00 20.60 34.60 42.30 2 Two males 1.60 8.60 1.40 48.20 3.60 11.50 5.00 49.10 3 One female 27.10 9.90 29.30 56.30 23.90 20.00 26.30 39.40 4 Two females 1.60 6.40 2.50 62.80 1.90 12.80 1.20 37.40 5 One male and one female 35.00 9.90 35.90 51.00 42.60 15.70 32.90 33.30 6 Total3 100.00 8.10 100.00 52.90 100.00 17.30 100.00 38.90 Asian or Pacific Islander 7 One male 23.40 9.30 22.10 14.50 16.20 17.70 33.50 35.80 8 Two males 3.80 9.20 2.20 15.60 1.50 13.80 1.30 37.50 9 One female 16.90 9.30 15.70 14.10 13.60 16.80 22.50 35.70 10 Two females 2.50 12.00 1.50 14.60 1.30 12.90 .80 31.70 11 One male and one female 53.40 8.50 58.50 10.00 67.50 12.00 41.90 24.10 12 Total3 100.00 8.90 100.00 11.80 100.00 13.60 100.00 30.80 Black 13 One male 28.30 12.30 28.40 52.80 25.00 26.00 29.00 40.80 14 Two males 1.40 10.80 1.10 53.80 .60 24.40 .50 46.30 15 One female 35.70 11.80 38.70 57.30 32.60 25.30 39.70 41.80 16 Two females 3.00 12.40 3.00 64.20 1.60 23.50 1.60 50.40 17 One male and one female 31.60 12.90 28.80 49.00 40.20 22.90 29.20 40.90 18 Total3 100.00 12.30 100.00 53.70 100.00 24.40 100.00 41.40 Hispanic 19 One male 26.00 9.60 31.60 43.50 20.30 22.80 35.00 39.60 20 Two males 5.90 10.00 2.60 40.50 1.90 16.40 1.20 46.00 21 One female 13.70 9.60 18.30 41.40 16.00 20.60 22.90 41.50 22 Two females 2.40 10.30 1.80 44.90 1.30 18.00 1.00 48.10 23 One male and one female 52.00 9.30 45.70 34.00 60.50 18.50 40.00 39.30 24 Total3 100.00 9.50 100.00 38.70 100.00 19.70 100.00 38.80 White 25 One male 26.30 7.70 24.50 32.00 17.80 15.70 23.00 27.20 26 Two males 1.50 7.10 1.30 28.20 .70 12.40 .70 26.40 27 One female 17.60 6.90 18.50 32.20 14.10 13.70 18.70 27.60 28 Two females 1.30 7.40 1.20 36.60 .70 12.40 .90 31.50 29 One male and one female 53.30 6.90 54.50 21.00 66.70 10.10 56.70 19.60 30 Total3 100.00 7.10 100.00 26.00 100.00 11.60 100.00 23.00 All 31 One male 26.60 8.70 25.30 34.90 18.50 17.30 25.10 31.00 32 Two males 2.20 8.70 1.40 31.20 .80 13.60 .80 32.10 33 One female 19.70 8.50 20.40 37.00 15.60 16.10 21.60 32.20 34 Two females 1.70 9.40 1.40 42.40 .90 14.50 1.00 36.70 35 One male and one female 49.80 7.90 51.50 23.00 64.20 11.30 51.50 22.60 36 Total3 100.00 8.30 100.00 29.30 100.00 13.20 100.00 26.90 1. Applicants are categorized by race of first applicant listed on Loan Application Register, 3. Includes all applicants from racial or ethnic group regardless of whether gender was except for joint white and minority applications, which are not shown in this table. reported. 2. Loans backed by the Federal Housing Administration, the Department of Veterans SOURCE. FFIEC, Home Mortgage Disclosure Act. Affairs, or the Farmers Home Administration. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A67 4.39 APPLICATIONS FOR HOME LOANS REPORTED UNDER HMDA, 1998 By Loan Program and Size of Dwelling Percent One- to four-family dwellings Home purchase Home refinancing Type of loan Approved Approved Approved Approved and but not Denied Withdrawn File closed Total and but not Denied Withdrawn File closed Total accepted accepted accepted accepted 1 FHA 80.2 2.3 8.3 7.8 1.4 100 74.4 5.1 6.0 10.1 4.5 100 2 VA 80.7 2.2 8.4 7.5 1.1 100 77.7 3.0 3.6 12.3 3.4 100 3 1 in HA 79.4 1.3 12.6 5.8 .9 100 51.6 5.4 23.5 17.8 1.7 100 4 Conventional 53.1 9.6 29.3 6.8 1.1 100 57.6 8.7 19.1 11.6 3.0 100 5 All 57.2 8.5 26.1 7.0 1.2 100 58.8 8.4 18.2 11.5 3.1 100 One- to four-family dwellings Home improvement Approved Approved Approved Approved and but not Denied Withdrawn File closed Total and but not Denied Withdrawn File closed Total accepted accepted accepted accepted 1 FHA 25.2 12.9 51.0 9.9 1.0 100 71.3 12.2 7.6 7.0 2.0 100 2 VA 75.4 4.9 10.5 7.7 1.5 100 83.8 * 10.0 6.3 * 100 3 1 niHA 17.5 30.8 45.0 3.2 3.5 100 60.0 10.0 20.0 10.0 * 100 4 Conventional 50.4 10.8 33.2 4.7 .9 100 71.1 3.3 11.6 11.7 2.3 100 5 All 48.6 11.0 34.4 5.0 .9 100 71.1 4.2 11.2 11.3 2.3 100 NOTE. Loans approved and accepted were approved by the lender and accepted by the *Less than .05 percent, applicant. Loans approved but not accepted were approved by the lender but not accepted by 1. Multifamily dwellings are those for five or more families, the applicant. Applications denied were denied by the lender, and applications withdrawn SOURCE. FFIEC, Home Mortgage Disclosure Act. were withdrawn by the applicant. When an application was left incomplete by the applicant, the lender reported file closed and took no further action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • September 1999 4.40 APPLICATIONS FOR ONE- TO FOUR-FAMILY HOME LOANS REPORTED UNDER HMDA, 1998 By Disposition of Loan and Characteristics of Applicant and Census Tract A. Home Purchase Loans Percent Government-backed 1 Conventional Characteristic Approved Denied Withdrawn File closed Total Approved Denied Withdrawn File closed Total APPLICANT Racial or ethnic identity 1 American Indian or Alaskan Native .... 82.0 8.1 7.8 2.1 100 41.0 52.9 5.3 .8 100 2 Asian or Pacific Islander . 81.6 8.9 8.2 1.3 100 78.4 11.8 8.1 1.6 100 3 Black 76.9 12.3 9.0 1.8 100 38.8 53.7 6.4 1.1 100 4 Hispanic 80.2 9.5 8.5 1.7 100 53.1 38.7 6.9 1.3 100 5 White 85.4 7.1 6.5 1.0 100 67.4 26.0 5.7 .9 100 6 Other 80.9 9.6 8.0 1.5 100 64.0 25.9 8.5 1.6 100 7 Joint2 83.3 8.5 7.1 1.1 100 69.9 22.6 6.4 1.1 100 Income ratio (percentage of MSA median J3 8 Less than 50 77.8 12.4 8.1 1.8 100 47.4 45.5 5.9 1.2 100 9 American Indian or Alaskan Native . . 74.8 11.8 7.5 5.9 100 40.2 52.3 5.8 1.8 100 10 Asian or Pacific Islander 78.0 11.7 9.3 1.1 100 69.7 20.2 8.2 2.0 100 11 Black 73.0 15.2 9.4 2.3 100 38.6 54.6 5.4 1.4 100 12 Hispanic 79.4 11.3 7.9 1.5 100 45.2 48.6 5.0 1.2 100 13 White 80.3 11.0 7.2 1.5 100 50.9 43.8 4.4 .9 100 14 Other 76.4 14.7 6.6 2.3 100 50.5 40.8 7.2 1.5 100 15 Joint2 74.6 16.0 7.9 1.5 100 50.6 41.5 6.5 1.5 100 16 50-79 84.7 7.9 6.4 1.1 100 62.4 30.4 6.1 1.1 100 17 American Indian or Alaskan Native . . 86.4 6.8 5.5 1.3 100 53.9 39.2 5.7 1.2 100 18 Asian or Pacific Islander 83.5 8.3 7.0 1.2 100 79.2 12.6 6.8 1.4 100 19 Black 79.8 11.0 7.7 1.5 100 48.5 43.2 6.8 1.5 100 20 Hispanic 83.3 8.7 6.8 1.2 100 55.1 38.1 5.7 1.1 100 21 White 86.9 6.6 5.6 .8 100 66.7 27.6 4.9 .8 100 22 Other 84.2 7.9 6.8 1.0 100 64.3 27.9 6.2 1.6 100 23 Joint2 83.5 9.0 6.7 .9 100 58.9 34.7 5.5 1.0 100 24 80-119 86.0 6.9 6.2 .9 100 72.7 19.3 6.8 1.2 100 25 American Indian or Alaskan Native . . 87.1 5.5 6.3 1.1 100 63.1 28.3 7.4 1.2 100 26 Asian or Pacific Islander 83.9 7.7 7.4 1.1 100 81.4 9.9 7.2 1.5 100 27 Black 81.1 10.0 7.7 1.2 100 56.6 33.4 8.3 1.7 100 28 Hispanic 82.1 9.2 7.4 1.3 100 63.2 28.3 7.0 1.4 100 29 White 88.4 5.6 5.3 .7 100 76.7 16.9 5.5 .9 100 30 Other 62.4 6.5 5.2 .9 100 22.9 6.2 2.3 .5 100 31 Joint2 86.0 6.8 6.3 .9 100 73.8 19.2 6.0 1.0 100 32 120 or more 85.7 6.4 6.8 1.1 100 81.9 10.0 6.8 1.3 100 33 American Indian or Alaskan Native . . 86.3 5.7 7.0 1.0 100 74.0 16.4 8.0 1.5 100 34 Asian or Pacific Islander 83.2 8.5 7.2 1.1 100 82.1 8.9 7.5 1.5 100 35 Black 80.7 10.3 7.8 1.2 100 67.3 21.5 9.3 1.9 100 36 Hispanic 80.2 7.9 9.6 2.4 100 73.0 16.5 8.4 2.1 100 37 White 88.6 5.1 5.5 .7 100 84.8 8.5 5.7 1.0 100 38 Other 81.7 9.3 7.7 1.3 100 78.1 12.5 7.9 1.5 100 39 Joint2 86.3 6.8 6.0 .9 100 83.2 9.5 6.2 1.1 100 CENSUS TRACT Racial or ethnic composition (minorities as percentage of population) 40 Less than 10 86.6 6.6 5.8 .9 100 75.5 16.9 6.5 1.1 100 41 10-19 85.3 7.2 6.5 1.0 100 71.8 19.8 7.2 1.3 100 42 20-49 83.0 8.4 7.4 1.2 100 65.7 25.0 7.9 1.4 100 43 50-79 79.2 10.9 8.2 1.6 100 60.1 29.3 9.0 1.7 100 44 80-100 75.3 12.5 10.2 2.0 100 52.4 33.8 11.6 2.2 100 Income4 45 Low 74.7 12.7 10.6 2.0 100 52.4 34.2 11.2 2.1 100 46 Moderate 81.0 9.7 7.8 1.4 100 58.4 32.1 8.1 1.4 100 47 Middle 84.8 7.6 6.6 1.1 100 68.8 23.0 7.0 1.2 100 48 Upper 85.0 6.9 6.9 1.1 100 79.9 11.7 7.1 1.3 100 Location5 49 Central city 83.1 8.4 7.2 1.3 100 68.7 22.2 7.7 1.4 100 50 Non-central city 84.7 163.1 109.9 29.3 100 72.3 19.5 7.0 1.2 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A69 4.40 APPLICATIONS FOR ONE- TO FOUR-FAMILY HOME LOANS REPORTED UNDER HMDA, 1998 By Disposition of Loan and Characteristics of Applicant and Census Tract—Continued B. Home Refinancing and Home Improvement Loans Percent Home refinancing Home improvement CChhaarraacctteerriissttiicc Approved Denied Withdrawn File closed Total Approved Denied Withdrawn File closed Total APPLICANT Racial or ethnic identity 1 American Indian or Alaskan Native .... 63.1 17.3 13.5 6.0 100 55.6 38.9 4.3 1.1 100 2 Asian or Pacific Islander . 74.5 13.6 9.0 2.9 100 63.4 30.8 3.9 1.9 100 3 Black 56.0 24.4 13.9 5.6 100 54.3 41.4 3.4 .9 100 4 Hispanic 62.1 19.7 13.0 5.2 100 56.9 38.8 3.0 1.4 100 5 White 77.7 11.6 8.2 2.4 100 73.1 23.0 3.4 .4 100 6 Other 46.5 36.8 14.2 2.5 100 52.2 43.5 3.1 1.2 100 7 Joint2 75.7 12.5 8.8 2.9 100 69.8 26.5 3.2 .5 100 Income ratio (percentage of MSA median)3 8 Less than 50 51.2 30.8 13.6 4.4 100 44.9 49.3 4.9 .9 100 9 American Indian or Alaskan Native . . 57.2 23.7 12.3 6.7 100 39.7 55.0 3.3 2.1 100 10 Asian or Pacific Islander 58.0 23.7 13.0 5.3 100 50.7 45.0 1.9 2.4 100 11 Black 48.5 30.1 14.2 7.2 100 47.0 48.6 3.3 1.1 100 12 Hispanic 50.0 28.7 14.5 6.8 100 45.4 49.8 2.8 2.0 100 13 White 63.1 21.8 10.9 4.2 100 59.2 36.7 3.7 .4 100 14 Other 38.5 52.1 6.5 2.9 100 39.9 56.4 2.3 1.4 100 15 Joint2 61.8 20.0 12.9 5.3 100 46.8 49.4 3.7 .1 100 16 50-79 61.4 22.8 12.3 3.5 100 52.8 41.4 4.8 .9 100 17 American Indian or Alaskan Native . . 60.0 21.1 13.4 5.5 100 50.9 43.5 4.6 1.0 100 18 Asian or Pacific Islander 69.5 16.8 10.2 3.4 100 59.6 34.5 3.5 2.3 100 19 Black 52.9 27.1 13.7 6.2 100 53.0 42.8 3.3 1.0 100 20 Hispanic 57.4 24.0 13.2 5.4 100 51.3 43.6 3.2 1.9 100 21 White 72.9 14.9 9.2 3.0 100 67.4 28.6 3.5 .5 100 22 Other 47.9 38.1 10.7 3.3 100 49.0 47.0 2.9 1.2 100 23 Joint2 68.3 17.7 10.3 3.7 100 58.3 37.9 3.3 .4 100 24 80-119 68.1 18.0 10.8 3.0 100 60.1 34.1 4.9 .8 100 25 American Indian or Alaskan Native . . 66.2 16.4 12.4 4.9 100 61.4 33.2 4.3 1.1 100 26 Asian or Pacific Islander 75.6 13.3 8.3 2.8 100 65.2 29.4 3.7 1.7 100 27 Black 56.1 25.1 13.1 5.6 100 56.5 39.4 3.4 .8 100 28 Hispanic 61.8 21.4 12.3 4.6 100 55.7 39.8 3.4 1.1 100 29 White 78.1 11.6 7.9 2.4 100 73.8 22.4 3.3 .4 100 30 Other 9.2 4.9 1.8 .5 100 4.0 3.2 .2 .1 100 31 Joint2 73.5 14.5 8.8 3.2 100 68.0 28.9 2.7 .4 100 32 120 or more 75.7 12.7 9.0 2.6 100 69.4 24.8 4.9 .9 100 33 American Indian or Alaskan Native . . 70.9 14.5 10.6 4.0 100 69.2 25.3 4.4 1.1 100 34 Asian or Pacific Islander 78.6 11.5 7.4 2.5 100 72.0 21.4 4.9 1.7 100 35 Black 60.8 22.3 11.9 5.0 100 63.0 32.5 3.6 .9 100 36 Hispanic 66.8 16.4 11.5 5.3 100 64.0 32.4 2.8 .8 100 37 White 83.0 8.6 6.5 1.9 100 81.1 15.2 3.3 .5 100 38 Other 66.1 21.0 10.1 2.9 100 61.6 33.9 3.4 1.2 100 39 Joint2 79.2 11.1 7.3 2.4 100 75.6 20.4 3.4 .5 100 CENSUS TRACT Racial or ethnic composition (minorities as percentage of population) 40 Less than 10 72.8 14.6 10.1 2.5 100 66.8 27.6 4.9 .7 100 41 10-19 69.4 16.3 11.3 3.0 100 60.4 33.3 5.3 1.0 100 42 20-49 63.6 20.1 12.8 3.5 100 53.6 40.0 5.3 1.1 100 43 50-79 56.1 24.8 14.6 4.6 100 49.4 44.0 5.1 1.5 100 44 80-100 49.0 28.9 16.6 5.5 100 47.2 46.2 5.1 1.4 100 Income4 45 Low 49.1 29.8 16.0 5.1 100 44.2 49.1 5.4 1.2 100 46 Moderate 56.5 25.0 14.3 4.2 100 50.4 43.4 5.0 1.2 100 47 Middle 67.1 18.1 11.7 3.1 100 60.3 33.9 4.9 .8 100 48 Upper 75.0 12.6 9.7 2.6 100 66.8 27.0 5.1 1.0 100 Location5 49 Central city 65.0 19.2 12.3 3.5 100 55.6 38.4 4.9 1.1 100 50 Non-central city 69.8 16.3 11.0 2.9 100 62.4 31.8 5.0 .9 100 NOTE. Applicant income ratio is applicant income as a percentage of MSA median. MSA median family income for the MSA in which the tract is located. Categories are defined as median is median family income of the metropolitan statistical area (MSA) in which the follows: Low income, median family income for census tract less than 50 percent of median property related to the loan is located. family income for MSA; Moderate income, median family income for census tract at least 50 1. Loans backed by the Federal Housing Administration, the Department of Veterans and less than 80 percent of MSA median; Middle income, median family income at least 80 Affairs, or the Farmers Home Administration. percent and less than 120 percent of MSA median; Upper income, median family income 120 2. White and minority. percent and greater of MSA median. 3. MSA median is median family income of the metropolitan statistical area (MSA) in 5. For census tracts located in MSAs. which the property related to the loan is located. SOURCE. FFIEC, Home Mortgage Disclosure Act. 4. Census tracts are categorized by the median family income for the tract relative to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • September 1999 4.41 HOME LOANS SOLD, 1998 By Purchaser and Characteristics of Borrower and Census Tract Fannie Mae Ginnie Mae Freddie Mac FmHA Commercial bank Number Percent Number Percent Number Percent Number Percent Number Percent 1 All 2,586,071 100.0 1,352,302 100.0 1,910,191 100.0 4,866 100.0 168,195 100.0 BORROWER Racial or ethnic identity 2 American Indian or Alaskan Native .... 5,902 .3 4,072 .5 3,257 .2 14 .3 337 .2 3 Asian or Pacific Islander 83,191 3.9 13,807 1.6 47,821 3.1 67 1.6 3,904 2.8 4 Black 57,889 2.7 103,988 12.2 32,205 2.1 511 12.5 11,635 8.3 5 Hispanic 83,188 3.9 100,227 11.8 46,980 3.0 606 14.8 8,499 6.1 6 White 1,829,449 86.0 590,684 69.5 1,376,700 88.7 2,780 68.0 111,405 79.9 7 Other 20,866 1.0 8,878 1.0 14,353 .9 29 .7 921 .7 8 Joint 47,024 2.2 27,673 3.3 31,086 2.0 84 2.1 2,735 2.0 9 Total 2,127,509 100.0 849,329 100.0 1,552,402 100.0 4,091 100.0 139,436 100.0 Income ratio (percentage of MSA median) 10 Less than 50 90,695 4.7 66,973 11.3 62,318 4.5 343 8.3 8,696 6.5 11 50-79 320,131 16.5 190,384 32.1 222,829 16.0 1,310 31.7 24,602 18.3 12 80-99 286,945 14.8 122,092 20.6 208,425 14.9 754 18.2 19,472 14.5 13 100-119 283,574 14.6 87,567 14.8 208,921 15.0 519 12.6 17,614 13.1 14 120 or more 957,993 49.4 126,632 21.3 693,732 49.7 1,209 29.2 63,736 47.5 15 Total 1,939,338 100.0 593,648 100.0 1,396,225 100.0 4,135 100.0 134,120 100.0 CENSUS TRACT Racial or ethnic composition (minorities as percentage of population) 16 Less than 10 1,279,244 56.5 449,233 36.6 1,005,722 61.1 2,027 45.9 76,458 52.2 17 10-19 490,796 21.7 293,879 23.9 336,802 20.5 1,035 23.4 31,580 21.5 18 20-49 356,260 15.7 325,137 26.5 225,998 13.7 850 19.2 23,943 16.3 19 50-79 94,898 4.2 95,729 7.8 54,792 3.3 178 4.0 7,664 5.2 20 80-100 41,840 1.8 63,783 5.2 21,540 1.3 327 7.4 6,912 4.7 21 Total 2,263,038 100.0 1,227,761 100.0 1,644,854 100.0 4,417 100.0 146,557 100.0 Income 22 Low 15,988 .7 18,010 1.5 9,044 .5 76 1.7 2,481 1.7 23 Moderate 163,781 7.2 171,261 13.9 107,663 6.5 575 13.0 16,320 11.0 24 Middle 1,117,816 49.3 721,348 58.4 830,017 50.4 2,404 54.5 73,096 49.1 25 Upper 967,935 42.7 323,835 26.2 699,847 42.5 1,359 30.8 56,942 38.3 26 Total 2,265,520 100.0 1,234,454 100.0 1,646,571 100.0 4,414 100.0 148,839 100.0 Location 27 Central city 810,323 35.8 515,868 41.8 560,948 34.1 1,744 39.6 55,954 37.6 28 Non-central city 1,455,061 64.2 718,184 58.2 1,085,615 65.9 2,660 60.4 92,987 62.4 29 Total 2,265,384 100.0 1,234,052 100.0 1,646,563 100.0 4,404 100.0 148,941 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A71 4.41 HOME LOANS SOLD, 1998 By Purchaser and Characteristics of Borrower and Census Tract—Continued Savings bank or savings and loan Life insurance company association Characteristic 74,944 7,055 1,071,139 2,898,438 BORROWER Racial or ethnic identity 31 American Indian or Alaskan Native 176 .3 21 .3 2,730 .4 11,619 .5 32 Asian or Pacific Islander 1,972 3.0 95 1.4 36,263 4.9 64,236 2.9 33 Black 3,531 5.3 302 4.5 44,237 6.0 216,301 9.6 34 Hispanic 2,714 4.1 206 3.0 43,125 5.9 157,691 7.0 35 White 56,201 84.4 5,989 88.6 587,209 79.7 1,724,101 76.6 36 Other 617 .9 30 .4 7,555 1.0 22,782 1.0 37 Joint 1,360 2.0 114 1.7 15,311 2.1 53,592 2.4 38 Total 66,571 100.0 6,757 736,430 100.0 2,250,322 100.0 Income ratio (percentage of MSA median)' 39 Less than 50 2,874 4.9 341 6.0 59,446 8.4 191,973 9.4 40 50-79 10,153 17.5 1,265 22.3 126,372 17.8 437,950 21.5 41 80-99 8,141 14.0 17.1 82,500 11.6 300,006 14.8 42 100-119 7,513 12.9 15.6 74,042 10.4 252,870 12.4 43 120 or more 29,459 50.7 2,207 39.0 367,422 51.8 850,890 41.8 44 Total 58,140 100.0 5,663 100.0 709,782 100.0 2,033,689 100.0 CENSUS TRACT Racial or ethnic composition (minorities as percentage of population) 45 Less than 10 39,918 62.0 73.7 444,443 47.4 1,080,032 43.9 46 10-19 11,848 18.4 842 13.8 225,073 24.0 551,846 22.4 47 20-49 8,254 12.8 549 9.0 172,878 18.4 506,206 20.6 48 50-79 2,541 3.9 148 2.4 53,414 5.7 168,941 6.9 49 80-100 1,810 2.8 1.1 41,666 4.4 153,264 6.2 50 Total 64,371 100.0 6,105 100.0 937,474 100.0 2,460,289 100.0 Income2 51 Low 820 1.3 105 1.7 19,435 2.1 61,556 2.5 52 Moderate 5,529 8.6 576 9.4 102,244 10.8 329,326 13.4 53 Middle 30,016 46.5 3,591 58.8 410,128 43.4 1,213,069 49.3 54 Upper 28,142 43.6 1,831 30.0 413,550 43.7 856,679 34.8 55 Total 64,507 100.0 6,103 100.0 945,357 100.0 2,460,630 100.0 Location 56 Central city 20,301 31.4 2,591 42.4 371,892 39.3 1,012,383 41.1 57 Non-central city 44,270 68.6 3,514 57.6 573,652 60.7 1.448,485 58.9 58 Total 64,571 6,105 945,544 2,460,868 Note. Includes securitized loans. See also notes to table 4.40. 2. Census tracts are categorized by the median family income for the tract relative to the Fannie Mae—Federal National Mortgage Association median family income for the MSA in which the tract is located. Categories are defined as Ginnie Mae—Government National Mortgage Association follows: Low income, median family income for census tract less than 50 percent of median Freddie Mac—Federal Home Loan Mortgage Corporation family income for MSA; Moderate income, median family income for census tract at least 50 FmHA—Farmers Home Administration and less than 80 percent of MSA median; Middle income, median family income at least 80 Affiliate—Affiliate of institution reporting the loan percent and less than 120 percent of MSA median; Upper income, median family income 120 1. Median family income of the metropolitan statistical area (MSA) in which the property percent and greater of MSA median. related to the loan is located. SOURCE. FFIEC, Home Mortgage Disclosure Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • September 1999 4.411 LENDER SHARE AND DOLLAR VOLUME OF RESIDENTIAL-MORTGAGE ORIGINATIONS, 1993-981 Mortgage companies YYeeaarr SSaavviinnggss iinnssttiittuuttiioonnss22 CCoommmmeerrcciiaall bbaannkkss o S r u s b a s v i i d n i g ar s i e i s n s o t f i tu b t a io n n k s s 3 Independently owned4 ((bbiill CC llii rr oo ee nn dd ss ii tt oo uu ff nn dd iioo oo nn llll ss aa rrss)) DDoollllaarr vvoolluummee Conventional single-family 1 1993 23 19 19 35 4 871 2 1994 26 21 18 30 5 553 i 1995 26 20 25 26 3 452 4 1996 27 18 26 26 4 548 1997 26 15 27 29 3 610 6 1998 25 12 32 28 3 1,124 FHA, VA, and RHS single-family / 1993 9 8 25 57 1 156 8 1994 10 9 28 52 1 90 9 1995 10 8 33 48 1 76 10 1996 10 7 33 49 1 96 11 1997 9 5 37 49 1 100 12 1998 7 4 39 50 1 149 Total, single-family 13 1993 21 18 20 39 4 1,027 14 1994 24 19 20 33 5 643 15 1995 24 18 26 29 3 528 16 1996 24 16 27 30 3 644 17 1997 24 14 29 31 3 710 18 1998 23 11 32 31 3 1,273 Total, multifamily 19 1993 52 33 5 7 3 16 20 1994 56 34 3 4 3 17 21 1995 53 35 4 4 4 13 22 1996 50 34 6 7 3 16 23 1997 48 32 6 12 3 19 24 1998 44 27 11 15 3 25 Total, residential 25 1993 21 18 19 38 4 1,043 26 1994 25 19 19 32 5 660 27 1995 24 19 25 29 3 541 28 1996 25 17 26 29 3 660 29 1997 24 14 28 31 3 729 30 1998 23 12 32 31 3 1,297 NOTE. Coverage of depository institutions declined in 1997 because of an increase in the 3. Includes mortgage company subsidiaries of a bank holding company or a service asset size threshold for exempt institutions from $10 million to $28 million. corporation. 1. Based on the dollar volume of originations reported under the Home Mortgage Disclo- 4. Coverage of independently owned mortgage companies expanded in 1993 when those sure Act. Originations insured or guaranteed by the Rural Housing Service (RHS) include the companies with less than $10 million in assets but with 100 or more home-purchase former Farmers Home Administration. originations were included. 2. Includes savings and loan associations and savings banks. SOURCE. Home Mortgage Disclosure Act, 1990-98. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Private Mortage Insurance A73 4.42 APPLICATIONS RECEIVED AND POLICIES WRITTEN FOR PRIVATE MORTGAGE INSURANCE, 1995-98 By Insurance Company 1995 1996 1997 1998 CCoommppaannyy Applications P w o r l i i t c t i e e n s Applications P w o r l i i t c te ie n s Applications P w o r l i i t c te ie n s Applications P w o r l i i t c te ie n s 1 Amerin Guaranty 48,266 48,229 61,401 61,378 60,149 60,105 116,744 116,725 2 Commonwealth Mortgage Assurance 127,734 95,476 151,261 106,768 152,874 112,513 212,097 165,336 3 GE Capital Mortgage Insurance 281,755 221,450 269,133 199,728 210,493 160,847 302,606 244,496 4 Mortgage Guaranty Insurance 331,534 267,423 360,167 283,897 325,336 265,566 436,225 356,419 5 PMI Mortgage Insurance 157,929 119,582 181,904 142,896 152,129 119,181 255,656 211,074 6 Republic Mortgage Insurance 119,147 94,038 158,731 123,289 132,204 102,221 183,240 145,023 7 Triad Guaranty Insurance 18,910 14,699 23,942 19,143 36,908 31,129 46,568 38,518 8 United Guaranty 150,962 118,092 170,868 132,661 147,256 120,182 214,162 182,327 9 Total 1,236,237 978,989 1,377,407 1,069,760 1,217,349 971,744 1,767,298 1,459,918 SOURCE. Federal Financial Institutions Examination Council. 4.43 APPLICATIONS RECEIVED AND POLICIES WRITTEN FOR PRIVATE MORTGAGE INSURANCE, 1998 By Purpose of Loan and Insurance Company Percent Home purchase Home refinance Total CCoommppaannyy Applications Policies written Applications Policies written Applications Policies written 1 Amerin Guaranty 6.1 7.4 7.5 9.3 6.6 8.0 2 Commonwealth Mortgage Assurance 11.8 11.2 12.4 11.6 12.0 11.3 3 GE Capital Mortgage Insurance 16.8 16.4 17.8 17.5 17.1 16.7 4 Mortgage Guaranty Insurance 25.1 24.8 23.8 23.6 24.7 24.4 5 PMI Mortgage Insurance 14.6 14.6 14.3 14.1 14.5 14.5 6 Republic Mortgage Insurance 10.4 10.1 10.2 9.7 10.4 9.9 7 Triad Guaranty Insurance 2.7 2.7 2.6 2.6 2.6 2.6 8 United Guaranty 12.4 12.8 11.5 11.7 12.1 12.5 9 Total 100.0 100.0 100.0 100.0 100.0 100.0 MEMO 10 Number of applications or policies 1,186,504.0 988,268.0 580,794.0 471,650.0 1,767,298.0 1,459,918.0 SOURCE. Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • September 1999 4.44 APPLICATIONS FOR PRIVATE MORTGAGE INSURANCE, 1998 By Purpose of Loan and Characteristic of Applicant and Census Tract Home purchase Home refinance CChhaarraacctteerriissttiicc Number Percent Number Percent APPLICANT Race or ethnic group 1 American Indian or Alaskan Native 2,525 .3 1,293 .3 2 Asian or Pacific Islander 27,406 3.0 10,782 2.5 3 Black 43,198 4.7 19,010 4.5 4 Hispanic 53,967 5.9 19,757 4.6 5 White 740,862 80.6 352,140 82.5 6 Other 32,042 3.5 14,302 3.4 7 Joint (white and minority) 19,571 2.1 9,399 2.2 8 Total 919,571 100.0 426,683 100.0 Income (percentage of MSA medianJ1 9 Less than 50 36,136 3.8 12,336 2.5 10 50-79 158,674 16.7 68,479 14.0 11 80-99 146,301 15.4 75,243 15.4 12 100-119 148,624 15.7 79,802 16.3 13 120 or more 457,928 48.3 253,643 51.8 14 Total 947,663 100.0 489,503 100.0 CENSUS TRACT Racial composition (minorities as percentage of population) 15 Less than 10 513,245 53.6 263,362 53.1 16 10-19 213,763 22.3 110,778 22.3 17 20-49 160,507 16.8 86,206 17.4 18 50-79 45,758 4.8 22,818 4.6 19 80-100 24,185 2.5 12,801 2.6 20 Total 957,458 100.0 495,965 100.0 Income2 21 Lower 11,129 1.2 3,576 .7 22 Moderate 86,481 9.0 40,002 8.1 23 Middle 475,135 49.7 264,783 53.4 24 Upper 383,810 40.1 187,198 37.8 25 Total 956,555 100.0 495,559 100.0 Location3 26 Central city 374,783 38.8 173,358 34.6 27 Non-central city 590,506 61.2 327,077 65.4 28 Total 965,289 100.0 500,435 100.0 NOTE. Not all characteristics were reported for all loans. 3. For census tracts located in MSAs. 1. MSA median is median family income of the metropolitan statistical area (MSA) in SOURCE. Federal Financial Institutions Examination Council, which the property related to the loan is located. 2. Lower: median family income for census tract less than 50 percent of median family income for MSA. Moderate: 50 percent to less than 80 percent. Middle: 80 percent to less than 120 percent. Upper: 120 percent or more. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Private Mortgage Insurance A75 4.45 APPLICATIONS FOR PRIVATE MORTGAGE INSURANCE, 1998 By Purpose of Loan, Disposition of Application, Characteristic of Applicant, and Census Tract Percent Home purchase Home refinance CChhaarraacctteerriissttiicc Approved Denied Withdrawn File closed Total Approved Denied Withdrawn File closed Total I Total 90.8 6.2 2.4 .6 100.0 91.5 5.5 2.5 .5 100.0 APPLICANT Race or ethnic group 2 American Indian or Alaskan Native 87.9 8.6 2.8 .8 100.0 89.8 7.3 2.5 .4 100.0 3 Asian or Pacific Islander 87.6 7.9 3.5 1.0 100.0 89.5 6.3 3.3 .8 100.0 4 Black 82.3 13.1 3.5 1.0 100.0 85.9 10.2 3.2 .8 100.0 5 Hispanic 84.7 10.9 3.2 1.1 100.0 87.1 8.9 3.1 .9 100.0 6 White 91.1 5.9 2.4 .6 100.0 91.6 5.4 2.5 .5 100.0 7 Other 97.7 1.4 .8 .1 100.0 97.8 1.2 .9 .1 100.0 8 Joint (white and minority) 89.2 7.3 2.9 .7 100.0 91.3 5.6 2.6 .6 100.0 Income (percentage of MSA median)1 9 Less than 50 85.2 11.9 2.4 .5 100.0 85.8 11.0 2.7 ..66 110000..00 10 50-79 91.0 6.5 2.0 .5 100.0 89.5 7.5 2.6 .5 100.0 11 80-99 92.5 5.2 1.9 .5 100.0 91.3 5.9 2.4 .4 100.0 12 100-119 93.0 4.7 1.8 .4 100.0 91.9 5.3 2.3 .4 100.0 13 120 or more 93.1 4.4 2.0 .5 100.0 92.4 4.6 2.5 .5 100.0 CENSUS TRACT Racial composition (minorities as percentage of population) 14 Less than 10 93.8 4.1 1.7 .3 100.0 92.4 4.8 2.4 .4 100.0 15 10-19 92.1 5.2 2.1 .5 100.0 91.7 5.3 2.5 .5 100.0 16 20-49 9900..44 6.6 2.4 .6 100.0 90.9 6.0 2.5 .6 100.0 17 50-79 8888..11 8.4 2.7 .9 100.0 88.6 7.5 3.0 .8 100.0 18 80-100 85.0 10.8 3.1 1.1 100.0 85.7 10.2 3.2 .8 100.0 Income2 19 Lower 86.1 9.9 3.1 .9 100.0 86.7 9.5 3.2 .6 100.0 20 Moderate 89.4 7.6 2.4 .6 100.0 89.0 7.5 2.8 .6 100.0 21 Middle 92.4 5.2 1.9 .5 100.0 91.7 5.5 2.4 .4 100.0 22 Upper 93.2 4.5 1.9 .5 100.0 92.3 4.8 2.5 .5 100.0 Location3 23 Central city 91.9 5.6 2.0 .5 100.0 91.4 5.6 2.5 .5 100.0 24 Non-central city 92.7 4.9 1.9 .5 100.0 91.8 5.3 2.5 .5 100.0 NOTE. Not all characteristics were reported for all loans. 3. For census tracts located in MSAs. 1. Median family income of the metropolitan statistical area (MSA) in which the property SOURCE. Federal Financial Institutions Examination Council, related to the loan is located. 2. Lower: median family income for census tract less than 50 percent of median family income for MSA of tract. Moderate-. 50 percent to less than 80 percent. Middle: 80 percent to less than 120 percent. Upper: 120 percent or more. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • September 1999 4.46 SMALL LOANS TO BUSINESSES AND FARMS, 1997-98 Total business loans 1 Number 2,560,795.0 2,578,218.0 2 Amount (thousands of dollars) 159,401,302.0 161,343,498.0 Percent to small firms' 3 Number 50.0 58.1 4 Amount 42.1 47.5 Total farm loans 5 Number 212,822.0 207,784.0 6 Amount (thousands of dollars) 11,192,400.0 11,453,284.0 Percent to small farms2 7 Number 89.5 90.7 8 Amount 81.3 83.5 Activity of CRA reporters (percent) All small loans to businesses2 9 Number 67.9 66.2 10 Amount 66.2 65.8 All small loans to farms" 11 Number 22.2 22.3 12 Amount 27.8 27.4 Distribution of business loans by asset size of lender Number (percent) 13 Less than 100 1.2 2.0 14 100 to 249 6.5 5.9 15 250 to 999 15.7 15.5 16 1,000 or more 76.6 76.7 17 Total 100.0 100.0 Amount (percent) 18 Less than 100 1.4 19 100 to 249 3.5 3.2 20 250 to 999 20.9 22.6 21 1,000 or more 74.2 73.4 22 Total 100.0 Distribution of farm loans by asset size of lender Number (percent) 23 Less than 100 6.4 4.8 24 100 to 249 10.4 8.2 25 250 to 999 37.4 39.0 26 1,000 or more 45.8 48.0 27 Total 100.0 100.0 Amount (percent) 28 Less than 100 5.1 3.5 29 100 to 249 8.2 6.6 30 250 to 999 34.2 36.4 31 1,000 or more 52.5 53.5 32 Total 100.0 100.0 Distribution of business loans by income of census tract3 Number 33 Low 4.6 4.4 34 Moderate 16.0 15.6 35 Middle 49.1 49.5 36 Upper 29.8 30.0 37 Income not reported .5 .5 38 Total 100.0 100.0 Amount 39 Low 5.4 5.2 40 Moderate 16.0 15.7 41 Middle 46.5 46.8 42 Upper 31.4 31.6 43 Income not reported .7 .7 44 Total 100.0 100.0 MEMO Number of reporters 45 Commercial banks 1,421.0 1,576.0 46 Savings institutions 475.0 290.0 47 Total 1,896.0 1,866.0 1. Businesses and farms with revenues of $1 million or less. 3. Low income: census tract median family income less than 50 percent of MSA median 2. Percentages reflect the ratio of activity by CRA reporters to activity by all lenders. family income or nonmetropolitan portion of state median family income; moderate income: Calculations are based on information reported in the June 1997 and 1998 Call Reports for 50-79 percent; middle income: 80-120 percent; upper income'. 120 percent or more, commercial banks and the Thrift Financial Reports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Loans to Businesses and Farms All 4.47 ORIGINATIONS AND PURCHASES OF SMALL LOANS TO BUSINESSES AND FARMS, 1998 By Size of Loan Size of loan (dollars) MMEEMMOO LLooaannss ttoo ffiirrmmss AAllll llooaannss wwiitthh rreevveennuueess ooff $$11 mmiilllliioonn TTTyyypppeee ooofff bbbooorrrrrrooowwweeerrr aaannnddd llloooaaannn 100,000 or less 100,001 to 250,000 More than 250,000 oorr lleessss Total Percent Total Percent Total Percent Total Percent Total Percent Number of Loans Business 1 Originations 2,209,430 86.4 188,938 7.4 157,661 6.2 2,556,029 100 1,492,741 58.4 2 Purchases 18,838 84.9 1,428 6.4 1,923 8.7 22,189 100 5,240 23.6 3 Total 2,228,268 86.4 190,366 7.4 159,584 6.2 2,578,218 100 1,497,981 58.1 Farm 4 Originations 175,643 85.2 22,239 10.8 8,331 4.0 206,213 100 187,621 91.0 5 Purchases 1,126 71.7 311 19.8 134 8.5 1,571 100 737 46.9 6 Total 176,769 85.1 22,550 10.9 8,465 4.1 207,784 100 188,358 90.7 All 7 Originations 2,385,073 86.3 211,177 7.6 165,992 6.0 2,762,242 100 1,680,362 60.8 8 Purchases 19,964 84.0 1,739 7.3 2,057 8.7 23,760 100 5,977 25.2 9 Total 2,405,037 86.3 212,916 7.6 168,049 6.0 2,786,002 100 1,686,339 60.5 Amount of loans (thousands of dollars) Business 10 Originations 45,262,974 28.4 32,655,468 20.5 81,640,813 51.2 159,559,255 100 76,006,536 47.6 11 Purchases 494,928 27.7 243,099 13.6 1,046,216 58.6 1,784,243 100 603,189 33.8 12 Total 45,757,902 28.4 32,898,567 20.4 82,687,029 51.2 161,343,498 100 76,609,725 47.5 Farm 13 Originations 4,663,086 41.2 3,660,212 32.3 2,992,107 26.4 11,315,405 100 9,496,216 83.9 14 Purchases 37,208 27.0 52,125 37.8 48,546 35.2 137,879 100 65,214 47.3 15 Total 4,700,294 41.0 3,712,337 32.4 3,040,653 26.5 11,453,284 100 9,561,430 83.5 All 16 Originations 49,926,060 29.2 36,315,680 21.3 84,632,920 49.5 170,874,660 100 85,502,752 50.0 17 Purchases 532,136 27.7 295,224 15.4 1,094,762 57.0 1,922,122 100 668,403 34.8 18 Total 50,458,196 29.2 36,610,904 21.2 85,727,682 49.6 172,796,782 100 86,171,155 49.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Special Tables • September 1999 4.48 ORIGINATIONS AND PURCHASES OF SMALL LOANS TO BUSINESSES AND FARMS, 1998 By Type of Borrower and Loan, and Distributed by Size of Lending Institution Institutions, by asset size (millions of dollars) Type of borrower and loan Less than 100 100 to 249 250 to 999 1,000 or more Total Percent Total Percent Total Percent Total Percent Total Percent Number of loans Business 1 Originations 51,194 2.0 150,834 5.9 395,555 15.5 1,958,446 76.6 2,556,029 100 2 Purchases 842 3.8 216 1.0 2,794 12.6 18,337 82.6 22,189 100 3 Total 52,036 2.0 151,050 5.9 398,349 15.5 1,976,783 76.7 2,578,218 100 Farm 4 Originations 9,731 4.7 16,923 8.2 80,410 39.0 99,149 48.1 206,213 100 5 Purchases 313 19.9 146 9.3 607 38.6 505 32.1 1,571 100 6 Total 10,044 4.8 17,069 8.2 81,017 39.0 99,654 48.0 207,784 100 All 1 Originations 60,925 2.2 167,757 6.1 475,965 17.2 2,057,595 74.5 2,762,242 100 8 Purchases 1,155 4.9 362 1.5 3,401 14.3 18,842 79.3 23,760 100 9 Total 62,080 2.2 168,119 6.0 479,366 17.2 2,076,437 74.5 2,786,002 100 Amount of loans (thousands of dollars) Business 10 Originations 1,135,415 .7 5,120,446 3.2 36,074,614 22.6 117,228,780 73.5 15,559,255 100 11 Purchases 117,559 6.6 74,661 4.2 434,598 24.4 1,157,425 64.9 1,784,243 100 12 Total 1,252,974 .8 5,195,107 3.2 36,509,212 22.6 118,386,205 73.4 161,343,498 100 Farm 13 Originations 389,262 3.4 756,314 6.7 4,100,618 36.2 6,069,211 53.6 11,315,405 100 14 Purchases 10,310 7.5 4,043 2.9 66,449 48.2 57,077 41.4 137,879 100 15 Total 399,572 3.5 760,357 6.6 4,167,067 36.4 6,126,288 53.5 11,453,284 100 All 16 Originations 1,524,677 .9 5,876,760 3.4 40,175,232 23.5 123,297,991 72.2 170,874,660 100 17 Purchases 127,869 6.7 78,704 4.1 501,047 26.1 1,214,502 63.2 1,922,122 100 18 Total 1,652,546 1.0 5,955,464 3.4 40,676,279 23.5 124,512,493 72.1 172,796,782 100 MEMO 19 Number of institutions reporting 140 230 1,028 468 1,866 20 Number of institutions extending loans . 131 233 940 420 1,714 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Community Reinvestment A79 4.49 COMMUNITY DEVELOPMENT LENDING, 1998 Number of loans (th A ou m s o an u d n s t o o f f l d o o a l n la s rs) MEMO: CRA reporters AAAsssssseeettt sssiiizzzeee ooofff llleeennndddeeerrr (((mmmiiilllllliiiooonnnsss ooofff dddooollllllaaarrrsss))) Community development loans TToottaall PPeerrcceenntt TToottaall PPeerrcceenntt NNuummbbeerr PPeerrcceenntt Number Percent extending extending 1 Less than 100 146 .7 49,406 .3 140 7.5 37 3.6 2 100 to 249 509 2.3 122,955 .8 230 12.3 82 8.0 3 250 to 999 6,730 31.0 2,142,522 13.2 1,028 55.1 540 52.7 4 1,000 or more 14,358 66.0 13,869,743 85.7 468 25.1 365 35.6 5 All 21,743 100.0 16,184,626 100.0 1,866 100.0 1,024 100.0 MEMO 6 Lending by all affiliates 872 4.0 890,830 5.5 36 3.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Bulletin • September 1999 Index to Statistical Tables References are to pages A3-A79 although the prefix 'A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Federal agency obligations, 5, 9, 10, 11, 28, 29 Assets and liabilities (See also Foreigners) Federal credit agencies, 30 Commercial banks, 15-21 Federal finance Domestic finance companies, 32, 33 Debt subject to statutory limitation, and types and ownership Federal Reserve Banks, 10 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. (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) U.S. government securities held, 5, 10, 11, 27 CAPACITY utilization, 43 Federal Reserve credit, 5,6, 10, 12 Capital accounts Federal Reserve notes, 10 Commercial banks, 15-21 Federally sponsored credit agencies, 30 Federal Reserve Banks, 10 Finance companies Certificates of deposit, 23 Commercial and industrial loans Assets and liabilities, 33 Business and farms, loans to 76-78 Business credit, 33 Commercial banks, 15-21 Loans, 36 Weekly reporting banks, 17, 18 Paper, 22, 23 Commercial banks Float, 5 Assets and liabilities, 15-21 Flow of funds, 37-41 Commercial and industrial loans, 15-21, 76-79 Foreign currency operations, 10 Consumer loans held, by type and terms, 36, 68-72 Foreign deposits in U.S. banks, 5 Real estate mortgages held, by holder and property, 35, 64—72 Foreign exchange rates, 62 Time and savings deposits, 4 Foreign-related institutions, 20 Commercial paper, 22, 23, 33 Foreign trade, 51 Condition statements (See Assets and liabilities) Foreigners Construction, 42, 46 Claims on, 52, 55, 56, 57, 59 Consumer credit, 36 Liabilities to, 51, 52, 53, 58, 60, 61 Consumer prices, 42 Consumption expenditures, 48, 49 GOLD Corporations Certificate account, 10 Profits and their distribution, 32 Stock, 5, 51 Security issues, 31, 61 Government National Mortgage Association, 30, 34, 35 Cost of living (See Consumer prices) Gross domestic product, 48, 49 Credit unions, 36 Community development loans, under CRA, 79 HOME Mortgage Disclosure Act Currency in circulation, 5, 13 Applications for home loans, 66-69 Customer credit, stock market, 24 Home loans, 70, 71, 72 Residential lending by financial institutions, 66, 70, 71, 72 DEBT (See specific types of debt or securities) Housing, new and existing units, 46 Demand deposits, 15-21 Depository institutions INCOME, personal and national, 42, 48, 49 Reserve requirements, 8 Industrial production, 42, 44 Reserves and related items, 4, 5, 6, 12 Insurance companies, 27, 35 Deposits (See also specific types) Insurance, private mortgage, 73-75 Commercial banks, 4, 15-21 Interest rates Federal Reserve Banks, 5, 10 Bonds, 23 Discount rates at Reserve Banks and at foreign central banks and Consumer credit, 36 foreign countries (See Interest rates) Federal Reserve Banks, 7 Discounts and advances by Reserve Banks (See Loans) Money and capital markets, 23 Dividends, corporate, 32 Mortgages, 34 Prime rate, 22 EMPLOYMENT, 42 International capital transactions of United States, 50-61 Euro, 62 International organizations, 52, 53, 55, 58, 59 Inventories, 48 FARM mortgage loans, 35, 76-78 Investment companies, issues and assets, 32 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 Investments (See also specific types) Reserves Commercial banks, 4, 15-21 Commercial banks, 15-21 Federal Reserve Banks, 10, 11 Depository institutions, 4, 5, 6, 12 Financial institutions, 35 Federal Reserve Banks, 10 U.S. reserve assets, 51 LABOR force, 42 Residential mortgage loans, 34, 35, 64-72 Life insurance companies (See Insurance companies) Retail credit and retail sales, 36, 42 Loans (See also specific types) Business, 76-78 SAVING Commercial banks, 15-21, 64-69, 76-79 Flow of funds, 37-41 Conventional, 64, 65, 66, 68 National income accounts, 48 Community development, 79 Savings institutions, 35, 36, 37-41 Farms, 76-78 Savings deposits (See Time and savings deposits) Fannie Mae, 70 Securities (See also specific types) Federal Reserve Banks, 5, 6, 7, 10, 11 Federal and federally sponsored credit agencies, 30 FHA, 64 Foreign transactions, 60 FmHA, 64, 70 New issues, 31 Prices, 24 Financial institutions, 35 Special drawing rights, 5, 10, 50, 51 Freddie Mac, 70 State and local governments Ginnie Mae, 70 Home purchase, 65-67 Holdings of U.S. government securities, 27 Insured or guaranteed by United States, 34, 35 New security issues, 31 VA, 64, 67 Rates on securities, 23 Stock market, selected statistics, 24 Stocks (See also Securities) MANUFACTURING New issues, 31 Capacity utilization, 43 Prices, 24 Production, 43, 45 Margin requirements, 24 Student Loan Marketing Association, 30 Member banks, reserve requirements, 8 Mining production, 45 TAX receipts, federal, 26 Mobile homes shipped, 46 Thrift institutions, 4. (See also Credit unions and Savings Monetary and credit aggregates, 4, 12 institutions) Money and capital market rates, 23 Time and savings deposits, 4, 12, 14, 15-21 Money stock measures and components, 4, 13 Trade, foreign, 51 Mortgage insurance, 73-75 Treasury cash, Treasury currency, 5 Mortgages (See Real estate loans) Treasury deposits, 5, 10, 25 Mutual funds, 12, 32 Treasury operating balance, 25 Mutual savings banks (See Thrift institutions) UNEMPLOYMENT, 42 U.S. government balances NATIONAL defense outlays, 26 Commercial bank holdings, 15-21 National income, 48 Treasury deposits at Reserve Banks, 5, 10, 25 U.S. government securities OPEN market transactions, 9 Bank holdings, 15-21, 27 Dealer transactions, positions, and financing, 29 PERSONAL income, 49 Federal Reserve Bank holdings, 5, 10, 11, 27 Prices Foreign and international holdings and Consumer and producer, 42, 47 transactions, 10, 27, 61 Stock market, 24 Open market transactions, 9 Prime rate, 22 Outstanding, by type and holder, 27, 28 Private mortgage insurance, 73-75 Rates, 23 Producer prices, 42, 47 U.S. international transactions, 50-62 Production, 42, 44 Utilities, production, 45 Profits, corporate, 32 VETERANS Administration, 34, 35 REAL estate loans Banks, 15-21, 35 WEEKLY reporting banks, 17, 18 Terms, yields, and activity, 34 Wholesale (producer) prices, 42, 47 Type of holder and property mortgaged, 35 Reserve requirements, 8 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Federal Reserve Bulletin • September 1999 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman LAURENCE H. MEYER EDWARD W. KELLEY, JR. ROGER W. FERGUSON, JR. OFFICE OF BOARD MEMBERS DIVISION OF INTERNATIONAL FINANCE LYNN S. FOX, Assistant to the Board KAREN H. JOHNSON, Director DONALD J. WINN, Assistant to the Board LEWIS S. ALEXANDER, Deputy Director WINTHROP P. HAMBLEY, Deputy Congressional Liaison DAVID H. HOWARD, Deputy Director BOB STAHLY MOORE, Special Assistant to the Board THOMAS A. CONNORS, Deputy Associate Director DIANE E. WERNEKE, Special Assistant to the Board DALE W. HENDERSON, Associate Director DONALD B. ADAMS, Senior Adviser RICHARD T. FREEMAN, Assistant Director LEGAL DIVISION WILLIAM L. HELKIE, Assistant Director J. VIRGIL MATTINGLY, JR., General Counsel STEVEN B. KAMIN, Assistant Director SCOTT G. ALVAREZ, Associate General Counsel RALPH W. TRYON, Assistant Director RICHARD M. ASHTON, Associate General Counsel OLIVER IRELAND, Associate General Counsel DIVISION OF RESEARCH AND STATISTICS KATHLEEN M. O'DAY, Associate General Counsel MICHAEL J. PRELL, Director KATHERINE H. WHEATLEY, Assistant General Counsel EDWARD C. ETTIN, Deputy Director DAVID J. STOCKTON, Deputy Director WILLIAM R. JONES, Associate Director OFFICE OF THE SECRETARY MYRON L. KWAST, Associate Director JENNIFER J. JOHNSON, Secretary PATRICK M. PARKINSON, Associate Director ROBERT DEV. FRIERSON, Associate Secretary THOMAS D. SIMPSON, Associate Director BARBARA R. LOWREY, Associate Secretary and Ombudsman LAWRENCE SLIFMAN, Associate Director MARTHA S. SCANLON, Deputy Associate Director STEPHEN D. OLINER, Assistant Director DIVISION OF BANKING STEPHEN A. RHOADES, Assistant Director SUPERVISION AND REGULATION JANICE SHACK-MARQUEZ, Assistant Director RICHARD SPILLENKOTHEN, Director CHARLES S. STRUCKMEYER, Assistant Director STEPHEN C. SCHEMERING, Deputy Director ALICE PATRICIA WHITE, Assistant Director HERBERT A. BIERN, Associate Director JOYCE K. ZICKLER, Assistant Director ROGER T. COLE, Associate Director GLENN B. CANNER, Senior Adviser WILLIAM A. RYBACK, Associate Director DAVID S. JONES, Senior Adviser GERALD A. EDWARDS, JR., Deputy Associate Director STEPHEN M. HOFFMAN, JR., Deputy Associate Director DIVISION OF MONETARY AFFAIRS JAMES V. HOUPT, Deputy Associate Director JACK P. JENNINGS, Deputy Associate Director DONALD L. KOHN, Director MICHAEL G. MARTINSON, Deputy Associate Director DAVID E. LINDSEY, Deputy Director SIDNEY M. SUSSAN, Deputy Associate Director BRIAN F. MADIGAN, Associate Director MOLLY S. WASSOM, Deputy Associate Director RICHARD D. PORTER, Deputy Associate Director HOWARD A. AMER, Assistant Director VINCENT R. REINHART, Deputy Associate Director NORAH M. BARGER, Assistant Director WILLIAM C. WHITESELL, Assistant Director BETSY CROSS, Assistant Director NORMAND R. V. BERNARD, Special Assistant to the Board RICHARD A. SMALL, Assistant Director WILLIAM C. SCHNEIDER, JR., Project Director, DIVISION OF CONSUMER National Information Center AND COMMUNITY AFFAIRS DOLORES S. SMITH, Director GLENN E. LONEY, Deputy Director SANDRA F. BRAUNSTEIN, Assistant Director MAUREEN P. ENGLISH, Assistant Director ADRIENNE D. HURT, Assistant Director IRENE SHAWN MCNULTY, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

EDWARD M. GRAMLICH OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS STEPHEN R. MALPHRUS, Staff Director LOUISE L. ROSEMAN, Director PAUL W. BETTGE, Assistant Director MANAGEMENT DIVISION KENNETH D. BUCKLEY, Assistant Director STEPHEN J. CLARK, Associate Director, Finance Function JACK DENNIS, JR., Assistant Director JOSEPH H. HAYES, JR., Assistant Director DARRELL R. PAULEY, Associate Director, Human Resources Function JEFFREY C. MARQUARDT, Assistant Director MARSHA REIDHILL, Assistant Director SHEILA CLARK, EEO Programs Director JEFF STEHM, Assistant Director DIVISION OF SUPPORT SERVICES OFFICE OF THE INSPECTOR GENERAL ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director BARRY R- SNYDER, Inspector General DAVID L. WILLIAMS, Assistant Director DONALD L. ROBINSON, Deputy Inspector General DIVISION OF INFORMATION TECHNOLOGY RICHARD C. STEVENS, Director MARIANNE M. EMERSON, Deputy Director TILLENA G. CLARK, Assistant Director MAUREEN HANNAN, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director DAY W. RADEBAUGH, JR., Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Federal Reserve Bulletin • September 1999 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman EDWARD G. BOEHNE EDWARD W. KELLEY, JR. MICHAEL H. MOSKOW ROGER W. FERGUSON, JR. LAURENCE H. MEYER GARY H. STERN EDWARD M. GRAMLICH ROBERT D. MCTEER, JR. ALTERNATE MEMBERS J. ALFRED BROADDUS, JR. JERRY L. JORDAN JAMIE B. STEWART, JR. JACK GUYNN ROBERT T. PARRY STAFF DONALD L. KOHN, Secretary and Economist CHRISTINE M. CUMMING, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary DAVID H. HOWARD, Associate Economist LYNN S. Fox, Assistant Secretary WILLIAM C. HUNTER, Associate Economist GARY P. GILLUM, Assistant Secretary RICHARD W. LANG, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel DAVID E. LINDSEY, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel ARTHUR J. ROLNICK, Associate Economist KAREN H. JOHNSON, Economist HARVEY ROSENBLUM, Associate Economist MICHAEL J. PRELL, Economist LAWRENCE SLIFMAN, Associate Economist LEWIS S. ALEXANDER, Associate Economist DAVID J. STOCKTON, Associate Economist PETER R. FISHER, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL ROBERT W. GILLESPIE, President KENNETH D. LEWIS,Vice President LAWRENCE K. FISH, First District NORMAN R. BOBINS, Seventh District DOUGLAS A. WARNER III, Second District KATIE S. WINCHESTER, Eighth District RONALD L. HANKEY, Third District RICHARD A. ZONA, Ninth District ROBERT W. GILLESPIE, Fourth District C. Q. CHANDLER, Tenth District KENNETH D. LEWIS, Fifth District RICHARD W. EVANS, JR., Eleventh District STEPHEN A. HANSEL, Sixth District WALTER A. DODS, JR., Twelfth District JAMES ANNABLE, Co-Secretary WILLIAM J. KORSVIK, Co-Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

CONSUMER ADVISORY COUNCIL YVONNE S. SPARKS STRAUTHER, St. Louis, Missouri, Chairman DWIGHT GOLANN, Boston, Massachusetts, Vice Chairman LAUREN ANDERSON, New Orleans, Louisiana JOHN C. LAMB, Sacramento, California WALTER J. BOYER, Garland, Texas ANNE S. LI, Trenton, New Jersey WAYNE-KENT A. BRADSHAW, Los Angeles, California MARTHA W. MILLER, Greensboro, North Carolina MALCOLM M. BUSH, Chicago, Illinois DANIEL W. MORTON, Columbus, Ohio MARY ELLEN DOMEIER, New ULM, Minnesota CAROL J. PARRY, New York, New York JEREMY D. EISLER, Biloxi, Mississippi PHILIP PRICE, JR., Philadelphia, Pennsylvania ROBERT F. ELLIOT, Prospect Heights, Illinois MARTA RAMOS, San Juan, Puerto Rico JOHN C. GAMBOA, San Francisco, California DAVID L. RAMP, St. Paul, Minnesota ROSE M. GARCIA, Las Cruces, New Mexico MARILYN ROSS, Omaha, Nebraska VINCENT J. GIBLIN, West Caldwell, New Jersey ROBERT G. SCHWEMM, Lexington, Kentucky KARLA S. IRVINE, Cincinnati, Ohio DAVID J. SHIRK, Eugene, Oregon WILLIE M. JONES, Boston, Massachusetts GAIL M. SMALL, Lame Deer, Montana JANET C. KOEHLER, Ponte Vedra, Florida GARY S. WASHINGTON, Chicago, Illinois GWENN S. KYZER, Allen, Texas ROBERT L. WYNN, II, Madison, Wisconsin THRIFT INSTITUTIONS ADVISORY COUNCIL WILLIAM A. FITZGERALD, Omaha, Nebraska, President F. WELLER MEYER, Falls Church, Virginia, Vice President GAROLD R. BASE, Piano, Texas BABETTE E. HEIMBUCH, Santa Monica, California JAMES C. BLAINE, Raleigh, North Carolina THOMAS S. JOHNSON, New York, New York DAVID A. BOCHNOWSKI, Munster, Indiana WILLIAM A. LONGBRAKE, Seattle, Washington LAWRENCE L. BOUDREAUX III, New Orleans, Louisiana KATHLEEN E. MARINANGEL, McHenry, Illinois RICHARD P. COUGHLIN, Stoneham, Massachusetts ANTHONY J. POPP, Marietta, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 Federal Reserve Bulletin • September 1999 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, Rates for subscribers outside the United States are as follows MS-127, Board of Governors of the Federal Reserve System, and include additional air mail costs: Washington, DC 20551, or telephone (202) 452-3244, or FAX Federal Reserve Regulatory Service, $250.00 per year. (202) 728-5886. You may also use the publications order Each Handbook, $90.00 per year. form available on the Board's World Wide Web site FEDERAL RESERVE REGULATORY SERVICE FOR PERSONAL (http://www.federalreserve.gov). When a charge is indicated, pay- COMPUTERS. CD-ROM; updated monthly. ment should accompany request and be made payable to the Standalone PC. $300 per year. Board of Governors of the Federal Reserve System or may be Network, maximum 1 concurrent user. $300 per year. ordered via Mastercard, Visa, or American Express. Payment from Network, maximum 10 concurrent users. $750 per year. foreign residents should be drawn on a U.S. bank. Network, maximum 50 concurrent users. $2,000 per year. Network, maximum 100 concurrent users. $3,000 per year. Subscribers outside the United States should add $50 to cover BOOKS AND MISCELLANEOUS PUBLICATIONS additional airmail costs. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. THE FEDERAL RESERVE ACT AND OTHER STATUTORY PROVISIONS 1994. 157 pp. AFFECTING THE FEDERAL RESERVE SYSTEM, as amended ANNUAL REPORT, 1998. through October 1998. 723 pp. $20.00 each. ANNUAL REPORT: BUDGET REVIEW, 1999. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 COUNTRY MODEL, May 1984. 590 pp. $14.50 each. each in the United States, its possessions, Canada, and INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. Mexico. Elsewhere, $35.00 per year or $3.00 each. 440 pp. $9.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, num- FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. ber of pages, and price. December 1986. 264 pp. $10.00 each. 1981 October 1982 239 pp. $ 6.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1982 December 1983 266 pp. $ 7.50 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1983 October 1984 264 pp. $11.50 RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A 1984 October 1985 254 pp. $12.50 JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996. 1985 October 1986 231 pp. $15.00 578 pp. $25.00 each. 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 EDUCATION PAMPHLETS 1980-89 March 1991 712 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1990 November 1991 185 pp. $25.00 available without charge. 1991 November 1992 215 pp. $25.00 1992 December 1993 215 pp. $25.00 1993 December 1994 281 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1994 December 1995 190 pp. $25.00 Consumer Handbook to Credit Protection Laws 1990-95 November 1996 404 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small Businesses Series on the Structure of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF The Board of Governors of the Federal Reserve System CHARTS. Weekly. $30.00 per year or $.70 each in the United The Federal Open Market Committee States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $.80 each. Federal Reserve Bank Board of Directors Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL A Consumer's Guide to Mortgage Lock-Ins RESERVE SYSTEM. A Consumer's Guide to Mortgage Settlement Costs ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Refinancings Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Home Mortgages: Understanding the Process and Your Right Vol. II (Irregular Transactions). 1969. 116 pp. Each volume to Fair Lending $5.00. How to File a Consumer Complaint GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 each. Making Sense of Savings FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated SHOP: The Card You Pick Can Save You Money monthly. (Requests must be prepaid.) Welcome to the Federal Reserve Consumer and Community Affairs Handbook. $75.00 per year. When Your Home is on the Line: What You Should Know Monetary Policy and Reserve Requirements Handbook. $75.00 About Home Equity Lines of Credit per year. Keys to Vehicle Leasing Securities Credit Transactions Handbook. $75.00 per year. Looking for the Best Mortgage The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 STAFF STUDIES: Only Summaries Printed in the 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- BULLETIN GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. Studies and papers on economic and financial subjects that are of 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by general interest. Requests to obtain single copies of the full text or James T. Fergus and John L. Goodman, Jr. July 1993. to be added to the mailing list for the series may be sent to 20 pp. Publications Services. 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANK- ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING Staff Studies 1-158, 161, 163, 165, 166, and 168-169 are out of PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, print. by Stephen A. Rhoades. July 1994. 37 pp. 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. Donald Savage. February 1990. 12 pp. Lowrey, December 1997. 17 pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by DENCE, by Gregory Elliehausen, April 1998. 35 pp. Gregory E. Elliehausen and John D. Wolken. September 1990. 35 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A88 Federal Reserve Bulletin • September 1999 Maps of the Federal Reserve System H f l N R b? •^MMNL 2 BOSTON n f H H M B M ^^ G BNIWYORK V-RLLL AUU • CLEVTLANU PST.ADELPHIA 1A ~ m RICHMOND ST. LOUIS IHSS MUM o • a AT L.ANTA M B — tt LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A89 1-A 2-B 3-C 4-D 5-E ME Pittsburgh Baltimore MD NY \< / PA • V NC Buffalo y cinnati •Charlotte MA ™ / KY CT ^ RI sc BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H • Nashville KY Birmingham. H • n / Lou is ville MS MO - TN AR •Memphis New Orleans Little Rock { MS ATLANTA CHICAGO ST. LOUIS ND MN • Helena MINNEAPOLIS 10-J 12-L [1m NE V MO (Si • • l>enver NM 1— Oklahoma Cit> KANSAS CITY 11-K rx ~ I 1 I * • 1 O-R- 1 1 Paso rA—r-1 N Houston • L * San Antonio^ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A90 Federal Reserve Bulletin • September 1999 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 Peter G. Peterson Jamie B. Stewart, Jr. Buffalo 14240 Bal Dixit Carl W. Turnipseed1 PHILADELPHIA 19105 Joan Carter Edward G. Boehne Charisse R. Lillie William H. Stone, Jr. CLEVELAND* 44101 G. Watts Humphrey, Jr. Jerry L. Jordan David H. Hoag Sandra Pianalto Cincinnati 45201 George C. Juilfs Barbara B.Henshaw Pittsburgh 15230 John T. Ryan, III Robert B. Schaub RICHMOND* 23219 Claudine B. Malone J. Alfred Broaddus, Jr. Jeremiah J. Sheehan Walter A. Varvel Baltimore 22203 Daniel R. Baker William J. Tignaneili i Charlotte 28230 Joan H. Zimmerman Dan M. Bechter1 ATLANTA 30303 John F. Wieland Jack Guynn Paula Lovell Patrick K. Barron James M. McKee Birmingham 35283 V. Larkin Martin Andre T. Anderson Jacksonville 32231 Marsha G. Rydberg Robert J. Slack Miami 33152 Mark T. Sodders James T. Curry III Nashville 37203 N. Whitney Johns Melvyn K. Purcell1 New Orleans 70161 R. Glenn Pumpelly Robert J. Musso1 CHICAGO* 60690 Lester H. McKeever, Jr. Michael H. Moskow Arthur C. Martinez William C. Conrad Detroit 48231 Florine Mark David R. Allardice1 ST. LOUIS 63166 Susan S. Elliott William Poole Charles W. Mueller W. LeGrande Rives Little Rock 72203 Diana T. Hueter Robert A. Hopkins Louisville 40232 Roger Reynolds Thomas A. Boone Memphis 38101 Mike P. Sturdivant, Jr. Martha Perine Beard MINNEAPOLIS 55480 David A. Koch Gary H. Stern James J. Howard Colleen K. Strand Helena 59601 Thomas O. Markle Samuel H. Gane KANSAS CITY 64198 Jo Marie Dancik Thomas M. Hoenig Terrence P. Dunn Richard K. Rasdall Denver 80217 Kathryn A. Paul Carl M. Gambs 1 Oklahoma City 73125 Larry W. Brummett Kelly J. Dubbert Omaha 68102 Gladys Styles Johnston 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, III1 San Antonio 78295 Vacancy James L. Stull1 SAN FRANCISCO 94120 Gary G. Michael Robert T. Parry Nelson C. Rising John F. Moore Los Angeles 90051 Lonnie Kane Mark L. Mullinix1 Portland 97208 Nancy Wilgenbusch Raymond H. Laurence1 Salt Lake City 84125 Barbara L. Wilson 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

A91 Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS The Federal Reserve Board publishes a series of Shop . . . The Card You Pick Can Save You Money brochures covering individual credit laws and topics, is designed to help consumers comparison shop when as pictured below. looking for a credit card. It contains the results of the Five brochures on the mortgage process are avail- Federal Reserve Board's survey of the terms of credit able: A Consumer's Guide to Mortgage Lock-Ins, card plans offered by credit card issuers throughout A Consumer's Guide to Mortgage Refinancings, A the United States. Because the terms can affect the Consumer's Guide to Mortgage Settlement Costs, amount an individual pays for using a credit card, the Home Mortgages: Understanding the Process and booklet lists the annual percentage rate (APR), annual Your Right to Fair Lending, and Looking for the Best fee, grace period, type of pricing (fixed or variable Mortgage: Shop, Compare, Negotiate. These bro- rate), and a telephone number for each card issuer chures were prepared in conjunction with the Federal surveyed. A Guide to Business Credit for Women, Home Loan Bank Board and in consultation with Minorities, and Small Businesses covers the credit other federal agencies and trade and consumer application process and points out sources of technigroups. The Board also publishes the Consumer cal assistance for small business loans. Handbook to Credit Protection Laws, a complete Up to 100 copies of consumer publications are guide to consumer credit protections. This forty-four- available free of charge from Publications Services, page booklet explains how to shop and obtain credit, Mail Stop 127, Board of Governors of the Federal how to maintain a good credit rating, and how to Reserve System, Washington, DC 20551. dispute unfair credit transactions. The Card You Pick Can Save You Money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A92 Federal Reserve Bulletin • September 1999 Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory func- The Payment System Handbook deals with expedited tions, the Board publishes the Federal Reserve Regu- funds availability, check collection, wire transfers, and latory Service, a four-volume loose-leaf service con- risk-reduction policy. It includes Regulations CC, J, and taining all Board regulations as well as related statutes, EE, related statutes and commentaries, and policy interpretations, policy statements, rulings, and staff statements on risk reduction in the payment system. opinions. For those with a more specialized interest in For domestic subscribers, the annual rate is $200 for the Board's regulations, parts of this service are pub- the Federal Reserve Regulatory Service and $75 for lished separately as handbooks pertaining to monetary each handbook. For subscribers outside the United policy, securities credit, consumer affairs, and the pay- States, the price including additional air mail costs is ment system. $250 for the service and $90 for each handbook. These publications are designed to help those who The Federal Reserve Regulatory Service is also availmust frequently refer to the Board's regulatory materi- able on CD-ROM for use on personal computers. For a als. They are updated monthly, and each contains cita- standalone PC, the annual subscription fee is $300. For tion indexes and a subject index. network subscriptions, the annual fee is $300 for 1 con- The Monetary Policy and Reserve Requirements current user, $750 for a maximum of 10 concurrent Handbook contains Regulations A, D, and Q, plus users, $2,000 for a maximum of 50 concurrent users, related materials. and $3,000 for a maximum of 100 concurrent users. The Securities Credit Transactions Handbook con- Subscribers outside the United States should add $50 tains Regulations T, U, and X, dealing with exten- to cover additional airmail costs. For further informasions of credit for the purchase of securities, together tion, call (202) 452-3244. with related statutes, Board interpretations, rulings, All subscription requests must be accompanied by a and staff opinions. Also included is the Board's list of check or money order payable to the Board of Goverforeign margin stocks. nors of the Federal Reserve System. Orders should be The Consumer and Community Affairs Handbook addressed to Publications Services, mail stop 127, Board contains Regulations B, C, E, M, Z, AA, BB, and DD, of Governors of the Federal Reserve System, Washingand associated materials. ton, DC 20551. GUIDE TO THE FLOW OF FUNDS ACCOUNTS Guide to the Flow of Funds Accounts explains in detail dures as seasonal adjustment, extrapolation, and how the U.S. financial flow accounts are prepared. The interpolation. accounts, which are compiled by the Division of The balance of the Guide contains explanatory tables Research and Statistics, are published in the Board's corresponding to the tables of financial flows data that quarterly Z.l statistical release, "Flow of Funds appeared in the September 1992 Z.l release. These Accounts, Flows and Outstandings." The Guide updates tables give, for each data series, the source of the data or and replaces Introduction to Flow of Funds, published the methods of calculation, along with annual data for in 1980. 1991 that were published in the September 1992 release. The 670-page Guide begins with an explanation of Guide to the Flow of Funds Accounts is available for the organization and uses of the flow of funds accounts $8.50 per copy from Publications Services, Board of and their relationship to the national income and Governors of the Federal Reserve System, Washington, product accounts prepared by the U.S. Department of DC 20551. Orders must include a check or money order, Commerce. Also discussed are the individual data in U.S. dollars, made payable to the Board of Governors series that make up the accounts and such proce- of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis